Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed
consolidated financial statements and the notes thereto, filed with the U.S. Securities and Exchange Commission (the “SEC”) on the same day as this discussion. Those financial statements have been prepared in U.S. dollars and in conformity with
United States generally accepted accounting principles (“US GAAP”) and, among other things, include more detailed information regarding the basis of presentation for the following information. Unless otherwise specified herein or the context
otherwise requires, references to “Icon,” “Icon Energy,” the “Company,” “we,” “our” and “us” or similar terms, refer to Icon Energy Corp. or any one or more of its subsidiaries, or to such entities collectively.
All share and per share amounts referenced in this discussion give retroactive effect, as of the earliest period presented, to the one-for-five
reverse stock split of our common shares effected on January 8, 2026 as well as the one-for-forty reverse stock split of our common shares effected on April 1, 2025. Unless otherwise indicated, all references to “our fleet,” and “our vessels,”
include right-of-use assets under finance leases, and all references to currency amounts are in U.S. dollars. We use the term deadweight tons (“dwt”) in describing the size of our vessels. Dwt, expressed in metric tons (1,000 kilograms), is a measure of the total weight a vessel can safely carry, including cargo, fuel, ballast and fresh water, lubricants, crew, provisions, stores and spare parts.
Overview
We are a growth-oriented shipping company, providing worldwide seaborne transportation services for dry bulk cargoes via our fleet of oceangoing vessels. We generate our revenues
by chartering our vessels to regional and international dry bulk operators, commodity traders and end users. As of March 31, 2026, our fleet comprised of the following dry bulk vessels:
|
Vessel Name
|
|
Vessel Type
|
|
Year
Built
|
|
Charter Type
|
|
Earliest Charter
Expiration
|
|
Latest Charter
Expiration
|
|
Alfa
|
|
Panamax
|
|
2006
|
|
Index-linked time charter(3)
|
|
December 2026
|
|
Evergreen(1)
|
|
Bravo
|
|
Kamsarmax
|
|
2007
|
|
Index-linked time charter
|
|
Evergreen(1)
|
|
Evergreen(1)
|
|
Charlie
|
|
Ultramax
|
|
2020
|
|
Index-linked time charter(2)
|
|
August 2027
|
|
December 2027
|
|
(1)
|
The charter continues indefinitely, subject to 3 months’ termination notice by either party.
|
| (2) |
In addition to the daily hire rate, the Company is also entitled to receive part of the fuel cost savings to be realized by the charterer through the use of the vessel’s scrubber.
|
| (3) |
Subsequent to the reporting period, converted to a fixed daily hire rate of $18,000 for the seven-month period from June to December 2026.
|
Implications of Being an Emerging Growth Company
We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of
specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include, amongst other things:
| |
• |
exemption from the auditor attestation requirement in the assessment of the emerging growth company’s internal controls over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002;
|
|
• |
exemption from new or revised financial accounting standards applicable to public companies until such standards are also applicable to private companies; and
|
|
• |
exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board, requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor
would be required to provide additional information about the audit and financial statements.
|
We may take advantage of these provisions until the end of the fiscal year following the fifth anniversary of our initial public offering or such earlier time that we are no
longer an emerging growth company. We will cease to be an emerging growth company if we have more than $1.235 billion in “total annual gross revenues” during the most recently completed fiscal year, we have issued more than $1 billion in
non-convertible debt in the past three years, or we become a “large accelerated filer”. For as long as we take advantage of the reduced reporting obligations, the information that we provide shareholders may be different from information provided by
other public companies.
We are choosing to take advantage of these reduced burdens, save for the exemption from new or revised financial accounting standards applicable to public companies until such
standards are also applicable to private companies. We are choosing to “opt out” of such extended transition period and will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for
non-emerging growth public companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.
Cautionary Note Regarding Forward-Looking Statements
This discussion and analysis of financial condition and results of operations contains “forward-looking statements made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995.” Forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions, or strategies regarding the future and are therefore
statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,”
“potential,” “predict,” “project,” “should,” “would” and similar expressions that are other than statements of historical fact, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are
based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third
parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant risks, uncertainties and contingencies which are difficult or impossible to predict and are
beyond our control, the Company cannot provide assurance that it will achieve or accomplish these expectations, beliefs or projections. The Company’s actual results could differ materially from those anticipated in forward-looking statements for many
reasons, including as described in the Company’s filings with the SEC. As a result, you are cautioned not to unduly rely on any forward-looking statements, which speak only as of the date of this discussion. Factors that could cause actual results to
differ materially from those discussed in the forward-looking statements include, among other things: the Company’s future operating or financial results; the Company’s liquidity, including its ability to service any indebtedness; changes in shipping
industry trends, including charter rates, vessel values and factors affecting vessel supply and demand; future, pending or recent acquisitions and dispositions, business strategy, areas of possible expansion or contraction, and expected capital
spending or operating expenses; risks associated with operations; broader market impacts arising from war (or threatened war) or international hostilities; risks associated with pandemics; and other factors listed from time to time in the Company’s
filings with the SEC. For more discussion of the risks that could impact forward-looking statements, you are encouraged to review the discussion under the title “Risk Factors” in the Company’s most recent
Annual Report on Form 20-F. Except to the extent required by law, the Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in
the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
Operating Results
Principal factors affecting our operating results
We believe the principal factors affecting our operating results are the underlying supply and demand dynamics of the commodities our vessels carry, the number of vessels
competing for those cargoes, and ultimately the overall economic and market conditions, regulatory changes, global geopolitical events, capital availability, and market sentiment. Other key factors that are fundamental to our business, operating
results, cash flows and financial condition include:
| |
• |
the number of vessels in our fleet;
|
|
• |
our customer relationships;
|
|
• |
our access to capital required to acquire additional, or renew existing, vessels and implement our business strategy;
|
|
• |
our ability to acquire and sell vessels at prices we deem satisfactory; and
|
|
• |
our and our vessels’ manager’s ability to:
|
| |
o |
successfully utilize and employ our vessels at economically attractive rates;
|
|
o |
effectively and efficiently manage our vessels and control vessel operating costs; and
|
|
o |
ensure compliance with regulations, environmental, health and safety standards applicable to our business.
