Icon Energy (NASDAQ: ICON) doubles revenue, trims loss and reshapes capital stack
Icon Energy Corp. reported stronger operating performance for the six months ended June 30, 2026. Revenue was $7.8 million, up from $3.5 million a year earlier, driven largely by the Ultramax M/V Charlie finance-leased in 2025, while net loss narrowed to $0.4 million from $3.7 million.
Operating loss was modest at $0.1 million as higher vessel operating, drydocking and G&A costs offset revenue growth. Operating activities used $1.9 million of cash, but equity issuances under a standby equity purchase agreement and an ATM program plus earlier offerings provided $6.0 million of financing cash, lifting cash and restricted cash to $8.2 million.
Total assets were $64.8 million, including $49.5 million of vessels and $3.6 million of deferred drydocking costs. Long-term debt, including a finance lease on M/V Charlie, was $33.8 million net of costs, with the company stating compliance with loan covenants and $13.9 million of minimum contracted charter revenue through 2027.
Common equity increased through share issuances to 3.9 million shares issued, partly offset by repurchase of 111,082 shares. Preferred financing remains significant: cumulative dividends on Series A Preferred Shares were $2.4 million in the period at a 25.7% rate, and a limited waiver commits Icon to pay a $1.5 million restricted stock dividend by December 31, 2026. The company also adopted a new Equity Incentive Plan in August 2026.
Positive
- Revenue more than doubled to $7.8 million from $3.5 million year over year, while net loss shrank to $0.4 million from $3.7 million, indicating materially improved operating performance.
- Contracted charter coverage provides visibility, with minimum contracted revenue of $13.9 million through 2027, including index-linked charters preserving upside exposure.
- Balance sheet liquidity improved: cash, cash equivalents and restricted cash rose to $8.2 million, supported by $6.0 million of net financing inflows and access to a remaining $12.7 million under the $20.0 million SEPA.
Negative
- Despite revenue growth, the company still posted a net loss of $0.4 million and used $1.9 million of cash in operating activities, indicating the business is not yet self-funding.
- Preferred equity burden is heavy: cumulative Series A Preferred dividends of $2.4 million in six months far exceeded net loss, materially reducing earnings available to common shareholders.
- Leverage remains significant, with $33.8 million of long-term debt and finance lease liabilities against $64.8 million of total assets, including a $20.5 million finance lease on M/V Charlie.
Filing Explained
The waiver preserves the 25.7% Series A rate; the committed $1.5 million common-share dividend remains due by December 31, 2026.
The August 12 waiver kept the Series A Preferred dividend rate at
Issuing those shares would increase the total common-share count and reduce existing holders’ percentage ownership absent offsetting changes. Because the obligation is stated in dollars rather than shares, the filing does not establish the resulting share count or dilution amount.
The company adopted an Equity Incentive Plan on
Key Figures
Revenue: $7,832 (thousands)
Net loss: $367 (thousands)
Operating cash flow: $1,903 (thousands) used
+5 more
8 metrics
Revenue
$7,832 (thousands)
Six-month period ended June 30, 2026; up from $3,547 (thousands) in 2025
Net loss
$367 (thousands)
Six-month period ended June 30, 2026; improved from $3,694 (thousands) loss in 2025
Operating cash flow
$1,903 (thousands) used
Net cash used in operating activities for six months ended June 30, 2026
Cash and restricted cash
$8,216 (thousands)
Cash, cash equivalents and restricted cash as of June 30, 2026
Long-term debt
$33,821 (thousands)
Total long-term debt net of deferred financing costs as of June 30, 2026
Series A dividends
$2,436 (thousands)
Cumulative dividends on Series A Preferred Shares for six months ended June 30, 2026
Minimum contracted revenue
$13,869 (thousands)
Non-cancellable time charter minimum revenue expected in 2026–2027
SEPA capacity remaining
$12,668 (thousands)
Commitment amount available under $20,000 Standby Equity Purchase Agreement as of June 30, 2026
Key Terms
finance lease liability, Standby Equity Purchase Agreement, Class A Warrants, protection and indemnity association, +2 more
6 terms
finance lease liability financial
"the Company has recognized a finance lease liability, which was initially measured at $21,697"
Standby Equity Purchase Agreement financial
"entered into a Standby Equity Purchase Agreement (“SEPA”) with YA II PN, Ltd."
A standby equity purchase agreement is a contract in which an investor or group agrees to buy a company’s newly issued shares on demand, giving the company a ready source of cash it can tap when needed. Think of it like a line of credit made with stock instead of a loan: it provides financial backup but can increase the number of shares outstanding, diluting existing owners and affecting per‑share value, so investors watch these deals for their impact on ownership and earnings per share.
Class A Warrants financial
"The Class A Warrants included in the units sold by the Company in its January 2025 offering"
protection and indemnity association regulatory
"The Company is member of a protection and indemnity association (“P&I Club”)"
deadweight tons technical
"We use the term deadweight tons (“dwt”) in describing the size of vessels."
Deadweight tons (DWT) measure how much weight a ship can safely carry, including cargo, fuel, water, crew and supplies—think of it as a truck’s payload capacity but for a vessel. It matters to investors because DWT determines a ship’s revenue potential and operating costs: larger DWT usually means more cargo per voyage and higher earnings capacity, while also affecting fuel use, port access and freight rates.
Section 883 of the Internal Revenue Code regulatory
"Pursuant to Section 883 of the Internal Revenue Code of the United States"
FAQ
How did Icon Energy (ICON) perform financially for the six months ended June 30, 2026?
Icon Energy reported revenue of $7.8 million, up from $3.5 million a year earlier, and a net loss of $0.4 million, improved from a $3.7 million loss. Operating cash flow was negative $1.9 million, partly offset by $6.0 million of net financing inflows.
What is Icon Energy’s (ICON) liquidity and debt position as of June 30, 2026?
Icon held $8.2 million in cash, cash equivalents and restricted cash and had $33.8 million of long-term debt net of costs. This includes a $13.5 million term loan and a $20.5 million finance lease on M/V Charlie, with covenants reported in compliance.
How significant are Series A Preferred dividends for Icon Energy (ICON) common shareholders?
Series A Preferred dividends were $2.4 million for the six months, compared with a $0.4 million net loss. Net loss attributable to common shareholders was $2.8 million, and the stated dividend rate on Series A shares remained 25.7% following a waiver agreement.
What equity financing actions did Icon Energy (ICON) take in early 2026?
During the six months, Icon issued 1,976,780 shares under a $20.0 million Standby Equity Purchase Agreement for net proceeds of $5.9 million and 1,129,253 shares via an ATM program for $1.7 million, while also repurchasing 111,082 shares for $0.1 million.
What is Icon Energy’s (ICON) future revenue visibility from existing charters?
Minimum contracted revenue from non-cancellable time charters was $13.9 million as of June 30, 2026, with $8.8 million expected in 2026 and $5.0 million in 2027. Several vessels are on index-linked time charters, providing upside to market rate improvements.
What is the purpose of Icon Energy’s (ICON) new Equity Incentive Plan and Series A waiver?
On August 11, 2026, Icon adopted an Equity Incentive Plan to grant equity-based awards to employees and eligible persons. On August 12, 2026, a waiver kept the Series A dividend rate at 25.7% in exchange for a $1.5 million restricted stock dividend obligation by year-end 2026.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2026
Commission File Number: 001-42174
Icon Energy Corp.
(Translation of registrant’s name into English)
c/o Pavimar Shipping Co.
17th km National Road
Athens-Lamia & Foinikos Str.
14564, Nea Kifissia
Athens, Greece
+30 211 88 81 300
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached to this report on Form 6-K as Exhibit 99.1
and Exhibit 99.2 are the unaudited interim condensed consolidated financial statements and related management’s
discussion and analysis of financial condition and results of operations of Icon Energy Corp. (the “Company”) as of June 30, 2026, and for the six-month period then ended.
Additionally, on August 11, 2026 the Company adopted an Equity Incentive Plan (the “Plan”) intended to promote the success of the Company
by providing equity-based and other incentive awards to selected employees and other eligible persons whose initiative and efforts are important to the successful conduct of the Company’s business. The Plan is intended to attract, retain,
motivate and reward such persons, align their interests with those of the Company’s shareholders and enhance the long-term performance and value of the Company. The foregoing description of the Plan is qualified in its entirety by reference to
such document, which is attached hereto as Exhibit 10.1.
Lastly, on August 12, 2026, by reference to the Company’s
Second Amended and Restated Statement of Designations of Rights, Preferences and Privileges of Series A Cumulative Convertible Perpetual Preferred Shares (the “Statement of Designations”, and such shares, the “Series A Preferred Shares”),
the Company and the sole holder (the “Holder”) of the Series A Preferred Shares entered into a limited waiver (the “Waiver”) pursuant to which, the Holder waived the adjustment that would otherwise have occurred with respect to the
applicable dividend rate on the Series A Preferred Shares as a result of the Company’s election to pay the June 30, 2026 dividend on the Series A Preferred Shares in kind. In exchange, the Company shall, at any time on or before December
31, 2026, declare and promptly thereafter pay a restricted stock dividend on the Series A Preferred Shares in an aggregate amount of $1.5 million of the Company’s common shares. The Company and the Holder also agreed to
clarifications to certain terms of the Series A Preferred Shares. The foregoing description of the Waiver is qualified in its entirety by reference to such
document, which is attached hereto as Exhibit 10.2.
This report on Form 6-K (this “Report”), including all exhibits hereto, is incorporated by reference into the Company’s registration
statement on Form F-3 (File No. 333-291988) and shall be a part of such registration statement from the date on which this Report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
ICON ENERGY CORP.
|
||
|
Date: August 14, 2026
|
By:
|
/s/ Dennis Psachos
|
|
Name:
|
Dennis Psachos
|
|
|
Title:
|
Chief Financial Officer
|
|
Exhibit 99.1
INDEX TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS OF ICON ENERGY CORP.
|
Consolidated Balance Sheets as of June 30, 2026 (unaudited) and December 31, 2025 (audited)
|
2
|
|
Unaudited Interim Consolidated Statements of Loss for the six-month periods ended June 30, 2026 and 2025
|
3
|
|
Unaudited Interim Consolidated Statements of Changes in Shareholders’ Equity for the six-month periods ended June 30, 2026 and 2025
|
4
|
|
Unaudited Interim Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2026 and 2025
|
5
|
|
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
|
6 |
1
ICON ENERGY CORP.
