Seanergy Maritime Holdings Corp. (SHIP) Earnings Call Transcript & Summary

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. Stamatios Tsantanis, Chairman and Chief Executive Officer; and Mr. Stavros Gyftakis, Chief Financial Officer of the company. [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 27-A of the Securities Act of 1933 as amended and Section 21-E of the Securities Exchange Act of 1934 as amended, concerning future events and the company's growth strategy and measures to implement such strategy. 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 or 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 in 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 happened due to hundreds of people trying to dial in at the same time and apparently the servers have crashed. 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 a 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 onboard our ships as well as our office staff. We also needed to make sure that our business runs efficiently and our fleet continues 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 taking full advantage of the shoring 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 2 months of the second quarter were also equally weak. However, as mentioned before, we are at the beginning of June, and the economic activity has recovered strongly, and we now see a clear path back to normal conditions. Generally, we have reasons to be particularly optimistic that the rising trend will continue for the remaining of the year. Specifically in the past weeks, Brazilian and Australian iron ore exports have been very strong and Vale has reiterated their annual production targets. It is important to state that our export volumes have now normalized to pre-crisis levels. In addition, the Chinese and the U.S. governments have announced a record amounts of fiscal stimulus and infrastructure projects in order to support their economies. Therefore, steel demand has been quite strong. As an indication, in China, iron ore inventories have dropped to multiyear lows in the first half of 2020, implying large draws by steel sector and significant requirement to restock as soon as possible. These developments have taken place against a backdrop of restricted vessel supply due to limited newbuilding orders over the past few years. For the first quarter of 2020, our financial performance was negatively affected by the factors above. Our fleet daily time charter equivalent, or TCE, was equal to $8,481 per day, higher by 11% as compared to time charter equivalent of $7,633 for the first quarter of 2019. We have to note that we overperformed significantly the average time charter of the Baltic Capesize Index, or BCI, for the same period, which stood at $4,569 per day, one of the lowest periods in history. For the quarter ended March 31, 2020, the company generated net revenues of $13.3 million, a 17% decrease compared to the first quarter of 2019. EBITDA for the quarter was approximately $1 million compared to EBITDA of $0.4 million in the same period of 2019. Net loss for the first quarter was $8.3 million compared to a net loss of $8.6 million in the first quarter of 2019. However, it appears that the improved market conditions seen currently will lead to a much stronger second half of the year. This is in line with what we saw in 2019 last year, when the improvement in the second part of the year was not only enough to offset the weak performance during the first 6 months but also led to the strongest annual rates of the last 5 years. Moving on to corporate developments. Seanergy took a number of important actions that have developed an even stronger company. First, on the chartering front, on May 15, 2020, one of our Capesizes, the Knightship, was delivered to a new long-term time charter with Glencore, one of the world's largest commodities traders. Under the terms of the agreement, the installation of exhaust gas scrubber system, which was $3.5 million, was completed at the charterer's cost and the employment duration will be for a period of 3 to 5 years. The daily hire of the time charterer in index linked to the Baltic Capesize Index. This is the 1/3 of our vessels chartered on a long-term basis by Glencore and the sixth ship of our fleet in such arrangement with a first-class charterer. Contrary to a number of other shipping companies, we have not burdened our shareholders with millions of dollars of compliance CapEx-associated with the installation of scrubbers. As mentioned earlier, all of our fleet now operates in spot or index-linked charters, which takes full advantage of the booming market conditions and produces strong cash flows from the beginning of June. I also wanted to give you a high-level update of our financial developments. First, we are pleased to announce that we have already refinanced $31.1 million of indebtedness with initial maturities within 2020 and 2021. The new maturities have now been extended to 2022 at substantially the same terms. We are also finalizing discussions with another lenders with 2020 maturities, and we expect positive results soon. We will keep you posted with upcoming good news very soon. Given the high uncertainty that we faced in Q1 due to the low market levels and the COVID-19 situation, we initiated a series of public equity offerings aimed to further improve our financial position. We raised a substantial amount of equity from these offerings with very, very strong institutional interest. In addition to the common shares, virtually all the warrants issued have now been exercised to common shares. So no additional overhang or dilution is expected from these warrant conversions. Our shareholders' equity at the end of the first quarter was $21.9 million, but when adjusted for a recent equity raising activity, our shareholders' equity is approximately $68.9 million. The total adjusted capitalization of Seanergy is now approximately $285 million. Seanergy is very well capitalized to withstand any unexpected market pressure that may arise in this volatile environment. Moreover, Seanergy is very well-funded and in great position to capitalize on attractive opportunities at historically low values. Before I pass the call to our CFO, Stavros Gyftakis, I wanted to note that our share price declined through the first quarter of 2020 due to the unprecedented challenges faced in our sector. We do not believe this is representative of our true value. Even though the NASDAQ has granted us an extension until September 25, 2020, which is effectively 4, 5 months from now, to comply with a minimum bid price, we decided to proactively resolve this matter now. Therefore, our Board of Directors is determined to proceed with the reverse stock split, expect to be effective on June 30, 2020. Such decision aims to restore the price of our shares to an acceptable range, in which most of our peers trade. We strongly believe that executing a reverse stock trade at this time will further encourage institutional interest in our stock and provide a clear runway for the second half of the year. We want to thank our shareholders for their support and loyalty during the previous challenging period of our sector, and we expect to deliver strong shareholder value going forward in what we believe to be a much better market environment. On that note, I will pass the call to our CFO, Stavros Gyftakis, and I will come back later on for the market segment developments.

