This prospectus is part of a “shelf” registration statement that we filed with the U.S. Securities and Exchange Commission (the “SEC”). By using a shelf registration statement,
we may, from time to time, offer and sell up to $450,000,000 of the securities described in this prospectus in one or more offerings. This prospectus provides you with a general description of the securities we may offer. Each time we offer
securities pursuant to this prospectus, we will provide you with a prospectus supplement that will provide specific information about the securities being offered and describe the specific terms of that offering. A prospectus supplement may also
include a discussion of any additional risk factors or other special considerations that apply to the securities being offered and add to, update or change the information contained in this prospectus. If there is any inconsistency between the
information in this prospectus and any prospectus supplement, you should rely on the prospectus supplement. We may also add, update or change information contained in this prospectus by incorporating by reference information that we file or furnish
to the SEC. Before purchasing any securities, you should read carefully both this prospectus and any prospectus supplement, together with the additional information described under “Where You Can Find Additional Information.”
This prospectus and any prospectus supplement are part of a shelf registration statement we filed with the SEC and do not contain all of the information in the registration
statement. Documents establishing the terms of the offered securities are filed as exhibits to the registration statement or will be filed with documents that we file or furnish to the SEC and incorporate by reference in this prospectus. Statements
in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete
description of the relevant matters. For further information about us or the securities offered hereby, you should refer to the registration statement, which you can obtain as described below under “Where You Can Find Additional Information.”
We have not authorized anyone to provide any information or to make any representations other than as contained or incorporated by reference in this prospectus or in any
accompanying prospectus supplement. We take no responsibility for, and can provide no assurance as to the reliability of, any information that others may give you. The information contained or incorporated by reference in this prospectus and any
prospectus supplement is accurate as of the dates of the applicable documents. Our business, financial condition, results of operations and prospects may have changed since the applicable dates. When this prospectus or a prospectus supplement are
delivered or sale pursuant to this prospectus or a prospectus supplement is made, we are not implying that the information is current as of the date of the delivery or sale. You should not consider any information in this prospectus, any prospectus
supplement or in the documents incorporated by reference herein to be investment, legal or tax advice. We encourage you to consult your own counsel, accountant and other advisors for legal, tax, business, financial and related advice regarding an
investment in our securities.
We are offering to sell, and seeking offers to buy, securities only in jurisdictions where offers and sales are permitted. The distribution of this prospectus and the offering
of securities in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities
and the distribution of this prospectus outside the United States. This prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus by any
person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
Unless the context otherwise requires, as used in this prospectus, the terms “Company”, “we”, “us” and “our” refer to Castor Maritime Inc. and all of its subsidiaries, and
“Castor Maritime Inc.” refers only to Castor Maritime Inc. and not to its subsidiaries. We use the term deadweight ton, or dwt, in describing the size of vessels. Dwt, expressed in metric tons each of which is equivalent to 1,000 kilograms, refers
to the maximum weight of cargo and supplies that a vessel can carry. Unless otherwise indicated, all references to “dollars” and “$” in this prospectus are to, and amounts presented in this prospectus are in, United States dollars and financial
information presented in this prospectus that is derived from financial statements incorporated by reference is prepared in accordance with accounting principles generally accepted in the United States.
We are a growth-oriented global shipping company that was incorporated in the Republic of the Marshall Islands for the purpose of acquiring, owning, chartering and operating
oceangoing cargo vessels. We are a provider of worldwide seaborne transportation services for dry bulk cargo as well as crude oil and refined petroleum products. During 2021 and as of the date of this prospectus, we grew our dry bulk fleet from six
to 20 dry bulk vessels, and we established our tanker operations by acquiring seven Aframax/LR2 and two Handysize tanker vessels. These acquisitions were financed using a mix of cash from operations and the net cash proceeds from our equity and
debt financing transactions. As a result, as of March 31, 2022, our fleet consisted of 20 dry bulk carriers with an aggregate cargo carrying capacity of 1.7 million dwt and an average age of 12.3 years, seven Aframax/LR2 tankers with an aggregate
cargo carrying capacity of 0.8 million dwt and an average age of 17.5 years and two Handysize tankers with an aggregate cargo carrying capacity of 0.1 million dwt and an average age of 16.1 years. The average age of our entire fleet is 13.9 years.
Our fleet vessels operate in the time charter and voyage charter markets, while some of our tanker vessels currently operate in pools. Our commercial strategy primarily focuses on deploying our
fleet under a mix of period time charters and trip time charters according to our assessment of market conditions, adjusting the mix of these charters to take advantage of the relatively stable cash flows and high utilization rates associated with
period time charters or to profit from attractive trip charter rates during periods of strong charter market conditions.
Our vessels are technically managed by Pavimar S.A. (“Pavimar”), a company controlled by Ismini Panagiotidis, the sister of our Chairman, Chief Executive Officer and Chief
Financial Officer, Petros Panagiotidis. Under the technical management agreements, our ship-owning subsidiaries pay a daily fee to Pavimar for the provision of a wide range of shipping services such as crew management, technical management,
operational employment management, insurance management, provisioning, bunkering, accounting and audit support services.
Our vessels are commercially managed by Castor Ships S.A. (“Castor Ships”), a company controlled by our Chairman, Chief Executive Officer and Chief Financial Officer, Petros
Panagiotidis. Castor Ships manages our business overall and provides us with commercial, chartering and administrative services, including, but not limited to, securing employment for our fleet, arranging and supervising the vessels’ commercial
operations, handling all of our vessel sale and purchase transactions, undertaking related shipping project and management advisory and support services, as well as other associated services requested from time to time by us and our ship-owning
subsidiaries. In exchange for these services, we and our subsidiaries pay Castor Ships (i) a flat quarterly management fee for the management and administration of our business, (ii) a daily fee per vessel for the provision of commercial services
and (iii) a commission on all charter agreements and on each sale and purchase transaction.
As of March 28, 2022, we had 94,610,088 issued and outstanding common shares. Upon the exercise of our outstanding warrants, we may issue up to an additional 19,360,978 common
shares. We also have outstanding 12,000 Series B Preferred Shares, each of which has the voting power of 100,000 common shares.
We were incorporated under the laws of the Republic of the Marshall Islands in September 2017. Our registered office in the Marshall Islands is located at Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960. Our registered agent in the Republic of the Marshall Islands at such address is The Trust Company of the Marshall Islands, Inc. Our principal executive office is located at
223 Christodoulou Chatzipavlou Street, Hawaii Royal Gardens, 3036 Limassol, Cyprus. Our principal executive office telephone number is + 357 25 357 767. Our corporate website address is www.castormaritime.com. The information contained on
our website does not constitute part of this prospectus.
You can find a more detailed description of our fleet, business, management arrangements and other information in our annual report on Form 20-F for the year ended December 31,
2020, filed with the SEC on March 31, 2021 (the “Annual Report”) incorporated by reference in this prospectus, or similar sections in our subsequent filings incorporated by reference in this prospectus.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Matters discussed in this prospectus or in documents incorporated by reference in this prospectus may constitute forward-looking statements. We intend such forward‑looking statements to be covered
by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Forward-looking statements include all matters that are not historical facts or matters of fact at the date of the applicable document.
We are including this cautionary statement in connection with this safe harbor legislation. Forward-looking statements, which reflect our current views with respect to future events and financial
performance. These forward-looking statements may generally, but not always, be identified by the use of works such as “anticipate,” “believe,” “targets,” “likely,” “will,” “would,” “could,” “should,” “seeks,” “continue,” “contemplate,” “possible,”
“might,” “expect,” “intend,” “estimate,” “forecast,” “project,” “plan,” “objective,” “potential,” “may,” “anticipates” or similar expressions or phrases.
The forward-looking statements in this prospectus or in documents incorporated by reference in this prospectus are based upon various assumptions, many of which are based, in turn, upon further
assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made,
because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these forward-looking
statements, including these expectations, beliefs or projections.
In addition to these assumptions, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include generally:
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our business strategy, expected capital spending and other plans and objectives for future operations;
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dry bulk and tanker market conditions and trends, including volatility in charter rates, factors affecting supply and demand, fluctuating vessel values, opportunities for the profitable operations of dry bulk
and tanker carriers and the strength of world economies;
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the rapid growth of our fleet, our ability to realize the expected benefits from our past or future vessel acquisitions, and the effects of our fleet’s growth on our future financial condition, operating
results, future revenues and expenses, future liquidity, and the adequacy of cash flows from our operations;
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our relationships with our current and future service providers and customers, including the ongoing performance of their obligations, compliance with applicable laws, and any impacts on our reputation due to
our association with them;
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our ability to borrow under existing or future debt agreements or to refinance our debt on favorable terms and our ability to comply with the covenants contained therein, in particular due to economic,
financial or operational reasons;
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our continued ability to enter into time or voyage charters with existing and new customers, and to re-charter our vessels upon the expiry of the existing charters;
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changes in our operating and capitalized expenses, including bunker prices, dry-docking, insurance costs, costs associated with regulatory compliance, and costs associated with climate change;
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our ability to fund future capital expenditures and investments in the acquisition and refurbishment of our vessels (including the amount and nature thereof and the timing of completion thereof, the delivery
and commencement of operations dates, expected downtime and lost revenue);
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instances of off-hire, including due to limitations imposed by COVID-19 and/or due to vessel upgrades and repairs;
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future sales of our securities in the public market and our ability to maintain compliance with applicable listing standards;
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volatility in our share price, including due to high volume transactions in our shares by retail investors;
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potential conflicts of interest involving members of our Board of Directors, senior management and certain of our service providers that are related parties;
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general domestic and international political conditions or events, including “trade wars”, global public health threats and major outbreaks of disease;
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changes in seaborne and other transportation, including due to fluctuating demand for dry bulk and tanker vessels and/or disruption of shipping routes due to accidents, political events, international
hostilities and instability, piracy or acts of terrorism;
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changes in governmental rules and regulations or actions taken by regulatory authorities, including changes to environmental regulations applicable to the shipping industry;
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the impact of adverse weather and natural disasters; and
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any other factor detailed from time to time in our reports.
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Any forward-looking statements contained or incorporated by reference herein are made only as of the date of the particular statement, and except to the extent required by applicable law we
undertake no obligation to update any forward-looking statement or statements, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for us to predict all or any of these
factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking
statement. See “Risk Factors.” Risk factors described or incorporated by reference in this prospectus are not necessarily all of the important factors that could cause actual results or developments to
differ materially from those expressed in any of our forward-looking statements. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.
An investment in our securities involves a high degree of risk. Before making an investment in our securities, you should carefully consider all of the information included or
incorporated by reference into this prospectus and any prospectus supplement, including the risks described under the heading “Item 3. Key Information—D. Risk Factors” in our Annual Report as updated by
annual and other reports and documents we file with the SEC after the date of this prospectus and that are incorporated by reference herein. You should carefully consider all of these risks, including those summarized under “Cautionary Statement Regarding Forward-Looking Statements” above, any risks set forth under the heading “Risk Factors” in any prospectus supplement, as well as the other
information included or incorporated by reference in this prospectus and any prospectus supplement before you decide whether to buy any of the securities. If any of these risks actually occur, our business, financial condition and results of
operations could suffer and you may lose all or part of your investment in such securities.
The use of proceeds from the sale of securities will be set forth in the applicable prospectus supplement. Unless we specify otherwise in any prospectus supplement, we may use
the net proceeds from the sale of securities offered by this prospectus for capital expenditures, working capital, to make vessel or other asset acquisitions or for general corporate purposes or a combination thereof.
A prospectus supplement or report on Form 6-K incorporated by reference into the registration statement of which this prospectus is a part will include information relating to
our capitalization and indebtedness.
DESCRIPTION OF SHARE CAPITAL
The following description of our share capital is not complete and may not contain all the information you should consider before investing in our shares. This description is
summarized from and qualified in its entirety by reference to, our Articles of Incorporation, as amended (the “Articles of Incorporation”), Bylaws, the Stockholders Rights Agreement by and between the Castor Maritime Inc. and American Stock
Transfer & Trust Company, LLC, as rights agent (the “Rights Agreement”) and Marshall Islands law, including the Marshall Islands Business Corporations Act (the “BCA”). Our Articles of Incorporation, Bylaws and Rights Agreement have been filed
with the SEC and are incorporated by reference as exhibits to the registration statement of which this prospectus forms a part. See also “Item 10. Additional Information—B. Memorandum and Articles of Association”
and Exhibit 2.2 of our Annual Report incorporated by reference herein, as updated by annual and other reports and documents we file with the SEC after the date of this prospectus and that are incorporated by reference herein.
Purpose
Our purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the BCA. Under Marshall Islands law generally and our
Articles of Incorporation and Bylaws there are no limitations on the ownership rights of our shareholders.
Authorized Capitalization
Under our Articles of Incorporation, our authorized capital stock consists of 2,000,000,000 shares. 1,950,000,000 shares are designated as common shares, par value $0.001 per
share, of which 94,610,088 common shares are issued and outstanding as of March 28, 2022, and 50,000,000 shares are designated as preferred shares, par value $0.001 per share, of which 12,000 Series B Preferred Shares are currently issued and
outstanding. We have also designated 480,000 Series A Preferred Shares and 1,000,000 shares as Series C Participating Preferred Shares, none of which are outstanding as of the date of this prospectus.
Description of Common Shares
Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of shareholders. Subject to preferences that may be applicable to any
outstanding preferred shares, holders of common shares are entitled to receive ratably all dividends, if any, declared by our Board out of funds legally available for dividends. Upon our dissolution or liquidation or the sale of all or
substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred shares having liquidation preferences, if any, the holders of our common shares are entitled to receive pro rata
our remaining assets available for distribution. Holders of common shares do not have conversion, redemption or pre-emptive rights to subscribe to any of our securities. The rights, preferences and privileges of holders of our common shares are
subject to the rights of the holders of any preferred shares, which we have issued in the past or which we may issue in the future.
Share History
On May 28, 2021, we effected a 1-for-10 reverse stock split of our common shares without any change in the number of our authorized common shares. As a result of the reverse
stock split, the number of outstanding shares as of May 28, 2021, was decreased to 89,955,848 while the par value of our common shares remained unchanged at $0.001 per share. All share and per share amounts, as well as warrant shares eligible for
purchase under the Company’s effective warrant schemes have been retroactively adjusted to reflect the reverse stock split.
On September 22, 2017, pursuant to an Exchange Agreement between the Company, Spetses Shipping Co., and the shareholders of Spetses Shipping Co., we made certain issuances of
our capital stock, including the issuance of 12,000 Series B Preferred Shares to Thalassa, a company controlled by Petros Panagiotidis, the Company’s Chairman, Chief Executive Officer and Chief Financial Officer. Each Series B Preferred Share has
the voting power of one hundred thousand (100,000) common shares.
On November 21, 2017, we declared a dividend of one preferred share purchase right for each outstanding common share and adopted a stockholder rights plan, as set forth in the
Rights Agreement. In connection with the Rights Agreement, we have designated 1,000,000 shares as Series C Participating Preferred Shares, none of which are outstanding as of the date of this prospectus.
On June 28, 2019, we entered into an equity distribution agreement (the “First Equity Distribution Agreement”), with Maxim Group LLC (“Maxim”) acting as a sales agent, under
which we could, from time to time, offer and sell our common shares through an at-the-market offering (the “First ATM Program”), having an aggregate offering price of up to $10.0 million. No warrants, derivatives, or other share classes were
associated with this transaction. From the First ATM Program effective date and as of December 31, 2021, we had raised gross and net proceeds (after deducting sales commissions and other fees and expenses) of $2.6 million and $2.3 million,
respectively, by issuing and selling 61,811 common shares. On June 21, 2021, we terminated the First ATM Program.
On October 10, 2019, we reached an agreement with all of the holders of our then outstanding Series A Preferred Shares to waive until December 31, 2021 all due and overdue
dividends and to adopt an amended and restated Statement of Designations on our Series A Preferred Shares. Pursuant to this amendment and restatement, on October 17, 2019, we issued 300,000 common shares to the holders of the Series A Preferred
Shares in exchange for the waiver of approximately $4.3 million worth of dividends accumulated on the Series A Preferred Shares, for the period since their original issuance to June 30, 2019. On December 8, 2021, we redeemed in full all our Series
A Preferred Shares at a cash liquidation preference of $30.00 per share, for a total amount of $14.4 million.
On January 27, 2020, we entered into a securities purchase agreement with YAII PN, LTD (the “Investor”), pursuant to which we agreed to sell and it agreed to purchase up to
three convertible debentures for a maximum aggregate price of $5.0 million. During the period from January 2020 up until June 2020, the Investor had converted the full $5.0 million principal amount and $0.1 million of interest under the convertible
debentures for 804,208 common shares.
On June 23, 2020, we entered into an agreement with Maxim, acting as underwriter, pursuant to which we offered and sold 5,911,000 units, each unit consisting of (i) one common share or a pre-funded
warrant to purchase one common share at an exercise price equal to $0.10 per common share (a “Pre-Funded Warrant”), and (ii) one Class A Warrant to purchase one common share (a “Class A Warrant”), for $3.50 per unit (or $3.40 per unit including a
Pre-Funded Warrant), (the “2020 June Equity Offering”). The 2020 June Equity Offering closed on June 26, 2020 and resulted in the issuance of 5,908,269 common shares and 5,911,000 Class A Warrants, which also included 771,000 over-allotment units
pursuant to an over-allotment option that was exercised by Maxim on June 24, 2020. We raised gross and net cash proceeds from this transaction of approximately $20.7 million and $18.6 million, respectively. Further, as of December 31, 2021, an
aggregate of 5,848,656 Class A Warrants have been exercised at an exercise price of $3.50 per warrant, for which we have received total gross proceeds of approximately $20.5 million.
On July 12, 2020, we entered into agreements with certain unaffiliated institutional investors pursuant to which we offered 5,775,000 common shares in a registered offering (the “2020 July Equity
Offering”). In a concurrent private placement, we also issued warrants to purchase up to 5,775,000 common shares (the “Private Placement Warrants”). The aggregate purchase price for each common share and Private Placement Warrant was $3.00. In
connection with the 2020 July Equity Offering, which closed on July 15, 2020, we received gross and net cash proceeds of approximately $17.3 million and $15.7 million, respectively. Further, as of December 31, 2021, an aggregate of 5,707,136
Private Placement Warrants have been exercised at an exercise price of $3.50 per warrant, for which we have received total gross proceeds of approximately $20.0 million.
On December 30, 2020, we entered into agreements with certain unaffiliated institutional investors pursuant to which we offered 9,475,000 common shares and warrants to purchase 9,475,000 common
shares (the “January 5 Warrants”) in a registered direct offering which closed on January 5, 2021 (the “2021 January First Equity Offering”). The aggregate purchase price for each common share and January 5 Warrant was $1.90. In connection with
this offering, we received gross proceeds of approximately $18.0 million and net proceeds of approximately $16.5 million, net of estimated fees and expenses of approximately $1.5 million. All of the January 5 Warrants have been exercised at an
exercise price of $1.90 per warrant, for which we have received total gross proceeds of approximately $18.0 million.
