Thank you for standing by, ladies and gentlemen, and welcome to the Euroseas Conference Call on the First Quarter 2021 Financial Results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasos Aslidis, Chief Financial Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a Question-And-Answer Session. [Operator Instructions] I must advise you that this conference is being recorded today. Forward-looking statement. Please be reminded that the company announced their results with a press release that has been publicly distributed. Before passing the floor to Mr. Pittas, I would like to remind everyone that in today's presentation and conference call, Euroseas will be making forward-looking statements. These statements are within the meaning of the federal securities laws. Matters discussed may be forward-looking statements, which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. I kindly draw your attention to Slide number 2 of the webcast presentation, which has the full forward-looking statement and the same statement was also included in the press release. Please take a minute to go through the whole statement and read it. And now I would like to pass the floor to Mr. Pittas. Please go ahead, sir.

Good morning, ladies and gentlemen, and welcome to our scheduled conference call for today. Together with me is Tasos Aslidis, our Chief Financial Officer. The purpose of today's call is to discuss our financial results for the three months ended March 31, 2021. Let us turn to Slide 3. Our income statement highlights are shown here. For the first quarter of 2021, we reported total net revenues of $14.3 million and net income of $3.8 million. Net income attributable to common shareholders after a $0.2 million dividend on the Series B preferred shares in the first quarter of 2021 was $3.6 million or $0.53 per share basic and diluted. Adjusted net income attributable to the common shareholders was $3 million or $0.45 per share basic and diluted. This difference stems mainly from the unrealized gain we had on the value of our interest rate hedge. Adjusted EBITDA for the period stood at $5.6 million. Tasos will go over our financial highlights in more detail later on in the presentation. Please turn to Slide 4 where we discuss our recent operating developments. The charter of Akinada Bridge declared the 10 to 12 months option at $20,000 per day as from December 2021. Our EM Kea was extended for a period of 25 to 28 months at $22,000 per day, starting from April 2021. The EM Hydra was fixed for 23 to 25 months at $20,000 per day as from May 2021. The Joanna was fixed for a period of 18 to 21 months at $16,800 a day as from May 2021. Finally, the Synergy Busan was fixed for a period of 36 to 40 months at $25,000 per day as from April 2021. Overall, the duration of these charters was an average around two years. As mentioned in the previous earnings…

Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. I will now take you through the next five slides to give you an overview of our financial results for the first quarter of 2021 and compare them to the same periods of 2020. For that, let's turn to Slide 15. For the first quarter of 2021, the company reported total net revenues of $14.3 million, representing a 7.3% decrease of total net revenues of $15.4 million during the first quarter of 2020, which was primarily due to the lower number of vessels we operated in 2021. On average, 14 vessels were owned and operated during the first quarter of 2021 compared to 19 vessels during the first quarter of 2020. The company reported a net income for the period of $3.8 million and a net income attributable to common shareholders of $3.6 million, as compared to a net income of $2 million and a net income attributable to common shareholders of $1.8 million for the first quarter of 2020. Interest and other financing costs for the fourth quarter of 2020 amounted to $0.8 million compared to $1.1 million for the same period of 2019 as a result of lower debt levels during the period. It should be noted that in the fourth quarter of 2020, we also recorded a loss on debt extinguishment of $0.5 million, due to the conversion of the loan to common stock as per the terms of the loan agreement in November 2020. Depreciation expense for the fourth quarter of 2020 was $1.6 million as compared to $1.5 million in the fourth quarter of 2019. Dry docking expenses amounted to $0.1 million during the fourth quarter of 2020, comprising of the cost of one vessel completing an intermediate survey in water.…

Thank you, Tasos. Let’s now open up the floor for any discussion that we may have.

[Operator Instructions] Your first question comes from the line of Tate Sullivan from Maxim Group. Please go ahead. Your line is open.

Hello. Good day. Thank you. Starting on Slide 17 with the coverage days percentage at 49% for 2022 and here we are in almost end of May, how does that coverage percent compare historically? Is that a higher than normal level?

It is much higher than what we have had during the last decade. Our strategy when charter rates are not so strong are to fix generally for smaller periods. And in good markets, we aim to fix for longer periods and it’s also easier achievable in the market. So, as you’ve seen the last few fixes that we did were on an average of two year length and we expect that the fixes that we will do for the remaining five vessels within this year will again be at least two years.

Following up on that, so with two years, and been longer than historic, what is the current term length average of your current contracts, they were less than two or about a year probably?

Yes, I think the latest average is probably less than two years right now, but as vessels are – the charters of our vessels are renewed and rolled over, I imagine that will increase.

Okay. Thank you and I know we are talking about ten years ago at this point, but I think, can you just review your comments about 2023 about rates probably anticipating the additional supply? And I mean, what might impact that timing in 2023? And what have you seen in previous cycles if you can comment?

20% order book that we currently have approximately. It is historically not a very high order book. But -- and that order book delivers over a five year period. 2021 and 2022, we have a very little deliveries. So, that’s why we are very confident that this demand is there 2021 and 2022 are going to be extremely good years. In 2022, the fleet can grow by a maximum of 3.3% that is without any slippage, without any scrapping. So, that’s what really makes us confident for 2022. 2023, the deliveries – the expected deliveries are about 6.5% of the current fleet. This is not immaterial. It’s a significant delivery schedule. It is although on the bigger ships, very small part of these deliveries of 2023 have to do with ships up to 7,000 TEU where we are active. So, we are a bit more confident about that part of the market. But if demand does not continue growing very strongly, we could see a correction coming in 2023.

Okay. Thank you very much for those follow-up comments and very comprehensive. And thank you. Have a great rest of the day.

Thank you.

Thank you.

