Exhibit
99.3
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The
following is a discussion of our financial condition and results of operations for the three month periods ended March 31, 2022 and 2023.
Unless otherwise specified herein, references to the “Company,” “we” or “our” shall include PYXIS
TANKERS INC. and its subsidiaries. You should read the following discussion and analysis together with our Unaudited Interim Condensed
Consolidated Financial Statements as of March 31, 2023 and for the three month periods ended March 31, 2022 and 2023, and the accompanying
notes thereto, included elsewhere in this report. For additional information relating to our management’s discussion and analysis
of financial condition and results of operations, please see our Annual Report on Form 20-F for the year ended December 31, 2022, filed
with the U.S. Securities and Exchange Commission (the “SEC”) on April 12, 2023 (the “2022 Annual Report”).
Forward-Looking
Statements
Our
disclosure and analysis pertaining to our operations, cash flows and financial position, including, in particular, the likelihood of
our success in developing and expanding our business and making acquisitions, include forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature, that depend upon or refer to future events
or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,”
“believes,” “estimates,” “seeks,” “targets,” “continue,” “contemplate,”
“possible,” “likely,” “might,” “will,” “should,” “would,” “could,”
“projects,” “forecasts,” “potential”, “may,” and similar expressions are forward-looking
statements. All statements herein that are not statements of either historical or current facts, including among other things, our expected
financial performance, expectations or objectives regarding future and market charter rate expectations and, in particular, the effects
of COVID-19, including variants thereto, such as, Omicron, and the Russian-Ukrainian war, on our financial condition and operations and
the product tanker industry in general, are forward-looking statements. Forward-looking statements include, but are not limited to, such
matters as our future operating or financial results, global and regional economic and political conditions, including piracy, pending
vessel acquisitions, our business strategy and expected capital spending or operating expenses, including dry-docking and insurance costs,
competition in the product tanker industry, statements about shipping market trends, including charter rates and factors affecting supply
and demand, our financial condition and liquidity and capital resources, including our ability to obtain financing in the future to fund
capital expenditures, acquisitions and other general corporate activities, our ability to enter into fixed-rate charters after our current
charters expire and our ability to earn income in the spot market and our expectations of the availability of vessels to purchase, the
time it may take to construct new vessels, and vessels’ useful lives. Many of these statements are based on our assumptions about
factors that are beyond our ability to control or predict and are subject to risks and uncertainties that are described more fully under
the “Item 3. Key Information – D. Risk Factors” section of the 2022 Annual Report and our other public filings with
the SEC. Any of these factors or a combination of these factors could materially affect our future results of operations and the ultimate
accuracy of the forward-looking statements.
Factors
that might cause future results to differ include, but are not limited to, the following:
| |
● |
changes
in governmental rules and regulations or actions taken by regulatory authorities; |
| |
● |
changes
in economic and competitive conditions affecting our business, including market fluctuations in charter rates and charterers’
abilities to perform under existing time charters; |
| |
● |
the
length and number of off-hire periods and dependence on third-party managers; |
| |
● |
business
disruptions due to natural disasters and health catastrophes, such as COVID-19;
|
| |
● |
major
geo-political events and conflicts, such as the Russian-Ukrainian war; and |
| |
● |
other
factors discussed under “Item 3. Key Information – D. Risk Factors” of the 2022 Annual Report. |
You
should not place undue reliance on forward-looking statements contained herein because they are statements about events that are not
certain to occur as described or at all. All forward-looking statements herein are qualified in their entirety by the cautionary statements
contained herein. These forward-looking statements are not guarantees of our future performance, and actual results and future developments
may vary materially from those projected in the forward-looking statements. Except to the extent required by applicable law or regulation,
we undertake no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.
Overview
We
are PYXIS TANKERS INC., a corporation incorporated in the Republic of the Marshall Islands on March 23, 2015. We currently own, directly
or indirectly, 100% ownership interest in the following vessel owning companies:
| |
● |
SEVENTHONE
CORP., established under the laws of the Republic of the Marshall Islands (“Seventhone”); |
| |
● |
EIGHTHONE
CORP., established under the laws of the Republic of the Marshall Islands (“Eighthone,”); |
| |
● |
TENTHONE
CORP., established under the laws of the Republic of the Marshall Islands (“Tenthone”); |
| |
● |
ELEVENTHONE
CORP., established under the laws of the Republic of the Marshall Islands (“Eleventhone” and collectively with Seventhone,
Eighthone and Tenthone, the “Vessel-owning Companies”). |
Pyxis
also currently owns 100% ownership interest in the following non-vessel owning companies:
| |
● |
SECONDONE
CORPORATION LTD., established under the laws of the Republic of the Marshal Islands (“Secondone”) that owned the vessel
“Northsea Alpha” that was sold to an unaffiliated third party on January 28, 2022; |
| |
● |
THIRDONE
CORPORATION LTD., established under the laws of the Republic of the Marshal Islands (“Thirdone”) that owned the vessel
“Northsea Beta” that was sold to an unaffiliated third party on March 1, 2022; |
| |
● |
FOURTHONE
CORPORATION LTD., established under the laws of the Republic of Malta (“Fourthone”) that owned the vessel “Pyxis
Malou” that was sold to an unaffiliated third party on March 23, 2023; |
| |
● |
SIXTHONE
CORP., established under the laws of the Republic of the Marshal Islands (“Sixthone”) that owned the vessel “Pyxis
Delta” that was sold to an unaffiliated third party on January 13, 2020, and |
| |
● |
MARITIME
TECHNOLOGIES CORP., established under the laws of Delaware. |
All
of the Vessel-owning Companies are engaged in the marine transportation of liquid cargoes through the ownership and operation of tanker
vessels, as listed below:
| Vessel-owning Company | |
Incorporation date | |
Vessel | |
Dead Weight Tons (“DWT’) | | |
Year built | |
Acquisition date |
| | |
| |
| |
| | |
| |
|
| Seventhone | |
05/31/2011 | |
Pyxis Theta | |
| 51,795 | | |
2013 | |
09/16/2013 |
| Eighthone | |
02/08/2013 | |
Pyxis Epsilon | |
| 50,295 | | |
2015 | |
01/14/2015 |
| Tenthone | |
04/22/2021 | |
Pyxis Karteria | |
| 46,652 | | |
2013 | |
07/15/2021 |
| Eleventhone | |
11/09/2021 | |
Pyxis Lamda | |
| 50,145 | | |
2017 | |
12/20/2021 |
Vessel
Management
PYXIS
MARITIME CORP. (“Maritime”), a corporation established under the laws of the Republic of the Marshall Islands, which is beneficially
owned by Mr. Valentios (“Eddie”) Valentis, our Chairman, Chief Executive Officer and Class I Director, provides certain ship
management services to the Vessel-owning Companies, including but not limited to chartering, financing and accounting, sale and purchase,
insurance, operations, dry-docking and construction supervision, for a fixed daily fee per vessel, under a head management agreement
(the “Head Management Agreement”).
With
effect from the delivery of each vessel, the crewing and technical management of the vessels were contracted to INTERNATIONAL TANKER
MANAGEMENT LTD. (“ITM”) with permission from Maritime. ITM is an unrelated third party technical manager, represented by
its branch based in Dubai, UAE. Each ship-management agreement with ITM continues by its terms until it is terminated by either party.
The ship-management agreements may be cancelled by us or ITM for any reason at any time upon three months’ advance notice.
Results
of Operations
Our
revenues consist of earnings under the charters on which we employ our vessels. We believe that the important measures for analyzing
trends in the results of our operations consist of the following:
Revenues,
net
We
generate revenues by chartering our vessels for the transportation of petroleum products and other liquid bulk items, such as organic
chemicals and vegetable oils. Revenues are generated primarily by the number of vessels in our fleet, the number of voyage days employed
and the amount of daily charter hire earned under vessels’ charters. These factors, in turn, can be affected by a number of decisions
by us, including the amount of time spent positioning a vessel for charter, dry-dockings, repairs, maintenance and upgrading, as well
as the age, condition and specifications of our ships and supply and demand factors in the product tanker market. As of May 19, 2023,
the three of our vessels in our fleet were employed in short term time charters and one in spot market. Revenues from time charter agreements
providing for varying daily rates are accounted for as operating leases and thus are recognized on a straight line basis over the term
of the time charter as service is performed. Revenue under spot charters is recognized from loading of the current spot charter to discharge
of the current spot charter. Vessels operating on time charters provide more predictable cash flows, but can yield lower profit margins
than vessels operating in the spot market during periods characterized by favorable market conditions. The vessel owner generally pays
commissions on both types of charters on the gross charter rate. Address commissions represent a discount provided directly to the charterers
based on a fixed percentage of the agreed upon charter and is presented as a reduction in revenues.
Time
Charters
A
time charter is a contract for the use of a vessel for a specific period of time during which the charterer pays substantially all of
the voyage expenses, including port and canal charges and the cost of bunker (fuel oil), but the vessel owner pays vessel operating expenses,
including the cost of crewing, insuring, repairing and maintaining the vessel, the costs of spares and consumable stores and tonnage
taxes. Time charter rates are usually set at fixed rates during the term of the charter. Prevailing time charter rates fluctuate on a
seasonal and on a year-to-year basis and, as a result, when employment is being sought for a vessel with an expiring or terminated time
charter, the prevailing time charter rates achievable in the time charter market may be substantially higher or lower than the expiring
or terminated time charter rate. Fluctuations in time charter rates are influenced by changes in spot charter rates, which are in turn
influenced by a number of factors, including vessel supply and demand. The main factors that could increase total vessel operating expenses
are crew salaries, insurance premiums, spare parts orders, repairs that are not covered under insurance policies and lubricant prices.
