Aristides Pittas - Chairman and Chief Executive Officer Tasos Aslidis - Chief Financial Officer

Donald Bogden - Wells Fargo

Thank you for standing by ladies and gentlemen and welcome to the Euroseas’ Conference Call on the Second Quarter 2015 Financial Results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer and Mr. Tasos Aslidis, Chief Financial Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I must advise you that this conference is also being recorded today. Please be reminded that the company announced their results with a press release that has publicly distributed. Before passing the floor to Mr. Pittas, I would like to remind everyone that in today’s presentation and conference call, Euroseas will be making forward-looking statements. These statements are within the meaning of the federal securities laws, matters discussed maybe forward-looking statements, which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. I kindly draw your attention to Slide #2 of the webcast presentation, which has the full forward-looking statement and the same statement was also included in the press release. Please take a moment to go through the whole statements and read it. I would now like to pass the floor to Mr. Aristides Pittas, Chairman and Chief Executive Officer of Euroseas. Please go ahead, sir.

Good morning and thank you for joining us today for our conference call. Together with me is Tasos Aslidis, our CFO. The purpose of today’s call is to discuss our financial results for the three and six month period ended June 30, 2015. Let’s turn to Slide 3 of our presentation for our financial results overview. Let’s start with our second quarter results. For the second quarter of 2015, we reported total net revenues of $9.4 million. Net loss for the period was $3.3 million, while net loss attributable to common shareholders for the period was $3.7 million or $0.64 loss per share basic and diluted. The difference being the $0.4 million in dividends paid to our Series B preferred shareholders. Adjusted EBITDA for the second quarter of 2015 was negative $100,000. Turning to our first half 2015 financial highlights we reported total net revenues of $17.6 million. Net loss for the period was $8.7 million, while net loss attributable to common shareholders was $9.5 million, or $1.64 loss per share basic and diluted. The difference of $0.8 million is the dividends paid to our Series B preferred shareholders. Adjusted EBITDA for the first half of 2015 was minus $1.9 million. Our CFO, Tasos Aslidis will go over our financials in more detail later on during the quarter. Please turn to Slide 4. As you already know in Q4 2013 and Q1 2014, we embarked into an ambitious plan to renew and expand our drybulk fleet by placing an order for two newbuilding Ultramaxes and two newbuilding Kamsarmaxes costing about $120 million in total. The first three ships are due for delivery in Q1 2016 and the last one in Q4 of 2016. At the same time, we placed the orders. We issued about $30 million of preferred equity and on an affiliated private equity firm also invested $15 million in Euroseas common stock. It was thought at the time that this equity will be sufficient to fully finance the program. However, the poor drybulk markets that ensued resulted in depletion of our expected results and also a reduction on the bank debt that can be expected to be raised as financing is a function of vessel market values which have been reduced thus weakening our balance sheet. We have already agreed balloon financing of 62.5% to 65% of market values for two of the vessels and are very confident we will obtain similar financing for the remaining two ships if not better since one of the finance at Kamsarmaxes comes with a full year charter at $14,100 per day to a first class charter. We have however, decided to proceed with the shareholders rights offering to raise between $10 million and $20 million and ensure that we have access to sufficient equity to finance the remaining portion of our newbuilding program even under a poor market scenario. As always maintaining the strong balance sheet even at adverse periods remains our priority. And the rights offering which provides our existing shareholders, including our family the opportunity to participate in setting the foundations for the company’s further growth was deemed as the best way to reward shareholder loyalty. We do hope that our shareholders will appreciate the opportunity to invest in the bottom of the market and will join our family which should fully participate in the offering and even over subscribe in doing so. Please turn to Page 5. We were pleased to see a recovery of the containership market during the second quarter of this year which allowed us to re-charter several of our containerships at levels that generated positive cash flows. Four of our containerships were re-chartered at significantly higher levels between $10,450 and $13,500 per day for periods of aging from a month to a year. During the same period three of our drybulk vessels came up for re-chartering and two of them were done at improved rates benefiting from the recent market improvement versus third was put in a 1-year index based charter, practically also benefiting from the recovering market. While the near-term supply-demand balance is challenging especially for the drybulk market these rate increases took place at periods with traditionally seasonally low rates and may be an indication of a better overall rate environment to come. As for our drydockings we have had the Aggeliki P in drydock in the second quarter, a further vessel Manolis P commenced its drydock then that finished in July and the Ninos: entered drydock at the