Results

Ardmore Shipping Corporation

11/10/2021 | Press release | Distributed by Public on 11/10/2021 07:07

Current Report by Foreign Issuer (Form 6-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For three and nine months ended September 30, 2021

Commission file number 001-36028

ARDMORE SHIPPING CORPORATION

(Exact name of Registrant as specified in its charter)

Belvedere Building,

Ground Floor,

69 Pitts Bay Road,

Pembroke,

HM08,

Bermuda

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F Form 40- F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).

Yes No

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).

Yes No

INFORMATION CONTAINED IN THIS FORM 6-K REPORT

Attached to this Report on Form 6-K are (1) Management's Discussion and Analysis of Financial Condition and Results of Operations and (2) the unaudited interim condensed consolidated financial statements and related notes of Ardmore Shipping Corporation (the "Company"), as at September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020.

This Report is hereby incorporated by reference into the following registration statements of the Company:

Registration Statement on Form F-3D (Registration No. 333-203205) filed with the U.S. Securities and Exchange Commission on April 2, 2015;

Registration Statement on Form S-8 (Registration No. 333-213344) filed with the U.S. Securities and Exchange Commission on August 26, 2016;

Registration Statement on Form F-3 (Registration No. 333-227129) filed with the U.S. Securities and Exchange Commission on August 31, 2018;

Registration Statement on Form F-3 (Registration No. 333-233540) filed with the U.S. Securities and Exchange Commission on August 30, 2019; and

Registration Statement on Form F-3 (Registration No. 333-258974) filed with the U.S. Securities and Exchange Commission on August 20, 2021.

FORWARD-LOOKING STATEMENTS

Matters discussed in this report may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe", "anticipate", "intend", "estimate", "forecast", "plan", "potential", "should", "may", "will", "expect" and similar expressions are among those that identify forward-looking statements.

Forward-looking statements in this report include, among others, statements regarding: future operating results; the employment of the Company's vessels; the outcome of the Company's strategies and implementation of the Company's Energy Transition Plan; the effect of the COVID-19 pandemic on, among others, oil demand, the Company's business, financial condition and results of operations including liquidity; future drydocking days; sufficiency of liquidity and capital resources; the Company's joint venture and investment involving Element 1 Corp. and/or Maritime Partners, LLC. The forward-looking statements in this report are based upon various assumptions, including, among others, the Company's examination of historical operating trends, data contained in the Company's records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company's control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in the Company's view, could cause actual results to differ materially from those discussed in the forward-looking statements include: general market conditions, including fluctuations in charter rates and vessel values; changes in demand for and the supply of tanker vessel capacity; changes in the Company's operating expenses, including bunker prices, drydocking and insurance costs; changes in the projections of spot and time charter or pool trading of the Company's vessels; fluctuations in oil prices; the market for the Company's vessels; competition in the tanker industry; availability of financing and refinancing; charter counterparty performance; ability to obtain financing and comply with covenants in the Company's financing arrangements; the strength of world economies and currencies; changes in governmental rules and regulations or actions taken by regulatory authorities; new or revised accounting pronouncements; general domestic and international political conditions; potential disruption of shipping routes due to accidents, piracy or political events; vessel breakdowns and instances of off-hires; the Company's financial condition and liquidity; the duration and scope of the COVID-19 pandemic; actual performance of Element 1 Corp's technology and systems, particularly in the marine environment; the level and timing of adoption of the technology by participants in the marine industry; and other factors. Please see the Company's filings with the U.S. Securities and Exchange Commission, including the Company's Form 20-F for the year ended December 31, 2020, for a more complete discussion of these and other risks and uncertainties. The Company cautions readers of this report not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to update or revise any forward-looking statements. These forward-looking statements are not guarantees of the Company's future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ARDMORE SHIPPING CORPORATION

Date: November 10, 2021

By:

/s/ Paul Tivnan

Paul Tivnan

Chief Financial Officer, Treasurer and Secretary

ARDMORE SHIPPING CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited interim condensed consolidated financial statements and accompanying notes contained in this Report on Form 6-K and with our audited consolidated financial statements contained in "Item 18. Financial Statements" and "Item 5. Operating and Financial Review and Prospects" of our Annual Report on Form 20-F for the year ended December 31, 2020. The unaudited interim condensed consolidated financial statements included in this report have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements ("U.S. GAAP") and are presented in U.S. dollars as at September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020. Unless the context otherwise requires, the terms "Ardmore," the "Company", "we," "our" and "us" refer to Ardmore Shipping Corporation (NYSE: ASC) and its consolidated subsidiaries.

GENERAL

Ardmore owns and operates a fleet of Medium Range ("MR") product and chemical tankers ranging from 25,000 to 50,000 deadweight tonnes ("Dwt"). We provide seaborne transportation of petroleum products and chemicals worldwide to oil majors, national oil companies, oil and chemical traders, and chemical companies, with our modern, fuel-efficient fleet of mid-size tankers. As at September 30, 2021, we had in operation 27 vessels (including two chartered-in vessels), including 21 MR tankers ranging from 45,000 Dwt to 49,999 Dwt (15 Eco-Design and six Eco-Mod) and six Eco-Design IMO 2 product / chemical tankers ranging from 25,000 Dwt to 37,800 Dwt. Since March 1, 2021, we are commercially managing four of Carl Büttner's 24,000 Dwt chemical tankers.

We are strategically focused on modern, fuel-efficient, mid-size product and chemical tankers. We actively pursue opportunities to exploit the overlap we believe exists between the clean petroleum product ("CPP") and chemical sectors in order to enhance earnings, and also seek to engage in more complex CPP trades, such as multi-grade and multi-port loading and discharging operations, where our knowledge of chemical operations is beneficial to our CPP customers.

Our fuel-efficient operations are designed to enhance our operating performance and provide value-added service to our customers. We believe we are at the forefront of fuel efficiency and emissions reduction trends and are well positioned to capitalize on these developments with our fleet of Eco-design and Eco-mod vessels. Our acquisition strategy includes to continue to build our fleet with Eco-design newbuildings or Eco-design second-hand vessels and with modern second-hand vessels that can be upgraded to Eco-mod.

We believe that the global energy transition will have a profound impact on the shipping industry, including the product and chemical tanker segments. While this transition will unfold over years, the impact is already being felt through anticipated Energy Efficiency Existing Ship Index and Carbon Intensity Indicator regulations and constraints on newbuilding ordering activity. We view energy transition as less of a compliance challenge and more of an opportunity, which we have set out in our Energy Transition Plan ("ETP"), which is posted on our website. We have established Ardmore Ventures as our holding company for existing and future potential investments related to the ETP and we completed our first projects under the ETP in June 2021.

We are an integrated shipping company. The majority of our fleet is technically managed by a combination of Ardmore Shipping Services (Ireland) Limited and Anglo Ardmore Ship Management Limited, a joint venture entity that is 50% owned by us, and we also retain a third-party technical manager for some of our vessels. We have a resolute focus on both high-quality service and efficient operations, and we believe that our corporate overhead and operating expenses are among the lowest of our peers.

1

We are commercially independent, as we have no blanket employment arrangements with third-party or related-party commercial managers. Through our in-house chartering and commercial team, we market our services directly to a broad range of customers, including oil majors, national oil companies, oil and chemical traders, chemical companies, and pooling service providers. We monitor the tanker markets to understand how to best utilize our vessels and may change our chartering strategy to take advantage of changing market conditions.

As of September 30, 2021, our fleet consisted of the following 25 owned vessels:

Vessel Name

Type

Dwt Tonnes

IMO

Built

Country

Flag

Specification

Ardmore Seavaliant

Product/Chemical

49,998

2/3

Feb-13

Korea

MI

Eco-design

Ardmore Seaventure

Product/Chemical

49,998

2/3

Jun-13

Korea

MI

Eco-design

Ardmore Seavantage

Product/Chemical

49,997

2/3

Jan-14

Korea

MI

Eco-design

Ardmore Seavanguard

Product/Chemical

49,998

2/3

Feb-14

Korea

MI

Eco-design

Ardmore Sealion

Product/Chemical

49,999

2/3

May-15

Korea

MI

Eco-design

Ardmore Seafox

Product/Chemical

49,999

2/3

Jun-15

Korea

MI

Eco-design

Ardmore Seawolf

Product/Chemical

49,999

2/3

Aug-15

Korea

MI

Eco-design

Ardmore Seahawk

Product/Chemical

49,999

2/3

Nov-15

Korea

MI

Eco-design

Ardmore Endeavour

Product/Chemical

49,997

2/3

Jul-13

Korea

MI

Eco-design

Ardmore Enterprise

Product/Chemical

49,453

2/3

Sep-13

Korea

MI

Eco-design

Ardmore Endurance

Product/Chemical

49,466

2/3

Dec-13

Korea

MI

Eco-design

Ardmore Encounter

Product/Chemical

49,478

2/3

Jan-14

Korea

MI

Eco-design

Ardmore Explorer

Product/Chemical

49,494

2/3

Jan-14

Korea

MI

Eco-design

Ardmore Exporter

Product/Chemical

49,466

2/3

Feb-14

Korea

MI

Eco-design

Ardmore Engineer

Product/Chemical

49,420

2/3

Mar-14

Korea

MI

Eco-design

Ardmore Sealancer

Product

47,451

-

Jun-08

Japan

MI

Eco-mod

Ardmore Sealeader

Product

47,463

-

Aug-08

Japan

MI

Eco-mod

Ardmore Sealifter

Product

47,472

-

Jun-08

Japan

MI

Eco-mod

Ardmore Seafarer

Product

49,999

-

Jun-10

Japan

MI

Eco-mod

Ardmore Dauntless

Product/Chemical

37,764

2

Feb-15

Japan

MI

Eco-design

Ardmore Defender

Product/Chemical

37,791

2

Feb-15

Japan

MI

Eco-design

Ardmore Cherokee

Product/Chemical

25,215

2

Jan-15

Japan

MI

Eco-design

Ardmore Cheyenne

Product/Chemical

25,217

2

Mar-15

Japan

MI

Eco-design

Ardmore Chinook

Product/Chemical

25,217

2

Jul-15

Japan

MI

Eco-design

Ardmore Chippewa

Product/Chemical

25,217

2

Nov-15

Japan

MI

Eco-design

Total

25

1,115,567

SIGNIFICANT DEVELOPMENTS

Element 1 Strategic Investments and Maritime Partners

On June 17, 2021, we completed our previously-announced strategic investment in Element 1 Corp.'s methanol-to-hydrogen technology through the establishment of the e1 Marine joint venture with affiliates of Element 1 Corp and