|
In addition to those factors described above, our results of operations have been, and are expected to continue to be, affected by a range of material events and uncertainties
many of which are beyond our control. Therefore, it is reasonably likely that the reported financial information is not necessarily indicative of our future operating results or future financial condition. Please also read “Item 3. Key Information—D. Risk Factors” in our most recent Annual Report on Form 20-F and other important risk factors described from time to time in the reports we subsequently file with the SEC.
Components of our operating results
Segmental reporting. We transport dry bulk cargoes along global shipping routes
through the ownership and operation of dry bulk vessels. We have identified our Chairwoman and Chief Executive Officer as the Chief Operations Decision Maker (“CODM”) in accordance with ASC 280 “Segment Reporting.”
The CODM manages the business on a consolidated basis and uses the net income/(loss) as reported on the consolidated statement of income/(loss) to allocate resources, make operating decisions and assess performance, without discrete financial
information for each charter type, customer, vessel or vessel type. Our vessels serve the same type of customers, have similar operations and maintenance requirements, operate in the same regulatory environment, and are subject to similar economic
characteristics. Also, when we charter a vessel, the charterer is generally free to trade such vessel worldwide or within broad geographical limits and, therefore, the disclosure of geographical information is impracticable. As a result, we have
identified one single reportable segment and the assets of such segment are presented under the caption “Total Assets” in the consolidated balance sheets. The significant expense category of our sole
reportable segment is vessel operating expenses as reported on the consolidated statements of income/(loss). Based on the principles of ASC 280 “Segment Reporting,” we believe that disaggregating into more
than one reportable segment, would not be meaningful or informative.
Revenue, net. We generate revenues by chartering our vessels to regional and
international dry bulk operators, commodity traders and end users, primarily on time charters (either index-linked or fixed rate) or voyage charters, depending on market conditions, opportunities available to us, and other strategic and tactical
considerations. The main charter contract types are (i) voyage charters, also known as spot voyages, where the owner and charterer agree to carry out a single voyage to transport an agreed quantity of cargo between certain ports or geographical
regions, (ii) time charters, where the charterer agrees to hire a vessel for a predetermined period of time with the operational responsibility of the vessel remaining with the owner, and (iii) bareboat charters, where a vessel is fully leased to a
charterer, including all operational responsibility.
Voyage expenses. Voyage expenses primarily consist of bunker fuel consumption,
port dues, canal tolls, brokerage and commercial management commissions, and other expenses directly associated with the performance of a particular charter. Apart from commissions, voyage expenses mainly arise from voyage charters, or when a vessel
is repositioning or unemployed. In such cases, voyage expenses are borne by us. Conversely, when a vessel is employed under a time charter, substantially all voyage expenses are paid by the charterers, save for commissions. Bunker fuel consumption
and occasionally port dues and canal tolls, may also be incurred between the end of one charter contract and the commencement of the next.
Vessel operating expenses. Vessel operating expenses reflect the costs to operate
and maintain our vessels and primarily consist of manning costs, vessel insurance premiums, repairs and maintenance, machinery lubricants, spares, stores, and ancillary expenses.
Management fees. Management fees are paid in exchange for certain corporate
administration functions, and vessel commercial and technical management services. Our Board of Directors has organized the provision of management services through Pavimar Shipping Co. (“Pavimar”), a ship management company incorporated in the
Republic of the Marshall Islands, with a branch office in Greece established under the provisions of Law 27 of 1975. Pavimar is controlled by our Chairwoman and Chief Executive Officer. Pursuant to the management agreement with Pavimar, in place
since its effective date of January 18, 2024, Pavimar provides us with vessel commercial and technical management services, including, but not limited to, securing employment, post-fixture support, handling vessel sale and purchases, arranging and
supervising crew, repairs and maintenance, insurance, provisions, bunkering, day to day vessel operations, and ancillary services. Prior to January 18, 2024, similar services were provided to us by Pavimar S.A., a ship management company incorporated
in the Republic of the Marshall Islands, with a branch office in Greece established under the provisions of Law 27 of 1975, also controlled by our Chairwoman and Chief Executive Officer. In our results of operations, “management fees” include the
fees incurred in connection with the provision of technical management services, whereas the commercial management commissions and sale or purchase commissions, are reported under “voyage expenses,” and “gain/loss on sale of vessels” or “vessel
cost,” respectively.
General and administrative expenses. General and administrative expenses include
general corporate expenses, audit, legal, advisory and other professional fees, directors’ remuneration, compensation for our executives and corporate secretary. General and administrative expenses also include expenses associated with being a public
company, such as stock exchange fees, regulatory and compliance costs, investor relations, and director and officer liability insurance premiums.