beginning of Q3. Our current fleet is shown on Page 6 and includes the four newbuilding drybulk vessels. In total we will have 19 vessels including nine drybulk vessels and 10 container carriers. On Slide 7, you will find the Euromar fleet, our joint venture with Eton Park and Rhone Capital. Euromar has a fleet of eight intermediate and two handysize container vessels between 1,700 teu and 3,100 teu and one Post Panamax vessel of 5,600 teu. Euroseas owns 14% of this venture. Holds about $2.9 million in preferred equity and has $4 million further commitment to be invested as preferred equity at Euromar’s option. Euromar’s current cash position is about $21 million. Let’s move to Slide 9 for a brief overview of the market. Starting with bulkers, since end of March, the BDI doubled to approximately $1,200 as of August 10, 2015. In more detail, Panamax spot rates averaged $4,847 in March and have been rising gradually to $8,178 as of August 10. Supramax rates average – spot rates averaged $6,019 in March and have also been rising to $9,416 as of August 10. However, 1 year time charter rates did not increase accordingly. In fact Panamaxes fell slightly to $7,250 a day in July from $7,680 a day in March, while Supramaxes increased from $8,000 per day approximately to $9,000 per day. Secondhand prices were declining until May, but have increased by about 5% since a positive sign that the market may have welcomed. Newbuilding prices have dropped to multi-year lows falling approximately 5% since March, but practically no new orders are being placed due to the weak market conditions. As for containerships, rates have been correcting with the last four weeks following the strong market rally during March to May. Secondhand prices have hovered around all time low levels, last seen in 2013 and through the end of the first quarter. However, following the rates rally, we have seen sales at levels 10% higher. At the same time, newbuilding prices have held stable. The idle fleet is hovering around 300,000 teu, a historically low number which is a good sign. Smaller vessels such as ours below 3,000 teu, formed a much lower part of the idle fleet than usual. Turning to Slide 10, you can view the drybulk age profile and delivery schedule. The delivery schedule for drybulk vessels in the beginning of 2015 stood at a significant 11.3% of the fleet for the full year and of course was dominated by the larger vessels. This does not take into account cancellations, slippages and scrapping. In the past years, it has been very difficult to quantify how much of the order book will get delivered. We expect that at least 35% of this order book will not get delivered due to cancellations, conversions or slippage. This is the same percentage as we saw last year. For 2016, the order book stands at 7.9%, but dropped significantly in 2017 to 1.9%. Turn to slide 11, the containers delivery schedule at the beginning of 2015 stood at 10.4% and again was dominated by the larger vessels. Here again cancellations and slippages will cause – will change the original estimates. For 2016, the order book stands at a low level of 5.1%, which gives ground for optimism, especially as no new orders can be placed to be delivered before 2017. For 2017, the order book is also at a very low at 3.5%. However, there is still some time for this to increase further and some projects are already under negotiation. The great majority of the order book is for larger ships. However, cascading is still happening. We have seen and we continue to see Panamaxes between 3,000 teu to 5,000 teu being displaced by the new larger ships in the longer routes. At the same time though, some of these ships cascaded down to routes that were served by the 1,000 teu to 3,000 teu ships. We have lately seen a stabilization of this situation, as we have seen cheaper oil and size restrictions are putting a brake on this process. Turning to Slide 12, the world economy has not changed much since the first quarter of 2015 with the U.S. and the UK still doing better than the other developed markets and volatility still an ongoing issue. There are quite a few growth drivers which could counterbalance the negatives of the uncertainties that remain globally such as the instability in the Middle East. Oil prices are at a 6-year low. The effect of the lower prices however, is somehow muted by the higher U.S. dollar for countries that rely on the U.S. currency. The Iran nuclear deal supports stability and they further result in lower oil prices as increased supply comes to the market and trade with the country device. In the U.S., the market fear over rates hike might be averted due to the strong dollar. And if rates do increase, we expect them to be minimal and gradual. Quantitative easing in the euro area and Japan is helping growth, weakening the currencies and supporting their exports. Grexit for the time being is averted offering further stability in the euro area. Yesterday’s Chinese yuan devaluation confirms the government’s commitment to avoid the hard landing and adjust to moderate growth. Higher growth is also expected in summer months in countries, especially India. Slide 13 shows expectations of world GDP according to the IMF and also shipping demand growth. Projected world GDP in 2015 and 2016 is expected to be 3.3% and 3.8% respectively. 2015 expectations were revised downwards by 0.2% from the previous quarter. 