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Derivatives and Fair Value Disclosures
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Derivatives and Fair Value Disclosures
10. Derivatives and Fair Value Disclosures
The Company uses interest rate swaps for the management of interest rate risk exposure. The interest rate swaps effectively convert a portion of the Company’s debt from a floating to a fixed rate. The Company is a party to one floating-to-fixed interest rate swap with a major financial institution at December 31, 2024 (2023: two swaps) covering notional amounts aggregating to $19,164,000 at December 31, 2024 (2023: $42,510,194) pursuant to which it pays fixed rates and receives floating rates based on the SOFR. These agreements contain no leverage features. As of December 31, 2023 and 2024 one derivative contract qualified for hedge accounting since its inception.
The following table presents information relating to the Company’s interest rate swap arrangements as of December 31, 2023 and 2024.
 
   
Effective date
  
Termination date
  
Fixed Rate
(Company
pays)
    
Floating
Rate
(Company
receives)
  
Fair Value
Asset

December 31,
2023
    
Notional

Amount

December 31,
2023
    
Fair Value
Asset

December 31,
2024
    
Notional

Amount

December 31,
2024
  
Swap 1
  
April 10, 2018
  
December 11, 2025
     2.74 %    SOFR   $ 731,814     $ 21,236,000     $ 387,608     $ 19,164,000  
Swap 2
  
February 5, 2022
   June 30, 2026     1.49 %    SOFR   $ 1,126,863     $ 21,274,194       —        —   
         
 
 
    
 
 
    
 
 
    
 
 
  
Total
          
$
1,858,677
 
  
$
42,510,194
 
  
$
387,608
 
  
$
19,164,000
 
         
 
 
    
 
 
    
 
 
    
 
 
  
 
*
Swap 1 was early terminated in April 2025 (Note 19)
**
Swap 2 was early terminated in February 2024 (Note 9)
The
 
following tables present information on the location and amounts of derivatives’ fair values reflected in the consolidated balance sheets and with respect to gains and losses on derivative positions reflected in the consolidated statements of income or in the consolidated balance sheets, as a component of accumulated other comprehensive income.
Tabular disclosure of financial instruments is as follows:
 
         
December 31,
  
         
2023
     
2024
  
Derivatives designated as
hedging instruments
   
Balance Sheet Location
   
Asset

Derivatives
     
Liability

Derivatives
     
Asset

Derivatives
     
Liability

Derivatives
  
Interest Rate Swap Agreements
    Non current assets — Fair value of derivatives      731,814        —         —         —   
Interest Rate Swap Agreements
    Current assets — Fair value of derivatives      —         —         387,608        —   
     
 
 
     
 
 
     
 
 
     
 
 
  
Total derivatives designated as hedging instruments
      
 
731,814
 
   
 
— 
 
   
 
387,608
 
   
 
— 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
         
December 31,
  
         
2023
     
2024
  
Derivatives not designated as
hedging instruments
   
Balance Sheet Location
   
Asset

Derivatives
     
Liability

Derivatives
     
Asset

Derivatives
     
Liability

Derivatives
  
Interest Rate Swap Agreements
    Non current assets — Fair value of derivatives      1,126,863        —         —         —   
     
 
 
     
 
 
     
 
 
     
 
 
  
Total derivatives not designated as hedging instruments
      
 
1,126,863
 
   
 
— 
 
   
 
— 
 
   
 
— 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
The effect of derivative instruments on the consolidated statements of income for the years ended December 31, 2022, 2023 and 2024 is as follows:
 
    
Location of

Gain/(Loss)
     
Year Ended December 31,
  
Derivatives not designated as hedging
instruments
   
Recognized
     
2022
     
2023
     
2024
  
Interest Rate Swap — Change in Fair Value
      Gain on derivatives        1,697,401        (570,539 )       (1,126,863 ) 
Interest Rate Swap — Realized income
      Gain on derivatives        1,061        808,157        1,226,149  
     
 
 
     
 
 
     
 
 
  
Total gain on derivatives
      
 
1,698,462
 
   
 
237,618
 
   
 
99,286
 
     
 
 
     
 
 
     
 
 
  
    
Location of

(Loss)/Gain
     
Year Ended December 31,
  
Derivatives designated as hedging
instruments
   
Recognized
     
2022
     
2023
     
2024
  
Interest Rate Swap — Realized (expense)/income
      Interest and finance costs        (126,241 )       4,771,235        591,664  
     
 
 
     
 
 
     
 
 
  
Total (loss)/gain on derivatives
      
 
(126,241
) 
   
 
4,771,235
 
   
 
591,664
 
     
 
 
     
 
 
     
 
 
  
The components of accumulated other comprehensive income included in the accompanying consolidated balance sheets consist of unrealized gain on cash flow hedges relating to the Company’s interest rate swap contracts and are analyzed as follows:
 
    
Unrealized
(Loss)/Income
on cash flow
hedges
  
Balance, January 1, 2022
      (3,103,945 ) 
  
 
 
