SCHEDULE 13D/A: OceanPal Insider Ownership Rises to 30.49% Following Preferred Stock Conversion Price Adjustment

Ioannis Zafirakis and Abra Marinvest Inc. have increased their beneficial ownership in OceanPal Inc. to 30.49% of common stock, driven by a change in the conversion price of Series C and Series D Preferred Stock.

Summary

• Abra Marinvest Inc. and Ioannis Zafirakis (collectively, the "Reporting Persons") have filed Amendment No. 10 to their Schedule 13D, reporting an increase in their beneficial ownership of OceanPal Inc. common stock.
• The increase in ownership percentage is primarily due to a change in the conversion price of the Issuer's Series C Preferred Stock and Series D Preferred Stock, which are convertible into common shares at the Reporting Persons' option.
• As of February 7, 2025, the Reporting Persons are deemed to beneficially own 3,291,941 shares of OceanPal Inc. common stock, representing 30.49% of the Issuer's total issued and outstanding shares.
• This beneficial ownership includes 3,104 shares of Series D Preferred Stock convertible into 2,733,597 common shares (25.32%) and 634 shares of Series C Preferred Stock convertible into 558,344 common shares (5.17%).
• The conversion of preferred shares is subject to a restriction that prevents the Reporting Persons from becoming beneficial owners of more than 49% of the total issued and outstanding common shares.
• Ioannis Zafirakis, a citizen of Greece, is the owner of all issued and outstanding shares of Abra Marinvest Inc., a Marshall Islands corporation, and indirectly controls the beneficial ownership of shares held by Abra.
• The Reporting Persons acquired Series C Preferred Stock through the Issuer's 2021 Equity Incentive Plan and Series D Preferred Stock through distributions from Diana Shipping Inc. and as partial consideration for the Issuer's purchase of the m/t Zeze Start.
• 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 $27.0 million from an entity controlled by Zafirakis.
• On October 15, 2024, the Reporting Persons sold an aggregate of 7,033 shares of Series D Preferred Stock to various holders.

Sentiment

Score: 6

Explanation: The document is primarily a factual disclosure of increased insider ownership due to technical adjustments in preferred stock conversion. The continued significant stake and stated intent to increase shareholder value by a key insider are mildly positive, indicating stability and active engagement, but it does not contain new operational or financial performance data to significantly shift sentiment.

Positives

• The increase in beneficial ownership by a key insider (Ioannis Zafirakis, a Board and Executive Committee member) may signal continued confidence in the company's long-term prospects.
• The Reporting Persons' stated purpose of transaction includes investment purposes and a willingness to act to increase shareholder value, suggesting active engagement in corporate governance.

Negatives

• The document does not present any explicit negative financial or operational outcomes for OceanPal Inc.

Risks

• The beneficial ownership is primarily through convertible preferred stock, meaning the actual common share count and percentage could fluctuate based on conversion decisions and the underlying conversion price.
• The 49% ownership restriction on conversion limits the extent to which the Reporting Persons can increase their direct common share holdings through conversion.

Future Outlook

The Reporting Persons indicate that they may, at any time, acquire additional shares or dispose of existing shares based on market conditions and investment considerations. They also reserve the right to act in concert with other shareholders and recommend courses of action to the Issuer's management and Board to increase shareholder value.

Management Comments

• Ioannis Zafirakis is a member of the Board of Directors and a member of the Executive Committee of the Issuer and 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 pertains to a shipping company (OceanPal Inc.) and involves transactions related to vessel acquisitions (m/v Baltimore, m/v Melia, m/t Zeze Start) and preferred stock conversions, which are common financing and ownership structures within the maritime industry. The involvement of Diana Shipping Inc. highlights inter-company relationships within the broader shipping sector.

Comparison to Industry Standards

• The beneficial ownership percentage of 30.49% by a key insider group is significant and indicates a strong, concentrated ownership stake, which is not uncommon in the shipping industry, particularly among Greek-controlled entities where families or closely-knit groups often maintain substantial control.
• The use of convertible preferred stock as a financing mechanism and for distributions (as seen with Diana Shipping Inc.) is a flexible tool often employed in capital-intensive industries like shipping to manage equity dilution and provide different risk/reward profiles to investors.
• The related-party transaction involving the purchase of m/t Zeze Start from an entity controlled by Zafirakis for $27.0 million is a common practice in the shipping industry, where principals often have interests in multiple entities that transact with each other. Such transactions are typically scrutinized for fairness and arm's-length terms.

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 Ioannis Zafirakis.

Stakeholder Impact

• Shareholders: The increased beneficial ownership by a key insider could be viewed positively as a sign of commitment and alignment of interests, but also raises questions about control concentration. The potential for future conversions could impact share float.
• Management/Board: Ioannis Zafirakis's significant ownership and role on the Board and Executive Committee give him substantial influence over corporate activities and strategic direction.
• Creditors: No direct impact mentioned, but strong insider ownership can sometimes signal stability.

Next Steps

• The Reporting Persons may acquire additional shares or dispose of existing shares based on their ongoing evaluation of market conditions and investment opportunities.
• The Reporting Persons may act in concert with other shareholders or recommend courses of action to the Issuer's management and Board to increase shareholder value.
• The Support Agreement with Sphinx Investment Corp. restricts conversion of preferred shares held by directors and officers until May 17, 2025.

Key Dates

Keywords

OceanPal Inc., Schedule 13D, Beneficial Ownership, Preferred Stock Conversion, Series C Preferred Stock, Series D Preferred Stock, Ioannis Zafirakis, Abra Marinvest Inc., SEC Filing, Insider Ownership, Corporate Governance, Shipping Industry