2016 remains the same. China is still expected by the IMF to grow by 6.8% in 2015 same as last quarter and still healthy level, whilst India is also still projected by the IMF to grow by 7.5% in 2015. The U.S. is showing slower growth on the period this quarter as well as Brazil and the Asian countries. As can be seen in the bottom of the Slide 12, Clarksons’ projections point to drybulk growth of 1.6% in 2015, which is significantly less of the 3.1% expected last quarter. Containership trade is also showing less growth from the previous quarter to 5.2% from 6.6%. These decreases stem naturally from the reduction of global growth by about 0.5% from the end 2014 projections. Let’s turn to Slide 14 to summarize our outlook for the drybulk sector. Market fundamentals for 2015 and ‘16 still appear challenging due to weaker demand, but the lack of orders is positive for the sector in 2017. Any possible upside in the market in 2015 still currently relies on the restocking. China remains the main source of the drybulk rate growth, although its economy seems to be adjusting to a new normal moderate growth rate. Iron ore import prospects look good after the reduction of inventories by about 25% under peak. Also, we are entering the seasonally stronger second half period. Oil imports on the other hand may continue to suffer due to environmental concerns and falling gas and oil prices. Grain imports though should grow further. Also, India that has been faring better than China this year and primarily trade is expected to grow further. Let’s turn to Slide 15 to discuss the containership market. We expect demand prospects to improve in the second half of 2015 and 2016 by 4% to 6%. The weakening euro does not cut European imports, but the dollar strength is expected to boost U.S. imports further. With no new incremental deliveries for 2015 and 2016, we expect the supply demand balance a bit negative in 2015. Therefore, the current progression we are seeing in charter rates does not come as a surprise. However, the 2016 supply demand balance turns positive and we would expect a further market improvement in 2016. Continuing ordering of mega vessels from the various alliances creates concerns from 2017 onwards. Although up to now, the scheduled deliveries for 2017, amounts to only 3.5% of the fleet, a very low number. However, there are ongoing discussions, which will probably lead to the increase in this figure. The number and size of new orders that will be placed in the near future will of course dictate and effect the market rents from the second half 2017 onwards. The order book in the Sub-Panamax sector seems to be very tight. However, different rating patterns and further cascading can still be expected. Cheap oil though is making the smaller vessels that consume more oil per teu carried, more competitive. Let’s turn to Slide 17 to view our own drybulk employment schedule. Our drybulk coverage for 2015 currently stands at around 68% and for 2016 at 23%. As said previously, we are continuing the practice of employing our vessels in short-term contracts in anticipation of the market improvement. Let’s turn to Slide 18 for our containership employment schedule. We currently have 52% coverage in 2015 based and minimal coverage for 2016. As with the drybulk vessels, our strategy for our containerships has been to employ them on short-term employments in the anticipation of the market continuing to improve. We have fixed though one vessel for 1 year during the last quarter and if we see charter rates for a year at levels in excess of $10,000 per day we will probably fix a few more of the upcoming vessels for charter at those levels. Whilst we will keep some other vessels on shorter term employment hoping that 2016 will prove to be an even better year as we anticipate. Let’s turn to Slide 19. As you can see on this slide, we are well positioned to benefit from the possible market recovery in both the container and the drybulk sectors as most of our fleet opens for employment during 2016. Our cash flow sensitivity to an improving market is quite significant. With every $1,000 increase in charter rates contributing about $0.30 in earnings per share or free cash flow per share in 2015 and one extra U.S. dollar in 2016. Please turn to Slide 20. Our bulk manager is continuing to keep our costs low. Our daily costs per vessel for Q2 ‘15 was in line with our budget and similar to previous years. The graph in this page compares daily costs excluding drybulk costs since 2008 without peers. Overall our costs remain amongst the lowest of the public shipping companies. For the second quarter of 2015, our operational fleet utilization was 99.9% and our commercial fleet utilization was 98.4%. Let’s now turn to Slide 21, the left side of this slide shows the evolution of time charter rates of Panamax drybulk ships and containers of 1,700 teu since 2001. While container rates have improved significantly and are very close the average since 2001, the drybulk Panamax 1 year time charter rate weakened to the lowest level of this 15-year period and are only now started – starting to gradually improve, but are still well below the average. The right hand slide of Slide 19 shows the current vessel values in relation to historical prices. Both Panamax and containership prices remain below the average from 2000 to 2014. We continue to believe that we will see a gradual improvement over the next couple of years in both markets that will boost prices closer to the historical averages. The containership market will probably lead the way as 2016 seems to be shaping up better for the container market than for the drybulk market. It was the second half of 2016 and in 2017, we would expect the drybulk market to also recover and that we will be able to capitalize on the four newbuilding drybulk ships that we will have recently taken delivery of. With that, I will the pass floor over to our CFO, Tasos Aslidis to take you through our financials in more detail.