Depreciation and amortization expenses. Depreciation is computed using the straight-line method over the estimated useful life of a vessel,
after considering its estimated salvage value. Each vessel’s salvage value is equal to the product of its lightweight tonnage and estimated scrap rate. Salvage values are periodically reviewed and revised, if needed, to recognize changes in
conditions, new regulations or for other reasons. Revisions of salvage value affect the depreciable amount of the vessels and the depreciation expense in the period of the revision and future periods. The same methodology is followed to compute the
amortization of right-of-use assets under finance leases. Management estimates the useful life of our vessels (and right-of-use asset under finance lease) to be 25 years from the date of initial delivery from the shipyard.
Amortization of deferred drydocking costs. Vessels are subject to regularly
scheduled drydocking and special surveys which are carried out every 30 to 60 months to coincide with the renewal of the related compliance certificates issued by the classification societies, unless a further extension is obtained in rare cases and
under certain conditions. Drydocking and special survey costs are accounted for under the deferral method, whereby the costs incurred are deferred and amortized on a straight-line basis over the period through the date the next survey is scheduled to
become due. Costs qualifying for deferral mainly relate to shipyard costs, hull preparation and painting, inspection of hull structure and mechanical components, steelworks, machinery works, and electrical works, as well as lodging and subsistence of
personnel dispatched to the yard site to supervise. If a drydocking and/or a special survey is performed prior to its originally scheduled date, any remaining unamortized balance from previous events is immediately expensed. Unamortized balances of
vessels that are sold are also written-off and included in the calculation of the resulting gain or loss in the period of the vessel’s sale.
Interest and finance costs. Interest and finance costs primarily consist of
interest expenses incurred under our loan agreements or other financing arrangements (including finance leases) and finance costs related to entering into new or amending existing loan agreements or other financing arrangements, including
arrangement, advisory, legal, and other fees and expenses (or the amortization of such costs to the extent previously deferred). Finance costs are deferred and amortized over the life of the related loan or financing arrangement using the effective
interest method. Unamortized deferred finance costs relating to loans or other financing arrangements repaid or refinanced, meeting the criteria of debt extinguishment, are expensed in the period of such repayment or refinancing. Interest and finance
costs also include issuance costs which have been immediately expensed as discussed in Note 2 “Significant Accounting Policies and Recent Accounting Pronouncements—Issuance costs” of our consolidated financial
statements in our most recent Annual Report on Form 20-F.
Interest income. Interest income reflects the interest earned on our cash, cash
equivalents and restricted cash deposits.
Gain/(loss) on equity-linked instruments, net. Gain/(loss) on equity-linked
instruments, net, reflects the (i) loss recognized on initial measurement of the Class A Warrants, net of the gains/losses recognized on subsequent remeasurements of such fair value upon each settlement and reporting period end date, and (ii)
gains/losses recognized on settlement of shares issued under the SEPA (as defined below). See “Liquidity and Capital Resources—Our Borrowing and Capital Raising Activities” below, as well as Note 7 “Long-Term Debt” and Note 8 “Capital Structure” to our unaudited interim condensed consolidated
financial statements filed with the SEC on the same day as this discussion, for additional information relating to the January 2025 offering, the Class A Warrants and the SEPA.
Key performance indicators
The key performance indicators that management uses to assess our financial condition and results of operations are:
Ownership Days. Ownership Days are the total days we owned our vessels (or right-of-use asset under finance lease) during the relevant period.
We use this to measure the size of our fleet over a period.
Available Days. Available Days are the Ownership Days, less any days during which our vessels were unable to be used for their intended
purpose as a result of scheduled maintenance, upgrades, modifications, drydockings, special or intermediate surveys, or changes in ownership logistics, including positioning for and repositioning from such events. We use this to measure the number of
days in a period during which our vessels should be capable of generating revenues.
Operating Days. Operating Days are the Available Days, less any days during which our vessels were unable to be used for their intended
purpose as a result of unforeseen events and circumstances. We use this to measure the number of days in a period during which our vessels actually generated revenues.
Vessel Utilization. Vessel Utilization is the ratio of Operating Days to Available Days, measuring the days during which our vessels actually
generated revenues as a percentage of the days during which our vessels should be capable of generating revenues.
Average Number of Vessels. Average Number of Vessels is the ratio of Ownership Days to calendar days in a period and is another measure of the
size of our fleet over a period.
Minimum Contracted Revenue. The amount of minimum contracted revenue is estimated by reference to the contracted period and hire rate, net of
charterers’ commissions but before brokerage and commercial management commissions and assuming no unforeseen off-hire days. For index-linked contracts, minimum contracted revenue is estimated by reference to the average of the relevant index during
the 15 days preceding the calculation date.
The following table summarizes these key performance indicators during the reported periods:
| |
|
Three-month period ended
March 31,
|
|
| |
|
2026
|
|
|
2025
|
|
|
Fleet operational data
|
|
|
|
|
|
|
|
Ownership Days
|
|
|
270.0
|
|
|
|
180.0
|
|
|
Available Days
|
|
|
270.0
|
|
|
|
180.0
|
|
|
Operating Days
|
|
|
269.8
|
|
|
|
180.0
|
|
|
Vessel Utilization
|
|
|
99.9
|
%
|
|
|
100.0
|
%
|
|
Average Number of Vessels
|
|
|
3.0
|
|
|
|
2.0
|
|
Furthermore, the minimum contracted revenue expected to be recognized on the non-cancellable time charters of our vessels as of March 31, 2026 is estimated to $14.5 million.