Thank you. And your next question comes from the line of Poe Fratt from NOBLE Capital Markets. Please go ahead. Your line is open.

Hey, good morning Aristides. Good morning, Tasos.

Good morning, Poe.

Just to follow-up on the question about just forward cover. Have you ever had forward cover that is this high?

Difficult to say. I think maybe back in 2005 and 2006, we had similar coverage. But definitely for the last 15 years, no.

Okay. And then, as you look at extending the contract terms. Are you potentially changing any of the contract terms to enhance your or protect yourselves in case rates go down? So, that there aren’t any cancellation provisions? Or can you just discuss on sort of how you approach the contract terms and whether they changed at all as the markets moved up?

I think, what has happened is that the markets has accepted itself to the covers set that they have to offer longer periods, because otherwise, they will have to pay even higher rates over a one year charter or six months charter. I recently read that that the charterer chartered a ship for 70,000 – for 1200 TEUs in for $70,000 a day. But we see that’s for a small period of three months. And so, that’s something charterers don’t want to pay and of course, something that – and we prefer to have the certainty of lower number which is still extremely profitable, but it gives us a longer duration. And the clauses in the charter parties they are not – there do not exist clauses that are make it easy for somebody to break the charter. And so, we don’t see significant changes there.

Okay. That’s helpful. And then, Aristides, if you could just sort of talk about your fleet profile and sort of as you are looking at some of the regulations coming down the pipe, can you just talk about how you are thinking on strategically how to deal with the future regulations?

Of course, we adhere with all – to all current regulations and we will adhere to all future regulations. And whatever the IMO decides, which is essentially the governing entity of all ship – worldwide shipping, we are a strong supporters of the IMO and disciples to improve the living conditions of all the ships and the decarbonization process. So we are totally in favor of all that and we demonstrate that throughout ESG Report, which we just published today and put it up on our website showing where we are and where we will be going forward. Obviously, the fleet is going to get renewed to an extent as we buy new vessels and the older vessels are going to gradually be taken out of the markets. But I think it’s the fact that we have generally older vessels or fleet is on average age of 16 years doesn’t mean that we contribute disproportionally towards the pollution of that. Ships have changed very little over the last 25 years. Since 2013, we are seeing ships that are slightly more economical, i.e., produce slightly less fuel emissions, but just slightly. You can cover that by having your vessel trade have not slower and compete with a younger ship. So, the dynamics that will determine how we react are the market sensitive and of course, as I said, we will continue abiding by all the rules and we are supporters of further decarbonization. And we will adjust our policies accordingly.

Okay. Great. When might we start to see that process of some of the older vessels leaving the fleet?

You probably saw that last year when we sold our eldest vessels. You saw five of our vessels being scrapped last year. Two of them would probably been scrapped anyway even if the market was strong, because they were around 30 years old. But the other three, they probably would not have been scrapped, if the markets were as strong as this. So, with a strong market, there is an incentive to keep the vessel a bit longer and to pass the vessel survey that may cost $1 million to $1.5 million and keep the vessel because you can recoup the extra cost of passing the special survey within a very short period of time. So, we will see what happens. Definitely, when we have a next drop in the market, you can expect to see us selling some of the elder vessels. But for the next couple of years, I don’t think that we will be disposing of any of our ships.

Okay. And then, Tasos, if you could address one thing. On Page 17, you’ve put calendar days and then available days for hire and it looks like you – there is a difference of, call it, just over 20 days per quarter for the next three quarters. But I am looking at your drydocking expenses over next 12 months is going up from – in putting materially the 641, should I be thinking about were drydocking days going forward? Or can you just give me some color on, sort of what your drydock schedule looks for – like for the rest of the year?

Well, I think that, what you see here the difference very lightly reflects as one scheduled drydock every quarter for the next three quarters and something similar for 2022. So, that is really where that difference comes from. Again, this is indicative, although it does reflect our best estimates for a drydocking schedule.

Okay. And so it looks like that $700,000 or $750,000 per quarter for drydocking expenses?

This is - the $641 is per day, right? That you see at the bottom of Slide 18. $641 per day is the contribution of drydocking expenses to cash breakeven level.

Yes. Yes, and then, I was just looking at the total expense for the quarter looking at the number of days that you have. Could you – typically, you are in pretty active discussions with your lenders. So, do you have an update on the balloon payments – $12 million balloon payment that is due at the end of the year. Should – how should we be thinking about that as far as terms?

I think it is very largely – it will be refinanced as I mentioned in my remarks. Although it should be fairly, we have already started exploring auctions to refinance that and reduce its cost and I think we are on a good path to do that.

Okay. And then, it looks like the ATM was active in the first quarter. Can you give me the number of shares that you issued in the first quarter? And then, comment on the activity going forward as much as you can?

I think we issued about roughly, 90,000 shares during the first quarter. I can get you the exact number as I get on the top of my head, but something like that. And we are going to use it opportunistically we believe the price at which we can issue stock is not dilutive to our shareholders. We provide an indication that we think our NAVs in the mid $20, $24 or you shouldn’t expect us to sell at $14 or $15 shares from the ATM.

Okay. And then, in the past, you’ve talked about potentially retiring the preferred, there doesn’t seem too much near-term pressure just because of the dividend rate is 8%. Can you talk about the preferred and whether it’s going to continue to be part of the capital structure as we look after this 2022?

I think I did mentioned in my remarks that it is very likely would be redeemed in the remaining of this year.

Okay. Thank you so much. I missed that.

Thank you. Thank you, Poe.

Thank you, Poe.

Thank you. I will now pass the floor back to the Chairman and CEO, Aristides Pittas for closing remarks.

Thank you everybody for being with us in today’s first quarter results discussion. We will be back to you in three months time. Thank you.

Thanks everybody. Have a nice day.

Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.