Stainless Tankers ASA

Quarterly Report • Nov 8, 2023

Condensed interim financial statements

The reported condensed interim consolidated financial figures for the Stainless Tankers Group presented below comprise revenue and expenses incurred during the period 1 December 2022 – 30 September 2023 ('YTD').

Consolidated statement of profit or loss and other comprehensive income (unaudited)

In US\$	Notes	YTD	Q3 2023
Operating revenue	5	18,711,035	11,691,880
Vessel voyage expenses	6	(853,245)	(437,549)
Vessel operating expenses	7	(7,605,283)	(4,950,705)
Administrative expenses	8	(1,263,327)	(576,175)
Other income		10,098	-
EBITDA		8,999,278	5,727,452
Depreciation		(3,511,070)	(2,272,653)
Operating result (EBIT)		5,488,208	3,454,798
Financial income	9	167,862	33,193
Financial expenses	9	(2,681,664)	(1,586,990)
Profit before tax (EBT)		2,974,406	1,901,001
Taxes		(18,822)	(6,274)
Profit and other comprehensive income for the period		2,955,584	1,894,727
Attributable to:
Equity holders of the parent company		2,955,584	1,894,727
Non-controlling interests		-	-
		2,955,584	1,894,727

In US\$	Notes	30 Sep 2023
ASSETS
Non-current assets
Vessels	10	117,689,813
Total non-current assets		117,689,813
Current assets
Trade and other receivables	11	5,935,927
Accrued income	11	18,588
Cash and cash equivalents	12	3,582,093
Total current assets		9,536,608
Total assets		127,226,421
EQUITY AND LIABILITIES
Equity
Share capital		13,072,672
Share premium		49,061,047
Retained earnings		2,955,584
Total equity		65,089,303
Non-current liabilities
Interest-bearing debt - non-current	14	53,394,382
Total non-current liabilities		53,394,382
Current liabilities
Interest-bearing debt - current	14	7,602,453
Trade and other payables	15	1,101,495
Accrued taxation		18,822
Deferred income		19,967
Total current liabilities		8,742,737
Total equity and liabilities		127,226,421

Consolidated statement of changes in equity (unaudited)

In US\$	Notes	Share capital	Share premium	Retained earnings	Total
As at 01 December 2022		-	-	-	-
Capital increase - private placement (cash)	13	13,072,672	54,030,330	-	67,103,002
Transaction costs		-	(3,281,783)	-	(3,281,783)
Profit and other comprehensive income for the period		-	-	1,060,857	1,060,857
As at 30 June 2023		13,072,672	50,748,547	1,060,857	64,882,076
Profit and other comprehensive income for the period		-	-	1,894,727	1,894,727
Dividends distribution during the period		-	(1,687,500)	-	(1,687,500)
As at 30 September 2023		13,072,672	49,061,047	2,955,584	65,089,303

Consolidated statement of cash flows (unaudited)

In US\$	Notes	YTD	Q3 2023
Profit and other comprehensive income for the period		2,974,406	1,901,001
Financial expenses	9	2,401,501	1,553,797
Depreciation	10	3,511,070	2,272,653
Cash flow from operating activities before changes in working
capital		8,886,978	5,727,452
Changes in working capital
Increase in trade and other receivables		(5,935,927)	(1,264,267)
Increase in trade and other payables		1,101,495	(805,564)
Deferred income		1,380	(269,461)
Cash flow from operating activities		4,053,924	3,388,160
Acquisition of vessels		(121,200,883)	-
Interest received		167,862	33,193
Cash flow from investing activities		(121,033,020)	33,193
Proceeds from issue of share capital	13	67,103,002	-
Transaction related costs	13	(3,281,783)	-
Dividends paid		(1,687,500)	(1,687,500)
Proceeds from issue of debt	14	67,500,000	-
Borrowing costs	14	(1,115,619)	(49,180)
Repayment of debt	14	(5,486,875)	(3,004,375)
Interest paid on interest-bearing debt	14	(2,470,036)	(1,529,347)
Cash flow from financing activities		120,561,188	(6,270,402)
Net change in cash and cash equivalents		3,582,092	(2,849,050)
Cash and cash equivalents at beginning of period		-	6,431,142
Cash and cash equivalents at end of period	12	3,582,092	3,582,092

Notes to the condensed interim consolidated financial statements (unaudited)

Note 1 – General informa�on

Stainless Tankers ASA (the 'Company') was incorporated on 1 December 2022 by Tu�on Management Limited ("TML"), as a limited liability company and was established for the sole purpose to operate as a holding company for a shipping group owning stainless steel chemical tankers. These consolidated financial statements comprise the Company and its subsidiaries (together referred to as the 'Group').