Results of Operations for the three-month periods ended March 31, 2026 and 2025
The following table summarizes our results of operations for the three-month periods ended March 31, 2026 and 2025:
| |
|
Three-month period
ended March 31,
|
|
|
(in thousands of U.S. dollars)
|
|
2026
|
|
|
2025
|
|
|
Revenue, net
|
|
$
|
3,646
|
|
|
$
|
1,525
|
|
|
Voyage expenses
|
|
|
(165
|
)
|
|
|
(75
|
)
|
|
Vessel operating expenses
|
|
|
(1,425
|
)
|
|
|
(928
|
)
|
|
Management fees
|
|
|
(216
|
)
|
|
|
(144
|
)
|
|
General and administrative expenses
|
|
|
(709
|
)
|
|
|
(490
|
)
|
|
Depreciation and amortization expenses
|
|
|
(857
|
)
|
|
|
(572
|
)
|
|
Amortization of deferred drydocking costs
|
|
|
(233
|
)
|
|
|
(129
|
)
|
|
Interest and finance costs
|
|
|
(689
|
)
|
|
|
(1,654
|
)
|
|
Interest income
|
|
|
42
|
|
|
|
34
|
|
|
Gain/(loss) on equity-linked instruments, net
|
|
|
1,023
|
|
|
|
(537
|
)
|
|
Other costs, net
|
|
|
—
|
|
|
|
(7
|
)
|
|
Net income/(loss)
|
|
$
|
417
|
|
|
$
|
(2,977
|
)
|
Revenue, net. Throughout the first three months of 2026 and 2025, Icon’s vessels operated under index-linked time charters. The increase in
revenue between these two periods is primarily due to the higher number of Operating Days during the first three months of 2026 as a result of the addition of the M/V Charlie to Icon’s fleet in June 2025. The
increase in revenue was furthered by the year-on-year increase in dry bulk charter market rates, as reflected by the increased Daily TCE (as defined below). Overall, revenue, net increased by 139% to $3.6 million in the first quarter of 2026, up from
$1.5 million in the comparable period in 2025.
Voyage expenses. The increase in voyage expenses from $0.1 million during the three-month period ended March 31, 2025, to $0.2 million during
the corresponding period of 2026, is primarily attributable to the higher commissions associated with the increased revenue in the comparative periods.
Vessel operating expenses. The increase in operating expenses from $0.9 million during the first three months of 2025 to $1.4 million during
the corresponding period of 2026, was driven by the addition of the M/V Charlie to Icon’s fleet in June 2025, and the resulting increase in Ownership Days.
Management fees. Management fees increased in the first three months of 2026 as compared to the same period in 2025 as a result of the
increased Ownership Days between the periods.
General and administrative expenses. The $0.2 million increase in general and administrative expenses in the three-month period ended March
31, 2026, compared to the same period in 2025, was primarily driven by increased legal costs, including those associated with the January 8, 2026 reverse stock split.
Depreciation and amortization expenses. Depreciation and amortization expenses increased due to the addition of the M/V Charlie to Icon’s fleet, which has been accounted for as a right-of-use asset under finance lease.
Amortization of deferred drydocking costs. The increase of $0.1 million during the three-month period ended March 31, 2026, compared to the
same period in 2025, is due to the costs deferred in connection with the drydocking of the M/V Charlie in December 2025, resulting in higher amortization charges thereafter.
Interest and finance costs. The primary reason for the decrease in interest and finance costs during the three-month period ended March 31,
2026, compared to the same period in 2025, was the absence of the $1.3 million issuance costs incurred in connection with the Company’s January 2025 offering. This reduction was partially offset by the implicit interest associated with the bareboat
charter-in of the M/V Charlie, which has been accounted for as a finance lease liability.
Gain/(loss) on equity-linked instruments, net. The gain on equity-linked instruments of $1.0 million in the three-month period ended March 31,
2026 reflects the gains recognized on issuance of common shares under the SEPA. The loss on equity-linked instruments of $0.5 million in the three-month period ended March 31, 2025, reflects the loss recognized on initial measurement of the Class A
Warrants.
Key developments during the reporting period
Reverse stock split. On January 8, 2026, we effected a reverse stock split, whereby every five of our issued and outstanding common shares
were automatically converted into one, without any change in the par value per share or the total number of common shares Icon is authorized to issue. The reverse stock split did not (i) affect any common shareholder’s ownership percentage (except as
a result of the cancellation of fractional shares which were settled in cash), (ii) have any direct impact on our market capitalization, or (iii) modify any voting rights or other terms of our common shares.
Vessel employment. In March 2026, we entered into an agreement with a reputable dry bulk operator to charter the M/V Charlie for a period of 16 to 20 months. The new charter commenced immediately upon completion of the vessel’s previous charter at the end of April 2026 and expires between August and December 2027. Under this charter, the vessel is
earning hire at a floating daily hire rate linked to the Baltic Supramax Index, while preserving the option to convert to a fixed daily hire rate, at a time and for a period of the Company’s choosing. The charter also provides for compensation
related to fuel cost savings derived from the vessel’s scrubber.
Recent Developments. See “Recent Developments” below for information about key developments after
March 31, 2026 and through the date this discussion was issued.
Liquidity and Capital Resources
Supply and demand dynamics, seasonality, and competition in the markets we operate, have historically caused increased volatility. We expect this to continue in the foreseeable
future with a consequent effect on the financial performance of our vessels and, in turn, our short and long-term liquidity.
Our primary short-term liquidity needs are to fund general working capital requirements, vessel operating expenses, general and administrative expenses, costs to maintain the
class certification of our vessels by undergoing periodical drydockings and special surveys, and to service our debt. In addition, our bareboat charter-in agreement for the M/V Charlie requires that we honor
our hire obligations thereunder. We anticipate that our primary sources of funds for our short-term liquidity needs will be cash on hand and from operations.