INTERIM CONSOLIDATED BALANCE SHEETS
|
(in thousands of U.S. dollars except for share data)
|
Notes
|
June 30, 2026
(unaudited)
|
December 31, 2025
(audited)
|
|||||||||
|
Assets
|
||||||||||||
|
Current assets
|
||||||||||||
|
Cash and cash equivalents
|
$
|
|
$
|
|
||||||||
|
Restricted cash
|
|
|
||||||||||
|
Trade receivables
|
|
|
||||||||||
| Due from manager | 3 | |||||||||||
|
Inventories
|
|
|
||||||||||
|
Prepayments and advances
|
|
|
||||||||||
|
Other current assets
|
|
|
||||||||||
|
Total current assets
|
$
|
|
$
|
|
||||||||
|
Non-current assets
|
||||||||||||
|
Vessels, net
|
4
|
|
|
|||||||||
|
Restricted cash
|
7
|
|
|
|||||||||
| Investments in equity securities |
2 | |||||||||||
|
Deferred drydocking costs, net
|
5
|
|
|
|||||||||
|
Deferred issuance costs
|
8 |
|
|
|||||||||
|
Total non-current assets
|
$
|
|
$
|
|
||||||||
|
Total assets
|
$
|
|
$
|
|
||||||||
|
Liabilities and shareholders’ equity
|
||||||||||||
|
Current liabilities
|
||||||||||||
|
Current portion of long term debt, net of deferred financing costs
|
7
|
|
|
|||||||||
|
Due to manager
|
3
|
|
|
|||||||||
|
Accounts payable
|
|
|
||||||||||
|
Deferred revenue
|
|
|
||||||||||
|
Accrued liabilities
|
|
|
||||||||||
|
Total current liabilities
|
$
|
|
$
|
|
||||||||
|
Non-current liabilities
|
||||||||||||
|
Non-current portion of long term debt, net of deferred financing costs
|
7
|
|
|
|||||||||
|
Total non-current liabilities
|
$
|
|
$
|
|
||||||||
|
Total liabilities
|
$
|
|
$
|
|
||||||||
|
Commitments and contingencies
|
6
|
— | — | |||||||||
|
Shareholders’ equity
|
||||||||||||
|
Common shares: authorized
|
8
|
|
|
|||||||||
|
Preferred Shares: authorized
|
8
|
|
|
|||||||||
|
Additional paid-in capital
|
8
|
|
|
|||||||||
|
Cost of treasury stock (
|
8 |
( |
) | |||||||||
|
Accumulated Deficit
|
(
|
)
|
(
|
)
|
||||||||
|
Total shareholders’ equity
|
$
|
|
$
|
|
||||||||
|
Total shareholders’ equity and liabilities
|
$
|
|
$
|
|
||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
2
ICON ENERGY CORP.
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF LOSS
|
Six-month period ended
|
||||||||||||
|
(in thousands of U.S. dollars except for share and per share data)
|
Notes
|
June 30, 2026
|
June 30, 2025
|
|||||||||
|
Revenue, net
|
2
|
$
|
|
$
|
|
|||||||
|
Voyage expenses
|
(
|
)
|
(
|
)
|
||||||||
|
Vessels operating expenses
|
(
|
)
|
(
|
)
|
||||||||
|
Management fees
|
3
|
(
|
)
|
(
|
)
|
|||||||
|
General and administrative expenses
|
(
|
)
|
(
|
)
|
||||||||
|
Depreciation and amortization expenses
|
4
|
(
|
)
|
(
|
)
|
|||||||
|
Amortization of deferred drydocking costs
|
5
|
(
|
)
|
(
|
)
|
|||||||
|
Operating loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||
|
Interest and finance costs
|
7,8
|
(
|
)
|
(
|
)
|
|||||||
|
Interest income
|
|
|
||||||||||
|
Gain/(loss) on equity-linked instruments, net
|
8,10
|
|
(
|
)
|
||||||||
|
Other income/(costs), net
|
|
(
|
)
|
|||||||||
|
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||
|
Cumulative dividends on Series A Preferred Shares
|
3,8
|
(
|
)
|
(
|
)
|
|||||||
|
Net loss attributable to common shareholders
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||
|
Loss per common share, basic and diluted
|
9
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||
|
Weighted average number of shares, basic and diluted
|
9
|
|
|
|||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
3
ICON ENERGY CORP.
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
|
Preferred
Shares
|
Common Shares
|
Treasury Shares | ||||||||||||||||||||||||||||||||||
|
(in thousands of U.S. dollars except for share data)
|
No. of
Shares
|
Par
Value
|
No. of
Shares
|
Par
Value
|
No. of
Shares
|
Amount |
Additional
Paid in
Capital
|
Retained
Earnings/
(Accumulated
Deficit)
|
Total
|
|||||||||||||||||||||||||||
|
Balance January 1, 2025
|
|
|
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||||||||||
|
Issuance of common shares and Placement Agent’s Warrant (Note 8)
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Issuance of Series A Preferred Shares (Note 8)
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Dividends paid in cash and in kind (Note 8)
|
—
|
|
—
|
|
— |
(
|
)
|
|
(
|
)
|
||||||||||||||||||||||||||
|
Net loss for the period
|
—
|
|
—
|
|
— |
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||||
|
Balance June 30, 2025
|
|
|
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||||||||||||||||
|
Balance January 1, 2026
|
$ | $ | ( |
) | $ | |||||||||||||||||||||||||||||||
|
Issuance of common shares, net of deferred issuance costs (Note 8)
|
||||||||||||||||||||||||||||||||||||
|
Repurchase of common shares (Note 8)
|
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
|
Dividends paid in kind (Note 8)
|
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
|
Issuance of Series A Preferred Shares (Note 8)
|
||||||||||||||||||||||||||||||||||||
|
Net loss for the period
|
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
|
Balance June 30, 2026
|
( |
) | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
4
ICON ENERGY CORP.
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Six-month period ended
|
||||||||||||
|
(in thousands of U.S. dollars—except for share data)
|
Notes
|
June 30, 2026
|
June 30, 2025
|
|||||||||
|
Cash flows from operating activities
|
||||||||||||
|
Net Loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||
| Adjustments to reconcile net loss to net cash provided by operating activities | ||||||||||||
|
Depreciation and amortization expenses
|
4
|
|
|
|||||||||
|
Amortization of financing costs
|
|
|
||||||||||
|
Issuance costs and (gain)/loss on equity-linked instruments, net
|
(
|
)
|
|
|||||||||
|
Amortization of deferred drydocking costs
|
5
|
|
|
|||||||||
|
|
||||||||||||
|
(Increase)/decrease in:
|
||||||||||||
|
Trade receivables
|
|
(
|
)
|
|||||||||
|
Due from manager
|
3
|
(
|
)
|
|
||||||||
|
Inventories
|
(
|
)
|
(
|
)
|
||||||||
|
Prepayments and advances
|
|
(
|
)
|
|||||||||
|
Other current assets
|
(
|
)
|
|
|||||||||
|
Increase/(decrease) in:
|
||||||||||||
|
Due to manager
|
3
|
(
|
)
|
|
||||||||
|
Accounts payable
|
|
(
|
)
|
|||||||||
|
Deferred revenue
|
|
|
||||||||||
|
Accrued liabilities
|
|
|
||||||||||
|
Payments for drydocking
|
5
|
(
|
)
|
|
||||||||
|
Net cash used in operating activities
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||
|
|
||||||||||||
|
Cash flows from investing activities
|
||||||||||||
|
Investment in equity securities
|
2 | ( |
) | |||||||||
|
Vessel acquisitions and improvements
|
4
|
|
(
|
)
|
||||||||
|
Net cash used in investing activities
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||
|
|
||||||||||||
|
Cash flows from financing activities
|
||||||||||||
|
Proceeds from issuance of common shares
|
8
|
|
|
|||||||||
|
Repurchase of common shares
|
8
|
(
|
)
|
|
||||||||
|
Return of paid-in capital
|
8 | ( |
) | |||||||||
|
Finance and issuance costs paid
|
7,8
|
(
|
)
|
(
|
)
|
|||||||
|
Repayment of long-term debt
|
7
|
(
|
)
|
(
|
)
|
|||||||
|
Net cash provided by financing activities
|
$
|
|
$
|
|
||||||||
|
|
||||||||||||
|
Net increase in cash, cash equivalents and restricted cash
|
$
|
|
$
|
|
||||||||
|
Cash, cash equivalents and restricted cash at the beginning of the period
|
|
|
||||||||||
|
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
|
$
|
|
||||||||
|
|
||||||||||||
|
Supplemental cash flow information
|
||||||||||||
|
Cash paid for interest
|
$
|
|
$
|
|
||||||||
|
|
||||||||||||
|
Non-cash financing activities
|
||||||||||||
|
Issuance costs paid in kind
|
8 | $ |
$ |
|||||||||
|
Finance lease liability
|
7
|
|
|
|||||||||
|
Dividend paid in kind on Series A Preferred Shares
|
8
|
|
|
|
||||||||
|
Non-cash investing activities
|
||||||||||||
|
Vessel acquisition
|
4
|
$
|
|
$ |
|
|||||||
|
|
||||||||||||
|
Reconciliation of Cash, cash equivalents and restricted cash
|
||||||||||||
|
Cash and cash equivalents
|
$
|
|
$
|
|
||||||||
|
Restricted cash, current
|
|
|
||||||||||
|
Restricted cash, non-current
|
|
|
||||||||||
|
Total cash, cash equivalents and restricted cash
|
$
|
|
$
|
|
||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
5
ICON ENERGY CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars—except for share and per share data)
| 1. |
Basis of Presentation and General Information:
|
Overview. Icon Energy Corp.
(“Icon” and together with its subsidiaries, the “Company”) was incorporated on August 30, 2023, under the laws of the Republic of the Marshall Islands and provides worldwide seaborne transportation services for dry bulk cargoes via its fleet of
oceangoing vessels. Icon generates revenues by chartering its vessels to regional and international dry bulk operators, commodity traders and end users, primarily on time charters (“TC”) (either index-linked or fixed rate) or voyage charters,
depending on market conditions, available opportunities, and other strategic and tactical considerations. As of June 30, 2026, Icon’s fleet comprised of the following dry bulk vessels:
|
Vessel Name
|
Vessel Type
|
|
Year Built
|
|
Charter Type
|
|
Earliest Charter Expiration
|
Latest Charter Expiration |
||
|
|
|
|
2006
|
|
|
|
December 2026
|
Evergreen(1) |
||
|
|
|
|
2007
|
|
|
|
Evergreen(1)
|
Evergreen(1) |
||
|
|
|
2020
|
|
August 2027
|
December 2027
|
| (1) | The charter continues
indefinitely, subject to |
| (2) |
| (3) |
Icon complements its
core dry bulk business through selective co-investments in adjacent maritime opportunities alongside experienced industry partners. Under this framework, as of June 30, 2026, Icon owns an approximately 4.7 % equity interest in a 2,000
TEU geared container feeder with high reefer capacity, built in 2008.
Formation of the Company. On June 11, 2024, Icon acquired all of the
outstanding shares of the investment holding company Maui Shipping Co. (“Maui”) in exchange for 15,000 Series A Cumulative Convertible
Perpetual Preferred Shares (the “Series A Preferred Shares”), 1,500,000 Series B Perpetual Preferred Shares (the “Series B Preferred
Shares”), and 1,000 common shares of Icon. Maui was incorporated on October 27, 2022, under the laws of the Republic of Marshall
Islands and, on May 3, 2023, entered into a deed of transfer of shares with the shareholders of the shipowning company Positano Marine Inc. (“Positano”), whereby all outstanding shares of Positano were transferred to Maui. For further
information, including a description of the main characteristics of the Series A Preferred Shares and Series B Preferred Shares, see Note 8 “Capital Structure—Formation of the
Company.”