Maritime Partners, LLC each owning 33.33% of e1 Marine and our purchase of a 10% equity stake, on a fully diluted

basis, in Element 1 Corp. We paid an aggregate of $5.0 million in cash and $5.3 million through the issuance of ASC

common shares for our equity stake in Element 1 Corp. and our equity interest in e1 Marine. In a related transaction, the

affiliate of Maritime Partners, LLC also invested $25.0 million in our newly created Series A 8.5% Cumulative

Redeemable Perpetual Preferred Shares. These represented the initial transactions under our Energy Transition Plan.

Refinancing of Two Vessels

On June 25, 2021, we completed financing transactions for two vessels, Ardmore Seawolf and Ardmore Seahawk, which were refinanced with an existing lender. The net cash proceeds to us from these transactions, after repayment of existing debt, were $15.5 million in the aggregate.

2

COVID-19

In response to the COVID-19 pandemic, many countries, ports and organizations, including those where we conduct a large part of our operations, have implemented measures to combat the outbreak, such as quarantines and travel restrictions. Such measures have caused severe trade disruptions. In addition, the pandemic has resulted and may continue to result in a significant decline in global demand for refined oil products.

As our business is the transportation of refined oil products on behalf of oil majors, oil traders and other customers, any significant decrease in demand for the cargo Ardmore transports could adversely affect demand for our vessels and services. The extent to which the pandemic may impact our results of operations and financial condition, including possible impairments, will depend on future developments, which are highly uncertain and cannot be predicted, including, among others, new information which may emerge concerning the severity of the virus and of its variants and the level of the effectiveness and delivery of vaccines and other actions to contain or treat its impact. Accordingly, an estimate of the impact on us cannot be made at this time.

3

RESULTS OF OPERATIONS

Factors You Should Consider When Evaluating Our Results

There are a number of factors that should be considered when evaluating our historical financial performance and assessing our future prospects and we use a variety of financial and operational terms and concepts when analyzing our results of operations. Please read "Item 5. Operating and Financial Review and Prospects" in our Annual Report on Form 20-F for the year ended December 31, 2020 for additional information.

In accordance with U.S. GAAP, we report gross revenues in our condensed statements of operations and report voyage expenses separately. Ship-owners base economic decisions regarding the deployment of their vessels upon actual and anticipated time charter equivalent, or TCE rates (which represent net revenues divided by revenue days) and industry analysts typically measure rates in terms of TCE rates. This is because under time charters the customer typically pays the voyage expenses, while under voyage charters, also known as spot market charters, the shipowner usually pays the voyage expenses. Accordingly, the discussion of revenue below focuses on TCE rates where applicable. Net revenues, a non-U.S. GAAP financial measure, represents revenues less voyage expenses. Voyage expenses are all expenses related to a particular voyage, which include, among other things, bunkers and port/canal costs. Net revenue utilized to calculate TCE is determined on a discharge to discharge basis, which is different from how we record revenue under U.S. GAAP. Under discharge to discharge, revenue is recognized beginning from the discharge of cargo from the prior voyage to the anticipated discharge of cargo in the current voyage, and voyage expenses are recognized as incurred.

Statement of Operations for the three months ended September 30, 2021 and September 30, 2020

The following table presents our operating results for the three months ended September 30, 2021 and September 30, 2020.

Three months ended

September 30, 2021

September 30, 2020

Variance

Variance (%)

Revenue, net

$

47,199,860

45,206,271

1,993,589

4%

Voyage expenses

(23,100,685)

(16,830,964)

(6,269,721)

(37)%

Vessel operating expenses

(15,511,136)

(16,124,919)

613,783

4%

Charter hire costs

(2,281,452)

(155,550)

(2,125,902)

(1,367)%

Depreciation

(7,978,252)

(8,117,971)

139,719

2%

Amortization of deferred drydock expenditures

(1,134,332)

(1,708,215)

573,883

34%

General and administrative expenses

Corporate

(4,293,560)

(4,116,490)

(177,070)

(4)%

Commercial and chartering

(750,472)

(791,220)

40,748

5%

Unrealized (losses) / gains on derivatives

(25,394)

11,289

(36,683)

(325)%

Interest expense and finance costs

(4,383,322)

(4,023,165)

(360,157)

(9)%

Interest income

9,000

37,652

(28,652)

(76)%

Loss before taxes

(12,249,745)

(6,613,282)

(5,636,463)

(85)%

Income tax

(44,792)

(19,715)

(25,077)

(127)%

Net loss

$

(12,294,537)

(6,632,997)

(5,661,540)

(85)%

Preferred dividend

(535,616)

-

(535,616)

(100)%

Net loss attributable to common stockholders

$

(12,830,153)

(6,632,997)

(6,197,156)

(93)%

Revenue.Revenue for the three months ended September 30, 2021, was $47.2 million, an increase of $2.0 million from $45.2 million for the three months ended September 30, 2020.

4

Our average number of operating vessels increased to 27 for the three months ended September 30, 2021, from 25.5 for the three months ended September 30, 2020.

We had four product tankers employed under time charters as at September 30, 2021 compared with none as at September 30, 2020. Revenue days derived from time charters were 362 for the three months ended September 30, 2021, as compared to none for the three months ended September 30, 2020. The increase in revenue days for time-chartered vessels resulted in an increase in revenue of $5.0 million.

We had 2,024 spot revenue days for the three months ended September 30, 2021, as compared to 2,334 for the three months ended September 30, 2020. We had 23 and 26 vessels employed directly in the spot market as at September 30, 2021 and 2020, respectively. The decrease in spot revenue days resulted in a decrease in revenue of $6.0 million, while changes in spot rates resulted in an increase in revenue of $2.8 million for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020.

Voyage Expenses.Voyage expenses were $23.1 million for the three months ended September 30, 2021, an increase of $6.3 million from $16.8 million for the three months ended September 30, 2020. Voyage expenses increased primarily due to the increase in bunker prices resulting in an increase of $8.5 million, offset by a decrease in spot revenue days of $2.2 million for the three months ended September 30, 2021, as compared to the three months ended September 30, 2020.

TCE Rate.The average TCE rate for our fleet was $10,319 per day for the three months ended September 30, 2021, a decrease of $2,113 per day from $12,432 per day for the three months ended September 30, 2020. The decrease in average TCE rate was the result of lower spot rates for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020. TCE rates represent net revenues (or revenue less voyage expenses) divided by revenue days, as further defined above.

Vessel Operating Expenses.Vessel operating expenses were $15.5 million for the three months ended September 30, 2021, a decrease of $0.6 million from $16.1 million for the three months ended September 30, 2020. This decrease is due to the timing of vessel operating expenses between quarters. Vessel operating expenses, by their nature, are prone to fluctuations between periods. Average fleet operating expenses per day, including technical management fees, were $6,373 per vessel for the three months ended September 30, 2021, as compared to $6,714 per vessel for the three months ended September 30, 2020. The timing of crew changes as a result of COVID-19 related delays in 2020 was a contributing factor in the difference for the three months ended September 30, 2021 when compared with September 30, 2020.

Charter Hire Costs. Charter hire costs were $2.3 million for the three months ended September 30, 2021. We chartered-in one vessel in September 2020 and another in June 2021.

Depreciation.Depreciation expense for the three months ended September 30, 2021, was $8.0 million, consistent with $8.1 million for the three months ended September 30, 2020.

Amortization of Deferred Drydock Expenditures.Amortization of deferred drydock expenditures for the three months ended September 30, 2021 was $1.1 million, a decrease of $0.6 million from $1.7 million for the three months ended September 30, 2020. The deferred costs of drydockings for a given vessel are amortized on a straight-line basis to the next scheduled drydocking of the vessel.

General and Administrative Expenses: Corporate. Corporate-related general and administrative expenses for the three months ended September 30, 2021 were $4.3 million, an increase of $0.2 million from $4.1 million for the three months ended September 30, 2020.

General and Administrative Expenses: Commercial and Chartering. Commercial and chartering expenses are the expenses attributable to our chartering and commercial operations departments in connection with our spot trading activities. Commercial and chartering expenses were $0.8 million for the three months ended September 30, 2021 consistent with $0.8 million for the three months ended September 30, 2020.

5

Interest Expense and Finance Costs. Interest expense and finance costs include loan interest, finance lease interest, and amortization of deferred finance fees. Interest expense and finance costs for the three months ended September 30, 2021 were $4.4 million, an increase of $0.4 million from $4.0 million for the three months ended September 30, 2020. Cash interest expense increased by $0.3 million to $3.9 million for the three months ended September 30, 2021, from $3.6 million for the three months ended September 30, 2020, primarily due to increased average LIBOR during the three months ended September 30, 2021, as compared to the three months ended September 30, 2020. Amortization of deferred finance fees for the three months ended September 30, 2021 was $0.4 million, consistent with $0.4 million for the three months ended September 30, 2020.