Our primary long-term liquidity needs are expected to relate to growing and renewing our fleet through vessel acquisitions, capital expenditures required to comply with
international shipping standards and environmental laws and regulations, costs to maintain the class certification of our vessels by undergoing periodical drydockings and special surveys, and to service our debt. In addition, our bareboat charter-in
agreement for the M/V Charlie requires that we honor our hire obligations thereunder, including the purchase option at the end of its term in June 2028, if we eventually exercise it. We have declared our
intention to exercise such option, subject to certain conditions. We anticipate that our primary sources of funds for our long-term liquidity needs will be cash from operations, loan facilities (including but not limited to drawings from the
uncommitted upsize option of up to another $75 million under the Maui Term Loan Facility, as discussed below), other financing arrangements and equity issuances (including but not limited to the $12.8 million and the $2.3 million remaining as of
March 31, 2026 under the SEPA and the ATM Agreement, respectively, as discussed below).
We operate in a capital-intensive industry and in the future we may seek any combination of loan agreements, other financing arrangements and equity issuances, to raise capital
and fund our operations and growth. We believe that our working capital is sufficient to meet our requirements for the next twelve months, taking into account our projected cash flows from operations.
Cash flows for the three-month periods ended March 31, 2026 and 2025
As of March 31, 2026 and 2025, we had cash, cash equivalents and restricted cash of $9.7 million and $8.2 million, respectively. Our cash flows from operating, investing and
financing activities during the three-month periods ended March 31, 2026 and 2025, are summarized in the following table:
| |
|
Three-month period
ended
March 31,
|
|
|
(in thousands of U.S. dollars)
|
|
2026
|
|
|
2025
|
|
|
Cash used in operating activities
|
|
$
|
(1,055
|
)
|
|
$
|
(561
|
)
|
|
Cash used in investing activities
|
|
|
—
|
|
|
|
(2,750
|
)
|
|
Cash provided by financing activities
|
|
|
6,154
|
|
|
|
10,082
|
|
|
Net increase in cash, cash equivalents and restricted cash
|
|
$
|
5,099
|
|
|
$
|
6,771
|
|
|
Cash, cash equivalents and restricted cash at the beginning of the period
|
|
|
4,580
|
|
|
|
1,446
|
|
|
Cash, cash equivalents and restricted cash at the end of the period
|
|
$
|
9,679
|
|
|
$
|
8,217
|
|
| |
|
|
|
|
|
|
|
|
|
Reconciliation of cash, cash equivalents and restricted cash
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
8,979
|
|
|
$
|
7,717
|
|
|
Restricted cash, current
|
|
|
200
|
|
|
|
—
|
|
|
Restricted cash, non-current
|
|
|
500
|
|
|
|
500
|
|
|
Cash, cash equivalents and restricted cash at the end of the period
|
|
$
|
9,679
|
|
|
$
|
8,217
|
|
Restricted cash consists of cash deposits earmarked for a specific purpose and cannot be used freely for general business operations. As of March, 2026, restricted cash consists
of (i) minimum cash deposits of $0.5 million, which are required to be maintained throughout the term of the Company’s term loan facility and can only be applied towards repayment of the final principal installment pursuant to the terms and
conditions of such facility and (ii) cash reserves of $0.2 million, which can only be applied towards payment of future vessel drydocking costs.
Operating activities. Cash of $0.6 million used in operating activities during the three-month period ended March 31, 2025, increased to $1.1
million during the same period in 2026, mainly due to the $1.1 million payments relating to vessel drydockings (also see “Capital expenditures” below). Most of these payments relate to the drydocking of the
M/V Charlie, which was completed in December 2025, with the related invoices being gradually settled in accordance with the payment terms of the shipyard and the spares and equipment suppliers. This was
partially offset by favorable working capital developments between the same periods (after taking into account the effects of non-cash (gain)/loss on equity-linked instruments, issuance costs, depreciation expense and amortization of deferred
drydocking costs on net income).
Investing activities. Cash used in investing activities during the three-month period ended March 31, 2025 relates to the advance payment in
relation to the bareboat charter of the M/V Charlie. No cash was used in investing activities during the three-month period ended March 31, 2026.
Financing activities. Cash provided by financing activities during the three-month period ended March 31, 2026, relates to the net proceeds
from the issuance of common shares under the SEPA and ATM agreement, offset by principal repayments of long-term debt. Cash provided by financing activities during the three-month period ended March 31, 2025, relates to the net proceeds from the
Company’s January 2025 offering, counterbalanced by principal repayments of long-term debt.
Capital expenditures
Drydockings. To ensure safety, seaworthiness and compliance with applicable rules and regulations, every vessel regularly undergoes
maintenance and surveys. As part of this program, each vessel is temporarily withdrawn from service for drydocking, typically at 30- to 60-month intervals. The associated cash outflows are generally staggered over a period of up to six months,
pursuant to the payment terms agreed with the shipyard and the suppliers of spares and equipment. Drydocking related payments during the three-month period ended March 31, 2026 amounted to $1.1 million. See “Recent
Developments” below for further information about our capital expenditures after March 31, 2026 and through the date this discussion was issued.