Thank you, Stamatios. Good morning, everyone. Before getting into the numbers, I would like to note that the results refer to one of the most challenging periods for our industry and the global economy. All this is now behind us, and we are 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 a time charter equivalent of $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 performance benefited from the favorable time charter equivalent rate achieved in voyage is contracted during the fourth quarter of 2019, which were carried over to the revenue of the first 3 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 of 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 agreements, achieving full utilization. Net operating revenue in the first quarter of 2020, defined as revenue after deducting all voyage expense 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 and by our whole fleet for the full first quarter. So a single vessel will generate in 2 months 16% of our entire operating revenue for the first quarter. Moving on to the expense side. Operating expenses for the first quarter were $5.1 million, increased from $4.4 million in the first quarter of last year, mainly due to the timing of certain payments. Nonetheless, the figure is comparable with the $5.1 million operating expenses incurred to the fourth quarter of 2019. At the same time, general and administrative expenses were down by 19%. EBITDA in the first quarter of 2020 was approximately $1 million, up by 130% compared to an EBITDA of $430,000 in the same period of 2019. The improved commercial performance of our fleet resulted in higher net operating revenues, offsetting the marginal increase in operating expenses. Interest and finance cost in the first quarter of 2020 amounted to $5.7 million, a decrease of 9% from $6.3 million in the first quarter of last year. Of this amount, cash interest expense represented about $4.2 million, marking a reduction of 11% compared to the corresponding amount of $4.8 million in 2019. On the interest front, we are marking the year-over-year improvement through the last 3 years. As a result of the above variations, net loss for the first quarter of 2020 was $8.3 million as compared to a net loss of $8.6 million in the same period last year. Now turning to our balance sheet. As of the end of the quarter, Seanergy had $6.2 million in cash and cash equivalents, and shareholders' equity was equal to $21.9 million. The effect of the recent capital raising activities will reflect in our 6-month balance sheet, translating into much stronger shareholders' equity position and solid cash reserves and risk after having fully absorbed shortfalls from the low earnings environment up to June. Now having said this, I would like to note that the series of equity raisings that took place in the second quarter of the year came in response to the extreme levels of macroeconomic uncertainty that prevailed at the time when global industrial economic activity was halted. Our primary aim has been to strengthen our balance sheet and ensure the smooth continuation of our fleet operations. So far, we have emphasized on maintaining liquidity and the flexibility to respond to the rapidly changing and highly uncertain market conditions. If the recent improvement in the dry bulk market proves to have any durability as we expected will, we would not rule out shifting emphasis on the deleveraging of our balance sheet through unlevered or low-levered vessel acquisitions. This would eventually contribute to an expansion of our scale and operating leverage as a leading pure-play Capesize platform. Lastly, I would like to provide some color on the ongoing discussions with our lenders for the upcoming maturities on 2 of our senior secured facilities. The phases in June 2020, and the amount outstanding is approximately $29 million. We are currently in process of finalizing an agreement to refinance the loan in a way that will create accretion for investors while reducing the breakeven through the underlying vessels. Considering the proximity of the maturity, we regret that we are unable to share more information today, yet we will be in a position to provide further details about the agreement in due course. Unfortunately, the COVID-19 situation has increased the processing time for most banks these days and thus the delay in concluding our arrangement. At the same time, we're having constructive discussions with our lenders with the aim to reach an agreement on the second and last facility expiring in 2020, way ahead of the December maturity. I would like to reassure our shareholders that based on the proactive capital-raising actions that we took during the first half of the year and the improved market conditions since the start of June, we are on the right track to address successfully the upcoming maturities. This concludes my review of the financials. I will now turn the call back to Stamatios who will discuss the market and industry fundamentals before concluding with his final remarks. Stamatios?