Statement of Operations for the nine months ended September 30, 2021 and September 30, 2020

The following table presents our operating results for the nine months ended September 30, 2021 and September 30, 2020.

Nine months ended

September 30, 2021

September 30, 2020

Variance

Variance (%)

Revenue, net

$

140,025,232

178,332,280

(38,307,048)

(21)%

Voyage expenses

(63,985,687)

(61,365,121)

(2,620,566)

(4)%

Vessel operating expenses

(45,091,468)

(46,124,309)

1,032,841

2%

Charter hire costs

(4,845,334)

(155,550)

(4,689,784)

(3,015)%

Depreciation

(23,693,915)

(23,918,364)

224,449

1%

Amortization of deferred drydock expenditures

(3,884,365)

(4,485,885)

601,520

13%

General and administrative expenses

Corporate

(12,730,427)

(12,054,616)

(675,811)

(6)%

Commercial and chartering

(2,197,189)

(2,546,319)

349,130

14%

Unrealized gains / (losses) on derivatives

54,655

(88,003)

142,658

162%

Interest expense and finance costs

(12,471,055)

(14,252,270)

1,781,215

12%

Interest income

38,991

255,842

(216,851)

(85)%

Loss before taxes

(28,780,562)

13,597,685

(42,378,247)

(312)%

Income tax

(136,006)

(128,478)

(7,528)

(6)%

Net loss

$

(28,916,568)

13,469,207

(42,385,775)

(315)%

Preferred dividend

(617,123)

-

(617,123)

(100)%

Net loss attributable to common stockholders

$

(29,533,691)

13,469,207

(43,002,898)

(319)%

Revenue.Revenue for the nine months ended September 30, 2021 was $140.0 million, a decrease of $38.3 million from $178.3 million for September 30, 2020.

Our average number of operating vessels increased to 26.4 for the nine months ended September 30, 2021, from 25.2 for the nine months ended September 30, 2020.

We had four product tankers employed under time charters as at September 30, 2021 compared with none as at September 30, 2020. Revenue days derived from time charters were 911 for the nine months ended September 30, 2021, as compared to none for the nine months ended September 30, 2020. The increase in revenue days for time-chartered vessels resulted in an increase in revenue of $12.2 million.

We had 6,126 spot revenue days for the nine months ended September 30, 2021, as compared to 6,783 for the nine months ended September 30, 2020. We had 23 and 26 vessels employed directly in the spot market as at September 30, 2021 and 2020, respectively. The decrease in spot revenue days resulted in a decrease in revenue of $17.3 million, while changes in spot rates resulted in a decrease in revenue of $33.7 million for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020.

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Voyage Expenses.Voyage expenses were $64.0 million for the nine months ended September 30, 2021, an increase of $2.6 million from $61.4 million for the nine months ended September 30, 2020. Voyage expenses increased primarily due to an increase in bunker prices resulting in an increase of $8.5 million, offset by a decrease in spot revenue days of $5.9 million for the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020.

TCE Rate.The average TCE rate for our fleet was $11,153 per day for the nine months ended September 30, 2021, a decrease of $6,071 per day from $17,224 per day for the nine months ended September 30, 2020. The decrease in average TCE rate was the result of lower spot rates for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020. TCE rates represent net revenues (or revenue less voyage expenses) divided by revenue days, as further defined above.

Vessel Operating Expenses.Vessel operating expenses were $45.1 million for the nine months ended September 30, 2021, a decrease of $1.0 million from $46.1 million for the nine months ended September 30, 2020. This decrease is due to the timing of vessel operating expenses between quarters. Vessel operating expenses, by their nature, are prone to fluctuations between periods. Average fleet operating expenses per day, including technical management fees, were $6,370 per vessel for the nine months ended September 30, 2021, as compared to $6,510 per vessel for the nine months ended September 30, 2020.

Charter Hire Costs. Charter hire costs were $4.8 million for the nine months ended September 30, 2021, an increase of $4.6 million from $0.2 million for the nine months ended September 30, 2020. We chartered-in one vessel in September 2020 and another in June 2021.

Depreciation.Depreciation expense for the nine months ended September 30, 2021 was $23.7 million, consistent with $23.9 million for the nine months ended September 30, 2020.

Amortization of Deferred Drydock Expenditures.Amortization of deferred drydock expenditures for the nine months ended September 30, 2021 was $3.9 million, a decrease of $0.6 million from $4.5 million for the nine months ended September 30, 2020. The deferred costs of drydockings for a given vessel are amortized on a straight-line basis to the next scheduled drydocking of the vessel.

General and Administrative Expenses: Corporate. Corporate-related general and administrative expenses for the nine months ended September 30, 2021 were $12.7 million, an increase of $0.6 million from $12.1 million for the nine months ended September 30, 2020.

General and Administrative Expenses: Commercial and Chartering. Commercial and chartering expenses are the expenses attributable to our chartering and commercial operations departments in connection with our spot trading activities. Commercial and chartering expenses for the nine months ended September 30, 2021 were $2.2 million, a decrease of $0.3 million from $2.5 million for the nine months ended September 30, 2020.

Interest Expense and Finance Costs. Interest expense and finance costs include loan interest, finance lease interest, and amortization of deferred finance fees. Interest expense and finance costs for the nine months ended September 30, 2021 were $12.5 million, a decrease of $1.8 million from $14.3 million for the nine months ended September 30, 2020. Cash interest expense decreased by $2.6 million to $10.4 million for September 30, 2021, from $13.0 million for the nine months ended September 30, 2020, primarily due to a decreased average LIBOR during the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020, as well as our entering into three year floating to fixed interest rate swap agreements during the second quarter of 2020 with an average fixed interest rate of 0.32%. Amortization of deferred finance fees for the nine months ended September 30, 2021 was $1.8 million, an increase of $0.5 million from $1.3 million for the nine months ended September 30, 2020.

7

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash and cash equivalents, cash flows provided by our operations, our undrawn credit facilities and capital raised through debt and equity financing transactions. As at September 30, 2021, we had $61.4 million in liquidity available with cash and cash equivalents of $54.5 million (December 31, 2020: $58.4 million) and amounts available and undrawn under our revolving credit facilities of $6.9 million (December 31, 2020: $0.0 million). We believe that our working capital, together with expected cash flows from operations, will be sufficient for our present requirements.

Our short-term liquidity requirements include the payment of operating expenses (including voyage expenses and bunkers from spot chartering our vessels), drydocking expenditures, debt servicing costs, lease payments, dividends on our shares of preferred stock, any dividends on our shares of common stock, scheduled repayments of long-term debt, as well as funding our other working capital requirements. Our short-term and spot charters contribute to the volatility of our net operating cash flow, and thus our ability to generate sufficient cash flows to meet our short-term liquidity needs. Historically, the tanker industry has been cyclical, experiencing volatility in profitability and asset values resulting from changes in the supply of, and demand for, vessel capacity. In addition, tanker spot markets historically have exhibited seasonal variations in charter rates. Tanker spot markets are typically stronger in the winter months as a result of increased oil consumption in the northern hemisphere and unpredictable weather patterns that tend to disrupt vessel scheduling. Spot charters preserve flexibility to take advantage of increasing rate environments, but also expose the ship-owner to decreasing rate environments.

Our long-term capital needs are primarily for capital expenditures and debt repayment and finance lease payments. Generally, we expect that our long-term sources of funds will be cash balances, long-term bank borrowings, finance leases and other debt or equity financings. We expect that we will rely upon internal and external financing sources, including, cash balances, bank borrowings, lease financings and the issuance of debt and equity securities, to fund acquisitions and expansion capital expenditures.

Our credit facilities and finance leases are described in Notes 3 ("Debt") and 4 ("Leases"), respectively, to our interim condensed consolidated financial statements included in this Report on Form 6-K. Our financing facilities contain covenants and other restrictions we believe are typical of debt financing collateralized by vessels, including those that restrict the relevant subsidiaries from incurring or guaranteeing additional indebtedness, granting certain liens, and selling, transferring, assigning or conveying assets. The majority of our financing facilities do not impose a restriction on dividends, distributions, or returns of capital unless an event of default has occurred, is continuing or will result from such payment. Our financing facilities require us to maintain various financial covenants. Should we not meet these financial covenants or other covenants, the lenders may declare our obligations under the applicable agreements immediately due and payable, and terminate any further loan commitments, which would significantly affect our short-term liquidity requirements. As at September 30, 2021, we were in compliance with all covenants relating to our financing facilities.

CASH FLOW DATA

Cash Flow Data for the nine months ended September 30, 2021 and September 30, 2020

Nine months ended

CASH FLOW DATA

September 30, 2021

September 30, 2020

Net cash (used in) / provided by operating activities

$

(2,306,428)

46,915,954

Net cash provided by / (used in) investing activities

$

2,558,404

(20,035,066)

Net cash used in financing activities

$

(4,140,655)

(20,386,833)

Cash (used in) / provided by operating activities

For the nine months ended September 30, 2021, net cash used in operating activities was $2.3 million. Net loss adjusted for non-cash items resulted in an inflow of $2.2 million. Changes in operating assets and liabilities resulted in an inflow of $0.5 million and drydock payments were $4.9 million. For the nine months ended September 30, 2020, net cash provided by operating activities was $46.9 million. Net income adjusted for non-cash items resulted in an inflow of $45.7 million. Changes in operating assets and liabilities resulted in an inflow of $5.7 million and drydock payments were $4.5 million.