Our borrowing and capital raising activities during the reporting period
Maui Term Loan Facility. On September 16, 2024, we entered into a term loan facility with a leading international financial institution for
up to $91.5 million, consisting of a committed portion of up to $16.5 million and an uncommitted upsize option of up to another $75 million (the “Maui Term Loan Facility”). On September 19, 2024, we borrowed the $16.5 million committed portion in
full, to finance part of the purchase price of the M/V Bravo and to leverage the M/V Alfa. For additional information about the Maui Term Loan Facility, see Note 7 “Long-Term Debt” to our unaudited interim condensed consolidated financial statements filed with the SEC on the same day as this
discussion. As of March 31, 2026, we had not borrowed any amount under the uncommitted upsize option and, following principal repayments of $0.2 million made during the reporting period, the outstanding balance under the Maui Term Loan Facility was
$13.7 million.
Finance lease liability. On March 21, 2025, we entered into a bareboat agreement with an unaffiliated third party to charter-in, with the
option to eventually purchase, the M/V Charlie. On June 21, 2025, the vessel was delivered to the Company. After assessing the terms of the bareboat agreement and considering the lease classification criteria
under ASC 842 “Leases,” we recognized as a finance lease liability, which was initially measured at $21.7 million. For additional information about this finance lease liability, see Note 7 “Long-Term Debt” to our unaudited interim condensed consolidated financial statements filed with the SEC on the same day as this
discussion. As of March 31, 2026, following principal repayments of $0.3 million made during the reporting period, the outstanding balance under this financial lease liability was $20.8 million.
Standby Equity Purchase Agreement. On August 27, 2025 (the “Effective Date”), we entered into a standby equity purchase agreement (“SEPA”)
with YA II PN, Ltd., a Cayman Islands exempt limited company (“Yorkville”). Pursuant to the SEPA, subject to the terms and conditions set forth therein, we have the right, but not the obligation, to issue (each such issuance, an “Advance”) to
Yorkville, and Yorkville has the obligation to subscribe for common shares for an aggregate subscription amount of up to $20 million (the “Commitment Amount”), at any time from the Effective Date until August 27, 2028, unless earlier terminated
pursuant to its terms, by delivering written notice to Yorkville (each, an “Advance Notice”). For additional information about the SEPA, see Note 8 “Capital Structure” to our unaudited interim condensed consolidated financial statements filed with the SEC on the same day as this discussion. During the three-month period ended March 31, 2026, we issued 1,816,493 common
shares pursuant to Advances under the SEPA for aggregate net proceeds of $5.8 million and a net gain on issuance of $1.0 million. We also issued 72,386 common shares in satisfaction of the second half of the commitment fee under the SEPA. As of March
31, 2026, $12.8 million of the Commitment Amount remained available for future Advances.
ATM Agreement. On February 4, 2026, we entered into an at-the-market offering agreement (the “ATM Agreement”) with Maxim Group LLC
(“Maxim”). Under the terms of the ATM Agreement, we may, from time to time, offer and sell common shares having an aggregate offering value of up to $3.4 million to or through Maxim, acting as sales agent. The timing and amount of any sales under the
ATM Agreement are at our sole discretion. For additional information about the ATM Agreement, see Note 8 “Capital Structure” to our unaudited interim condensed consolidated financial statements filed with the SEC on the same day as this discussion. During the three-month period ended March 31, 2026, we issued 633,213 common shares under the ATM Agreement for aggregate
net proceeds of $1.1 million. As of March 31, 2026, $2.3 million remained available under the ATM Agreement.
Recent Developments. See “Recent Developments” below for further information about our borrowing
and capital raising activities after March 31, 2026 and through the date this discussion was issued.
Recent Developments
Vessel employment. In April 2026, the M/V Charlie was delivered to a reputable
dry bulk operator and commenced a 16- to 20-month time charter. Under this charter, the vessel is earning hire at a floating daily rate linked to the Baltic Supramax Index, while preserving the option to convert to a fixed hire rate, at a time and
for a period of the Company’s choosing, The charter also provides for compensation related to fuel cost savings derived from the vessel’s scrubber.
Vessel employment. In May 2026, we exercised our option to convert the floating hire rate under the time charter of the M/V
Alfa to a fixed hire rate of $18,000 per day for the seven-month period from June to December 2026, contributing approximately $3.7 million to Icon’s estimated minimum contracted revenue.
Capital expenditures. The M/V Alfa completed her drydocking in May 2026 and the
M/V Bravo is expected to complete her drydocking in June 2026. These drydockings are estimated to cost approximately $2.5 million in aggregate and the vessels are expected to be taken off service for
approximately 45 days in aggregate.
Investment. On May 22, 2026, the Company’s Board of Directors approved the Company’s non-controlling participation in the
acquisition of a 2,000 TEU geared container feeder with high reefer capacity, built in 2008. Upon acquisition, the vessel will be chartered to an investment-grade liner operator, at a fixed hire rate of $26,500 per day for a period of 24 to 26
months, generating approximately $19 million of minimum contracted revenue. It will be acquired by a consortium of professional maritime investors led by a reputable containership owner and operator, which will also undertake the vessel’s commercial
and technical management. The Company has agreed to invest $0.5 million in exchange for a 4.7% equity interest in the entity formed to acquire the vessel. The investment is expected to be funded from cash on hand and to close by the end of June 2026,
subject to definitive documentation and customary closing conditions.
