Thank you for standing by ladies and gentlemen and welcome to the Seanergy Maritime Conference Call on the First Quarter 2020 Financial Results. We have with us Mr. Stamatis Tsantanis, Chairman and Chief Executive Officer; and Mr. Stavros Gyftakis, 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. Please be reminded that the Company publicly released its financial results, which are available to download on the Seanergy website at seanergymaritime.com. If you do not have a copy of the press release, you may contact Capital Link at (212) 661-7566 and they will be happy to send it to you. Before turning the call over to Mr. Tsantanis, we would like to remind you that this conference call contains forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, concerning future events and the Company's growth strategy and measures to implement such strategies. Words such as expects, intends, plans, believes, anticipates, hopes, estimates and variations of such words and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks and are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to competitive factors in the market in which the Company operates; risks associated with operations outside the United States; changing rules and regulations applicable to the shipping industry; and other risk factors included from time to time in the Company's Annual Report on Form 20-F and other filings with the Securities and Exchange Commission, which is also known as the SEC. The Company's filings can be obtained free of charge on the SEC's website at www.sec.gov. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Now, I will pass the floor to Mr. Tsantanis. Please go ahead, sir.

Thank you, Jody. Good morning, everyone and thank you for joining us today to discuss our results for the quarter ending March 31, 2020. I want to apologize, before I start the call, for the late start. It's happened due to hundreds of people trying to dial in at the same time and webcast. Now, we’re good to go and we will start immediately. First, I want to wish everyone the best of health in these difficult circumstances and the safe return to normality. The outbreak of COVID-19 pandemic had an unprecedented effect on the whole planet and caused severe challenges for societies, governments, and businesses across the world. During these times, our primary concern was the health and safety of our people on border ships, as well as our office staff. We also needed to make sure that our business runs efficiently and our fleet continuous to operate commercially and technically with no disruptions, and we were very successful. Before we present our results, I want to start with some basic facts. Since the beginning of June, the Capesize market has increased by more than 700% from historical lows of $2,000 to $3,000 per ship per day to more than $26,000, $28,000 per ship per day. Seanergy is the only listed company in the United States with a pure-play Capesize fleet and all of our vessels are employed in spot or index-linked charters, thus taking full advantage of the soaring market conditions. However, as with most global businesses, during the first quarter of 2020, which is historical now, we saw a steep decline for the raw materials that we transport, which caused -- which combined with increased levels of uncertainty led to a very-weak charter market environment. I also want to state that the first two months of the…

Thank you, Stamatis. Good morning, everyone. Before we get into the numbers, I would like to note that the results reflect one of the most challenging periods for our industry and the global economy. All this is now behind us and we're currently looking at much brighter days for the Capesize sector as attested by the impressive rebound of the market through the recent weeks. In the first quarter of 2020, our fleet achieved the time charter equivalent $8,500, marking an 11% improvement from that of the first quarter of 2019, while outperforming the Capesize Index by a solid 86%. Our fleet’s performance benefited from the favorable time charter equivalent rate achieved in voyages contracted during the fourth quarter of 2019, which were carried over to the revenue of the first three months of 2020. Additionally, in the fourth quarter of 2019, we exercised the option to convert the floating rate to fixed under one of our long-term time charters for a period that extended until the end of February 2020 at a much stronger rate than what materialized in the market. Lastly, when compared to 2019, in the first quarter of 2020, we had more vessels employed under time charter agreement achieving full utilization. The net operating revenue in the first quarter of 2020 defined as revenue after deducting all voyage expenses and commissions was $7.6 million, marking an increase of 13% when compared to $6.8 million in the first quarter of 2019. Now, to give you an idea of the current market rate, we recently triggered the fixed rate option in one of our time charters for July and August, locking the vessel at a rate of $19,250 per day. This corresponds to approximately $1.2 million in net operating revenues or about 16% of the net operating revenues…

