SCHEDULE: OceanPal Inc. Major Shareholder Reports Decrease in Beneficial Ownership to 13.57%

Abra Marinvest Inc. and Ioannis Zafirakis have filed an Amendment No. 17 to their Schedule 13D, reporting a decrease in their beneficial ownership of OceanPal Inc. common stock to 13.57% due to an increase in outstanding shares and changes in preferred stock conversion prices.

Summary

• Amendment No. 17 to Schedule 13D was filed by Ioannis Zafirakis and Abra Marinvest Inc. (the "Reporting Persons").
• The filing reports a decrease in the percentage ownership of OceanPal Inc. (the "Issuer") common stock.
• Beneficial ownership for the Reporting Persons is now 2,917,764 Shares, representing 13.57% of the Issuer's outstanding common stock.
• The decrease is attributed to an increase in the Issuer's outstanding common stock and a change in the conversion price of Series C Preferred Stock and Series D Preferred Stock.
• The Reporting Persons hold 3,104 shares of Series D Preferred Stock, convertible into 2,097,439 Shares, and 1,214 shares of Series C Preferred Stock, convertible into 820,325 Shares.
• Ownership is subject to certain conversion restrictions, including that the shares shall not be convertible to the extent that such conversion would result in the Reporting Persons becoming the beneficial owner of more than 49% of the total issued and outstanding Shares.

Sentiment

Score: 4

Explanation: The filing indicates a decrease in the beneficial ownership percentage for the reporting persons due to dilution and changes in conversion terms, which is generally a negative for their control. However, the underlying transactions (vessel acquisitions) could be positive for the company's growth, and the reporting persons maintain a significant stake and board influence.

Positives

• Reporting Persons continue to hold a significant stake of 13.57% in OceanPal Inc.
• Ioannis Zafirakis is a member of the Board of Directors and Executive Committee of the Issuer, indicating continued influence over corporate activities.
• Reporting Persons acquired Series D Preferred Stock as partial consideration for the Issuer's purchase of the m/t Zeze Start for an aggregate purchase price of $27.0 million, from an entity controlled by Zafirakis, which could be a strategic asset acquisition for the Issuer.

Negatives

• The percentage of beneficial ownership for the Reporting Persons has decreased.
• The decrease in ownership is partly due to an increase in the Issuer's outstanding common stock, indicating dilution.
• Changes in the conversion price of Series C and Series D Preferred Stock have negatively impacted the number of common shares convertible from the Reporting Persons' preferred stock holdings.

Risks

• Ownership restrictions: Series C and Series D Preferred Stock are not convertible into common shares if such conversion would result in the Reporting Persons owning more than 49% of the total issued and outstanding common shares.
• Future acquisitions or dispositions of shares by the Reporting Persons are subject to ongoing evaluation of their investment, prevailing market conditions, other investment opportunities, and other factors, which could lead to further changes in their ownership stake.

Future Outlook

The Reporting Persons may, at any time and from time to time, acquire additional Shares or dispose of any or all of the Shares they then own. These decisions will depend upon an ongoing evaluation of their investment, prevailing market conditions, other investment opportunities, and other factors. They also reserve the right to act in concert with other shareholders or recommend courses of action to the Issuer's management and Board of Directors to increase shareholder value.

Management Comments

• Ioannis Zafirakis, as a member of the Board of Directors and the Executive Committee of the Issuer, may have influence over the corporate activities of the Issuer.
• 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

This filing reflects a change in a significant shareholder's stake in OceanPal Inc., a company involved in the shipping industry. The use of preferred stock as consideration for vessel acquisitions (m/v Baltimore, m/v Melia, m/t Zeze Start) is a common financing strategy within the maritime sector, allowing companies to acquire assets while managing cash flow and equity dilution.

Corporate Governance

Related Party Transactions

• On September 11, 2024, 9,442 shares of Series D Preferred Stock were issued to the Reporting Persons as partial consideration for the Issuer's purchase of the m/t Zeze Start for an aggregate purchase price of $27.0 million from an entity controlled by Zafirakis.

Stakeholder Impact

• Shareholders: The increase in outstanding common stock and changes in preferred stock conversion prices affect the overall share structure and potentially future dilution. The decrease in a major shareholder's percentage ownership could be viewed differently by various investors.
• Management/Board: Ioannis Zafirakis, a key Reporting Person, remains on the Board and Executive Committee, indicating continued influence on strategic direction and potential collaboration on value-enhancing initiatives.

Next Steps

• Reporting Persons may acquire additional Shares or dispose of any or all of the Shares they then own.
• Reporting Persons may act in concert with any other shareholders of the Issuer or other persons for a common purpose.
• Reporting Persons may recommend courses of action to the Issuer's management, Board of Directors, and shareholders to increase shareholder value.

Key Dates

Recommendation

While the filing indicates a decrease in the reporting persons' percentage ownership due to dilution, they still maintain a significant stake (13.57%) and board influence. The underlying transactions (vessel acquisitions) could be positive for the company's long-term prospects. The filing primarily updates ownership percentages rather than signaling a fundamental shift in company performance or strategy that would warrant a strong buy or sell. Investors should hold and monitor future developments and the company's operational performance.

Keywords

OceanPal Inc., Schedule 13D, beneficial ownership, common stock, preferred stock, Series C Preferred Stock, Series D Preferred Stock, Ioannis Zafirakis, Abra Marinvest Inc., SEC filing, corporate governance, equity ownership, dilution, vessel acquisition