On January 8, 2021, we entered into agreements with certain unaffiliated institutional investors pursuant to which we offered 13,700,000 common shares and warrants to purchase 13,700,000 common
shares (the “January 12 Warrants”) in a registered direct offering which closed on January 12, 2021 (the “2021 January Second Equity Offering”). The aggregate purchase price for each common share and January 12 Warrant was $1.90. In connection with
this offering, we received gross proceeds of approximately $26.0 million and net proceeds of approximately $24.1 million, net of estimated fees and expenses of approximately $1.9 million. All of the January 12 Warrants have been exercised at an
exercise price of $1.90 per warrant, for which we have received total gross proceeds of approximately $26.0 million.
On April 5, 2021, we entered into agreements with certain unaffiliated institutional investors pursuant to which we offered and sold 19,230,770 common shares and warrants to purchase up to
19,230,770 common shares (the “April 7 Warrants”) in a registered direct offering which closed on April 7, 2021 (the “2021 April Equity Offering”). In connection with the 2021 April Equity Offering, we received gross and net cash proceeds of
approximately $125.0 million and $116.3 million, respectively. As of December 31, 2021, all April 7 Warrants having an exercise price of $6.50 remained unexercised and potentially issuable into common shares.
On June 14, 2021, we entered into an equity distribution agreement, or the Second Equity Distribution Agreement, with Maxim acting as a sales agent, which we amended and restated on the date of
this prospectus. Under the Second Equity Distribution Agreement, until June 14, 2022 we may, from time to time, offer and sell our common shares through an at-the-market offering (the “Second ATM Program”), having an aggregate offering price of up
to $150.0 million. No warrants, derivatives, or other share classes were associated with this transaction. From the Second ATM Program effective date and as of the date of this prospectus, we had raised
gross and net proceeds (after deducting sales commissions and other fees and expenses) of $12.9 million and $12.4 million, respectively, by issuing and selling 4,654,240 common shares.
DESCRIPTION OF DEBT SECURITIES
As specified in the applicable prospectus supplement, we may offer and issue debt securities from time to time in one or more series, under one or
more indentures, each dated as of a date on or prior to the issuance of the debt securities to which it relates. We may issue senior debt securities and subordinated debt securities pursuant to separate indentures, a senior indenture and a
subordinated indenture, respectively, in each case between us and the trustee (to be named in a prospectus supplement), forms of which are filed as exhibits to the registration statement of which this prospectus forms a part. The senior
indenture and the subordinated indenture, as amended or supplemented from time to time, are sometimes referred to individually as an “indenture” and collectively as the “indentures.”
The following describes the general terms that will apply to any debt securities that we may offer pursuant to this prospectus. The terms and provisions of any debt securities
that we offer may differ from the terms described below, and may not be subject to or contain any or all of the terms described below. The specific terms and provisions of the debt securities, and the extent to which the general terms of the debt
securities described in this prospectus apply to those debt securities, will be set forth in the applicable prospectus supplement. This description will include, where applicable:
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the designation, aggregate principal amount and authorized denominations of such debt securities;
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the issue price, expressed as a percentage of the aggregate principal amount of such debt securities;
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the maturity date or dates of such debt securities;
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the interest rate per annum, if any of such debt securities;
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if the debt securities provide for interest payments, the date from which interest will accrue, the dates on which interest will be payable, the date on which payment of interest will commence and the regular
record dates for interest payment dates;
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any optional or mandatory sinking fund provisions or exchangeability provisions;
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the terms and conditions upon which conversion of any convertible debt securities may be effected, including the conversion price, the conversion period and other conversion provisions;
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whether the debt securities will be our senior or subordinated securities;
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whether the debt securities will be our secured or unsecured obligations;
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the applicability and terms of any guarantees;
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the date, if any, after which and the price or prices at which the debt securities may be optionally redeemed or must be mandatorily redeemed and any other terms and provisions of optional or mandatory
redemptions;
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the denominations in which the debt securities of the series will be issuable;
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the portion of the principal amount of the debt securities of the series which will be payable upon acceleration or provable in bankruptcy;
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the currency or currencies, including composite currencies, in which principal, premium and interest will be payable, if other than the currency of the United States of America;
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if principal, premium or interest is payable, at our election or at the election of any holder, in a currency other than that in which the debt securities of the series are stated to be payable, the period or
periods within which, and the terms and conditions upon which, the election may be made;
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whether interest will be payable in cash or additional securities at our or the holder’s option and the terms and conditions upon which the election may be made;
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if denominated in a currency or currencies other than the currency of the United States of America, the equivalent price in the currency of the United States of America for purposes of determining the voting
rights of holders of those debt securities under the applicable indenture;
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if the amount of payments of principal, premium or interest may be determined with reference to an index, formula or other method based on a coin or currency other than that in which the debt securities of
the series are stated to be payable, the manner in which the amounts will be determined;
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any restrictive covenants or other material terms relating to the debt securities;
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whether the debt securities will be issued in the form of global securities or certificates in registered form;
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any listing on any securities exchange or quotation system;
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additional provisions, if any, related to defeasance and discharge of the debt securities; and
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any other special features of the debt securities.
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Each series of debt securities may be issued at various times with different maturity dates, may bear interest at different rates and may otherwise vary. We will provide you
with information on the federal income tax considerations and other special considerations applicable to any debt securities in the applicable prospectus supplement.
The description in the applicable prospectus supplement of any debt securities the Company offers will not necessarily be complete and will be qualified in its entirety by
reference to the applicable indenture and any applicable supplemental indenture, which will be filed with the SEC if we offer any debt securities. You should read the applicable indenture, any applicable supplemental indenture and any applicable
prospectus supplement in their entirety.
As specified in the applicable prospectus supplement, we may offer and issue warrants to purchase any of our debt or equity securities. Warrants may be issued independently or
together with any other securities and may be attached to, or separate from, such securities. The terms of any warrants to be issued and a description of the material provisions of any applicable warrant agreement will be set forth in the
applicable prospectus supplement. We expect that such terms will include, among others:
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the title of such warrants;
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the aggregate number of such warrants;
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the price or prices at which such warrants will be issued;
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the number and type of our securities purchasable upon exercise of such warrants;
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the price at which our securities purchasable upon exercise of such warrants may be purchased;
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the date on which the right to exercise such warrants shall commence and the date on which such right shall expire;
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if applicable, the minimum or maximum amount of such warrants which may be exercised at any one time;
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if applicable, the designation and terms of the securities with which such warrants are issued and the number of such warrants issued with each such security;
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if applicable, the date on and after which such warrants and the related securities will be separately transferable;
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information with respect to book-entry procedures, if any;
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if applicable, a discussion of any material U.S. federal income tax considerations; and
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any other terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such warrants.
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The description in the applicable prospectus supplement of any warrants we offer will not necessarily be complete and will be qualified in its entirety by reference to the
applicable warrant agreement, which will be filed with the SEC if we offer warrants. You should read the applicable warrant agreement and any applicable prospectus supplement in their entirety.
DESCRIPTION OF PURCHASE CONTRACTS
As specified in the applicable prospectus supplement, we may offer and issue purchase contracts for the purchase or sale of any of our debt or equity securities issued by us.
Each purchase contract will entitle the holder thereof to purchase or sell, and obligate us to sell or purchase, on specified dates, such securities at a specified purchase
price, which may be based on a formula, all as set forth in the applicable prospectus supplement. The applicable prospectus supplement will also specify the methods by which the holders may purchase or sell such securities and any acceleration,
cancellation or termination provisions, provisions relating to U.S. federal income tax considerations, if any, or other provisions relating to the settlement of a purchase contract.
The purchase contracts may require us to make periodic payments to the holders thereof or vice versa, which payments may be deferred to the extent set forth in the applicable
prospectus supplement, and those payments may be unsecured or pre-funded on some basis. The purchase contracts may require the holders thereof to secure their obligations in a specified manner to be described in the applicable prospectus
supplement. Alternatively, purchase contracts may require holders to satisfy their obligations thereunder when the purchase contracts are issued. Our obligation to settle such pre-paid purchase contracts on the relevant settlement date may
constitute indebtedness. Accordingly, pre-paid purchase contracts will be issued under either the senior indenture or the subordinated indenture.
The applicable prospectus supplement relating to any purchase contracts we offer will specify the material terms of the purchase contracts and whether they will be issued separately or as part of
units. The description in the applicable prospectus supplement of any purchase contracts we offer will not necessarily be complete and will be qualified in its entirety by reference to the applicable purchase contract agreement, a form of which
will be filed with the SEC if we offer purchase contracts. You should read the applicable purchase contract agreement and any applicable prospectus supplement in their entirety.
As specified in the applicable prospectus supplement, we may issue rights to purchase our equity securities. These rights may be issued independently or together with any other
security offered by this prospectus and may or may not be transferable by the shareholder receiving the rights in the rights offering. In connection with any rights offering, we may enter into a standby underwriting agreement with one or more
underwriters pursuant to which the underwriter will purchase any securities that remain unsubscribed for upon completion of the rights offering.
The applicable prospectus supplement relating to any rights will describe the terms of the offered rights, including, where applicable, the following:
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the exercise price for the rights;
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the number of rights issued to each shareholder;
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the extent to which the rights are transferable;
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any other terms of the rights, including terms, procedures and limitations relating to the exchange and exercise of the rights;
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the date on which the right to exercise the rights will commence and the date on which the right will expire;
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the amount of rights outstanding;
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the extent to which the rights include an over-subscription privilege with respect to unsubscribed securities; and
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the material terms of any standby underwriting arrangement entered into by us in connection with the rights offering.
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The description in the applicable prospectus supplement of any rights we offer will not necessarily be complete and will be qualified in its entirety by reference to the
applicable rights certificate or rights agreement, which will be filed with the SEC if we offer rights. You should read the applicable rights certificate, the applicable rights agreement and any applicable prospectus supplement in their entirety.
As specified in the applicable prospectus supplement, we may issue units consisting of one or more rights, purchase contracts, warrants, debt securities, preferred shares,
common shares or any combination of such securities. The applicable prospectus supplement will describe the terms of the offered units. We expect that such terms will include, among others:
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the terms of the units and of the rights, purchase contracts, warrants, debt securities, preferred shares and common shares comprising the units, including whether and under
what circumstances the securities comprising the units may be traded separately;
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a description of the terms of any unit agreement governing the units;
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if applicable, a discussion of any material U.S. federal income tax considerations; and
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a description of the provisions for the payment, settlement, transfer or exchange of the units.
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The description in the applicable prospectus supplement of any units we offer will not necessarily be complete and will be qualified in its entirety by reference to the
applicable unit agreement, a form of which will be filed with the SEC if we offer units. You should read the applicable unit agreement and any applicable prospectus supplement in their entirety.
We may sell or distribute the securities included in this prospectus through underwriters, whether individually or through an underwriting syndicate led by one or more managing
underwriters, through agents, to dealers and/or directly to one or more purchasers. We may sell the securities from time to time at fixed prices, market prices prevailing at the time of sale, prices related to the prevailing market prices, varying
prices determined at the time of sale or negotiated prices.
In addition, we may sell some or all of the securities included in this prospectus through:
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a block trade in which a broker-dealer may resell a portion of the block, as principal, in order to facilitate the transaction;
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purchases by a broker-dealer, as principal, and resale by the broker-dealer for its account;
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ordinary brokerage transactions and transactions in which a broker solicits purchasers; or
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trading plans entered into by us pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are in place at the time of an offering pursuant to this prospectus
and any applicable prospectus supplement hereto that provide for periodic sales of our securities on the basis of parameters described in such trading plans.
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In addition, we may enter into options or other types of transactions that require us to deliver our securities to a broker-dealer, who will then resell or transfer the
securities under this prospectus.
We may enter into hedging transactions with respect to our securities. For example, we may:
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enter into transactions involving short sales of our common shares by broker-dealers;
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sell common shares short and deliver the shares to close out short positions; or
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loan or pledge the common shares to a broker-dealer, who may sell the loaned shares or, in the event of default, sell the pledged shares.
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We may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the
applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third
party may use securities pledged by us, or borrowed from us to settle those sales or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open
borrowings of stock.
Offers to purchase the securities being offered by this prospectus may be solicited directly. Agents may also be designated to solicit offers to purchase the securities from
time to time. Any agent involved in the offer or sale of our securities will be identified in a prospectus supplement. We reserve the right to accept and, from time to time, to reject, in whole or in part, any proposed purchase of securities to be
made directly or through agents.
Underwriters or agents could make sales in privately negotiated transactions and/or any other method permitted by law, including sales deemed to be an at-the-market offering as
defined in Rule 415 promulgated under the Securities Act, which includes sales made directly on or through the Nasdaq, the existing trading market for our common shares, or sales made to or through a market maker other than on an exchange.
Each time that we sell securities covered by this prospectus, we will provide a prospectus supplement or supplements that will describe the method of distribution and set forth
the terms and conditions of the offering of such securities, including the offering price of the securities, the proceeds to us, any underwriting discounts or commissions and other items constituting underwriters’ compensation.
Any initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time. We may grant to the underwriters
options to purchase additional offered securities to cover over-allotments, if any, at the public offering price, with additional underwriting discounts or commissions and on terms as may be set forth in the applicable prospectus supplement.
Underwriters, dealers and agents that participate in the distribution of the securities may be underwriters as defined in the Securities Act, and any discounts or commissions
received by them from us and any profit on the resale of the securities by them may be treated as underwriting discounts and commissions under the Securities Act.
We may have agreements with underwriters, dealers and agents to indemnify them against some civil liabilities, including liabilities under the Securities Act, to contribute to
payments which the underwriters, dealers or agents may be required to make or to reimburse those persons for certain expenses.
The specific terms of any lock-up provisions in respect of any given offering will be described in the applicable prospectus supplement.
Underwriters, dealers and agents may engage in transactions with, or perform services for, us or our subsidiaries in the ordinary course of their businesses.
The following is a discussion of the material U.S. federal income tax considerations relevant to a U.S. Holder and a Non-U.S. Holder, each as defined below,
with respect to the common shares. You should carefully read the discussion below, as well as the discussion of the material Marshall Islands tax considerations associated with our operations and the acquisition, ownership and disposition of our
common shares set forth in the section entitled “Taxation” of our Annual Report incorporated by reference herein, as well as any updated discussion of material Marshall Islands, U.S. federal income tax and other tax considerations in annual and
other reports and documents we file with the SEC after the date of this prospectus and that are incorporated by reference herein.
This discussion does not purport to deal with the tax consequences of owning common shares to all categories of investors, such as dealers in securities or commodities, traders in securities that
elect to use a mark-to-market method of accounting for securities holdings, financial institutions, insurance companies, tax-exempt organizations, U.S. expatriates, persons liable for the Medicare contribution tax on net investment income, persons
liable for the alternative minimum tax, persons who hold common shares as part of a straddle, hedge, conversion transaction or integrated investment, U.S. Holders whose functional currency is not the United States dollar, and investors that own,
actually or under applicable constructive ownership rules, 10% or more of our common shares. This discussion deals only with holders who hold our common shares as a capital asset. You are encouraged to consult your own tax advisors concerning the
overall tax consequences arising in your own particular situation under U.S. federal, state, local or foreign law of the ownership of common shares. The discussion below is based, in part, on the description of our business in our Annual Report and
other documents incorporated by reference herein and assumes that we conduct our business as described therein. Except as otherwise noted, this discussion is based on the assumption that we will not maintain an office or other fixed place of
business within the United States. References in the following discussion to “we” and “us” are to Castor Maritime Inc. and its subsidiaries on a consolidated basis.
U.S. Federal Income Taxation of Our Company
Taxation of Operating Income: In General
Unless exempt from U.S. federal income taxation under the rules discussed below, a foreign corporation is subject to U.S. federal income taxation in respect of any 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 pool, partnership, strategic alliance, joint operating agreement, cost sharing arrangements or other joint
venture it directly or indirectly owns or participates in that generates such income, or from the performance of services directly related to those uses, which we refer to collectively as “shipping income,” to the extent that the shipping income is
derived from sources within the United States. For these purposes, 50% of shipping income that is attributable to transportation that begins or ends, but that does not begin and end, in the United States constitutes income from sources within the
United States, which we refer to as “U.S. source gross shipping income” or USSGTI.
Shipping income attributable to transportation that begins and ends in the United States is U.S. source income. We are not permitted by law to engage in such transportation and thus will not earn
income that is from sources within the United States.
Shipping income attributable to transportation between non-U.S. ports is considered to be derived from sources outside the United States. Such income is not subject to U.S. tax.
If not exempt from tax under Section 883 of the Code, our USSGTI would be subject to a tax of 4% without allowance for any deductions (“the 4% tax”) as described below.
Exemption of Operating Income from U.S. Federal Income Taxation
Under Section 883 of the Code and the regulations thereunder, we will be exempt from the 4% tax on our USSGTI if:
(1) we are organized in a foreign country that grants an “equivalent exemption” to corporations organized in the United States; and
(2) either
(a) more than 50% of the value of our stock is owned, directly or indirectly, by individuals who are “residents” of a foreign country that grants an “equivalent exemption” to corporations organized
in the United States (each such individual is a “qualified shareholder” and collectively, “qualified shareholders”), which we refer to as the “50% Ownership Test,” or
(b) our stock is “primarily and regularly traded on an established securities market” in our country of organization, in another country that grants an “equivalent exemption” to U.S. corporations,
or in the United States, which we refer to as the “Publicly-Traded Test”.
The Marshall Islands, the jurisdiction in which we and our ship-owning subsidiaries are incorporated, grants an “equivalent exemption” to U.S. corporations. Therefore, we will be exempt from the 4%
on our USSGTI if we meet either the 50% Ownership Test or the Publicly-Traded Test.
Due to the widely dispersed nature of the ownership of our common shares, it is highly unlikely that we could satisfy the requirements of the 50% Ownership Test. Therefore, we expect to be exempt
from the 4% tax on our USSGTI only if we are able to satisfy the Publicly-Traded Test.
Treasury Regulations provide, in pertinent part, that stock of a foreign corporation must be “primarily and regularly traded on an established securities market in the US or in a qualified foreign
country”. To be “primarily traded” on an established securities market, the number of shares of each class of our stock that are traded during any taxable year on all established securities markets in the country where they are listed must exceed
the number of shares in each such class that are traded during that year on established securities markets in any other country. Our common shares, which are traded on the Nasdaq Capital Market, meet the test of being “primarily traded”.