Thank you, Stavros. Moving on to the industry outlook. As we mentioned in the beginning of our call, the Capesize sector was severely affected in Q1 by a 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. Not to withstand the difficult start of the year, ship 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 government of China and the United States have put enormous stimulus in place in order to jump-start 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 2 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 in the shipment trade of bauxite or the possibility of further iron ore mines expansions in Africa and Brazil. As regards to fleet growth, there are a number of reasons to be optimistic as the Capesize order book is at historical lows. As mentioned in more detail in our previous earnings call, the international maritime organization regulations regarding CO2 emissions are bound to become very restrictive from 2030 onwards, and the uncertainty around new vessels and engine designs makes it very hard for shipowners to commit to new investments. This is also clearly reflected in the lack of availability of financing for new projects. We are confident that the positive supply outlook sets the stage for continued strong market performance, and this is evident by the resilience of the Capesize rates even during the highly uncertain macroeconomic environment over the last 2 years. Seanergy's emphasis on the improvement of the fleet's environmental efficiency and the establishment of -- and the established long-term relationships with prominent charterers ensure our fleet's continued commercial success. As a closing remark, the Capesize vessels are once again outperforming the rest of the dry bulk market by far. Seanergy is the only pure-play Capesize company listed in the U.S. capital markets with all of our ships taking advantage of the shoring market conditions. Moreover, our strong balance sheet will allow us to capitalize on attractive opportunities at historically low asset values and deliver highly accretive transactions to our shareholders. On that note, I would like to turn the call to our operator and answer any questions you may have. So Jody, please take the call.

[Operator Instructions] Our first question today is from the line of Tate Sullivan.

I'm Tate Sullivan from Maxim. Can you first -- can you give more -- you mentioned it before, but can you give more background on the precision for the timing specifically of the stock split or reasons for timing it now, please?

Well, Tate, of course. First of all, as I mentioned, our stocks had dropped a lot during the first quarter. It had 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 our 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 joining the company now will take advantage of the whole thing.

Okay. And a couple more for me, please. Looking back on the 1Q results that's been currently, did your spot rates hold up better than the index rates would suggest that your rates, your time charterer equivalent was more resilient during severely low rates than I expected? And if you can comment on how they can hold up a little better than what we saw in the index in May as well to -- any dynamics there?

Well, that's actually a very good question. To be honest, there's no magic answer to that. 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 where the index was. However, of course, at a certain 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 gone 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.

And in the current environment and for this current quarter with the rates have already improving so meaningfully, what other operating expenses can you cut 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 0 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, we will be dry dock-free until the end of the year. That means that we will hopefully be taking advantage of -- full advantage of the stronger market from now until the year-end. So no additional expenses, no additional CapEx. We expect from now and from the beginning of June until the end of the year to have a very clear runway on a very healthy revenue stream.

Okay. And the last one from me, please, is that you mentioned that with the improvement on your balance sheet, can you give some historical context on, I mean, for instance, when was your last acquisition? And was it -- how did you move forward? Will you look for more at newbuilds even though the shift to the current order book, you got a historical low, you now mentioned that were -- there are current ships? Or can you give anymore context there?

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 get in and buy additional assets right now. I cannot comment any further on that front, but watch this space. That's all I can say. The good thing here is that it's very hard to make any predictions for newbuildings 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 on the Capesize lies with the second-hand ships. And this is what has been always the best solution for Seanergy, and this is how we have made our most accretive transactions so far.