Spot
Charters
Generally,
a spot charter refers to a contract to carry a specific cargo for a single voyage, which commonly lasts from several days up to three
months. Spot charters typically involve the carriage of a specific amount and type of cargo on a load-port to discharge-port basis, subject
to various cargo handling terms, and the vessel owner is paid on a per-ton basis. Under a spot charter, the vessel owner is responsible
for the payment of all expenses including its capital costs, voyage expenses (such as port, canal and bunker costs) and vessel operating
expenses. Fluctuations in spot charter rates are caused by imbalances in the availability of cargoes for shipment and the number of vessels
available at any given time to transport these cargoes at a given port.
Voyage
Related Costs and Commissions
We
incur voyage related costs for our vessels operating under spot charters, which mainly include port and canal charges and bunker expenses.
Port and canal charges and bunker expenses primarily increase in periods during which vessels are employed on spot charters because these
expenses are for the account of the vessel owner. Brokerage commissions payable for both spot and time charter contracts, if any, depend
on a number of factors, including, among other things, the number of shipbrokers involved in arranging the charter and the amount of
commissions charged by brokers related to the charterer. Such commissions are deferred and amortized over the related period in a charter
to the extent revenue has been deferred since commissions are earned as revenues are earned.
Vessel
Operating Expenses
We
incur vessel operating expenses for our vessels operating under time and spot charters. Vessel operating expenses primarily consist of
crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable
stores, tonnage taxes and other miscellaneous expenses necessary for the operation of the vessel. All vessel operating expenses are expensed
as incurred.
General
and Administrative Expenses
The
primary components of general and administrative expenses consist of the annual fee payable to Maritime for the administrative services
under our Head Management Agreement, which is described in more detail in our 2022 Annual Report and provides for the services of our
senior executive officers, and the expenses associated with being a public company. Such public company expenses include the costs of
preparing public reporting documents, legal and accounting costs, including costs of legal and accounting professionals and staff, and
costs related to compliance with the rules, regulations and requirements of the SEC, the rules of the Nasdaq Stock Market (“Nasdaq”),
the Company’s board of directors’ (the “Board”) compensation and investor relations.
Management
Fees
We
pay management fees to Maritime and ITM for commercial and technical management services, respectively, for our vessels. These services
include: obtaining employment for our vessels and managing our relationships with charterers; strategic management services; technical
management services, which include managing day-to-day vessel operations, ensuring regulatory and classification society compliance,
arranging our hire of qualified officers and crew, arranging and supervising dry-docking and repairs and arranging insurance for vessels;
and providing shoreside personnel who carry out the management functions described above. As part of their ship management services,
Maritime provides us with supervision services for new construction of vessels; these costs are capitalized as part of the total delivered
cost of the vessel.
Depreciation
We
depreciate the cost of our vessels after deducting the estimated residual value, on a straight-line basis over the expected useful life
of each vessel, which is estimated to be 25 years from the date of initial delivery from the shipyard. Scrap rate of $340/light weight
ton (“LWT”) is used to calculate the salvage value of our vessels.
Special
Survey and Dry-docking
We
are obliged to periodically drydock each of our vessels for inspection, and to make significant modifications to comply with industry
certification or governmental requirements. Generally, each vessel is drydocked every 30 to 60 months for scheduled inspections, depending
on its age. The capitalized costs of dry-dockings for a given vessel are amortized on a straight-line basis to the next scheduled drydocking
of the vessel.
Interest
and Finance Costs
We
have historically incurred interest expense and financing costs in connection with the debt incurred to partially finance the acquisition
of our existing fleet. We have also incurred interest expense in relation to the $6.0 million Amended and Restated Promissory Note we
issued on October 28, 2015, in favor of Maritime Investors Corp. (the “Promissory Note”). During first quarter of 2023, we
repaid in full the Promissory Note due to Maritime Investors Corp. Except for the interest payments under our Promissory Note that are
based on a fixed rate, the interest rates under our other debt agreements are linked to the LIBOR and SOFR rates. In order to hedge our
variable interest rate exposure, on January 19, 2018, we, through one of our vessel-owning subsidiaries, purchased an interest rate cap
with one of our lenders for a notional amount of $10.0 million and a cap rate on LIBOR of 3.5%. The interest rate cap terminated on July
18, 2022. Similarly, on July 16, 2021, the same subsidiary purchased an additional interest rate cap for the amount of $9.6 million at
a cap rate on LIBOR of 2% with a termination date of July 8, 2025. This cap was sold on January 25, 2023 and we realized a net cash gain
of $0.5 million. In the future, we may consider the use of additional financial hedging products to further limit our interest rate exposure.
In
evaluating our financial condition, we focus on the above financial and operating measures as well as fleet and vessel type for utilization,
time charter equivalent rates and operating expenses to assess our operating performance. We also monitor our cash position and outstanding
debt to assess short-term liquidity and our ability to finance further fleet expansion. Discussions about possible acquisitions or sales
of existing vessels are based on our financial and operational criteria which depend on the state of the charter market, availability
of vessel investments, employment opportunities, anticipated dry-docking costs and general economic prospects.
Selected
Information
Our
selected consolidated financial data as of March 31, 2023 and for the three months ended March 31, 2022 and 2023, presented in the tables
below, have been derived from our Unaudited Interim Condensed Consolidated Financial Statements and notes thereto included elsewhere
herein. Our selected consolidated financial data as of December 31, 2022, presented in the tables below have been derived from our audited
financial statements and notes thereto, included in our 2022 Annual Report.
| Interim Condensed Consolidated Statements of Comprehensive Income / (Loss) Data | |
Three months ended March 31, | |
| (Amounts in thousands of U.S. dollars, except per share data) | |
2022 | | |
2023 | |
| | |
| | |
| |
| Revenues, net | |
$ | 6,906 | | |
$ | 11,616 | |
| Voyage related costs and commissions | |
| (3,057 | ) | |
| (2,400 | ) |
| Vessel operating expenses | |
| (3,372 | ) | |
| (3,337 | ) |
| General and administrative expenses | |
| (608 | ) | |
| (1,305 | ) |
| Management fees, related parties | |
| (211 | ) | |
| (166 | ) |
| Management fees, other | |
| (310 | ) | |
| (248 | ) |
| Amortization of special survey costs | |
| (85 | ) | |
| (85 | ) |
| Depreciation | |
| (1,503 | ) | |
| (1,402 | ) |
| Bad debt provisions | |
| (50 | ) | |
| — | |
| Gain/(Loss) from the sale of vessels, net | |
| (466 | ) | |
| 8,018 | |
| Operating income/(loss) | |
$ | (2,756 | ) | |
$ | 10,691 | |
| | |
| | | |
| | |
| Other expenses, net: | |
| | | |
| | |
| Loss from debt extinguishment | |
| (34 | ) | |
| (287 | ) |
| (Loss)/Gain from financial derivative instruments | |
| 234 | | |
| (59 | ) |
| Interest and finance costs, net | |
| (874 | ) | |
| (1,430 | ) |
| Total other expenses, net | |
$ | (674 | ) | |
$ | (1,776 | ) |
| | |
| | | |
| | |
| Net income/(loss) | |
$ | (3,430 | ) | |
$ | 8,915 | |
| | |
| | | |
| | |
| Dividend Series A Convertible Preferred Stock | |
| (231 | ) | |
| (219 | ) |
| Net income/(loss) attributable to common shareholders | |
$ | (3,661 | ) | |
$ | 8,696 | |
| | |
| | | |
| | |
| Income / (loss) per common share, basic | |
$ | (0.34 | ) | |
$ | 0.81 | |
| Income / (loss) per common share, diluted | |
$ | (0.34 | ) | |
$ | 0.71 | |
| | |
| | | |
| | |
| Weighted average number of shares, basic | |
| 10,613,424 | | |
| 10,706,972 | |
| Weighted average number of shares, diluted | |
| 10,613,424 | | |
| 12,602,547 | |
| Interim Condensed Consolidated Balance Sheets Data | |
December 31, | | |
March 31, | |
| (Amounts in thousands of U.S. dollars) | |
2022 | | |
2023 | |
| | |
| | |
| |
| Total current assets | |
$ | 21,131 | | |
$ | 35,371 | |
| Total other non-current assets | |
| 3,663 | | |
| 2,800 | |
| Total fixed assets, net | |
| 114,185 | | |
| 96,677 | |
| Total assets | |
$ | 138,979 | | |
$ | 134,848 | |
| Total current liabilities | |
| 12,561 | | |
| 10,100 | |
| Total non-current liabilities | |
| 65,047 | | |
| 54,668 | |
| Total stockholders’ equity | |
$ | 61,371 | | |
$ | 70,080 | |
| Interim Condensed Consolidated Statements of Cash Flows Data | |
Three months ended March 31, | |
| (Amounts in thousands of U.S. dollars) | |
2022 | | |
2023 | |
| | |
| | |
| |
| Net cash used in operating activities | |
$ | (2,886 | ) | |
$ | 6,569 | |
| Net cash (used in) / provided by investing activities | |
| 5,077 | | |
| 24,292 | |
| Net cash (used in) / provided by financing activities | |
| (7,573 | ) | |
| (10,505 | ) |
| Change in cash and cash equivalents and restricted cash | |
$ | (5,382 | ) | |
$ | 20,356 | |
As
of March 31, 2023 our fleet consisted of four eco-efficient medium-range 2 (“MR2”) tankers, “Pyxis Lamda”,
“Pyxis Theta”, “Pyxis Karteria” and “Pyxis Epsilon”. Our two small tankers “Northsea
Alpha” and “Northsea Beta” were sold on January 28, 2022 and March 1, 2022, respectively. Our eco-modified
MR2, “Pyxis Malou” was sold on March 23, 2023. The following table presents the fleet data for the MR2 tankers for
the three months of 2022 and 2023.
