DORIAN LPG LTD., 10-K filed on 6/12/2020
Annual Report
v3.20.1
Document and Entity Information - USD ($)
12 Months Ended
Mar. 31, 2020
Jun. 09, 2020
Sep. 30, 2019
Document and Entity Information      
Entity Registrant Name DORIAN LPG LTD.    
Entity Central Index Key 0001596993    
Document Type 10-K    
Document Period End Date Mar. 31, 2020    
Amendment Flag false    
Current Fiscal Year End Date --03-31    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Accelerated Filer    
Entity Public Float     $ 414,273,991
Entity Common Stock, Shares Outstanding   50,827,952  
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Document Fiscal Year Focus 2020    
Document Fiscal Period Focus FY    
v3.20.1
Consolidated Balance Sheets - USD ($)
Mar. 31, 2020
Mar. 31, 2019
Current assets    
Cash and cash equivalents $ 48,389,688 $ 30,838,684
Short-term investments 14,923,140 599,949
Restricted cash - current 3,370,178  
Trade receivables, net and accrued revenues 820,846 1,384,118
Due from related parties 66,847,701 44,455,643
Inventories 1,996,203 2,111,637
Prepaid expenses and other current assets 3,266,999 3,199,038
Total current assets 139,614,755 82,589,069
Fixed assets    
Vessels, net 1,437,658,833 1,478,520,314
Other fixed assets, net 185,613 160,283
Total fixed assets 1,437,844,446 1,478,680,597
Other non-current assets    
Deferred charges, net 7,336,726 2,000,794
Derivative instruments   6,448,498
Due from related parties—non-current 23,100,000 19,800,000
Restricted cash - non-current 35,629,261 35,633,962
Operating lease right-of-use assets 26,861,551  
Other non-current assets 1,573,104 217,097
Total assets 1,671,959,843 1,625,370,017
Current liabilities    
Trade accounts payable 13,552,796 7,212,580
Accrued expenses 4,080,952 3,436,116
Due to related parties 436,850 489,644
Deferred income 2,068,205 4,258,683
Derivative instruments 2,605,442  
Current portion of long-term operating lease liabilities 9,212,589  
Current portion of long-term debt 53,056,125 63,968,414
Total current liabilities 85,012,959 79,365,437
Long-term liabilities    
Long-term debt—net of current portion and deferred financing fees 581,919,094 632,122,372
Long-term operating lease liabilities 17,651,939  
Derivative instruments 9,152,829  
Other long-term liabilities 1,170,824 1,199,650
Total long-term liabilities 609,894,686 633,322,022
Total liabilities 694,907,645 712,687,459
Commitments and contingencies
Shareholders' equity    
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued nor outstanding
Common stock, $0.01 par value, 450,000,000 shares authorized, 59,083,290 and 58,882,515 shares issued, 50,827,952 and 55,167,708 shares outstanding (net of treasury stock), as of March 31, 2020 and March 31, 2019, respectively 590,833 588,826
Additional paid-in-capital 866,809,371 863,583,692
Treasury stock, at cost; 8,255,338 and 3,714,807 shares as of March 31, 2020 and March 31, 2019, respectively (87,183,865) (36,484,561)
Retained earnings 196,835,859 84,994,601
Total shareholders' equity 977,052,198 912,682,558
Total liabilities and shareholders' equity $ 1,671,959,843 $ 1,625,370,017
v3.20.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Mar. 31, 2020
Mar. 31, 2019
Consolidated Balance Sheets    
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized 50,000,000 50,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 450,000,000 450,000,000
Common stock, shares issued 59,083,290 58,882,515
Common stock, shares outstanding (net of treasury stock) 50,827,952 55,167,708
Treasury stock, shares at cost 8,255,338 3,714,807
v3.20.1
Consolidated Statements of Operations - USD ($)
12 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2018
Revenues.      
Revenues $ 333,429,998 $ 158,032,485 $ 159,334,760
Expenses      
Voyage expenses 3,242,923 1,697,883 2,213,773
Charter hire expenses 9,861,898 237,525  
Vessel operating expenses 71,478,369 66,880,568 64,312,644
Depreciation and amortization 66,262,530 65,201,151 65,329,951
General and administrative expenses 23,355,768 24,434,246 26,186,332
Professional and legal fees related to the BW Proposal   10,022,747  
Total expenses 174,201,488 168,474,120 158,042,700
Other income-related parties 1,840,321 2,479,599 2,549,325
Operating income/(loss) 161,068,831 (7,962,036) 3,841,385
Other income/(expenses)      
Interest and finance costs (36,105,541) (40,649,231) (35,658,045)
Interest income 1,458,725 1,755,259 440,059
Unrealized gain/(loss) on derivatives (18,206,769) (7,816,401) 8,421,531
Realized gain/(loss) on derivatives 2,800,374 3,788,123 (1,328,886)
Gain on early extinguishment of debt     4,117,364
Other gain/(loss), net 825,638 (61,619) (234,094)
Total other income/(expenses), net (49,227,573) (42,983,869) (24,242,071)
Net income/(loss) $ 111,841,258 $ (50,945,905) $ (20,400,686)
Weighted average shares outstanding Basic (in shares) 53,881,483 54,513,118 54,039,886
Weighted average shares outstanding Diluted (in shares) 54,115,338 54,513,118 54,039,886
Earnings/(loss) per common share – basic (in dollars per share) $ 2.08 $ (0.93) $ (0.38)
Earnings/(loss) per common share – diluted (in dollars per share) $ 2.07 $ (0.93) $ (0.38)
Net pool revenues - related party      
Revenues.      
Revenues $ 298,079,123 $ 120,015,771 $ 106,958,576
Time charter revenues      
Revenues.      
Revenues 34,111,230 37,726,214 50,176,166
Voyage charter revenues      
Revenues.      
Revenues     2,068,491
Other revenues, net      
Revenues.      
Revenues $ 1,239,645 $ 290,500 $ 131,527
v3.20.1
Consolidated Statements of Shareholders' Equity - USD ($)
Common stock
Treasury stock
Additional paid-in capital
Retained earnings
Total
Balance at Mar. 31, 2017 $ 583,422 $ (33,897,269) $ 852,974,373 $ 156,341,192 $ 976,001,718
Balance (in shares) at Mar. 31, 2017 58,342,201        
Increase (Decrease) in Shareholders' Equity          
Net income/(loss) for the period       (20,400,686) (20,400,686)
Restricted share award issuances $ 2,980   (2,980)    
Restricted share award issuances (in shares) 297,960        
Stock-based compensation     5,138,489   5,138,489
Purchase of treasury stock   (1,326,159)     (1,326,159)
Balance at Mar. 31, 2018 $ 586,402 (35,223,428) 858,109,882 135,940,506 959,413,362
Balance (in shares) at Mar. 31, 2018 58,640,161        
Increase (Decrease) in Shareholders' Equity          
Net income/(loss) for the period       (50,945,905) (50,945,905)
Restricted share award issuances $ 2,424   (2,424)    
Restricted share award issuances (in shares) 242,354        
Stock-based compensation     5,476,234   5,476,234
Purchase of treasury stock   (1,261,133)     (1,261,133)
Balance at Mar. 31, 2019 $ 588,826 (36,484,561) 863,583,692 84,994,601 912,682,558
Balance (in shares) at Mar. 31, 2019 58,882,515        
Increase (Decrease) in Shareholders' Equity          
Net income/(loss) for the period       111,841,258 111,841,258
Restricted share award issuances $ 2,007   (2,007)    
Restricted share award issuances (in shares) 200,775        
Stock-based compensation     3,227,686   3,227,686
Purchase of treasury stock   (50,699,304)     (50,699,304)
Balance at Mar. 31, 2020 $ 590,833 $ (87,183,865) $ 866,809,371 $ 196,835,859 $ 977,052,198
Balance (in shares) at Mar. 31, 2020 59,083,290        
v3.20.1
Consolidated Statements of Cash Flows - USD ($)
12 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2018
Cash flows from operating activities:      
Net income/(loss) $ 111,841,258 $ (50,945,905) $ (20,400,686)
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:      
Depreciation and amortization 66,262,530 65,201,151 65,329,951
Amortization of operating lease right-of-use asset 1,885,522    
Amortization of financing costs 2,893,392 3,136,051 7,506,509
Unrealized (gain)/loss on derivatives 18,206,769 7,816,401 (8,421,531)
Stock-based compensation expense 3,227,686 5,476,234 5,138,489
Gain on early extinguishment of debt     (4,117,364)
Unrealized foreign currency (gain)/loss, net 311,539 303,835 (63,761)
Other non-cash items, net (1,200,001) (48,182) 144,545
Changes in operating assets and liabilities      
Trade receivables, net and accrued revenue 563,272 (1,047,956) (325,132)
Prepaid expenses and other current assets (222,510) (537,549) (579,981)
Due from related parties (25,692,058) (17,574,923) 15,576,280
Inventories 115,434 (98,730) 567,835
Other non-current assets (1,356,007) (131,457) (10,171)
Operating lease liabilities—current and long-term (1,888,347)    
Trade accounts payable 1,470,669 793,925 (561,808)
Accrued expenses and other liabilities (2,078,325) (2,999,444) (2,406,945)
Due to related parties (52,794) 144,129 334,353
Payments for drydocking costs (5,251,622) (604,147) (461,480)
Net cash provided by operating activities 169,036,407 8,883,433 57,249,103
Cash flows from investing activities:      
Vessel-related capital expenditures (19,883,090) (3,972,815) (297,534)
Payments for short-term investments (14,888,638) (499,690)  
Proceeds from sale of investment securities 1,767,906    
Payments to acquire other fixed assets (141,012) (47,799) (139,503)
Net cash used in investing activities (33,144,834) (4,520,304) (437,037)
Cash flows from financing activities:      
Proceeds from long-term debt borrowings   65,137,500 261,000,000
Repayment of long-term debt borrowings (63,968,414) (130,205,069) (251,994,382)
Purchase of treasury stock (50,642,795) (1,310,064) (1,220,535)
Financing costs paid (40,547) (628,144) (3,113,425)
Net cash provided by/(used in) financing activities (114,651,756) (67,005,777) 4,671,658
Effects of exchange rates on cash and cash equivalents (323,336) (253,086) (8,042)
Net increase/(decrease) in cash, cash equivalents, and restricted cash 20,916,481 (62,895,734) 61,475,682
Cash, cash equivalents, and restricted cash at the beginning of the period 66,472,646 129,368,380 67,892,698
Cash, cash equivalents, and restricted cash at the end of the period 87,389,127 66,472,646 129,368,380
Supplemental disclosure of cash flow information      
Cash paid during the period for interest 32,461,153 36,906,567 27,958,102
Cash paid for amounts included in the measurement of operating lease liabilities 2,810,468    
Vessel-related capital expenditures included in liabilities 4,408,333 33,015 60,854
Financing costs included in liabilities $ 595,138 $ 595,138 $ 142,434
v3.20.1
Consolidated Statements of Cash Flows (Parenthetical) - USD ($)
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2018
Mar. 31, 2017
Reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the total amount of such items reported in the statements of cash flows:        
Cash and cash equivalents $ 48,389,688 $ 30,838,684 $ 103,505,676  
Restricted cash - current 3,370,178      
Restricted cash - non-current 35,629,261 35,633,962 25,862,704  
Cash and cash equivalents and restricted cash at end of period shown in the statement of cash flows $ 87,389,127 $ 66,472,646 $ 129,368,380 $ 67,892,698
v3.20.1
Basis of Presentation and General Information
12 Months Ended
Mar. 31, 2020
Basis of Presentation and General Information  
Basis of Presentation and General Information