The shares of the Company are listed on the Euronext Growth Oslo exchange.

Stainless Tankers ASA is a public limited liability company incorporated and domiciled in Norway, with a registered address at Henrik Ibsens gate 90, 0255 Oslo, Norway.

Note 2 – Basis of prepara�on

The interim consolidated financial statements for the period 1 December 2022 – 30 September 2023 are prepared in accordance with IAS 34 Interim Financial Repor�ng as issued by the Interna�onal Accoun�ng Standards Board ('IASB') and as adopted by the European Union. These are the first financial statements prepared in accordance with IFRS, and IFRS 1 First-�me adop�on of IFRS has been applied.

The financial statements have not been subject to an audit and do not include all informa�on and disclosures required in the annual financial statements.

The financial statements are based on historical cost except as disclosed in the accounts.

The financial statements are presented in US Dollar (US\$), which is the func�onal currency of the Company and the Group.

The interim consolidated financial statements are prepared based on the assump�on of going concern.

Only standards and interpreta�ons that are applicable to the Group have been included and the Group reviews the impact of these changes in its financial statements. There are some amendments to the standards effec�ve from 1 January 2023. None of these have had any effect on the Financial Statements. The Group will adopt the relevant new and amended standards and interpreta�ons when they become effec�ve, subject to EU approval before the consolidated financial statements are issued. At the date of the approval of these FS, the group has not iden�fied any significant impact to the Group's Financial Statements as a result of new standards or amendments effec�ve 2023 or later.

Note 3 – Significant accoun�ng policies

Consolidation

The interim consolidated financial statements comprise the financial statements of Stainless Tankers ASA and its subsidiaries as at 30 September 2023. All intra-group balances, transac�ons, unrealised gains and losses resul�ng from intra-group transac�ons and dividends are eliminated. Subsidiaries are all companies where the Group has a controlling interest. Control is achieved when the Group is exposed, or has rights to variable returns from its involvement with the investee and has the ability to effect those returns through its power over the investee. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases. The financial statements of the subsidiaries are prepared for the same accoun�ng period as those of the Company, using consistent accoun�ng principles for similar transac�ons and events under otherwise similar circumstances.

Non-controlling interests represent the por�on of comprehensive income and net assets that are not held by the Group and are presented separately in the consolidated statement of comprehensive income and

within equity in the consolidated statement of financial posi�on, separately from the Company's shareholders' equity.

Revenue recognition

The Group's �me charter contract revenues are separated into a lease element accounted with IFRS 16 Leases and a service element which is accounted for in accordance with IFRS 15 Revenue from Contracts with Customers.

Time charter, pool revenue and other revenue contracts with customers are recognised when control of goods or services are transferred to the customer and when each separate performance obliga�on in the customer contract is fulfilled following the "over-�me principle". It is recognised at an amount that reflects the considera�on which the Group expects to receive in exchange for those goods or services.

The Group acts as a par�cipant in the pool arrangements. The performance obliga�on under the pool arrangements is equal as set under the �me charter contracts. Revenues for the vessels employed in the pool are based on average revenues across the pool the vessels are employed in, i.e. the vessels earn the average charter rate of the pool for the respec�ve month, with certain adjustments which reflect the rela�ve specifica�on of each vessel in the pool.

The service element from the Group's �me charter contracts is recognised over �me, as the performance obliga�on is also sa�sfied over �me. Revenue from bunkers and other goods and services from customers are recognised during the period the goods or services are transferred to the customer, following the "point in �me principle".

Operating expenses

Opera�ng expenses are accounted for on an accrual basis. Expenses are charged to the income statement, except for those incurred in the acquisi�on of an investment which are capitalised as part of the cost of the investment. Expenses arising from the disposal of investments are deducted from disposal proceeds.

Vessel opera�ng expenses of the Group are expenses related to the opera�on of vessels, such as (but not limited to) crewing expenses, expenses for repair and maintenance, lubrica�on oil consump�on and insurance.