The transactions described above were treated as reorganizations of companies under common control and have been accounted for in
a manner similar to the pooling of interests method, as each entity was controlled by the Company’s Chairwoman and Chief Executive Officer. Accordingly, the Company’s unaudited interim condensed consolidated financial statements have been
presented by giving retroactive effect to the transactions described above, using historical carrying values of the assets and liabilities of Maui and Positano. The Company’s unaudited interim consolidated statements of loss present the results
of operations for the period in which the transfers occurred as if the transfers of shares and exchange of equity interests had occurred on the date Positano was incorporated and as if Positano and Maui were consolidated subsidiaries of the
Company from their date of incorporation. Results of operations and cash flows during the presented periods, comprise those of the previously separate entities consolidated. The equity accounts of the entities are combined and the difference
between the consideration paid and the net assets acquired is reflected as an equity transaction and has been given retroactive effect as of the earliest period presented.
Initial public offering. On July 15, 2024, Icon completed the initial
public offering of its common shares, which began trading on the Nasdaq Capital Market on July 12, 2024, under the symbol “ICON.” For further information see Note 8, “Capital Structure—Initial public offering.”
Reverse stock splits. Unless otherwise stated, all share and per share
amounts in these unaudited interim condensed consolidated financial statements have been retroactively adjusted, as of the earliest period presented, to reflect the one-for-forty reverse stock split of the Company’s common shares effected on April 1, 2025 (the “April 2025 Reverse Stock Split”) and the one-for-five reverse stock split of the Company’s common shares effected on January 8, 2026 (the “January 2026 Reverse Stock Split” and together with the April 2025 Reverse
Stock Split, the “Reverse Stock Splits”). For further information see Note 8 “Capital Structure—Reverse Stock Splits.”
Subsidiaries. The accompanying unaudited interim condensed consolidated financial
statements include the accounts of Icon and its subsidiaries:
|
Company
|
|
Activity
|
|
Incorporation country
|
|
Vessel name
|
|
Icon Energy Corp.
|
|
|
|
|
|
—
|
|
Maui Shipping Co.(1)
|
|
|
|
|
|
—
|
|
Positano Marine Inc.(1)
|
|
|
|
|
|
|
|
Reef Shiptrade Ltd.(1)
|
|
|
|
|
|
|
|
Charlie Marine Ltd.(1)
|
|
|
|
|||
| Icon Investment Holdings Ltd.(1) |
— |
| (1) |
|
6
| 2. |
Significant Accounting Policies and Recent Accounting Pronouncements:
|
A discussion of the Company’s significant accounting policies and recent accounting pronouncements can be found in Note 2 “Significant Accounting Policies and Recent Accounting Pronouncements” of the Company’s consolidated financial statements for the year ended December 31, 2025, included
in the Company’s annual report on Form 20-F for the year ended December 31, 2025. There have been no material changes to these policies in the six-month period ended June 30, 2026, other than updates to reflect the passage of time and align with
the financial data as of June 30, 2026, and for the six-month period then ended, as well as to include accounting policies that became significant to the Company as of June 30, 2026, and during the six-month period then ended, which are discussed
below:
Environmental Credits and Environmental Credit Obligations. In May 2026, the FASB issued ASU 2026-02, “Environmental Credits and
Environmental Credit Obligations” (Topic 818). This guidance establishes recognition, measurement, presentation and disclosure requirements for
all entities that generate, purchase, or receive environmental credits or have a regulatory compliance obligation that may be settled with environmental credits. This guidance is required to be adopted by the Company in the first quarter of
2028 on a retrospective basis. The Company is evaluating the impact this guidance may have on the consolidated financial statements.
Segmental reporting. The
Company transports dry bulk cargoes along global shipping routes through the ownership and operation of dry bulk vessels. The Company has identified its 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 loss as reported on the consolidated statements of loss to allocate resources, make
operating decisions and assess performance, without discrete financial information for each charter type, customer, vessel or vessel type. The Company’s 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 the Company charters 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, the Company has 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 the Company’s sole reportable segment is vessel operating expenses as
reported on the consolidated statements of loss. Based on the principles of ASC 280 “Segment Reporting,” the Company believes that disaggregating into more than one reportable segment, would not be
meaningful or informative.
Investments in Equity Securities. The Company accounts for equity investments in which it does not have a controlling financial interest, and over which it cannot exercise significant influence, in accordance with ASC 321 “Investments—Equity
Securities.” For equity investments that do not have readily determinable fair values (such as privately held consortiums or joint ventures where the Company’s interest is purely passive), the Company has elected to apply the
measurement alternative as per ASC 321-10-35-2. Under this alternative, these investments are initially recorded at cost and subsequently measured at cost, less any impairment. If the Company identifies observable price changes in orderly
transactions for the identical or a similar investment of the same issuer, it measures its equity investment at fair value in accordance with ASC 820 as of the date that the observable transaction occurred, with the corresponding gain or loss
recognized in the consolidated statements of loss. At each reporting date, the Company reassesses whether an investment continues to qualify for the measurement alternative. Dividend income from these investments is recognized in the
consolidated statements of loss when the Company’s right to receive payment is established, provided it represents a return on investment rather than a return of capital. The investment is presented in the accompanying unaudited interim
consolidated balance sheet as of June 30, 2026 under the caption “Investment in equity securities”.
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. The Company invested $488 in exchange for a 4.7 % equity interest in the common stock of the entity that acquired the vessel. The Company also incurred directly attributable acquisition costs of $5 . Accordingly, the investment was initially measured at cost of $493 .
Impairment of investments in equity securities. The Company assesses its investments in equity securities for impairment whenever events or changes in
circumstances indicate that the carrying amount of an investment may not be recoverable. This assessment considers various factors, including the economic and regulatory environment, the operational performance of the underlying assets, and the
overall financial condition of the investee. If qualitative indicators suggest that the fair value of the investment is less than its carrying amount, the Company estimates the fair value of the investment and recognizes an impairment loss in
the consolidated statements of loss equal to the difference between the carrying value and the estimated fair value. The Company assessed that there were no adverse events or changes in circumstances between the investment date and June 30,
2026 that would indicate that the investment was impaired.
Revenue, net. For the six-month periods ended June 30, 2026 and 2025, all of the Company’s revenue derived from lease contracts where the Company is the lessor. During the same periods,
the Company’s major charterers that individually accounted for more than 10% of the Company’s revenue, were as follows:
|
% of Company’s revenue during
the six-month periods ended
|
||||||||
|
Charterer
|
June 30, 2026
|
June 30, 2025
|
||||||
|
A
|
|
|
%
|
|||||
| B |
% | |||||||
| C |
% | |||||||
| D |
% | |||||||
7
Treasury stock. Repurchases of the Company’s
common shares are accounted for under the cost method. The cost of common shares repurchased is recorded as treasury stock and presented as a reduction of shareholders’ equity. Treasury shares are considered issued but not outstanding and are
excluded from the computation of basic and diluted loss per common share from the date of repurchase. The Company has elected to use the weighted average cost method to determine the cost of treasury shares upon any subsequent reissuance or
retirement. The Company does not recognize gains or losses in the consolidated statements of loss from transactions involving its own shares. Differences between the weighted average cost of treasury shares and the proceeds received upon any
subsequent reissuance are recorded within additional paid-in capital or accumulated deficit, as applicable. The Company considers the applicable corporate law provisions relating to the acquisition and holding of treasury shares. The
acquisition and holding of treasury shares did not result in a restriction of retained earnings or accumulated deficit for the payment of dividends and did not have any other effect of a significant nature.
| 3. |
Transactions with Related Parties:
|
Pavimar Shipping Co. (Ship
management). On November 1, 2023, the Company entered into a management agreement with
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 Greek Law 27 of 1975. Pavimar is controlled by the Company’s
Chairwoman and Chief Executive Officer. The management agreement with Pavimar became effective on January 18, 2024, and under its terms, Pavimar provided the Company 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. With
effect from April 1, 2026, the services provided by Pavimar to the Company were consolidated under a new agreement (see “Pavimar
Shipping Co. (Master management agreement)” below) and all prior management agreements
were terminated with all termination fees and other amounts otherwise payable in connection with such terminations being waived. See Pavimar Shipping Co. (Master management agreement) below.
Pavimar Shipping Co. (Services
agreement). Pursuant to the services agreement dated October 1, 2023, as amended and
restated on April 1, 2024, Pavimar provides the Company with the services of its Chief Executive Officer, Chief Financial Officer and Corporate Secretary. Under that agreement, Pavimar is also 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, and the Company paid, incentive compensation in the amount of $200 ,
which is included in “General and administrative expenses” in the accompanying unaudited interim consolidated statements of loss. With effect from April 1, 2026, the services provided by Pavimar to the Company were consolidated under a new
agreement (see “Pavimar Shipping Co. (Master management agreement)” below) and all prior management agreements were terminated with all termination fees and other amounts otherwise payable in connection
with such terminations being waived.
Pavimar Shipping Co. (Master management agreement). Effective from April 1, 2026, the Company and Pavimar entered into a new agreement (the “Master Management Agreement”) to supersede and expand upon the existing arrangements between the parties. All prior services and management
agreements were terminated 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 the Company’s 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 per vessel plus $125 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 $0.8 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.
8
In relation to the Ship Management Services, including the respective services under the superseded ship management
agreement, total charges by Pavimar during the six-month periods ended June 30, 2026 and 2025, comprise of technical management fees of $434
and $298 , respectively, and performance incentives of $129 and $35 , respectively. These amounts are included in “management fees”
and “voyage expenses,” respectively, in the accompanying unaudited interim consolidated statements of loss. In relation to the Corporate Services, including the respective services under the superseded services agreement, total charges by Pavimar
during the six-month periods ended June 30, 2026 and 2025, amounted to $211 and $7 , respectively. These amounts are included in “General and administrative expenses” in the accompanying unaudited interim consolidated statements of loss, save for an amount of $6 which relates to capital raising commissions during the six-month period ended June 30, 2026, which is accounted for as a deduction from the
respective proceeds and included in “Additional paid-in capital” in the accompanying unaudited interim consolidated balance sheet.
Further, to enable Pavimar to make payments relating to vessel operating expenses on behalf of the Company, the Company makes monthly working capital advances to Pavimar. Occasional and
extraordinary funding needs, including those in relation to drydockings, are covered upon request or reimbursed at cost. Under these arrangements, the outstanding balance was $1,743 due from Pavimar as of June 30, 2026, and $178 due to Pavimar as of
December 31, 2025. These amounts are reflected in “Due from manager” and “Due to manager,” respectively, in the accompanying unaudited interim consolidated balance sheet as of June 30, 2026 and the accompanying consolidated balance sheet as of
December 31, 2025.
Atlantis Holding Corp. The sole holder of the Series A Preferred Shares and Series B Preferred Shares is Atlantis
Holding Corp., an entity incorporated in the Republic of the Marshall Islands, controlled by the Company’s Chairwoman and Chief Executive Officer.