Dorian LPG Ltd.

Notes to Consolidated Financial Statements 

(Expressed in United States Dollars)

 

1.

Basis of Presentation and General Information

 

Dorian LPG Ltd. (“Dorian”) was incorporated on July 1, 2013 under the laws of the Republic of the Marshall Islands, is headquartered in the United States and is engaged in the transportation of liquefied petroleum gas (“LPG”) worldwide through the ownership and operation of LPG tankers. Dorian LPG Ltd. and its subsidiaries (together “we,” “us,” “our,” or the “Company”) are focused on owning and operating very large gas carriers (“VLGCs”), each with a cargo carrying capacity of greater than 80,000 cbm. As of March 31, 2020, our fleet consists of twenty-four VLGCs, including nineteen fuel-efficient 84,000 cbm ECO-design VLGCs (“ECO VLGCs”), three 82,000 cbm VLGCs, and two time chartered-in VLGCs. Nine of our technically-managed ECO VLGCs are fitted with exhaust gas cleaning systems (commonly referred to as “scrubbers”) to reduce sulfur emissions. The installation of scrubbers on six of these VLGCs was completed during the year ended March 31, 2020 and the installation of a scrubber on an additional VLGC was in progress as of March 31, 2020 and was completed in April 2020. An additional three of our technically-managed VLGCs had contractual commitments to be equipped with scrubbers as of March 31, 2020, for which one is currently in progress of being scrubber-equipped.

 

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of Dorian LPG Ltd. and its subsidiaries.

 

On April 1, 2015, Dorian and Phoenix Tankers Pte. Ltd. (“Phoenix”) began operations of Helios LPG Pool LLC (the “Helios Pool”), which entered into pool participation agreements for the purpose of establishing and operating, as charterer, under variable rate time charters to be entered into with owners or disponent owners of VLGCs, a commercial pool of VLGCs whereby revenues and expenses are shared. See Note 3 below for further description of the Helios Pool relationship. 

 

Our subsidiaries, which are all wholly-owned and all are incorporated in Republic of the Marshall Islands (unless otherwise indicated below), as of March 31, 2020 are listed below.

 

Vessel Owning Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

    

Type of

    

 

    

 

    

 

 

Subsidiary

 

vessel

 

Vessel’s name

 

Built

 

CBM(1)

 

CMNL LPG Transport LLC

 

VLGC

 

Captain Markos NL(2)

 

2006

 

82,000

 

CJNP LPG Transport LLC

 

VLGC

 

Captain John NP(2)

 

2007

 

82,000

 

CNML LPG Transport LLC

 

VLGC

 

Captain Nicholas ML(2)

 

2008

 

82,000

 

Comet LPG Transport LLC

 

VLGC

 

Comet

 

2014

 

84,000

 

Corsair LPG Transport LLC

 

VLGC

 

Corsair(2)

 

2014

 

84,000

 

Corvette LPG Transport LLC

 

VLGC

 

Corvette(2)

 

2015

 

84,000

 

Dorian Shanghai LPG Transport LLC

 

VLGC

 

Cougar

 

2015

 

84,000

 

Concorde LPG Transport LLC

 

VLGC

 

Concorde(2)

 

2015

 

84,000

 

Dorian Houston LPG Transport LLC

 

VLGC

 

Cobra

 

2015

 

84,000

 

Dorian Sao Paulo LPG Transport LLC

 

VLGC

 

Continental

 

2015

 

84,000

 

Dorian Ulsan LPG Transport LLC

 

VLGC

 

Constitution

 

2015

 

84,000

 

Dorian Amsterdam LPG Transport LLC

 

VLGC

 

Commodore

 

2015

 

84,000

 

Dorian Dubai LPG Transport LLC

 

VLGC

 

Cresques

 

2015

 

84,000

 

Constellation LPG Transport LLC

 

VLGC

 

Constellation

 

2015

 

84,000

 

Dorian Monaco LPG Transport LLC

 

VLGC

 

Cheyenne

 

2015

 

84,000

 

Dorian Barcelona LPG Transport LLC

 

VLGC

 

Clermont

 

2015

 

84,000

 

Dorian Geneva LPG Transport LLC

 

VLGC

 

Cratis

 

2015

 

84,000

 

Dorian Cape Town LPG Transport LLC

 

VLGC

 

Chaparral

 

2015

 

84,000

 

Dorian Tokyo LPG Transport LLC

 

VLGC

 

Copernicus

 

2015

 

84,000

 

Commander LPG Transport LLC

 

VLGC

 

Commander

 

2015

 

84,000

 

Dorian Explorer LPG Transport LLC

 

VLGC

 

Challenger

 

2015

 

84,000

 

Dorian Exporter LPG Transport LLC

 

VLGC

 

Caravelle

 

2016

 

84,000

 

 

Management Subsidiaries

 

 

 

 

Subsidiary

 

Dorian LPG Management Corp.

 

Dorian LPG (USA) LLC (incorporated in USA)

 

Dorian LPG (UK) Ltd. (incorporated in UK)

 

Dorian LPG Finance LLC

 

Occident River Trading Limited (incorporated in UK)

 

Dorian LPG (DK) ApS (incorporated in Denmark)

 

Dorian LPG Chartering LLC

 

Dorian LPG FFAS LLC

 


(1)

CBM: Cubic meters, a standard measure for LPG tanker capacity

(2)

Operated pursuant to a bareboat charter agreement. Refer to Notes 9 below for further information

 

Customers

 

For the year ended March 31, 2020, the Helios Pool accounted for 89% of our total revenues. No other individual charterer accounted for more than 10%. For the year ended March 31, 2019, the Helios Pool and one other individual charterer represented 76% and 14% of our total revenues, respectively. For the year ended March 31, 2018, the Helios Pool and two other individual charterers accounted for 67%,  13% and 11% of our total revenues, respectively.

v3.20.1
Significant Accounting Policies
12 Months Ended
Mar. 31, 2020
Significant Accounting Policies  
Significant Accounting Policies

2. Significant Accounting Policies

 

(a)   Principles of consolidation:  The consolidated financial statements incorporate the financial statements of the Company and its wholly‑owned subsidiaries. Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statements of operations from the effective date of acquisition and up to the effective date of disposal, as appropriate. All intercompany balances and transactions have been eliminated.

 

(b)   Use of estimates:  The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

(c)   Other comprehensive income/(loss):  We follow the accounting guidance relating to comprehensive income, which requires separate presentation of certain transactions that are recorded directly as components of shareholders’ equity. We have no other comprehensive income/(loss) items and, accordingly, comprehensive income/(loss) equals net income/(loss) for the periods presented and thus we have not presented this in the consolidated statement of operations or in a separate statement.

 

(d)   Foreign currency translation:  Our functional currency is the U.S. Dollar. Foreign currency transactions are measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. As of balance sheet date, monetary assets and liabilities that are denominated in a currency other than the functional currency are adjusted to reflect the exchange rate at the balance sheet date and any gains or losses are included in the statement of operations. For the periods presented, we had no foreign currency derivative instruments.

 

(e)   Cash and cash equivalents:  We consider highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents.

 

(f)   Short-term investments:  We consider short-term, highly-liquid time deposits placed with financial institutions, which are readily convertible into known amounts of cash with original maturities of more than three months, but less than 12 months at the time of purchase to be short-term investments.

 

(g)   Trade receivables, net and accrued revenues:  Trade receivables, net and accrued revenues, reflect receivables from vessel charters, net of an allowance for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. Provision for doubtful accounts for the periods presented was zero.

 

(h)   Due from related parties:  Due from related parties reflect receivables from the Helios Pool and other related parties. Distributions of earnings due from the Helios Pool are classified as current and working capital contributed to the Helios Pool is classified as non-current.

 

(i)   Inventories:  Inventories consist of bunkers on board the vessels when vessels are unemployed or are operating under voyage charters and lubricants and stores on board the vessels. Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first in, first out method. Net realizable value is the estimated selling price, less reasonably predictable costs of disposal and transportation.