Financial income and expenses

Interest income and expense is recognised as accrued and is presented under the financial income or expense in the income statement.

Foreign currency transactions

Transac�ons in foreign currencies are recorded in the func�onal currency exchange rate at the date of the transac�on. Monetary assets and liabili�es in foreign currency are translated at the func�onal currency exchange rate prevailing at the balance sheet date. Exchange differences arising from transla�ons into the func�onal currency are recorded in the income statement. Non-monetary assets and liabili�es measured at historical cost in foreign currency are translated into the func�onal currency using the historical exchange rate. Non-monetary assets and liabili�es recognised at fair value are translated using the exchange rate on the date of the determina�on of the fair value.

For subsidiaries with func�onal currencies other than USD, financial posi�on items are translated at the rate of exchange at the balance sheet date, and income statements are translated at the exchange rate prevailing at the date of the transac�on. Exchange differences arising on the transla�on are recognized in other comprehensive income as foreign currency differences.

Vessels and other tangible assets

Tangible fixed assets are stated at historical cost, less subsequent deprecia�on and impairment. For vessels purchased, these costs include expenditures that are directly atributable to the acquisi�on of the vessels and eligible for capitalisa�on. Upon acquisi�on, all components of the vessels, with a cost significant to the

total acquisi�on costs, are separately iden�fied and depreciated over that component's useful life on a straight-line basis.

Deprecia�on is calculated on a straight-line basis over the es�mated useful life of the assets, taking residual values into considera�on, and adjusted for impairment charges, if any. The es�mated useful life of the Group's vessels are 25 years. Residual values of the vessels are es�mated as the lightweight tonnage of each vessel mul�plied by scrap value per ton. Expected useful lives of assets, and residual values, are reviewed at each balance sheet date and, where they differ significantly from previous es�mates, deprecia�on calcula�ons are altered accordingly.

Ordinary repairs and maintenance expenses are charged to the income statement as incurred. Costs related to dry-docking or other major overhauls are recognized in the carrying amount of the vessels. This recogni�on is made when the dry-docking has been performed and is depreciated based on es�mated �me to the next class renewal, which is normally five years. All other costs that do not meet this recogni�on criteria are expensed as repairs and maintenance.

Vessels and other tangible assets are derecognised upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising from the derecogni�on of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) are included in the profit or loss during the period the asset is derecognised.

Impairment of vessels and other tangible assets

Vessels and other tangible assets are assessed for impairment indicators at each repor�ng period. If impairment indicators are iden�fied, the recoverable amount is es�mated, and if the carrying amount exceeds its recoverable amount an impairment loss is recognised, i.e. the asset is writen down to its recoverable amount. An asset's recoverable amount is calculated as the higher of the net realisable value and its value in use. The net realisable value is the amount obtainable from the sale of an asset in an arm's length transac�on less the costs of sale and the value in use is the present value of es�mated future cash flows expected from the con�nued use of an asset. An impairment loss recognised in prior periods for an asset is reversed if, and only if, there has been a change in the es�mates used to determine the asset's recoverable amount since the last impairment loss was recognised.

Leases

Group as lessor

The Group enters into lease agreements as a lessor with respect to its vessels under opera�ng leases to nonrelated par�es.

Leases where substan�ally all risks and rewards incidental to ownership are retained by the lessor are classified as opera�ng leases. Charter income received under opera�ng leases (net of any incen�ves given to the lessee) are recognised in profit or loss on a straight-line basis over the period of the lease term.

Fuel and lubrication oil

The Group values its inventories, which comprise lubrica�on oil and fuel on board the vessels, at the lower of cost and net realisable value. They are accounted for on a weighted average cost basis.

Trade and other receivables

Trade and other receivables are measured at the transac�on price upon ini�al recogni�on and subsequently measured at amor�zed cost less expected credit losses.

Cash and cash equivalents

Cash and cash equivalents include restricted and unrestricted cash, bank deposits and other highly liquid investments with original maturi�es of three months or less.

Share issuance

Share issuance costs related to a share issuance transac�on are recognised directly in equity. If share issuance costs, for tax purposes, can be deducted from other taxable income in the same period as they are incurred, the costs are recognised net a�er tax.

Dividends

Dividends are recognised as a liability in the Group's financial statements from the date when the dividend is approved by the General Mee�ng.