| | |
Three months ended March 31, | |
| MR Fleet data | |
2022 | | |
2023 | |
| | |
| | |
| |
| Ownership days (1) | |
| 450 | | |
| 442 | |
| Available days (2) | |
| 436 | | |
| 438 | |
| Operating days (3) | |
| 324 | | |
| 392 | |
| Utilization % (4) | |
| 74.3 | % | |
| 89.5 | % |
| Daily time charter equivalent rate (5) | |
$ | 11,227 | | |
$ | 23,508 | |
| Daily vessel operating expenses (6) | |
$ | 6,991 | | |
$ | 7,554 | |
| Average number of vessels (7) | |
| 5.0 | | |
| 4.9 | |
| Number of vessels at period end | |
| 5 | | |
| 4 | |
| Weighted average age of vessels at period end (8) | |
| 8.6 | | |
| 8.6 | |
| (1) |
Ownership
days are the total number of days in a period during which we owned each of the vessels in our fleet. Ownership days are an indicator
of the size of our fleet over a period and affect both the amount of revenues generated and the amount of expenses incurred during
the respective period. |
| (2) |
Available
days are the number of ownership days in a period, less the aggregate number of days that our vessels were off-hire due to scheduled
repairs or repairs under guarantee, vessel upgrades or special surveys and intermediate dry-dockings and the aggregate number of
days that we spent positioning our vessels during the respective period for such repairs, upgrades and surveys. Available days measures
the aggregate number of days in a period during which vessels should be capable of generating revenues. |
| (3) |
Operating
days are the number of Available days in a period, less the aggregate number of days that our vessels were off-hire or out of service
due to any reason, including technical breakdowns and unforeseen circumstances. Operating days measures the aggregate number of days
in a period during which vessels actually generate revenues. |
| (4) |
We
calculate fleet utilization by dividing the number of Operating days during a period by the number of Available days during the same
period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its
vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under
guarantee, vessel upgrades, special surveys and intermediate dry-dockings or vessel positioning. |
| (5) |
Daily
TCE rate is a standard shipping industry performance measure of the average daily revenue performance of a vessel on a per voyage
basis. TCE is not calculated in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). We utilize
TCE because we believe it is a meaningful measure to compare period-to-period changes in our performance despite changes in the mix
of charter types (i.e., spot charters, time charters and bareboat charters) under which our vessels may be employed between the periods.
Our management also utilizes TCE to assist them in making decisions regarding employment of the vessels. We believe that our method
of calculating TCE is consistent with industry standards and is calculated by dividing voyage revenues after deducting voyage expenses,
including commissions, by Operating days for the relevant period. Voyage expenses primarily consist of brokerage commissions, port,
canal and bunker costs that are unique to a particular voyage, which would otherwise be paid by the charter under a time charter
contract. |
| (6) |
Daily
vessel operating expenses are direct operating expenses such as crewing, provisions, repairs and maintenance, insurance, deck and
engine stores, lubricating oils and tonnage tax divided by Ownership days. |
| (7) |
Average
number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number
of days each vessel was part of our fleet during such period divided by the number of calendar days in the period. |
| (8) |
Weighted
average age of the fleet is the sum of the ages of our vessels, weighted by the DWT of each vessel on the total fleet DWT. |
The
following table reflects the calculation of our medium range (“MR”) fleet daily TCE rates for the three month periods ended
March 31, 2022 and 2023:
| (Amounts in thousands of U.S. dollars, except | |
Three months ended March 31, | |
| for operating days and daily TCE rates) | |
2022 | | |
2023 | |
| | |
| | |
| |
| MR Revenues, net | |
$ | 6,309 | | |
$ | 11,616 | |
| MR Voyage related costs and commissions | |
| (2,671 | ) | |
| (2,401 | ) |
| MR Time charter equivalent revenues (1) | |
$ | 3,638 | | |
$ | 9,215 | |
| | |
| | | |
| | |
| MR Operating days for fleet (2) | |
| 324 | | |
| 392 | |
| MR Daily TCE rate (1) , (2) | |
$ | 11,227 | | |
$ | 23,508 | |
| |
(1) |
Subject
to rounding; |
| |
(2) |
“Northsea
Alpha” and “Northsea Beta” which were sold on January 28, 2022 and March 1, 2022 respectively, have been excluded
in the above table. Both vessels have been under spot employment for approximately 7 and 36 days, respectively, in 2022 as of the
delivery date to their buyer. For the three months ended March 31, 2022, “Revenues, net” attributable to these vessels
was $597 thousands and “Voyage related costs and commissions” was $385 thousands. |
The
following table reflects the daily TCE rate, daily operating expenses (“Opex”) and utilization rate on a per MR2 vessel type
for the three month periods ended March 31, 2022 and 2023:
| MR2 Vessels Rates | |
| |
Three months ended March 31, | |
| (Amounts in U.S. dollars per day) | |
| |
2022 | | |
2023 | |
| | |
| |
| | |
| |
| Eco-Efficient MR2: (2023: 4 vessels) | |
| |
| | | |
| | |
| (2022: 4 vessels) | |
TCE : | |
| 11,356 | | |
| 24,809 | |
| | |
Opex : | |
| 6,801 | | |
| 7,281 | |
| | |
Utilization % : | |
| 74.6 | % | |
| 91.9 | % |
| Eco-Modified MR2: (1 vessel) | |
| |
| | | |
| | |
| | |
TCE : | |
| 10,722 | | |
| 16,965 | |
| | |
Opex : | |
| 7,749 | | |
| 8,751 | |
| | |
Utilization % : | |
| 73.3 | % | |
| 79.3 | % |
| Fleet: (2023: 5 vessels) * | |
| |
| | | |
| | |
| (2022: 5 vessels) * | |
TCE : | |
| 11,227 | | |
| 23,508 | |
| | |
Opex : | |
| 6,991 | | |
| 7,554 | |
| | |
Utilization % : | |
| 74.3 | % | |
| 89.5 | % |
*
a)
Our two small tankers “Northsea Alpha” and “Northsea Beta” were sold on January 28, and March 1, 2022, respectively.
Both vessels had been under spot employment for approximately 7 and 36 days, respectively, in 2022 as of the delivery date to their buyer.
The small tankers have been excluded in the above table calculations.
b)
In February 2022, the “Pyxis Epsilon” experienced a brief grounding at port which resulted in minor damages to the vessel.
The vessel was off-hire for 43 days including shipyard repairs and returned to commercial employment at the end of March 2022.
c)
The Eco-Modified “Pyxis Malou” was sold to an unaffiliated buyer on March 23, 2023.
Results
of Operations
Three
months ended March 31, 2022 and 2023
Amounts
relating to variations in period–on–period comparisons shown in this section are derived from the interim consolidated financials
presented below. (Amounts are presented in million U.S. dollars, rounded to the nearest one hundred thousand, except as otherwise
noted)
Revenues,
net: Revenues, net of $11.6 million for the three months ended March 31, 2023, represented an increase of $4.7 million, or 68%, from
$6.9 million in the comparable period of 2022. In the first quarter of 2023, our MR daily TCE rate for our fleet was $23,508, a $12,281
per day increase from the same period in 2022. The aforementioned variations are the result of the significant improvement in charter
rates between the comparable periods.
Voyage
related costs and commissions: Voyage related costs and commissions of $2.4 million in the first quarter of 2023, represented a decrease
of $0.7 million, or 21%, from $3.1 million in the same period of 2022, primarily as a result of decreased spot employment for our MR’s
from 132 days in the first quarter in 2022 to 76 days in the first quarter in 2023 and as a result of the sales of “Northsea
Alpha” and “Northsea Beta” which occurred during the first quarter of 2022. Under spot charters, all voyage
expenses are typically borne by us rather than the charterer and a decrease in spot employment results in decreased voyage related costs
and commissions.
Vessel
operating expenses: Vessel operating expenses of $3.3 million for the three month period ended March 31, 2023, remained stable compared
to 2022, as a result of slightly higher operating expenses for our MR’s fully offset of lower operating expenses due to the sales
of “Northsea Alpha” and “Northsea Beta” during the first quarter of 2022.
General
and administrative expenses: General and administrative expenses of $1.3 million for the first quarter, 2023, increased by $0.7
million or 115% compared to $0.6 million in the same period of 2022. The increase was attributable mainly to the higher
administration fees that were adjusted by 9.65% to reflect the 2022 inflation rate in Greece and a performance bonus of $0.6 million
to our ship management company, Maritime, an entity affiliated with our Chairman and Chief Executive
Officer, Mr. Valentis.