Transactions with
Pavimar. Pursuant to the services agreement dated October 1, 2023, as amended and restated on April 1, 2024, Pavimar is eligible to receive incentive compensation from the Company in connection with the
services rendered, at such times, amounts, and forms as may be determined by the Company’s Board of Directors. No incentive compensation has been approved since October 1, 2023. On April 1, 2026, the independent Compensation Committee of the
Company’s Board of Directors approved incentive compensation in the amount of $0.2 million. On June 5, 2026, the Company and Pavimar executed a new agreement (the
“Master Management Agreement”), to supersede and expand upon the existing arrangements between the parties to reflect the level of commitment, resources, and
operational involvement the Company anticipates from Pavimar. The Master Management Agreement is retroactively effective from April 1, 2026, being the date the Company’s
Board of Directors approved entering into such agreement, with all prior services and management agreements being terminated and with all termination fees and other amounts otherwise payable in connection with such terminations being waived. Pursuant to the Master Management Agreement and under the Company’s
direction, Pavimar provides the Company with a range of corporate management and administration services (the “Corporate Services”), including, but not limited to, accounting, representation, tax administration, clerical and secretarial support,
corporate officer services (including the services of our Chief Executive Officer, Chief Financial Officer and Corporate Secretary), third party professional services coordination, investment administration, financial advisory and treasury
services. In exchange for the Corporate Services, unless otherwise agreed on a case by case basis, Pavimar charges a quarterly fee of $25,000 per vessel plus $125,000 for the group as a whole, a 1.00% capital raising commission on all gross
capital raised by the Company in capital and debt markets, an annual investment administration fee equal to 1.00% of the net asset value of the Company’s passive investments, and a contingent fee equal to 15% of realized net profits, if any, from
the Company’s passive investments. In addition, Pavimar provides the Company with vessel commercial and technical management services (the “Ship Management
Services”), including, but not limited to, securing employment, post-fixture support, handling vessel sale and purchases, arranging and supervising crew, repairs and maintenance, insurance, provisions, bunkering, day to day vessel operations, and
ancillary services. In exchange for the Ship Management Services, unless otherwise agreed on a case by case basis, Pavimar charges a daily management fee of $800 per vessel, a performance incentive of 1.25% on all gross income arising out of or
in connection with the use or operations of the Company’s vessels, and a commission of 1.00% on the gross sale or purchase price on each vessel sale or purchase transaction. The Master Management Agreement also provides for annual inflation
adjustments to fixed fees, reimbursement of out-of-pocket costs and expenses, extraordinary fees for incremental services that may be requested by the Company, and allows for incentive compensation at such times, amounts, and forms as may be
determined by the Company’s Board of Directors. The Master Management Agreement has a term of eight years, renewing annually, and provides for payment of a termination fee equal to the fixed fees that would otherwise be payable over the remaining
term of the Master Management Agreement.
Share repurchase program. On
December 18, 2025, our Board of Directors authorized a share repurchase program under which we may, from time to time, repurchase up to an aggregate of $1 million of our outstanding common shares through December 31, 2026 (the “Program”). For
additional information about the Program, see Note 8 “Capital Structure” to our unaudited interim condensed consolidated
financial statements filed with the SEC on the same day as this discussion. Subsequent to the end of the reporting period and through the date this discussion was issued, the Company repurchased 77,396 common shares under the Program for an aggregate
gross amount of approximately $0.1 million.
ATM Agreement. Subsequent to the end of the reporting period and through the date this discussion was issued, the Company
issued 496,040 common shares pursuant to the ATM Agreement for aggregate net proceeds of $0.6 million.
Number of common shares. As of the date this discussion was issued, the Company had 3,710,109 common shares issued,
consisting of 77,396 common shares held in treasury and 3,632,713 common shares outstanding.
Critical Accounting Estimates
This discussion and analysis of our financial condition and results of operations is based on, and should be read in conjunction with, our unaudited interim condensed consolidated financial statements and the notes thereto, which have been prepared in accordance with US GAAP and filed with the SEC on the same day as this discussion.
The preparation of our unaudited interim condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of such financial statements, and the reported amounts of revenues and expenses during the reporting period. Management bases its
estimates on historical experience, current trends, anticipated future events, and other factors it believes are reasonable under the circumstances. Actual results could differ materially from those estimates. Management reviews those estimates on an
ongoing basis, including those related to revenue recognition, future drydock dates, the selection of useful lives and residual values of our vessels (or right-of-use asset under finance lease), expected future cash flows from our vessels to support
impairment assessments, and provisions for accounts receivable, legal disputes and contingencies. Critical accounting estimates are those that involve management’s most difficult, subjective, or complex judgments, typically due to the need to make
assumptions about the effects of matters that are inherently uncertain. These estimates have the potential to result in materially different outcomes under different assumptions and conditions.
There have been no material changes during the three months ended March 31, 2026 to our critical accounting estimates as described in our most recent Annual Report on Form 20-F.
For a more detailed discussion of our critical accounting estimates, as well as the accounting policies that are most significant to the presentation of our financial position, results of operations, and cash flows, please refer to our most recent
Annual Report on Form 20-F and Note 2 “Significant Accounting Policies and Recent Accounting Pronouncements” to our unaudited interim condensed consolidated financial statements filed with the SEC on the same day as this discussion.
Non-GAAP Financial Measures
To supplement our financial information presented in accordance with US GAAP, we may use certain “non-GAAP financial measures” as such term is defined in Regulation G promulgated
by the SEC. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in, or excluded from, the most directly comparable
measure calculated and presented in accordance with US GAAP. We believe non-GAAP financial measures provide investors with greater transparency and supplemental data relating to our financial condition and results of operations and, therefore, a more
complete understanding of our business and financial performance than the comparable US GAAP measures alone. However, non-GAAP financial measures should only be used in addition to, and not as substitutes for, the financial results presented in
accordance with US GAAP. Although we believe the following definitions and calculation methods are consistent with industry standards, our non-GAAP financial measures may not be directly comparable to similarly titled measures of other companies:
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• |
Time Charter Equivalent (“TCE”). TCE is a measure of revenue generated over a period that accounts for the effect of the different charter types under which our vessels may
be employed. TCE is calculated by deducting voyage expenses from revenue and making any other adjustments that may be required to approximate the revenue that would have been generated, had the vessels been employed under time charters, net
of commissions. TCE is typically expressed on a daily basis (“Daily TCE”) by dividing it by Operating Days, to eliminate the effect of changes in fleet composition between periods.