 

(j)   Vessels, net:  Vessels, net are stated at cost net of accumulated depreciation and impairment charges. The costs of the vessels acquired as part of a business acquisition are recorded at their fair value on the date of acquisition. The cost of vessels purchased consists of the contract price, less discounts, plus any direct expenses incurred upon acquisition, including improvements, commission paid, delivery expenses and other expenditures to prepare the vessel for her initial voyage. The initial purchase of LPG coolant for the refrigeration of cargo is also capitalized. Allocated interest costs incurred during construction are capitalized. Subsequent expenditures for conversions and major improvements, including scrubbers, are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Repairs and maintenance are expensed as incurred.

 

(k)   Impairment of long‑lived assets:  We review our vessels “held and used” for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of future undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, the asset is evaluated for an impairment loss. Measurement of the impairment loss is based on the fair value of the asset.

 

(l)   Vessel depreciation:  Depreciation is computed using the straight‑line method over the estimated useful life of the vessels, after considering the estimated salvage value. Each vessel’s salvage value is equal to the product of its lightweight tonnage and estimated scrap rate. Management estimates the useful life of its vessels to be 25 years from the date of initial delivery from the shipyard. Secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful life.

 

(m)  Drydocking and special survey costs:  Drydocking and special survey costs are accounted under the deferral method whereby the actual costs incurred are deferred and are amortized on a straight‑line basis over the period through the date the next survey is scheduled to become due. The classification societies provide guidelines applicable to LPG vessels relating to extended intervals for drydocking. Generally, we are required to drydock each of our vessels every five years until they reach 15 years of age unless an extension of the drydocking to seven and one-half years is requested and granted by the classification society and the vessel is not older than 20 years of age. Costs deferred are limited to actual costs incurred at the yard and parts used in the drydocking or special survey. Costs deferred include expenditures incurred relating to shipyard costs, hull preparation and painting, inspection of hull structure and mechanical components, steelworks, machinery works, and electrical works. If a survey is performed prior to the scheduled date, the remaining unamortized balances are immediately written off. Unamortized balances of vessels that are sold are written‑off and included in the calculation of the resulting gain or loss in the period of the vessel’s sale. The amortization charge is presented within Depreciation and amortization in the consolidated statement of operations.

 

(n)   Financing costs:  Financing costs incurred for obtaining new loans and credit facilities are deferred and amortized to interest expense over the respective term of the loan or credit facility using the effective interest rate method. Any unamortized balance of costs relating to loans repaid or refinanced is expensed in the period the repayment or refinancing is made, subject to the accounting guidance regarding Debt—Modifications and Extinguishments. Any unamortized balance of costs related to credit facilities repaid is expensed in the period. Any unamortized balance of costs relating to credit facilities refinanced are deferred and amortized over the term of the respective credit facility in the period the refinancing occurs, subject to the provisions of the accounting guidance relating to Debt—Modifications and Extinguishments. The unamortized financing costs are reflected as a reduction of Long-term debt—net of current portion and deferred financing fees in the accompanying consolidated balance sheet.

 

(o)   Restricted cash:  Restricted cash represents minimum liquidity to be maintained with certain banks under our borrowing arrangements and pledged cash deposits. The restricted cash is classified as non-current in the event that its obligation is not expected to be terminated within the next twelve months as they are long-term in nature.

 

(p)   Leases: We adopted the new lease guidance as described in Note 2 effective April 1, 2019 and applied the modified retrospective approach. Refer to Note 10 for a description of our operating lease expenses for the years ended March 31, 2020, 2019, and 2018 and to Note 18 for a description of commitments related to our leases as of March 31, 2020. The following is a description of our arrangements that were impacted by this new guidance.

 

Time charter-out contracts

 

Our time charter revenues are generated from our vessels being hired by a third-party charterer for a specified period in exchange for consideration, which is based on a monthly hire rate. The charterer has the full discretion over the ports subject to compliance with the applicable charter party agreement and relevant laws. In a time charter contract, we are responsible for all the costs incurred for running the vessel such as crew costs, vessel insurance, repairs and maintenance, and lubricants. The charterer bears the voyage related costs such as bunker expenses, port charges and canal tolls during the hire period. The performance obligations in a time charter contract are satisfied on a straight-line basis over the term of the contract beginning when the vessel is delivered to the charterer until it is redelivered back to us. The charterer generally pays the charter hire monthly in advance. We determined that our time charter contracts are considered operating leases and therefore fall under the scope of the guidance because (i) the vessel is an identifiable asset, (ii) we do not have substantive substitution rights, and (iii) the charterer has the right to control the use of the vessel during the term of the contract and derives the economic benefits from such use. Under the guidance, we elected the practical expedient available to lessors to not separate the lease and non-lease components included in the time charter revenue because (i) the pattern of revenue recognition for the lease and non-lease components is the same as it is earned by the passage of time and (ii) the lease component, if accounted for separately, would be classified as an operating lease. The adoption of the guidance did not impact our accounting for time charter out contracts.

 

Time charter revenues are recognized when an agreement exists, the price is fixed, service is provided and the collection of the related revenue is reasonably assured. We record time charter revenues on a straight-line basis over the term of the charter as service is provided. Time charter revenues received in advance of the provision of charter service are recorded as deferred income and recognized when the charter service is rendered. Deferred income or accrued revenue also may result from straight‑line revenue recognition in respect of charter agreements that provide for varying charter rates. Deferred income and accrued revenue amounts that will be recognized within the next twelve months are presented as current, with amounts to be recognized thereafter presented as non‑current. Revenues earned through the profit-sharing arrangements in the time charters represent contingent rental revenues that are recognized when earned and amounts are reasonably assured based on estimates provided by the charterer. Revenue generated from time charters is accounted for as revenue earned under the new leasing guidance further described below.

 

Net pool revenues—related party

 

As from April 1, 2015, we began operation of a pool. Net pool revenues—related party for each vessel in the pool is determined in accordance with the profit-sharing terms specified within the pool agreement. In particular, the pool manager calculates the net pool revenues using gross revenues less voyage expenses of all the pool vessels and less the general and administrative expenses of the pool and distributes the net pool revenues as time charter hire to participants based on:

 

pool points (vessel attributes such as cargo carrying capacity, fuel consumption, and speed are taken into consideration); and

 

number of days the vessel participated in the pool in the period.

 

We recognize net pool revenues—related party on a monthly basis, when the vessel has participated in the pool during the period and the amount of net pool revenues for the month can be estimated reliably. Revenue generated from the pool is accounted for as revenue from operating leases, pursuant to the accounting standard on leases, as further described below.

 

Time charter-in contracts

 

Our time charter-in contracts relate to the charter-in activity of vessels from third parties for a specified period of time in exchange for consideration, which is based on a monthly hire rate. We elected the practical expedient of the guidance that allows for contracts with an initial lease term of 12 months or less to be excluded from the operating lease right-of-use assets and lease liabilities recognized on our consolidated balance sheets.

 

Under the guidance, we elected the practical expedients available to lessees to not separate the lease and non-lease components included in the charter hire expense because (i) the pattern of revenue recognition for the lease and non-lease components is the same as it is earned by the passage of time and (ii) the lease component, if accounted for separately, would be classified as an operating lease. We elected not to separate the lease and non-lease components included in charter hire expense, but to recognize operating lease expense as a combined single lease component for all time charter-in contracts.

 

Office leases

 

We carried forward our historical assessments of (i) whether contracts are or contain leases, (ii) lease classifications, and (iii) initial direct costs. For leases with terms greater than 12 months, we record the related right-of-use asset and lease liability as the present value of fixed lease payments over the lease term. For leases that do not provide a readily determinable discount rate, we use our incremental borrowing rate to discount lease payments to present value.

 

Under the guidance, we elected the practical expedients available to lessees to not separate the lease and non-lease components included in the office lease expense because (i) the pattern of revenue recognition for the lease and non-lease components is the same as it is earned by the passage of time and (ii) the lease component, if accounted for separately, would be classified as an operating lease. We elected not to separate the lease and non-lease components included in general and administrative expenses, but to recognize operating lease expense as a combined single lease component for all office leases.

 

(q)Voyage charter revenues:  In a voyage charter contract, a charterer hires a vessel to transport a specific agreed-upon cargo for a single voyage, which may contain multiple load ports and discharge ports. The consideration in such a contract is determined on the basis of a freight rate per metric ton of cargo carried or occasionally on a lump sum basis. The charter party generally has a minimum amount of cargo. The charterer is liable for any short loading of cargo or "dead" freight. The contract generally has standard payment terms of freight paid within three to five days after completion of loading. The contract generally has a "demurrage" or "despatch" clause. As per this clause, the charterer reimburses us for any potential delays exceeding the allowed laytime as per the charter party clause at the ports visited which is recorded as demurrage revenue. Conversely, the charterer is given credit if the loading/discharging activities happen within the allowed laytime, known as despatch, resulting in a reduction in revenue. The voyage contracts generally have variable consideration in the form of demurrage or despatch.    Revenue from voyage charters is recognized when (i) the parties to the contract have approved the contract in the form of a written charter agreement and are committed to perform their respective obligations, (ii) we can identify each party’s rights regarding the services to be transferred, (iii) we can identify the payment terms for the services to be transferred, (iv) the charter agreement has commercial substance (that is, the risk, timing, or amount of our future cash flows is expected to change as a result of the contract) and (v) it is probable that we will collect substantially all of the consideration to which we will be entitled in exchange for the services that will be transferred to the charterer.

 

Voyage charter agreements do not contain a lease and are therefore considered service contracts that fall under the provisions of Accounting Standard Codification (“ASC”) 606 Revenue from Contracts with Customers. Voyage contracts are considered service contracts which fall under the provisions of ASC 606 because we retain control over the operations of the vessel, including directing the routes taken and vessel speed. Voyage contracts generally have variable consideration in the form of demurrage or despatch. We determined that a voyage charter agreement includes a single performance obligation, which is to provide the charterer with an integrated transportation service within a specified time period. In addition, we have concluded that a contract for a voyage charter meets the criteria to recognize revenue over time because the charterer simultaneously receives and consumes the benefits of the our performance as the voyage progresses and therefore revenues are recognized on a pro rata basis over the duration of the voyage determined on a load-to-discharge port basis. In the event a vessel is acquired or sold while a voyage is in progress, the revenue recognized is based on an allocation formula agreed between the buyer and the seller. Demurrage income represents payments by the charterer to the vessel owner when loading or discharging time exceeds the stipulated time in the voyage charter and is recognized when earned and collection is reasonably assured. Despatch expense represents payments by us to the charterer when loading or discharging time is less than the stipulated time in the voyage charter and is recognized as incurred. Voyage charter revenue relating to voyages in progress as of the balance sheet date are accrued and presented in Trade receivables and accrued revenue in the accompanying consolidated balance sheet.

