SCHEDULE 13D/A: OceanPal Inc. Insider Ownership Surges to 61.94% as Preferred Shares Vest

Semiramis Paliou and affiliated entities have increased their beneficial ownership in OceanPal Inc. to 61.94% of common stock through the vesting and conversion potential of Series C and Series D Preferred Stock.

Summary

• This document is Amendment No. 31 to the Schedule 13D filing for OceanPal Inc., reporting an increase in beneficial ownership by Semiramis Paliou, Tuscany Shipping Corp., and 4 Sweet Dreams S.A. (collectively, the "Reporting Persons").
• As of February 21, 2025, the Reporting Persons are deemed to beneficially own 12,215,692 Shares, representing 61.94% of OceanPal Inc.'s total issued and outstanding common shares.
• The increase in ownership is primarily due to the vesting of 2,770 shares of Series C Convertible Preferred Stock, which are now convertible into common shares at the Reporting Persons' option.
• The Reporting Persons also hold Series D Preferred Stock, acquired through distributions from Diana Shipping Inc. and a purchase from Abra Marinvest Inc., which are convertible into common shares.
• Semiramis Paliou, as a director and Chairperson of OceanPal Inc., holds significant influence over the company's corporate activities and states the acquisitions are for investment purposes.

Sentiment

Score: 6

Explanation: The filing indicates increased insider ownership, which can be seen as a positive signal of confidence. However, the highly concentrated ownership and complex preferred stock structure with conversion restrictions introduce elements of complexity and potential governance concerns for minority shareholders. The temporary restriction on preferred share conversion for insiders is a neutral to slightly negative point for liquidity.

Positives

• Increased beneficial ownership by key insiders, including Semiramis Paliou (a director and Chairperson), may signal strong confidence in the company's future prospects.
• The vesting of Series C Preferred Stock indicates the progression of awards under the Issuer's 2021 Equity Incentive Plan.

Negatives

• The significant concentration of ownership (61.94%) by a single group of reporting persons could raise corporate governance concerns regarding the influence of minority shareholders.
• The stated 49% conversion restriction on Series C and D Preferred Stock, despite beneficial ownership being reported at 61.94%, suggests a complex ownership structure that might limit immediate liquidity or full conversion for the Reporting Persons.

Risks

• Concentrated Ownership: The Reporting Persons' beneficial ownership of 61.94% grants them substantial control, potentially limiting the influence and decision-making power of other shareholders.
• Conversion Restrictions: The Series C and Series D Preferred Stock have ownership restrictions preventing conversion if it results in beneficial ownership exceeding 49% of total outstanding shares, which could affect the Reporting Persons' ability to fully convert their preferred stock holdings into common shares.
• Preferred Stock Complexity: The existence of multiple series of preferred stock (Series C, D, E) with varying conversion terms, voting rights, and restrictions adds complexity to the company's capital structure, which could be challenging for investors to fully understand.

Future Outlook

The Reporting Persons state their intention to potentially acquire additional shares or dispose of existing ones based on an ongoing evaluation of their investment, prevailing market conditions, and other investment considerations. They also reserve the right to act in concert with other shareholders and recommend courses of action to management and the board to increase shareholder value.

Management Comments

• "Paliou is a director and the Chairperson of the Board of Directors and the Executive Committee of the Issuer and may have influence over the corporate activities of the Issuer, including activities which may relate to items described in subparagraphs (a) through (j) of Item 4 of Schedule 13D."
• "The Reporting Persons acquired the Shares... solely for investment purposes."
• "The Reporting Persons, at any time and from time to time, may acquire additional Shares... or dispose of any or all of the Shares they then own depending upon an ongoing evaluation of their investment in the Shares, prevailing market conditions, other investment opportunities, other investment considerations and/or other factors."
• "The Reporting Persons further reserve the right to act in concert with any other shareholders of the Issuer, or other persons, for a common purpose should they determine to do so, and/or to recommend courses of action to the Issuer's management, the Issuer's Board of Directors, the Issuer's shareholders and others."
• "In addition, the Reporting Persons are in contact with members of the Issuer's management, the other members of the Issuer's Board of Directors, other significant shareholders and others regarding alternatives that the Issuer could employ to increase shareholder value."

Industry Context

NA

Corporate Governance

Related Party Transactions

• Semiramis Paliou, a Reporting Person, is a director and the Chairperson of the Board of Directors and the Executive Committee of OceanPal Inc.
• The Issuer issued 1,200 shares of Series E Preferred Stock to Semiramis Paliou on March 20, 2023.
• The Reporting Persons acquired Series D Preferred Stock through distributions from Diana Shipping Inc., which was partial consideration for OceanPal Inc.'s purchase of the m/v Baltimore and m/v Melia from Diana Shipping Inc.

Stakeholder Impact

• Shareholders: The significant increase in beneficial ownership by a key insider (61.94%) could be viewed positively as a sign of confidence, but also raises concerns about control and potential dilution if preferred shares are fully converted. The complex preferred share structure and conversion restrictions may affect common share value and liquidity.
• Management/Board: Semiramis Paliou's substantial ownership and role as Chairperson provide strong influence over corporate activities and strategic direction.
• Creditors: No direct impact on creditors is explicitly mentioned, but a stable, insider-controlled ownership structure might be viewed favorably by some.

Next Steps

• The Reporting Persons may acquire additional shares or dispose of existing shares based on their investment evaluation and market conditions.
• The Reporting Persons may act in concert with other shareholders or recommend courses of action to management and the board to increase shareholder value.
• The 15% voting limitation on Series E Preferred Stock will terminate upon a "Series B Event" (cancellation or transfer of all Series B Preferred Stock).
• The restriction on converting preferred shares held by directors and officers will expire on May 17, 2025, after which conversion may proceed.

Key Dates

Keywords

OceanPal Inc., Schedule 13D, Beneficial Ownership, Semiramis Paliou, Tuscany Shipping Corp., 4 Sweet Dreams S.A., Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Equity Incentive Plan, Corporate Governance, Shareholder Value, SEC Filing, Shipping Industry