Dividends accrued on the Series A Preferred Shares for the six-month periods ended June 30, 2026 and 2025, amounted to $2,436 and $1,272 , respectively, and are presented in the
accompanying unaudited interim consolidated statements of loss as a deduction from the net loss of the relevant periods to derive the net loss attributable to common shareholders.
Dividends paid on Series A Preferred Shares during the six-month periods ended June 30, 2026 and 2025 amounted to $2,436
and $2,249 , respectively. Such dividends were paid in kind by issuing 2,436 and 2,249 Series A Preferred Shares on June 30,
2026 and 2025, respectively (see Note 8 “Capital Structure” and Note 12 “Subsequent Events”).
| 4. |
Vessels, net:
|
The movement in “Vessels, net”, between the periods presented in the accompanying unaudited interim consolidated balance sheet as
of June 30, 2026 and the accompanying consolidated balance sheet as of December 31, 2025 is analyzed as follows:
|
Vessels
cost
|
Accumulated
Depreciation and
Amortization
|
Vessels,
net
|
||||||||||
|
Balance, January 1, 2026
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
|
Depreciation and amortization expenses
|
—
|
(
|
)
|
(
|
)
|
|||||||
|
Balance, June 30, 2026
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
Right-of-use assets under finance leases. On
March 21, 2025, the Company entered into a bareboat agreement with an unaffiliated third party to charter-in, with the option to eventually purchase, a 2020-built,
scrubber-fitted, Eco, Ultramax, dry bulk carrier with a carrying capacity of 63,668 dwt. On June 21, 2025, the Company took delivery
of the vessel and renamed it M/V Charlie. Pursuant to that agreement, the Company made two
advance payments of $2,750 7.50 per day over the bareboat charter period, and $18,000 at the end of its term in June 2028, if the Company exercises its option to purchase the vessel. The Company has declared its intention to exercise such
purchase option, subject to certain conditions. The Company assessed the terms of the aforementioned bareboat agreement considering the lease classification criteria under ASC 842 “Leases” and concluded that the agreement is a finance lease. Consequently, upon inception of the lease, the Company has recognized a finance lease liability (see Note 7 “Long-Term Debt”) and recorded a right of use asset under finance lease in an amount of $28,100 .
| 5. |
Deferred Drydocking Costs, net:
|
The movement in “Deferred drydocking costs, net”, between the periods presented in the accompanying unaudited interim consolidated
balance sheet as of June 30, 2026 and the accompanying consolidated balance sheet as of December 31, 2025 is analyzed as follows:
|
Deferred drydocking
costs, net
|
||||
|
Balance, January 1, 2026
|
$
|
|
||
| Additions |
||||
|
Amortization / write-off
|
(
|
)
|
||
|
Balance, June 30, 2026
|
$
|
|
||
The additions to deferred drydocking costs presented above relate to costs incurred for the drydocking of the M/V Alfa and the M/V Bravo.
The M/V Alfa completed her drydocking in May 2026 and the M/V Bravo in June 2026.
9
| 6. |
Commitments and Contingencies:
|
Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the
ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company’s vessels. Currently, management is not aware of
any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying unaudited interim condensed consolidated financial statements. The Company is member of a protection and
indemnity association (“P&I Club”) that is a member of the International Group of P&I Clubs, which covers its third-party liabilities in connection with its shipping activities. Members of P&I Clubs are typically subject to possible
supplemental amounts or calls, payable to the P&I Club based on its claim records as well as the claim records of all other members of the individual associations, and members of the International Group of P&I Clubs.
The Company also accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and
is able to reasonably estimate the probable exposure. Currently, management is not aware of any such claims or contingent liabilities which should be disclosed, or for which a provision should be established in the accompanying unaudited interim
condensed consolidated financial statements. The Company’s protection and indemnity insurance coverage for pollution is $1,000,000 per
vessel per incident.
Commitments under long-term lease contracts. The minimum
contracted revenue expected to be recognized on the non-cancellable time charters of the Company’s vessels as of June 30, 2026, is estimated as follows:
|
Year
|
Amount
|
|||
|
2026
|
|
|
||
|
2027
|
|
|||
|
Total
|
$
|
|
||
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.
| 7. |
Long-Term Debt:
|
The amount of long-term debt shown in the accompanying unaudited interim consolidated balance sheet as of June 30, 2026 and
December 31, 2025, is analyzed as follows:
|
June 30, 2026
|
December 31, 2025
|
|||||||
|
Total long-term debt
|
||||||||
|
Loan agreement
|
$
|
|
$
|
|
||||
|
Finance lease liability
|
|
|
||||||
|
Less: Deferred financing costs
|
(
|
)
|
(
|
)
|
||||
|
Total long-term debt, net of deferred financing costs
|
$
|
|
$
|
|
||||
|
Current portion of long-term debt
|
||||||||
|
Loan agreement
|
$
|
|
$
|
|
||||
|
Finance lease liability
|
|
|
||||||
|
Less: Current portion of deferred financing costs
|
(
|
)
|
(
|
)
|
||||
|
Current portion of long-term debt, net of deferred financing costs
|
$
|
|
$
|
|
||||
|
Non-current portion of long-term debt
|
||||||||
|
Loan agreement
|
$
|
|
$
|
|
||||
|
Finance lease liability
|
|
|
||||||
|
Less: Non-current portion of deferred financing costs
|
(
|
)
|
(
|
)
|
||||
|
Non-current portion of long-term debt, net of deferred financing costs
|
$
|
|
$
|
|
||||
Loan agreement. On September 16, 2024, Positano and Reef Shiptrade
Ltd. (“Reef”), as joint and several borrowers, together with Maui, as guarantor, entered into a new term loan facility (the “Maui Term Loan Facility”) with a leading international financial institution for up to $91,500 , consisting of a committed portion of up to $16,500
and an uncommitted upsize option of up to another $75,000 . On September 19, 2024, the entities borrowed the $16,500 committed portion in full, to finance part of the purchase price of the M/V Bravo and to leverage the
M/V Alfa. The borrowed portion of the Maui Term Loan Facility is secured by, among other things, (i) a first priority mortgage on the M/V Alfa and the M/V Bravo, (ii) an assignment of their earnings and insurances, (iii) a pledge of their earnings accounts, and (iv) a pledge of the equity interests of each of the Company’s subsidiaries owning the mortgaged
vessels. The Maui Term Loan Facility contains certain undertakings that may limit or restrict the borrower’s and the guarantor’s ability to (i) incur additional indebtedness, (ii) make any substantial change to the nature of their business, (iii)
pay dividends, (iv) sell the mortgaged vessels or change their management, and (v) effect a change of control, enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction or joint venture arrangement. It also contains
certain financial covenants, requiring the borrowers to maintain (i) minimum restricted cash deposits of $250 per mortgaged vessel,
(ii) reserves for upcoming vessel drydocking costs and (iii) a maximum ‘loan to mortgaged vessels value’ ratio of 65 %. As of June 30,
2026, the Company was in compliance with all applicable financial covenants.
The uncommitted upsize option of up to another $75,000 under the Maui Term Loan Facility may be made available to the Company, in whole or in parts, to finance future vessel acquisitions. This portion of the Maui Term Loan Facility
remains free of interest or other fees, and the Company is not obliged to borrow it, or any part thereof. The terms of borrowing this portion, or any part thereof, will be determined at the time it is requested.
10
During the six-month period ended June 30, 2026, the weighted average interest rate on the borrowed portion of the
Maui Term Loan Facility was 7.64 %. The amount outstanding as of June 30, 2026, is repayable in quarterly installments, with a balloon payment due at maturity in December 2028:
|
Year
|
Amount
|
|||
|
2026
|
$
|
|
||
|
2027
|
|
|||
|
2028
|
|
|||
|
Total
|
$
|
|
||
Finance lease liability. The Company, after assessing the terms of the
bareboat agreement for M/V Charlie (see Note 4 “Vessels, net”) considering the lease classification criteria under ASC 842 “Leases,” concluded that the agreement
is a finance lease. Consequently, the Company has recognized a finance lease liability, which was initially measured at $21,697 , being
the net present value of the lease payments to be made over the lease term, including the purchase option to acquire the vessel at the end of the lease period, discounted by the Company’s incremental borrowing rate of approximately 7.6 %. As of June 30, 2026, the outstanding balance was $20,465 ,
repayable in 24 consecutive monthly installments, including the purchase option at the end of the lease term in June 2028.
The following table presents such lease payments, including the purchase option, on an undiscounted basis:
|
Year
|
Amount
|
|||
|
2026
|
$
|
|
||
|
2027
|
|
|||
|
2028
|
|
|||
|
Total lease payments (undiscounted)
|
$
|
|
||
|
Less: Discount based on incremental borrowing rate
|
(
|
)
|
||
|
Total finance lease liability
|
$
|
|
||
The revenue generated from the right of use asset under finance lease during the six-month period ended June 30, 2026, was $3,316 and is included in “Revenue, net” in the accompanying unaudited interim consolidated statement of loss.
| 8. |
Capital Structure:
|
Formation of the Company. On June 11, 2024, Icon acquired all of the outstanding
shares of Maui in exchange for 15,000 Series A Preferred Shares, 1,500,000 Series B Preferred Shares, and 1,000 common shares
of Icon. Maui was incorporated on October 27, 2022, under the laws of the Republic of Marshall Islands and, on May 3, 2023,
entered into a deed of transfer of shares with the shareholders of Positano, whereby all outstanding shares of Positano were transferred to Maui. The transaction was accounted for as described in Note 1 “Basis of Presentation and General Information” herein. The main characteristics of the Series A Preferred Shares and the Series B Preferred Shares are as follows:
|
|
• |
Series A Preferred Shares have a stated amount of $
|
Each holder of Series A Preferred Shares has the right, subject to certain conditions, at any time commencing on July 16, 2025 and until July 15, 2032, to convert all (but not a portion), of the Series A Preferred Shares
beneficially held by such holder into a number of common shares equal to the quotient of the aggregate stated amount of the Series A Preferred Shares converted plus any accrued and unpaid dividends divided by the conversion rate then in effect.
The conversion rate is equal to the lower of (i) $1,200 per common share, subject to certain anti-dilution adjustments (i.e. in the
event of capital reorganization, merger, stock dividend or other distribution of the Company’s assets, stock split or combination) (the “Pre-Determined Price”) and (ii) the volume weighted average price (“VWAP”) of the Company’s common shares
over the five consecutive trading day period expiring on the trading day immediately prior to the date of delivery of written notice
of the conversion. The Pre-Determined Price is also subject to adjustments, when the Company issues equity securities at prices below the Pre-Determined Price then in effect. In that event, the Pre-Determined Price shall be reduced to an amount
equal to the effective price of such issuance of equity securities. Such adjustment, may have an effect incremental to maintaining the value of the conversion privilege and, therefore, constitutes a down round feature. The issuance of the
Company’s equity securities in the January 2025 offering, the ATM Agreement and pursuant to the Standby Equity Purchase Agreement (all discussed below), would have triggered such feature, however, same have been deemed to be issuances of
“Excluded Shares” as defined in the terms of the Series A Preferred Shares and, therefore, all potential adjustments to the Pre-Determined Price as a result of the January 2025 offering and the issuance of common shares pursuant to the Standby
Equity Purchase Agreement have been waived.