  
Other comprehensive income before reclassifications
      8,164,187  
Amounts reclassified from accumulated other comprehensive loss relating to qualifying hedges
      126,241  
  
 
 
  
Balance, December 31, 2022
      5,186,483  
  
 
 
  
Other comprehensive income before reclassifications
      316,566  
Amounts reclassified from accumulated other comprehensive income relating to qualifying hedges
      (4,771,235 ) 
  
 
 
  
Balance, December 31, 2023
      731,814  
  
 
 
  
Other comprehensive income before reclassifications
      247,458  
Amounts reclassified from accumulated other comprehensive income relating to qualifying hedges
      (591,664 ) 
  
 
 
  
Balance, December 31, 2024
      387,608  
  
 
 
  
 
Fair Value of Financial Instruments and Concentration of Credit Risk
: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents, restricted cash, short-term investments, trade and other receivables, claims receivable, payable to related parties, trade accounts payable and accrued liabilities. The Company limits its credit risk with respect to accounts receivable by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its trade accounts receivable. The Company places its cash and cash equivalents with high credit quality financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company is exposed to credit risk in the event of non-performance by its counterparties to derivative instruments; however, the Company limits its exposure by transacting with counterparties with high credit ratings. The carrying values of cash and cash equivalents, restricted cash, trade and other receivables, claims receivable, payable to related parties, trade accounts payable and accrued liabilities are reasonable estimates of their fair value due to the short term nature of these financial instruments. Cash and cash equivalents and restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities. The fair value of long term bank loans is estimated based on current rates offered to the Company for similar debt of the same remaining maturities. Their carrying value approximates their fair market value due to their variable interest rate, being SOFR. SOFR rates are observable at commonly quoted intervals for the full terms of the loans and hence floating rate loans are considered Level 2 items in accordance with the fair value hierarchy. Additionally, the Company considers the creditworthiness of each counterparty when determining the fair value of the derivative instruments. The Company’s interest rate swap agreements are recorded at fair value. The fair value of the interest rate swaps is determined using a discounted cash flow method based on market-based SOFR swap yield curves. SOFR swap rates are observable at commonly quoted intervals for the full terms of the swap and therefore are considered Level 2 items.
Fair Value Disclosures:
The Company has categorized assets and liabilities recorded at fair value based upon the fair value hierarchy specified by the guidance. The levels of fair value hierarchy are as follows:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
The following table presents the fair values for assets and liabilities measured on a recurring basis categorized into a Level based upon the lowest level of significant input to the valuations as of December 31, 2023:
 
           
Fair Value Measurements Using
  
Description
   
Fair Value as of
December 31,

2023
     
Quoted Prices

in Active Markets for

Identical Assets

(Level 1)
     
Significant Other
Observable Inputs

(Level 2)
     
Significant

Unobservable Inputs

(Level 3)
  
Assets:
            
Interest Rate Swap Agreements
      1,858,677        —         1,858,677        —   
  
 
 
     
 
 
     
 
 
     
 
 
  
Total
   
 
1,858,677
 
   
 
— 
 
   
 
1,858,677
 
   
 
— 
 
  
 
 
     
 
 
     
 
 
     
 
 
  
 
The following table presents the fair values for assets and liabilities measured on a recurring basis categorized into a Level based upon the lowest level of significant input to the valuations as of December 31, 2024:
 
           
Fair Value Measurements Using
  
Description
   
Fair Value as of
December 31,

2024
     
Quoted Prices

in Active Markets for
Identical Assets

(Level 1)
     
Significant Other
Observable Inputs

(Level 2)
     
Significant
Unobservable Inputs

(Level 3)
  
Assets:
            
Interest Rate Swap Agreements
      387,608        —         387,608        —   
  
 
 
     
 
 
     
 
 
     
 
 
  
Total
   
 
387,608
 
   
 
— 
 
   
 
387,608
 
   
 
— 
 
  
 
 
     
 
 
     
 
 
     
 
 
  
The following table present the fair values for assets measured on a non-recurring basis as of December 31, 2023 categorized into a Level based upon the lowest level of significant input to the valuations:
 
           
Fair Value Measurements Using
  
      
Quoted Prices
in Active
     
Significant
                
Description
   
Fair Value
as of
December
2023
     
Markets for
Identical
Assets

(Level 1)
     
Other
Observable
Inputs
(Level 2)
     
Significant
Unobservable
Inputs

(Level 3)
     
Impairment
Loss
  
Long-lived assets held for sale
      35,340,000        —         35,340,000        —         (2,759,553 ) 
  
 
 
        
 
 
        
 
 
  
Total
   
 
35,340,000
 
   
 
— 
 
   
 
35,340,000
 
   
 
— 
 
   
 
(2,759,553
) 
The vessels Eco Green and Eco Dream were classified as held for sale as of December 31, 2023 (Note 6) and were recognized at their fair value of $35,340,000 less costs to sell of $706,800. The fair value was determined based on the transaction price, as the sale price was agreed with unaffiliated third parties.
As of 31.12.2024, there were no assets nor liabilities measured on a non-recurring basis.