Management
fees: For the three months ended March 31, 2023, management fees charged by Maritime and to ITM, our fleet’s
technical manager, decreased by $0.1 million to $0.4 million compared to $0.5 million in the same period of 2022. The decrease is
the result of the sales of “Northsea Alpha” and “Northsea Beta” which occurred during the
first quarter of 2022 partially counterbalanced by the fact that ship management fees to Maritime for the three months ended March
31, 2023 adjusted upwards to reflect the 9.65% annual 2022 inflation rate in Greece.
Amortization
of special survey costs: Amortization of special survey costs of $0.1 million for the quarter ended March 31, 2023, remained flat
compared to the same period in 2022.
Depreciation:
Depreciation of $1.4 million for the quarter ended March 31, 2023, decreased by $0.1 million or 7% compared to $1.5 million in the same
period of 2022. The decrease was attributed to ceasing of depreciation due to the sale of vessel “Pyxis Malou” during
the first quarter of 2023 and due to the sales of “Northsea Alpha” and “Northsea Beta” during the
first quarter of 2022.
Gain/(Loss)
from the sale of vessels, net: During the three months ended March 31, 2023, we recorded a net gain of $8.0 million related to the
sale of our oldest MR tanker, the “Pyxis Malou”. In the comparable quarter in 2022, we recorded $0.5 million loss
related to repositioning costs for the delivery of the “Northsea Alpha” and “Northsea Beta” to
their buyer.
Loss
from debt extinguishment: During the three months ended March 31, 2023, we recorded a loss from debt extinguishment of approximately
$0.3 million reflecting the write-off of the remaining unamortized balance of deferred financing costs, which were associated with the
loans repayment of the “Pyxis Malou” which sold on March 23, 2023 and “Pyxis Karteria” refinance
during the first quarter. During the three months ended March 31, 2022, we recorded a loss from debt extinguishment of approximately
$0.03 million reflecting the write-off of the remaining unamortized balance of deferred financing costs, which were associated with the
repayment of the “Northsea Alpha” and “Northsea Beta” loans.
Interest
and finance costs, net: Interest and finance costs, net, for the quarter ended March 31, 2023, were $1.4 million, compared to $0.9
million in the comparable period in 2022, an increase of $0.6 million, or 64%. Despite lower average debt levels, this increase was primarily
attributable to higher LIBOR rates paid on all the floating rate bank debt. In addition to scheduled loan amortization, we prepaid the
$6.0 million 7.5% Promissory Note in full during the first quarter, 2023. On March 13, 2023, the Company completed the debt refinancing
of the “Pyxis Karteria”, our 2013 built vessel with a $15.5 million five year secured loan from a new lender. The
loan is priced at SOFR plus 2.7%.
Cash
Flows
Our
principal sources of funds for the three months ended March 31, 2023, have been cash from our operating and investing activities as well
as proceeds from vessel sale. Our principal uses of funds have been the working capital requirements and the debt service payments on
our loan agreements. Cash and cash equivalents and restricted cash as of March 31, 2023, amounted to $30.6 million, compared to $10.2
million as of December 31, 2022. As of March 31, 2023, we had a working capital surplus of $25.3 million compared to working capital
surplus of $8.6 million as of December 31, 2022. We define working capital as current assets minus current liabilities.
Operating
Activities
Net
cash provided by operating activities was $6.6 million for the three months ended March 31, 2023, compared to net cash used of $2.9 million
for the same period in 2022. The net income for the period was $8.9 million compared to net loss of $3.4 million for the three month
period ended March 31, 2022, contributing $12.3 million more operating cash. Aggregate movements in working capital accounts, current
assets and current liabilities, driven to increased cash by $3.8 million. This increase was mainly attributable to the $5.5 million increase
from net trade accounts receivable, $1.0 million increase from inventories and $2.1 million decrease of hire collected in advance.
Investing
Activities
Net
cash provided by investing activities during the three months ended March 31, 2023, was $24.3 million a result of the $24.3 million proceeds,
net of commissions and related expenses, of the sale of the “Pyxis Malou”. The same period in 2022 reflected an aggregate
$5.1 million in net cash provided by investing activities which were primarily a result of the $8.5 million proceeds, net of commissions,
of the sale of the “Northsea Alpha” and “Northsea Beta” partially offset by the $3.0 million cash
settlement of the balance related to “Pyxis Lamda” acquisition and $0.4 million payments for the Ballast Water Treatment
System (“BWTS”) installed in “Pyxis Lamda” during the period.
Financing
Activities
Net
cash used in financing activities was $10.5 million for the three month period ended March 31, 2023, mainly reflected new long-term debt
of $15.5 million for Tenthone, secured by the “Pyxis Karteria” counterbalanced by repayment of the financing fees
payments of $0.1 million related to the new loan facilities and aggregate of $20.2 million of debt principal payments, including the
prepayments of the Fourthone’s for “Pyxis Malou” sale and Tenthone’s loan facilities of an aggregate $17.94
million to Alpha Bank and Vista Bank, respectively. In addition, during the first quarter of 2023 we repaid in full the $6.0 million
Promissory Note. We also received $0.6 million from the financial derivative instrument – cap rate sale and we paid $0.2
million dividends related to the 7.75% Series A Cumulative Convertible Preferred Shares (the “Series A Preferred Shares”).
For
the three month period ended March 31, 2022, mainly reflecting the aggregate of $7.4 million of debt principal payments, including the
prepayments of the Secondone’s and Thirdone’s loan facilities of an aggregate $5.8 million to Amsterdam Trade Bank N.V..
Also, during the first quarter of 2022, we paid $0.2 million dividends related to the 7.75% Series A Cumulative Convertible Preferred
Shares (the “Series A Preferred Shares”).
Debt
Agreements
For
information relating to our debt agreements, please see Note 8 to our financial statements included in our 2022 Annual Report for the
year ended December 31, 2022 and Note 7 to our Unaudited Interim Condensed Consolidated Financial Statements for the three month periods
ended March 31, 2022 and 2023 included elsewhere herein.
Liquidity
and Capital Resources
Our
principal sources of liquidity have been cash flows from operations, borrowings from bank debt and our related parties, private placement
of common stock and issuance of convertible preferred shares and we expect in the future, cash flow from operations, proceeds from further
issuances of equity and debt as well as re-financings of debt. Recognizing the uncertainty caused by COVID-19 and the potential impact
of the Russian-Ukrainian war, we expect that our future liquidity requirements should relate primarily to:
| ● | our
vessel operating expenses, including dry-docking and special survey costs; |
| ● | payments
of interest and other debt-related expenses and the repayment of principal on our loans; |
| ● | payment
of technical and commercial management fees for our daily vessel operations; |
| ● | maintenance
of cash reserves to provide for contingencies and to adhere to minimum liquidity for loan
covenants including potential dry-docking reserves; and |
| ● | potential
vessel acquisitions. |
We
expect to rely upon operating cash flows from the employment of our vessels on spot and time charters and, upon occasion, amounts due
to related parties, long-term borrowings and the proceeds from future equity and debt offerings to fund our liquidity and capital needs
and implement our growth plan. We perform on a regular basis cash flow projection to evaluate whether we will be in a position to cover
our liquidity needs for the next 12-month period and be in compliance with the financial and security collateral cover ratio covenants
under the existing debt agreements. In developing estimates of future cash flows, we make assumptions about the vessels’ future
performance, with significant assumptions relating to time charter equivalent rates by vessel type, vessels’ operating expenses,
vessels’ capital expenditures, fleet utilization, our management fees, general and administrative expenses and debt servicing requirements.
The assumptions used to develop estimates of future cash flows are based on historical trends as well as future expectations. As of March
31, 2023, we had a working capital surplus of $25.3 million, defined as current assets minus current liabilities. As of the filing date
of the first quarter of 2023 Unaudited Interim Condensed Consolidated Financial Statements, we expect that we will be in a position to
cover our liquidity needs for the next 12-month period, through cash generated from operations and by managing our working capital requirements.
In addition, the Company may consider the raising of capital including debt, equity securities, joint ventures and/or sale of assets
for corporate and strategic reasons.
Our
business is capital intensive and our future success will depend on our ability to maintain a high-quality fleet through the acquisition
of modern tanker vessels and the selective sale of older tanker vessels.
While
we pay cash dividends on our outstanding Series A Preferred Stock, we do not intend to pay dividends to the holders of our common shares
in the near future and expect to retain our cash flows primarily for the payment of vessel operating costs, dry-docking costs, debt servicing
and other obligations, general corporate and administrative expenses and reinvestment in our business (such as to fund vessel or fleet
acquisitions), in each case, as determined by our board of directors.
On
May 11, 2022, following the Company’s annual shareholder meeting the board of directors of the Company approved the
implementation of a reverse stock split (the “Reverse Stock Split”) of our common shares at the ratio of
one share for four existing common shares, effective May 13, 2022. Following the Reverse Stock Split, our common shares continued
trading on the Nasdaq Capital Markets under its existing symbol, “PXS”, with a new CUSIP number, 71726130. The payment
for fractional share interests in connection with the Reverse Stock Split reduced the outstanding common shares to 10,613,424
post-Reverse Stock Split. The Reverse Stock Split was undertaken with the objective of meeting the minimum $1.00 per share
requirement for maintaining the listing of the common shares on the Nasdaq Capital Markets. Furthermore, following the Reverse Stock
Split, (a) the Conversion Price, as defined in the certification of designation of the Company’s 7.75% Series A Cumulative
Convertible Preferred Shares (NASDAQ Cap Mkts: PXSAP), was adjusted from $1.40 to $5.60 and (b) the Exercise Price, as defined in
the Company’s warrants to purchase common shares (NASDAQ Cap Mkts: PXSAW), was adjusted from $1.40 to $5.60. All the share and
per share information for all periods presented has been adjusted to reflect the one for four Reverse Stock Split.