Financial liabilities

All loans and borrowings are ini�ally measured at fair value less directly atributable transac�on costs, and are subsequently measured at amor�zed cost, using the effec�ve interest method. The calcula�on takes into account any premium or discount on acquisi�on and includes transac�on costs and fees that are an integral part of the effec�ve interest rate. A financial liability is derecognised when the obliga�on under the liability is discharged, cancelled, or expires.

Provisions

Provisions are recognised when the Group has a present legal or construc�ve obliga�on as a result of a past event, when it is more likely than not that an ou�low or resources represen�ng economic benefits will be required to setle the obliga�on and a reliable es�mate can be made for the amount of the obliga�on.

Fair value measurement

Deriva�ve financial instruments are measured at fair value. The fair value of financial instruments traded in ac�ve markets are determined by reference to quoted market prices or dealer price quota�ons, without any deduc�on for transac�on costs. The fair value of financial instruments not traded in ac�ve markets is determined using appropriate evalua�on techniques.

Taxes

The Group operates within several jurisdic�ons and tax regimes, including the Norwegian general tax regime and tonnage tax regime as well as the Isle of Man tax regime. Changes in taxa�on law or the interpreta�on of taxa�on law may affect the business, results of opera�ons and financial condi�on of the Group. To the extent tax rules change, this could have both a prospec�ve and retrospec�ve impact on the Group both of which could be material. The Group's income tax returns may be subject to examina�on and review. If any tax authority successfully challenges the Group's opera�onal or legal structure, eligibility for the Norwegian tonnage tax regime, hereunder due to performance of disqualifying ac�vi�es or holding disqualifying assets, taxable pretence or similar circumstances, the Group's effec�ve tax rate could increase substan�ally and have a material adverse effect on the Group's business, financial condi�on, results of opera�ons, cash flows and/or prospects.

It is the inten�on that the Group will be taxed under the Norwegian tonnage tax regime. Under the tonnage tax regime, qualifying shipping income is exempt from taxa�on in Norway. Net financial income is subject to tax in accordance with the general Norwegian tax rules and certain special rules in the tonnage tax regime. Instead of tax on qualifying shipping income, a tonnage tax based on the net tonnage of the vessel(s) is paid. Should the Group for any reason such as due to ac�vi�es and/or assets held by a Group company not qualify for the Norwegian tonnage tax regime, net taxable profits are taxed at the corporate income tax rate, currently 22%.

The Company's subsidiaries are incorporated in the Isle of Man and will, consequently, in principle be taxable in the Isle of Man under local regula�on and will not be subject to any material taxa�on under the laws of Isle of Man. There can be no assurance that this will con�nue, as Isle of Man may change its tax laws and regula�ons. Further, also other jurisdic�ons may claim that Group companies are tax resident in their jurisdic�on and claim taxes on earnings or assets on that basis.

Related parties

Par�es are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the party in making financial and opera�ng decisions. Par�es are also related if they are subject to common control or common significant influence. Related party transac�ons are recorded based on their es�mated fair value.

Classification in the statement of financial position

Current assets and short-term liabili�es comprised of items due less than one year from the balance sheet date, as well as items due more than one year from the balance sheet date that are related to the opera�ng cycle.

Liabili�es with maturi�es less than one year from the balance sheet date are classified as current. All other debt is classified as long-term debt. Long-term debt due for repayment within one year from the balance sheet date is classified as current.

Statement of cash flows

The statement of cash flows has been prepared based on the indirect method.

Subsequent events

New informa�on on the Group's financial posi�on at the balance sheet date is taken into account in the financial statements. Subsequent events that do not affect the Group's posi�on at the balance sheet date, but which will affect the Group's posi�on in the future, are disclosed if significant.

Note 4 - Cri�cal accoun�ng judgements and key sources of es�ma�on uncertainty

The prepara�on of interim consolidated financial statements for the Group and applica�on of the accoun�ng policies, which are described in Note 3, requires judgements, es�mates and assump�ons to be made about the carrying amounts of assets and liabili�es. The es�mates and associated assump�ons are based on historical experience and other factors considered to be relevant. Actual outcomes may differ from these es�mates and assump�ons and could require a material adjustment to the carrying amount of the asset or liability affected in future periods. Es�mates and underlying assump�ons are reviewed on an on-going basis.