8

Cash provided by / (used in) / investing activities

For the nine months ended September 30, 2021, net cash provided by investing activities was $2.6 million, with proceeds from the sale of the Ardmore Seamariner in January 2021 of $9.9 million partially offset by payments made for our investments in Element 1 Corp. and our e1 Marine joint venture and related transaction costs of $5.1 million, as well as payments in relation to vessel equipment, advances for ballast water treatment systems and other non-current assets of $2.2 million. For the nine months ended September 30, 2020, net cash used in investing activities was $20.0 million. Payments made for the acquisition of the Ardmore Seafarer and other vessel equipment were $17.7 million. Payments in relation to ballast water treatment systems, leasehold improvements and other non-current assets were $2.4 million.

Cash used in financing activities

For the nine months ended September 30, 2021, the net cash used in financing activities was $4.1 million. Repayments of debt amounted to $60.3 million and total principal repayments of finance lease arrangements were $14.7 million. Net proceeds from the issue of preferred stock were $23.0 million and proceeds from finance lease arrangements were $49.0 million. Dividend payments on Series A Redeemable Preferred Stock amounted to $0.3 million. For the nine months ended September 30, 2020, the net cash used in financing activities was $20.4 million. Proceeds from debt were $7.8 million. Repayments of debt amounted to $12.6 million and total principal repayments of finance lease arrangements were $13.9 million. Payments of cash dividends were $1.7 million.

CAPITAL EXPENDITURES

Drydock

The drydocking schedule for our vessels that were in operation as of September 30, 2021 is as follows:

For the Years Ending December 31,

2021

2022

2023

2024

Number of vessels in drydock (excluding in-water surveys)

4 (1)

-

9

6

(1) Includes four drydockings which occurred in the nine months ended September 30, 2021

We endeavor to manage the timing of future dockings across the fleet in order to minimize the number of vessels that are drydocked at any one time. As our fleet matures and expands, our drydock expenses are likely to increase.

Ballast Water Treatment Systems Installation

The ballast water treatment systems ("BWTS") installation schedule for our vessels that were in operation as of September 30, 2021 is as follows:

For the Years Ending December 31,

2021

2022

2023

2024

Number of ballast water treatment system installations

1 (1)

-

7

5

(1) Includes one ballast water treatment system installation which occurred in the nine months ended September 30, 2021.

We endeavor to manage the timing of future ballast water treatment system installations across the fleet in order to minimize the number of vessels that are completing ballast water treatment system installations at any one time.

9

CRITICAL ACCOUNTING ESTIMATES

We prepare our financial statements in accordance with U.S. GAAP, which require us to make estimates in the application of our accounting policies based on our best assumptions, judgments and opinions. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ materially from our assumptions and estimates. Accounting estimates and assumptions that we consider to be the most critical to an understanding of our financial statements because they inherently involve significant judgments and uncertainties are discussed in "Item 5. Operating and Financial Review and Prospects" in our Annual Report on Form 20-F for the year ended December 31, 2020. There have been no significant changes to these estimates and assumptions in three and nine months ended September 30, 2021.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity or capital resources.

DISCLOSURES ABOUT MARKET RISK

In addition to the risks set forth below, you should carefully consider the risk factors discussed in "Item 3. Key Information - D. Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2020, regarding risks which could materially affect our business, financial condition and results of operations.

Operational Risk

We are exposed to operating costs arising from various vessel operations. Key areas of operating risk include drydock, repair costs, insurance, piracy and fuel prices. Our risk management includes various strategies for technical management of drydock and repairs coordinated with a focus on measuring cost and quality. Our relatively young fleet helps to minimize the risk. Given the potential for accidents and other incidents that may occur in vessel operations, the fleet is insured against various types of risk. We have established a set of countermeasures in order to minimize the risk of piracy attacks during voyages, particularly through regions which the Joint War Committee or our insurers consider high risk, or which they recommend monitoring, to make the navigation safer for sea staff and to protect our assets. The price and supply of fuel is unpredictable and can fluctuate from time to time. We periodically consider and monitor the need for fuel hedging to manage this risk. We are also subject to operational risks relating to COVID-19 as described in the "Significant Developments" section of this report.

Foreign Exchange Risk

The majority of our transactions, assets and liabilities are denominated in U.S. Dollars, our functional currency. We incur certain general and operating expenses in other currencies (primarily the Euro, Singapore Dollar, and Pounds Sterling) and, as a result, there is a risk that currency fluctuations may have a negative effect on the value of our cash flows. Such risk may also have an adverse effect on our financial condition and results of operations. We believe these adverse effects to be immaterial and we have not entered into any derivative contracts to manage foreign exchange risk during three and nine months ended September 30, 2021.

Interest Rate Risk

We are exposed to the impact of interest rate changes, primarily through borrowings that require us to make interest payments based on LIBOR. Significant increases in interest rates could adversely affect our results of operations and our ability to repay debt. We regularly monitor interest rate exposure and enter into swap arrangements to hedge exposure where it is considered economically advantageous to do so.

10

We are exposed to the risk of credit loss in the event of non-performance by the counterparties to the interest rate swap agreements. In order to minimize counterparty risk, we have only entered into derivative transactions with investment grade counterparties at the time of the transactions. In addition, to the extent possible and practical, interest rate swaps are entered into with different counterparties to reduce concentration risk.

During the three months ended June 30, 2020, we entered into floating-to-fixed interest rate swap agreements over a three-year term with multiple counterparties. In accordance with these transactions, we will pay an average fixed-rate interest amount of 0.32% and will receive floating rate interest amounts based on LIBOR. These interest rate swaps have a total notional amount of $324.1 million of which $273.3 million are designated as cash flow hedges.

LIBOR is scheduled to be phased out and alternative reference rates for interest rates may be adopted, which could affect our interest rate risk. For additional information, please see the risk factor entitled "There is uncertainty as to the continued use of LIBOR in the future, and the interest rates on our LIBOR-based obligations may increase in the future" Item 3.D (Key Information--Risk Factors) in our Annual Report on Form 20-F for the year ended December 31, 2020.

Liquidity Risk

Our principal objective in relation to liquidity is to ensure that we have access at minimum cost to sufficient liquidity to enable us to meet our obligations as they come due and to provide adequately for contingencies. Our policy is to manage our liquidity by forecasting of cash flows arising from or expense relating to spot voyage revenue, time charter revenue, pool revenue, vessel operating expenses, general and administrative overhead and servicing of debt.

Credit Risk

There is a concentration of credit risk with respect to our cash and cash equivalents to the extent that substantially all of the amounts are held in ABN Bank and Nordea Bank, and in short-term funds (with a credit risk rating of at least AA) managed by Blackrock State Street Global Advisors and JPMorgan Asset Management. While we believe this risk of loss is low, we intend to review and revise our policy for managing cash and cash equivalents if considered prudent to do so.

We limit our credit risk with trade accounts receivable by performing ongoing credit evaluations of our customers' financial condition. We generally do not require collateral for our trade accounts receivable.

We may be exposed to a credit risk in relation to vessel employment and at times may have multiple vessels employed by one charterer. We consider and evaluate concentration of credit risk regularly and perform on-going evaluations of these charterers for credit risk, including credit concentration risk. As at September 30, 2021, our 27 vessels in operation (including two chartered-in vessel) were employed with 22 different charterers.

Inflation

We do not expect inflation to be a significant risk to direct expenses in the current and foreseeable economic environment.

11

Ardmore Shipping Corporation

INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Page

Unaudited Interim Condensed Consolidated Balance Sheets as at September 30, 2021 and December 31, 2020

F-2

Unaudited Interim Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and September 30, 2020

F-3

Unaudited Interim Condensed Consolidated Statements of Comprehensive (Loss) / Income for the three and nine months ended September 30, 2021 and September 30, 2020

F-4

Unaudited Interim Condensed Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholders' Equity for the three and nine months ended September 30, 2021 and September 30, 2020

F-5

Unaudited Interim Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and September 30, 2020

F-6

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

F-7

F-1

Ardmore Shipping Corporation

Unaudited Interim Condensed Consolidated Balance Sheets

As at September 30, 2021 and December 31, 2020

(Expressed in U.S. Dollars, except as indicated)

As at

September 30, 2021

December 31, 2020

ASSETS

Current assets

Cash and cash equivalents

54,476,651

58,365,330

Receivables, net of allowance for bad debts of $0.8 million (2020: $0.5 million)

18,523,409

17,808,496

Prepaid expenses and other assets

3,161,888

3,683,910

Advances and deposits

3,779,031

2,516,646

Inventories

10,267,752

10,274,062

Vessel held for sale

-

9,895,000

Total current assets

90,208,731

102,543,444

Non-current assets

Investments and other assets, net

11,009,518

678,632

Vessels and vessel equipment, net

610,733,088

631,458,305

Deferred drydock expenditures, net

10,089,582

10,216,090

Advances for ballast water treatment systems

2,032,894

2,568,874

Amount receivable in respect of finance leases

2,880,000

2,880,000

Non-current portion of derivative assets

255,139

-

Operating lease, right-of-use asset

1,348,032

1,662,510

Total non-current assets

638,348,253

649,464,411

TOTAL ASSETS

728,556,984

752,007,855

LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY

Current liabilities

Accounts payable

7,929,529

9,125,321

Accrued expenses and other liabilities

12,378,288

11,233,767

Deferred revenue

1,364,185

-

Accrued interest on debt and finance leases

708,130

769,304

Current portion of long-term debt

15,076,992

22,456,396

Current portion of finance lease obligations

20,724,948

18,454,222

Current portion of derivative liabilities

402,469

397,418

Current portion of operating lease obligations

332,868

463,559

Total current liabilities

58,917,409

62,899,987

Non-current liabilities

Non-current portion of long-term debt

136,470,315

188,054,568

Non-current portion of finance lease obligations

210,815,138

179,250,162

Non-current portion of derivative liabilities

-

433,974

Non-current portion of operating lease obligations

790,420

1,034,218

Total non-current liabilities

348,075,873

368,772,922

TOTAL LIABILITIES

406,993,282

431,672,909

Redeemable Preferred Stock

Cumulative Series A 8.5% redeemable preferred stock

23,041,348

-

Total redeemable preferred stock

23,041,348

-

Stockholders' equity

Common stock

363,839

352,067

Additional paid in capital

425,312,334

418,180,983

Accumulated other comprehensive loss

(151,159)