On
January 25, 2023 we sold our $9.6 million interest cap rate on LIBOR of 2% with termination date of July 8, 2025 and we realized a net
cash gain of $0.5 million. In the future, we may consider the use of additional financial hedging products to further limit our interest
rate exposure.
On
February 10, 2023 we repaid $3.0 million of the $6.0 million 7.5% promissory note due Maritime Investors Corp., an affiliate
of Mr. Valentis. The remaining balance of this obligation was repaid on March 14, 2023.
On
March 13, 2023, the Company completed the debt refinancing of the “Pyxis Karteria”, our 2013 built vessel with a $15.5 million
five year secured loan from a new lender, Piraeus Bank, S.A. Loan principal is repayable over 5 years with quarterly amortization. The
loan is priced at SOFR plus 2.7% with standard terms and conditions.
On
March 23, 2023, pursuant to the sale agreement that we entered into on March 1, 2023, the “Pyxis Malou” was delivered to
her buyer. The aggregate gross sale price was $24.8 million from which $6.4 million was used for the prepayment of the respective loan
facility and $0.75 million to prepay the outstanding loan for the “Pyxis Lamda”.
During
the months of January through March, 2023 the Company paid monthly cash dividends of $0.1615 for each outstanding Series A Preferred
Share, which aggregated to $207 for the three months ended as of March 31, 2023.
On
March 31, 2023, we had a total of 10,745,654 common shares (the “Common Shares”) issued and outstanding of which Mr. Valentis
beneficially owned 53.3%, 420,085 Series A Preferred Shares (trading symbol - PXSAP), which have a conversion price of $5.60, and 1,590,540
warrants (PXSAW), which have an exercise price of $5.60, (excluding non-tradeable underwriter’s common stock purchase warrants
of which 428,571 and 16,000 have exercise prices of $8.75 and $5.60, respectively, and 2,000 and 2,683 Series A Preferred Shares purchase
warrants which have an exercise price of $24.92 and $25.00 per share, respectively).
Results
of Annual Meeting of Shareholders of May 11, 2023
At
the scheduled annual 2023 shareholder meeting, the Company’s shareholders re-elected Mr. Basil Mavroleon and Mr. Robin Das as Class
III Directors to serve for a term of three years until the 2026 annual meeting.
Subsequent
Events
During
April 2023, the Company paid monthly cash dividends of $0.1615 per share on its outstanding Series A Preferred Shares, amounting to approximately
$68,000. Similarly, on May 2, 2023, the board of directors of Pyxis declared a monthly dividend of $0.1615 per share, for the month
of May 2023. The cash dividend of $68,000 will be payable on May 22, 2023, to holders of record as of May 15, 2023.
On
May 11, 2023, our Board of Directors authorized a common stock re-purchase program of up to $2 million for a period of six months through
open market transactions.
There
are not any other subsequent events which might affect the financial statements.
Recent
Developments
For
information relating to our recent developments, please refer to section “Liquidity and Capital Resources” above and to Note
14 to our Unaudited Interim Condensed Consolidated Financial Statements as of March 31, 2023 and for the three month periods ended March
31, 2022 and 2023 included elsewhere herein.
Fleet
Information (as of May 19, 2023)
| Vessel Name | |
Shipyard | |
Vessel type | |
Carrying Capacity (dwt) | | |
Year Built | |
Type of charter | |
Charter(1) Rate
(per day) | | |
Anticipated Earliest Redelivery Date |
| | |
| |
| |
| | |
| |
| |
| | |
|
| Pyxis Lamda | |
SPP / S. Korea | |
MR | |
| 50,145 | | |
2017 | |
Spot | |
| n/a | | |
n/a |
| Pyxis Epsilon (2) | |
SPP / S. Korea | |
MR | |
| 50,295 | | |
2015 | |
Time | |
$ | 30,000 | | |
Sep 2023 |
| Pyxis Theta (3) | |
SPP / S. Korea | |
MR | |
| 51,795 | | |
2013 | |
Time | |
| 22,500 | | |
Jun 2023 |
| Pyxis Karteria (4) | |
Hyundai / S. Korea | |
MR | |
| 46,652 | | |
2013 | |
Time | |
| 30,000 | | |
May 2023 |
| | |
| |
| |
| 198,887 | | |
| |
| |
| | | |
|
| 1) | Charter
rates are gross in U.S.$ and do not reflect any commissions payable. |
| 2) | “Pyxis
Epsilon” is fixed on a time charter for 12 months, +/- 30 days at $30,000 per day. |
| 3) | “Pyxis
Theta” is fixed on a time charter for min 120 days and max 180 days. 0-30 days
at $13,500 per day, 31-60 days at $18,500 per day, 61-120 days at $22,500 and 121-180 days
at $26,000 per day. |
| 4) | “Pyxis
Karteria” was fixed on a time charter for min 4, max 6 months at $16,000 per day.
Charterer declared his option of additional min 45 max 90 days at $30,000 after the vessel
completed her second special survey in Mid-April, 2023. |
pYXIS
TANKERS INC.
INDEX
TO Unaudited Interim Condensed Consolidated Financial Statements
PYXIS TANKERS INC.
Consolidated
Balance Sheets
As
of December 31, 2022 and March 31, 2023 (unaudited)
(Expressed
in thousands of U.S. dollars, except for share and per share data)
| | |
Notes | | |
December 31,
2022 | | |
March 31,
2023 | |
| ASSETS | |
| | |
| | | |
| | |
| | |
| | |
| | | |
| | |
| CURRENT ASSETS: | |
| | |
| | | |
| | |
| Cash and cash equivalents | |
| | |
$ | 7,563 | | |
$ | 28,145 | |
| Restricted cash, current portion | |
| | |
| 376 | | |
| 400 | |
| Inventories | |
4 | | |
| 1,911 | | |
| 894 | |
| Trade accounts receivable, net | |
13 | | |
| 10,469 | | |
| 4,987 | |
| Prepayments and other current assets | |
| | |
| 204 | | |
| 657 | |
| Insurance claim receivable | |
| | |
| 608 | | |
| 288 | |
| Total current assets | |
| | |
| 21,131 | | |
| 35,371 | |
| | |
| | |
| | | |
| | |
| FIXED ASSETS, NET: | |
| | |
| | | |
| | |
| Vessels, net | |
5 | | |
| 114,185 | | |
| 96,677 | |
| Total fixed assets, net | |
| | |
| 114,185 | | |
| 96,677 | |
| | |
| | |
| | | |
| | |
| OTHER NON-CURRENT ASSETS: | |
| | |
| | | |
| | |
| Restricted cash, net of current portion | |
| | |
| 2,250 | | |
| 2,000 | |
| Financial derivative instrument | |
| | |
| 619 | | |
| — | |
| Deferred dry dock and special survey costs, net | |
6 | | |
| 794 | | |
| 800 | |
| Total other non-current assets | |
| | |
| 3,663 | | |
| 2,800 | |
| Total assets | |
| | |
$ | 138,979 | | |
$ | 134,848 | |
| | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | |
| | | |
| | |
| | |
| | |
| | | |
| | |
| CURRENT LIABILITIES: | |
| | |
| | | |
| | |
| Current portion of long-term debt, net of deferred financing costs | |
7 | | |
$ | 5,829 | | |
$ | 5,704 | |
| Trade accounts payable | |
| | |
| 2,604 | | |
| 2,676 | |
| Due to related parties | |
3 | | |
| 1,028 | | |
| 1,107 | |
| Hire collected in advance | |
| | |
| 2,133 | | |
| — | |
| Accrued and other liabilities | |
| | |
| 967 | | |
| 613 | |
| Total current liabilities | |
| | |
| 12,561 | | |
| 10,100 | |
| | |
| | |
| | | |
| | |
| NON-CURRENT LIABILITIES: | |
| | |
| | | |
| | |
| Long-term debt, net of current portion and deferred financing costs | |
7 | | |
| 59,047 | | |
| 54,668 | |
| Promissory note | |
3 | | |
| 6,000 | | |
| — | |
| Total non-current liabilities | |
| | |
| 65,047 | | |
| 54,668 | |
| | |
| | |
| | | |
| | |
| COMMITMENTS AND CONTINGENCIES | |
11 | | |
| — | | |
| — | |
| | |
| | |
| | | |
| | |
| STOCKHOLDERS’ EQUITY: | |
| | |
| | | |
| | |
| Preferred stock ($0.001 par value; 50,000,000 shares authorized; of which 1,000,000 authorized Series A Convertible Preferred Shares; 449,473 Series A Convertible Preferred Shares issued and outstanding as at December 31, 2022 and 420,085 at March 31, 2023) | |
8 | | |
| — | | |
| — | |
| Common stock ($0.001 par value; 450,000,000 shares authorized; 10,614,319 shares issued and outstanding as at December 31, 2022 and 10,745,654 at March 31, 2023, respectively) | |
8 | | |
| 11 | | |
| 11 | |
| Additional paid-in capital | |
8 | | |
| 111,869 | | |
| 111,869 | |
| Accumulated deficit | |
| | |
| (50,509 | ) | |
| (41,800 | ) |
| Total stockholders’ equity | |
| | |
| 61,371 | | |
| 70,080 | |
| Total liabilities and stockholders’ equity | |
| | |
$ | 138,979 | | |
$ | 134,848 | |
The
accompanying notes are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements
PYXIS TANKERS INC.