To be “regularly traded” one or more classes of our stock representing more than 50% of the total combined voting power of all classes of stock entitled to vote and of the total value of the stock
that is listed must be listed on an established securities market (“the vote and value” test) and meet certain other requirements. Our common shares are listed on the Nasdaq Capital Market, but do not represent more than 50% of the voting power of
all classes of stock entitled to vote. Our Series B Preferred Shares, which have super voting rights and have voting control but are not entitled to dividends, are not listed. Thus, based on a strict reading of the vote and value test described
above, our stock is not “regularly traded”.
Treasury Regulations provide, in pertinent part, that a class of stock will not be considered to be “regularly traded” on an established securities market for any taxable year in which 50% or more
of such class of the outstanding shares of the stock is owned, actually or constructively under specified stock attribution 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 outstanding stock, which we refer to as the “5 Percent Override Rule”. When more than 50% of the shares are owned by 5% shareholders, then we will be subject to the 5% Override Rule unless we can establish that among the shares included in the
closely-held block of stock are a sufficient number of shares in that block to “prevent nonqualified shareholders in the closely held block from owning 50 percent or more of the stock”.
We believe our ownership structure meets the intent and purpose of the Publicly-Traded Test and the tax policy behind it even if it does not literally meet the vote and value requirements. In our
case, there is no closely held block because less than 5% shareholders in aggregate own more than 50% of the value of our stock. However, we expect that we would have satisfied the Publicly-Traded Test if, instead of our current share structure,
our common shares represented more than 50% of the voting power of our stock. In addition, we can establish that nonqualified shareholders cannot exercise voting control over the corporation because a qualified shareholder controls the non-traded
voting stock. Moreover, we believe that the 5% Override Rule suggests that the Publicly-Traded Test should be interpreted by reference to its overall purpose, which we consider to be that Section 883 should generally be available to a publicly
traded company unless it is more than 50% owned, by vote or value, by nonqualified 5% shareholders. We therefore believe our particular stock structure, when considered by the US Treasury in light of the Publicly-Traded Test enunciated in the
regulations should be accepted as satisfying the exemption. Accordingly, for our 2021 and future taxable years, we intend to take the position that we qualify for the benefits of Section 883. However, there can be no assurance that our particular
stock structure will be treated as satisfying the Publicly-Traded Test. Accordingly, there can be no assurance that we or our subsidiaries will qualify for the benefits of Section 883 for any taxable year.
Taxation in the Absence of Exemption under Section 883 of the Code
For the 2020 and prior taxable years, we took the position that USSGTI, to the extent not considered to be “effectively connected” with the conduct of a U.S. trade or business, as described below,
was subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, which we refer to as the “4% gross basis tax regime,” for the 2020 taxable year. The same rules would apply to us for our 2021 and
future taxable years if contrary to our position described above the IRS determines that we do not qualify for the benefits of Section 883 of the Code.
To the extent the benefits of the exemption under Section 883 of the Code are unavailable and USSGTI is considered to be “effectively connected” with the conduct of a U.S. trade or business, as
described below, any such “effectively connected” U.S.-source shipping income, net of applicable deductions, would be subject to the U.S. federal corporate income tax 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 U.S. trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of such U.S. trade or
business.
USSGTI would be considered “effectively connected” with the conduct of a U.S. trade or business only if:
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We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
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substantially all our USSGTI is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the
same points for voyages that begin or end in the United States.
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We do not currently have, nor intend to have or permit circumstances that would result in having, any vessel operating to the United States on a regularly scheduled basis. Based on the foregoing
and on the expected mode of our shipping operations and other activities, we believe that none of our USSGTI will be “effectively connected” with the conduct of a U.S. trade or business.
U.S. Taxation of Gain on Sale of Vessels
Regardless of whether we qualify for exemption under Section 883 of the Code, we do not expect to be subject to U.S. federal income taxation with respect to gain realized on a sale of a vessel,
provided the sale is considered to occur outside of the United States under U.S. federal income tax principles. In general, a sale of a vessel will be considered to occur outside 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 of a vessel by us will be considered to occur outside of the United States.
U.S. Federal Income Taxation of U.S. Holders
As used herein, the term “U.S. Holder” means a beneficial owner of our common shares that is a U.S. citizen or resident, U.S. corporation or other U.S. entity taxable as a corporation, an estate
the income of which is subject to U.S. federal income taxation regardless of its source, or a trust if (i) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons
have the authority to control all substantial decisions of the trust or (ii) it has in place an election to be treated as a United States person for U.S. federal income tax purposes.
If a partnership holds our common shares, the tax treatment of a partner of such partnership will generally depend upon the status of the partner and upon the activities of the partnership. If you
are a partner in a partnership holding our common shares, you are encouraged to consult your tax advisor.
Distributions
Subject to the discussion of passive foreign investment companies, or PFIC, below, any distributions made by us with respect to our common shares to a U.S. Holder will generally constitute
dividends to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of such earnings and profits will be treated first as a nontaxable return of capital to the
extent of the U.S. Holder’s tax basis in his common shares on a dollar-for-dollar basis and thereafter as capital gain. However, we do not expect to calculate earnings and profits in accordance with U.S. federal income tax principles. Accordingly,
you should expect to generally treat distributions we make as dividends. Because we are not a U.S. corporation, U.S. Holders that are corporations will generally not be entitled to claim a dividends-received deduction with respect to any
distributions they receive from us. Dividends paid with respect to our common shares will generally be treated as “passive category income” for purposes of computing allowable foreign tax credits for U.S. foreign tax credit purposes.
Dividends paid on our common shares to a U.S. Holder who is an individual, trust or estate will generally be treated as ordinary income. However, if you are a U.S. Holder that is an individual,
estate or trust, dividends that constitute qualified dividend income will be taxable to you at the preferential rates applicable to long-term capital gains provided that you hold the shares for more than 60 days during the 121-day period beginning
60 days before the ex-dividend date and meet other holding period requirements. Dividends paid with respect to the shares generally will be qualified dividend income provided that, in the year that you receive the dividend, the shares are readily
tradable on an established securities market in the United States. Our common stock is listed on the Nasdaq Capital Market and we therefore expect that dividends will be qualified dividend income.
Special rules may apply to any “extraordinary dividend,” generally, a dividend paid by us in an amount which is equal to or in excess of 10% of a shareholder’s adjusted tax basis (or fair market
value in certain circumstances) or dividends received within a one-year period that, in the aggregate, equal or exceed 20% of a shareholder’s adjusted tax basis (or fair market value upon the shareholder’s election) in a common share. If we pay an
“extraordinary dividend” on our common shares that is treated as “qualified dividend income,” then any loss derived by a U.S. Non-Corporate Holder from the sale or exchange of such common shares will be treated as long-term capital loss to the
extent of such dividend.
Sale, Exchange or other Disposition of Common Shares
Subject to the discussion of our status as a PFIC below, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares 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 is greater than one year at the time of the sale, exchange or other disposition. Such capital gain or loss will generally be treated as U.S.-source income or loss, as applicable, for U.S. foreign tax credit purposes. A U.S.
Holder’s ability to deduct capital losses is subject to certain limitations.
Passive Foreign Investment Company Status and Significant Tax Consequences
Special U.S. federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a PFIC for U.S. federal income tax purposes. In general, 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, either
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atleast 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 conduct of a rental business); or
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at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income.
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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 our subsidiaries’ corporations
in which we own at least 25% of the value of the subsidiary’s stock. Income earned, or deemed earned, by us in connection with the performance of services would not constitute “passive income” for these purposes. By contrast, rental income would
generally constitute “passive income” unless we were treated under specific rules as deriving our rental income in the active conduct of a trade or business.
In general, income derived from the bareboat charter of a vessel will be treated as “passive income” for purposes of determining whether we are a PFIC and such vessel will be treated as an asset
which produces or is held for the production of “passive income”. On the other hand, income derived from the time charter of a vessel should not be treated as “passive income” for such purpose, but rather should be treated as services income;
likewise, a time chartered vessel should generally not be treated as an asset which produces or is held for the production of “passive income”.
Based on our current assets and activities, we do not believe that we will be a PFIC for the current or subsequent taxable years. Although there is no legal authority directly on point, and we are
not relying upon an opinion of counsel on this issue, our belief is based principally on the position that, for purposes of determining whether we are a passive foreign investment company, the gross income we derive or are deemed to derive from the
time chartering and voyage chartering activities of our wholly-owned subsidiaries should constitute services income, rather than rental income. Correspondingly, such income should 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, should not constitute passive assets for purposes of determining whether we were a passive foreign investment company. We
believe there is substantial legal authority supporting our position consisting of case law and IRS pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes.
However, in the absence of any legal authority specifically relating to the statutory provisions governing passive foreign investment companies, the IRS or a court could disagree with our position. In addition, although we intend to conduct our
affairs in a manner to avoid being classified as a passive foreign investment company with respect to any taxable year, we cannot assure you 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 U.S. federal income 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 discussed below, as an alternative to making a QEF Election, a U.S. Holder should be able to make a “mark-to-market” election
with respect to our common shares, which election is referred to as a “Mark-to-Market Election”. A U.S. Holder holding PFIC shares that does not make either a “QEF Election” or “Mark-to-Market Election” will be subject to the Default PFIC Regime,
as defined and discussed below in “Taxation—U.S. Federal Income Taxation of U.S. Holders—Taxation of U.S. Holders Not Making a Timely QEF or “Mark-to-Market” Election”.
If the Company were to be treated as a PFIC, a U.S. Holder would be required to file IRS Form 8621 to report certain information regarding the Company. If you are a U.S. Holder who held our common
shares during any period in which we are a PFIC, you are strongly encouraged to consult your tax advisor.
The QEF Election
If a U.S. Holder makes a timely QEF Election, which U.S. Holder we refer to as an “Electing Holder,” the Electing Holder must report each year for United States federal income tax purposes his pro
rata share of our ordinary earnings and our net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless of whether or not distributions were made by us to the Electing Holder. The
Electing Holder’s adjusted tax basis in the common shares will be increased to reflect taxed but undistributed 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 common shares 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 our common shares. A U.S. Holder would make a
QEF Election with respect to any year that our Company is a PFIC by filing one copy of IRS Form 8621 with his United States federal income tax return and a second copy in accordance with the instructions to such form. It should be noted that if any
of our subsidiaries is treated as a corporation for U.S. federal income tax purposes, a U.S. Holder must make a separate QEF Election with respect to each such subsidiary.
Taxation of U.S. Holders Making a “Mark-to-Market” Election
If we are a PFIC in a taxable year and our shares are treated as “marketable stock” in such year, you may make a mark-to-market election with respect to your shares. As long as our common shares
are traded on the Nasdaq Capital Market, as they currently are and as they may continue to be, our common shares should be considered “marketable stock” for purposes of making the Mark-to-Market Election. U.S. Holders are urged to consult their own
tax advisors in this regard.
Taxation of U.S. Holders Not Making a Timely QEF or “Mark-to-Market” Election
Finally, a U.S. Holder who does not make either a QEF Election or a Mark-to-Market Election with respect to any taxable year in which we are treated as a PFIC, or a U.S. Holder whose QEF Election
is invalidated or terminated, or a Non-Electing Holder, would be subject to special rules, or the Default PFIC Regime, with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing Holder on the
common shares in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder’s holding period for the common shares), and (2)
any gain realized on the sale, exchange, redemption or other disposition of the common shares.
Under the Default PFIC Regime:
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the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common shares;
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the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income; and
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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 an interest charge for the deemed
tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
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Any distributions other than “excess distributions” by us to a Non-Electing Holder will be treated as discussed above under “Taxation—U.S. Federal Income Taxation of U.S. Holders—Distributions”.
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 with its acquisition of
the common shares. If a Non-Electing Holder who is an individual dies while owning the common shares, such Non-Electing Holder’s successor generally would not receive a step-up in tax basis with respect to the common shares.
U.S. Federal Income Taxation of “Non-U.S. Holders”
A beneficial owner of our common shares (other than a partnership) that is not a U.S. Holder is referred to herein as a “Non-U.S. Holder”.
Dividends on Common Shares
Non-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on dividends received from us with respect to our common shares, unless that income is effectively
connected with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty with respect to those dividends, that income is taxable only if it is
attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States.
Sale, Exchange or Other Disposition of Common Shares
Non-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of our common shares, unless:
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the gain is effectively connected with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty with respect to
that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or
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the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.
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If the Non-U.S. Holder is engaged in a U.S. trade or business for U.S. federal income tax purposes, the income from the common shares, including dividends and the gain from the sale, exchange or
other disposition of the stock that is effectively connected with the conduct of that trade or business will generally be subject to U.S. federal income tax in the same manner as discussed in the previous section relating to the taxation of U.S.
Holders. In addition, in the case of a corporate Non-U.S. Holder, the earnings and profits of such Non-U.S. Holder that are attributable to effectively connected income, subject to certain adjustments, may be subject to an additional branch profits
tax at a rate of 30%, or at a lower rate as may be specified by an applicable U.S. income tax treaty.
Backup Withholding and Information Reporting
In general, dividend payments, or other taxable distributions, made within the United States to you will be subject to information reporting requirements. In addition, such payments will be subject
to backup withholding tax if you are a non-corporate U.S. Holder and you:
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fail to provide an accurate taxpayer identification number;
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are notified by the IRS that you have failed to report all interest or dividends required to be shown on your U.S. federal income tax returns; or
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in certain circumstances, fail to comply with applicable certification requirements.
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Non-U.S. Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on an applicable IRS Form W-8.
If you sell your common shares to or through a U.S. office of a broker, the payment of the proceeds is subject to both U.S. backup withholding and information reporting unless you certify that you
are a non-U.S. person, under penalties of perjury, or you otherwise establish an exemption. If you sell your common shares through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to you outside the United States, then
information reporting and backup withholding generally will not apply to that payment. However, U.S. information reporting requirements, and in certain cases backup withholding requirements, will apply to a payment of sales proceeds, even if that
payment is made to you outside the United States, if you sell your common shares through a non-U.S. office of a broker that is a U.S. person or has some other contacts with the United States. Backup withholding tax is not an additional tax. Rather,
you generally may obtain a refund of any amounts withheld under backup withholding rules that exceed your U.S. federal income tax liability by filing a refund claim with 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) who hold “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 which the aggregate value of all such assets exceeds $75,000 at any time during the
taxable year or $50,000 on the last day of the taxable year (or such higher dollar amount as prescribed by applicable Treasury Regulations). Specified foreign financial assets would include, among other assets, our common shares, unless the shares
are held through an account maintained with a U.S. financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect.
Additionally, in the event an individual U.S. Holder (and to the extent specified in applicable Treasury regulations, an individual Non-U.S. Holder or a U.S. entity) that is required to file IRS Form 8938 does not file such form, the statute of
limitations on the assessment and collection of U.S. federal income taxes of such holder for the related tax year may not close until three years after the date that the required information is filed. U.S. Holders (including U.S. entities) and
Non-U.S. Holders are encouraged to consult their own tax advisors regarding their reporting obligations under this legislation.
The following are the estimated expenses, other than any underwriting discounts and commissions and expenses reimbursed by us, of the issuance and
distribution of the securities being registered under the registration statement of which this prospectus forms a part, all of which have been or will be paid by us.
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SEC registration fee
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$
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41,715
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FINRA filing fee
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$
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225,500
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Legal fees and expenses
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$
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*
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Accounting fees and expenses
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$
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*
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Miscellaneous
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$
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*
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Total
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$
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*
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* To be provided in a prospectus supplement or as an exhibit to a report on Form 6-K that is incorporated by reference.
ENFORCEMENT OF CIVIL LIABILITIES
We are a Republic of the Marshall Islands corporation and our principal executive offices are located outside the United States. All of the directors, officers and our
independent registered public accounting firm reside outside the United States. In addition, substantially all of our assets and the assets of certain of our directors, officers and our independent registered public accounting firm are located
outside the United States. As a result, it may not be possible for you to serve legal process within the United States upon us or any of these persons. It may also not be possible for you to enforce, both in and outside the United States, judgments
you may obtain in United States courts against us or these persons in any action, including actions based upon the civil liability provisions of U.S. federal or state securities laws.
Furthermore, there is substantial doubt that courts of such jurisdictions would enforce judgments of U.S. courts obtained in actions against us, our directors or officers and
such experts based upon the civil liability provisions of applicable U.S federal and state securities laws or would enforce, in original actions, liabilities against us, our directors or officers and such experts based on those laws.
The validity of the securities offered by this prospectus will be passed upon for us by Sullivan & Cromwell LLP with respect to matters of United States and New York law
and Seward & Kissel LLP with respect to matters of Marshall Islands law.
The financial statements of Castor Maritime Inc. as of December 31, 2020 and 2019, and for the years ended December 31, 2020 and 2019, the year ended September 30, 2018
and the three months ended December 31, 2018 incorporated by reference in this Prospectus, have been audited by Deloitte Certified Public Accountants S.A., an independent registered public accounting firm, as stated in their report. Such
financial statements are incorporated by reference in reliance upon the report of such firm given their authority as experts in accounting and auditing. The offices of Deloitte Certified Public Accountants S.A. are located at Fragoklissias 3a
& Granikou Str., 15125 Maroussi, Athens, Greece.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
Available Information
We file annual reports and other information with the SEC. However, as a “foreign private issuer” we are allowed four months from the end of our fiscal year to file our annual
report with the SEC, and we are not required to disclose certain detailed information regarding executive compensation that is required from United States domestic issuers. In addition, we are not required under the Exchange Act to file periodic
reports and financial statements with the SEC as frequently as companies that are not foreign private issuers whose securities are registered under the Exchange Act. Also, we are exempt from the rules under the Exchange Act prescribing the
furnishing and content of proxy statements to shareholders. While we furnish proxy statements to shareholders in accordance with the rules of the Nasdaq, those proxy statements do not conform to Schedule 14A of the proxy rules promulgated under the
Exchange Act. In addition, as a foreign private issuer, our officers and directors are exempt from the rules under the Exchange Act relating to short swing profit reporting and liability.
The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The
address of that website is http://www.sec.gov. Other than as described below, the information contained in or accessible from that website is not part of this prospectus.
Our filings are also available on our website at http://www.castormaritime.com. The information on our website, however, is not, and should not be deemed to be, a part of this
prospectus.
This prospectus and any prospectus supplement are part of a registration statement on Form F-3 relating to the securities covered by this prospectus that we filed with the SEC
and do not contain all of the information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Forms of the indentures and other documents establishing the terms of the offered
securities are or may be filed as exhibits to the registration statement or documents incorporated by reference in the registration statement. Statements in this prospectus or any prospectus supplement about these documents are summaries and each
statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters.
Information Incorporated by Reference
The SEC allows us to “incorporate by reference” information that we file with it. This means that we can disclose important information to you by referring you to those filed
documents. The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the SEC prior to the termination of this offering will also be considered to be part of this prospectus.