Thank you, Stavros. Moving on to the industry outlook, as we mentioned in the beginning of our call, the Capesize sector was really affected in Q1 by combination of negative factors. The main factors were the unusual severe local weather disruptions, especially in Brazil, and of course the outsized impact of the COVID-19 pandemic worldwide. As a result, iron ore exports were considerably lower than expected at the start of the year. However, as mentioned earlier, since the beginning of June, Capesize market has performed exceptionally well and the BCI levels have improved enormously from a daily level of about $2,000 per ship per day to more than $28,000 per ship currently. Consistent with previous years, high volatility and seasonality are normal features of the Capesize market and should not distract us from the positive overall fundamentals. Notwithstanding the difficult start of the year, seaborne iron ore ton-mile demand is expected to rise by about 0.3% in 2020 compared to a contraction of about 3% in 2019. As mentioned before, the global governments of China and the United States have put enormous stimulus in place in order to jumpstart their economies. Furthermore bauxite volumes which rose by more than 10% in 2019 are expected to rise by similar levels in 2020 and thereafter, and continue to support demand for larger vessels through long-haul voyages out of West Africa. Looking further towards the next two years, the eventual full resumption of Vale iron ore production could add more than 60 million additional tons of long-haul Brazilian exports that is on top of the current guidance of 320 million tons. These levels alone would be enough to sustain a healthy Capesize market in the future, without even factoring in any further growth drivers, such as the explosive growth seen seaborne trade of…

Thank you very much, sir. [Operator Instructions] Our first question for today is from the line of Tate Sullivan. Please go ahead.

Hi. Thank you. It’s Tate Sullivan from Maxim. Thank you for the comments. First, can you -- you mentioned it before, but can you give more background on the precision to the timing specifically of the stock split, the reasons for timing it now?

Well, Tate, of course. First of all, as I mentioned, our stock had dropped a lot during the first quarter, it has nothing to do with the offerings that we did. It was just a result of where the overall market was going. We decided to do it now. Even though we have another quarter basically ahead of us, and we decided to do it now, so we provide a clear runway for the investors and in order for stock price to reflect what we believe to be the true value of our shares. I mean, we don't really think we deserve to be hovering between $0.20 and $0.35. I mean, this is a company, which is worth much, much more than that. And we want that to be reflected in our stock price. We decided to do it now that the market has recovered significantly, and everybody's joining the Company now. We'll take advantage of the whole thing.

Looking back on 1Q results and currently, you just [indiscernible] better than the index rate would suggest that your time charter equivalent was more resilient during severely low rates than I expected. And if you can comment on how they can hold up a little bit better than what we saw the index during May as well too, any dynamics there?

Well, that's actually a very good question. To be honest, there is no magic answer to that. So, we had a lot of ships coming in, in the first quarter from the Q4, which was substantially -- which was fixed at substantially much higher levels? That's why we were able to produce almost, I don't know, 60% or 70% higher rates than were the index was. However, of course, the second point, the reality kicked in for everyone, the COVID situation together with all these negative factors we explained before. And, it came to a point where we had to face the market ourselves as well. Right now, of course, the market has grown up, as I mentioned before, almost 700%. And I think it's going to remain at much higher levels for the second half of the year. Therefore the cash flows of the Company as they were last year in the second half will be multiple times the ones of the first half of the year.

Thank you. And in the current environment on for this current quarter with the rates already improving so meaningfully, what other operating expenses in the current market?

Well, we don't have any other -- I mean, the good thing about our fleet is, first of all, we have almost zero dry dock days. So having completed all our dry dock schedule in 2019, the majority of our fleet, if I remember well, 9 out of 10 cases will be dry dock pretty until the end of the year. That means that we will hopefully be taking advantage of -- full advantage of the standard market from now until the year-end. So, no additional expenses, no additional CapEx, we expect from now and from beginning of June until the end of the year to have a very clear runaway on a very healthy revenue stream.

Thank you. And the last one for me, please, is you mentioned improvement in your balance sheet. Can you give some historical context on for instance when was your last acquisition and was it -- as you move forward, will you acquire -- more new builds -- the current order book at a historical low you mentioned or current ships or can you give any more context?

Yes. Even though the market has seen a very high increase in rates, there are still some amazing acquisition opportunities for someone that is willing to getting and buy additional assets right now. I cannot comment any further on that front, but what -- space, that's all I can say. The good thing here is that it's very hard to make any predictions for new buildings because the new regulations have not any clear outlook as to what the future ship is going to be. So, the real value right now in the Capesizes lies with the second hand ships. And this is what has been always the best solution for Seanergy. And this is how we've made our most accretive transactions so far.

Our next question is from Poe Fratt. Please go ahead.

Good morning, Poe Fratt from Noble Capital Markets. Could you -- you highlighted that you raised $30 million through the middle of May. Can you highlight how much additional capital came in through the exercise of the warrants?

