OceanFreight Inc. (NASDAQ: $OCNF)(D*)

OceanFreight Inc. (NASDAQ: $OCNF)(D*)

* Financial status indicator is deficient: Issuer failed to meet NASDAQ continued listing requirements.

OceanFreight Inc. (OCNF) is a global provider of shipping transportation services. The Company specializes in transporting drybulk cargoes, including such commodities as iron ore, coal, grain and other materials and crude oil cargoes through the ownership and operation of nine drybulk carriers and four tanker vessels. During the year ended December 31, 2006, the fleet of the Company consisted of eight Panamax and one Capesize drybulk carriers and three Aframax and one Suezmax tanker vessels with a total capacity of 1.2 million dead weight tons (dwt) and an average age of 13.9 years.

OceanFreight Inc. was founded in 2006 and is based in Athens, Greece.

Share Statistics (14-April-10)			FY 2007	FY 2008	% Chg	Q4 2008	Q4 2009	% Chg
Symbol	OCNF	Revenue, $Mn	36.13M	147.1M	307.1%	36.27M	28.23M	22.2%
Current price	$0.79	Gross marg.	69.1%	72.4%	4.8%	27.7%	43.4%	56.7%
52wk Range:	$2.10-0.70	Oper. margin	28.2%	38.5%	36.5%	30.6%	-467.5%	1627%
Avg Vol (3m):	2,661,300	Net margin	22.6%	18.8%	16.8%	-31.9%	-478.9%	1401%
Market Cap.	113.20M
Dil. Shares Outst.	181.8M	EPS, $	0.78	1.94	148.7%	-0.65	-0.98	50.8%

Source: Reuters.com, SEC Filings.

Financial Summary

For the three-month period ended December 31, 2009, the Company reported Net Loss of $135.9 million or basic and diluted loss per share of $0.98. Included in these results are:

• A book loss of approximately $18.2 million associated with the sale of the M/V Pierre and M/V Juneau.

• An impairment loss of $116.4 million associated with the write down of the Company’s tanker vessels to their fair market values.

• A gain of $1.3 million associated with the change in the fair value of the interest rate swaps.

• Excluding the above items Net loss for the fourth quarter of 2009 would be $2.6 million or $0.02 per share.

• EBITDA for the year ended December 31, 2009, was $55.5 million as adjusted for the effect of the loss from the sale of vessels and impairment loss.

Fleet Developments

• On December 9, 2009, the Company took delivery of the M/V Cohiba, a 2006-built 174,200 dwt Capesize drybulk carrier, for a total cost of $61.9 million. Upon delivery, the vessel commenced fixed rate employment for a five-year minimum period at a gross daily rate of $26,250.

• On December 11, 2009, the Company agreed to sell the M/V Pierre to a third party for a gross sale price of $22.6 million, resulting in a loss of approximately $17.4 million. The vessel is scheduled to be delivered to its new owners between March 1, 2010, and April 15, 2010.

• In addition, as previously announced, the Company has entered into an agreement to purchase a 2005-built 180,263 dwt Capesize drybulk carrier, to be renamed M/V Montecristo, for a purchase price of $49.5 million. OCNF said it expect to take delivery of the M/V Montecristo in the second quarter of 2010 following which it will commence on time charter employment for a minimum period of four years at a gross daily rate of $23,500.

• Upon completion of the above transactions, OCNF’s fleet will consist of 13 vessels, comprised of nine dry bulk carriers (four Capesizes, five Panamaxes) and four tankers (one Suezmax, three Aframaxes) with a combined deadweight tonnage of approximately 1.5 million tons and a weighted average age of approximately 10.8 years.

Fourth Quarter 2009 Results

For the fourth quarter ended December 31, 2009, Voyage Revenues amounted to $28.2 million; Operating Loss amounted to $132.7 million, which includes the effect of the loss from the sale of vessels of $18.2 million and impairment loss of $116.4 million. Net Loss amounted to $135.9 or $(0.98) per share. EBITDA for the fourth quarter of 2009 was $11.4 million as adjusted for the effect of the loss from the sale of vessels and impairment loss.

An average of 12.3 vessels were owned and operated during the fourth quarter of 2009, earning an average Time Charter Equivalent, or TCE rate, of $25,172 per day.

Year Ended December 31, 2009 Results

For the year ended December 31, 2009, Gross Revenue amounted to $118.5 million; Operating Loss was $164.9 million, which includes the effect of the loss from the sale of vessels of $69.3 million and impairment loss of $116.4 million. Net Loss amounted to $179.4 million or $(2.28) per share. EBITDA for the year was $55.5 million as adjusted for the effect of the loss from the sale of vessels and impairment loss.

An average of 12.7 vessels were owned and operated during the year 2009, earning an average Time Charter Equivalent, or TCE, rate of $28,523 per day.

Capitalization

On December 31, 2009, debt (debt, net of deferred financing fees) to total capitalization (debt and stockholders’ equity) ratio was 50.8% and net debt (debt less cash, cash equivalents and restricted cash) to total capitalization ratio was 41.9%.

Financing

As of the date of this release, OCNF has raised approximately $98.2 million in net proceeds under the current Standby Equity Distribution Agreement with YA Global Master SPV ltd., an affiliate of Yorkville Advisors. The proceeds of this offering together with the existing loan facilities are expected to be sufficient to finance the vessel acquisitions announced to date. As of the date of this release the Company has 181,800,001 shares outstanding.