We incorporate by reference in this prospectus the documents listed below which have been filed with the SEC:
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Our Annual Report on Form 20-F for the year ended December 31, 2020, filed with the SEC on March 30, 2021; |
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Our Reports on Form 6-K filed with the SEC on April 7, 2021, April 9, 2021 (applicable parts only), April 15, 2021, April 19, 2021, April 19, 2021 (applicable parts only), April
28, 2021, April 30, 2021 (applicable parts only), May 4, 2021 (applicable parts only), May 11,
2021, May 18, 2021 (applicable parts only), May 21, 2021, May 25, 2021, June 3, 2021 (applicable parts only), June 9,
2021, June 15, 2021, June 17, 2021,
June 24, 2021, July 28, 2021 (applicable
parts only), July 30, 2021, August 5,
2021 (applicable parts only), August 11, 2021, August 26, 2021 (applicable parts only), September
13, 2021, September 22, 2021 (applicable parts only), October 7, 2021, October 20, 2021, October 26, 2021, November 8, 2021, November 18, 2021, December 1, 2021, December 7, 2021, December 20, 2021, January 5, 2022, January 18, 2022 (applicable
parts only) and March 10, 2022;
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Our subsequent reports on Form 20-F that we file with the SEC; and
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Our reports on Form 6-K that we furnish to the SEC after the date of this prospectus only to the extent that they expressly state that we incorporate them by reference into this prospectus.
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Information in later documents that is incorporated by reference will automatically update and supersede information in earlier documents in this prospectus.
We have not authorized anyone to provide any information or to make any representations other than as contained or incorporated by reference in this prospectus or in any
accompanying prospectus supplement. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. The information contained or incorporated by reference in this prospectus and
any prospectus supplement is accurate as of the dates of the applicable documents. Our business, financial condition, results of operations and prospects may have changed since the applicable dates. When this prospectus or a prospectus supplement
are delivered or sale pursuant to this prospectus or a prospectus supplement is made, we are not implying that the information is current as of the date of the delivery or sale.
You may request a free copy of the above-mentioned filings or any subsequent filing we incorporate by reference to this prospectus by writing or telephoning us at the following
address:
Castor Maritime Inc.
Attn: Petros Panagiotidis
223 Christodoulou Chatzipavlou Street
Hawaii Royal Gardens,
3036 Limassol
Cyprus
+ 357 25 357 767
Exhibits to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus or any accompanying prospectus
supplement.
PROSPECTUS
Up to $150,000,000 of Common Shares
Castor Maritime Inc.
We have entered into an amended and restated equity distribution agreement (the “Distribution Agreement”) with Maxim Group LLC (“Maxim” or the “Sales Agent”) as our sales agent, relating to our
common shares, par value $0.001 per share, offered by this prospectus. In accordance with the terms of the Distribution Agreement, we may, through our sales agent, offer and sell from time to time our common shares, par value $0.001 per share,
having an aggregate offering amount of up to $150,000,000 (the “Aggregate Offering Amount”). We originally filed a prospectus supplement, dated June 14, 2021 (the “Prior Prospectus Supplement”), for the offer and sale of up to $300,000,000 of
shares of our common stock pursuant to the Equity Distribution Agreement under the shelf registration statement on Form F-3 (Registration Statement No. 333-254977). As of the date of this prospectus, we have issued and sold an aggregate of
4,654,240 shares of common stock pursuant to the Prior Prospectus Supplement, for which we had received gross proceeds of $12,854,356. Accordingly, this prospectus covers the offer and sale of up to $137,145,644 of our common shares that may be
sold under the Distribution Agreement as of the date of this prospectus.
Sales of our common shares, if any, under this prospectus may be made in sales deemed to be “at-the-market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended (the
“Securities Act”), including by sales made directly on or through the Nasdaq Capital Market (“Nasdaq”) or another market for our common shares, sales made to or through a market maker other than on an exchange or otherwise, in negotiated
transactions at market prices prevailing at the time of sale or at negotiated prices, or as otherwise agreed with the Sales Agent. Subject to the terms and conditions of the Distribution Agreement, the Sales Agent will use its commercially
reasonable efforts to sell on our behalf all of the designated shares. We may instruct the Sales Agent not to sell any shares if the sales cannot be affected at or above the price designated by us in any such instruction.
We will pay the Sales Agent a commission equal to 2.0% of the Aggregate Offering Amount sold by the Sales Agent pursuant to the Distribution Agreement. In connection with the sale of our common
shares on our behalf, the Sales Agent may be deemed to be an “underwriter” within the meaning of the Securities Act, and the compensation paid to the Sales Agent may be deemed to be underwriting commissions or discounts.
Our common shares are listed on Nasdaq under the symbol “CTRM”. The last reported sale price of our common shares on Nasdaq on March 28, 2022 was $1.84 per share.
Investing in our common shares involves a high degree of risk and uncertainty. See “Risk Factors” beginning on page 7 of this prospectus, and in our annual report on Form
20-F for the fiscal year ended on December 31, 2020, filed with the U.S. Securities and Exchange Commission on March 30, 2021 (the “Annual Report”), as updated by annual reports and other reports and documents we file with the SEC after the
date of this prospectus and that are incorporated by reference herein, to read about the risks you should consider before purchasing our common shares.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
Maxim Group LLC
The date of this prospectus is March 31, 2022.
TABLE OF CONTENTS
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This prospectus is part of a registration statement that we filed with the United States Securities and Exchange Commission (the “SEC”), utilizing a “shelf” registration process.
This prospectus relates to an offering of up to $137,145,644 of our common shares through Maxim. These sales, if any, will be made pursuant to the terms of the Distribution Agreement entered
into between us and Maxim on March 31, 2022.
This prospectus and the documents incorporated by reference include important information about us, our common shares being offered and other information you should know before investing. We
may add, update or change information contained in this prospectus by incorporating by reference information that we file with or furnish to the SEC. You should read carefully this prospectus together with the additional information described
under “Where You Can Find Additional Information” before investing in our common shares.
This prospectus does not contain all of the information in the registration statement. Documents establishing the terms of the offered common shares, as well as the Distribution Agreement, are
filed as exhibits to the registration statement or will be filed with documents that we file or furnish to the SEC and incorporate by reference in this prospectus. Statements in this prospectus about these documents are summaries and each
statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. For further information about us or the securities offered
hereby, you should refer to the registration statement, which you can obtain as described below under “Where You Can Find Additional Information.”
We have authorized only the information contained or incorporated by reference in this prospectus and any free writing prospectus prepared by or on behalf of us or to which we have referred
you. We have not, and the Sales Agent has not, authorized anyone to provide you with information that is different or to make any representations other than as contained or incorporated by reference into this prospectus and any such free
writing prospectus. We and the Sales Agent take no responsibility for, and can provide no assurance as to the reliability of, any information that others may give you. The information contained or incorporated by reference in this prospectus is
accurate as of the dates of the applicable documents, regardless of the time of delivery of the prospectus or the date of any sale of our common shares. Our business, financial condition, results of operations and prospects may have changed
since the applicable dates. When this prospectus is delivered or a sale of our common shares is made pursuant to this prospectus, neither we nor the Sales Agent is implying that the information is current as of the date of the delivery or sale.
You should not consider any information in this prospectus or in the documents incorporated by reference herein to be investment, legal or tax advice. We and the Sales Agent encourage you to consult with your own counsel, accountant and other
advisors for legal, tax, business, financial and related advice regarding an investment in our common shares.
We are offering to sell, and seeking offers to buy, common shares only in jurisdictions where offers and sales are permitted. The distribution of this prospectus and the offering of common
shares in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the common shares
and the distribution of this prospectus outside the United States. This prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus by
any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
Unless the context otherwise requires, as used in this prospectus, the terms “Company”, “we”, “us” and “our” refer to Castor Maritime Inc. and all of its subsidiaries, and “Castor Maritime
Inc.” refers only to Castor Maritime Inc. and not to its subsidiaries. We use the term deadweight ton, or dwt, in describing the size of vessels. Dwt, expressed in metric tons each of which is equivalent to 1,000 kilograms, refers to the
maximum weight of cargo and supplies that a vessel can carry. Unless otherwise indicated, all references to “dollars” and “$” in this prospectus are to, and amounts presented in this prospectus are in, United States dollars and financial
information presented in this prospectus that is derived from financial statements incorporated by reference is prepared in accordance with accounting principles generally accepted in the United States.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Matters discussed in this prospectus or in documents incorporated by reference in this prospectus may constitute forward-looking statements. We intend such forward‑looking statements to be
covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include all
matters that are not historical facts or matters of fact at the date of the applicable document.
We are including this cautionary statement in connection with this safe harbor legislation. Forward-looking statements, which reflect our current views with respect to future events and
financial performance. These forward-looking statements may generally, but not always, be identified by the use of works such as “anticipate,” “believe,” “targets,” “likely,” “will,” “would,” “could,” “should,” “seeks,” “continue,”
“contemplate,” “possible,” “might,” “expect,” “intend,” “estimate,” “forecast,” “project,” “plan,” “objective,” “potential,” “may,” “anticipates” or similar expressions or phrases.
The forward-looking statements in this prospectus or in documents incorporated by reference in this prospectus are based upon various assumptions, many of which are based, in turn, upon further
assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made,
because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these
forward-looking statements, including these expectations, beliefs or projections.
In addition to these assumptions, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include generally:
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our business strategy, expected capital spending and other plans and objectives for future operations;
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dry bulk and tanker market conditions and trends, including volatility in charter rates, factors affecting supply and demand, fluctuating vessel values, opportunities for the profitable operations of dry bulk and tanker carriers and
the strength of world economies;
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the rapid growth of our fleet, our ability to realize the expected benefits from our past or future vessel acquisitions, and the effects of our fleet’s growth on our future financial condition, operating results, future revenues and
expenses, future liquidity, and the adequacy of cash flows from our operations;
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our relationships with our current and future service providers and customers, including the ongoing performance of their obligations, compliance with applicable laws, and any impacts on our reputation due to our association with
them;
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our ability to borrow under existing or future debt agreements or to refinance our debt on favorable terms and our ability to comply with the covenants contained therein, in particular due to economic, financial or operational
reasons;
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our continued ability to enter into time or voyage charters with existing and new customers, and to re-charter our vessels upon the expiry of the existing charters;
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changes in our operating and capitalized expenses, including bunker prices, dry-docking, insurance costs, costs associated with regulatory compliance, and costs associated with climate change;
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our ability to fund future capital expenditures and investments in the acquisition and refurbishment of our vessels (including the amount and nature thereof and the timing of completion thereof, the delivery and commencement of
operations dates, expected downtime and lost revenue);
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instances of off-hire, including due to limitations imposed by COVID-19 and/or due to vessel upgrades and repairs;
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future sales of our securities in the public market and our ability to maintain compliance with applicable listing standards;
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volatility in our share price, including due to high volume transactions in our shares by retail investors;
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potential conflicts of interest involving members of our Board of Directors (the “Board”), senior management and certain of our service providers that are related parties;
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general domestic and international political conditions or events, including “trade wars”, global public health threats and major outbreaks of disease;
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changes in seaborne and other transportation, including due to fluctuating demand for dry bulk and tanker vessels and/or disruption of shipping routes due to accidents, political events, international hostilities and instability,
piracy or acts of terrorism;
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changes in governmental rules and regulations or actions taken by regulatory authorities, including changes to environmental regulations applicable to the shipping industry;
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the impact of adverse weather and natural disasters; and
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any other factor detailed from time to time in our reports.
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Any forward-looking statements contained or incorporated by reference herein are made only as of the date of the particular statement, and except to the extent required by applicable law we
undertake no obligation to update any forward-looking statement or statements, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for us to predict all or any of
these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any
forward-looking statement. See “Risk Factors.” Risk factors described or incorporated by reference in this prospectus are not necessarily all of the important factors that could cause actual results or
developments to differ materially from those expressed in any of our forward-looking statements. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.
The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this
prospectus and the documents incorporated by reference herein, including the “Risk Factors” sections of this prospectus and any documents incorporated by reference as well as the financial statements included in any documents incorporated by
reference. See “Where You Can Find Additional Information.” This summary may not contain all of the information that may be important to you and you should review carefully the entire prospectus and the more detailed information that is
included herein and in the documents incorporated by reference.
Our Company
We are a growth-oriented global shipping company that was incorporated in the Republic of the Marshall Islands for the purpose of acquiring, owning, chartering and operating oceangoing cargo
vessels. We are a provider of worldwide seaborne transportation services for dry bulk cargo as well as crude oil and refined petroleum products. During 2021 and as of the date of this prospectus, we grew our fleet from six vessels to 29
vessels through the acquisition of 23 new vessels.
Our Fleet
During 2021 and as of the date of this prospectus, we grew our dry bulk fleet from six to 20 dry bulk vessels, and we established our tanker operations by acquiring seven Aframax/LR2 and two
Handysize tanker vessels. These acquisitions were financed using a mix of cash from operations and the net cash proceeds from our equity and debt financing transactions. As a result, as of the date of this prospectus our fleet consisted of 20
dry bulk carriers with an aggregate cargo carrying capacity of 1.7 million dwt and an average age of 12.3 years, seven Aframax/LR2 tankers with an aggregate cargo carrying capacity of 0.8 million dwt and an average age of 17.5 years and two
Handysize tankers with an aggregate cargo carrying capacity of 0.1 million dwt and an average age of 16.1 years. The average age of our entire fleet is 13.9 years.
Our fleet vessels operate in the time charter and voyage charter markets, while some of our tanker vessels currently operate in pools. Our commercial strategy primarily focuses on deploying
our fleet under a mix of period time charters and trip time charters according to our assessment of market conditions, adjusting the mix of these charters to take advantage of the relatively stable cash flows and high utilization rates
associated with period time charters or to profit from attractive trip charter rates during periods of strong charter market conditions.
The following table summarizes key information about our fleet as of March 28, 2022:
Dry Bulk Segment
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Vessel Name
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Year
Built
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Type of
Charter
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Capacity
(dwt)
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Delivered to
Castor
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Gross Charter Rate
($/day)
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Estimated Earliest
Charter
Expiration
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Estimated Latest
Charter
Expiration
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Panamax
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Magic Nova
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2010
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Period Time Charter
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78,833
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October 2020
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$25,300(1)
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October 2022
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February 2023
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Magic Mars
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2014
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Period Time Charter
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76,822
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September 2021
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$21,500(2)
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November 2022
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February 2023
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Magic Phoenix
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2008
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Period Time Charter
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76,636
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October 2021
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102% of BPI4TC(3) (4)
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September 2022
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December 2022
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Magic Horizon
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2010
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Trip Time Charter
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76,619
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October 2020
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$20,100(5)
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March 2022
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March 2022
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Magic Moon
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2005
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Trip Time Charter
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76,602
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October 2019
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$25,000
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April 2022
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April 2022
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Magic P
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2004
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Period Time Charter
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76,453
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February 2017
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$27,500
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April 2022
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July 2022
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Magic Sun
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2001
|
|
Trip Time Charter
|
|
|
75,311
|
|
September 2019
|
|
$17,500 plus $750,000 Ballast Bonus
|
|
April 2022
|
|
April 2022
|
|
|
Magic Vela
|
|
2011
|
|
Trip Time Charter
|
|
|
75,003
|
|
May 2021
|
|
$16,000 plus $550,000 Ballast Bonus
|
|
April 2022
|
|
April 2022
|
|
|
Magic Eclipse
|
|
2011
|
|
Period Time Charter
|
|
|
74,940
|
|
June 2021
|
|
$28,500
|
|
April 2022
|
|
July 2022
|
|
|
Magic Pluto
|
|
2013
|
|
Period Time Charter
|
|
|
74,940
|
|
August 2021
|
|
$24,000(6)
|
|
November 2022
|
|
February 2023
|
|
|
Magic Callisto
|
|
2012
|
|
Period Time Charter
|
|
|
74,930
|
|
January 2022
|
|
$27,000(7)
|
|
October 2022
|
|
January 2023
|
|
|
Magic Rainbow
|
|
2007
|
|
Trip Time Charter
|
|
|
73,593
|
|
August 2020
|
|
$16,000
|
|
April 2022
|
|
April 2022
|
|
|
Kamsarmax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Magic Venus
|
|
2010
|
|
Trip Time Charter
|
|
|
83,416
|
|
March 2021
|
|
$16,300 plus $630,000 Ballast Bonus(8)
|
|
April 2022
|
|
April 2022
|
|
|
Magic Thunder
|
|
2011
|
|
Period Time Charter
|
|
|
83,375
|
|
April 2021
|
|
100% of BPI5TC
|
|
October 2022
|
|
January 2023
|
|
|
Magic Argo
|
|
2009
|
|
Trip Time Charter
|
|
|
82,338
|
|
March 2021
|
|
$16,600(9)
|
|
April 2022
|
|
April 2022
|
|
|
Magic Perseus
|
|
2013
|
|
Period Time Charter
|
|
|
82,158
|
|
August 2021
|
|
100% of BPI5TC
|
|
October 2022
|
|
January 2023
|
|
|
Magic Starlight
|
|
2015
|
|
Period Time Charter
|
|
|
81,048
|
|
May 2021
|
|
$32,000(10)
|
|
September 2022
|
|
March 2023
|
|
|
Magic Twilight
|
|
2010
|
|
Period Time Charter
|
|
|
80,283
|
|
April 2021
|
|
$25,000(11)
|
|
January 2023
|
|
April 2023
|
|
|
Magic Nebula
|
|
2010
|
|
Period Time Charter
|
|
|
80,281
|
|
May 2021
|
|
$23,500
|
|
September 2022
|
|
November 2022
|
|
|
Capesize
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Magic Orion
|
|
2006
|
|
Period Time Charter
|
|
|
180,200
|
|
March 2021
|
|
101% of BCI5TC(12)
|
|
October 2022
|
|
January 2023
|
|
|
(1) |
The vessels’ daily gross charter rate is equal to 92% of BPI5TC. In accordance with the prevailing charter party, on 17/02/2022 owners converted the index-linked rate to fixed from 01/03/2022 until 30/09/2022, at a rate of $25,300
per day. Upon completion of said period, the rate will be converted back to index linked. The benchmark vessel used in the calculation of the average of the Baltic Panamax Index 5TC routes is a non-scrubber fitted 82,500mt dwt vessel
(Kamsarmax) with specific age, speed - consumption, and design characteristics.
|
|
(2) |
The vessels’ daily gross charter rate is equal to 91% of BPI5TC. In accordance with the prevailing charter party, on 20/01/2022 owners converted the index-linked rate to fixed from 01/02/2022 until 30/09/2022, at a rate of $21,500
per day. Upon completion of said period, the rate will be converted back to index linked.