Judgments

In the process of applying the Group's accoun�ng policies, management has made the following judgments, apart from those involving es�ma�ons, which had the most significant effect on the amounts recognised in the consolidated financial statements:

Vessel life and impairment

The carrying value of the Group's vessel represents its original cost at the �me it was delivered or purchased less deprecia�on calculated using an es�mated useful life of 25 years from the date the vessel was originally delivered from the shipyard. In the shipping industry, use of life in this range has become the standard. The actual life of a vessel may be different. If the economic life assigned to the vessel proves to be too long because of new regula�ons or other future events, higher deprecia�on expense and impairment losses could result in future periods related to a reduc�on in the useful life of the vessel.

The carrying value of the Group's vessel may not represent its fair market value at any point in �me since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of new buildings. Historically, both charter rates and vessel values tend to be both correlated and vola�le. The Group records impairment losses only when events occur that cause the Group to believe that future cash flows for the vessel will be less than its carrying value. The carrying amount of a vessel held and used by the Group is reviewed for poten�al impairment whenever events or changes in circumstances indicate that the carrying amount of the vessel may not be fully recoverable. In such instances, an impairment charge would be

recognised if the es�mate of the discounted future cash flows expected to result from the use of the vessel and its eventual disposi�on is less than the vessel's carrying amount.

In developing es�mates of future cash flows, the Group must make assump�ons about future charter rates, ship opera�ng expenses and the es�mated remaining useful life of the vessel. These assump�ons are based on historical trends as well as future expecta�ons. Although management believes that the assump�ons used to evaluate poten�al impairment are reasonable and appropriate, such assump�ons may be highly subjec�ve.

Note 5 - Operating revenue

	YTD	Q3 2023
	US\$	US\$
Service revenue from time charters	1,971,688	1,354,141
Lease revenue from time charters	3,785,306	2,528,415
Pool charter revenue	12,954,040	7,809,325
	18,711,035	11,691,880

(a) Contract balances

The Group has recognised the following liabilities related to contracts with customers:

	YTD
	US\$
Contract liabili�es
Current
Contract liabili�es	-
Contract liabili�es	-

Contract liabilities represent the performance due to a charterer for the remaining lease period, as at the period end. This may happen in the case where the charterer has made an advance payment before the completion of the lease period, as of the period end date.

(b) Performance obligations

Information about the Group's performance obligations are summarised below:

Revenue from time charters - Under IFRS 15, the lease component and the service component of time charters need to be separately disclosed. The service component is accounted for separately under IFRS 15. The service component in the time charter includes a single performance obligation. The performance obligation is satisfied over time, given that the charterers simultaneously receive and consume the benefits provided by the Group. Revenue recognized in respect of the service component under IFRS 15 did not change. The lease component continues to be accounted for as a lease under IFRS 16 (Note 5).

The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at 30 September 2023 are, as follows:

		30 Sep 2023
		US\$
Within one year		2,001,450
Between two to five years		-
		2,001,450
Note 6 – Vessel voyage expenses
	YTD	Q3 2023
	US\$	US\$
Commission fees	599,349	332,504
Bunkers consumption	5,738	3,446
Pool administration costs and other expenses	246,267	101,440
Other voyage expenses	1,891	160
	853,245	437,549
Note 7 – Vessel operating expenses
	YTD	Q3 2023
	US\$	US\$
Vessel operating expenses	7,605,283	4,950,705
	7,605,283	4,950,705
Note 8 – Administrative expenses
	YTD	Q3 2023
	US\$	US\$
Auditor's remuneration	60,000	20,000
Legal and other professional fees	129,733	62,546
Directors' fees (Note 16)	84,712	36,843
Management service fees	900,900	418,600
Bank charges	7,910	3,764
Other expenses	80,071	34,422
	1,263,327	576,175

Between 1 March 2023 and 30 September 2023, the Company paid a management service fee of US\$900,900 to its shareholder TML, in accordance with the Management Services Agreement.