 

We adopted ASC 606 on April 1, 2018 using the modified retrospective approach. The adoption of the amended guidance did not have any material impact on the consolidated financial statements for the year ended March 31, 2019 or for prior periods, given our revenues are primarily generated by pool and time charter arrangements, and there were no voyage charter arrangements in progress as of March 31, 2019 or 2018.

 

(r)   Voyage expenses:  Voyage expenses are expensed as incurred, except for expenses during the ballast portion of the voyage (period between the contract date and the date of the vessel’s arrival to the load port). Any expenses incurred during the ballast portion of the voyage such as bunker expenses, canal tolls and port expenses are deferred and are recognized on a straight-line basis, in voyage expenses, over the voyage duration as we satisfy the performance obligations under the contract provided these costs are (1) incurred to fulfill a contract that we can specifically identify, (2) able to generate or enhance resources of the company that will be used to satisfy performance of the terms of the contract, and (3) expected to be recovered from the charterer. These costs are considered contract fulfillment costs because the costs are direct costs related to the performance of the contract and are expected to be recovered.

 

(s)   Commissions:    Charter hire commissions to brokers or managers, if any, are deferred and amortized over the related charter period and are included in Voyage expenses.

 

(t)   Charter hire expenses:  Charter hire expenses in relation to vessels that we may occasionally charter in from third parties are recorded on a straight-line basis over the term of the charter as service is provided. Charter hire expenses paid in advance of the provision of charter service are recorded as a current asset and recognized when the charter service is rendered. Deferred expenses also may result from straight-line recognition in respect of charter agreements that provide for varying charter rates. Deferred expense amounts that will be recognized within the next twelve months are presented as current, with amounts to be recognized thereafter presented as noncurrent.

 

(u)  Vessel operating expenses:  Vessel operating expenses are accounted for as incurred on the accrual basis. Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores and other miscellaneous expenses.

 

(v)   Repairs and maintenance:  All repair and maintenance expenses, including underwater inspection costs are expensed in the period incurred. Such costs are included in Vessel operating expenses.

 

(w)   Stock-based compensation:   Stock-based payments to employees and directors are determined based on their grant date fair values and are amortized against income over the vesting period. The fair value is considered to be the closing price recorded on the grant date. We account for restricted stock award forfeitures upon occurrence.

 

(x)   Stock repurchases:  We record the repurchase of our shares of common stock at cost based on the settlement date of the transaction. These shares are classified as treasury stock, which is a reduction to shareholders’ equity. Treasury shares are included in authorized and issued shares, but excluded from outstanding shares.

 

(y)   Segment reporting:  Each of our vessels serve the same type of customer, have similar operations and maintenance requirements, operate in the same regulatory environment, and are subject to similar economic characteristics. Based on this, we have determined that it operates in one reportable segment, the international transportation of liquid petroleum gas with its fleet of vessels. Furthermore, when we charter a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographic information is impracticable.

 

(z)   Derivative instruments:  All derivatives are stated at their fair value, as either a derivative asset or a liability. The fair value of the interest rate derivatives is based on a discounted cash flow analysis and their fair value changes are recognized in current period earnings. When the derivatives do qualify for hedge accounting, depending upon the nature of the hedge, changes in fair value of the derivatives are either recognized in current period earnings or in other comprehensive income/(loss) (effective portion) until the hedged item is recognized in the consolidated statements of operations. For the periods presented, no derivatives were accounted for as accounting hedges.

 

(aa)  Fair value of financial instruments:  In accordance with the requirements of accounting guidance relating to Fair Value Measurements, the Company classifies and discloses its assets and liabilities carried at fair value in one of the following three categories:

 

Level 1:

Quoted market prices in active markets for identical assets or liabilities.

Level 2:

Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3:

Unobservable inputs that are not corroborated by market data.

 

(bb)  Recent accounting pronouncements:

 

Accounting Pronouncements Recently Adopted

 

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-2 (codified as ASC 842) to update the requirements of financial accounting and reporting for lessees and lessors. The updated guidance, for lease terms of more than 12 months, will require a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize a straight-line total lease expense. Lessor accounting remained largely unchanged from previous U.S. GAAP. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. In July 2018, the FASB issued amended guidance to provide entities with relief from the cost of implementing certain aspects of the new leasing guidance. Entities may elect not to recast comparative periods presented when transitioning to the new leasing guidance and, furthermore, lessors may elect not to separate lease and nonlease components when certain conditions are met. The pronouncement is effective prospectively for public business entities for annual periods beginning after December 15, 2018, and interim periods within that reporting period. Early adoption is permitted for all entities. We adopted the guidance effective April 1, 2019 and applied the modified retrospective approach. Comparative information has not been restated and continues to be reported under the accounting guidance in effect for those periods. We elected to adopt the “package of practical expedients,” which permitted us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We elected the short-term lease recognition exemption for all leases that qualified. This means, for those leases that qualified, we did not recognize right-of-use assets or lease liabilities, and this included not recognizing right-of-use assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all leases other than leases of real estate, and this included not separating lease and non-lease components for all leases other than leases of real estate in transition. The adoption did not have a material effect on our consolidated statements of operations or cash flows. We recognized operating lease right-of-use assets and operating lease liabilities related to our office leases (described in Note 10) on our consolidated balance sheet of approximately $1.2 million as of April 1, 2019. Refer to Note 18 for a description of our operating lease expenses for the years ended March 31, 2020, 2019 and 2018 and commitments related to our leases as of March 31, 2020. In relation to our time chartered-in VLGC (described in Note 10), the adoption of the new guidance had no impact on our financial statements since the length of the time charter was not more than 12 months. Refer to Note 10 — Leases for additional information regarding the adoption of ASC 842 from a lessor as well as from a lessee perspective.

 

v3.20.1
Transactions with Related Parties
12 Months Ended
Mar. 31, 2020
Transactions with Related Parties  
Transactions with Related Parties

3. Transactions with Related Parties

 

Dorian (Hellas) S.A.

 

Dorian (Hellas) S.A. (“DHSA”) formerly provided technical, crew, commercial management, insurance and accounting services to our vessels and had agreements to outsource certain of these services to Eagle Ocean Transport Inc. (“Eagle Ocean Transport”), which is 100% owned by Mr. John C. Hadjipateras, our Chairman, President and Chief Executive Officer.

 

Dorian LPG (USA) LLC and its subsidiaries entered into an agreement with DHSA, retroactive to July 2014 and superseding an agreement between Dorian LPG (UK) Ltd. and DHSA, for the provision by Dorian LPG (USA) LLC and its subsidiaries of certain chartering and marine operation services to DHSA, for which income was earned and included in “Other income-related parties” totaling $0.1 million, $0.2 million and $0.4 million for the years ended March 31, 2020,  2019 and 2018, respectively. As of March 31, 2020,  $1.3 million was due from DHSA and included in “Due from related parties.” As of March 31, 2019, $1.2 million was due from DHSA and included in “Due from related parties.”

 

Eagle Ocean Transport incurs miscellaneous costs on behalf of us, for which we reimbursed Eagle Ocean Transport less than $0.1 million for each of the years ended March 31, 2020 and 2019, and $0.1 million for the year ended March 31, 2018. Such expenses are reimbursed based on their actual cost.

 

Helios LPG Pool LLC (“Helios Pool”)

 

On April 1, 2015, Dorian and Phoenix began operations of the Helios Pool, which entered into pool participation agreements for the purpose of establishing and operating, as charterer, under variable rate time charters to be entered into with owners or disponent owners of VLGCs, a commercial pool of VLGCs whereby revenues and expenses are shared. We hold a 50% interest in the Helios Pool as a joint venture with Phoenix and all significant rights and obligations are equally shared by both parties. All profits of the Helios Pool are distributed to the pool participants based on pool points assigned to each vessel as variable charter hire and, as a result, there are no profits available to the equity investors as a share of equity. We have determined that the Helios Pool is a variable interest entity as it does not have sufficient equity at risk. We do not consolidate the Helios Pool because we are not the primary beneficiary and do not have a controlling financial interest. In consideration of Accounting Standards Codification (“ASC”) 810-10-50-4e, the significant factors considered and judgments made in determining that the power to direct the activities of the Helios Pool that most significantly impact the entity’s economic performance are shared, in that all significant performance activities which relate to approval of pool policies and strategies related to pool customers and the marketing of the pool for the procurement of customers for the pool vessels, addition of new pool vessels and the pool cost management, require unanimous board consent from a board consisting of two members from each joint venture investor. Further, in accordance with the guidance in ASC 810-10-25-38D, the Company and Phoenix are not related parties as defined in ASC 850 nor are they de facto agents pursuant to ASC 810-10, the power over the significant activities of the Helios Pool is shared, and no party is the primary beneficiary in the Helios Pool, or has a controlling financial interest. As of March 31, 2020, the Helios Pool operated thirty-six VLGCs, including twenty-two vessels from our fleet (including one vessel time chartered-in from an unrelated party), four Phoenix vessels, five from other participants, and five time chartered-in vessels.