|
|
(3) |
The benchmark vessel used in the calculation of the average of the Baltic Panamax Index 4TC routes is a non-scrubber fitted 74,000mt dwt vessel (Panamax) with specific age, speed - consumption, and design characteristics.
|
|
(4) |
In accordance with the prevailing charter party, on 03/03/2022 owners converted the index-linked rate to fixed from 01/04/2022 until 30/09/2022, at a rate of $28,100 per day. Upon completion of said period, the rate will be
converted back to index linked.
|
|
(5) |
Upon completion of current time charter trip, estimated within April, the vessel has been fixed on a time charter period at a gross daily charter rate equal to 103% of the average of Baltic Panamax Index 4TC routes, with a minimum
duration of 12 months and a maximum duration of 15 months, at the charterer’s option.
|
|
(6) |
The vessels’ daily gross charter rate is equal to 91% of BPI5TC. In accordance with the prevailing charter party, on 08/02/2022 owners converted the index-linked rate to fixed from 01/03/2022 until 30/09/2022, at a rate of $24,000
per day. Upon completion of said period, the rate will be converted back to index linked.
|
|
(7) |
The vessels’ daily gross charter rate is equal to 101% of BPI4TC. In accordance with the prevailing charter party, on 22/02/2022 owners converted the index-linked rate to fixed from 01/03/2022 until 30/09/2022, at a rate of $27,000
per day. Upon completion of said period, the rate will be converted back to index linked.
|
|
(8) |
Upon completion of current time charter trip, estimated within April, the vessel has been fixed on a time charter period at a gross daily charter rate equal to 100% of the average of Baltic Panamax Index 5TC routes, with a minimum
duration of about 13 months and a maximum duration of about 15 months, at the charterer’s option.
|
|
(9) |
Upon completion of current time charter trip, estimated within April, the vessel has been fixed on a time charter period at a gross daily charter rate equal to 103% of the average of Baltic Panamax Index 5TC routes, with a minimum
duration of 12 months and a maximum duration of 15 months, at the charterer’s option.
|
|
(10) |
The vessels’ daily gross charter rate is equal to 114% of BPI4TC. In accordance with the prevailing charter party, on 19/10/2021 owners converted the index-linked rate to fixed from 01/01/2022 until 30/09/2022, at a rate of $32,000
per day. Upon completion of said period, the rate will be converted back to index linked.
|
|
(11) |
In accordance with the prevailing charter party, the vessel’s daily gross charter rate is $25,000 per day for the first 30 days and thereafter index-linked at a rate equal to 93% of BPI5TC.
|
|
(12) |
The benchmark vessel used in the calculation of the average of the Baltic Capesize Index 5TC routes is a non-scrubber fitted 180,000mt dwt vessel (Capesize) with specific age, speed - consumption, and design characteristics.
|
Aframax/LR2 Tanker Segment
|
Vessel Name
|
|
Year
Built
|
|
Type of
Charter
|
|
Capacity
(dwt)
|
|
Delivered to
Castor
|
|
Gross Charter Rate
($/day)
|
|
|
Estimated Earliest
Charter
Expiration
|
|
|
Estimated Latest
Charter
Expiration
|
|
|
Aframax/LR2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wonder Polaris
|
|
2005
|
|
Voyage
|
|
|
115,351
|
|
March 2021
|
|
$
|
6,500
|
(1)
|
|
31 March 2022 (2)
|
|
|
|
N/A
|
|
|
Wonder Sirius
|
|
2005
|
|
Unfixed
|
|
|
115,341
|
|
March 2021
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
Wonder Bellatrix
|
|
2006
|
|
Voyage
|
|
|
115,341
|
|
December 2021
|
|
$
|
21,024
|
(1)
|
|
3 April 2022 (2)
|
|
|
|
N/A
|
|
|
Wonder Musica
|
|
2004
|
|
Unfixed
|
|
|
106,290
|
|
June 2021
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
Wonder Avior
|
|
2004
|
|
Voyage
|
|
|
106,162
|
|
May 2021
|
|
$
|
7,440
|
(1)
|
|
16 April 2022 (2)
|
|
|
|
N/A
|
|
|
Wonder Arcturus
|
|
2002
|
|
Unfixed
|
|
|
106,149
|
|
May 2021
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
Aframax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wonder Vega
|
|
2005
|
|
Tanker Pool (3)
|
|
|
106,062
|
|
May 2021
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
(1) |
For vessels that are employed on the voyage/spot market, the gross daily charter rate is considered as the Daily TCE Rate on the basis of the expected completion date.
|
|
(2) |
Estimated completion date of the voyage.
|
|
(3) |
The vessel is currently participating in an unaffiliated tanker pool specializing in the employment of Aframax tanker vessels.
|
Handysize Tanker Segment
|
Vessel Name
|
Year
Built
|
Type of
Charter
|
|
Capacity
(dwt)
|
|
Delivered to
Castor
|
|
Gross Charter Rate
($/day)
|
|
|
Estimated Earliest
Charter
Expiration
|
|
|
Estimated Latest
Charter
Expiration
|
|
|
Wonder Mimosa
|
2006
|
Tanker Pool (1)
|
|
|
36,718
|
|
May 2021
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
Wonder Formosa
|
2006
|
Tanker Pool (1)
|
|
|
36,660
|
|
June 2021
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
(1) |
The vessel is currently participating in an unaffiliated tanker pool specializing in the employment of Handysize tanker vessels.
|
Fleet Development
During the years ended December 31, 2019, 2020 and 2021 and further as of the date of this prospectus, we implemented our strategic fleet growth plan by acquiring the vessels listed below:
|
Vessel Name
|
Vessel Type
|
|
DWT
|
|
|
Year
Built
|
|
Country of
Construction
|
|
Purchase Price
(in million)
|
|
Delivery
Date
|
|
Dry Bulk Carriers
|
|
2019 Acquisitions
|
|
Magic Sun
|
Panamax
|
|
|
75,311
|
|
|
|
2001
|
|
S. Korea
|
|
$
|
6.71
|
|
09/05/2019
|
|
Magic Moon
|
Panamax
|
|
|
76,602
|
|
|
|
2005
|
|
Japan
|
|
$
|
10.20
|
|
10/20/2019
|
|
2020 Acquisitions
|
|
Magic Rainbow
|
Panamax
|
|
|
73,593
|
|
|
|
2007
|
|
China
|
|
$
|
7.85
|
|
08/08/2020
|
|
Magic Horizon
|
Panamax
|
|
|
76,619
|
|
|
|
2010
|
|
Japan
|
|
$
|
12.75
|
|
10/09/2020
|
|
Magic Nova
|
Panamax
|
|
|
78,833
|
|
|
|
2010
|
|
Japan
|
|
$
|
13.86
|
|
10/15/2020
|
|
2021 Acquisitions
|
|
Magic Orion
|
Capesize
|
|
|
180,200
|
|
|
|
2006
|
|
Japan
|
|
$
|
17.50
|
|
03/17/2021
|
|
Magic Venus
|
Kamsarmax
|
|
|
83,416
|
|
|
|
2010
|
|
Japan
|
|
$
|
15.85
|
|
03/02/2021
|
|
Magic Argo
|
Kamsarmax
|
|
|
82,338
|
|
|
|
2009
|
|
Japan
|
|
$
|
14.50
|
|
03/18/2021
|
|
Magic Twilight
|
Kamsarmax
|
|
|
80,283
|
|
|
|
2010
|
|
S. Korea
|
|
$
|
14.80
|
|
04/09/2021
|
|
Magic Nebula
|
Kamsarmax
|
|
|
80,281
|
|
|
|
2010
|
|
S. Korea
|
|
$
|
15.45
|
|
05/20/2021
|
|
Magic Thunder
|
Kamsarmax
|
|
|
83,375
|
|
|
|
2011
|
|
Japan
|
|
$
|
16.85
|
|
04/13/2021
|
|
Magic Eclipse
|
Panamax
|
|
|
74,940
|
|
|
|
2011
|
|
Japan
|
|
$
|
18.48
|
|
06/07/2021
|
|
Magic Starlight
|
Kamsarmax
|
|
|
81,048
|
|
|
|
2015
|
|
China
|
|
$
|
23.50
|
|
05/23/2021
|
|
Magic Vela
|
Panamax
|
|
|
75,003
|
|
|
|
2011
|
|
China
|
|
$
|
14.50
|
|
05/12/2021
|
|
Magic Perseus
|
Kamsarmax
|
|
|
82,158
|
|
|
|
2013
|
|
Japan
|
|
$
|
21.00
|
|
08/09/2021
|
|
Magic Pluto
|
Panamax
|
|
|
74,940
|
|
|
|
2013
|
|
Japan
|
|
$
|
19.06
|
|
08/06/2021
|
|
Magic Mars
|
Panamax
|
|
|
76,822
|
|
|
|
2014
|
|
S. Korea
|
|
$
|
20.40
|
|
09/20/2021
|
|
Magic Phoenix
|
Panamax
|
|
|
76,636
|
|
|
|
2008
|
|
Japan
|
|
$
|
18.75
|
|
10/26/2021
|
|
2022 Acquisitions
|
|
Magic Callisto
|
Panamax
|
|
|
74,930
|
|
|
|
2012
|
|
Japan
|
|
$
|
23.55
|
|
01/04/2022
|
|
Tankers
|
|
2021 Acquisitions
|
|
Wonder Polaris
|
Aframax LR2
|
|
|
115,351
|
|
|
|
2005
|
|
S. Korea
|
|
$
|
13.60
|
|
03/11/21
|
|
Wonder Sirius
|
Aframax LR2
|
|
|
115,341
|
|
|
|
2005
|
|
S. Korea
|
|
$
|
13.60
|
|
03/22/21
|
|
Wonder Vega
|
Aframax
|
|
|
106,062
|
|
|
|
2005
|
|
S. Korea
|
|
$
|
14.80
|
|
05/21/21
|
|
Wonder Avior
|
Aframax LR2
|
|
|
106,162
|
|
|
|
2004
|
|
S. Korea
|
|
$
|
12.00
|
|
05/27/21
|
|
Wonder Arcturus
|
Aframax LR2
|
|
|
106,149
|
|
|
|
2002
|
|
S. Korea
|
|
$
|
10.00
|
|
05/31/21
|
|
Wonder Mimosa
|
Handysize
|
|
|
36,718
|
|
|
|
2006
|
|
S. Korea
|
|
$
|
7.25
|
|
05/31/21
|
|
Wonder Musica
|
Aframax LR2
|
|
|
106,290
|
|
|
|
2004
|
|
S. Korea
|
|
$
|
12.00
|
|
06/15/21
|
|
Wonder Formosa
|
Handysize
|
|
|
36,660
|
|
|
|
2006
|
|
S. Korea
|
|
$
|
8.00
|
|
06/22/21
|
|
Wonder Bellatrix
|
Aframax LR2
|
|
|
115,341
|
|
|
|
2006
|
|
S. Korea
|
|
$
|
18.15
|
|
12/23/21
|
All the above-mentioned acquisitions were financed using a mix of cash from operations and the net cash proceeds from our equity and financing transactions.
Chartering of our Fleet
We actively market our vessels, in the short, medium and long-term charter markets in order to secure optimal employment in our three reportable segments, (i) Dry bulk vessels, (ii)
Aframax/LR2 tanker vessels, and (iii) Handysize vessels. As of March 28, 2022, seven of our dry bulk vessels were chartered on the trip time charter market, three of our tankers were participating in pools and six of our tankers were
chartered on the voyage charter market, totaling 16 vessels employed in the spot market. Our remaining 13 vessels were employed under medium term time charters which have either a fixed or floating (i.e., index-linked) charter hire rate.
Charter rates in the spot market are volatile and sometimes fluctuate on a seasonal and year-to-year basis. Fluctuations derive from imbalances in the availability of cargoes for shipment and
the number of vessels available at any given time to transport these cargoes. Vessels operating in the spot market generate revenue that is less predictable than those under period time charters but may enable us to capture increased profit
margins during periods of improvements in the dry bulk and tanker markets. Downturns in the dry bulk and/or tanker industries would result in a reduction in profit margins and could lead to losses. Following the dry bulk market recovery in
2021, we may opportunistically look to employ more of our vessels in the spot market under trip time charter contracts, voyage charter contracts or pooling arrangements.
Management of our Business
Our vessels are technically managed by Pavimar S.A. (“Pavimar”), a company controlled by Ismini Panagiotidis, the sister of our Chairman, Chief Executive Officer and Chief Financial Officer,
Petros Panagiotidis. Under the technical management agreements, our ship-owning subsidiaries pay a $600 daily fee to Pavimar for the provision of a wide range of shipping services such as crew management, technical management, operational
employment management, insurance management, provisioning, bunkering, accounting and audit support services, which Pavimar may choose to subcontract to other parties at its discretion. As of December 31, 2021, Pavimar had subcontracted the
technical management of three of the Company’s dry bulk vessels and nine of its tanker vessels to third-party ship-management companies. Pavimar pays, at its own expense, these third-party management companies a fee for the services it has
subcontracted to them, without burdening the Company with any additional cost.
Our vessels are commercially managed by Castor Ships S.A. (“Castor Ships”), a company controlled by our Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis.
Castor Ships manages our business overall and provides us with commercial, chartering and administrative services, including, but not limited to, securing employment for our fleet, arranging and supervising the vessels’ commercial operations,
handling all of the Company’s vessel sale and purchase transactions, undertaking related shipping project and management advisory and support services, as well as other associated services requested from time to time by us and our ship-owning
subsidiaries. In exchange for these services, we and our subsidiaries pay Castor Ships (i) a flat quarterly management fee in the amount of $0.3 million for the management and administration of our business, (ii) a daily fee of $250 per
vessel for the provision of commercial services, (iii) a commission of 1.25% on all charter agreements and (iv) a commission of 1% on each sale and purchase transaction.
Outstanding Shares
On May 28, 2021, we effected a one-for-ten reverse stock split of our common shares (the “Reverse Stock Split”). As of March 28, 2022, we had 94,610,088 issued and outstanding common shares.
Upon the exercise of our outstanding warrants, we may issue up to an additional 19,360,978 common shares. We also have outstanding 12,000 Series B Preferred Shares, each of which has the voting power of 100,000 common shares.
Corporate Information
We were incorporated under the laws of the Republic of the Marshall Islands in September 2017. Our registered office in the Marshall Islands is located at Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro, Marshall Islands MH96960. Our registered agent in the Republic of the Marshall Islands at such address is The Trust Company of the Marshall Islands, Inc. Our principal executive office is located at 223 Christodoulou
Chatzipavlou Street, Hawaii Royal Gardens, 3036 Limassol, Cyprus. Our principal executive office telephone number is + 357 25 357 767. Our corporate website address is www.castormaritime.com. The information contained on our website
does not constitute part of this prospectus.
|
Issuer
|
|
Castor Maritime Inc., a Marshall Islands corporation.
|
| |
|
|
|
Securities Offered by Us
|
|
Common shares having an aggregate offering amount of up to $150,000,000.
|
| |
|
|
|
Manner of Offering
|
|
“At-the-market offering” that may be made from time to time through our sales agent, Maxim. See “Plan of Distribution” on page 24.
|
| |
|
|
|
Use of Proceeds
|
|
We intend to use the net proceeds from the sale of securities offered by this prospectus for capital expenditures, working capital, funding for vessel and other asset or share acquisitions or for other
general corporate purposes, or a combination thereof. Asset acquisitions may be structured as individual asset purchases, the acquisition of the equity interests of vessel owning entities or the acquisition of the equity interests of
the direct or indirect owner of one or more vessels or shipping assets. We may choose to raise less than the maximum $150,000,000 in gross offering proceeds permitted by this prospectus.
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Risk Factors
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Investing in our common shares is highly speculative and involves a high degree of risk. See “Risk Factors” beginning on page 7 of this prospectus and in our
annual report on Form 20-F, which is incorporated by reference herein, to read about the risks you should consider before purchasing our common shares.
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Listing
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Our common shares currently trade on the Nasdaq under the symbol “CTRM” and on the Norwegian OTC, or the NOTC, under the symbol “CASTOR”.
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An investment in our common shares involves a high degree of risk and uncertainty. We have identified a number of risk factors which you should consider before investing in
our common shares. Before making an investment in our securities, you should consider carefully the risks set forth below, those risk factors set forth under the heading “Risk Factors” in our annual report on Form 20-F incorporated by reference
in this prospectus, and in any other documents we have incorporated by reference in this prospectus. Additional risks and uncertainties of which we are not presently aware or that we currently deem immaterial
could also affect our business operations and financial condition. The occurrence of one or more of these risk factors could adversely affect our results of operations or financial condition and you may lose all or part of your
investment in our common shares.
We have grown our fleet exponentially and we may have difficulty managing our growth properly which may adversely affect our operations and profitability.
We are a company formed for the purpose of acquiring, owning, chartering, and operating oceangoing cargo vessels. Since December 31, 2020, and as of the date of this prospectus, we have grown
our fleet from six vessels to 29 vessels.
Growing any business presents numerous risks such as undisclosed liabilities and obligations, difficulty in obtaining additional qualified personnel and managing relationships with customers
and suppliers and integrating newly acquired operations into existing infrastructures. The significant expansion of our fleet may impose significant additional responsibilities on our management and the management and staff of our commercial
and technical managers, and may necessitate that we, and/or they, increase the number of our and/or their personnel.
Our or our managers’ current operating and financial systems may not be adequate as we continue to implement our plan to expand the size of our fleet and our attempts to improve those systems
may be ineffective. In addition, if we further expand our fleet, we will need to recruit suitable additional seafarers and shore-side administrative and management personnel. We cannot guarantee that we will be able to hire suitable employees
as we expand our fleet. If we encounter business or financial difficulties, we may not be able to adequately staff our vessels or our shore-side personnel. If we are unable to grow our financial and operating systems or to recruit suitable
employees as we expand our fleet, our financial performance may be adversely affected and, among other things, the amount of our available free cash may be reduced.
Our share price has been highly volatile and may continue to be volatile in the future, and as a result, investors in our common shares could incur
substantial losses.
The stock market in general, and the market for shipping companies in particular, have experienced extreme volatility that has often been unrelated or disproportionate to the operating
performance of particular companies. As a result of this volatility, investors may experience rapid and substantial losses on their investment in our common shares that are unrelated to our operating performance. Our stock price has recently
been volatile and may continue be volatile, which may cause our common shares to trade above or below what we believe to be their fundamental value. During 2021, the market price of our common shares on the Nasdaq has fluctuated from an
intra-day low of $1.36 per share on December 30, 2021 to an intra-day high of $19.50 per share on February 11, 2021. On December 31, 2021 and March 28, 2022 the closing price of our common shares was $1.42 and $1.84 per share, respectively.
Significant historical fluctuations in the market price of our common shares have been accompanied by reports of strong and atypical retail investor interest, including on social media and online forums.