Note 9 - Finance (costs)/income

	YTD	Q3 2023
	US\$	US\$
Interest income	167,862	33,193
Finance income	167,862	33,193
Interest expense (Note 14)	(2,569,364)	(1,586,990)
Debt commitment fees	(112,300)	-
Finance costs	(2,681,664)	(1,586,990)
Net finance costs	(2,513,801)	(1,553,797)

Note 10 - Vessels

	Total
	US\$
Cost
Additions	121,200,883
Balance as at 30 June 2023	121,200,883
Addi�ons	-
Balance as at 30 September 2023	121,200,883
Depreciation
Charge for the period	1,238,417
Balance as at 30 June 2023	1,238,417
Charge for the period	2,272,653
Balance as at 30 September 2023	3,511,070
Net book amount
Balance as at 30 June 2023	119,962,466
Balance as at 30 September 2023	117,689,813
Insured value (US\$)	155,859,000
Total light weight tonnage (ldt)	36,928.86

On 17 March 2023, BSL Gwen Shipping Ltd (Sellers) entered into a memorandum of agreement (the 'MoA') with ST1 Ltd (Buyers) for the acquisi�on of a Japanese built stainless steel chemical tanker vessel Gwen with an IMO number 9407067, built in 2008. The purchase price was agreed at US\$17,100,000. Pursuant to the MoA, the vessel was to be delivered prior to 1 April 2023, with a daily penalty to be subtracted from the purchase price for each day passing a�er 1 April 2023. The vessel was delivered on 19 May 2023. Included in the addi�ons above, there is a price reduc�on amoun�ng to US\$290,000 and various takeover costs and legal fees amoun�ng to US\$19,143 which are amor�sed over the remaining useful life of the vessel.

On 17 March 2023, BSL Barbouni Shipping Ltd (Sellers) entered into a memorandum of agreement (the 'MoA') with ST2 Ltd (Buyers) for the acquisi�on of a Japanese built stainless steel chemical tanker vessel Barbouni with an IMO number 9416020, built in 2007. The purchase price was agreed at US\$16,300,000. Pursuant to the MoA, the vessel was to be delivered prior to 1 April 2023, with a daily penalty to be subtracted from the purchase price for each day passing a�er 1 April 2023. The vessel was delivered on 11 April 2023. Included in the addi�ons above, there is a price reduc�on amoun�ng to US\$86,281 and various takeover costs and legal fees amoun�ng to US\$16,143 which are amor�sed over the remaining useful life of the vessel.

On 17 March 2023, HSL Filly Shipping Ltd (Sellers) entered into a memorandum of agreement (the 'MoA') with ST23 Ltd (Buyers) for the acquisi�on of a Japanese built stainless steel chemical tanker vessel Lavraki with an IMO number 9323077, built in 2007. The purchase price was agreed at US\$15,800,000. Pursuant to the MoA, the vessel was to be delivered prior to 1 April 2023, with a daily penalty to be subtracted from the purchase price for each day passing a�er 1 April 2023. The vessel was delivered on 29 June 2023. Included in the addi�ons above, there is a price reduc�on amoun�ng to US\$536,000 and various takeover costs and legal fees amoun�ng to US\$16,143 which are amor�sed over the remaining useful life of the vessel.

On 17 March 2023, HSL Bronco Shipping Ltd (Sellers) entered into a memorandum of agreement (the 'MoA') with ST4 Ltd (Buyers) for the acquisi�on of a Japanese built stainless steel chemical tanker vessel City Island with an IMO number 9360960, built in 2007. The purchase price was agreed at US\$17,100,000. Pursuant to the MoA, the vessel was to be delivered prior to 1 April 2023, with a daily penalty to be subtracted from the purchase price for each day passing a�er 1 April 2023. The vessel was delivered on 4 May 2023. Included in the addi�ons above, there is a price reduc�on amoun�ng to US\$384,292 and various takeover costs and legal fees amoun�ng to US\$39,833 which are amor�sed over the remaining useful life of the vessel.

On 17 March 2023, ASL Orchid Shipping Ltd (Sellers) entered into a memorandum of agreement (the 'MoA') with ST5 Ltd (Buyers) for the acquisi�on of a Japanese built stainless steel chemical tanker vessel Orchid Kefalonia with an IMO number 9363821, built in 2008. The purchase price was agreed at US\$18,200,000. Pursuant to the MoA, the vessel was to be delivered prior to 1 April 2023, with a daily penalty to be subtracted from the purchase price for each day passing a�er 1 April 2023. The vessel was delivered on 10 May 2023. Included in the addi�ons above, there is a price reduc�on amoun�ng to US\$452,870 and various takeover costs and legal fees amoun�ng to US\$16,143 which are amor�sed over the remaining useful life of the vessel.

