Cash Flows
Net cash provided by operating activities was $1.3 million for the six months ended June 30, 2022, compared to $3.3 million for
the six months ended June 30, 2021. The decrease in net cash provided by operating activities in spite of the increase in our net income, was mainly attributed to timing reasons and more specifically to collections of revenue subsequent to
June 30, 2022 relating to revenue for the six month period ended June 30, 2022 and to inventory purchases close to period end partly offset by the fact that these were not paid in full as of June 30, 2022.
Net cash used in investing activities was $79.0 million for the six months ended June 30, 2022; which amount mainly represents the
aggregate consideration paid for the acquisition of four tanker vessels: Two product tankers acquired from related party entities that were delivered to the Company on March 28, 2022 and on May 31, 2022, respectively, and two Suezmax
tankers acquired from unaffiliated third parties which were each delivered to the Company on June 3, 2022. Net cash used in investing activities for the six months ended June 30, 2021 amounting to $0.1 million related to improvements
for one vessel.
Net cash (used in) / provided by financing activities was inflows of $153.5 million for the six months ended
June 30, 2022, consisting of $167.6 million of gross proceeds from our three capital raising equity offerings since our listing on Nasdaq, partially offset by $10.8 million relating to stock issuance costs along with $2.4 million
of scheduled loan repayments and $0.9 million paid in r dividends on our Series A preferred shares. Net cash used in financing activities for the six months ended June 30, 2021 amounting to $6.3 million related to net transfers to our
former Parent, StealthGas Inc.
Liquidity and Capital Resources
As of June 30, 2022, we had cash and cash equivalents of $79.1 million and $0.5 million of restricted cash classified as current assets as well
as $2.5 million of restricted cash classified as non-current assets.
Our principal sources of funds for our
liquidity needs have been equity offerings and cash flows from operations. Potential additional sources of funds include equity offerings and bank borrowings. Our principal use of funds has been to acquire our vessels, maintain the quality of our
vessels, and fund working capital requirements.
Our liquidity needs, as of June 30, 2022, primarily relate to funding expenses for operating our
vessels, any vessel improvements that may be required and general and administrative expenses.
As of June 30, 2022, we had $25.5 million of
outstanding indebtedness net of arrangement fees, which was incurred under our 2021 DNB senior secured credit facility (the 2021 DNB Senior Secured Credit Facility) in November 2021 to refinance outstanding indebtedness of StealthGas
Inc. secured by the four vessels that it contributed to us as part of the spin-off. We are in advanced discussion to secure financing for the remaining four vessels of our fleet which are currently
unencumbered. For information relating to our financing arrangements, please refer to Note 5 of our audited consolidated financial statements included in our Annual Report and Note 5 to our unaudited interim condensed consolidated financial
statements included herewith.
In July 2022, we entered into agreements with entities affiliated with the family of our Chief Executive Officer to acquire
two handysize dry bulk carriers for a total consideration of $39 million, which we expect to finance with cash on hand and post-delivery secured debt financing we are seeking to arrange.
We have 795,878 Series A Preferred Shares outstanding, which have a dividend rate of 8.75% per annum per $25.00 of liquidation preference per share, with
respect to which we paid aggregate dividends of $0.9 million in the six months ended June 30, 2022.
We believe that our working capital along
with our cash flows generated from operations are sufficient for our present short-term liquidity requirements. We believe that, unless there is a major and sustained downturn in market conditions applicable to our specific shipping industry
segment, our internally generated cash flows will be sufficient to fund our operations, including working capital requirements, for at least 12 months taking into account any possible capital commitments and debt service requirements.
Critical Accounting Estimates
A discussion of our
critical accounting estimates can be found in our Annual Report.
Forward-Looking Statements
Matters discussed in this report may constitute forward-looking statements. Forward-looking statements reflect our current views with respect
to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, or impact or duration of the COVID-19 pandemic,
the conflict in Ukraine and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking statements in this report are based upon various assumptions, many of which are based, in turn, upon
further assumptions, including without limitation, managements 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 assure you that it will achieve or accomplish these expectations,
beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the impact of
the COVID-19 pandemic and efforts throughout the world to contain its spread, the strength of world economies and currencies, general market conditions, including changes in charter hire rates and
vessel values, supply and demand for oil and oil products, charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydockings, shipyard performance, changes in our operating
expenses, including bunker prices, drydocking and insurance costs, ability to obtain financing and comply with covenants in our financing arrangements, or actions taken by regulatory authorities, potential liability from pending or future
litigation, domestic and international political conditions, the conflict in Ukraine and related sanctions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. Risks and uncertainties are further
described in the Annual Report and other reports we file with the U.S. Securities and Exchange Commission.
4