The market volatility and trading patterns we have experienced may create several risks for investors, including but not limited to the following:
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the market price of our common shares may experience rapid and substantial increases or decreases unrelated to our operating performance or prospects, or macro or industry fundamentals;
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to the extent volatility in our common shares is caused by a “short squeeze” in which coordinated trading activity causes a spike in the market price of our common shares as traders with a short position make market purchases to
avoid or to mitigate potential losses, investors may purchase at inflated prices unrelated to our financial performance or prospects, and may thereafter suffer substantial losses as prices decline once the level of short-covering
purchases has abated;
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if the market price of our common shares declines, you may be unable to resell your shares at or above the price at which you acquired them. We cannot assure you that the equity issuance of our common shares will not fluctuate,
increase or decline significantly in the future, in which case you could incur substantial losses.
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We may continue to incur rapid and substantial increases or decreases in our stock price in the foreseeable future that may not coincide in timing with the disclosure of news or developments by
or affecting us. Accordingly, the market price of our common shares may decline or fluctuate rapidly, regardless of any developments in our business. Overall, there are various factors, many of which are beyond our control, that could
negatively affect the market price of our common shares or result in fluctuations in the price or trading volume of our common shares, which include but are not limited to:
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investor reaction to our business strategy;
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the sentiment of the significant number of retail investors whom we believe to hold our common shares, in part due to direct access by retail investors to broadly available trading platforms, and whose investment thesis may be
influenced by views expressed on financial trading and other social media sites and online forums;
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the amount and status of short interest in our common shares, access to margin debt, trading in options and other derivatives on our common shares and any related hedging and other trading factors;
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our continued compliance with the listing standards of the Nasdaq;
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regulatory or legal developments in the United States and other countries, especially changes in laws or regulations applicable to our industry;
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variations in our financial results or those of companies that are perceived to be similar to us;
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our ability or inability to raise additional capital and the terms on which we raise it;
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our continued compliance with our debt covenants;
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variations in the value of our fleet;
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declines in the market prices of stocks generally;
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trading volume of our common shares;
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sales of our common shares by us or our shareholders;
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speculation in the press or investment community about our Company or industry;
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general economic, industry and market conditions; and
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other events or factors, including those resulting from such events, or the prospect of such events, including war, terrorism and other international conflicts, public health issues including health epidemics or pandemics, including
the ongoing COVID-19 pandemic, and natural disasters such as fire, hurricanes, earthquakes, tornados or other adverse weather and climate conditions, whether occurring in the United States or elsewhere, could disrupt our operations or
result in political or economic instability.
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In addition, some companies that have experienced volatility in the market price of their common shares have been subject to securities class-action litigation. If instituted against us, such litigation could
result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, financial condition, operating results and growth prospects. There can be no guarantee that the price
of our common shares will remain at its current level or that future sales of our common shares will not be at prices lower than those sold to investors.
Nasdaq may delist our common shares from its exchange which could limit your ability to make transactions in our securities and
subject us to additional trading restrictions.
On April 14, 2020, we received written notification from Nasdaq indicating that because the closing bid price of the Company’s common shares for 30 consecutive business days, from February 27,
2020 to April 13, 2020, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq, the Company was not in compliance with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2). Following
certain extension periods obtained, we had until June 28, 2021, to regain compliance with the minimum bid price requirement. On May 28, 2021, we effected a one-for-ten reverse stock split in order to regain compliance with the minimum bid price
requirement, and, as a result, we regained compliance on June 14, 2021.
During the month of January 2022, our closing bid price ranged between $1.08 and $1.53 per share. If a breach of the minimum bid price requirement of Nasdaq were to occur again, we might be
unable to regain compliance, which, in turn could lead to a suspension or delisting of our common shares. If a suspension or delisting of our common shares were to occur, there would be significantly less liquidity in the suspended or delisted
common shares. In addition, our ability to raise additional capital through equity or debt financing would be greatly impaired. A suspension or delisting may also breach the terms of certain of our material contracts, such as the Distribution
Agreement. There can be no assurance that we will maintain compliance with the minimum bid price requirements of Nasdaq in the future.
Recent share issuances and future issuances of additional shares, or the potential for such issuances, may impact the price of our common shares and could
impair our ability to raise capital through subsequent equity offerings. Shareholders may experience significant dilution as a result of any such issuances.
We have already issued and sold large quantities of our common shares pursuant to previous public and private offerings of our equity and equity-linked securities. The Company had 94,610,088
issued and outstanding common shares as of March 28, 2022. Upon the exercise of our outstanding warrants, the Company may issue up to an additional 19,360,978 common shares. Additionally, the Company has an authorized share capital of
1,950,000,000 common shares that it may issue without further shareholder approval. Our growth strategy may require the issuance of a substantial amount of additional shares. We cannot assure you at what price the offering of our shares in the
future, if any, will be made but they may be offered and sold at a price significantly below the current trading price of our common shares or the acquisition price of common shares by shareholders and may be at a discount to the trading price
of our common shares at the time of such sale. Purchasers of the common shares we sell, as well as our existing shareholders, will experience significant dilution if we sell shares at prices significantly below the price at which they invested.
In addition, we may issue additional common shares or other equity securities of equal or senior rank in the future in connection with, among other things, debt prepayments, future vessel
acquisitions, without shareholder approval, in a number of circumstances. To the extent that we issue restricted stock units, stock appreciation rights, options or warrants to purchase our common shares in the future and those stock
appreciation rights, options or warrants are exercised or as the restricted stock units vest, our shareholders may experience further dilution. Holders of shares of our common shares have no preemptive rights that entitle such holders to
purchase their pro rata share of any offering of shares of any class or series and, therefore, such sales or offerings could result in increased dilution to our shareholders.
Our issuance of additional common shares or other equity securities of equal or senior rank, or the perception that such issuances may occur, could have the following effects:
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our existing shareholders’ proportionate ownership interest in us will decrease;
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the earnings per share and the per share amount of cash available for dividends on our common shares (as and if declared) could decrease;
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the relative voting strength of each previously outstanding common share could be diminished;
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the market price of our common shares could decline; and
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our ability to raise capital through the sale of additional securities at a time and price that we deem appropriate, could be impaired.
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The market price of our common shares could also decline due to sales, or the announcements of proposed sales, of a large number of common shares by our large shareholders, or the perception
that these sales could occur.
We intend to use the net proceeds from the sale of the securities offered by this prospectus for capital expenditures, working capital funding for payments for vessel, other asset or share
acquisitions or for other general corporate purposes, or a combination thereof. Asset acquisitions may be structured as individual assets purchases, the acquisition of the equity interests of vessel owning entities or the acquisition of the
equity interests of the direct or indirect owner of one or more vessels or shipping assets.
The following table sets forth our capitalization as of September 30, 2021:
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on an as adjusted basis, to give effect to events that have occurred between October 1, 2021, and March 28, 2022:
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(1) |
the drawdown of: (i) $23.15 million of indebtedness under a credit facility with Chailease International Financial Services (Singapore) Pte. Ltd., for the post-delivery financing of the Magic Rainbow and the Magic Phoenix on November
24, 2021, and (ii) $55.0 million of indebtedness with Deutsche Bank AG, for the post-delivery financing of the Magic Starlight, the Magic Mars, the Magic Pluto, the Magic Perseus and the Magic Vela on January 13, 2022;
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(2) |
scheduled principal repayments under our secured credit facilities of $7.7 million; and
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(3) |
the redemption in full of all of our Series A Preferred Shares at a cash liquidation preference of $30 per share, for a total amount of $14.4 million on December 8,2021; and
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on an as further adjusted basis to give effect to the issuance and sale of common shares covered by this prospectus. This calculation assumes the issuance and sale of 74,535,676 common shares using an assumed price of $1.84 per
share, which is the closing price of our common stock on the Nasdaq on March 28, 2022, resulting in assumed net proceeds of approximately $134.2 million, after sales commissions and estimated offering expenses. The actual number of
shares issued, and the price at which they will be issued, may differ depending on the timing of the sales.
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The “Actual” historical data in the table below is derived from, and should be read in conjunction with, our unaudited interim condensed consolidated financial information for the nine months
ended September 30, 2021 attached as an Exhibit 99.1 to our current report on Form 6-K filed on November 8, 2021, which is incorporated by reference herein.
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(All figures in U.S. dollars, except for share amounts)
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Actual
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As Adjusted
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As Further
Adjusted
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Debt:
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Long-term debt (including current portion) – Secured (1)
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82,441,393
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152,895,393
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152,895,393
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Total debt
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$
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82,441,393
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$
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152,895,393
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152,895,393
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Shareholders’ equity:
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Common shares, $0.001 par value; 1,950,000,000 shares authorized; 94,610,088 shares issued and outstanding on an actual and as adjusted basis and 169,145,764 on an as
further adjusted basis
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$
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94,610
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$
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94,610
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$
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169,146
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Series B Preferred Shares; 12,000 shares issued and outstanding on an actual, adjusted and as further adjusted basis
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12
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12
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12
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Series A Preferred Shares, $0.001 par value; 9.75% cumulative redeemable perpetual preferred shares (liquidation preference of $30 per share), 480,000 shares issued
and outstanding on an actual basis and 0 shares issued and outstanding on an as adjusted and as further adjusted basis (2)
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480
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-
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-
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Additional paid-in capital
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306,301,313
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303,673,950
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437,837,145
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Retained earnings
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21,742,909
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9,970,752
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9,970,752
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Total Shareholders’ Equity
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$
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328,139,324
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$
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313,739,324
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$
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447,977,055
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Total Capitalization
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$
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410,580,717
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$
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466,634,717
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$
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600,872,448
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(1)
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The capitalization table does not take into account any debt issuance costs for the new credit facilities or any amortization of deferred finance fees incurred after
September 30, 2021.
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(2)
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On December 8, 2021, we redeemed in full all our Series A Preferred Shares at a cash liquidation preference of $30 per share, for a total amount of $14.4 million.
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To date we have not paid any dividends to our shareholders and we may never pay dividends. We cannot assure you that we will be able to pay dividends at all, and our ability to pay dividends
will be subject to the limitations set forth below.
Under our Bylaws, our Board may declare and pay dividends in cash, stock or other property of the Company. Our Board will continue to assess our dividend policy. The declaration and payment of
dividends, if any, will always be subject to the discretion of our Board, restrictions contained in any of our agreements (including our current and future credit facilities) and the requirements of Marshall Islands law. If the Board determines
to declare dividends, the timing and amount of any dividends declared will depend on, among other things, our earnings, financial condition and cash requirements (including current capital expenditure programs) and availability, our ability to
obtain debt and equity financing on acceptable terms as contemplated by our growth strategy, investment opportunities, overall market conditions and the ability of our subsidiaries to distribute funds to us. The foregoing is not an exhaustive
list of factors which may impact the payment of dividends. The dry bulk and tanker industries are highly volatile, and we cannot predict with certainty the amount of cash, if any, that will be available for distribution as dividends in any
period. Also, there may be a high degree of variability from period to period in the amount of cash that is available for the payment of dividends.
Marshall Islands law provides that we may pay dividends on and redeem any shares of capital stock only to the extent that assets are legally available for such purposes. Legally available
assets generally are limited to our surplus, which essentially represents our retained earnings and the excess of consideration received by us for the sale of shares above the par value of the shares. In addition, under Marshall Islands law, we
may not pay dividends on or redeem any shares of capital stock if we are insolvent or would be rendered insolvent by the payment of such a dividend or the making of such redemption.
DESCRIPTION OF SECURITIES WE ARE OFFERING
The following description of our share capital is not complete and may not contain all the information you should consider before investing in our shares. This description is summarized from
and qualified in its entirety by reference to, our Articles of Incorporation, as amended (the “Articles of Incorporation”), Bylaws, the Stockholders Rights Agreement by and between the Castor Maritime Inc. and American Stock Transfer &
Trust Company, LLC, as rights agent (the “Rights Agreement”) and Marshall Islands law, including the Marshall Islands Business Corporations Act (the “BCA”). Our Articles of Incorporation, Bylaws and Rights Agreement have been filed with the SEC
and are incorporated by reference as exhibits to the registration statement of which this prospectus forms a part. See also “Item 10. Additional Information—B. Memorandum and Articles of Association” and
Exhibit 2.2 of our annual report on Form 20-F incorporated by reference herein, as updated by annual and other reports and documents we file with the SEC after the date of this prospectus and that are incorporated by reference herein.
We are offering common shares having an aggregate offering amount of up to $150,000,000 pursuant to the Distribution Agreement.
Purpose
Our purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the BCA. Under Marshall Islands law generally and our Articles of
Incorporation and Bylaws there are no limitations on the ownership rights of our shareholders.
Authorized Capitalization
Under our Articles of Incorporation, our authorized capital stock consists of 2,000,000,000 shares. 1,950,000,000 shares are designated as common shares, par value $0.001 per share, of which
94,610,088 common shares are issued and outstanding as of March 28, 2022, and 50,000,000 shares are designated as preferred shares, par value $0.001 per share, of which 12,000 Series B Preferred Shares are currently issued and outstanding. We
have also designated 480,000 Series A Preferred Shares and 1,000,000 shares as Series C Participating Preferred Shares, none of which are outstanding as of the date of this prospectus.
Description of Common Shares
Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of shareholders. Subject to preferences that may be applicable to any outstanding preferred
shares, holders of common shares are entitled to receive ratably all dividends, if any, declared by our Board out of funds legally available for dividends. Upon our dissolution or liquidation or the sale of all or substantially all of our
assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred shares having liquidation preferences, if any, the holders of our common shares are entitled to receive pro rata our remaining assets
available for distribution. Holders of common shares do not have conversion, redemption or pre-emptive rights to subscribe to any of our securities. The rights, preferences and privileges of holders of our common shares are subject to the
rights of the holders of any preferred shares, which we have issued in the past or which we may issue in the future.
Share History
On May 28, 2021, we effected a 1-for-10 reverse stock split of our common shares without any change in the number of our authorized common shares. As a result of the reverse stock split, the
number of outstanding shares as of May 28, 2021, was decreased to 89,955,848 while the par value of our common shares remained unchanged at $0.001 per share. All share and per share amounts, as well as warrant shares eligible for purchase under
the Company’s effective warrant schemes have been retroactively adjusted to reflect the reverse stock split.
On September 22, 2017, pursuant to an Exchange Agreement between the Company, Spetses Shipping Co., and the shareholders of Spetses Shipping Co., we made certain issuances of our capital
stock, including the issuance of 12,000 Series B Preferred Shares to Thalassa, a company controlled by Petros Panagiotidis, the Company’s Chairman, Chief Executive Officer and Chief Financial Officer. Each Series B Preferred Share has the
voting power of one hundred thousand (100,000) common shares.
On November 21, 2017, we declared a dividend of one preferred share purchase right for each outstanding common share and adopted a stockholder rights plan, as set forth in the Rights Agreement.
In connection with the Stockholders Rights Agreement, we have designated 1,000,000 shares as Series C Participating Preferred Shares, none of which are outstanding as of the date of this prospectus.
On June 28, 2019, we entered into an equity distribution agreement (the “First Equity Distribution Agreement”), with Maxim Group LLC (“Maxim”) acting as a sales agent, under which we could,
from time to time, offer and sell our common shares through an at-the-market offering (the “First ATM Program”), having an aggregate offering price of up to $10.0 million. No warrants, derivatives, or other share classes were associated with
this transaction. On June 21, 2021, we terminated the First ATM Program. Under the First ATM Program we raised gross and net proceeds (after deducting sales commissions and other fees and expenses) of $2.6 million and $2.3 million,
respectively, by issuing and selling 61,811 common shares.
On October 10, 2019, we reached an agreement with all of the holders of our then outstanding Series A Preferred Shares to waive until December 31, 2021 all due and overdue dividends and to
adopt an amended and restated Statement of Designations on our Series A Preferred Shares. Pursuant to this amendment and restatement, on October 17, 2019, we issued 300,000 common shares to the holders of the Series A Preferred Shares in
exchange for the waiver of approximately $4.3 million worth of dividends accumulated on the Series A Preferred Shares, for the period since their original issuance to June 30, 2019. On December 8, 2021, we redeemed in full all our Series A
Preferred Shares at a cash liquidation preference of $30.00 per share, for a total amount of $14.4 million.
On January 27, 2020, we entered into a securities purchase agreement with YAII PN, LTD (the “Investor”), pursuant to which we agreed to sell and it agreed to purchase up to three convertible
debentures for a maximum aggregate price of $5.0 million. During the period from January 2020 up until June 2020, the Investor had converted the full $5.0 million principal amount and $0.1 million of interest under the convertible debentures
for 804,208 common shares.
On June 23, 2020, we entered into an agreement with Maxim, acting as underwriter, pursuant to which we offered and sold 5,911,000 units, each unit consisting of (i) one common share or a
pre-funded warrant to purchase one common share at an exercise price equal to $0.10 per common share (a “Pre-Funded Warrant”), and (ii) one Class A Warrant to purchase one common share (a “Class A Warrant”), for $3.50 per unit (or $3.40 per
unit including a Pre-Funded Warrant), (the “2020 June Equity Offering”). The 2020 June Equity Offering closed on June 26, 2020 and resulted in the issuance of 5,908,269 common shares and 5,911,000 Class A Warrants, which also included 771,000
over-allotment units pursuant to an over-allotment option that was exercised by Maxim on June 24, 2020. We raised gross and net cash proceeds from this transaction of approximately $20.7 million and $18.6 million, respectively. Further, as of
December 31, 2021, an aggregate of 5,848,656 Class A Warrants have been exercised at an exercise price of $3.50 per warrant, for which we have received total gross proceeds of approximately $20.5 million.
On July 12, 2020, we entered into agreements with certain unaffiliated institutional investors pursuant to which we offered 5,775,000 common shares in a registered offering (the “2020 July
Equity Offering”). In a concurrent private placement, we also issued warrants to purchase up to 5,775,000 common shares (the “Private Placement Warrants”). The aggregate purchase price for each common share and Private Placement Warrant was
$3.00. In connection with the 2020 July Equity Offering, which closed on July 15, 2020, we received gross and net cash proceeds of approximately $17.3 million and $15.7 million, respectively. Further, as of December 31, 2021, an aggregate of
5,707,136 Private Placement Warrants have been exercised at an exercise price of $3.50 per warrant, for which we have received total gross proceeds of approximately $20.0 million.
On December 30, 2020, we entered into agreements with certain unaffiliated institutional investors pursuant to which we offered 9,475,000 common shares and warrants to purchase 9,475,000 common
shares (the “January 5 Warrants”) in a registered direct offering which closed on January 5, 2021 (the “2021 January First Equity Offering”). The aggregate purchase price for each common share and January 5 Warrant was $1.90. In connection with
this offering, we received gross proceeds of approximately $18.0 million and net proceeds of approximately $16.5 million, net of estimated fees and expenses of approximately $1.5 million. All of the January 5 Warrants have been exercised at an
exercise price of $1.90 per warrant, for which we have received total gross proceeds of approximately $18.0 million.