On 17 March 2023, ASL Friesian Shipping Ltd (Sellers) entered into a memorandum of agreement (the 'MoA') with ST6 Ltd (Buyers) for the acquisi�on of a Japanese built stainless steel chemical tanker vessel Orchid Sylt with an IMO number 9367413, built in 2009. The purchase price was agreed at US\$19,400,000. Pursuant to the MoA, the vessel was to be delivered prior to 1 April 2023, with a daily penalty to be subtracted from the purchase price for each day passing a�er 1 April 2023. The vessel was delivered on 2 May 2023. Included in the addi�ons above, there is a price reduc�on amoun�ng to US\$361,292 and various takeover costs and legal fees amoun�ng to US\$19,143 which are amor�sed over the remaining useful life of the vessel.

On 17 March 2023, ASL Charger Shipping Ltd (Sellers) entered into a memorandum of agreement (the 'MoA') with ST7 Ltd (Buyers) for the acquisi�on of a Japanese built stainless steel chemical tanker vessel Orchid Madeira with an IMO number 9367401, built in 2009. The purchase price was agreed at US\$19,400,000. Pursuant to the MoA, the vessel was to be delivered prior to 1 April 2023, with a daily penalty to be subtracted from the purchase price for each day passing a�er 1 April 2023. The vessel was delivered on 12 April 2023. Included in the addi�ons above, there is a price reduc�on amoun�ng to US\$130,573 and various takeover costs and legal fees amoun�ng to US\$15,643 which are amor�sed over the remaining useful life of the vessel.

The vessels are pledged on the Group's bank loan detailed in Note 14.

As at 30 September 2023, the management carried out an assessment of whether there is any indica�on that the vessels may have suffered an impairment loss. Management assessed the recoverable amount as at the period end and no impairment was recognised in the period ended 30 September 2023 based on the assessment.

Note 11 - Trade and other receivables

	30 Sep 2023
	US\$
Charterers balances receivable	3,499,530
Pool working capital receivable	1,650,000
Prepayments	562,538
Accrued income	18,588
Other receivables	223,859
	5,954,515

Included in the prepayments, there is an amount of US\$342,349 due from the ship managers of the vessels, representing advance cash paid.

Note 12 - Cash and cash equivalents

Cash balances are analysed as follows:

	30 Sep 2023
	US\$
Cash at bank	660,109
Restricted cash	2,921,985
	3,582,093

Restricted cash comprise (i) a minimum liquidity requirement of US\$250,000 per Vessel held in a restricted cash account and (ii) funding of a dry dock reserve account of US\$1,171,985 (Note 14).

Note 13 - Equity contribution

	No. of shares	Share capital	Share premium	Total
		US\$	US\$	US\$
Balance as at 01 December 2022	-	-	-	-
Proceeds during the period	13,500,000	13,072,672	54,030,330	67,103,002
Balance as at 30 June 2023	13,500,000	13,072,672	54,030,330	67,103,002
Proceeds during the period	-	-	-	-
Dividend distribution during the period	-	-	(1,687,500)	(1,687,500)
Balance as at 30 September 2023	13,500,000	13,072,672	49,061,047	62,133,718

The equity contribution represents paid in capital made by the equity holders during the period. On August 24 2023, the distribution of a cash dividend in the form of paid-in capital, amounting to

US\$1,687,500, was approved at the Extraordinary General Meeting.

Note 14 - Borrowings

	Sep-23
	US\$
Current borrowings
Bank loans	7,602,453
Non-current borrowings
Bank loans	53,394,382
Total	60,996,835

Maturity of borrowings:

	Sep-23
	US\$
Within one year	7,602,453
Between two and five years	53,394,382
	60,996,835

On 17 March 2023, Stainless Tankers Limited ("STL") as borrower, (ii) the SPVs as buyers, (iii) the Company as guarantor (collec�vely, the Obligors), and (iv) Macquarie Bank Limited, London Branch as lender, arranger, facility agent and security agent" (the "Lender") entered into a facility agreement whereby the Lender makes available a loan of up to US\$97,500,000, comprising a US\$67,500,000 tranche, being the Commited Amount, and US\$30,000,000 or such other higher amount as might be agreed between the Lender and the ship owning en��es, being the Uncommited Amount (the "Facility Agreement").