Unaudited
Interim Consolidated Statements of Comprehensive Income/(Loss)
For
the three month periods ended March 31, 2022 and 2023
(Expressed
in thousands of U.S. dollars, except for share and per share data)
| | |
| | |
Three
months ended March 31, | |
| | |
Notes | | |
2022 | | |
2023 | |
| | |
| | |
| | |
| |
| Revenues, net | |
13 | | |
$ | 6,906 | | |
$ | 11,616 | |
| | |
| | |
| | | |
| | |
| Expenses: | |
| | |
| | | |
| | |
| Voyage related costs and commissions | |
3 | | |
| (3,057 | ) | |
| (2,400 | ) |
| Vessel operating expenses | |
| | |
| (3,372 | ) | |
| (3,337 | ) |
| General and administrative expenses | |
3 | | |
| (608 | ) | |
| (1,305 | ) |
| Management fees, related parties | |
3 | | |
| (211 | ) | |
| (166 | ) |
| Management fees, other | |
| | |
| (310 | ) | |
| (248 | ) |
| Amortization of special survey costs | |
6 | | |
| (85 | ) | |
| (85 | ) |
| Depreciation | |
5 | | |
| (1,503 | ) | |
| (1,402 | ) |
| Bad debt provisions | |
| | |
| (50 | ) | |
| — | |
| Gain/(Loss) from the sale of vessels, net | |
| | |
| (466 | ) | |
| 8,018 | |
| Operating income/(loss) | |
| | |
| (2,756 | ) | |
| 10,691 | |
| | |
| | |
| | | |
| | |
| Other expenses, net: | |
| | |
| | | |
| | |
| Loss from debt extinguishment | |
7 | | |
| (34 | ) | |
| (287 | ) |
| Gain/(loss) from financial derivative instruments | |
10 | | |
| 234 | | |
| (59 | ) |
| Interest and finance costs, net | |
12 | | |
| (874 | ) | |
| (1,430 | ) |
| Total other expenses, net | |
| | |
| (674 | ) | |
| (1,776 | ) |
| | |
| | |
| | | |
| | |
| Net income/(loss) | |
| | |
$ | (3,430 | ) | |
$ | 8,915 | |
| | |
| | |
| | | |
| | |
| Dividend Series A Convertible Preferred Stock | |
| | |
| (231 | ) | |
| (219 | ) |
| | |
| | |
| | | |
| | |
| Net income/(loss) attributable to common shareholders | |
9 | | |
$ | (3,661 | ) | |
$ | 8,696 | |
| | |
| | |
| | | |
| | |
| Income/(loss) per common share, basic | |
9 | | |
$ | (0.34 | ) | |
$ | 0.81 | |
| Income/(loss) per common share, diluted | |
9 | | |
$ | (0.34 | ) | |
$ | 0.71 | |
| | |
| | |
| | | |
| | |
| Weighted average number of common shares, basic | |
9 | | |
| 10,613,424 | | |
| 10,706,972 | |
| Weighted average number of common shares, diluted | |
9 | | |
| 10,613,424 | | |
| 12,602,547 | |
The
accompanying notes are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements
PYXIS TANKERS INC.
Unaudited
Interim Consolidated Statements of Stockholders’ Equity
For
the three month periods ended March 31, 2022 and 2023
(Expressed
in thousands of U.S. dollars, except for share and per share data)
| | |
Series
A Convertible | | |
Common | | |
| | |
| | |
| |
| | |
Preferred
Shares | | |
Stock | | |
Additional | | |
| | |
Total | |
| | |
#
of
shares | | |
Par
Value | | |
#
of
shares | | |
Par
Value | | |
Paid-in
Capital | | |
Accumulated
Deficit | | |
Stockholders’ Equity | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Balance
January 1, 2023 | |
| 449,473 | | |
| — | | |
| 10,614,319 | | |
$ | 11 | | |
$ | 111,869 | | |
$ | (50,509 | ) | |
$ | 61,371 | |
| Conversion of Series A Convertible
Preferred Shares to common stock | |
| (29,388 | ) | |
| — | | |
| 131,335 | | |
| — | | |
| — | | |
| — | | |
| — | |
| Preferred stock dividends
paid | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (207 | ) | |
| (207 | ) |
| Net
income | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 8,916 | | |
| 8,916 | |
| Balance
March 31, 2023 | |
| 420,085 | | |
| — | | |
| 10,745,654 | | |
$ | 11 | | |
$ | 111,869 | | |
$ | (41,800 | ) | |
$ | 70,080 | |
The
accompanying notes are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements
PYXIS TANKERS INC.
Unaudited
Interim Consolidated Statements of Cash Flows
For
the three month periods ended March 31, 2022 and 2023
(Expressed
in thousands of U.S. dollars, except for share and per share data)
| | |
Three months ended March 31, | |
| | |
2022 | | |
2023 | |
| Cash flows from operating activities: | |
| | | |
| | |
| Net income/(loss) | |
$ | (3,430 | ) | |
$ | 8,915 | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | |
| | | |
| | |
| Depreciation | |
| 1,503 | | |
| 1,402 | |
| Amortization and write-off of special survey costs | |
| 85 | | |
| 85 | |
| Amortization and write-off of financing costs | |
| 81 | | |
| 69 | |
| Loss from debt extinguishment | |
| 34 | | |
| 287 | |
| Loss/(Gain) from financial derivative instrument | |
| (234 | ) | |
| 59 | |
| Gain on sale of vessel, net | |
| — | | |
| (8,018 | ) |
| Bad debt provisions | |
| 50 | | |
| — | |
| Changes in assets and liabilities: | |
| | | |
| | |
| Inventories | |
| (750 | ) | |
| 1,017 | |
| Due from related parties | |
| 854 | | |
| 79 | |
| Trade accounts receivable, net | |
| (947 | ) | |
| 5,482 | |
| Prepayments and other assets | |
| (113 | ) | |
| (453 | ) |
| Insurance claim receivable | |
| (1,601 | ) | |
| 320 | |
| Special survey cost | |
| (370 | ) | |
| (260 | ) |
| Trade accounts payable | |
| 2,175 | | |
| 72 | |
| Hire collected in advance | |
| — | | |
| (2,133 | ) |
| Accrued and other liabilities | |
| (223 | ) | |
| (354 | ) |
| Net cash provided by/(used in) operating activities | |
$ | (2,886 | ) | |
$ | 6,569 | |
| | |
| | | |
| | |
| Cash flow from investing activities: | |
| | | |
| | |
| Proceeds from the sale of vessel, net | |
| 8,509 | | |
| 24,292 | |
| Payments for vessel acquisition | |
| (2,995 | ) | |
| — | |
| Ballast water treatment system installation | |
| (437 | ) | |
| — | |
| Net cash provided by investing activities | |
$ | 5,077 | | |
$ | 24,292 | |
| | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | |
| Proceeds from long-term debt | |
| — | | |
| 15,500 | |
| Repayment of long-term debt | |
| (7,355 | ) | |
| (20,215 | ) |
| Repayment of promissory note | |
| — | | |
| (6,000 | ) |
| Financial derivative instrument | |
| — | | |
| 561 | |
| Payment of financing costs | |
| — | | |
| (144 | ) |
| Preferred stock dividends paid | |
| (218 | ) | |
| (207 | ) |
| Net cash used in financing activities | |
$ | (7,573 | ) | |
$ | (10,505 | ) |
| | |
| | | |
| | |
| Net (decrease)/increase in cash and cash equivalents and restricted cash | |
| (5,382 | ) | |
| 20,356 | |
| Cash and cash equivalents and restricted cash at the beginning of the period | |
| 9,874 | | |
| 10,189 | |
| Cash and cash equivalents and restricted cash at the end of the period | |
$ | 4,492 | | |
$ | 30,545 | |
| | |
| | | |
| | |
| SUPPLEMENTAL INFORMATION: | |
| | | |
| | |
| Cash paid for interest | |
$ | 877 | | |
$ | 3,912 | |
| Unpaid portion of vessel additions | |
| — | | |
| — | |
| Unpaid portion of Ballast water treatment system installation | |
| 118 | | |
| — | |
The
accompanying notes are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements.
PYXIS
TANKERS INC.