On January 8, 2021, we entered into agreements with certain unaffiliated institutional investors pursuant to which we offered 13,700,000 common shares and warrants to purchase 13,700,000 common
shares (the “January 12 Warrants”) in a registered direct offering which closed on January 12, 2021 (the “2021 January Second Equity Offering”). The aggregate purchase price for each common share and January 12 Warrant was $1.90. In connection
with this offering, we received gross proceeds of approximately $26.0 million and net proceeds of approximately $24.1 million, net of estimated fees and expenses of approximately $1.9 million. All of the January 12 Warrants have been exercised
at an exercise price of $1.90 per warrant, for which we have received total gross proceeds of approximately $26.0 million.
On April 5, 2021, we entered into agreements with certain unaffiliated institutional investors pursuant to which we offered and sold 19,230,770 common shares and warrants to purchase up to
19,230,770 common shares (the “April 7 Warrants”) in a registered direct offering which closed on April 7, 2021 (the “2021 April Equity Offering”). In connection with the 2021 April Equity Offering, we received gross and net cash proceeds of
approximately $125.0 million and $116.3 million, respectively. As of December 31, 2021, all April 7 Warrants having an exercise price of $6.50 remained unexercised and potentially issuable into common shares.
On June 14, 2021, we entered into an equity distribution agreement, or the Second Equity Distribution Agreement, with Maxim acting as a sales agent having an initial aggregate offering price
of up to $300.0 million, which we amended and restated on the date of this prospectus. Under the amended Second Equity Distribution Agreement, until June 14, 2022 we may, from time to time, offer and sell our common shares through an
at-the-market offering (the “Second ATM Program”), having an aggregate offering price of up to $150.0 million. No warrants, derivatives, or other share classes were associated with this transaction. From the Second ATM Program effective date
and as of the date of this prospectus, we had raised gross and net proceeds (after deducting sales commissions and other fees and expenses) of $12.9 million and $12.4 million, respectively, by issuing and selling 4,654,240 common shares.
Listing
Our common shares are listed on the Nasdaq Capital Market under the symbol “CTRM” and on the Norwegian OTC, or the NOTC, under the symbol “CASTOR”.
Transfer Agent
The transfer agent and registrar for our common shares is American Stock Transfer & Trust Company LLC.
The following is a discussion of the material U.S. federal income tax considerations relevant to a U.S. Holder and a Non-U.S. Holder, each as defined below, with respect to
the common shares. You should carefully read the discussion of the material Marshall Islands tax considerations associated with our operations and the acquisition, ownership and disposition of our common shares set forth in the section entitled
“Taxation” of our annual report on Form 20-F incorporated by reference herein, as well as any updated discussion of material Marshall Islands, U.S. federal income tax and other tax considerations in annual and other reports and documents we
file with the SEC after the date of this prospectus and that are incorporated by reference herein.
This discussion does not purport to deal with the tax consequences of owning common shares to all categories of investors, such as dealers in securities or commodities, traders in securities
that elect to use a mark-to-market method of accounting for securities holdings, financial institutions, insurance companies, tax-exempt organizations, U.S. expatriates, persons liable for the Medicare contribution tax on net investment income,
persons liable for the alternative minimum tax, persons who hold common shares as part of a straddle, hedge, conversion transaction or integrated investment, U.S. Holders whose functional currency is not the United States dollar, and investors
that own, actually or under applicable constructive ownership rules, 10% or more of our common shares. This discussion deals only with holders who hold our common shares as a capital asset. You are encouraged to consult your own tax advisors
concerning the overall tax consequences arising in your own particular situation under U.S. federal, state, local or foreign law of the ownership of common shares. The discussion below is based, in part, on the description of our business in
our Annual Report and other documents incorporated by reference herein and assumes that we conduct our business as described therein. Except as otherwise noted, this discussion is based on the assumption that we will not maintain an office or
other fixed place of business within the United States. References in the following discussion to “we” and “us” are to Castor Maritime Inc. and its subsidiaries on a consolidated basis.
U.S. Federal Income Taxation of Our Company
Taxation of Operating Income: In General
Unless exempt from U.S. federal income taxation under the rules discussed below, a foreign corporation is subject to U.S. federal income taxation in respect of any 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 pool, partnership, strategic alliance, joint operating agreement, cost sharing arrangements or other
joint venture it directly or indirectly owns or participates in that generates such income, or from the performance of services directly related to those uses, which we refer to collectively as “shipping income,” to the extent that the shipping
income is derived from sources within the United States. For these purposes, 50% of shipping income that is attributable to transportation that begins or ends, but that does not begin and end, in the United States constitutes income from
sources within the United States, which we refer to as “U.S. source gross shipping income” or USSGTI.
Shipping income attributable to transportation that begins and ends in the United States is U.S. source income. We are not permitted by law to engage in such transportation and thus will not
earn income that is from sources within the United States.
Shipping income attributable to transportation between non-U.S. ports is considered to be derived from sources outside the United States. Such income is not subject to U.S. tax.
If not exempt from tax under Section 883 of the Code, our USSGTI would be subject to a tax of 4% without allowance for any deductions (“the 4% tax”) as described below.
Exemption of Operating Income from U.S. Federal Income Taxation
Under Section 883 of the Code and the regulations thereunder, we will be exempt from the 4% tax on our USSGTI if:
(1) we are organized in a foreign country that grants an “equivalent exemption” to corporations organized in the United States; and
(2) either
(a) more than 50% of the value of our stock is owned, directly or indirectly, by individuals who are “residents” of a foreign country that grants an “equivalent exemption” to corporations
organized in the United States (each such individual is a “qualified shareholder” and collectively, “qualified shareholders”), which we refer to as the “50% Ownership Test,” or
(b) our stock is “primarily and regularly traded on an established securities market” in our country of organization, in another country that grants an “equivalent exemption” to U.S.
corporations, or in the United States, which we refer to as the “Publicly-Traded Test”.
The Marshall Islands, the jurisdiction in which we and our ship-owning subsidiaries are incorporated, grants an “equivalent exemption” to U.S. corporations. Therefore, we will be exempt from
the 4% on our USSGTI if we meet either the 50% Ownership Test or the Publicly-Traded Test.
Due to the widely dispersed nature of the ownership of our common shares, it is highly unlikely that we could satisfy the requirements of the 50% Ownership Test. Therefore, we expect to be
exempt from the 4% tax on our USSGTI only if we are able to satisfy the Publicly-Traded Test.
Treasury Regulations provide, in pertinent part, that stock of a foreign corporation must be “primarily and regularly traded on an established securities market in the US or in a qualified
foreign country”. To be “primarily traded” on an established securities market, the number of shares of each class of our stock that are traded during any taxable year on all established securities markets in the country where they are listed
must exceed the number of shares in each such class that are traded during that year on established securities markets in any other country. Our common shares, which are traded on the Nasdaq Capital Market, meet the test of being “primarily
traded”.
To be “regularly traded” one or more classes of our stock representing more than 50% of the total combined voting power of all classes of stock entitled to vote and of the total value of the
stock that is listed must be listed on an established securities market (“the vote and value” test) and meet certain other requirements. Our common shares are listed on the Nasdaq Capital Market, but do not represent more than 50% of the voting
power of all classes of stock entitled to vote. Our Series B Preferred Shares, which have super voting rights and have voting control but are not entitled to dividends, are not listed. Thus, based on a strict reading of the vote and value test
described above, our stock is not “regularly traded”.
Treasury Regulations provide, in pertinent part, that a class of stock will not be considered to be “regularly traded” on an established securities market for any taxable year in which 50% or
more of such class of the outstanding shares of the stock is owned, actually or constructively under specified stock attribution 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 outstanding stock, which we refer to as the “5 Percent Override Rule”. When more than 50% of the shares are owned by 5% shareholders, then we will be subject to the 5% Override Rule unless we can establish that among the shares
included in the closely-held block of stock are a sufficient number of shares in that block to “prevent nonqualified shareholders in the closely held block from owning 50 percent or more of the stock”.
We believe our ownership structure meets the intent and purpose of the Publicly-Traded Test and the tax policy behind it even if it does not literally meet the vote and value requirements. In
our case, there is no closely held block because less than 5% shareholders in aggregate own more than 50% of the value of our stock. However, we expect that we would have satisfied the Publicly-Traded Test if, instead of our current share
structure, our common shares represented more than 50% of the voting power of our stock. In addition, we can establish that nonqualified shareholders cannot exercise voting control over the corporation because a qualified shareholder controls
the non-traded voting stock. Moreover, we believe that the 5% Override Rule suggests that the Publicly-Traded Test should be interpreted by reference to its overall purpose, which we consider to be that Section 883 should generally be available
to a publicly traded company unless it is more than 50% owned, by vote or value, by nonqualified 5% shareholders. We therefore believe our particular stock structure, when considered by the US Treasury in light of the Publicly-Traded Test
enunciated in the regulations should be accepted as satisfying the exemption. Accordingly, for our 2021 and future taxable years, we intend to take the position that we qualify for the benefits of Section 883. However, there can be no assurance
that our particular stock structure will be treated as satisfying the Publicly-Traded Test. Accordingly, there can be no assurance that we or our subsidiaries will qualify for the benefits of Section 883 for any taxable year.
Taxation in the Absence of Exemption under Section 883 of the Code
For the 2020 and prior taxable years, we took the position that USSGTI, to the extent not considered to be “effectively connected” with the conduct of a U.S. trade or business, as described
below, was subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, which we refer to as the “4% gross basis tax regime,” for the 2020 taxable year. The same rules would apply to us for our
2021 and future taxable years if contrary to our position described above the IRS determines that we do not qualify for the benefits of Section 883 of the Code.
To the extent the benefits of the exemption under Section 883 of the Code are unavailable and USSGTI is considered to be “effectively connected” with the conduct of a U.S. trade or business, as
described below, any such “effectively connected” U.S.-source shipping income, net of applicable deductions, would be subject to the U.S. federal corporate income tax 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 U.S. trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of such U.S. trade or
business.
USSGTI would be considered “effectively connected” with the conduct of a U.S. trade or business only if:
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We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
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substantially all our USSGTI is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages
that begin or end in the United States.
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We do not currently have, nor intend to have or permit circumstances that would result in having, any vessel operating to the United States on a regularly scheduled basis. Based on the
foregoing and on the expected mode of our shipping operations and other activities, we believe that none of our USSGTI will be “effectively connected” with the conduct of a U.S. trade or business.
U.S. Taxation of Gain on Sale of Vessels
Regardless of whether we qualify for exemption under Section 883 of the Code, we do not expect to be subject to U.S. federal income taxation with respect to gain realized on a sale of a vessel,
provided the sale is considered to occur outside of the United States under U.S. federal income tax principles. In general, a sale of a vessel will be considered to occur outside 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 of a vessel by us will be considered to occur outside of the United States.
U.S. Federal Income Taxation of U.S. Holders
As used herein, the term “U.S. Holder” means a beneficial owner of our common shares that is a U.S. citizen or resident, U.S. corporation or other U.S. entity taxable as a corporation, an
estate the income of which is subject to U.S. federal income taxation regardless of its source, or a trust if (i) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more
U.S. persons have the authority to control all substantial decisions of the trust or (ii) it has in place an election to be treated as a United States person for U.S. federal income tax purposes.
If a partnership holds our common shares, the tax treatment of a partner of such partnership will generally depend upon the status of the partner and upon the activities of the partnership. If
you are a partner in a partnership holding our common shares, you are encouraged to consult your tax advisor.
Distributions
Subject to the discussion of passive foreign investment companies, or PFIC, below, any distributions made by us with respect to our common shares to a U.S. Holder will generally constitute
dividends to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of such earnings and profits will be treated first as a nontaxable return of capital to
the extent of the U.S. Holder’s tax basis in his common shares on a dollar-for-dollar basis and thereafter as capital gain. However, we do not expect to calculate earnings and profits in accordance with U.S. federal income tax principles.
Accordingly, you should expect to generally treat distributions we make as dividends. Because we are not a U.S. corporation, U.S. Holders that are corporations will generally not be entitled to claim a dividends-received deduction with respect
to any distributions they receive from us. Dividends paid with respect to our common shares will generally be treated as “passive category income” for purposes of computing allowable foreign tax credits for U.S. foreign tax credit purposes.
Dividends paid on our common shares to a U.S. Holder who is an individual, trust or estate will generally be treated as ordinary income. However, if you are a U.S. Holder that is an individual,
estate or trust, dividends that constitute qualified dividend income will be taxable to you at the preferential rates applicable to long-term capital gains provided that you hold the shares for more than 60 days during the 121-day period
beginning 60 days before the ex-dividend date and meet other holding period requirements. Dividends paid with respect to the shares generally will be qualified dividend income provided that, in the year that you receive the dividend, the shares
are readily tradable on an established securities market in the United States. Our common stock is listed on the Nasdaq Capital Market and we therefore expect that dividends will be qualified dividend income.
Special rules may apply to any “extraordinary dividend,” generally, a dividend paid by us in an amount which is equal to or in excess of 10% of a shareholder’s adjusted tax basis (or fair
market value in certain circumstances) or dividends received within a one-year period that, in the aggregate, equal or exceed 20% of a shareholder’s adjusted tax basis (or fair market value upon the shareholder’s election) in a common share. If
we pay an “extraordinary dividend” on our common shares that is treated as “qualified dividend income,” then any loss derived by a U.S. Non-Corporate Holder from the sale or exchange of such common shares will be treated as long-term capital
loss to the extent of such dividend.
Sale, Exchange or other Disposition of Common Shares
Subject to the discussion of our status as a PFIC below, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares 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 is greater than one year at the time of the sale, exchange or other disposition. Such capital gain or loss will generally be treated as U.S.-source income or loss, as applicable, for U.S. foreign tax credit purposes. A
U.S. Holder’s ability to deduct capital losses is subject to certain limitations.
Passive Foreign Investment Company Status and Significant Tax Consequences
Special U.S. federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a PFIC for U.S. federal income tax purposes. In general, 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, 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 conduct of a rental
business); or
at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are 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 our subsidiaries’
corporations in which we own at least 25% of the value of the subsidiary’s stock. Income earned, or deemed earned, by us in connection with the performance of services would not constitute “passive income” for these purposes. By contrast,
rental income would generally constitute “passive income” unless we were treated under specific rules as deriving our rental income in the active conduct of a trade or business.
In general, income derived from the bareboat charter of a vessel will be treated as “passive income” for purposes of determining whether we are a PFIC and such vessel will be treated as an
asset which produces or is held for the production of “passive income”. On the other hand, income derived from the time charter of a vessel should not be treated as “passive income” for such purpose, but rather should be treated as services
income; likewise, a time chartered vessel should generally not be treated as an asset which produces or is held for the production of “passive income”.
Based on our current assets and activities, we do not believe that we will be a PFIC for the current or subsequent taxable years. Although there is no legal authority directly on point, and we
are not relying upon an opinion of counsel on this issue, our belief is based principally on the position that, for purposes of determining whether we are a passive foreign investment company, the gross income we derive or are deemed to derive
from the time chartering and voyage chartering activities of our wholly-owned subsidiaries should constitute services income, rather than rental income. Correspondingly, such income should 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, should not constitute passive assets for purposes of determining whether we were a passive foreign investment
company. We believe there is substantial legal authority supporting our position consisting of case law and IRS pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other
tax purposes. However, in the absence of any legal authority specifically relating to the statutory provisions governing passive foreign investment companies, the IRS or a court could disagree with our position. In addition, although we intend
to conduct our affairs in a manner to avoid being classified as a passive foreign investment company with respect to any taxable year, we cannot assure you 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 U.S. federal income 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 discussed below, as an alternative to making a QEF Election, a U.S. Holder should be able to make a “mark-to-market”
election with respect to our common shares, which election is referred to as a “Mark-to-Market Election”. A U.S. Holder holding PFIC shares that does not make either a “QEF Election” or “Mark-to-Market Election” will be subject to the Default
PFIC Regime, as defined and discussed below in “Taxation—U.S. Federal Income Taxation of U.S. Holders—Taxation of U.S. Holders Not Making a Timely QEF or “Mark-to-Market” Election”.
If the Company were to be treated as a PFIC, a U.S. Holder would be required to file IRS Form 8621 to report certain information regarding the Company. If you are a U.S. Holder who held our
common shares during any period in which we are a PFIC, you are strongly encouraged to consult your tax advisor.
The QEF Election
If a U.S. Holder makes a timely QEF Election, which U.S. Holder we refer to as an “Electing Holder,” the Electing Holder must report each year for United States federal income tax purposes his
pro rata share of our ordinary earnings and our net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless of whether or not distributions were made by us to the Electing Holder.
The Electing Holder’s adjusted tax basis in the common shares will be increased to reflect taxed but undistributed 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 common shares 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 our common shares. A U.S.
Holder would make a QEF Election with respect to any year that our Company is a PFIC by filing one copy of IRS Form 8621 with his United States federal income tax return and a second copy in accordance with the instructions to such form. It
should be noted that if any of our subsidiaries is treated as a corporation for U.S. federal income tax purposes, a U.S. Holder must make a separate QEF Election with respect to each such subsidiary.
Taxation of U.S. Holders Making a “Mark-to-Market” Election
If we are a PFIC in a taxable year and our shares are treated as “marketable stock” in such year, you may make a mark-to-market election with respect to your shares. As long as our common
shares are traded on the Nasdaq Capital Market, as they currently are and as they may continue to be, our common shares should be considered “marketable stock” for purposes of making the Mark-to-Market Election. U.S. Holders are urged to
consult their own tax advisors in this regard.
Taxation of U.S. Holders Not Making a Timely QEF or “Mark-to-Market” Election
Finally, a U.S. Holder who does not make either a QEF Election or a Mark-to-Market Election with respect to any taxable year in which we are treated as a PFIC, or a U.S. Holder whose QEF
Election is invalidated or terminated, or a Non-Electing Holder, would be subject to special rules, or the Default PFIC Regime, with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing
Holder on the common shares in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder’s holding period for the
common shares), and (2) any gain realized on the sale, exchange, redemption or other disposition of the common shares.
Under the Default PFIC Regime:
the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common shares;
the amount allocated to the current taxable year and any taxable year before we became a PFIC 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 an interest charge
for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
Any distributions other than “excess distributions” by us to a Non-Electing Holder will be treated as discussed above under “Taxation—U.S. Federal Income Taxation of U.S.
Holders—Distributions”.
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 with its acquisition
of the common shares. If a Non-Electing Holder who is an individual dies while owning the common shares, such Non-Electing Holder’s successor generally would not receive a step-up in tax basis with respect to the common shares.
