Globus Maritime(US:GLBS)2025-03-14 20:06PART I Item 3. Key Information This section outlines the principal risks associated with the company's business, the dry bulk shipping industry, and ownership of its common shares Risk Factors The company faces significant risks from the highly cyclical and volatile dry bulk shipping industry, geopolitical events, extensive environmental regulations, and company-specific financial and governance issues - The international dry bulk shipping industry is cyclical and highly volatile, with charter rates, vessel values, and profitability subject to significant fluctuations based on supply and demand for vessel capacity and commodities43 - Political instability, including the war in Ukraine and conflicts in the Middle East, could adversely affect business operations, financial results, and the ability to obtain financing545556 - Proposed U.S. port fees on Chinese-built vessels could materially increase operating costs, as six of the company's ten vessels were constructed in China. Fees could be as high as $1.5 million per port entry for a non-Chinese operator with Chinese-built vessels707277 - The company is subject to complex environmental laws and regulations (e.g., MARPOL, IMO 2020, EU ETS) that require significant capital expenditures for compliance and may become more stringent, potentially affecting vessel values and useful lives808186 - Fluctuations in the market value of vessels could trigger breaches of financial covenants in loan agreements, potentially leading to debt acceleration and foreclosure on vessels141144146 - The company derives a significant portion of its revenue from a small number of customers; in FY2024, approximately 77% of revenue came from four customers, increasing counterparty default risk190 - The CEO, through ownership of all Series B Preferred Shares, controls 49.99% of the company's voting power, allowing significant influence over corporate matters, which may limit the influence of common shareholders261800 Item 4. Information on the Company This section details the company's history, corporate actions, and business operations, including its fleet, chartering strategy, competitive landscape, and regulatory compliance History and Development of the Company Globus Maritime Limited, incorporated in 2006, operates as an integrated dry bulk shipping company, actively managing its fleet through sales of older vessels and acquisitions/newbuilds of modern ones - The company has actively managed its fleet by selling older vessels and acquiring modern ones; in 2023, it sold three vessels (m/v Sun Globe, m/v Sky Globe, m/v Star Globe) and in 2024 sold the m/v Moon Globe297299300 - In 2024, the company took delivery of three newbuild Ultramax vessels (m/v GLBS Hero, m/v GLBS Might, m/v GLBS Magic) and acquired two Kamsarmax vessels (m/v GLBS Angel, m/v GLBS Gigi) from a related party295296303 - The company has contracted for the construction of two new fuel-efficient Ultramax vessels, scheduled for delivery in the second half of 2026, with a total consideration of approximately $75.5 million301 Fleet Composition and Age | Metric | As of Dec 31, 2024 | As of Dec 31, 2023 | | :--- | :--- | :--- | | Number of Vessels | 10 | 6 | | Weighted Average Age (years) | 7.8 | 11.2 | | Total Carrying Capacity (dwt) | 734,249 | 453,745 | Business Overview Globus Maritime provides worldwide marine transportation services for dry bulk cargoes, employing a mixed chartering strategy and operating under extensive international safety and environmental regulations Fleet Details as of March 12, 2025 | Vessel | Year Built | Vessel Type | Carrying Capacity (dwt) | | :--- | :--- | :--- | :--- | | m/v River Globe | 2007 | Supramax | 53,627 | | m/v Galaxy Globe | 2015 | Kamsarmax | 81,167 | | m/v Diamond Globe | 2018 | Kamsarmax | 82,027 | | m/v Power Globe | 2011 | Kamsarmax | 80,655 | | m/v Orion Globe | 2015 | Kamsarmax | 81,837 | | m/v GLBS Hero | 2024 | Ultramax | 64,000 | | m/v GLBS Might | 2024 | Ultramax | 64,000 | | m/v GLBS Magic | 2024 | Ultramax | 64,000 | | m/v GLBS Angel | 2016 | Kamsarmax | 81,119 | | m/v GLBS Gigi | 2014 | Kamsarmax | 81,817 | | Total | | | 734,249 | - The company's chartering strategy is to use a mix of short-term, spot, and long-term charters to balance stable cash flow with the ability to capitalize on market upswings; as of the report date, all vessels were on short-term time charters, with eight being index-linked311313 - The company is subject to extensive environmental regulations, including MARPOL Annex VI, which limits sulfur emissions and requires measures to reduce greenhouse gas emissions (EEXI and CII), and the EU Emissions Trading Scheme (ETS), which will increase compliance costs382388409 Item 5. Operating and Financial Review and Prospects This section analyzes the company's financial condition and operating results, highlighting increased voyage revenues but decreased operating income due to higher administrative and interest expenses, alongside its liquidity and capital resources Operating Results For FY2024, voyage revenues increased by 12% to $34.5 million due to higher charter rates, but operating income declined by 46% to $3.4 million, primarily driven by a $3.1 million increase in administrative expenses and higher depreciation and interest costs Key Financial Results (Year-over-Year) | Metric (in millions USD) | FY 2024 | FY 