The holders of Series A Preferred Shares have no voting rights, subject to limited exceptions, and are entitled to receive biannual dividends, on each June 30 and December 31, payable in cash or in kind (in the
form of additional Series A Preferred Shares) or in a combination thereof, in the Company’s option, accruing at the applicable dividend rate per annum on the stated amount per Series A Preferred Share and on any unpaid accrued dividends.
Dividends on Series A Preferred Shares are cumulative and accrue, whether or no t declared by the Company’s Board of Directors,
however, such dividends are payable only when, as, and if declared by the Company’s Board of Directors. In each event of non-payment or payment in kind, the dividend rate then in effect shall increase by a factor of 1.33 (“Non-payment Rate Adjustment”) or 1.30
(“PIK Rate Adjustment”), respectively, from the day of such event onwards. On the day a previous non-payment is rectified by payment in cash, the relevant Non-payment Rate Adjustment will cease to apply. If the previous non-payment is rectified
by payment in kind, the relevant Non-payment Rate Adjustment will cease to apply and the PIK Rate Adjustment will be permanently applied instead. Partial non-payments, payments in kind or rectifications of previous non-payments, will be treated
proportionally.
11
On June 30, 2026, December 31, 2025, and June 30, 2025, the Company issued 2,436 , 1,705 and 2,249 Series A Preferred Shares, respectively, as payment-in-kind for the dividends accrued up to such dates, totaling $6,390 . The PIK Rate Adjustment that would otherwise have occurred as a result of the Company’s election to pay the June 30, 2026 dividend on the Series A Preferred Shares in kind has been waived and the applicable dividend rate remained at 25.7 % (see also Note 3 “Transactions with Related
Parties” and Note 12 “Subsequent Events” herein).
The holders of Series A Preferred Shares also have the right to participate, on an as-converted basis, in certain non-recurring dividends and distributions declared or made on common shares.
Accordingly, the sole holder of Series A Preferred Shares did not participate on an as-converted basis or otherwise, in any of the dividends the Company has declared and paid to common shareholders. Lastly, no cash dividend may be paid to common shareholders unless full cumulative dividends have been, or contemporaneously are being, paid or provided
for on all outstanding Series A Preferred Shares for all prior and then-ending dividend periods. Nevertheless, the sole holder of the Series A Preferred Shares has consented to the payment of all the dividends the Company has so far declared
and paid to common shareholders.
|
|
• |
Series B Preferred Shares are perpetual, non-redeemable, not convertible into common shares, have no maturity date and rankpari-passu with the Company’s common
shares. Each Series B Preferred Share has the voting power of
|
Shareholders’ rights agreement. On July 11, 2024, the Company entered into a shareholders’ rights agreement (the “Rights Agreement”) with Computershare Trust Company, N.A., as rights agent. Pursuant to the Rights
Agreement, each of the Company’s common shares includes one right (“Right”) that entitles the holder to purchase from the
Company one one-thousandth of a share of Series C Participating Preferred Share (the “Series C Preferred Share”) for $5,000 (the “Series C Exercise Price”), once the Rights become exercisable, subject to specified adjustments. The Rights will separate from the
common shares and become exercisable only if a person or group acquires beneficial ownership of 10 % (15 % in the case of a passive institutional investor) or more of the Company’s outstanding common shares, in a transaction not approved by the
Company’s Board of Directors, provided that none of the Company’s Chairwoman and Chief Executive Officer or her controlled affiliates will be considered an “acquiring person.” In that situation, each holder of a Right (other than the
acquiring person, whose Rights will become void and will not be exercisable) will have the right to purchase, in lieu of one one-thousandth
of a Series C Preferred Share, upon payment of the Series C Exercise Price, a number of the Company’s common shares having a then-current market value (as defined in the Rights Agreement) equal to twice the Series C Exercise Price. In
addition, if the Company is acquired in a merger or other business combination after an acquiring person acquires 10 % (15 % in the case of a passive institutional investor) or more of the Company’s common shares, each holder of a Right will thereafter have the
right to purchase, in lieu of one one-thousandth of a Series C Preferred Share, upon payment of the Series C Exercise Price, a
number of common shares of the acquiring person having a then-current market value equal to twice the Series C Exercise Price. The acquiring person will not be entitled to exercise these Rights. Furthermore, the Company’s Board of Directors
may redeem the Rights for $0.001 per Right under certain circumstances. If the Board of Directors redeems any Rights, it must
redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of the Rights will be to receive the redemption price of $0.001
per Right. In addition, after a person or group becomes an acquiring person, but before an acquiring person owns 50 % or more of
the Company’s outstanding common shares, the Board of Directors may extinguish the Rights by exchanging one common share or an
equivalent security for each Right, other than Rights held by the acquiring person. In certain circumstances, the Company may elect to exchange the Rights for cash or other of the Company’s securities having a value approximately equal to one common share. Under the Rights Agreement’s terms, it will expire on July 11, 2034 .
Initial public offering. On July 15, 2024, the Company completed the
initial public offering of 6,250 of its common shares, at an offering price of $800 per share, for gross proceeds of approximately $5,000 ,
before deducting underwriting discounts and offering expenses. Icon’s common shares began trading on the Nasdaq Capital Market on July 12, 2024, under the symbol “ICON.” Issuance costs directly attributable to the Company’s initial public
offering were initially deferred and, in turn, charged against the gross proceeds of that offering.
12
First Representative’s Warrant. On July 15, 2024, in connection to the
Company’s initial public offering, the Company issued to Maxim Group LLC, for acting as sole book-running manager, a warrant to purchase up to 400
common shares, in whole or in parts, at an exercise price of $880 per common share, subject to certain anti-dilution adjustments (i.e.
in the event of capital reorganization, merger, stock dividend or other distribution of the Company’s assets, stock split or combination) (the “First Representative’s Warrant”). If at the time of exercise of the First Representative’s Warrant
there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of, the common shares issuable upon such exercise, then the First Representative’s Warrant may only be exercised, in
whole or in part, by means of a cashless exercise in which case, the holder shall be entitled to receive a number of common shares equal to the difference between the applicable spot price per common share of the Company (as determined in the
First Representative’s Warrant) and the exercise price then in effect, multiplied by the number of common shares that would be issuable upon a cash exercise, divided by the applicable spot price per common share of the Company (as determined in
the First Representative’s Warrant). The First Representative’s Warrant is exercisable on or after January 11, 2025, expires on July 11, 2027, and does not entitle its holder to any voting rights, dividends or other rights as a shareholder of the
Company prior to its exercise. As of June 30, 2026, no First Representative’s Warrants had been
exercised. The accounting of the First Representative’s Warrant was assessed in
accordance with the Company’s policy for distinguishing liabilities from equity (see Note 2 “Significant Accounting
Policies and Recent Accounting Pronouncements” of the Company’s consolidated
financial statements for the year ended December 31, 2025, included in the Company’s annual report on Form 20-F for the year ended December 31, 2025) and it was determined that classification as equity is appropriate and that no features
required bifurcation. In addition, since the First Representative’s Warrant was issued to Maxim Group LLC for its services in connection with the Company’s initial public offering, the Company considered the provisions of ASC 718 “Compensation-Stock Compensation” and the cost of the First Representative’s Warrant was classified within shareholders’ equity, against the respective offering proceeds.
January 2025 offering. On January 24, 2025, the Company completed a
public offering of 45,802 units, each unit consisting of one common share and one warrant (the “Class A Warrants”) to
purchase common shares, at an offering price of $262 per unit (such numbers retroactively adjusted for the Reverse Stock Splits), for
gross proceeds of approximately $12,000 , before deducting underwriting discounts and offering expenses. Issuance costs directly
attributable to the Company’s January 2025 offering were immediately expensed, since the Class A Warrants were classified as a liability (see section “Class A Warrants” below) at an initially estimated
fair value that exceeded the proceeds received. Such issuance costs, amounting to $1,293 , are included in “interest and finance costs,
net” in the accompanying unaudited interim consolidated statement of loss for the six-month period ended June 30, 2025. The Company’s principal purpose for the offering was to obtain additional capital to fund its operations and growth,
including, among other things, funding for working capital needs, debt repayments and fleet expansion.
Placement Agent’s Warrant. On January 24, 2025, in connection to the
Company’s January 2025 offering, the Company issued to Maxim Group LLC, for acting as placement agent, a warrant to purchase up to 2,290
common shares, in whole or in parts, at an exercise price of $288.20 per common share, subject to certain anti-dilution adjustments
(i.e. in the event of capital reorganization, merger, stock dividend or other distribution of the Company’s assets, stock split or combination) (the “Placement Agent’s Warrant”). If at the time of exercise of the Placement Agent’s Warrant there
is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of, the common shares issuable upon such exercise, then the Placement Agent’s Warrant may only be exercised, in whole or in
part, by means of a cashless exercise in which case, the holder shall be entitled to receive a number of common shares equal to the difference between the applicable spot price per common share of the Company (as determined in the Placement
Agent’s Warrant) and the exercise price then in effect, multiplied by the number of common shares that would be issuable upon a cash exercise, divided by the applicable spot price per common share of the Company (as determined in the Placement
Agent’s Warrant). The Placement Agent’s Warrant is exercisable on or after July 24, 2025, expires on July 24, 2028, and does not entitle its holder to any voting rights, dividends or other rights as a shareholder of the Company prior to its
exercise. As of June 30, 2026, no Placement Agent’s Warrants have been exercised. The
accounting of the Placement Agent’s Warrant was assessed in accordance with the Company’s policy for distinguishing liabilities from equity (see Note 2 “Significant Accounting Policies and
Recent Accounting Pronouncements” of the Company’s consolidated financial statements for the year ended December 31, 2025, included in the Company’s annual report on Form 20-F for the year ended December 31, 2025) and it was determined
that classification as equity is appropriate and that no features required bifurcation. In addition, since the Placement Agent’s Warrant was issued to Maxim Group LLC for its services in connection with the Company’s January 2025 offering, the
Company considered the provisions of ASC 718 “Compensation-Stock Compensation” and the cost of the Placement Agent’s Warrant was immediately expensed similarly to the issuance costs
related to the January 2025 offering, discussed above.