Poe, I will pass first of all the answer of that to Stavros to give you. Let me give you the -- the call to Stavros and he will answer.

Hello, Poe. Actually, I mean the exercises are -- is an ongoing exercise, which has not been finalize yet and we expect to reconcile that in following update together with some ideas that we have for the potential use of the proceeds coming out of the warrant. But it's in the region of 15 plus million.

Okay, great. And so, will you -- if you look at cash at the end of the first quarter, $6.1 million, do you have a pro forma estimate for cash that would correlate to the table that you have in the press release on your pro forma adjusted capitalization table?

Well, that's why we have a very generic capitalization table out there, so people can do the math. I cannot really say right now, Poe, because there are certain important transactions that are going to be finalized in the next few days. So, I don't want to give a pro forma figure that may change substantially. So, I don't want to give you pro forma number, just for the offerings. So, there will be additional positive effects to our capitalization after these transactions are consummated. But I cannot really comment right now. It's going to be very soon though.

Just to be clear, those are from refinancing of the $29 million of debt that due at the end of the month or due now?

Not, just that, some other things as well, which we cannot really comment.

Okay.

They're not associated with offerings, they're estate associated with some deals that the Company has managed to execute and that will be announced in due course very soon.

And you talked about locking up through July and August this $19,250. Can you talk about any other opportunities that you have to lock in, what are attractive rates near term?

We have and we have already started looking in some of the ships for July and August. We're constantly monitoring the market right now. So, we have already started with one or two of our ships. The signal that we're getting is that the market is going to shoot up even further. So, we don't want to miss the upside, having had very tough first five months of the year. So, we are cautiously monitoring the markets. We're ready to pull the trigger. We have this flexibility from our index-linked charters to convert into fixed. So, we're taking a very cautious step and monitoring the whole circumstances on a daily basis to do additional ships.

Okay. So, do you have a figure right now for the third quarter on where -- how much forward cover you have right now?

Well, I don't want to give a figure, because the market has been shooting up so much and we have some spot charters that are yet to be finalized. So, I don't want to give a figure, because the majority of the fleet is index-linked. So, it moves with index on a daily basis. We have some conversions, as I mentioned before, to some fixed. But, I don't want to give a clear outlook to get, because, again, there are certain things that need to be developed. But it’s of course, at substantially higher levels than what we did in the first half of the year, multiple times.

Could you -- since the second quarter is almost done? Can you give us an idea of where your TCE rates were average for the second quarter? And then also, if you could just clarify, it seems like part of the premium -- it looks like the premium versus BCI in the first quarter was $3,912. What -- part of that is the recovery of scrubber investments, is that correct? And do you have an idea of how much of that outperformance is the recovery of investments on the scrubbers for the fleet that’s updated with scrubbers?

Yes. Like you very well said, I will start with the second part of your answer. The answer is yes. We have had an important recovery, as four of the ships were making a significant premium due to the scrubber premium that we are getting from the charterers. As for the second quarter guidance, as I mentioned in the call, April and May were also weak months. However, the soaring levels that we saw in June have not been able to make the right calculations yet to see what the effect is going to be for the second quarter. That's why I cannot give you guidance yet. We're still finalizing the cutoffs and the numbers, which we still have four days in the quarter. And that's why I don't want to provide a guidance because the increase has been so steep, so fast that it really caught us -- all this incremental revenue has kind of caught us by surprise. That’s why we cannot really give you an answer. And there are a lot of cutoff and accounting issues that need to be discussed before we provide a guidance. That's why I don't want to be held up in a guidance level right now. So, it's been a great month, June. It was not so great in April or May due to the fact of the prolonged crisis. So, that's why I don't want to give guidance right now.

Okay. So, it’s good to have a surprise that’s positive, once in a while. Could we focus on OpEx little bit, and where you -- OpEx was up in the first quarter just because there are expenses? Can you give us an idea of where OpEx will be for the rest of the year? And then, also, if we could look at the first and possibly the second quarter, what kind of working capital changes did you see and then also what the CapEx numbers you will be looking for the first and second quarters of the year?