Notes
to the Unaudited Interim Condensed Consolidated Financial Statements
(Expressed
in thousands of U.S. dollars, except for share and per share data)
| 1. | Basis
of Presentation and General Information: |
PYXIS
TANKERS INC. (“Pyxis”) is a corporation incorporated in the Republic of the Marshall Islands on March 23, 2015. As of March
31, 2023, Pyxis owns 100% ownership interest in the following four vessel-owning companies:
| ● | SEVENTHONE
CORP., established under the laws of the Republic of the Marshall Islands (“Seventhone”); |
| ● | EIGHTHONE
CORP., established under the laws of the Republic of the Marshall Islands (“Eighthone”); |
| ● | TENTHONE
CORP., established under the laws of the Republic of the Marshall Islands (“Tenthone”); |
| ● | ELEVENTHONE
CORP., established under the laws of the Republic of the Marshall Islands (“Eleventhone”
and collectively with Seventhone, Eighthone and Tenthone the “Vessel-owning companies”). |
Pyxis
also currently owns 100% ownership interest in the following non-vessel owning companies:
| ● | SECONDONE
CORPORATION LTD, established under the laws of the Republic of the Marshal Islands (“Secondone”)
that owned the vessel “Northsea Alpha” that was sold to an unaffiliated third
party on January 28, 2022; |
| ● | THIRDONE
CORPORATION LTD, established under the laws of the Republic of the Marshal Islands (“Thirdone”)
that owned the vessel “Northsea Beta” that was sold to an unaffiliated third
party on March 1, 2022; |
| ● | FOURTHONE
CORPORATION LTD, established under the laws of the Republic of Malta (“Fourthone”)
that owned the vessel “Pyxis Malou” that was sold to an unaffiliated third party
on March 23, 2023; |
| ● | SIXTHONE
CORP., established under the laws of the Republic of the Marshal Islands (“Sixthone”)
that owned the vessel “Pyxis Delta” that was sold to an unaffiliated third party
on January 13, 2020 and, |
| ● | MARITIME
TECHNOLOGIES CORP, established under the laws of Delaware. |
All
of the Vessel-owning companies are engaged in the marine transportation of liquid cargoes through the ownership and operation of tanker
vessels, as listed below:
Vessel-owning Company | |
Incorporation date | |
Vessel | |
Dead Weight tons “DWT” | | |
Year built | |
Acquisition date |
| Seventhone | |
05/31/2011 | |
Pyxis Theta | |
| 51,795 | | |
2013 | |
09/16/2013 |
| Eighthone | |
02/08/2013 | |
Pyxis Epsilon | |
| 50,295 | | |
2015 | |
01/14/2015 |
| Tenthone | |
04/22/2021 | |
Pyxis Karteria | |
| 46,652 | | |
2013 | |
07/15/2021 |
| Eleventhone | |
11/09/2021 | |
Pyxis Lamda | |
| 50,145 | | |
2017 | |
12/20/2021 |
Effective
May 13, 2022, the Company effected a four-for-one reverse stock split on its issued and outstanding common stock. All share and per share
amounts disclosed in the accompanying financial statements give effect to this reverse stock split retroactively, for all periods presented.
The
accompanying Unaudited Interim Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted
accounting principles (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”)
for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete
annual financial statements. In the opinion of the management of the Company, all adjustments (consisting of normal recurring adjustments)
necessary for a fair presentation of financial position, operating results and cash flows have been included in the accompanying Unaudited
Interim Condensed Consolidated Financial Statements. Interim results are not necessarily indicative of results that may be expected for
the year ending December 31, 2023. These Unaudited Interim Condensed Consolidated Financial Statements should be read in conjunction
with the Consolidated Financial Statements and footnotes for the year ended December 31, 2022, included in the Company’s Annual
Report on Form 20-F filed with the SEC on April 12, 2023 (the “2022 Annual Report”).
PYXIS TANKERS INC.
Notes to the Unaudited Interim Condensed Consolidated
Financial Statements
(Expressed in thousands of U.S. dollars,
except for share and per share data)
| 1. |
Basis of Presentation and General Information: -Continued: |
Revenues
for the three month periods ended March 31, 2022 and 2023, deriving from significant charterers individually accounting for 10% or more
of revenues (in percentages of total revenues), were as follows:
| Charterer | |
Three months ended March 31, | |
| | |
2022 | | |
2023 | |
| A | |
| — | | |
| 54 | % |
| B | |
| 31 | % | |
| 20 | % |
| C | |
| 12 | % | |
| — | |
| D | |
| 11 | % | |
| — | |
| E | |
| — | | |
| 15 | % |
| F | |
| — | | |
| 11 | % |
| Total | |
| 54 | % | |
| 100 | % |
The
following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the accompanying Consolidated
Balance Sheets that are presented in the accompanying interim condensed consolidated statement of cash flows for the three month periods
ended March 31, 2022 and 2023.
| | |
March 31, | |
| | |
2022 | | |
2023 | |
| Cash and cash equivalents | |
$ | 1,901 | | |
$ | 28,145 | |
| Restricted cash, current portion | |
| 341 | | |
| 400 | |
| Restricted cash, net of current portion | |
| 2,250 | | |
| 2,000 | |
| Total cash and cash equivalents and restricted cash | |
$ | 4,492 | | |
$ | 30,545 | |
PYXIS
MARITIME CORP. (“Maritime”), a corporation established under the laws of the Republic of the Marshall Islands, which is beneficially
owned by Mr. Valentios (“Eddie”) Valentis, the Company’s Chairman, Chief Executive Officer and Class I Director, provides
certain ship management services to the Vessel-owning companies, as discussed in Note 3.
With
effect from the delivery of each vessel, the crewing and technical management of the vessels were contracted to INTERNATIONAL TANKER
MANAGEMENT LTD. (“ITM”) with permission from Maritime. ITM is an unrelated third party technical manager, represented by
its branch based in Dubai, UAE. Each ship-management agreement with ITM is in force until it is terminated by either party. The ship-management
agreements can be cancelled either by the Company or ITM for any reason at any time upon three months’ advance notice.
As
of March 31, 2023, the Company had a working capital surplus of $25,271, defined as current assets minus current liabilities. As of the
filing date of the Unaudited Interim Condensed Consolidated Financial Statements, the Company believes that it will be in a position
to cover its liquidity needs for the next 12-month period through operating cash flows, management of working capital, sale of assets,
refinancing indebtedness or raising additional equity capital, or a combination thereof.
As
of March 31, 2023, Mr. Valentis beneficially owned approximately 53.3% of the Company’s common stock.
| 2. | Significant
Accounting Policies: |
The
accounting policies followed in the preparation of these Unaudited Interim Condensed Consolidated Financial Statements are the same with
those applied in the preparation of the Company’s Consolidated Financial Statements for the year ended December 31, 2022. See Note
2 to the Company’s Consolidated Financial Statements for the year ended December 31, 2022, included in the 2022 Annual Report.
There have been no material changes to these policies in the three month period ended March 31, 2023.
PYXIS TANKERS INC.
Notes to the Unaudited Interim Condensed Consolidated
Financial Statements
(Expressed in thousands of U.S. Dollars,
except for share and per share data)
| 3. | Transactions
with Related Parties: |
The
following transactions with related parties occurred during the three month periods ended March 31, 2022 and 2023.
The
following amounts were charged by Maritime pursuant to the head management and ship-management agreements with the Company, and are included
in the accompanying unaudited interim Consolidated Statements of Comprehensive Income / (Loss):
| | |
Three months ended March 31, | |
| | |
2022 | | |
2023 | |
| Included in Voyage related costs and commissions | |
| | | |
| | |
| Charter hire commissions | |
$ | 88 | | |
$ | 144 | |
| | |
| | | |
| | |
| Included in Management fees, related parties | |
| | | |
| | |
| Ship-management Fees | |
| 211 | | |
| 166 | |
| | |
| | | |
| | |
| Included in General and administrative expenses | |
| | | |
| | |
| Administration Fees | |
| 407 | | |
| 447 | |
| | |
| | | |
| | |
| Total | |
$ | 706 | | |
$ | 757 | |
As
of December 31, 2022 and March 31, 2023, the balances with Maritime was a due to of $1,028 and $1,107, respectively, and are included
in Due to related parties in the accompanying Consolidated Balance Sheets. The balances with Maritime are interest free and with no specific
repayment terms.
The
Company uses the services of Maritime, to provide a wide range of shipping services, including but not limited to, chartering, sale and
purchase, insurance, operations and dry-docking and construction supervision, all provided at a fixed daily fee per vessel (the “Head
Management Agreement”). For the ship management services, Maritime charges a fee payable by each subsidiary of $0.325 per day per
vessel while the vessel is in operation including any pool arrangements and $0.450 per day per vessel while the vessel is under construction,
as well as an additional daily fee (which is dependent on the seniority of the personnel) to cover the cost of engineers employed to
conduct the supervision of the newbuilding (collectively the “Ship-management Fees”). In addition, Maritime charges the Company
a commission rate of 1.25% on all charter hire agreements arranged by Maritime. For the administrative management services, the Company
pays Maritime a fixed fee of $1,600 annually (the “Administration Fees”) under the Head Management Agreement. In the event
of a change of control of the Company during the management period or within 12 months after the early termination of the Head Management
Agreement, then the Company will pay to Maritime an amount equal to 2.5 times the then annual Administration Fees. Pursuant to the amendment
of this agreement on March 18, 2020, in the event of such change of control and termination, the Company shall also pay to Maritime an
amount equal to 12 months of the then daily Ship-management Fees.
The
Ship-management Fees and the Administration Fees are adjusted annually according to the official inflation rate in Greece or such other
country where Maritime was headquartered during the preceding year. On August 9, 2016, the Company amended the Head Management Agreement
with Maritime to provide that in the event that the official inflation rate for any calendar year is deflationary, no adjustment shall
be made to the Ship-management Fees and the Administration Fees, which will remain, for the particular calendar year, as per the previous
calendar year. Effective January 1, 2019 and 2020, the Ship-management Fees and the Administration Fees were increased by 0.62%, and,
0.26% respectively, in line with the average inflation rate of Greece for 2018 and 2019. For 2020, the average rate in Greece was a deflation
of 1.24% and, as a result, no adjustment was made to the Ship-management Fees and the Administration Fees effective January 1, 2021,
which remained, for the particular calendar year, as per the previous year. Effective January 1, 2022 and 2023, the Ship-management Fees
and the Administration Fees were increased by 1.23% and 9.65%, respectively, in line with the average inflation rate of Greece for 2021
and 2022.
| (b) |
Maritime Investors Corp.: |
On
February 10, 2023 the Company repaid $3 million of the $6 million of the Amended & Restated Promissory Note due to Maritime Investors
Corp.