Class A Warrants. The Class A Warrants included in the units sold by
the Company in its January 2025 offering were immediately exercisable upon issuance, subject to certain beneficial ownership limitations, and expire on January 24, 2028. The Class A Warrants also contain certain (i) provisions adjusting the
exercise price and number of underlying common shares and (ii) mechanisms pursuant to which the holders can exercise each Class A Warrant for no additional cash consideration. Based on the combination of these features, the maximum number of
underlying common shares ranged between 45,802 and 458,015 . As of March 31, 2025, substantially all of the Class A Warrants had been exercised via such cashless mechanism and the Company issued 383,976 common shares. The remaining Class A Warrants can be exercised for up to 10
common shares. The accounting of the Class A Warrants was assessed in accordance with the Company’s policy for distinguishing liabilities from equity (see Note 2 “Significant Accounting Policies and Recent Accounting Pronouncements” of the Company’s consolidated financial statements for the year ended December 31, 2025, included in the Company’s
annual report on Form 20-F for the year ended December 31, 2025) and it was determined that the Class A Warrants cannot be considered indexed to the Company’s stock due to alternative settlement method and, therefore, they were recorded as
liabilities at fair value. The excess of such fair value over the proceeds received was recognized as a loss in the unaudited interim consolidated statement of loss for the three-month period ended March 31, 2025. Upon each settlement and reporting period end date, the Class A Warrants were remeasured to their fair value with the resulting gain/(loss) from changes in fair value being recorded in the unaudited interim consolidated
statement of loss, the respective liability settled, and shares issued recorded in equity with appropriate allocation between par value and additional paid in capital. During the three-months period ended March
31, 2025 the Company recorded a net loss of $537 , which is included in “Gain/(loss) on equity-linked instruments, net” in the
accompanying unaudited interim consolidated statement of loss. For further details about these fair value measurements see Note 10 “Financial Instruments and Fair Value Disclosures.”
13
NASDAQ Minimum Bid Price. On March 7, 2025, the Company received a
written notification from The Nasdaq Stock Market (“Nasdaq”), indicating that because the closing bid price of its common shares for 30 consecutive trading days, from January 23, 2025, to March 6, 2025, was below $1.00 per share, the Company was
no longer in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). On April 1, 2025, the Company effected the April 2025 Reverse Stock Split (as discussed below) and subsequently received a letter from Nasdaq
confirming that the Company had regained compliance with the Minimum Bid Price Requirement.
Reverse stock splits. On April 1, 2025, Icon effected a reverse stock
split (the “April 2025 Reverse Stock Split”), whereby every forty of its issued and outstanding common shares were automatically
converted into one. On January 8, 2026, Icon effected a further
reverse stock split (the “January 2026 Reverse Stock Split” and together with the April 2025 Reverse Stock Split, the “Reverse Stock Splits”), whereby every five of its issued and outstanding common shares were automatically converted into one. The Reverse Stock Splits were effected without any change in the par value per share or
the total number of common shares Icon is authorized to issue. Also, the Reverse Stock Splits 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 the market capitalization of the Company, or (iii) modify any voting rights or other terms of the common shares. Immediately before the January 2026 Reverse Stock Split, Icon had 3,460,000 691,977
Standby Equity Purchase Agreement. On August 27, 2025, the Company entered into a Standby Equity Purchase Agreement (“SEPA”) with YA II PN, Ltd., a Cayman
Islands exempt limited company (“Yorkville”), pursuant to which the Company has the right, but not the obligation, to issue (each such issuance, an “Advance”) to Yorkville, and Yorkville has the obligation to subscribe for, up to $20,000 (the “Commitment Amount”) of the Company’s common shares, from time to time during a three-year commitment period ending August 27, 2028, subject to certain conditions, including trading volume thresholds and the Company having in place an effective
registration statement for the resale by Yorkville of the common shares to be issued under the SEPA. The SEPA does not require Yorkville to subscribe for or acquire any common shares under the SEPA if those common shares, when aggregated with
all other common shares beneficially owned by Yorkville and its affiliates, would result in Yorkville and its affiliates (on an aggregated basis) beneficially owning more than 4.99 % of the then outstanding voting power or number of common shares. Under each Advance, the Company may issue common shares to Yorkville at a price equal to either (i) 96 % of the daily VWAP during a one-day pricing period or (ii) 97 % of the lowest daily VWAP during a three-day pricing period, at the Company’s election.
In connection with the SEPA, the Company paid to Yorkville a structuring and due diligence fee in the amount of $25 . In addition, the Company agreed to pay a commitment fee equal to 1 % of the Commitment Amount as follows: half due at execution of the SEPA, and the remaining half due at the earlier of (i) $10,000 worth of Advances or (ii) the 6-month anniversary of the execution of the SEPA. At each due date, the Company had the option, at its discretion, to pay all or a portion of the
commitment fee then due by the issuance of such number of common shares that is equal to the applicable portion of the commitment fee divided by the average of the daily VWAPs of the Company’s common shares during the three trading days immediately prior to the applicable due date. Upon the execution of the SEPA, the Company issued 9,049 common shares to Yorkville in satisfaction of the first half of the commitment fee and on March 3, 2026, issued an additional 72,386 common shares in satisfaction of the remaining balance.
The accounting of the SEPA, which, subject to its terms and conditions, gives the right to the Company to require Yorkville to purchase
common shares from the Company (“put right”), was assessed in accordance with the Company’s policy for contracts in its own equity (see Note 2 “Significant Accounting Policies and Recent Accounting
Pronouncements” of the Company’s consolidated financial statements for the year ended December 31, 2025, included in the Company’s annual report on Form 20-F for the year ended December 31, 2025) and it was determined that the SEPA is
an equity-linked instrument that does not qualify for equity classification. Accordingly, the put right was measured at fair value on the agreement date and remeasured as of December 31, 2025 and as of June 30, 2026. The Company analyzed the
terms of the freestanding put right and concluded that its fair value was de-minimis at all measurement dates.
During the six-month period ending June 30, 2026, the Company issued 1,976,780 common shares under the SEPA, resulting in net proceeds of $5,925
and a net gain on issuance of $1,010 which is included in “Gain/(loss) on equity-linked instruments, net” in the accompanying
unaudited interim consolidated statement of loss. As of such date, $12,668 of the Commitment Amount remains available for future
Advances.
Share Repurchase Program. On December 18, 2025, the Company’s Board of Directors authorized a share repurchase program under which the Company may, from time to
time, repurchase up to an aggregate of $1,000 of its outstanding common shares through December 31, 2026 (the “Program”).
Repurchases under the Program may be made, from time to time, in privately negotiated transactions, in open market transactions, or by other means, including through trading plans intended to qualify under Rule 10b-18 and/or Rule 10b5-1 of
the U.S. Securities Exchange Act of 1934, as amended. The amount and timing of any repurchases made under the Program will be at the Company’s sole discretion and will depend on a variety of factors, including legal requirements, market
conditions, other investment opportunities, available liquidity, and the prevailing market price of the Company’s common shares. The Program does not obligate the Company to repurchase any dollar amount or number of common shares and may be
suspended or discontinued at any time at the Company’s discretion. As of June 30, 2026, 111,082 common shares had been repurchased
and held as treasury stock under the Program, for an aggregate gross amount of $107 .
ATM Agreement: On February 4, 2026, the Company entered into an at-the-market offering agreement (the “ATM Agreement”) with Maxim Group LLC (“Maxim”). Under the
terms of the ATM Agreement, the Company may, from time to time, offer and sell its common shares having an aggregate offering value of up to $3,400
to or through Maxim, acting as sales agent. The timing and amount of any sales under the ATM Agreement are at the Company’s sole discretion. During the six-month period ending June 30, 2026, the Company issued 1,129,253 common shares pursuant to the ATM Agreement for aggregate net proceeds of $1,749 .
14
| 9. |
Loss per common share:
|
All common shares issued have equal rights and participate in dividends. Profit or loss attributable to common shareholders is
adjusted by the contractual amount of dividends on Series A Preferred Shares. Diluted loss per common share, if applicable, reflects the potential dilution that could occur if potentially dilutive instruments were exercised, resulting in the
issuance of additional shares that would then share in the Company’s net loss.
|
Six-month periods ended
|
||||||||
|
June 30, 2026
|
June 30, 2025
|
|||||||
|
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Cumulative dividends on Series A Preferred Shares
|
(
|
)
|
(
|
)
|
||||
|
Net loss attributable to common shareholders
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Divided by: Weighted average number of common shares, basic and diluted
|
|
|
||||||
|
Loss per common share, basic and diluted
|
$ | ( |
) |
$
|
(
|
)
|
||
Securities that could potentially dilute basic loss per common share in the future that were not included in the above computation
of diluted loss per common share, because to do so would have anti-dilutive effect, are (i) the First Representative’s Warrant, (ii) the Placement Agent’s Warrant, (iii) the Class A Warrants and (iv) the Series A Preferred Shares (see Note 8 “Capital Structure” herein).
| 10. |
Financial Instruments and Fair Value Disclosures:
|
Credit risk. Financial
instruments which potentially subject the Company to significant concentrations of credit risk, consist principally of trade receivables, amounts due from Pavimar, and cash, cash equivalents and restricted cash. The Company limits its credit risk
by performing ongoing credit evaluations of its counterparties’ financial condition and by collecting its trade receivables mainly in advance. The Company generally does not require collateral for its trade receivables, but when considered
necessary it may pursue additional securities and guarantees from its customers. Also, the Company places its cash and cash equivalents with established financial institutions and performs periodic evaluations of the relative credit standing of
those financial institutions.
Fair value. The
carrying values of the Company’s trade receivables, amounts due from/to the manager, accounts payable, and accrued liabilities, approximate their respective fair values due to the short-term nature of these financial instruments. Cash, cash
equivalents and restricted cash are considered as Level 1 items in accordance with the fair value hierarchy. The recorded value of the Company’s long-term debt is a reasonable estimate of its fair value as it bears interest at a variable rate
based on SOFR, which is observable at commonly quoted intervals for the full term of the long-term debt. Therefore, long-term debt is considered as a Level 2 item in accordance with the fair value hierarchy.
Estimating fair values of asset or liability classified financial instruments requires the development of estimates
that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price
of the Company’s common shares. In estimating the fair value of the Class A Warrants, the Company considered their features, including their immediate exercisability, the holders’ cashless exercise option and the maximum underlying
common shares, and determined it is appropriate to value them through Level 1 inputs, namely the quoted closing market price of the Company’s common shares on each measurement date. Accordingly, the Company initially recognized the Class A
Warrants at an estimated fair value of $46,269 . The excess of such fair value over the proceeds
received, amounting to $34,278 , was recognized as a loss in the unaudited interim consolidated statement of loss for the six-month period ended June 30, 2025. Substantially all of the Class A Warrants were exercised between February 11, 2025, and March
27, 2025, and from the non-recurring fair value measurements during that period, the Company recorded (i) a gain on settlement of $3,945 and (ii) a gain from changes in fair value of $29,796 . The gain from
the recurring measurement of the fair value of the outstanding Class A Warrants as of June 30, 2026, and the fair value of the outstanding Class A Warrants as of that date were not material.
As described in Note 8 “Capital Structure”, the Company classifies the SEPA as an equity-linked instrument measured at fair value. Upon the settlement of Advances under the SEPA,
the Company measures the common shares issued at their fair value on the issuance date.