(729,135)

Treasury stock

(15,635,765)

(15,635,765)

Accumulated deficit

(111,366,895)

(81,833,204)

Total stockholders' equity

298,522,354

320,334,946

Total redeemable preferred stock and stockholders' equity

321,563,702

320,334,946

TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY

728,556,984

752,007,855

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

F-2

Ardmore Shipping Corporation

Unaudited Interim Condensed Consolidated Statements of Operations

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares)

Three months ended

Nine months ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Revenue, net

47,199,860

45,206,271

140,025,232

178,332,280

Voyage expenses

(23,100,685)

(16,830,964)

(63,985,687)

(61,365,121)

Vessel operating expenses

(15,511,136)

(16,124,919)

(45,091,468)

(46,124,309)

Charter hire costs

(2,281,452)

(155,550)

(4,845,334)

(155,550)

Depreciation

(7,978,252)

(8,117,971)

(23,693,915)

(23,918,364)

Amortization of deferred drydock expenditures

(1,134,332)

(1,708,215)

(3,884,365)

(4,485,885)

General and administrative expenses

Corporate

(4,293,560)

(4,116,490)

(12,730,427)

(12,054,616)

Commercial and chartering

(750,472)

(791,220)

(2,197,189)

(2,546,319)

Unrealized (losses) / gains on derivatives

(25,394)

11,289

54,655

(88,003)

Interest expense and finance costs

(4,383,322)

(4,023,165)

(12,471,055)

(14,252,270)

Interest income

9,000

37,652

38,991

255,842

(Loss) / income before taxes

(12,249,745)

(6,613,282)

(28,780,562)

13,597,685

Income tax

(44,792)

(19,715)

(136,006)

(128,478)

Net (loss) / income

(12,294,537)

(6,632,997)

(28,916,568)

13,469,207

Preferred dividend

(535,616)

-

(617,123)

-

Net (loss) / income attributable to common stockholders

(12,830,153)

(6,632,997)

(29,533,691)

13,469,207

(Loss) / earnings per share, basic

(0.37)

(0.20)

(0.88)

0.41

Weighted average number of shares outstanding,
basic

34,363,884

33,285,255

33,720,853

33,243,493

(Loss) / earnings per share, diluted

(0.37)

(0.20)

(0.88)

0.40

Weighted average number of shares outstanding,
diluted

34,363,884

33,285,255

33,720,853

33,426,412

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

F-3

Ardmore Shipping Corporation

Unaudited Interim Condensed Consolidated Statements of Comprehensive (Loss) / Income

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars)

Three months ended

Nine months ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Net (loss) / income

(12,294,537)

(6,632,997)

(28,916,568)

13,469,207

Other comprehensive (loss) / income, net of tax

Net change in unrealized (losses) / gains on cash flow hedges

(7,136)

68,024

577,976

(705,395)

Other comprehensive (loss) / income, net of tax

(7,136)

68,024

577,976

(705,395)

Comprehensive (loss) / income

(12,301,673)

(6,564,973)

(28,338,592)

12,763,812

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

F-4

Ardmore Shipping Corporation

Unaudited Interim Condensed Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholders' Equity

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares)

Accumulated

Redeemable Preferred

Additional

other

Stock

Common Stock

paid in

comprehensive

Treasury

Accumulated

Shares

Amount

Shares

Amount

capital

loss

stock

deficit

TOTAL

Balance as at July 1, 2020

-

-

33,285,255

352,067

416,811,014

(773,419)

(15,348,909)

(55,684,805)

345,355,948

Share-based compensation

-

-

-

-

806,719

-

-

-

806,719

Changes in unrealized loss on cash flow hedges

-

-

-

-

-

68,024

-

-

68,024

Net loss

-

-

-

-

-

-

-

(6,632,997)

(6,632,997)

Balance as at September 30, 2020

-

-

33,285,255

352,067

417,617,733

(705,395)

(15,348,909)

(62,317,802)

339,597,694

Balance as at July 1, 2021

25,000

23,041,348

34,363,884

363,839

424,629,576

(144,023)

(15,635,765)

(98,536,742)

310,676,885

Share-based compensation

-

-

-

-

682,758

-

-

-

682,758

Changes in unrealized loss on cash flow hedges

-

-

-

-

-

(7,136)

-

-

(7,136)

Preference dividend

-

-

-

-

-

-

-

(535,616)

(535,616)

Net loss

-

-

-

-

-

-

-

(12,294,537)

(12,294,537)

Balance as at September 30, 2021

25,000

23,041,348

34,363,884

363,839

425,312,334

(151,159)

(15,635,765)

(111,366,895)

298,522,354

Accumulated

Redeemable Preferred

Additional

other

Stock

Common Stock

paid in

comprehensive

Treasury

Accumulated

Shares

Amount

Shares

Amount

capital

loss

stock

deficit

TOTAL

Balance as at January 1, 2020

-

-

33,097,831

350,192

416,841,494

-

(15,348,909)

(75,787,009)

326,055,768

Issue of common stock

-

-

187,424

1,875

(1,875)

-

-

-

-

Share-based compensation

-

-

-

-

2,437,422

-

-

-

2,437,422

Payment of dividend

-

-

-

-

(1,659,308)

-

-

-

(1,659,308)

Changes in unrealized loss on cash flow hedges

-

-

-

-

-

(705,395)

-

-

(705,395)

Net income

-

-

-

-

-

-

-

13,469,207

13,469,207

Balance as at September 30, 2020

-

-

33,285,255

352,067

417,617,733

(705,395)

(15,348,909)

(62,317,802)

339,597,694

Balance as at January 1, 2021

-

-

33,186,603

352,067

418,180,983

(729,135)

(15,635,765)

(81,833,204)

320,334,946

Issue of redeemable preferred stock, net of issuance costs

25,000

23,041,348

-

-

-

-

-

-

-

Issue of common stock

-

-

1,177,281

11,772

5,308,228

-

-

-

5,320,000

Share-based compensation

-

-

-

-

1,823,123

-

-

-

1,823,123

Changes in unrealized gain on cash flow hedges

-

-

-

-

-

577,976

-

-

577,976

Preference dividend

-

-

-

-

-

-

-

(617,123)

(617,123)

Net loss

-

-

-

-

-

-

-

(28,916,568)

(28,916,568)

Balance as at September 30, 2021

25,000

23,041,348

34,363,884

363,839

425,312,334

(151,159)

(15,635,765)

(111,366,895)

298,522,354

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

F-5

Ardmore Shipping Corporation

Unaudited Interim Condensed Consolidated Statements of Cash Flows

For three and nine months ended September 30, 2021and September 30, 2020

(Expressed in U.S. Dollars)

Nine months ended

September 30, 2021

September 30, 2020

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) / income

(28,916,568)

13,469,207

Adjustments to reconcile net (loss) / income to net cash (used in) / provided by operating activities:

Depreciation

23,693,915

23,918,364

Amortization of deferred drydock expenditures

3,884,365

4,485,885

Share-based compensation

1,823,123

2,437,422

Amortization of deferred finance fees

1,797,865

1,301,183

Unrealized (gains) / losses on derivatives

(54,655)

88,003

Foreign exchange

(60,011)

39,538

Deferred drydock expenditures

(4,948,073)

(4,535,473)

Changes in operating assets and liabilities:

Receivables

(714,913)

10,358,259

Prepaid expenses and other assets

522,022

323,816

Advances and deposits

(1,262,385)

1,232,291

Inventories

6,310

1,237,496

Accounts payable

(150,015)

(936,126)

Accrued expenses and other liabilities

812,594

(6,422,257)

Deferred revenue

1,364,185

-

Accrued interest on debt and finance leases

(104,187)

(81,654)

Net cash (used in) / provided by operating activities

(2,306,428)

46,915,954

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of vessels

9,895,000

-

Payments for acquisition of vessels and vessel equipment

(1,985,816)

(17,664,815)

Advances for ballast water treatment systems

(157,879)

(2,248,826)

Payments for other non-current assets

(80,308)

(121,425)

Payments for equity investments

(5,112,593)

-

Net cash provided by / (used in) investing activities

2,558,404

(20,035,066)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long-term debt

-

7,801,248

Repayments of long-term debt

(60,254,615)

(12,579,795)

Proceeds from finance leases

49,000,000

-

Repayments of finance leases

(14,691,204)

(13,948,978)

Payments for deferred finance fees

(980,000)

-

Payment of dividend

-

(1,659,308)

Issuance of preferred stock, net

23,041,348

-

Payment of preferred dividend

(256,184)

-

Net cash (used in) financing activities

(4,140,655)

(20,386,833)

Net (decrease) / increase in cash and cash equivalents

(3,888,679)

6,494,055

Cash and cash equivalents at the beginning of the year

58,365,330

51,723,107

Cash and cash equivalents at the end of the period

54,476,651

58,217,162

Cash paid during the period for interest in respect of debt

3,508,500

5,175,528

Cash paid during the period for interest in respect of finance leases

6,951,902

7,821,747

Cash paid during the period for operating lease liabilities

345,096

367,210

Cash paid during the period for income taxes

112,722

75,480

Non-cash investing activity: Investment in Element 1 by issuing 950,000shares of common stock

5,320,000

-

Non-cash financing activity: Accrued preferred dividends

360,939

-

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

F-6

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares and as otherwise stated)

1. General information and significant accounting policies

1.1. Background

Ardmore Shipping Corporation (NYSE: ASC) ("ASC"), together with its subsidiaries (collectively, the "Company"), provides seaborne transportation of petroleum products and chemicals worldwide to oil majors, national oil companies, oil and chemical traders, and chemical companies, with its modern, fuel-efficient fleet of mid-size product and chemical tankers and the Company operates its business in one operating segment, the transportation of refined petroleum products and chemicals. As at September 30, 2021, the Company had 25 owned vessels in operation. The average age of the Company's owned fleet as at September 30, 2021 was 8 years. The Company has also chartered in one vessel since the third quarter of 2021 on a short-term lease that is scheduled to expire in September 2022 and another vessel in the second quarter of 2021 on a short-term lease that is scheduled to expire in the first quarter of 2022.