2023 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Voyage Revenues | $34.5 | $30.8 | +$3.7 | +12% | | Vessel Operating Expenses | $14.3 | $16.1 | -$1.8 | -11% | | Operating Income | $3.4 | $6.3 | -$2.9 | -46% | | Total Comprehensive Income | $0.43 | $5.27 | -$4.84 | -92% | | Interest Expense & Finance Costs | $6.3 | $4.4 | +$1.9 | +43% | Key Operational Metrics | Metric | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Average Number of Vessels | 7.3 | 7.8 | | Ownership Days | 2,669 | 2,850 | | Fleet Utilization | 99.4% | 98.4% | | Daily TCE Rate ($) | 12,475 | 9,768 | - Administrative expenses to related parties surged to $3.8 million in 2024 from $0.7 million in 2023, mainly due to a $3 million one-time bonus awarded to a consulting company affiliated with the CEO upon the successful delivery of two newbuilding vessels556 - A reversal of impairment of $1.89 million was recorded in Q2 2024 related to the sale of the m/v Moon Globe, following a similar reversal of $4.4 million in Q1 2023 for the m/v Sun Globe, as their selling prices exceeded their carrying values534563 Liquidity and Capital Resources The company's liquidity is supported by cash from operations and reserves, with total outstanding debt significantly increasing to $138 million in 2024 to fund fleet expansion, while remaining in compliance with debt covenants Liquidity and Debt Position | Metric (in millions USD) | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $46.8 | $74.2 | | Restricted Cash | $3.8 | $3.6 | | Working Capital | $18.5 | $69.8 | | Total Outstanding Debt | $138.0 | $52.6 | - In 2024, the company secured several new financing facilities: a $23 million loan from Marguerite Maritime S.A., a $28 million sale and bareboat back arrangement for m/v GLBS Might, and a $25 million sale and bareboat back arrangement for m/v GLBS Magic574576581 - The company has significant capital expenditure commitments of approximately $60.6 million for two newbuilding vessels scheduled for delivery in the second half of 20266281048 - The CIT Loan Facility was amended in August 2023, increasing the principal to $72.25 million, and contains covenants requiring a minimum loan-to-value ratio of 65% and a maximum leverage ratio of 0.75:1.00, with which the company was in compliance572596603 Item 6. Directors, Senior Management and Employees This section details the company's board of directors and senior management, including the CEO's compensation structure, recent equity incentive plan adoption, and employee count - The board consists of five directors, with Georgios Feidakis as Chairman and his son, Athanasios Feidakis, as President, CEO, and CFO652660 Executive and Director Compensation (2024) | Recipient | Type | Amount Paid (in millions USD) | Amount Owed (as of 12/31/24) | | :--- | :--- | :--- | :--- | | Goldenmare Limited (CEO's affiliate) | Consultancy Fees & Bonus | ~$1.7 | ~$1.7 million | | Non-Executive Directors (Aggregate) | Fees | $0.304 | $0.08 million | - On March 13, 2024, the company adopted the 2024 Equity Incentive Plan, reserving 2,000,000 common shares for issuance to officers, employees, directors, and consultants, though no awards were granted in 2024678679682 - As of December 31, 2024, the company had 25 full-time employees, all located in Greece677 Item 7. Major Shareholders and Related Party Transactions This section outlines major shareholders, including the Chairman's 24.9% common share ownership and the CEO's 49.99% voting control via Series B Preferred Shares, and details significant related party transactions in 2024 Major Shareholders as of March 12, 2025 | Shareholder | Common Shares Beneficially Owned | Percentage of Common Shares | | :--- | :--- | :--- | | George Feidakis (Chairman) | 5,115,776 | 24.9% | | Lind Global Macro Fund, LP | 2,093,808 (warrants) | 9.2% | | Intracoastal Capital LLC | 1,959,250 (warrants) | 8.7% | | Armistice Capital, LLC | 1,200,000 (warrants) | 5.5% | - The CEO, Athanasios Feidakis, controls Goldenmare Limited, which holds 10,300 Series B Preferred Shares, each with 25,000 votes, capped at an aggregate of 49.99% of the total voting power of the company695800 - In October 2024, the company acquired two Kamsarmax vessels (m/v GLBS Angel and m/v GLBS Gigi) for a total of $54 million from an entity controlled by the Chairman and CEO, with $19 million of the purchase price due within one year704941 - The company's manager leases its office space from F.G. Europe A.E., an affiliate of the Chairman; rent paid in 2024 amounted to $353,000698937 Item 8. Financial Information This section refers to the consolidated financial statements and notes that the company has not been involved in significant legal proceedings, with its dividend policy suspended since 2012 due to board discretion and financing restrictions - The company has not paid any dividends on its common shares since 2012; the ability to pay dividends is subject to board discretion, financial condition, and restrictions in financing agreements708712 - Current financing arrangements, such as the CIT Loan Facility, prohibit or restrict dividend payments unless certain conditions are met, including maintaining a loan-to-value ratio below 60% and prepaying the loan in an amount equal to the dividend712605 Item 10. Additional Information This section covers the company's share capital, articles of incorporation, material contracts, and tax considerations, including its belief in Section 883 exemption from U.S. federal income tax and non-PFIC status - The company has a Shareholders Rights Agreement (poison pill) that becomes exercisable if a person or group acquires 15% or more of common shares without board approval, with certain exceptions for existing major shareholders725808 - The company believes its U.S. source shipping income is exempt from U.S. federal income tax under Section 883 of the Internal Revenue Code by satisfying the "Publicly Traded Test"744752 - Management believes the company should not be treated as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, based on the position that income from time charters constitutes services income rather than passive rental income199761 Item 11. Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks from floating-rate debt interest rates, foreign currency exchange rates, and fuel prices, with a 1.0% SOFR increase potentially adding $1.2 million in interest expense in 2025 Interest Rate Sensitivity on Debt (as of Dec 31, 2024) | Year | Additional Interest Expense from 1.0% SOFR Increase (million USD) | | :--- | :--- | | 2025 | $1.2 | | 2026 | $1.0 | | 2027 | $0.8 | | 2028 | $0.7 | | 2029 and thereafter | $2.3 | - The company's revenues are in U.S. dollars, while a portion of operating expenses are in other currencies, creating exposure to foreign exchange rate fluctuations, which the company does not currently hedge789790 PART II Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds This section details significant modifications to security holder rights, primarily through the issuance of Series B Preferred Shares, granting the CEO's affiliate substantial voting control, and the adoption of a Shareholders Rights Agreement to deter coercive takeovers - The 10,300 outstanding Series B Preferred Shares grant the holder 25,000 votes per share, but the total voting power is capped at 49.99%, giving an affiliate of the CEO substantial control over shareholder matters799800 - The company implemented a Shareholders Rights Agreement in August 2023 (amended January 2025) that triggers if a person or group acquires 15% or more of common shares without board approval, with certain existing major shareholders being exempt808 Item 15. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2024, with no material changes identified - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024809811 - Based on the COSO 2013 framework, management determined that the company's internal control over financial reporting was effective as of December 31, 2024813 Item 16. Corporate Governance and Other Disclosures This section covers governance topics, including the audit committee financial expert, principal accountant fees, foreign private issuer exemptions from Nasdaq rules, and the company's board-overseen cybersecurity risk management program - The board of directors has determined that Ioannis Kazantzidis is the audit committee financial expert and is independent under SEC and Nasdaq rules817 Principal Accountant Fees (Ernst & Young) | Service Category | 2024 (USD) | 2023 (USD) | | :--- | :--- | :--- | | Audit Fees | $214,470 | $226,800 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | | Total | $214,470 | $226,800 | - As a foreign private issuer, the company is exempt from certain Nasdaq corporate governance rules, including the requirement for a majority-independent board and shareholder approval for all equity compensation plans or certain share issuances828 - The company has implemented a cybersecurity risk management program overseen by the board of directors, utilizing a third-party, ISO 27001 certified IT provider, and has not experienced any material impact from cybersecurity threats to date833834838 PART III Item 18. Financial Statements This section presents the company's audited consolidated financial statements for 2024, 2023, and 2022, prepared under IFRS, with an unqualified auditor's opinion and vessel impairment assessment identified as a critical audit matter Consolidated Statement of Financial Position (Abridged) | (in thousands USD) | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | $320,986 | $231,401 | | Vessels, net | $248,979 | $100,557 | | Cash and cash equivalents | $46,837 | $74,202 | | Total Liabilities | $144,585 | $55,431 | | Long-term borrowings & Financial liabilities | $119,011 | $52,259 | | Total Equity | $176,401 | $175,970 | Consolidated Statement of Comprehensive Income (Abridged) | (in thousands USD) | FY 2024 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | | Total Revenues | $34,870 | $31,205 | $61,755 | | Operating Income | $3,399 | $6,277 | $23,632 | | Total Comprehensive Income | $431 | $5,272 | $24,280 | | Basic and Diluted EPS ($) | 0.02 | 0.26 | 1.18 | Consolidated Statement of Cash Flows (Abridged) | (in thousands USD) | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $11,285 | ($4,455) | | Net Cash from/(used in) Investing Activities | ($98,921) | $18,459 | | Net Cash from Financing Activities | $60,271 | $7,365 | | Net Change in Cash | ($27,365) | $21,369 | | Cash at End of Year | $46,837 | $74,202 | - The independent auditor, Ernst & Young (Hellas), identified the assessment of vessel impairment indicators as a Critical Audit Matter due to the significant judgment and estimation uncertainty involved in assessing volatile market conditions865866