The effect of these financial instruments is included in “Gain/(loss) on equity-linked instruments, net” in the accompanying unaudited interim consolidated statements of loss. The following table presents the effect of
the Company’s financial instruments measured at fair value on the unaudited interim consolidated statements of loss for the six-month periods ended June 30, 2026 and 2025:
|
Six-month periods
ended June 30,
|
||||||||
|
Financial instruments
|
2026
|
2025
|
||||||
|
Class A Warrants
|
$
|
|
$
|
(
|
)
|
|||
|
Gain on settlement of shares issued under the SEPA
|
|
|
||||||
|
Total gain/(loss) on equity-linked instruments, net
|
$
|
|
$
|
(
|
)
|
|||
15
| 11. |
Taxes:
|
Marshall Islands tax considerations. Icon and all of its subsidiaries
are incorporated in the Republic of the Marshall Islands as non-resident corporations pursuant to the Marshall Islands Business Corporations Act (the “BCA”) and are not doing business in the Republic of the Marshall Islands. As such, Icon and all
of its subsidiaries are not subject to tax on income or capital gains, no Marshall Islands withholding tax will be imposed upon payment of dividends to their respective shareholders, and their shareholders that are not residents of or domiciled
or carrying on any commercial activity in the Republic of the Marshall Islands will not be subject to Marshall Islands tax on the sale or other disposition of their shares.
Taxation on United States source income. Pursuant to Section 883 of the Internal Revenue Code of the United States (the “Code”), U.S. source income from the international operation of ships is generally exempt from U.S. federal income tax on such income if the
company meets the following requirements: (a) the company is organized in a foreign country that grants an equivalent exception to corporations organized in the U. S. and (b) either (i) more than 50 percent of the value of the company’s stock
is owned, directly or indirectly, by individuals who are “residents” of the company’s country of organization or of another foreign country that grants an “equivalent exemption” to corporations organized in the U.S. (the “50% Ownership Test”)
or (ii) the company’s stock is “primarily and regularly traded on one or more established securities markets” in its country of organization, in another country that grants an “equivalent exemption” to corporations organized in the U.S., or
in the U.S. (the “Publicly-Traded Test”). For the purposes of the Publicly-Traded Test, the regulations provide that the stock of a foreign corporation will be considered to be “primarily traded” on an established securities market in a
country if the number of shares of each class of stock used to satisfy the Publicly-Traded Test that is traded during the taxable year on all established securities markets in that country exceeds the number of shares in each such class that
is traded during that year on established securities markets in any other single country. Furthermore, the stock of a foreign corporation will be considered “regularly traded” if one or more classes of its stock representing 50% or more of
its outstanding shares, by total combined voting power of all classes of stock entitled to vote and by total combined value of all classes of stock, are listed on one or more established securities markets.
The jurisdiction where Icon and its subsidiaries are incorporated grant an equivalent exemption to United States corporations. The
Company believes that it will satisfy the 50% Ownership Test for the 2026 and 2025 taxable years and expects to satisfy the substantiation and reporting requirements to claim the respective benefits. Therefore, the Company intends to take the
position that it is exempt from U.S. federal income tax under Section 883 of the Code during the 2026 and 2025 taxable years. However, there can be no assurance that the Company will continue to satisfy the requirements of the 50% Ownership Test
in future taxable years.
| 12. |
Subsequent Events:
|
Shares repurchased under the Program. Subsequent to the end of the
reporting period and through the date these unaudited interim condensed consolidated financial statements were issued, the Company repurchased under the Program 137,481 common shares for aggregate gross amount of $141 .
Series A Preferred Shares Limited Waiver. On August 12, 2026, the Company and the sole holder (the “Holder”) of the Series A Preferred Shares entered
into a limited waiver (the “Waiver”) pursuant to which, the Holder waived the adjustment that would otherwise have occurred with respect to the applicable dividend rate on the Series A Preferred Shares as a result of the Company’s election to
pay the June 30, 2026 dividend on the Series A Preferred Shares in kind. In exchange, the Company shall, at any time on or before December 31, 2026, declare and promptly thereafter pay a restricted stock dividend on the Series A Preferred Shares in an aggregate amount of $1,500 of the Company’s common shares. The Company and the Holder also agreed to clarifications to certain terms of the Series A Preferred Shares.
Equity Incentive Plan. On August 11, 2026 the Company adopted an Equity Incentive Plan (the “Plan”) intended to promote the success of the Company by
providing equity-based and other incentive awards to selected employees and other eligible persons whose initiative and efforts are important to the successful conduct of the Company’s business. The Plan is intended to attract, retain,
motivate and reward such persons, align their interests with those of the Company’s shareholders and enhance the long-term performance and value of the Company. As of the date these unaudited interim condensed consolidated financial
statements were issued, no awards have been granted under the Plan.
16
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 owned vessels and right-of-use assets under finance leases but not vessels in which the Company holds non-controlling interests,
and all references to currency amounts are in U.S. dollars. We use the term deadweight tons (“dwt”) in describing the size of 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
revenue by chartering our vessels to regional and international dry bulk operators, commodity traders and end users, primarily on time charters (“TC”) (either index-linked or fixed rate) or voyage charters,
depending on market conditions, available opportunities, and other strategic and tactical considerations. As of June 30, 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
|
Fixed rate TC(3)
|
December 2026
|
Evergreen(1)
|
|||||
|
Bravo
|
Kamsarmax
|
2007
|
Index-linked TC
|
Evergreen(1)
|
Evergreen(1)
|
|||||
|
Charlie
|
Ultramax
|
2020
|
Index-linked TC(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) |
Index-linked daily hire rate converted to a fixed rate of $18,000 for the seven-month period from June to December 2026.
|
Vessels currently employed on index-linked time charters, earn hire at floating rates linked to the Baltic Panamax Index and the Baltic
Supramax Index. This strategy enables Icon to maintain high fleet utilization while preserving exposure to market upside. Icon also has the option to convert each floating hire rate to a fixed rate, at a time and for a period of its choosing,
thereby locking in forward earnings. Under all contracts, fuel costs are borne by the charterers, keeping Icon insulated from the direct impact of oil price volatility on its cost base, which is particularly relevant in light of recent swings in
oil markets.
Icon complements its core dry bulk business through selective co-investments in adjacent maritime opportunities alongside experienced
industry partners. Icon expects future co-investments under this framework, if any, to be pursued opportunistically and with disciplined sizing as passive, non-controlling positions, seeking to enhance returns while preserving Icon’s operational
focus. In addition, this framework is expected to expand market intelligence, broaden Icon’s network, and provide access to the expertise, insights and perspectives of other skilled investors and operators. It is also expected to deepen Icon’s
understanding of adjacent maritime sectors and reveal potential areas for future strategic expansion.
Under this framework, as of June 30, 2026, Icon owns an approximately 4.7% equity interest in a 2,000 TEU geared container feeder with
high reefer capacity, built in 2008. The vessel is operating under a 24 to 26 month time charter to an investment-grade liner operator at a fixed hire rate of $26,500 per day.
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 such as vessel employment or charter types or co-investments, amongst other things, 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 and other factors and risks
listed from time to time in the Company’s filings with the SEC, including those listed
herein. 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, including those listed herein.
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 loss as reported on the consolidated statement of 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 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 Greek Law 27 of 1975. Pavimar is controlled by our Chairwoman and Chief Executive Officer. 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. 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 and compensation for corporate services provided by Pavimar, including, but not limited to, accounting, representation, tax
administration, clerical and secretarial support, corporate officer services (including the services of the Company’s Chief Executive Officer, Chief Financial Officer and Corporate Secretary), third party professional services coordination,
investment administration, financial advisory and treasury services. General and administrative expenses also include incremental 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. Vessels in which the Company holds non-controlling interests are not included in this calculation.
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. 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:
|
Six-month period ended
June 30,
|
||||||||
|
2026
|
2025
|
|||||||
|
Fleet operational data
|
||||||||
|
Ownership Days
|
543.0
|
371.8
|
||||||
|
Available Days
|
490.6
|
368.6
|
||||||
|
Operating Days
|
490.3
|
368.2
|
||||||
|
Vessel Utilization
|
99.9
|
%
|
99.9
|
%
|
||||
|
Average Number of Vessels
|
3.0
|
2.1
|
||||||
Furthermore, the Minimum Contracted Revenue expected to be recognized on the non-cancellable time charters of our vessels as of June 30, 2026 is estimated to $13.9 million.
Minimum Contracted Revenue of vessels in which the Company holds non-controlling interests is not included in this calculation.
Results of Operations for the six-month periods ended June 30, 2026 and 2025
The following table summarizes our results of operations for the six-month periods ended June 30, 2026 and 2025, respectively:
|
Six-month period
ended June 30,
|
||||||||
|
(in thousands of U.S. dollars)
|
2026
|
2025
|
||||||
|
Revenue, net
|
$
|
7,832
|
$
|
3,547
|
||||
|
Voyage expenses
|
(633
|
)
|
(311
|
)
|
||||
|
Vessel operating expenses
|
(3,121
|
)
|
(1,995
|
)
|
||||
|
Management fees
|
(434
|
)
|
(298
|
)
|
||||
|
General and administrative expenses
|
(1,531
|
)
|
(687
|
)
|
||||
|
Depreciation and amortization expenses
|
(1,721
|
)
|
(1,181
|
)
|
||||
|
Amortization of deferred drydocking costs
|
(499
|
)
|
(259
|
)
|
||||
|
Interest and finance costs
|
(1,369
|
)
|
(2,040
|
)
|
||||
|
Interest income
|
94
|
79
|
||||||
|
Gain/(loss) on equity-linked instruments, net
|
1,010
|
(537
|
)
|
|||||
|
Other income/(costs), net
|
5
|
(12
|
)
|
|||||
|
Net loss
|
$
|
(367
|
)
|
$
|
(3,694
|
)
|
||
Revenue, net. Throughout the first six
months of 2026 and 2025, Icon’s vessels operated under index-linked time charters with the exception of M/V Alfa, whose floating, index-linked, hire rate
was converted to a fixed daily rate of $18,000 for the seven-month period from June through December 2026. The increase in revenue, net between these two periods is due to the year-on-year increase in dry bulk charter market rates, as reflected
by the increased Daily TCE (as defined below). The increase in revenue, net was furthered by the addition of the M/V Charlie to Icon’s fleet in June
2025, which resulted to a net higher number of Operating Days during the first six months of 2026, despite the M/V Alfa and M/V Bravo being temporarily taken off service to complete their scheduled drydockings during the period. Overall, revenue, net increased by 121% reaching $7.8 million in the first
six months of 2026, up from $3.5 million in the comparable period in 2025.
Voyage expenses. The increase in voyage expenses from $0.3 million during the six-month period ended June 30, 2025, to $0.6 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 $2.0 million during the first six months of 2025 to $3.1 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 six 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 $0.8 million increase in general and administrative expenses in the six-month period ended June 30, 2026, compared to the same period in 2025, was primarily driven by increased legal costs and additional costs arising from the management
agreement with Pavimar described below, including $0.2 million of incentive compensation expense.
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 $0.2 million during the six-month period ended June 30, 2026, compared to the
same period in 2025, is mainly 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 six-month period ended June 30,
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 six-month period ended June
30, 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 six-month period ended June 30, 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 April 2026,
immediately upon completion of the vessel’s previous charter, 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.
Capital expenditures. The M/V Alfa completed her drydocking in May 2026 and the M/V Bravo in June 2026. The cost of these drydockings was $2.7 million in aggregate and the vessels were taken off service for approximately 52 days in aggregate.