Thank you very much Aristides. Good morning from me as well ladies and gentlemen. As usual I will now provide you with a brief overview of our financial results for the three months and six months period ended June 30, 2015. For that, let’s turn first to Slide 23 and first take a look at our results for the second quarter of 2015 in comparison to the same period of last year. I will repeat here some of the same figures that Aristides gave you in the beginning of the presentation. For the second quarter of 2015, we reported total net revenues of $9.4 million representing a 2.8% decrease over total net revenues of $9.6 million during the second quarter of last year. We reported a net loss for the period of $3.3 million and a net loss attributable to common shareholders of $3.7 million as compared to a net loss of $5 million and $5.4 million respectively for the second quarter of 2014. As Aristides mentioned earlier, the difference between net loss and net loss attributable to common shareholders is $0.4 million and accounts for the dividends we paid to our Series B preferred shares in the second quarter of 2015. The preferred dividend can be paid at our option either in cash or in kind and we have elected to pay it in kind for the last six quarters. The results for the second quarter of 2015 include a $0.1 million unrealized gain on derivatives, a $0.9 million realized loss of derivatives as compared to $0.2 million unrealized gain and $0.2 million realized loss on derivatives for the same period of last year. Basic and diluted loss per share attributable to common shareholders for the second quarter of 2015 was $0.64 compared to basic and diluted loss per share of $0.95 for the second quarter of 2014. Excluding the effect on the loss attributable to common shareholders of the realized and unrealized gain on derivatives, the adjusted net loss per share attributable to common shareholders for the quarter ended June 30, 2015 would have been $0.65 basic and diluted compared to a net loss of $0.94 basic and diluted for the quarter ended June 30, 2014. Adjusted EBITDA for the second quarter of 2015 was negative $0.1 million compared to negative $1.6 million for the same period of last year. Let’s turn now to our first half 2015 financial highlights on the right part of the slide. For the first half of 2015, we reported total net revenues of $17.6 million representing an 8.3% decrease over the total net revenues of $19.1 million during the first half of 2014. We reported a net loss for the period of $8.7 million and a net loss attributable to common shareholders of $9.5 million as compared to net loss of $7.2 million and $7.9 million respectively for the same period first half of 2014. Again, the difference between net loss and net loss attributable to common shareholders is $0.8 million of the dividends we paid to our Series B preferred shares. The results for the first half of 2015 includes a $0.4 million unrealized loss of derivatives, a $0.1 million realized loss of derivatives as compared to $0.3 million unrealized gain and $0.4 million realized loss of derivatives for the same period of last year. Basic and diluted loss per share attributable to common shareholders for the first half of 2015 was $1.64 compared to basic and diluted compared to $1.5 per share for the first half of last year again basic and diluted. Excluding the effect on the loss attributable to the common shareholders for the first half of 2015 of the realized and unrealized loss on derivatives, the adjusted net loss per share attributable to common shareholders for the six-month period ended June 30, 2015 would have been $1.62 compared to a loss of $1.48 basic and diluted for the same period of last year. Adjusted EBITDA for the first half of 2015 was negative $1.9 million compared to negative $0.6 million during the first half of 2014. Let’s now move to Slide 24. In this slide, we will provide you our fleet performance for the three months and six months period ended June 30, 2015 in comparison to the same period of last year. As usual, we have broken down our presentation of fleet utilization in commercial and operational. For the second quarter of 2015, we reported a 98.4% commercial utilization rate and the 99.9% operational utilization rate as compared to 99.5% commercial and 99.7% operational for the same period of last year. Our utilization rate calculation does not include vessels on drybulk or in schedule repairs during the reporting periods. In the second quarter of 2015, we operated 15 vessels with a time charter rate equivalent of $7,127 per vessel per day, which represents a 3.3% decline compared to the time charter equivalent of $7,373 per vessel per day that we exceed during the same period of 2014, a period during which we operated 13.4 vessels. Overall, we believe we will continue to maintain one of the lowest operating cost structures amongst the public shipping companies. And I believe that this is one of our competitive advantages in the business. Total operating expenses, including management fees, G&A, but excluding drydock costs were $6,145 per vessel per day for the second quarter of 2015 as compared to $6,449 per vessel per day for the same period of last year. Let’s now look at the bottom of this table to our daily cash flow breakeven levels presented here on a per vessel per day basis. For the second quarter of 2015, we reported an operating breakeven level including loan repayments but before balloon payments of $8,611 per vessel per day as compared to approximately $10,637 per vessels per day for the same period of last year. There were balloon payments during the quarter equating to about $3,500 per vessel per day in both periods corresponding to two balloons of $4.9 million and $4.6 million respectively that were both refinanced. For the first half of 2015, we reported 96.6% commercial utilization rate and 99.9% operational utilization rate as compared to 99.7% commercial and 99.8% operational for the same period in the first six months of 2014. Once again, our utilization rate calculation does not include vessels from drydock or unscheduled repairs. In the first half of 2015, we operated 15 vessels with the time charter equivalent rate of $6,823 per vessel per day, which