First of all, the OpEx for the first quarter was inflated with the one-off expenses having to do with [indiscernible] on certain of our vessels because we decided to change [indiscernible]. Now going forward, you should expect our operating expenses normalize to the levels that you used to, around $4.5 million to $5 million per quarter for the entire fleet. Moving over to the dry docking expenses, as discussed in the past, we had one ship that went through dry docking in the first quarter, next is scrubber installation. The cost of scrubber installation and the associated price was covered charterer, which was Glencore. So, the overall CapEx that was left for Seanergy was around $0.5 million, $750,000.

Okay. Do you have an idea of how working capital changed over the first quarter and possibly for the second quarter?

Working capital over the second quarter was drastically reduced and we were able through the offerings -- to reduce lots on the working capital, and this was normalized to the level $0.5 million to $1 million per vessel, which is very normal, I mean considering our fleet comprises Capesize vessel.

Okay. And then, Stamatis, if we could just look this, you just indicated that you potentially think that the market is going to tighten even further. What [Technical Difficulty]. What do you think goes right from here, and what do you think goes wrong from here?

Well, the obvious answer for things that can go wrong are pretty much the same things that went wrong from -- in the beginning of the year. It has to be weather-related disruptions, as well as the COVID pandemic. However, if I may say, the dry bulk and especially the Capesizes are what we believe to be the more resilient in this kind of circumstance, because the first thing that any government is doing in order to boost the recoveries of their economies is the infrastructure spending. So, we're not affected by let's say, the planes or traveling or things like that. I mean, they will build more roads, they will build more houses, they will build all that to achieve the spacing and also to jumpstart their economies. In the U.S. also it was announced recently $1 trillion of infrastructure projects. And that is only helpful for the Capesizes, because we transport iron ore and coal, which is then converted into steel. So, it's one of the most resilient sectors to be in right now. So, things can go bad, if COVID outbreak, pandemic becomes a major issue again towards the end of the year, which we hope that doesn't happen, not for the rates, of course, but for the health of the global population. Number two, the weather disruptions that always are an issue in the northern export system of Brazil. Right now things appear to be quite normal. Things that can go well is the addition of imports of China in order to recover and to restock the inventories with iron ore, which the demand is particularly strong. And that's why the iron ore prices have gone up. And the aggressive and massive investments in infrastructure that are expected to happen, and they will lead the Capesize rates to go even further up. That's all I can say. All that of course, with new billing schedule, which appears to be kicking in now, and providing very strong fundamentals for the Capesize market.

And then, if we could just look at the reverse stock split for a second. In the press release, you indicated post reverse split that you'll have 30 million shares outstanding. How many shares would you have available to issue, if you chose to issue additional shares?

Well, I mean, a company always has the ability to raise additional capital. And that's not so relevant in way we're doing the whole thing right now. The main driver for the reverse stock split, as I said, is for the stock price to recover into levels that are more marketable and more investable for institutional investors. We don't really think that synergy belongs into the range between $0.20 and $0.35, especially now that we have strengthened the balance sheet into such a position that really qualifies for a massive upgrading in various forms, and the stock price is one of them. So that's the purpose and that's why we are proactively doing the reverse stock split now. And we don't wait until the very last moment. We think that in the rising market conditions, we need to give institutional investors the option to invest into the stock without necessarily having at any $0.20 to $0.35.

Okay. And I know that you don't want to give pro forma cash number. But, how about asking the question this way? How much cash are you comfortable having on the balance sheet, given the volatility of the Cape market? And then, also, when we look at your comments on the potential durability of the recovery, what -- do you think we're at the point where we're going to see a durable, secular market recovery, as opposed to a seasonal one, and then we're finally going to break out from the historic volatility that we've seen over the last three years?

Well, that's a very good question. I will try and be as direct as I can. The balance sheet of the Company has not only been very well strengthened with the cash that we have raised, but also with some additional deals, transactions that the Company has achieved so far. And we have not really announced, this is the ones that that was saying that we will be announcing in the next few weeks. So that's important to known that the balance sheet strength and not just because of the equity offerings, but from other actions that we did in the last two, three months and that are closing these days. We think that the Company has more than sufficient cash, not only to sustain market downturns, but also to look into expansion as well. That's all I can say right now. We have that in place and we are in very, very good shape, right now.

And there are no further questions at this time. I’ll now hand back to Mr. Stamatis Tsantanis. Thank you.

Thank you, Jody. Have a great day, everyone. Thank you for listening to our call.

Ladies and gentlemen, that does conclude the call for today. Thank you all for joining. You may now disconnect.