 

As of March 31, 2020, we had net receivables from the Helios Pool of $88.1 million (net of an amount due to Helios Pool of $0.4 million which is reflected under “Due to related Parties”), including $24.2 million of working capital contributed for the operation of our vessels in the pool. As of March 31, 2019, we had receivables from the Helios Pool of $62.5 million (net of an amount due to Helios Pool of $0.5 million which is reflected under “Due to related Parties”), including $19.8 million of working capital contributed for the operation of our vessels in the pool. Our maximum exposure to losses from the pool as of March 31, 2019 is limited to the receivables from the pool. The Helios Pool does not have any third-party debt obligations. The Helios Pool has entered into commercial management agreements with each of Dorian LPG (UK) Ltd. and Phoenix as commercial managers and has appointed both commercial managers as the exclusive commercial managers of pool vessels. Fees for commercial management services provided by Dorian LPG (UK) Ltd. are included in “Other income-related parties” in the consolidated statement of operations and were $1.6 million, $2.2 million and $2.2 million for the years ended March 31, 2020,  2019 and 2018, respectively. Additionally, we received a fixed reimbursement of expenses such as costs for security guards and war risk insurance for vessels operating in high risk areas from the Helios Pool, for which we earned $1.2 million, $0.3 million and $0.1 million for the years ended March 31, 2020,  2019 and 2018 respectively, and are included in “Other revenues, net” in the consolidated statement of operations.

 

Through our vessel owning subsidiaries, we have chartered vessels to the Helios Pool during the years ended March 31, 2020, 2019 and 2018. The time charter revenue from the Helios Pool is variable depending upon the net results of the pool, operating days and pool points for each vessel. The Helios Pool enters into voyage and time charters with external parties and receives freight and related revenue and, where applicable, incurs voyage costs such as bunkers, port costs and commissions. At the end of each month, the Helios Pool calculates net pool revenues using gross revenues, less voyage expenses of all pool vessels, less fixed time charter hire for any time chartered-in vessels, less the general and administrative expenses of the pool. Net pool revenues, less any amounts required for working capital of the Helios Pool, are distributed, to the extent they have been collected from third-party customers of the Helios Pool, as variable rate time charter hire for the relevant vessel to participants based on pool points (vessel attributes such as cargo carrying capacity, fuel consumption, and speed are taken into consideration) and number of days the vessel participated in the pool in the period. We recognize net pool revenues on a monthly basis, when each relevant vessel has participated in the pool during the period and the amount of net pool revenues for the month can be estimated reliably. Revenue earned from the Helios Pool is presented in Note 13.

 

Consulting 

 

A former member of our board of directors, who resigned as a director effective May 1, 2015, provided certain chartering and commercial services to the Company, its subsidiaries, and the Predecessor Companies since the formation of the Predecessor Companies. This individual entered into a consulting agreement in May 2015, which was amended in June 2016, that provided for, among other things, an annual fee for services rendered of $120,000. This agreement was terminated effective April 1, 2018. Related to this consulting agreement, we expensed $0.1 million for the year ended March 31, 2018. No such expenses were incurred for the years ended March 31, 2020 and 2019.

v3.20.1
Inventories
12 Months Ended
Mar. 31, 2020
Inventories  
Inventories

4. Inventories

 

Our inventories by type were as follows:

 

 

 

 

 

 

 

 

 

March 31, 2020

 

March 31, 2019

 

Lubricants

$

1,544,352

 

$

1,699,316

 

Victualing

 

328,297

 

 

287,795

 

Bonded stores

 

123,554

 

 

124,526

 

Total

$

1,996,203

 

$

2,111,637

 

 

v3.20.1
Vessels, Net
12 Months Ended
Mar. 31, 2020
Vessels, Net  
Vessels, Net

5. Vessels, Net

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Accumulated

    

 

 

 

 

 

Cost

 

depreciation

 

Net book Value

 

Balance, April 1, 2018

 

$

1,728,987,980

 

$

(189,876,147)

 

$

1,539,111,833

 

Other additions

 

 

4,005,830

 

 

 —

 

 

4,005,830

 

Depreciation

 

 

 —

 

 

(64,597,349)

 

 

(64,597,349)

 

Balance, March 31, 2019

 

$

1,732,993,810

 

$

(254,473,496)

 

$

1,478,520,314

 

Other additions

 

 

24,291,423

 

 

 —

 

 

24,291,423

 

Depreciation

 

 

 —

 

 

(65,152,904)

 

 

(65,152,904)

 

Balance, March 31, 2020

 

$

1,757,285,233

 

$

(319,626,400)

 

$

1,437,658,833

 

 

Additions to vessels, net mainly consisted of the installment payments on the purchase of scrubbers for certain of our VLGCs and other capital improvements to our VLGCs during the years ended March 31, 2020 and 2019. Our vessels, with a total carrying value of $1,437.7 million and $1,478.5 million as of March 31, 2020 and 2019, respectively, are first‑priority mortgaged as collateral for our long-term debt (refer to Note 9 below). No impairment loss was recorded for the periods presented.

v3.20.1
Other Fixed Assets, Net
12 Months Ended
Mar. 31, 2020
Other Fixed Assets, Net  
Other Fixed Assets, Net

6. Other Fixed Assets, Net

 

Other fixed assets, net were $0.2 million and $0.2 million as of March 31, 2020 and March 31, 2019, respectively, and represent leasehold improvements, software and furniture and fixtures at cost. Accumulated depreciation on other fixed assets, net was $0.3 million as of March 31, 2020 and $0.3 million as of March 31, 2019.

v3.20.1
Deferred Charges, Net
12 Months Ended
Mar. 31, 2020
Deferred Charges, Net.  
Deferred Charges, Net

7. Deferred Charges, Net

 

The analysis and movement of deferred charges, net is presented in the table below:

 

 

 

 

 

 

 

    

Drydocking

 

 

 

costs

 

Balance, April 1, 2018

 

$

1,574,522

 

Additions

 

 

955,372

 

Amortization

 

 

(529,100)

 

Balance, April 1, 2019

 

$

2,000,794

 

Additions

 

 

6,329,877

 

Amortization

 

 

(993,945)

 

Balance, March 31, 2020

 

$

7,336,726

 

 

v3.20.1
Accrued Expenses
12 Months Ended
Mar. 31, 2020
Accrued Expenses  
Accrued Expenses

8. Accrued Expenses

 

Accrued expenses comprised of the following:

 

 

 

 

 

 

 

 

 

March 31, 2020

    

March 31, 2019

 

Accrued voyage and vessel operating expenses

$

2,473,385

 

$

1,684,336

 

Accrued professional services

 

266,836

 

 

400,984

 

Accrued loan and swap interest

 

284,985

 

 

394,532

 

Accrued employee-related costs

 

949,310

 

 

867,514

 

Accrued board of directors' fees

 

88,750

 

 

88,750

 

Other

 

17,686

 

 

 —

 

Total

$

4,080,952

 

$

3,436,116

 

 

v3.20.1
Long-term Debt
12 Months Ended
Mar. 31, 2020
Long-term Debt  
Long-term Debt

9. Long‑Term Debt

 

Description of our Debt Obligations

 

2015 Facility

 

In March 2015, we entered into a $758 million debt financing facility with four separate tranches (collectively, with the amendments described below, the “2015 Facility”). Commercial debt financing (“Commercial Financing”) of $249 million was provided by ABN AMRO Capital USA LLC (“ABN”); ING Bank N.V., London Branch, ("ING"); DVB Bank SE ("DVB"); Citibank N.A., London Branch (“Citi”); and Commonwealth Bank of Australia, New York Branch, ("CBA") (collectively the "Commercial Lenders"), while the Export Import Bank of Korea ("KEXIM") directly provided $204 million of financing (“KEXIM Direct Financing”). The remaining $305 million of financing was provided under tranches guaranteed by KEXIM of $202 million (“KEXIM Guaranteed”) and insured by the Korea Trade Insurance Corporation ("K-sure") of $103 million (“K-sure Insured”). Financing under the KEXIM guaranteed and K-sure insured tranches are provided by certain Commercial Lenders; Deutsche Bank AG; and Santander Bank, N.A. As of March 31, 2020, the debt financing is secured by, among other things, sixteen of our ECO VLGCs, and represents a loan-to-contract cost ratio before fees of approximately 55%.

 

The 2015 Facility contains various covenants providing for, among other things, maintenance of certain financial ratios and certain limitations on payment of dividends, investments, acquisitions and indebtedness. A commitment fee was payable on the average daily unused amount under the 2015 Facility of 40% of the margin on each tranche. Certain terms of the borrowings under each tranche of the 2015 Facility are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Rate at 

 

 

    

 

    

Term

 

Interest Rate Description(1)

 

March 31, 2020(2)

 

Tranche 1

 

Commercial Financing

 

7

years

 

London InterBank Offered Rate (“LIBOR”) plus a margin(4)

 

3.98

%

Tranche 2

 

KEXIM Direct Financing

 

12

years(3)

 

LIBOR plus a margin of 2.45%

 

3.68

%

Tranche 3

 

KEXIM Guaranteed

 

12

years(3)

 

LIBOR plus a margin of 1.40%

 

2.63

%

Tranche 4

 

K-sure Insured

 

12

years(3)

 

LIBOR plus a margin of 1.50%

 

2.73

%

 


(1)

The interest rate of the 2015 Facility on Tranche 1 is determined in accordance with the agreement as three- or six- month LIBOR plus the applicable margin and the interest rate on Tranches 2, 3 and 4 is determined in accordance with the agreement as three- month LIBOR plus the applicable margin for the respective tranches.

 

(2)

The set LIBOR rate in effect as of March 31, 2020 was 1.23%.

 

(3)

The KEXIM Direct Financing, KEXIM Guaranteed, and K-Sure tranches have put options to call for the prepayment on the final payment date of the Commercial Financing tranche subject to specific notifications and commitments for refinancing/renewal of the Commercial Financing tranche.

 

(4)

The Commercial Financing tranche margin over LIBOR is 2.75% and is reduced to 2.50% if 50% or more but less than 75% of the vessels financed in the 2015 Facility are employed under time charters as defined in the agreement and to 2.25% if 75% or more of the vessels financed in the 2015 Facility are employed under time charters as defined in the agreement. As of March 31, 2020, the set margin was 2.75%.