U.S. Federal Income Taxation of “Non-U.S. Holders”
A beneficial owner of our common shares (other than a partnership) that is not a U.S. Holder is referred to herein as a “Non-U.S. Holder”.
Dividends on Common Shares
Non-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on dividends received from us with respect to our common shares, unless that income is effectively
connected with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty with respect to those dividends, that income is taxable only if it is
attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States.
Sale, Exchange or Other Disposition of Common Shares
Non-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of our common shares, unless:
the gain is effectively connected with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty
with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder 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 during the taxable year of disposition and other conditions are met.
If the Non-U.S. Holder is engaged in a U.S. trade or business for U.S. federal income tax purposes, the income from the common shares, including dividends and the gain from the sale, exchange
or other disposition of the stock that is effectively connected with the conduct of that trade or business will generally be subject to U.S. federal income tax in the same manner as discussed in the previous section relating to the taxation of
U.S. Holders. In addition, in the case of a corporate Non-U.S. Holder, the earnings and profits of such Non-U.S. Holder that are attributable to effectively connected income, subject to certain adjustments, may be subject to an additional
branch profits tax at a rate of 30%, or at a lower rate as may be specified by an applicable U.S. income tax treaty.
Backup Withholding and Information Reporting
In general, dividend payments, or other taxable distributions, made within the United States to you will be subject to information reporting requirements. In addition, such payments will be
subject to backup withholding tax if you are a non-corporate U.S. Holder and you:
fail to provide an accurate taxpayer identification number;
are notified by the IRS that you have failed to report all interest or dividends required to be shown on your U.S. federal income tax returns; or
in certain circumstances, fail to comply with applicable certification requirements.
Non-U.S. Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on an applicable IRS Form W-8.
If you sell your common shares to or through a U.S. office of a broker, the payment of the proceeds is subject to both U.S. backup withholding and information reporting unless you certify that
you are a non-U.S. person, under penalties of perjury, or you otherwise establish an exemption. If you sell your common shares through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to you outside the United States, then
information reporting and backup withholding generally will not apply to that payment. However, U.S. information reporting requirements, and in certain cases backup withholding requirements, will apply to a payment of sales proceeds, even if
that payment is made to you outside the United States, if you sell your common shares through a non-U.S. office of a broker that is a U.S. person or has some other contacts with the United States. Backup withholding tax is not an additional
tax. Rather, you generally may obtain a refund of any amounts withheld under backup withholding rules that exceed your U.S. federal income tax liability by filing a refund claim with 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) who hold “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 which the 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 by applicable Treasury Regulations). Specified foreign financial assets would include, among other assets, our common shares,
unless the shares are held through an account maintained with 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
willful neglect. 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 required to 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 close until 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 advisors regarding their reporting obligations under this legislation.
We have entered into the Distribution Agreement pursuant to which we may issue and sell up to an aggregate of $150,000,000 of our common shares from time to time solely through Maxim acting as
sales agent. A copy of the Distribution Agreement is filed as an exhibit to the registration statement of which this prospectus forms a part. Our common shares registered under this prospectus are subject to sale under such agreement.
Upon delivery of a placement notice and subject to the terms and conditions of the Distribution Agreement, Maxim may sell our common shares by any method permitted by law deemed to be an
“at-the-market” offering as defined in Rule 415 promulgated under the Securities Act, including sales made directly on Nasdaq, on any other existing trading market for our common shares or to or through a market maker. Maxim may also sell our
common shares by any other method permitted by law, including in privately negotiated transactions. We or Maxim may terminate the Distribution Agreement and the offering of our common shares upon notice.
We will pay Maxim commissions for its services in acting as our sales agent in the sale of our common shares pursuant to the Distribution Agreement. Maxim will be entitled to compensation at a
fixed commission rate equal to 2% of the Aggregate Offering Amount sold by Maxim pursuant to the Distribution Agreement. Because there is no minimum offering amount required as a condition to this offering, the actual total public offering
amount, commissions and proceeds to us, if any, are not determinable at this time. We have also agreed to reimburse Maxim for its reasonable and documented out-of-pocket expenses (including but not limited to the reasonable and documented fees
and expenses of its legal counsel) in an amount not to exceed $50,000. Additionally, we have agreed to reimburse Maxim $5,000 for its legal fees on each Bringdown Date (as defined in the Distribution Agreement) while this offering is open and,
if we increase the size of this offering, $15,000 for its legal fees for each prospectus supplement filed for such purpose.
Settlement for sales of common shares, unless the parties agree otherwise, will occur on the second trading day following the date on which any sales are made in return for payment of the net
proceeds to us. There are no arrangements to place any of the proceeds of this offering in an escrow, trust or similar account. Sales of our common shares as contemplated in this prospectus will be settled through the facilities of The
Depository Trust Company or by such other means as we and Maxim may agree upon.
Maxim will act as sales agent on a commercially reasonable efforts basis consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and
the rules of the Nasdaq Capital Market. In connection with the sale of the common shares on our behalf, Maxim will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of Maxim will be deemed to be
underwriting commissions or discounts. We have agreed to provide indemnification and contribution to Maxim against certain civil liabilities, including liabilities under the Securities Act.
The offering of our common shares pursuant to the Distribution Agreement will terminate upon the earlier of the (i) sale of all of our common shares provided for in this prospectus, or (ii)
termination of the Distribution Agreement as permitted therein. We may terminate the Distribution Agreement with five days of prior written notice. Maxim may terminate the Distribution Agreement at any time upon written notice.
Maxim and its affiliates may in the future provide various investment banking, commercial banking and other financial services for us and our affiliates, for which services they may in the
future receive customary fees. To the extent required by Regulation M, Maxim will not engage in any market making activities involving our common shares while the offering is ongoing under this prospectus.
This prospectus in electronic format may be made available on a web site maintained by Maxim and Maxim may distribute this prospectus electronically.
The following are the estimated expenses of the issuance and distribution of the securities offered by this prospectus, all of which will be paid by us.
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SEC Filing Fee
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$
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13,905
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FINRA Fee*
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$
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225,500
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Legal Fees and Expenses
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$
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125,000
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Accountants’ Fees and Expenses
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$
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25,000
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Miscellaneous Costs
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$
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595
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Total
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$
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390,000
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* The FINRA Fee was paid with respect to all securities that may be offered pursuant to the registration statement on Form F-3 of which this prospectus forms a part.
ENFORCEABILITY OF CIVIL
LIABILITIES
We are a Republic of the Marshall Islands corporation and our principal executive offices are located outside the United States. All of the directors, officers and our independent registered
public accounting firm reside outside the United States. In addition, substantially all of our assets and the assets of certain of our directors, officers and our independent registered public accounting firm are located outside the United
States. As a result, it may not be possible for you to serve legal process within the United States upon us or any of these persons. It may also not be possible for you to enforce, both in and outside the United States, judgments you may obtain
in United States courts against us or these persons in any action, including actions based upon the civil liability provisions of U.S. federal or state securities laws.
Furthermore, there is substantial doubt that courts of such jurisdictions would enforce judgments of U.S. courts obtained in actions against us, our directors or officers and such experts based
upon the civil liability provisions of applicable U.S federal and state securities laws or would enforce, in original actions, liabilities against us, our directors or officers and such experts based on those laws.
The validity of the securities offered by this prospectus will be passed upon for us by Seward & Kissel LLP. We are also being represented as to certain matters of U.S. federal law and New
York state law by Sullivan & Cromwell LLP. Ellenoff Grossman & Schole LLP is representing the Sales Agent in this offering.
The financial statements of Castor Maritime Inc. as of December 31, 2020 and 2019, and for the years ended December 31, 2020 and 2019, the year
ended September 30, 2018 and the three months ended December 31, 2018 incorporated by reference in this Prospectus, have been audited by Deloitte Certified Public Accountants S.A., an independent registered public accounting firm, as stated in
their report. Such financial statements are incorporated by reference in reliance upon the report of such firm given their authority as experts in accounting and auditing. The offices of Deloitte Certified Public Accountants S.A. are located at
Fragoklissias 3a & Granikou Str., 15125 Maroussi, Athens, Greece.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
Available Information
We file annual reports and other information with the SEC. However, as a “foreign private issuer” we are allowed four months from the end of our fiscal year to file our
annual report with the SEC, and we are not required to disclose certain detailed information regarding executive compensation that is required from United States domestic issuers. In addition, we are not required under the Exchange Act to file
periodic reports and financial statements with the SEC as frequently as companies that are not foreign private issuers whose securities are registered under the Exchange Act. Also, we are exempt from the rules under the Exchange Act prescribing
the furnishing and content of proxy statements to shareholders. While we furnish proxy statements to shareholders in accordance with the rules of the Nasdaq, those proxy statements do not conform to Schedule 14A of the proxy rules promulgated
under the Exchange Act. In addition, as a foreign private issuer, our officers and directors are exempt from the rules under the Exchange Act relating to short swing profit reporting and liability.
The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The
address of that website is http://www.sec.gov. Other than as described below, the information contained in or accessible from that website is not part of this prospectus.
Our filings are also available on our website at http://www.castormaritime.com. The information on our website, however, is not, and should not be deemed to be, a part of
this prospectus.
This prospectus is part of a registration statement on Form F-3 relating to the securities covered by this prospectus that we filed with the SEC and does not contain all of
the information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Forms of the documents establishing the terms of the offered securities are or may be filed as exhibits to the
registration statement or documents incorporated by reference in the registration statement. Statements in this prospectus about these documents are summaries and each statement is qualified in all respects by reference to the document to which
it refers. You should refer to the actual documents for a more complete description of the relevant matters.
Information Incorporated by Reference
The SEC allows us to “incorporate by reference” information that we file with it. This means that we can disclose important information to you by referring you to those
filed documents. The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the SEC prior to the termination of this offering will also be considered to be part of this
prospectus.
We incorporate by reference in this prospectus the documents listed below which have been filed with the SEC:
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Our Annual Report on Form 20-F for the year ended December 31, 2020, filed with the SEC on March 30, 2021; |
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Our Reports on Form 6-K filed with the SEC on April 7, 2021, April 9, 2021 (applicable parts only), April
15, 2021, April 19, 2021, April
19, 2021 (applicable parts only), April 28, 2021, April 30, 2021 (applicable parts only), May 4, 2021 (applicable parts only), May
11, 2021, May 18, 2021 (applicable parts only), May 21, 2021, May 25, 2021, June 3, 2021 (applicable parts only), June
9, 2021, June 15, 2021, June
17, 2021, June 24, 2021, July
28, 2021 (applicable parts only), July 30, 2021, August 5, 2021 (applicable parts only), August 11, 2021, August 26, 2021
(applicable parts only), September 13, 2021, September 22, 2021 (applicable parts only), October 7, 2021, October 20, 2021,
October 26, 2021, November 8, 2021,
November 18, 2021, December 1, 2021,
December 7, 2021, December 20, 2021,
January 5, 2022, January 18, 2022
(applicable parts only) and March 10, 2022;
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Our subsequent reports on Form 20-F that we file with the SEC; and
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Our reports on Form 6-K that we furnish to the SEC after the date of this prospectus only to the extent that they expressly state that we incorporate them by reference into this prospectus.
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Information in later documents that is incorporated by reference will automatically update and supersede information in earlier documents in this prospectus.
We have not, and the Sales Agent has not, authorized anyone to provide any information or to make any representations other than as contained or incorporated by reference
in this prospectus or any free writing prospectus prepared by or on behalf of us or to which we have referred you. We and the Sales Agent take no responsibility for, and can provide no assurance as to the reliability of, any other information
that others may give you. The information contained or incorporated by reference in this prospectus is accurate as of the dates of the applicable documents. Our business, financial condition, results of operations and prospects may have
changed since the applicable dates. When this prospectus is delivered or sale pursuant to this prospectus is made, neither we nor the Sales Agent are implying that the information is current as of the date of the delivery or sale.
You may request a free copy of the above-mentioned filings or any subsequent filing we incorporate by reference to this prospectus by writing or telephoning us at the
following address:
Castor Maritime Inc.
Attn: Petros Panagiotidis
223 Christodoulou Chatzipavlou Street
Hawaii Royal Gardens,
3036 Limassol
Cyprus
+ 357 25 357 767
Exhibits to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus.
$150,000,000 of Common Shares
Part II
Information Not Required in the Prospectus
| Item 8. |
Indemnification of Directors and Officer
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I. Article VIII of the Bylaws of the Registrant provides as follows:
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1. |
Any person who is or was a Director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another, partnership, joint venture, trust or other
enterprise shall be entitled to be indemnified by the Corporation upon the same terms, under the same conditions, and to the same extent as authorized by Section 60 of the BCA, if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The Corporation shall have the
power to pay in advance expenses a director or officer incurred while defending a civil or criminal proceeding, provided that the director or officer will repay the amount if it shall ultimately be determined that he or she is not entitled
to indemnification under this section. Any repeal or modification of this Article VIII shall not adversely affect any rights to indemnification and to the advancement of expenses of a Director or officer of the Corporation existing at the
time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.
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2. |
The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a Director or officer of the Corporation or is or was serving at the request of the Corporation as
a director or officer against any liability asserted against such person and incurred by such person in such capacity whether or not the Corporation would have the power to indemnify such person against such liability by law or under the
provisions of the Bylaws.
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II. Section 60 of the Associations Law of the Republic of the Marshall Islands provides as follows:
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1. |
Actions not by or in right of the corporation. A corporation shall have power to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is
or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of no contest, or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the
bests interests of the corporation, and, with respect to any criminal action or proceedings, had reasonable cause to believe that his conduct was unlawful.
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2. |
Actions by or in right of the corporation. A corporation shall have the power to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the corporation, or is or
was serving at the request of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against expenses (including
attorneys’ fees) actually and reasonably incurred by him or in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation and except that no indemnification shall be made in respect of any claims, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.
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3. |
When director or officer successful. To the extent that a director or officer of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in subsections (1) or (2) of this section, or in the defense of a claim, issue or matter therein, he shall be indemnified against expenses (including attorneys’ fees)
actually and reasonably incurred by him in connection therewith.
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4. |
Payment of expenses in advance. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid in advance of the
final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation as authorized in this section.
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5. |
Indemnification pursuant to other rights. The indemnification and advancement of expenses provided by, or granted pursuant to, the other
subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.
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6. |
Continuation of indemnification. The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall,
unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
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7. |
Insurance. A corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director or officer
of the corporation or is or was serving at the request of the corporation as a director or officer against any liability asserted against him and incurred by him in such capacity whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this section.
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Exhibit Index
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Description
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1.1
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Form of Underwriting Agreement (for equity securities)*
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1.2
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Form of Underwriting Agreement (for debt securities)*
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Amended and Restated Equity Distribution Agreement, dated March 31, 2022, by and among the Company and Maxim Group LLC
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Form of Common Share Certificate, incorporated by reference to Exhibit 99.2 of Amendment No. 2 to Form 8-A filed with the SEC on May 28, 2021
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4.2
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Form of Preferred Share Certificate*
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Stockholder Rights Agreement dated as of November 20, 2017 by and between the Company and American Stock Transfer & Trust Company, LLC, as rights agent incorporated by reference to Exhibit 10.2 to the
Company’s registration statement on Form F-4 filed with the SEC on April 11, 2018
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4.4
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Form of Warrant Agreement*
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4.5
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Form of Purchase Contract*
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Form of Senior Indenture, incorporated by reference to Exhibit 4.6 to Form F-3 (File No. 333-254977) filed with the SEC on April 1, 2021
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Form of Subordinated Indenture Exhibit 4.7 to Form F-3 (File No. 333-254977) filed with the SEC on April 1, 2021
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4.8
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Form of Unit Agreement*
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4.9
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Form of Rights Agreement*
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Opinion of Sullivan & Cromwell LLP, United States counsel to the Company.
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Opinion of Seward & Kissel LLP, Marshall Islands counsel to the Company.
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Opinion of Sullivan & Cromwell LLP with respect to certain U.S. tax matters.
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Consent of Independent Registered Public Accounting Firm (Deloitte Certified Public Accountants S.A.).
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23.2
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Consent of Sullivan & Cromwell LLP (included in Exhibits 5.1 and 8.1).
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23.3
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Consent of Seward & Kissel LLP (included in Exhibit 5.2).
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Power of Attorney, incorporated by reference to Exhibit 24.1 to Form F-3 (File No. 333-254977) filed with the SEC on April 1, 2021
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25.1
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Form of T-1 Statement of Eligibility (senior indenture)**
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25.2
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Form of T-1 Statement of Eligibility (subordinated indenture)**
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Filing Fee Table
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*
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To be filed as an amendment or incorporated by reference to a subsequently filed Report on Form 6-K.
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**
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To be filed in accordance with Section 305(b)(2) of the Trust Indenture Act of 1939, as amended.
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The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value
of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) of this section do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering
or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act of 1933 need not be furnished, provided, that the registrant includes
in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of
those financial statements. Notwithstanding the foregoing, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act of 1933 or Item 8.A. of Form 20-F if such
financial statements and information are contained in periodic reports filed with or furnished to the SEC by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of this registration statement as of the date the filed prospectus was deemed
part of and included in this registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made
pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date
such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at
that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of
the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior
to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(6) That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the Securities, the
undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by
or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(7) That for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(8) Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933, as amended and will be governed by the final adjudication of such issue.
(9) The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310
of the Trust Indenture Act in accordance with the rules and regulations prescribed by the SEC under Section 305(b)(2) of the Trust Indenture Act.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing
on Form F-3 and has duly caused this Post-Effective Amendment No. 1 to Form F-3 (File No. 333-254977) to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Limassol, country of Cyprus on March 31, 2022.
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CASTOR MARITIME INC.
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By:
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/s/ Petros Panagiotidis
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Name:
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Petros Panagiotidis
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Title:
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Chairman, Chief Executive Officer
and Chief Financial Officer
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Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 1 to Form F-3 (File No. 333-254977) has been signed below by the
following persons in the capacities and on March 31, 2022.
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Signature
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Title
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/s/ Petros Panagiotidis
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Chairman, Chief Executive Officer, Chief Financial Officer and Class C Director
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Petros Panagiotidis
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(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
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/s/ Dionysios Makris
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Secretary and Class B Director
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Dionysios Makris
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/s/ Georgios Daskalakis
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Class A Director
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Georgios Daskalakis
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AUTHORIZED UNITED STATES REPRESENTATIVE
Pursuant to the requirement of the Securities Act of 1933, the undersigned, the duly authorized representative in the United States of the aforementioned Registrant, has signed
this Post-Effective Amendment No. 1 to Form F-3 (File No. 333-254977) in the City of Newark, State of Delaware, on March 31, 2022.
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PUGLISI & ASSOCIATES
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By:
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/s/ Donald J. Puglisi |
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Name: Donald J. Puglisi
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Title: Managing Director
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