SCHEDULE 13D/A: OceanPal Insider Ownership Surges to 71.77% Following Preferred Stock Conversion Price Adjustment

Semiramis Paliou and affiliated entities have significantly increased their beneficial ownership in OceanPal Inc. to 71.77% of outstanding common stock, primarily due to a change in the conversion price of Series C and Series D Preferred Stock.

Summary

• The filing is Amendment No. 33 to Schedule 13D 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 April 11, 2025, the Reporting Persons are deemed to beneficially own 19,083,187 shares of OceanPal Inc. common stock, representing 71.77% of the total issued and outstanding shares, assuming conversion of their preferred stock holdings.
• This increase in percentage ownership is primarily attributed 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.
• The Series C Preferred Stock (3,640 shares owned by 4 Sweet Dreams S.A.) vested from the Issuer's 2021 Equity Incentive Plan.
• The Series D Preferred Stock (9,404 shares owned by Tuscany Shipping Corp. and 1,339 shares owned by 4 Sweet Dreams S.A.) was acquired through distributions from Diana Shipping Inc. (as part of consideration for vessel purchases by OceanPal) and a purchase from Abra Marinvest Inc. on October 15, 2024.
• Conversion of both Series C and Series D Preferred Stock is subject to ownership restrictions, preventing the Reporting Persons from becoming beneficial owners of more than 49% of the total issued and outstanding common shares upon conversion.
• Semiramis Paliou, as the owner of Tuscany Shipping Corp. and 4 Sweet Dreams S.A., is deemed to have indirect beneficial ownership of all shares held by these entities.
• Paliou also holds 1,200 shares of Series E Preferred Stock, issued on March 20, 2023, which carries significant voting rights (up to 25,000 votes per share, capped at 15% of total votes) but no dividend or liquidation rights, and is convertible into common shares after a "Series B Event."
• A Support Agreement dated May 17, 2024, with Sphinx Investment Corp. restricts the Issuer from converting preferred shares held by its directors and officers into common shares for one year from the agreement date.

Sentiment

Score: 7

Explanation: The significant increase in beneficial ownership by the Chairperson and affiliated entities, even if theoretical due to conversion restrictions, generally signals strong insider confidence and alignment of interests. The stated purpose of increasing shareholder value is positive. However, the complexity of the preferred stock structure and the 49% conversion cap introduce some caveats.

Positives

• Increased beneficial ownership by key insiders (Semiramis Paliou, Chairperson and Director) may signal strong confidence in the company's future.
• The acquisition of Series D Preferred Stock from Diana Shipping Inc. and Abra Marinvest Inc. indicates strategic asset transfers and investments.

Negatives

• The 49% ownership restriction on conversion of Series C and D Preferred Stock means the full beneficial ownership percentage (71.77%) is theoretical for reporting purposes and cannot be fully realized in common shares due to current limitations, which could limit liquidity or control for other shareholders if the preferred shares were to be converted.
• The Support Agreement restricts the conversion of preferred shares held by directors and officers for a year, potentially limiting the flexibility of these preferred shareholders to convert their holdings into common stock.

Risks

• Concentrated Ownership: Semiramis Paliou and her affiliated entities hold a significant majority (71.77% deemed beneficial ownership), which could lead to limited influence for minority shareholders in corporate decisions.
• Conversion Restrictions: The 49% ownership restriction on the conversion of Series C and D Preferred Stock means that the full beneficial ownership percentage reported is subject to limitations, potentially affecting the liquidity or voting power derived from these preferred shares if converted.
• 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.
• Voting Power Discrepancy: The Series E Preferred Stock grants significant voting power (up to 25,000 votes per share, capped at 15% of total votes) without corresponding economic rights (no dividends or liquidation rights), potentially creating a disconnect between economic interest and voting control.

Future Outlook

The Reporting Persons state their intention to hold the shares for investment purposes and may, at any time, acquire additional shares or dispose of existing ones based on market conditions and other 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 of Directors 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..."
• "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

This filing primarily concerns changes in beneficial ownership and corporate control within OceanPal Inc., a company likely operating in the shipping industry given its name and the mention of vessel purchases (m/v Baltimore and m/v Melia). The increase in insider ownership, particularly by the Chairperson, is a company-specific event rather than a broad industry trend, though it could reflect confidence in the dry bulk or tanker market outlook if that is OceanPal's segment.

Corporate Governance

Related Party Transactions

• Acquisition of Series C Preferred Stock by 4 Sweet Dreams S.A. from the Issuer's 2021 Equity Incentive Plan.
• Acquisition of Series D Preferred Stock by Reporting Persons through distributions from Diana Shipping Inc., which had received the Series D Preferred Stock as partial consideration for the Issuer's purchase of m/v Baltimore and m/v Melia from Diana Shipping Inc.
• Purchase of Series D Preferred Stock by Tuscany Shipping Corp. from Abra Marinvest Inc. on October 15, 2024.

Stakeholder Impact

• Shareholders: The significant increase in beneficial ownership by the Chairperson and affiliated entities could be viewed positively as a sign of insider confidence, but also raises concerns about highly concentrated control and potential dilution if preferred shares were fully convertible without restrictions. The 49% conversion cap on Series C and D Preferred Stock limits the immediate impact of the reported 71.77% beneficial ownership on the common share float. The Series E Preferred Stock further concentrates voting power.
• Management/Board: Semiramis Paliou, as Chairperson, gains increased influence over corporate activities. The Support Agreement temporarily restricts conversion for directors/officers.

Next Steps

• The Reporting Persons may acquire additional shares or dispose of existing shares based on ongoing evaluation of their investment.
• 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 Series E Preferred Stock held by Paliou will become fully convertible upon a "Series B Event" (cancellation or transfer of Series B Preferred Stock).
• The restriction on preferred share conversion by directors and officers under the Support Agreement will expire on May 17, 2025 (one year from May 17, 2024).

Key Dates

Recommendation

Keywords

OceanPal Inc., Schedule 13D, beneficial ownership, Semiramis Paliou, preferred stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, common stock, conversion price, corporate governance, insider ownership, shipping industry, SEC filing