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|
• |
Daily Vessel Operating Expenses (“Daily OPEX”). Daily OPEX is a measure of the vessel operating expenses incurred over a period divided by Ownership Days, to eliminate the
effect of changes in fleet composition between periods.
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|
• |
Earnings before Interest, Tax, Depreciation and Amortization (“EBITDA”). EBITDA is a financial measure we calculate by deducting interest and finance costs, interest income,
taxes, depreciation and amortization, from net income. EBITDA assists our management by carving out the effects that non-operating expenses and non-cash items have on our financial results. We believe this also enhances the comparability of
our operating performance between periods and against companies that may have varying capital structures, other depreciation and amortization policies, or that may be subject to different tax regulations.
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The following table summarizes these non-GAAP financial measures during the reported periods:
|
(in thousands of U.S. dollars, except for daily measures)
|
|
Three-month period ended
March 31,
|
|
| |
|
2026
|
|
|
2025
|
|
|
Non-GAAP financial measures
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
2,154
|
|
|
$
|
(656
|
)
|
|
Daily TCE
|
|
|
12,902
|
|
|
|
8,056
|
|
|
Daily OPEX
|
|
|
5,278
|
|
|
|
5,156
|
|
The following table reconciles non-GAAP financial measures to the most directly comparable US GAAP financial measures:
|
(in thousands of U.S. dollars, except for fleet operational data and daily measures)
|
|
Three-month period ended
March 31,
|
|
| |
|
2026
|
|
|
2025
|
|
|
TCE and Daily TCE:
|
|
|
|
|
|
|
|
Revenue, net
|
|
$
|
3,646
|
|
|
$
|
1,525
|
|
|
Less: Voyage expenses
|
|
|
(165
|
)
|
|
|
(75
|
)
|
|
TCE
|
|
$
|
3,481
|
|
|
$
|
1,450
|
|
|
Divided by: Operating Days
|
|
|
269.8
|
|
|
|
180.0
|
|
|
Daily TCE
|
|
$
|
12,902
|
|
|
$
|
8,056
|
|
| |
|
|
|
|
|
|
|
|
|
Daily OPEX:
|
|
|
|
|
|
|
|
|
|
Vessel operating expenses
|
|
$
|
1,425
|
|
|
$
|
928
|
|
|
Divided by: Ownership Days
|
|
|
270.0
|
|
|
|
180.0
|
|
|
Daily OPEX
|
|
$
|
5,278
|
|
|
$
|
5,156
|
|
| |
|
|
|
|
|
|
|
|
|
EBITDA:
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
417
|
|
|
$
|
(2,977
|
)
|
|
Plus: Depreciation expense
|
|
|
857
|
|
|
|
572
|
|
|
Plus: Amortization of deferred drydocking costs
|
|
|
233
|
|
|
|
129
|
|
|
Plus: Interest and finance costs
|
|
|
689
|
|
|
|
1,654
|
|
|
Less: Interest income
|
|
|
(42
|
)
|
|
|
(34
|
)
|
|
EBITDA
|
|
$
|
2,154
|
|
|
$
|
(656
|
)
|
Risk Factors Update
The following risk factors update and supplement, and should be read together with, the risk factors previously provided under "Risk Factors"
in the Company’s most recent Annual Report on Form 20-F for information on the risk factors to which the Company is subject. The following is a newly identified or developed risk factor to which the Company has become subject since the Company’s most
recent Annual Report on Form 20-F was filed.
The performance of any passive investments we make is dependent on the financial performance of our investees, over which we do not exercise control.
In connection with our current or future passive investment initiatives, we may seek investment opportunities in the broader maritime space and acquire
minority equity or other non-controlling interests in other companies or investees. Because we generally do not control these investees and may have limited shareholder or other investor rights, our ability to influence their business strategies,
operational decisions, capital allocation policies and other matters affecting their performance may be limited or nonexistent. As a result, the performance of such passive investments is dependent on the performance of such investees, over which
we do not exercise control.
The timing, amount and form of any returns from any passive investments are uncertain, and such investments may be illiquid.
The investees are generally not obligated to pay dividends, and their dividend policies are determined at their own discretion, based on their own financial performance, capital
requirements, and strategic priorities, all of which are outside our control. As a result, there can be no assurance regarding the timing, amount or form of any returns that may be realized by these investments. Also, the investees may be privately
held or the investments may be otherwise illiquid, and there may be no established trading or secondary market for such investments, which could limit our ability to dispose of such investments on favorable terms or at all.
Our passive investments are subject to the risks of the underlying businesses and may result in a partial or complete loss of our invested capital.
We are exposed to the risks inherent in all investment acquisitions, including that an investee may not successfully execute its business plan, grow its business or achieve
expected results. In addition, through these investments, we are exposed to the risks typical of their respective businesses, including regulatory and legislative risk, social, economic, political risk, market risk, cyber security, credit and
financial risk, and various operational risks. Any of these risks could adversely affect the financial condition and operating performance of our investees, reduce the value of our investments, and result in a partial or complete loss of our invested
capital.
13