 

The 2015 Facility is secured by, among other things, (i) first priority Bahamian mortgages on the vessels financed; (ii) first priority assignments of all of the financed vessels’ insurances, earnings, requisition compensation, and management agreements; (iii) first priority security interests in respect of all issued shares or limited liability company interests of the borrowers and vessel-owning guarantors; (iv) first priority charter assignments of all of the financed vessels’ long-term charters; (v) assignments of the interests of any ship manager in the insurances of the financed vessels; (vi) an assignment by the borrower of any bank, deposit or certificate of deposit opened in accordance with the facility; and (vii) a guaranty by the Company guaranteeing the obligations of the borrower and other guarantors under the facility agreement. The 2015 Facility further provides that the facility is to be secured by assignments of the borrower’s rights under any hedging contracts in connection with the facility, but such assignments have not been entered into at this time.

 

The 2015 Facility also contains customary covenants that require us to maintain adequate insurance coverage, properly maintain the vessels and to obtain the lender’s prior consent before changes are made to the flag, class or management of the vessels, or entry into a new line of business. The loan facility includes customary events of default, including those relating to a failure to pay principal or interest, breaches of covenants, representations and warranties, a cross-default to certain other debt obligations and non-compliance with security documents, and customary restrictions from paying dividends if an event of default has occurred and is continuing, or if an event of default would result therefrom.

 

On May 31, 2017, we entered into an agreement to amend the 2015 Facility. This amendment included the relaxation of certain covenants under the debt financing facility; the release of $26.8 million of restricted cash as of the date of this amendment that was applied towards the next two debt principal payments, interest and certain fees; and certain other modifications. Fees related to this amendment totaled approximately $1.1 million.

 

The following financial covenants, some of which were relaxed under this amendment, are the most restrictive from the 2015 Facility with which the Company is required to comply, calculated on a consolidated basis, determined and defined according to the provisions of the loan agreement:

 

·

The ratio of current assets and long-term restricted cash divided by current liabilities, excluding current portion of long-term debt, shall always be greater than 1.00;

 

·

Maintain minimum shareholders’ equity at all times equal to the aggregate of (i) $400,000,000, (ii) 50% of any new equity raised after loan agreement date and (iii) 25% of the positive net income for the immediately preceding financial year;

 

·

Minimum interest coverage ratio of consolidated EBITDA to consolidated net interest expense must be maintained greater than or equal to (i) 1.25 at all times prior to and through March 31, 2018, (ii) 1.50 at all times from April 1, 2018 through March 31, 2019, and (iii) 2.50 at all times thereafter; and

 

·

The ratio of consolidated net debt to consolidated total capitalization shall not exceed 0.60 to 1.00;

 

·

Fair market value of the mortgaged ships plus any additional security over the outstanding loan balance shall be at least (i) 125% at all times prior to and through March 31, 2018, (ii) 130% at all times from April 1, 2018 through March 31, 2019, (iii) 135% at all times thereafter.

 

The following negative covenant was added under this amendment:

 

·

Restrictions on dividends and stock repurchases until the earlier of (i) an Approved Equity Offering (defined below) and (ii) the second anniversary of this amendment; and

 

This amendment also includes a provision for the reduction of the minimum balance held as restricted cash. The minimum balance of the restricted cash deposited under this amendment is or was:

 

·

the lesser of $18.0 million and $1.0 million per mortgaged vessel under the 2015 Facility at all times from the date of this amendment through six months after the date of this amendment;

 

·

the lesser of $29.0 million and $1.6 million per mortgaged vessel under the 2015 Facility at all times from six months from the date of this amendment through the first anniversary of the date of this amendment;

 

·

the lesser of $40.0 million and $2.2 million per mortgaged vessel under the 2015 Facility at all times thereafter; and   

 

·

if we complete a common stock offering of at least $50.0 million, including fees (an “Approved Equity Offering”), the restricted cash shall be calculated as an amount at least equal to 5% of the total principal of the 2015 Facility outstanding, but at no time less than the lesser of $20.0 million and $1.1 million per mortgaged vessel under the 2015 Facility.

 

On July 23, 2019, we entered into an agreement to amend the 2015 Facility. Fees related to this amendment totaled less than $0.1 million. This amendment’s key provisions include:

 

1)

a modification to the definition of consolidated EBITDA to exclude expenses incurred in connection with the BW LPG acquisition attempt (see Exhibit 10.1); 

 

2)

the following financial covenant modification:

 

·

Minimum interest coverage ratio of consolidated EBITDA, as defined in the 2015 Facility, to consolidated net interest expense must be maintained greater than or equal to (i) 2.00 at all times from June 30, 2019 through March 31, 2020 and (ii) 2.50 from April 1, 2020 and at all times thereafter; and

 

3)

the following modification to the definition of consolidated liquidity:

 

·

if the minimum interest coverage ratio of consolidated EBITDA to consolidated net interest expense is less than 2.50 at any time or times during the period beginning on and including June 30, 2019 and ending on and including March 31, 2020, consolidated liquidity shall at such time or times be maintained in an amount at least equal to $47,500,000.

 

The 2015 Facility permits the lenders to accelerate the indebtedness if, without the prior written consent of the lenders, (i) one-third of our common shares are owned by any shareholder other than certain entities, directors or officers listed in the agreement; (ii) there are certain changes to our board of directors; or (iii) Mr. John C. Hadjipateras ceases to serve on our board of directors.

 

2017 Bridge Loan

 

On June 8, 2017, we entered into a $97.0 million bridge loan agreement (the “2017 Bridge Loan”) with DNB Capital LLC. The principal amount of the 2017 Bridge Loan was due on or before August 8, 2018 (the “Original Maturity Date”) and initially accrued interest on the outstanding principal amount at a rate of LIBOR plus 2.50% for the period ended December 7, 2017; LIBOR plus 4.50% for the period from December 8 until March 7, 2018; LIBOR plus 6.50% for the period March 8, 2018 until June 7, 2018, and LIBOR plus 8.50% from June 8, 2018 until the Original Maturity Date.

 

The proceeds of the 2017 Bridge Loan were used to repay in full our bank debt provided by Royal Bank of Scotland plc. associated with each of the Captain John NP,  Captain Markos NL and the Captain Nicholas ML (the “RBS Loan Facility”), at 96% of the then outstanding principal amount. The remaining proceeds were used to pay accrued interest, legal, arrangement and advisory fees related to the 2017 Bridge Loan.

 

The 2017 Bridge Loan was initially secured by, among other things, (i) first priority mortgages on the VLGCs that were financed under the RBS Loan Facility and the Corsair, (ii) first assignments of all freights, earnings and insurances relating to these four VLGCs, and (iii) pledges of membership interests of the borrowers.

 

On November 7, 2017, we prepaid $30.1 million of the 2017 Bridge Loan’s then outstanding principal with proceeds from the Corsair Japanese Financing (defined below) and the security interests related to the Corsair were released under the facility. Refer to “Corsair Japanese Financing” below for further details.

 

On December 8, 2017, we entered into an agreement to amend the Original Maturity Date and margin on the 2017 Bridge Loan for a fee of $0.2 million. The remaining outstanding principal amount of the 2017 Bridge Loan was due on or before December 31, 2018 (the “Amended Maturity Date”) and accrues interest on the outstanding principal amount at a rate of LIBOR plus 2.50% for the period ending March 31, 2018; LIBOR plus 6.50% for the period April 1, 2018 until June 30, 2018, and LIBOR plus 8.50% from July 1, 2018 until the Amended Maturity Date. 

 

On June 4, 2018, we prepaid $22.3 million of the 2017 Bridge Loan’s then outstanding principal using cash on hand prior to the closing of the CJNP Japanese Financing (defined below). On June 20, 2018, we prepaid the remaining 2017 Bridge Loan’s outstanding principal of $44.6 million ($21.2 million related to the Captain Nicholas ML and $23.4 million related to the Captain Markos NL) using cash on hand prior to the closing of the CMNL Japanese Financing (defined below) and the CNML Japanese Financing (defined below).  

 

Corsair Japanese Financing

 

On November 7, 2017, we refinanced a 2014-built VLGC, the Corsair, pursuant to a memorandum of agreement and a bareboat charter agreement (“Corsair Japanese Financing”). In connection therewith, we transferred the Corsair to the buyer for $65.0 million and, as part of the agreement, Corsair LPG Transport LLC, our wholly-owned subsidiary, bareboat chartered the vessel back for a period of 12 years, with purchase options from the end of year 2 onwards through a mandatory buyout by 2029. We continue to technically manage, commercially charter, and operate the Corsair. We received $52.0 million in cash as part of the transaction with $13.0 million to be retained by the buyer as a deposit (the “Corsair Deposit”), which can be used by us towards the repurchase of the vessel either pursuant to an early buyout option or at the end of the 12-year bareboat charter term. The refinancing proceeds of $52.0 million were used to prepay $30.1 million of the 2017 Bridge Loan’s then outstanding principal amount. The remaining proceeds were used to pay legal fees associated with this transaction and for general corporate purposes. The Corsair Japanese Financing is treated as a financing transaction and the VLGC continues to be recorded as an asset on our balance sheet. This debt financing has a fixed interest rate of 4.9%, not including financing costs of $0.1 million, monthly broker commission fees of 1.25% over the 12-year term on interest and principal payments made, broker commission fees of 1% of the purchase option price excluding the Corsair Deposit, and a monthly fixed straight-line principal obligation of approximately $0.3 million over the 12-year term with a balloon payment of $13.0 million.