In response to the COVID-19 pandemic, many countries, ports and organizations, including those where ASC conducts a large part of its operations, have implemented measures to combat the outbreak, such as quarantines and travel restrictions. Such measures have caused severe trade disruptions. In addition, the pandemic has resulted and may continue to result in a significant decline in global demand for refined oil products. As the Company's business is the transportation of refined oil products on behalf of oil majors, oil traders and other customers, any significant decrease in demand for the cargo the Company transports could adversely affect demand for its vessels and services. The extent to which the pandemic may impact the Company's results of operations and financial condition, including possible impairments, will depend on future developments, which are highly uncertain and cannot be predicted, including, among others, new information which may emerge concerning the virus and its variants and the level of the effectiveness and delivery of vaccines and other actions to contain or treat its impact. Accordingly, an estimate of the impact on the Company cannot be made at this time.

1.2. Management and organizational structure

ASC was incorporated in the Republic of the Marshall Islands on May 14, 2013. ASC commenced business operations through its predecessor company, Ardmore Shipping LLC, on April 15, 2010.

As at September 30, 2021, ASC had (a) 79 wholly owned subsidiaries, the majority of which represent single ship-owning companies for ASC's fleet, (b) one50%-owned joint venture, Anglo Ardmore Ship Management Limited ("AASML"), which provides technical management services to a majority of the ASC fleet, (c) one33.33%-owned joint venture, e1 Marine LLC, to market and sell Element 1 Corp.'s methanol-to-hydrogen technology to the marine sector, and (d) a 10% equity stake, on a fully diluted basis, in Element 1 Corp. During the three months ended June 30, 2021, the Company paid an aggregate of $5.0 million in cash and $5.3 million through the issuance of ASC common shares for the Company's equity stake in Element 1 Corp. and its equity interest in e1 Marine which is included in investments and other assets, net in the condensed consolidated balance sheet as of September 30, 2021.

Ardmore Shipping (Bermuda) Limited, a wholly owned subsidiary incorporated in Bermuda, carries out the Company's management services and associated functions. Ardmore Shipping Services (Ireland) Limited, a wholly owned subsidiary incorporated in Ireland, provides the Company's corporate, accounting, fleet administration and operations services. Each of Ardmore Shipping (Asia) Pte. Limited and Ardmore Shipping (Americas) LLC, wholly owned subsidiaries incorporated in Singapore and Delaware, respectively, performs commercial management and chartering services for the Company.

1.3. Basis of preparation

The accompanying interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"), and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") that apply to interim condensed financial statements.

F-7

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares and as otherwise stated)

Accordingly, they do not include all of the information and footnotes normally included in consolidated financial statements prepared in conformity with U.S. GAAP. They should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2020 Annual Report on Form 20-F, filed with the SEC on March 5, 2021. The condensed consolidated balance sheet as of December 31, 2020 has been derived from the audited financial statements at that date but does not include all of the footnotes required by U.S. GAAP for complete financial statements.

The accompanying interim condensed consolidated financial statements are unaudited and include all adjustments (consisting of normal recurring adjustments) that management considers necessary for a fair presentation of its condensed consolidated financial position and results of operations for the interim periods presented.

The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the entire year.

All subsidiaries are 100% directly or indirectly owned by ASC. All intercompany balances and transactions have been eliminated on consolidation.

1.4. Significant accounting policies

There have been no changes in the Company's significant accounting policies for the three and nine months ended September 30, 2021 as compared to the significant accounting policies described in the Company's audited consolidated financial statements for the year ended December 31, 2020. The accounting policies used in the preparation of the unaudited interim condensed consolidated financial statements are consistent with those applied in the audited financial statements for the year ended December 31, 2020.

2. Equity Investment

Element 1 Corp.- On June 17, 2021, the Company purchased a 10% equity stake in Element 1 Corp. ("E1"), a leading developer of advanced hydrogen generation systems used to power fuel cells, in exchange for $4.0 million in cash and $5.3 million through the issuance of the Company's common shares. The Company's 10% equity stake consists of 581,795 shares of E1's common stock and the Company also received 286,582 warrants to purchase additional Element 1 Corp. common stock which expire on the third anniversary from the date of the investment. The Company's total investment in E1 amounted to $9.3 million and is allocated to investment in the ordinary shares and warrants based on the relative fair value. The Company holds one board seat out of five, resulting in 20% voting rights and thus an ability to exercise significant influence in E1. Accordingly, the Company accounts for the investment in E1 using the equity method in accordance with ASC 323, Investments - Equity Method and Joint Ventures.

e1 Marine LLC - On June 17, 2021, the Company established a joint venture, e1 Marine LLC, with E1. and Maritime Partners LLC ("MP") to deliver a unique hydrogen delivery system to the marine sector with each owning 33.33% of e1 Marine. The Company accounts for the investments in e1 Marine LLC using the equity method in accordance with ASC 323, Investments - Equity Method and Joint Ventures.

The Company records its share of earnings and losses in these investment on a quarterly basis with a \loss of $0.05 million recognized in the three months ended September 30, 2021. The Company recorded an investment of $10.4 million, inclusive of transaction costs (E1 investment of $9.9 million and e1 Marine LLC investment of $0.5 million), which is included in investments and other assets, net in the condensed consolidated balance sheet as of September 30, 2021.

F-8

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares and as otherwise stated)

3. Debt

As at September 30, 2021, the Company had five loan facilities, which it has used primarily to finance vessel acquisitions or vessels under construction and also for working capital. The Company's applicable ship-owning subsidiaries have granted first-priority mortgages against the relevant vessels in favor of the lenders as security for the Company's obligations under the loan facilities, which totaled 11 vessels as at September 30, 2021. ASC and its subsidiary Ardmore Shipping LLC have provided guarantees in respect of the loan facilities and ASC has granted a guarantee over its trade receivables in respect of the ABN AMRO Revolving Facility. These guarantees can be called upon following a payment default. The outstanding principal balances on each loan facility as at September 30, 2021 and December 31, 2020 were as follows:

As at

September 30, 2021

December 31, 2020

NIBC Bank Facility

-

4,625,000

Nordea/SEB Joint Bank Facility

58,711,533

88,503,292

Nordea/SEB Revolving Facility

28,878,310

39,237,241

ABN/CACIB Joint Bank Facility

52,785,708

57,124,104

ABN AMRO Revolving Facility

4,453,721

14,394,250

IYO Bank Facility

8,800,000

10,000,000

Total debt

153,629,272

213,883,887

Deferred finance fees

(2,081,965)

(3,372,923)

Net total debt

151,547,307

210,510,964

Current portion of long-term debt

15,834,489

23,506,236

Current portion of deferred finance fees

(757,497)

(1,049,840)

Total current portion of long-term debt

15,076,992

22,456,396

Non-current portion of long-term debt

136,470,315

188,054,568

Future minimum scheduled repayments under the Company's loan facilities for each year are as follows:

As at

September 30, 2021

2021 (1)

3,958,622

2022

15,834,489

2023

20,288,211

2024

109,947,950

2025

3,600,000

153,629,272

(1)Three-month period ending December 31, 2021

NIBC Bank Facility

On September 12, 2014, one of ASC's subsidiaries entered into a $13.5 million long-term loan facility with NIBC Bank N.V. to finance a secondhand vessel acquisition which delivered to the Company in 2014. The facility was drawn down in September 2014. Interest is calculated at a rate of LIBOR plus 2.90%. Principal repayments on the loans are made on a quarterly basis, with a balloon payment payable with the final instalment. On January 7, 2021, Ardmore repaid the facility in full.

F-9

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares and as otherwise stated)

3. Debt (continued)

Nordea / SEB Joint Bank Facility and Nordea / SEB Revolving Facility

On December 11, 2019, eight of ASC's subsidiaries entered into a $100 million long-term loan facility and a $40 million revolving credit facility with Nordea Bank AB (publ) and Skandinaviska Enskilda Banken AB (publ) to refinance existing facilities. The facility was fully drawn down in December 2020 and 2019. Interest is calculated at a rate of LIBOR plus 2.4%. Principal repayments on the term loans are made on a quarterly basis, with a balloon payment payable with the final instalment. The revolving facility may be drawn down or repaid with five days' notice. On June 25, 2021, Ardmore partially repaid the facility in connection with the refinancing of two of the vessels under a new sale and leaseback arrangement. The term loan and revolving credit facility mature in December 2024.