represents about a 10% decline compared to the time charter equivalent rate of $7,585 per vessel per day that we achieved during the same period of last year, during which we operated 14.2 vessels. Total operating expenses again including management fees and G&A, but excluding drydock costs were $6,342 per vessel per day for the first half of 2015 as compared to $6,398 per vessel per day for the same period of last year. Let’s now look again at the bottom of this table to our daily cash flow breakeven level for the period presented here again on a per vessel per day basis. For the first half of 2015, we reported an operating breakeven level, including loan repayments, but not balloons of $8,687 per vessel per day as compared to approximately $9,188 per vessel per day for the same period of last year. Again, there were balloon payments during the period, the same balloons I mentioned earlier that correspond to approximately $1,750 per vessel per day in both periods and both of those balloons as I mentioned were refinanced. Let’s now move to Slide 25. This slide shows on the right hand side our cash flow breakeven levels that we expect to shape over the next 12 months and from the left side we see our scheduled debt repayments, including scheduled balloon repayments over the next four years. As you can see from the chart on the left part of the slide, in 2015, we have scheduled to make $10.7 million of loan repayments and $9.3 million of balloon repayments. There are three balloon repayments of $10.7 million that were due in 2015 and we already financed the $5 million balloon that we shared earlier this year. And we are currently in loan recommendation to finance another $3.4 million over balloon that is to be paid in the fourth quarter of 2015. Our loan repayments over the next 12 months amount approximately to $1,700 per vessel per day contribution to our cash flow breakeven level and you can see that figure in the last line of the table at the right of the slide. Again, this amount corresponds to the $10.5 million of loan repayments that we will have to make over the next 12 months. Additionally, we have to make balloon payments of $8.8 million, again over the next 12 months, which would increase if not refinanced our cash flow breakeven level by about $1,500 per vessel per day. Of that, as I just mentioned, $3.4 million has been already agreed to be refinanced for the equivalent of about $650 per vessel per day. After making assumptions for the other elements that make up our cash flow breakeven level that is operating expenses, administrative costs, interest and drydocking expenses, we currently estimate the cash flow breakeven level for the next 12 months of about $9,400 per vessel per day and that number again does include balloon repayments. Let’s now move to the next slide, Slide 26. And as usual, let me give you some highlights from our balances. As of June 30, 2015, our total cash was about $29.2 million comprised of about $15.7 million of unrestricted cash and $5.5 million of restricted funds and retention accounts. Our outstanding debt was $39.8 million and as a result our debt to capitalization ratio was about 29% and our debt to market value of our fleet ratio was about 54% and further, our net debt to market value of our fleet ratio was about 31%. We are happy to report that as of June 30, 2015 we were in compliance, with all of our loan covenants. Let me give you a word about our capital commitments. As Aristides mentioned at the beginning of our presentation, our newbuilding investment program requires about $118 million of funds over the period of 2015 and 2016. Again, I have discussed earlier in an slide representation, we already have paid $22.4 million of the equity requirements of this program and the remaining capital expenditure is to be financed with a combination of debt and equity. We already secured debt for two of the vessels, the two Ultramaxes to be delivered in the beginning of 2016 and we are in the process of arranging debt for one of the Kamsarmaxes also to be delivered in the beginning of 2016. This last vessel has a 4-year charter at $14,100 per day and thus we expect to be able to finance it in a straightforward manner. The debt for the second of Kamsarmax to be delivered at the end of 2016 will be arranged later in 2016. The remaining equity required for the financing of our newbuilding program will be provided by existing costs, possible balloon and financings, and by funds raised from our shareholders rights offering that we announced last month. Let’s turn to Slide 27 to review some of the details of this shareholders rights offering. Yesterday, we filed an amended registration statement Form S-1 with the Securities and Exchange Commission establishing the size and record date of the shareholders right offering amongst some other parameters. Thus, we will target to raise $10 million to $20 million of funds with the maximum size of the offering being $20 million. Existing shareholders of record as of August 14, 2015 will be given the right to buy shares in the offering. Subject to the registration statement being declared effective by the ACC, we expect the offering to commence or in about August 24, 2015 when the offering price will be announced as well. Shareholders will have about three weeks to exercise their rights, so if the offering starts on or about August 24, the offering will conclude around September 15. While the rights will not be tradable, our subscription is allowed for shareholders who wish to acquire more shares from those remaining from other shareholders who chose not to exercise their basic subscription rights. So, if someone wants to become a shareholder and benefit from the rights offering, he or she could buy shares by August 15 and subscribe like any existing shareholder who wishes to possibly increase his or her holdings. The shares of shareholders who did not exercise their rights if any would then be allocated to those whoever subscribes. French investment company, the main investment vehicle of the Pittas family and our main shareholder, which owns about 28% of Euroseas indicated that it will as a minimum exercise its basic subscription rights in full. And with that, let me turn the floor back to Aristides.

