Investments in Joint Ventures

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

7. Investments in joint ventures

During the first quarter of 2019, the Company entered into four joint venture agreements with a third party investor based on which the third party investor acquired for $20,720,975 a 49.9% equity interest in Spacegas Inc., Financial Power Inc., Cannes View Inc. and Colorado Oil and Gas Inc., four vessel owning companies of the Company, which own the vessels “Gas Defiance”, “Gas Shuriken”, “Gas Haralambos” and “Eco Lucidity”. The remaining 50.1% equity interest was valued at $20,804,025. The Company contributed funds for working capital purposes amounting to $751,500.

During the third quarter of 2019, Cannes View Inc. and Colorado Oil and Gas Inc., using the proceeds of a loan agreement that was entered into on July 9, 2019, returned an amount of $14,696,900 to the Company and the third party investor based on their equity interests. Amount returned to the Company amounted to $7,363,147.

On May 22, 2019, Frost Investments Corp Inc. was incorporated under the laws of the Marshall Islands. Frost Investments Corp Inc. acquired for $20,400,000 the vessel Eco Nebula and under a joint venture agreement is owned by the Company (50.1%) and by the third party investor (49.9%). The Company contributed funds for the acquisition of vessel Eco Nebula and for working capital purposes amounting to $10,571,100, as needed and proportionate to its 50.1% equity interest.

On February 13, 2020, the Company entered into a joint venture agreement with an unaffiliated third party, for the purpose of acquiring three medium gas carriers and the establishment of a new holding company. The new holding company, MGC Agressive Holdings Inc., was established and the Company has a 51% equity interest in it. Pursuant to this joint venture agreement, subsidiaries of MGC Agressive Holdings Inc. acquired on February 28, 2020, two medium gas carriers, the Gaschem Hamburg and the Gaschem Stade, and on March 11, 2020, one medium gas carrier, the Gaschem Bremen, at an aggregate price of $80,550,000. The Company contributed funds for the acquisition of these vessels and for working capital purposes amounting to $41,998,500, as needed and proportionate to its 51% equity interest.

During the second quarter of 2020, MGC Agressive Holdings Inc., using the proceeds of a loan agreement that was entered into on May 7, 2020, returned an amount of $47,600,000 to the Company and the unaffiliated third party based on their equity interests. Amount returned to the Company amounted to $24,276,000.

During the second quarter of 2020, Frost Investments Corp Inc., using the proceeds of a loan agreement that was entered into on December 3, 2019, returned an amount of $5,000,000 to the Company and the third party investor based on their equity interests. Amount returned to the Company amounted to $2,505,000.

During the first quarter of 2021, a subsidiary of MGC Agressive Holdings Inc. entered into a memorandum of agreement for the disposal of the vessel Gaschem Hamburg to an unaffiliated third party for $34,000,000. The vessel was delivered to its new owners on May 10, 2021.

The Company’s exposure is limited to its share of the net assets of Spacegas Inc., Financial Power Inc., Cannes View Inc., Colorado Oil and Gas Inc., Frost Investments Corp Inc. and MGC Agressive Holdings Inc.

(collectively “the joint venture entities”) proportionate to its equity interest in these companies. The Company shares the profits and losses, cash flows and other matters relating to its investments in the joint venture entities in accordance with its ownership percentage. The vessels are managed by the Manager, pursuant to management agreements, while three of the vessels were also managed by a third party manager during 2020. The Company accounts for investments in joint ventures using the equity method since it has joint control over the joint venture entities. The Company does not consolidate the joint venture entities because it does not have a controlling financial interest. The significant factors considered and judgments made in determining that the power to direct the activities of the joint venture entities that most significantly impact their economic performance are shared, are that all significant business decisions over operating and financial policies of the joint venture entities, require consent from each joint venture investor.

As of December 31, 2021, the carrying value of the Company’s equity method investments was $1.95 million higher than its interest in the investee’s underlying net assets. This basis difference relates to a vessel under construction and will be amortized over the vessel’s useful life.

A condensed summary of the financial information for equity accounted investments partially owned by the Company shown on a

100

% basis is as follows:


	December 31, 2020
	Spacegas Inc.		Financial Power Inc.		Cannes View Inc.			Colorado Oil and Gas Inc			Frost Investments Corp Inc.		MGC Agressive Holdings Inc.
	Spacegas Inc.		Financial Power Inc.		Cannes View Inc.			Colorado Oil and Gas Inc			Frost Investments Corp Inc.		MGC Agressive Holdings Inc.
Current assets		2,163,484		2,359,816		1,267,542			1,126,697			10,831,800		5,096,668
Non-current assets		12,559,048		12,575,608		13,801,972			12,335,790			19,464,419		82,809,937
Current liabilities		1,118,776		1,491,243		1,440,769			2,688,747			2,575,067		8,315,433
Long-term liabilities		4,855,255		4,855,255		7,050,860			6,169,497			9,384,573		40,958,366
Revenues		3,222,037		3,481,799		2,764,359			2,704,455			6,866,426		18,409,814
Operating income/(loss)		451,895		935,869		(645,197	)		(817,717	)		3,122,539		4,869,260
Net income/(loss)		246,616		728,428		(1,019,886	)		(1,155,342	)		2,656,770		3,882,812


	December 31, 2021
	Spacegas Inc.			Financial Power Inc.		Cannes View Inc.		Colorado Oil and Gas Inc			Frost Investments Corp Inc.		MGC Agressive Holdings Inc.
	Spacegas Inc.			Financial Power Inc.		Cannes View Inc.		Colorado Oil and Gas Inc			Frost Investments Corp Inc.		MGC Agressive Holdings Inc.
Current assets		2,347,954			3,112,192		1,630,592		1,017,765			13,208,202		23,228,225
Non-current assets		11,900,116			11,924,795		13,071,670		11,870,528			18,532,414		56,221,031
Current liabilities		1,426,492			1,506,835		1,687,929		3,231,113			2,247,545		5,357,705
Long-term liabilities		4,178,256			4,178,256		6,307,812		5,519,327			8,008,092		22,799,849
Revenues		3,023,283			3,464,824		4,227,682		3,154,728			7,162,657		17,468,871
Operating income/(loss)		26,559			893,121		396,337		(216,091	)		3,509,152		13,857,864
Net (loss)/income		(105,179	)		762,975		128,636		(466,393	)		3,148,404		12,918,760