ABN/CACIB Joint Bank Facility

On December 11, 2019, four of ASC's subsidiaries entered into a $61.5 million long-term loan facility with ABN AMRO Bank N.V. and Credit Agricole Corporate and Investment Bank to refinance existing facilities. Interest is calculated at a rate of LIBOR plus 2.4%. Principal repayments on the term loans are made on a quarterly basis, with a balloon payment payable with the final instalment. The loan facility matures in December 2024.

ABN AMRO Revolving Facility

On October 24, 2017, the Company entered into a $15 million revolving credit facility with ABN AMRO to fund working capital. Interest under this facility is calculated at a rate of LIBOR plus 3.9%. On October 7, 2021, the Company exercised an option to extend this facility for a further year to June 2023. Interest payments are payable on a quarterly basis.

IYO Bank Facility

On December 17, 2020, one of ASC's subsidiaries entered into a $10.0 million long-term loan facility with IYO Bank to finance a secondhand vessel acquisition which vessel delivered to the Company in 2020. The facility was drawn down in December 2020. Interest is calculated at a rate of LIBOR plus 2.25%. Principal repayments on the loans are made on a quarterly basis, with a balloon payment payable with the final instalment. The loan facility matures in December 2025.

F-10

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares and as otherwise stated)

3. Debt (continued)

Long-term debt financial covenants

The Company's existing long-term debt facilities described above include certain covenants. The financial covenants require that the Company:

maintain minimum solvency of not less than 30%;
maintain minimum cash and cash equivalents (of which at least 60% of such minimum amount is held in cash and which includes the undrawn portion of the Nordea/SEB Revolving Facility), based on the number of vessels

owned and chartered-in and 5% of outstanding debt; the required minimum cash and cash equivalents as at September 30, 2021 was $19.2 million;

ensure that the aggregate fair market value of the applicable vessels plus any additional collateral is, depending on the facility, no less than 130% of the debt outstanding for the facility;
maintain a corporate net worth of not less than $150million; and
maintain positive working capital, excluding balloon repayments and amounts outstanding under the ABN AMRO Revolving Facility, provided that the facility has a remaining maturity of more than three months.

The Company was in full compliance with all of its long-term debt financial covenants as at September 30, 2021 and December 31, 2020.

F-11

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares and as otherwise stated)

4. Leases

As at September 30, 2021, the Company was a party, as the lessee, to seven finance lease facilities. The Company's applicable ship-owning subsidiaries have granted first-priority mortgages against the relevant vessels in favor of the lenders as security for the Company's obligations under the finance lease facilities, which totaled 14 vessels as at September 30, 2021. ASC has provided guarantees in respect of the finance lease facilities. These guarantees can be called upon following a payment default. The outstanding principal balances on each finance lease facility as at September 30, 2021 and December 31, 2020 were as follows:

As at

September 30, 2021

December 31, 2020

Japanese Leases No.1 and 2

22,886,900

26,531,100

Japanese Lease No.3

11,338,000

13,119,000

CMBFL Leases No.1 to 4

66,992,860

72,459,942

Ocean Yield ASA

51,683,760

55,729,620

Japanese Lease No.4

20,456,241

21,949,099

China Huarong Leases

38,530,125

41,992,081

CMBFL / Shandong

67,060,600

-

Finance lease obligations

278,948,486

231,780,842

Amounts representing interest and deferred finance fees

(47,408,400)

(34,076,458)

Finance lease obligations, net of interest and deferred finance fees

231,540,086

197,704,384

Current portion of finance lease obligations

21,436,253

19,084,775

Current portion of deferred finance fees

(711,305)

(630,553)

Non-current portion of finance lease obligations

213,207,992

181,250,674

Non-current portion of deferred finance fees

(2,392,854)

(2,000,512)

Total finance lease obligations, net of deferred finance fees

231,540,086

197,704,384

Maturity analysis of the Company's finance lease facilities for each year are as follows:

As at

September 30, 2021

2021 (1)

8,065,589

2022

32,164,805

2023

43,722,900

2024

29,888,892

2025

81,557,056

2026 - 2030

83,549,244

Finance lease obligations

278,948,486

Amounts representing interest and deferred finance fees

(47,408,400)

Finance lease obligations, net of interest and deferred finance fees

231,540,086

(1) Three-month period ending December 31, 2021

F-12

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares and as otherwise stated)

4. Leases (continued)

Japanese Leases No. 1 and 2

On May 30, 2017, two of ASC's subsidiaries entered into an agreement for the sale and leaseback (under a finance lease arrangement) of the Ardmore Sealeader and Ardmore Sealifter, with JPV No. 7 and JPV No. 8,respectively. The facility was drawn down in May 2017. Repayments on the leases are made on a monthly basis and include principal and interest. The finance leases are scheduled to expire in 2023 and include purchase options exercisable by the Company. As part of the lease arrangement, the Company provided the purchasers with $2.9 million in the aggregate which shall be repaid at the end of the lease period, or upon the exercise of any of the purchase options. This amount is included in the consolidated balance sheets as 'Amount receivable in respect of finance leases' with the associated finance lease liability presented gross of the $2.9 million.

Japanese Lease No. 3

On January 30, 2018, one of ASC's subsidiaries entered into an agreement for the sale and leaseback (under a finance lease arrangement) of the Ardmore Sealancer with Neil Co., Ltd. The facility was drawn down in January 2018. Repayments on the lease are made on a monthly basis and include principal and interest. The finance lease is scheduled to expire in 2024 and includes purchase options exercisable by the Company. As part of the lease arrangement, the Company provided the purchaser with $1.4 million in the aggregate which shall be repaid at the end of the lease period, or upon the exercise of any of the purchase options. This amount has been offset against the finance lease liability in the consolidated balance sheets, with the associated finance lease liability presented net of the $1.4 million.

CMBFL Leases No. 1 to 4

On June 26, 2018, two of ASC's subsidiaries entered into an agreement for the sale and leaseback (under a finance lease arrangement) of the Ardmore Endurance and Ardmore Enterprise, respectively, with CMB Financial Leasing Co., Ltd ("CMBFL"). The facility was drawn down in June 2018. Interest is calculated at a rate of LIBOR plus 3.10%. Principal repayments on the leases are made on a quarterly basis. The finance leases are scheduled to expire in 2025 and include a mandatory purchase obligation for the Company to repurchase the vessels, as well as purchase options exercisable by the Company, which the Company could elect to exercise at an earlier date.

On October 25, 2018, two of ASC's subsidiaries entered into an agreement for the sale and leaseback (under a finance lease arrangement) of the Ardmore Encounter and Ardmore Explorer, respectively, with CMBFL. The facility was drawn down in October 2018. Interest is calculated at a rate of LIBOR plus 3.00%. Principal repayments on the leases are made on a quarterly basis. The finance leases are scheduled to expire in 2025 and include a mandatory purchase obligation for the Company to repurchase the vessels, as well as purchase options exercisable by the Company, which the Company could elect to exercise at an earlier date.

Ocean Yield ASA

On October 25, 2018, two of ASC's subsidiaries entered into an agreement for the sale and leaseback (under a finance lease arrangement) of the Ardmore Dauntless and Ardmore Defender, respectively, with Ocean Yield ASA. The facility was drawn down in October 2018. Interest is calculated at a rate of LIBOR plus 4.50%. Principal repayments on the leases are made on a monthly basis. The finance leases are scheduled to expire in 2030 and include a mandatory purchase obligation for the Company to repurchase the vessels, as well as purchase options exercisable by the Company, which the Company could elect to exercise at an earlier date.

F-13

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares and as otherwise stated)

4. Leases (continued)

Japanese Lease No. 4

On November 30, 2018, one of ASC's subsidiaries entered into an agreement for the sale and leaseback (under a finance lease arrangement), of the Ardmore Engineer with Rich Ocean Shipping. The facility was drawn down in December 2018. Interest is calculated at a rate of LIBOR plus 3.20%. Principal repayments on the lease are made on a monthly basis. The finance lease is scheduled to expire in 2029 and includes a mandatory purchase obligation for the Company to repurchase the vessel, as well as purchase options exercisable by the Company, which the Company could elect to exercise at an earlier date.

China Huarong Leases

On November 30, 2018, two of ASC's subsidiaries entered into an agreement for the sale and leaseback (under a finance lease arrangement), of the Ardmore Seavanguard and Ardmore Exporter, respectively, with China Huarong Financial Leasing Co., Ltd ("China Huarong"). The facility was drawn down in December 2018. Interest is calculated at a rate of LIBOR plus 3.50%. Principal repayments on the leases are made on a quarterly basis. The finance leases are scheduled to expire in 2025 and include a mandatory purchase obligation for the Company to repurchase the vessels, as well as purchase options exercisable by the Company, which the Company could elect to exercise at an earlier date.

CMBFL / Shandong

On June 25, 2021, two of ASC's subsidiaries entered into an agreement for the sale and leaseback (under a finance lease arrangement) of the Ardmore Seawolf and Ardmore Seahawk with CMBFL / Shandong, resulting in gross proceeds of $49.0 million less fess of $1.0 million. The facility was drawn down in June 2021. Principal repayments on the leases are made on a monthly basis. The finance leases are scheduled to expire in 2029 with a firm duration of five years with options to renew for a maximum period of eight years. Repurchase options, exercisable by the Company, are also included which begin on the third anniversary of the lease term.

Finance leases financial covenants

Some of the Company's existing finance lease facilities (as described above) include financial covenants which are the same, or no more onerous than, the Company's long-term debt financial covenants described in Note 3. The Company was in full compliance with all of its finance lease related financial covenants as at September 30, 2021 and December 31, 2020.