Investment in equity securities. In
June 2026, the Company invested $0.5 million to acquire a 4.7% equity interest in the common stock of the entity that acquired a 2,000 TEU geared container feeder with high reefer capacity, built in 2008. The vessel has been successfully
delivered in June 2026 and commenced its initial charter with an investment-grade liner operator at a fixed hire rate of $26,500 per day for a period of 24 to 26 months. The remaining equity interest was 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. For information about the Company’s accounting policy for investment in equity securities see
Note 2 “Significant Accounting Policies and Recent Accounting Pronouncements” of the Company’s unaudited interim condensed consolidated financial
statements and the noted thereto, filed with the SEC on the same day as this discussion.
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. Effective on April 1, 2026, the Company and Pavimar entered into 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. All prior
services and management agreements were terminated 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.
Recent Developments. See “Recent Developments” below for information about key developments after
June 30, 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, 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 $12.7 million and the $1.7 million
remaining as of June 30, 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 six-month periods ended June 30, 2026 and 2025
As of June 30, 2026 and 2025, we had cash, cash equivalents and restricted cash of $8.2 million and $4.5 million, respectively.
Our cash flows from operating, investing and financing activities during the six-month periods ended June 30, 2026 and 2025, are summarized in the following table:
|
Six-month period
ended
June 30,
|
||||||||
|
(in thousands of U.S. dollars)
|
2026
|
2025
|
||||||
|
Cash used in operating activities
|
$
|
(1,903
|
)
|
$
|
(271
|
)
|
||
|
Cash used in investing activities
|
(493
|
)
|
(5,826
|
)
|
||||
|
Cash provided by financing activities
|
6,032
|
9,140
|
||||||
|
Net increase in cash, cash equivalents and restricted cash
|
$
|
3,636
|
$
|
3,043
|
||||
|
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
|
$
|
8,216
|
$
|
4,489
|
||||
|
Reconciliation of cash, cash equivalents and restricted cash
|
||||||||
|
Cash and cash equivalents
|
$
|
7,716
|
$
|
3,789
|
||||
|
Restricted cash, current
|
—
|
200
|
||||||
|
Restricted cash, non-current
|
500
|
500
|
||||||
|
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
8,216
|
$
|
4,489
|
||||
Restricted cash consists of cash deposits earmarked for a specific purpose and cannot be used freely for general business operations. As of June 30, 2026, restricted cash consists
of 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.
Operating activities. Cash of $0.3
million used in operating activities during the six-month period ended June 30, 2025, increased to $1.9 million during the same period in 2026, mainly due to the $1.9 million payments relating to vessel drydockings (also see “Capital expenditures” below). Even though the drydocking of the M/V Charlie,
was completed in December 2025, most of the payments occurred during 2026 since the related invoices were gradually settled in accordance with the payment terms of the shipyard and the spares and equipment suppliers. Similarly, even though the
drydockings of the M/V Alfa and the M/V Bravo were completed
in the second quarter of 2026, part of the related cash outflows is expected to gradually occur within the second half of the year 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 six-month period ended June 30, 2026 relates to the acquisition of a 4.7% non-controlling equity interest in the common stock of the entity that acquired a 2,000 TEU geared container feeder vessel (see “Key developments during the reporting period” above). Cash used in investing activities during the six-month period ended June 30, 2025 relates to the advance
payments in relation to the bareboat charter of the M/V Charlie.
Financing activities. Cash provided by financing activities during the six-month period ended June 30, 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 and common shares repurchased under the Company’s share repurchase program. Cash provided by financing activities during the
six-month period ended June 30, 2025, relates to the net proceeds from the Company’s January 2025 offering, counterbalanced by principal repayments of long-term debt and distributions made to common shareholders.
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 six-month period ended June 30, 2026 amounted to $1.9 million. See “Key
developments during the reporting period” above for further information about our capital expenditures.
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 June 30, 2026, we had not borrowed any amount under the uncommitted upsize option and, following principal repayments of $0.4 million made during the reporting period, the outstanding balance under
the Maui Term Loan Facility was $13.5 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 June 30, 2026, following principal repayments of $0.6 million made during the reporting period, the outstanding balance under this financial lease liability was $20.5 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 six-month period ended June 30, 2026, we issued
1,976,780 common shares pursuant to Advances under the SEPA for aggregate net proceeds of $5.9 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 June 30, 2026, $12.7 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 six-month period ended June 30, 2026, we issued 1,129,253 common shares under the ATM Agreement for
aggregate net proceeds of $1.7 million. As of June 30, 2026, $1.7 million remained available under the ATM 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. During the six-month period ending June
30, 2026, the Company repurchased 111,082 common shares under the Program for an aggregate gross amount of approximately $0.1 million.
Recent Developments. See “Recent Developments” below for further information about our
borrowing and capital raising activities after June 30, 2026 and through the date this discussion was issued.
Recent Developments
Share repurchase program. Subsequent to the end of the reporting period
and through the date this discussion was issued, the Company repurchased 137,481 common shares under the Program for an aggregate gross amount of approximately $0.1 million.
Number of common
shares. As of the date this discussion was issued, the Company had 3,870,396 common shares issued, consisting of 248,563 common shares held in treasury and 3,621,833 common shares outstanding.
Series A Preferred
Shares Limited Waiver. On August 12, 2026, the Company and the sole holder (the “Holder”) of the Series A Preferred Shares entered into a limited waiver (the “Waiver”) pursuant to which, the Holder waived the adjustment that
would otherwise have occurred with respect to the applicable dividend rate on the Series A Preferred Shares as a result of the Company’s election to pay the June 30, 2026 dividend on the Series A Preferred Shares in kind. In exchange, the
Company shall, at any time on or before December 31, 2026, declare and promptly thereafter pay a restricted stock dividend on the Series A Preferred Shares in an
aggregate amount of $1.5 million of the Company’s common shares. The Company and the Holder also agreed to clarifications to certain terms of the Series A Preferred Shares.
Equity Incentive Plan.
On August 11, 2026 the Company adopted an Equity Incentive Plan (the "Plan") intended to promote the success of the Company by providing equity-based and other incentive awards to selected employees and other eligible persons whose initiative
and efforts are important to the successful conduct of the Company’s business. The Plan is intended to attract, retain, motivate and reward such persons, align their interests with those of the Company’s shareholders and enhance the long-term
performance and value of the Company. As of the date hereof, no awards have been granted under the Plan.
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.
Other than as discussed in Note 2 “Significant
Accounting Policies and Recent Accounting Pronouncements” of the Company’s unaudited interim condensed consolidated financial statements and the noted thereto, filed with the SEC on the same day as this discussion, there have been no
material changes during the six-months ended June 30, 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:
| • |
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.
|
| • |
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.
|
| • |
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.
|
The following table summarizes these non-GAAP financial measures during the reported periods:
|
(in thousands of U.S. dollars, except for daily measures)
|
Six-month period ended
June 30,
|
|||||||
|
2026
|
2025
|
|||||||
|
Non-GAAP financial measures
|
||||||||
|
EBITDA
|
$
|
3,128
|
$
|
(293
|
)
|
|||
|
Daily TCE
|
14,683
|
8,789
|
||||||
|
Daily OPEX
|
5,748
|
5,366
|
||||||
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)
|
Six-month period ended
June 30,
|
|||||||
|
2026
|
2025
|
|||||||
|
TCE and Daily TCE:
|
||||||||
|
Revenue, net
|
$
|
7,832
|
$
|
3,547
|
||||
|
Less: Voyage expenses
|
(633
|
)
|
(311
|
)
|
||||
|
TCE
|
$
|
7,199
|
$
|
3,236
|
||||
|
Divided by: Operating Days
|
490.3
|
368.2
|
||||||
|
Daily TCE
|
$
|
14,683
|
$
|
8,789
|
||||
|
Daily OPEX:
|
||||||||
|
Vessel operating expenses
|
$
|
3,121
|
$
|
1,995
|
||||
|
Divided by: Ownership Days
|
543.0
|
371.8
|
||||||
|
Daily OPEX
|
$
|
5,748
|
$
|
5,366
|
||||
|
EBITDA:
|
||||||||
|
Net loss
|
$
|
(367
|
)
|
$
|
(3,694
|
)
|
||
|
Plus: Depreciation expense
|
1,721
|
1,181
|
||||||
|
Plus: Amortization of deferred drydocking costs
|
499
|
259
|
||||||
|
Plus: Interest and finance costs
|
1,369
|
2,040
|
||||||
|
Less: Interest income
|
(94
|
)
|
(79
|
)
|
||||
|
EBITDA
|
$
|
3,128
|
$
|
(293
|
)
|
|||
Risk Factors Update
The following risk factor updates and supplements, but does not replace, 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 and other important
risk factors described from time to time in the reports we subsequently file with the SEC.
We are subject to Nasdaq rules which may change over time and could jeopardize the public market for our
Common Shares.
On July 22, 2026, the SEC approved a proposed rule change by The Nasdaq Stock Market LLC (Release No. 34-105971; File No.
SR-NASDAQ-2026-004), as modified by Amendment No. 1, adopting a new continued listing requirement based on a company’s market value of listed securities (“MVLS”). Under new Nasdaq Listing Rules 5450(a)(3) and 5550(a)(6), companies listed on the
Nasdaq Global Market (including the Global Select Market) and the Nasdaq Capital Market must maintain a minimum MVLS of at least $5 million. Nasdaq also amended Listing Rule 5810(c)(1) so that if a company’s MVLS falls below $5 million for 30
consecutive business days (the “MVLS Requirement”), Nasdaq staff will issue a Staff Delisting Determination and the company’s securities will be immediately subject to suspension and delisting. Nasdaq further amended Rule 5810(c)(3)(C) to
provide that a company failing the MVLS Requirement is not entitled to any cure or compliance period before that determination, unlike the cure periods generally available for other continued listing deficiencies. The rule allows a company to
appeal a Staff Delisting Determination to a Hearings Panel, which may reverse the determination if it finds the determination was made in error, or may grant an exception of up to 180 days for the company to demonstrate that it satisfies all of
Nasdaq’s initial listing requirements. The rule was approved, and became effective, on July 22, 2026. On July 29, 2026, the SEC notified The Nasdaq Stock Market LLC that it had received notices of intention to petition for review of the MVLS
Requirement, resulting in an automatic stay of the rule’s effectiveness pending further SEC proceedings. Accordingly, there can be no assurance as to the outcome or timing of the SEC’s review, whether the stay will be lifted, or whether and
when the continued listing requirement will ultimately become effective. Our MVLS is below $5 million as of the date hereof. Although we will continue to evaluate options to ensure we maintain a minimum MVLS of $5 million, there can be no
guarantee that such measures will be successful. If our Common Shares are suspended or delisted, it would likely have an adverse effect on the liquidity of our Common Shares, decrease the market price of our Common Shares, result in the
potential loss of confidence by investors, suppliers, customers, and employees, result in fewer business development opportunities, and adversely affect our ability to obtain financing for our continuing operations. Additionally, we will no
longer be able to sell our Common Shares pursuant to our Standby Equity Purchase Agreement or ATM Agreement.