The Facility Agreement was, inter alia, entered into in order to provide the ship owning en��es with financing for the purchase of the Vessels, in addi�on to the equity capital the Group would provide from the Private Placement.

Interest will accrue quarterly and commenced on the u�lisa�on date 30 March 2023, with first scheduled payment on 30 June 2023. Final repayment of the Facility Agreement is scheduled separately for each Vessel tranche, at the earlier of when a Vessel has reached twenty years of age or five years from u�lisa�on. Voluntary prepayment is allowed at higher amounts in mul�ples of US\$500,000. Mandatory prepayment becomes automa�cally due in the case of a sale or total loss, as well as any arrest from which a Vessel is not released within a period of 45 days. In the later case, repayment is due for each Vessel's tranche, respec�vely.

The Facility Agreement includes covenants on (i) a minimum liquidity requirement of US\$250,000 per Vessel held in a restricted cash account at all �mes (earning interest at 30-day SOFR p.a.), (ii) a con�nuing maximum loan to value ra�o of 65%, (iii) funding of a dry dock reserve account in equal monthly instalments beginning 12 months prior to an upcoming capex event for each Vessel, and (iv) sa�sfactory vessel inspec�ons to be performed prior to drawdown. The restric�ons on dividends for STL according to the Facility Agreement include (i) lender approval on the basis of a 12-month cash flow forecast, illustra�ng to the lender's sa�sfac�on that the borrower will not face liquidity constraints following a proposed dividend, (ii) a maximum loan to value ra�o of 60% immediately following the dividend distribu�on, and (iii) maintenance of US\$250,000 in unrestricted cash per Vessel immediately following dividend distribu�on.

Movement analysis:

	30 Sep 23
	US\$
Balance as at 01 December 2022	-
Drawdown (gross of borrowing costs)	67,500,000
Capitalised borrowing costs	(1,115,619)
Repayments	(5,486,875)
Interest expense (Note 9)	2,470,036
Amortisation of borrowing costs (Note 9)	99,329
Interest paid	(2,470,036)
Balance as at 30 September 2023	60,996,835

Note 15 - Trade and other payables

	30 Sep 23
	US\$
Trade payables	767,699
Accruals	333,693
Other payables	103
	1,101,495

Included in the other payables, there is an amount of US\$370,295 due to the technical manager of the vessels.

The fair values of trade and other payables due within one year approximate to their carrying amounts as presented above.

Note 16 - Related party transactions

Transactions with related parties (Note 8)

			YTD	Q3 2023
Name	Nature of relationship	Nature of transactions	US\$	US\$
Directorship fees	Board of Directors	Directorship fees	84,712	36,843
			84,712	36,843

Note 17 - Contingent liabilities

The Group had no contingent liabilities as at 30 September 2023.

Note 18 - Commitments

Operating lease commitments

The Group as lessor

Contracted revenues from vessels operations

The Group's long-term time charter arrangements aggregate time charter hire revenues as at the year-end over the firm contract period receivable are as follows:

	Lease revenue from time charters	Service revenue from time charters	Total
	US\$	US\$	US\$
Within one year	2,141,400	2,001,450	4,142,850
Between two and five years	-	-	-
	2,141,400	2,001,450	4,142,850

Note 19 - Events after the reporting period

On 18th and 19th October 2023, the Company incorporated two new entities ST8 Ltd and ST9 Ltd as part of the Stainless Tankers Group. These entities will be used to acquire two 2005-built J19 stainless steel chemical tankers (the "Additional Vessels"). On 7th November 2023, each of ST8 Ltd and ST9 Ltd entered into a memorandum of agreement to acquire the Additional Vessels for a combined purchase price of US\$27.0m, and Stainless Tankers Ltd entered into an addendum to the existing loan facility for the drawdown of an additional amount of US\$27.0m (the "Upsize Tranche") under this facility.

The acquisitions are scheduled to close on or around 15th November 2023. The Additional Vessels are of comparable size and configuration to the Company's existing fleet and will trade in Womar's Stainless Tankers Inc. commercial pool, where they are currently employed. The Upsize Tranche will have a cost of SOFR plus 450pbs and be repayable over a three-year period commencing in the first quarter of 2024 and ending in the first quarter of 2027.