Short Term Leases

The Company has entered into two short term lease agreements with one agreement effective July 23, 2020 to charter-in a 2010 built vessel for a period of 12 months and the other agreement effective June 4, 2021 to charter-in a 2009 built vessel for a period of eight months.The Company elected the practical expedient of FASB Accounting Standards Codification 842, Leases, which allows for time charter-in contracts with an initial lease term of 12 months or less to be excluded from the operating lease right-of-use assets and lease liabilities. The Company will continue to recognize the lease payments for all operating leases as charter hire expenses on the condensed consolidated statements of operations on a straight-line basis over the lease term.

F-14

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares and as otherwise stated)

5. Interest Rate Swaps

The Company's objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

During the second quarter of 2020, the Company entered into floating-to-fixed interest rate swap agreements, associated with existing variable-rate debt and financing facilities, over a three-year term with multiple counterparties. In accordance with these transactions, the Company will pay an average fixed-rate interest amount of 0.32% and will receive floating rate interest amounts based on LIBOR. These interest rate swaps have a total notional amount of $324.1 million of which $273.3 million is designated as cash flow hedges.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings.

Derivatives not designated as hedges are not speculative and are used to manage the Company's exposure to interest rate movements and other identified risks but do not meet the strict hedge accounting requirements and/or the Company has not elected to apply hedge accounting. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings.

The Company records the fair value of the interest rate swap as an asset or liability on its balance sheet. The following table shows the interest rate swap assets and liabilities as of September 30, 2021 and December 31, 2020:

Derivatives designated as hedging instruments

Balance Sheet location

September 30, 2021

December 31, 2020

Interest rate swap

Current portion of derivative liabilities

$

(347,412)

(349,374)

Interest rate swap

Non - current portion of derivative assets / (liabilities)

$

202,061

(379,762)

The following table shows the interest rate swap liabilities not designated as hedging instruments as of September 30, 2021 and December 31, 2020:

Derivatives not designated as hedging instruments

Balance Sheet location

September 30, 2021

December 31, 2020

Interest rate swap

Current portion of derivative liabilities

$

(55,057)

(48,044)

Interest rate swap

Non - current portion of derivative assets / (liabilities)

$

53,078

(54,212)

F-15

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares and as otherwise stated)

6. Share-based compensation

Stock appreciation rights

As at September 30, 2021, the Company had granted 3,710,473 stock appreciation rights ("SARs") (inclusive of 5,779 forfeited SARs) to certain of its officers and directors under its 2013 Equity Incentive Plan.

A summary of awards, simulation inputs, outputs and valuation methodology is as follows:

Model Inputs

Weighted

Risk-free

Average Fair

SARs

Exercise

Vesting

Grant

Dividend

rate of

Expected

Value @

Average Expected

Valuation

Grant Date

Awarded

Price

Period

Price

Yield

Return

Volatility

grant date

Exercise Life

Method

12‑Mar‑14

22,118

$

13.66

3yrs

$

13.66

2.93

%

2.06

%

56.31

%

$

4.17

4.6- 5.0yrs

Monte Carlo

01‑Sept‑14

5,595

$

13.91

3yrs

$

13.91

2.88

%

2.20

%

53.60

%

$

4.20

4.5- 5.0yrs

Monte Carlo

06‑Mar‑15

37,797

$

10.25

3yrs

$

10.25

3.90

%

1.90

%

61.38

%

$

2.98

4.2- 5.0yrs

Monte Carlo

15‑Jan‑16

205,519

$

9.20

3yrs

$

9.20

6.63

%

1.79

%

58.09

%

$

2.20

4.0- 5.0yrs

Monte Carlo

04‑Apr‑18

1,719,733

$

7.40

3yrs

$

7.40

0

%

2.51

%

40.59

%

$

2.67

4.25yrs

Black-Scholes

07‑Mar‑19

560,000

$

5.10

3yrs

$

5.10

0

%

2.43

%

43.65

%

$

2.00

4.5yrs

Black-Scholes

04‑Mar‑20

549,020

$

5.25

3yrs

$

5.25

0

%

0.73

%

46.42

%

$

2.04

4.5yrs

Black-Scholes

04‑Mar‑21

610,691

$

4.28

3yrs

$

4.28

0

%

0.66

%

55.39

%

$

1.93

4.5yrs

Black-Scholes

Changes in the SARs for the nine months ended September 30, 2021 are set forth below:

Weighted average

No. ofSARs

exercise price

Balance as at January 1, 2021

3,094,003

$

6.80

SARs granted during the nine months ended September 30, 2021

610,691

$

4.28

SARs forfeited during the nine months ended September 30, 2021

-

-

Balance as at September 30, 2021 (none of which are exercisable or convertible)

3,704,694

$

6.40

The total cost related to non-vested SAR awards expected to be recognized through 2024 is set forth below:

Period

TOTAL

2021 (1)

$

284,886

2022

828,434

2023

455,100

2024

65,480

$

1,633,900

(1) Three-month period ending December 31, 2021.

F-16

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares and as otherwise stated)

6. Share-based compensation (continued)

Restricted stock units

As at September 30, 2021, the Company had granted 791,857 restricted stock units ("RSUs") to certain of its officers and directors under its 2013 Equity Incentive Plan, of which 403,249 had vested.

A summary of awards is as follows:

Grant Date

RSUs Awarded

Service Period

Grant Price

02-Jan-19

176,659

2 years

$

4.64

07-Mar-19

86,210

3 years

$

5.10

28-May-19

59,237

1 year

$

7.47

04-Mar-20

94,105

3 years

$

5.25

29-May-20

78,510

1 year

$

5.84

04-Mar-21

56,957

1 year

$

4.28

04-Mar-21

144,596

3 years

$

4.28

07-Jun-21

95,583

1 year

$

4.31

Changes in the RSUs for the nine months ended September 30, 2021 are set forth below:

Weighted average

fair value at grant

No. of RSUs

date

Balance as at January 1, 2021

318,417

$

5.19

RSUs granted during the nine months ended September 30, 2021

297,136

$

4.29

RSUs vested during the nine months ended September 30, 2021

(226,945)

$

(5.20)

Balance as at September 30, 2021 (none of which are vested)

388,608

$

4.50

The total cost related to non-vested RSU awards expected to be recognized through 2024 is set forth below:

Period

TOTAL

2021 (1)

$

293,317

2022

607,681

2023

233,738

2024

34,382

$

1,169,118

(1) Three-month period ending December 31, 2021.

F-17

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares and as otherwise stated)

6. Share-based compensation (continued)

Dividend equivalent rights

As at September 30, 2021, the Company had granted 1,146,517 dividend equivalent rights ("DERs") to certain of its officers and directors under its 2013 Equity Incentive Plan.

A summary of awards, simulation inputs, outputs and valuation methodology is as follows:

Model Inputs

DERs

Service

Fair

Dividend

Risk-free rate

Expected

Valuation

Grant Date

Awarded

Period

Value

Yield

of Return

Volatility

Method

04-Nov-19

1,146,517

2yrs

$0.49

2.93

%

2.06

%

30.22

%

Monte Carlo

Changes in the DERs for the nine months ended September 30, 2021 are set forth below:

Weighted average fair

No. of DERs

value at grant date

Balance as at January 1, 2021

1,146,517

$

0.49

DERs granted during the nine months ended September 30, 2021

-

-

DERs forfeited during the nine months ended September 30, 2021

-

-

Balance as at September 30, 2021 (none of which are vested)

1,146,517

$

0.49

The total cost related to non-vested DER awards expected to be recognized through 2021 is set forth below:

Period

TOTAL

2021 (1)

$

23,408

$

23,408

(1) Three-month period ending December 31, 2021

F-18

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2021 and September 30, 2020

(Expressed in U.S. Dollars, except for shares and as otherwise stated)

7. Preferred Stock

On June 17, 2021, ASC issued 25,000 shares of Series A Cumulative Redeemable Perpetual Preferred Shares ("Series A Preferred Stock") to Maritime Partners LLC. The liquidation preference of the Series A Preferred Stock is $1,000.00 per share. The shares of Series A Preferred Stock accrue cumulative dividends, whether or not declared, at an annual rate of 8.5% per $1,000.00 of liquidation preference per share. Dividends are payable on January 30, April 30, July 30 and October 30 of each year, commencing July 30, 2021. So long as any share of the Series A Preferred Stock remains outstanding, no cash dividend may be declared or paid on ASC's common stock unless, among other things, all accrued and unpaid dividends have been paid on the Series A Preferred Stock. The Company may redeem, in whole or in part, the shares of Series A Preferred Stock outstanding, at a cash redemption price equal to (a) 103% of the liquidation preference per share on or after the third anniversary of the original issuance date of the Series A Preferred Stock and prior to the fourth anniversary, (b) 102% of the liquidation preference per share after such fourth anniversary and prior to the fifth anniversary and (c) 100% of the liquidated preference per share after such fifth anniversary.

The Series A Preferred Stock is redeemable, in whole or in part, upon the election of the Company or the Holder of shares of Series A Preferred Stock, upon the occurrence of certain change of control events, including if a person or group becomes the beneficial owner of a majority of ASC's total voting power. As it is possible, regardless of the probability of such occurrence, that a person or group could acquire beneficial ownership of a majority of the voting power of ASC's outstanding common stock without Company approval and thereby trigger a "change of control," the Series A Preferred Stock is classified as temporary equity for accounting purposes. The Series A Preferred Stock is presented in the Company's financial statements net of the related stock issuance costs.

F-19