Our next question is from Poe Fratt.

Poe Fratt from NOBLE Capital Markets. Could you -- you highlighted that you raise $30 million through the middle of May. Can you highlight how much additional capital came in through the exercise of the warrant.

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

Poe, actually, I mean, the exercises are -- is an ongoing exercise, which has not been finalized yet, and we expect to reconcile that in the following updates 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 when you -- if you look at cash at the end of the first quarter of, what, of $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 put 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 numbers just for the offerings. 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 strong, though.

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

Not just that, some other things as well which we cannot really comment. But they're not associated with offerings. They're associated with some deals that the company has managed to execute and that will be announced in due course very soon.

That's helpful. And you talked about locking up for July and August at $19,250. Can you talk about the -- any other opportunities that you have to lock in what are attractive rates near term?

We have and we have already started locking in some of the ships for July and August. We're constantly monitoring the market right now. So we have already started with 1 or 2 of our ships. The signals 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 5 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 charterers 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 [ board ] 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 the 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 yet 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.

When -- and could you -- since the second quarter is almost done, can you give us an idea of where you're seeing rates will average for the second quarter? And then also, Stamatios, if we could just clarify -- it seems like part of the premium -- it looks like the premium versus the BCI in the first quarter was $3,912, but 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 is outfitted with scrubbers?

Yes. Yes. Like you very well said, I will start with the second part of your answer (sic) [ question ]. The answer is yes. We have had an important recovery as 4 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 shoring 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 4 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 got us -- all this incremental revenue has kind of got 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 also great in April or May due to the fact of the prolonged crisis. So that's why I don't want to give a guidance right now.

Okay. So it's good to have just a surprise, a positive once in a while. Could we focus on OpEx a little bit and where you -- OpEx was up in the first quarter because of the timing of 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 quarter and possibly, the second quarter, what kind of working capital changes do you see? And then also, what CapEx number it would be looking forward the further second quarter of the year?

Thank you, Poe. This is Stavros. First of all, the OpEx front, I mean, the OpEx for the first quarter was inflated with the one-off expenses, having to do with the release premiums on certain of our vessels because we decided to change the underwriters. Now going forward, you should expect, I mean, our operating expenses to 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, I mean, we had one ship that went through dry-docking in the first quarter. The next is a scrubber installation. The cost of the scrubber installation, the associated of hires was covered by the charterer, which was Glencore. So the overall CapEx that was left for Seanergy was around $500,000 to $750,000.

Okay. And do you -- Stavros, do you have an idea of how working capital changed over the first quarter and possibly for the second quarter?

The working capital over the second quarter was drastically reduced. We were able, I mean, through the procedure of the offering coming to reduce lots on the working capital, and this has normalized to the level amounting to levels of $0.5 million to $1 million per vessel, which is very normal, I mean, considering our fleet comprises Capesize vessels.

Okay. And then, Stamatios, if we could just look at this, you just indicated that you potentially think that the market is going to tighten even further. What [ are we seeing now ] as far as take rate? What do you think could go right from here? And then also, what do you think could go 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 circumstances because the first thing that any government is doing in order to boost the recoveries of the 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 jump-start 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. We certainly hope that this doesn't happen, not for the rates, of course, but for the health of the global population. And number two, the weather disruptions that always are an issue in the northern export system of Brazil. And I know things are appearing -- appear to be quite normal. Things that can go well is the additional imports of China in order to recover and restock the inventories of 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. So that's all I can say. All that, of course, we've had views newbuilding schedule, which appears to be kicking in now and providing very strong fundamentals for the Capesize market.

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

Well, I mean, a company always has the ability to raise additional capital, and that's not so relevant in why we're doing the whole thing. But 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 Seanergy 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 rising market conditions, we need to give institutional investors the option to invest into the stock without necessarily having it as $0.01, $0.20 to $0.35.

Okay. And I know that you don't want to give a 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 relatively that we've seen over the last 3 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 one that I was saying that we will be announced in the next few weeks. So that's important to know that the balance has strengthened not just because of the equity offerings but from other actions that we did in the last 2, 3 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're in very, very good shape right now.

As there are no further questions at this time, I'll now hand back to Mr. Tsantanis.

Thank you, Jody. Have a great day, everyone, and 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.