Liquidity

As of December 31, 2009, the Company had total liquidity of approximately $46.3 million including restricted cash.

Financial Strength (14-Apr-2010)	Company	Industry	Sector	S&P 500
Quick Ratio (MRQ)	1.35	1.10	1.46	0.80
Current Ratio (MRQ)	1.37	1.22	1.83	0.96
Long-Term Debt to Equity (MRQ)	84.07	117.65	88.66	142.37
Total Debt to Equity (MRQ)	103.53	139.20	117.98	204.54

Source: Reuters.com, SEC Filings.

Analyst Consensus

Buy

Outperform

Hold

Underperform

Sell

No Opinion

This is the consensus forecast amongst one polled investment analysts. Against the OceanFreight Inc company.

Analyst Detail	Buy	Outperform	Hold	Underperform	Sell	No Opinion
Latest	0	0	1	0	0	0
4 weeks ago	0	0	1	0	0	0
2 months ago	0	0	1	0	0	0
3 months ago	0	0	1	0	0	0
Last year	0	0	2	0	0	0

Source: www.ft.com

Consensus Estimates Analysis

	# of Estimates	Mean	High	Low	1 Year Ago
SALES (in millions)
Year Ending Dec-10	1	116.60	116.60	116.60	117.24
Year Ending Dec-11	1	107.40	107.40	107.40	–
EARNINGS (per share)
Quarter Ending Jun-10	1	0.00	0.00	0.00	-0.06
Quarter Ending Sep-10	1	0.00	0.00	0.00	-0.15
Year Ending Dec-10	1	0.01	0.01	0.01	-0.14
Year Ending Dec-11	1	0.00	0.00	0.00	–

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=OCNF.W

Investment Highlights

OCNF recently announced that it has entered into an agreement to build three 206,000 DWT Very Large Ore Carriers at Shanghai Waigaichao Shipbuilding. Two of the vessels are scheduled to be delivered in the second and fourth quarters of 2012 and the third vessel is scheduled to be delivered in the first quarter of 2013. The total purchase price for the three vessels is approximately $204 million.

Basset Holdings, the founding shareholder controlled by CEO Anthony Kandylidis has agreed to support the Company’s expansion plan by making a commitment to provide up to 50% of the total contract price or $102 million in the form of an unsecured shareholder loan. The pricing of the shareholder loan will be on an arms-length basis and in line with third-party market pricing.

Utilizing the Company’s existing relationships with its charterers, OCNF has entered into the following time charter agreements thereby securing long-term employment for these vessels upon their respective deliveries:

• Newbuilding #1: Upon delivery in the second quarter of 2012 the vessel will commence fixed rate employment for a minimum period of three years at a gross rate of $25,000 per day.

• Newbuilding #2: Upon delivery in the fourth quarter of 2012 the vessel will commence fixed rate employment for a minimum period of five years at a gross base rate of $23,000 per day. The time charter contract includes a 50% profit share arrangement that applies from above the base rate to $40,000 per day.

• Newbuilding #3: Upon delivery in January 2013 the vessel will commence fixed rate employment for a minimum period of seven years at a gross rate of $21,500 per day. The time charter contract includes a 50% profit share arrangement that applies from above the base rate to $38,000 per day.

The Company expects to finance these acquisitions with a combination of cash currently on-hand, internally generated cash flows and debt through the support of Basset Holdings.

Source: http://www.oceanfreightinc.com/

Technical Analysis

Source: http://stockcharts.com

OCNF has been relatively stable recently. This is evidenced by the width of its Bollinger Bands, which are tighter than normal. Additionally, OCNF is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

OCNF’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

Comparative Analysis

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
Apr-14-2010	symbol	Share, $	$ Mn	2009	2010	2009	2010
Paragon Shipping Inc.	PRGN	4.71	241.31M	2.57	n/a	1.59	n/a
Euroseas Ltd.	ESEA	3.97	122.47M	n/a	n/a	1.91	n/a
Seanergy Maritime Holdings Corp.	SHIP	1.40	46.56M	1.12	n/a	0.48	n/a
Ocean Shipping Median			136.78M	1.84	n/a	1.32	n/a
OceanFreight Inc.	OCNF	0.79	113.20M	n/a	n/a	0.98	n/a

Source: Thomson Financial

Insider Trading Activity

NET SHARES PURCHASE ACTIVITY Inside Purchases – Last 6 Months
	Shares	Transaction
Purchases	n/a	n/a
Sales	n/a	n/a
Net Shares Purchased (Sold)	n/a	n/a
Total Insider Shares Held	n/a	n/a
% Net Shares Purchased (Sold)	n/a	n/a

Net Institutional Purchases — Prior Qtr to Latest Qtr
	Shares
Net Shares Purchased (Sold)	n/a
% Change in Institutional Shares Held	n/a

Source: Yahoo Finance

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice.

The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice. The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company. An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report. Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested. Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Subscribers are cautioned not to place undue reliance upon these forward looking statements. These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated. Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC. You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

We are committed to providing factual information on the companies that are profiled. However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions. We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so. Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.