Thank you, Tasos. I now open up the floor for any questions we may have.

Thank you. [Operator Instructions] Your first question comes from Donald Bogden from Wells Fargo. Please ask your question.

Good morning, gentlemen.

Hi, Donald.

So, first question is a follow-up to your comments on rationalization measures in the drybulk market. You mentioned you expect about 35% of the 2015 order book when delivered due to a combination of slippage, cancellations, conversions, but can you go a little further and break down that among the three? I mean, what do you think the extent of cancellations have been to-date and slippage and conversions as well?

Difficult to say, don’t know what the breakdown is. Cancellations are obviously less than the slippage, but I don’t have the numbers to tell you. Cancellations and conversions are less than slippage. Slippage is more than half of the total and even more I would say.

Yes, fair enough. Tough to target. And then a follow-up on the market in general, I mean, how much do you attribute the sort of Q2 and today in Q3 rising rates to sort of demand – under demand fundamentals and how much do you think would be contributing to the widespread lapse that we are seeing and have you seen the recent rise in rates sort of put a hold on owners putting additional times into lap?

Well, on our size of ships in drybulk, Panamaxes and Handymaxes, Ultramaxes, Supramaxes all that, layer has been absolute minimal. So, I think we have seen more of that in the cape sector. But on our sizes, we haven’t seen a lot of that. There has been some pickup in the trade and also on the distances travelled. I mean Brazil exports have risen a little bit and that has helped. But it’s more demand picking up from the extremely low levels of the first half of the year rather than laid up ships in our sizes. Of course there was quite significant scrapping, but the deliveries have been more than the scrapping sources.

Okay. And just one last follow-up for Tasos, I just want to make sure I am thinking about the cash breakeven levels you guys alluded to on Slide 25 correctly, so that would be $9,400 per day and then the additional $1,550 is the assumed added costs for financing, the remaining portion of the new build order book, am I thinking about that correct?

Correct, the $9,400 is if we do the – if we pay the loans plus the operating expenses, the additional $1,500 is related to the balloons that we have due to pay. If the balloons are not at the cash flow breakeven another $1,500, if we manage to refinance the balloons then that $1500 would not be there. As I mentioned already one of the balloons of the three balloons that will need to be paid over the next 12 months, we have agreed refinance $3.4 million of the $8.8 million. We are documenting it – we are almost done documenting that financing of balloons, so the $1500 is already being reduced by $650.

Okay, I appreciate that color guys. And thanks again.

Thanks, Donald.

Thank you. We have no further questions from the phones, please continue sir.

Okay. So if there is no more questions, thank you very much. And we will talk to you again during the next quarter with the results of Q3. Thank you for listening.

Thanks everybody.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.