Concorde Japanese Financing

 

On January 31, 2018, we refinanced a 2015-built VLGC, the Concorde, pursuant to a memorandum of agreement and a bareboat charter agreement. In connection therewith, we transferred the Concorde to the buyer for $70.0 million and, as part of the agreement, Concorde LPG Transport LLC, our wholly-owned subsidiary, bareboat chartered the vessel back for a period of 13 years,  with purchase options from the end of year 3 onwards through a mandatory buyout by 2031. We continue to technically manage, commercially charter, and operate the Concorde. We received $56.0 million in cash as part of the transaction with $14.0 million to be retained by the buyer as a deposit (the “Concorde Deposit”), which can be used by us towards the repurchase of the vessel either pursuant to an early buyout option or at the end of the 13-year bareboat charter term. The refinancing proceeds of $56.0 million were used to prepay $35.1 million of the 2015 Facility’s then outstanding principal amount. Pursuant to the 2015 Facility Amendment and in conjunction with this prepayment, $1.6 million of restricted cash was released under the 2015 Facility. The remaining proceeds were, or will be, used to pay legal fees associated with this transaction and for general corporate purposes. This transaction is treated as a financing transaction and the Concorde continues to be recorded as an asset on our balance sheet. This debt financing has a fixed interest rate of 4.9%, not including financing costs of $0.1 million, monthly broker commission fees of 1.25% over the 13-year term on interest and principal payments made, broker commission fees of 1% of an exercised purchase option excluding the Concorde Deposit, and a monthly fixed straight-line principal obligation of approximately $0.3 million over the 13-year term with a balloon payment of $14.0 million. 

 

 

Corvette Japanese Financing

 

On March 16, 2018, we refinanced a 2015-built VLGC, the Corvette, pursuant to a memorandum of agreement and a bareboat charter agreement. In connection therewith, we transferred the Corvette to the buyer for $70.0 million and, as part of the agreement, Corvette LPG Transport LLC, our wholly-owned subsidiary, bareboat chartered the vessel back for a period of 13 years,  with purchase options from the end of year 3 onwards through a mandatory buyout by 2031. We continue to technically manage, commercially charter, and operate the Corvette. We received $56.0 million in cash as part of the transaction with $14.0 million to be retained by the buyer as a deposit (the “Corvette Deposit”), which can be used by us towards the repurchase of the vessel either pursuant to an early buyout option or at the end of the 13-year bareboat charter term. The refinancing proceeds of $56.0 million were used to prepay $33.7 million of the 2015 Facility’s then outstanding principal amount. Pursuant to the 2015 Facility Amendment and in conjunction with this prepayment, $1.6 million of restricted cash was released under the 2015 Facility. The remaining proceeds were, or will be, used to pay legal fees associated with this transaction and for general corporate purposes. This transaction is treated as a financing transaction and the Corvette continues to be recorded as an asset on our balance sheet. This debt financing has a fixed interest rate of 4.9%, not including financing costs of $0.1 million, monthly broker commission fees of 1.25% over the 13-year term on interest and principal payments made, broker commission fees of 1% of an exercised purchase option excluding the Corvette Deposit, and a monthly fixed straight-line principal obligation of approximately $0.3 million over the 13-year term with a balloon payment of $14.0 million. 

 

CJNP Japanese Financing

 

On June 11, 2018, we refinanced our 2007-built VLGC, the Captain John NP, pursuant to a memorandum of agreement and a bareboat charter agreement (the “CJNP Japanese Financing”). In connection therewith, we transferred the Captain John NP to the buyer for $48.3 million and, as part of the agreement, CJNP LPG Transport LLC, our wholly-owned subsidiary, bareboat chartered the vessel back for a period of 6 years,  with purchase options from the end of year 2 through a mandatory buyout by 2024. We continue to technically manage, commercially charter, and operate the Captain John NP. We received $21.7 million, which increased our unrestricted cash, as part of the transaction with $26.6 million to be retained by the buyer as a deposit (the “CJNP Deposit”), which can be used by us towards the repurchase of the vessel either pursuant to an early buyout option or at the end of the 6-year bareboat charter term. This transaction is treated as a financing transaction and the Captain John NP continues to be recorded as an asset on our balance sheet. This debt financing has a fixed interest rate of 6.0%, not including financing costs of $0.1 million, monthly broker commission fees of 1.25% over the 6-year term on interest and principal payments made, broker commission fees of 0.5% paid upon the delivery of the Captain John NP to the buyer, broker commission fees of 0.5% payable on the repurchase of the Captain John NP, and a monthly fixed straight-line principal obligation of approximately $0.1 million over the 6-year term with a balloon payment of $13.0 million.

 

CMNL Japanese Financing

 

On June 25, 2018, we refinanced our 2006-built VLGC, the Captain Markos NL, pursuant to a memorandum of agreement and a bareboat charter agreement (the “CMNL Japanese Financing”). In connection therewith, we transferred the Captain Markos NL to the buyer for $45.8 million and, as part of the agreement, CMNL LPG Transport LLC, our wholly-owned subsidiary, bareboat chartered the vessel back for a period of 7 years,  with purchase options from the end of year 2 through a mandatory buyout by 2025. We continue to technically manage, commercially charter, and operate the Captain Markos NL. We received $20.6 million, which increased our unrestricted cash, as part of the transaction with $25.2 million to be retained by the buyer as a deposit (the “CMNL Deposit”), which can be used by us towards the repurchase of the vessel either pursuant to an early buyout option or at the end of the 7-year bareboat charter term. This transaction is treated as a financing transaction and the Captain Markos NL continues to be recorded as an asset on our balance sheet. This debt financing has a fixed interest rate of 6.0%, not including financing costs of $0.1 million, monthly broker commission fees of 1.25% over the 7-year term on interest and principal payments made, broker commission fees of 0.5% paid upon the delivery of the Captain Markos NL to the buyer, broker commission fees of 0.5%. payable on the repurchase of the Captain Markos NL, and a monthly fixed straight-line principal obligation of approximately $0.1 million over the 7-year term with a balloon payment of $11.0 million.

 

CNML Japanese Financing

 

On June 26, 2018, we refinanced our 2008-built VLGC, the Captain Nicholas ML, pursuant to a memorandum of agreement and a bareboat charter agreement (the “CNML Japanese Financing”). In connection therewith, we transferred the Captain Nicholas ML to the buyer for $50.8 million and, as part of the agreement, CNML LPG Transport LLC, our wholly-owned subsidiary, bareboat chartered the vessel back for a period of 7 years,  with purchase options from the end of year 2 through a mandatory buyout by 2025. We continue to technically manage, commercially charter, and operate the Captain Nicholas ML. We received $22.9 million, which increased our unrestricted cash, as part of the transaction with $27.9 million to be retained by the buyer as a deposit (the “CNML Deposit”), which can be used by us towards the repurchase of the vessel either pursuant to an early buyout option or at the end of the 7-year bareboat charter term. This transaction is treated as a financing transaction and the Captain Nicholas ML continues to be recorded as an asset on our balance sheet. This debt financing has a fixed interest rate of 6.0%, not including financing costs of $0.1 million, monthly broker commission fees of 1.25% over the 7-year term on interest and principal payments made, broker commission fees of 0.5%, paid upon the delivery of the Captain Nicholas ML to the buyer, broker commission fees of 0.5%, payable on the repurchase of the Captain Nicholas ML, and a monthly fixed straight-line principal obligation of approximately $0.1 million over the 7-year term with a balloon payment of $13.0 million.

 

Debt Obligations

 

The table below presents our debt obligations:

 

 

 

 

 

 

 

 

 

 

    

March 31, 2020

    

March 31, 2019

 

2015 Facility

 

 

 

 

 

 

 

Commercial Financing

 

$

163,385,998

 

$

175,687,613

 

KEXIM Direct Financing

 

 

110,716,127

 

 

125,860,144

 

KEXIM Guaranteed

 

 

115,385,072

 

 

130,366,568

 

K-sure Insured

 

 

57,098,924

 

 

64,706,170

 

Total 2015 Facility

 

$

446,586,121

 

$

496,620,495

 

 

 

 

 

 

 

 

 

Japanese Financings

 

 

 

 

 

 

 

Corsair Japanese Financing

 

$

44,145,833

 

$

47,395,833

 

Concorde Japanese Financing

 

 

48,730,769

 

 

51,961,538

 

Corvette Japanese Financing

 

 

49,269,231

 

 

52,500,000

 

CJNP Japanese Financing

 

 

19,058,750

 

 

20,506,250

 

CMNL Japanese Financing

 

 

18,076,488

 

 

19,446,131

 

CNML Japanese Financing

 

 

20,261,012

 

 

21,666,369

 

Total Japanese Financings

 

$

199,542,083

 

$

213,476,121

 

 

 

 

 

 

 

 

 

Total debt obligations

 

$

646,128,204

 

$

710,096,616

 

Less: deferred financing fees

 

 

11,152,985

 

 

14,005,830

 

Debt obligations—net of deferred financing fees

 

$

634,975,219

 

$

696,090,786

 

 

 

 

 

 

 

 

 

Presented as follows:

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

53,056,125

 

$

63,968,414

 

Long-term debt—net of current portion and deferred financing fees

 

 

581,919,094

 

 

632,122,372

 

Total

 

$

634,975,219

 

$

696,090,786

 

 

Deferred Financing Fees

 

The analysis and movement of deferred financing fees is presented in the table below: 

 

 

 

 

 

 

 

    

Financing

 

 

 

costs

 

Balance, April 1, 2018

 

$

16,061,034

 

Additions

 

 

1,080,847

 

Amortization

 

 

(3,136,051)

 

Balance, March 31, 2019

 

$

14,005,830

 

Additions

 

 

40,547

 

Amortization

 

 

(2,893,392)

 

Balance, March 31, 2020

 

$

11,152,985

 

 

Additions represent financing costs associated with an amendment to the 2015 Facility for the year ended March 31, 2020 and financing costs associated with the Corsair Japanese Financing, Concorde Japanese Financing, Corvette Japanese Financing, CJNP Japanese Financing, CMNL Japanese Financing, and CNML Japanese Financing (collectively the “Japanese Financings”) and the 2017 Bridge Loan for the year ended March 31, 2019, which have been deferred and are amortized over the life of the respective agreements and are included as part of interest expense in the consolidated statements of operations.

 

Future Cash Payments for Debt

 

The minimum annual principal payments, in accordance with the loan agreements, required to be made after March 31, 2020 are as follows:

 

 

 

 

 

Year ending March 31:

    

    

 

2021

$

53,056,125

 

2022

 

61,935,946

 

2023

 

52,266,798

 

2024

 

52,266,798

 

2025

 

214,015,573

 

Thereafter

 

212,586,964

 

Total

$

646,128,204

 

 

v3.20.1
Leases
12 Months Ended
Mar. 31, 2020
Leases  
Leases

10. Leases

 

Time charter-in contracts

 

The duration of our only time charter-in contract at the time of adoption of the guidance was 12 months. We accounted for this charter-in contract using the practical expedient for contracts with initial lease terms of 12 month or less as described above and, during the year ended March 31, 2020, expensed $8.2 million related to this time charter-in contract within “charter hire expense” on our consolidated statement of operations. During the year ended March 31, 2020, we time chartered-in a VLGC for a period of greater than 12 months and the applicable right-of-use asset and lease liabilities of $27.4 million were recognized on our balance sheets as of March 31, 2020. None of the three option periods of up to an aggregate of four years were included in the recognition of the right-of-use asset for the time chartered-in VLGC as market conditions at the time of each option renewal election date for a time charter-in will be major factors in the decision of whether to exercise the option and such conditions are not known at the time of initial recognition. As of March 31, 2020, we had a contract to time charter-in a vessel that was delivered to us in May 2020. This duration of this lease is 12 months with no option periods and, therefore, this operating lease was excluded from operating lease right-of-use asset and lease liability recognition on our consolidated balance sheets. Our time chartered-in VLGCs were deployed in the Helios Pool and earned net pool revenues of $18.3 million and $0.1 million for the years ended March 31, 2020 and 2019, respectively. We had no time chartered-in VLGCs during the year ended March 31, 2018.

 

Charter hire expenses for the VLGCs time chartered in were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended

 

 

March 31, 2020

 

March 31, 2019

 

March 31, 2018

Charter hire expenses

 

$

9,861,898

 

$

237,525

 

$

 —

 

Office leases

 

We currently have operating leases for our offices in Stamford, Connecticut, USA; London, United Kingdom; Copenhagen, Denmark; and Athens, Greece, which we determined to be operating leases and record the lease expense as part of general and administrative expenses in our consolidated statements of operations. During the year ended March 31, 2020, we renewed an operating lease for our London office greater than 12 months and the applicable right-of-use asset and lease liabilities of $0.2 million were recognized on our balance sheets as of March 31, 2020. Two option periods for our Athens office were included in the recognition of the right-of-use asset as it is probable that the renewal options of 1-year each will be exercised. We accounted for our Copenhagen office lease using the practical expedient for contracts with initial lease terms of 12 month or less as described above and, during the year ended March 31, 2020, expensed $0.1 million related to this time charter-in contract within “general and administrative expenses” on our consolidated statement of operations.

 

Operating lease rent expense related to our office leases was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended

 

 

March 31, 2020

 

March 31, 2019

 

March 31, 2018

Operating lease rent expense

 

$

541,574

 

$

471,425

 

$

426,155

 

For our office leases and time charter-in arrangement, the discount rate used ranged from 3.82% to 5.53%. The weighted average discount rate used to calculate the lease liability was 3.88%. The weighted average remaining lease term on our office leases and time chartered-in vessels as of March 31, 2020 is 33.9 months.

 

Our operating lease right-of-use asset and lease liabilities as of March 31, 2020 were as follows:

 

 

 

 

 

 

 

Description

 

Location on Balance Sheet

 

March 31, 2020

Assets:

 

 

 

 

 

Non-current

 

 

 

 

 

Office leases

 

Operating lease right-of-use assets

 

$

1,003,084

Time charter-in VLGCs

 

Operating lease right-of-use assets

 

$

25,858,467

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

Current

 

 

 

 

 

Office Leases

 

Current portion of long-term operating leases

 

$

398,096

Time charter-in VLGCs

 

Current portion of long-term operating leases

 

$

8,814,493

 

 

 

 

 

 

Long-term

 

 

 

 

 

Office Leases

 

Long-term operating leases

 

$

607,965

Time charter-in VLGCs

 

Long-term operating leases

 

$

17,043,974

Maturities of operating lease liabilities as of March 31, 2020 were as follows:

 

 

 

 

 

FY 2021

 

$

10,078,464

FY 2022

 

 

10,088,339

FY 2023

 

 

8,212,288

Total undiscounted lease payments

 

 

28,379,091

Less: imputed interest

 

 

(1,514,563)

Carrying value of lease liabilities

 

$

26,864,528

 

v3.20.1
Common Stock
12 Months Ended
Mar. 31, 2020
Common Stock.  
Common Stock

11. Common Stock

 

Under the articles of incorporation effective July 1, 2013, the Company’s authorized capital stock consists of 500,000,000 registered shares, par value $0.01 per share, of which 450,000,000 are designated as common share and 50,000,000 shares are designated as preferred shares.

 

Each holder of common shares is entitled to one vote on all matters submitted to a vote of shareholders. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of common shares are entitled to share equally in any dividends, which the Company’s board of directors may declare from time to time, out of funds legally available for dividends. Upon dissolution, liquidation or winding‑up, the holders of common shares will be entitled to share equally in all assets remaining after the payment of any liabilities and the liquidation preferences on any outstanding preferred stock. Holders of common shares do not have conversion, redemption or pre‑emptive rights.

 

In August 2019, our Board of Directors authorized the repurchase of up to $50 million of shares of our common stock through the period ended December 31, 2020 (the “Common Share Repurchase Program”) and, in February 2020, authorized an increase to our Common Share Repurchase Program to repurchase up to an additional $50 million of shares of our common stock. As of March 31, 2020, we repurchased a total of 4.4 million shares of our common stock for approximately $49.3 million under this program, resulting in $50.7 million of available authorization remaining. Purchases may be made at our discretion in the form of open market repurchase programs, privately negotiated transactions, accelerated share repurchase programs or a combination of these methods. The actual timing and amount of our repurchases will depend on Company and market conditions. We are not obligated to make any common share repurchases under this program.

 

Refer to Note 12 below for shares granted under the equity incentive plan during the years ended March 31, 2020, 2019, and 2018.

v3.20.1
Stock-Based Compensation Plans
12 Months Ended
Mar. 31, 2020
Stock-Based Compensation Plans  
Stock-Based Compensation Plans

12. Stock-Based Compensation Plans

 

In April 2014, we adopted an equity incentive plan, which we refer to as the Equity Incentive Plan, under which we expect that directors, officers, and employees (including any prospective officer or employee) of the Company and its subsidiaries and affiliates, and consultants and service providers to (including persons who are employed by or provide services to any entity that is itself a consultant or service provider to) the Company and its subsidiaries and affiliates, as well as entities whollyowned or generally exclusively controlled by such persons, may be eligible to receive nonqualified stock options, stock appreciation rights, stock awards, restricted stock units and performance compensation awards that the plan administrator determines are consistent with the purposes of the plan and the interests of the Company. We have reserved 2,850,000 of our common shares for issuance under the Equity Incentive Plan, subject to adjustment for changes in capitalization as provided in the Equity Incentive Plan in April 2014. The plan is administered by our compensation committee.

 

During the year ended March 31, 2020 we granted an aggregate of 175,200 shares of restricted stock and 22,500 restricted stock units to certain of our officers and employees. One-fourth of the shares of restricted stock vested on the grant date and one-fourth will vest equally on the first,  second and third anniversaries of the grant date.  One-third of restricted stock units will vest equally on the first,  second, and third anniversaries of the grant date. The shares of restricted stock and restricted stock units were valued at their grant date fair market value and are expensed on a straight-line basis over the respective vesting periods. 

 

During the year ended March 31, 2019, we granted 200,000 shares of restricted stock to certain of our officers and employees. One-fourth of these restricted shares vested immediately on the grant date, one-fourth vested one year after grant date, one-fourth will vest two years after grant date, and one-fourth will vest three years after grant date. The restricted shares were valued at their grant date fair market value and expensed on a straight-line basis over the vesting periods. 

 

During the year ended March 31, 2018, we granted 259,800 shares of restricted stock to certain of our officers and employees. One-fourth of these restricted shares vested immediately on the grant date, one-fourth will vest one year after grant date, one-fourth will vest two years after grant date, and one-fourth will vest three years after grant date. The restricted shares were valued at their grant date fair market value and expensed on a straight-line basis over the vesting periods. 

 

During the years ended March 31, 2020, 2019, and 2018, we granted 24,025,  35,295, and 31,800 shares of stock, respectively, to our non-executive directors, which were valued and expensed at their grant date fair market value.

 

During the years ended March 31, 2020, 2019, and 2018, we granted 1,550,  7,059, and 6,360 shares of stock, respectively, to a non-employee consultant, which were valued and expensed at their grant date fair market value.

 

Our stock-based compensation expense was $3.2 million, $5.5 million and $5.1 million for the years ended March 31, 2020,  2019, and 2018, respectively, and is included within general and administrative expenses in our accompanying consolidated statements of operations. Unrecognized compensation cost as of March 31, 2020 was $1.6 million and the expense will be recognized over a remaining weighted average life of 1.86 years.

 

A summary of the activity of our restricted shares as of March 31, 2020 and 2019 and changes during the year ended March 31, 2020 and 2019, are as follows:

 

 

 

 

 

 

 

 

 

    

 

    

Weighted-Average

 

 

 

 

 

Grant-Date

 

Incentive Share/Unit Awards

 

Number of Shares/Units

 

Fair Value

 

Unvested as of April 1, 2018

 

918,344

 

$

15.67

 

Granted

 

242,354

 

 

8.10

 

Vested

 

(519,685)

 

 

14.76

 

Unvested as of March 31, 2019

 

641,013

 

$

13.54

 

Granted

 

223,275