On
March 13, 2023, the Company completed the debt refinancing of the “Pyxis Karteria”, our 2013 built vessel with a $15.5 million
five year secured loan from a new lender, Piraeus Bank, S.A. Loan principal is repayable over five years with quarterly amortization.
The Loan is priced at SOFR plus 2.7% with standard terms and conditions. The net proceeds, after payment of closing fees and expenses,
was used to repay bank debt on the vessel and the $3 million outstanding of the $6 million Promissory Note due to Maritime Investors
Corp.
PYXIS TANKERS INC.
Notes to the Unaudited Interim Condensed Consolidated
Financial Statements
(Expressed in thousands of U.S. Dollars,
except for share and per share data)
| 3. | Transactions
with Related Parties: – Continued: |
Interest
charged on the Amended & Restated Promissory Note for the three months ended March 31, 2022 and 2023, amounted to $111 and $69, respectively,
and is included in Interest and finance costs, net in the accompanying unaudited interim Consolidated Statements of Comprehensive Income
/ (Loss). The outstanding balance of the Promissory Note as of March 31, 2023, amounting to nil.
The
amounts in the accompanying Consolidated Balance Sheets are analyzed as follows:
| | |
December 31, | | |
March 31, | |
| | |
2022 | | |
2023 | |
| Lubricants | |
$ | 617 | | |
$ | 452 | |
| Bunkers | |
| 1,294 | | |
| 442 | |
| Total | |
$ | 1,911 | | |
$ | 894 | |
The
amounts in the accompanying Consolidated Balance Sheets are analyzed as follows:
| | |
Vessel Cost | | |
Accumulated Depreciation | | |
Net Book Value | |
| | |
| | |
| | |
| |
| Balance January 1, 2023 | |
$ | 148,736 | | |
$ | (34,551 | ) | |
$ | 114,185 | |
| | |
| | | |
| | | |
| | |
| Sale of Vessel - Pyxis Malou | |
| (25,000 | ) | |
| 8,894 | | |
| (16,106 | ) |
| Depreciation | |
| — | | |
| (1,402 | ) | |
| (1,402 | ) |
| Balance March 31, 2023 | |
$ | 123,736 | | |
$ | (27,059 | ) | |
$ | 96,677 | |
On
March 23, 2023, pursuant to the sale agreement that we entered into on March 1, 2023, the “Pyxis Malou” was delivered to
her buyer. The aggregate gross sale price was $24.8 million from which $6.4 million was used for the prepayment of the respective loan
facility and $0.75 million to prepay the outstanding loan for the “Pyxis Lamda”.
As
of March 31, 2023, the Company reviewed the carrying amount in connection with the estimated recoverable amount for each of its vessels
held and used. This review indicated that such carrying amounts were fully recoverable for the Company’s vessels held and used
and, consequently, no impairment charge was deemed necessary for the period ended March 31, 2023.
All
of the Company’s vessels have been pledged as collateral to secure the bank loans discussed in Note 7.
| 6. | Deferred
dry dock and special survey costs, net: |
The
movement in deferred charges, net, in the accompanying Consolidated Balance Sheets are as follows:
| | |
2023 | |
| | |
| |
| Balance January 1, | |
$ | 794 | |
| Additions | |
| 260 | |
| Amortization of special survey costs | |
| (85 | ) |
| Pyxis Malou write-off | |
| (169 | ) |
| Balance March 31, | |
$ | 800 | |
The
additions during the first quarter are related with “Pyxis Karteria” special survey which completed on April 14, 2023. The
amortization of the special survey costs is separately reflected in the accompanying unaudited interim consolidated statement of comprehensive
income /(loss).
PYXIS TANKERS INC.
Notes to the Unaudited Interim Condensed Consolidated
Financial Statements
(Expressed in thousands of U.S. Dollars,
except for share and per share data)
The
amounts shown in the accompanying Consolidated Balance Sheets at December 31, 2022 and March 31, 2023, are analyzed as follows:
| | |
December 31, | | |
March 31, | |
| Vessel (Borrower) | |
2022 | | |
2023 | |
| (a) “Pyxis Malou” (Fourthone) | |
$ | 6,616 | | |
$ | — | |
| (b) “Pyxis Theta” (Seventhone) | |
| 12,550 | | |
| 12,250 | |
| (c) “Pyxis Epsilon” (Eighthone) | |
| 14,900 | | |
| 14,600 | |
| (d) “Pyxis Karteria” (Tenthone) | |
| 11,800 | | |
| 15,500 | |
| (e) “Pyxis Lamda” (Eleventhone) | |
| 19,884 | | |
| 18,684 | |
| Total | |
$ | 65,750 | | |
$ | 61,034 | |
| | |
December 31, | | |
March 31, | |
| | |
2022 | | |
2023 | |
| | |
| | |
| |
| Current portion | |
$ | 6,100 | | |
$ | 5,926 | |
| Less: Current portion of deferred financing costs | |
| (271 | ) | |
| (222 | ) |
| Current portion of long-term debt, net of deferred financing costs, current | |
$ | 5,829 | | |
$ | 5,704 | |
| | |
| | | |
| | |
| Long-term portion | |
$ | 59,650 | | |
$ | 55,108 | |
| Less: Non-current portion of deferred financing costs | |
| (603 | ) | |
| (440 | ) |
| Long-term debt, net of current portion and deferred financing costs, non-current | |
$ | 59,047 | | |
$ | 54,668 | |
(a)&(e)
On December 20, 2021, Fourthone and Eleventhone concluded as joint and several borrowers a loan agreement with Alpha Bank in order
to refinance the existing facility of the “Pyxis Malou” and to partly finance the acquisition of the “Pyxis
Lamda”.
On
the same date, Fourthone drew down an amount of $7,320 and fully settled the previous loan facility outstanding balance of $7,320. On
March 23, 2023, pursuant to the sale agreement with an unaffiliated third party we delivered “Pyxis Malou” to her buyer.
The aggregate gross sale price was $24.8 million from which $6.4 million was used for the prepayment of the respective loan facility
and $0.75 million to prepay the outstanding loan for the “Pyxis Lamda”. As of March 31, 2023, the loan balance of Pyxis Malou
has been fully settled.
Upon
delivery of “Pyxis Lamda”, on December 20, 2021, Eleventhone drew down an amount of $21,680. As of March 31, 2023,
the outstanding balance of the Eleventhone loan of $18,684 is repayable in 15 consecutive quarterly installments of $432 each, the first
falling due in June 2023, and the last installment accompanied by a balloon payment of $12,210 falling due in December 2026.
The
loan bears interest at SOFR plus a margin of 3.15% per annum.
Standard
loan covenants include, among others, a minimum liquidity and a minimum required Security Cover Ratio (“MSC”). The facility
imposes certain customary covenants and restrictions with respect to, among other things, the borrower’s ability to distribute
dividends, incur additional indebtedness, create liens, change its share capital, engage in mergers, or sell the vessel and a minimum
collateral value to outstanding loan principal. Certain major covenants include, as defined in such agreements:
Covenants:
| ● | The
borrower undertook to maintain minimum deposit with the bank of $750 at all times, (which
shall be reduced to the amount of $500, upon receipt of time charter employment for a period
of at least six months). |
| ● | The
ratio of the corporate guarantor’s total liabilities (exclusive of the Promissory Note)
to market adjusted total assets is not to exceed 75%. This requirement is only applicable
in order to assess whether the borrowers are entitled to distribute dividends to Pyxis. As
of March 31, 2023, the requirement was met as such ratio was 35.5%, or 39.5% lower than the
required threshold. |
| ● | MSC
is to be at least 125% of the respective outstanding loan balance. |
| ● | No
change of control shall be made directly or indirectly in the ownership, beneficial ownership,
control or management of any of the borrower and the corporate guarantor or any share therein
or the vessels, as a result of which less than 100% of the shares and voting rights in each
borrower are owned by the corporate guarantor or less than 25% of the shares and voting rights
in the corporate guarantor will remain in the ultimate legal and beneficial ownership of
the beneficial shareholders. |
PYXIS TANKERS INC.
Notes to the Unaudited Interim Condensed Consolidated
Financial Statements
(Expressed in thousands of U.S. Dollars,
except for share and per share data)
| 7. | Long-term
Debt: – Continued: |
(b)
On July 8, 2020, Seventhone entered into a $15,250 secured loan agreement with Alpha Bank, for the purpose of refinancing the outstanding
indebtedness of $11,293 under the previous loan facility, which was fully settled on the same day. As of March 31, 2023, the outstanding
balance of the Seventhone loan of $12,250 is repayable in 10 consecutive quarterly installments of $300 each, the first falling due in
April 2023, and the last installment accompanied by a balloon payment of $9,250 falling due in July 2025. The loan bears interest at
SOFR plus a margin of 3.35% per annum.
Standard
loan covenants include, among others, a minimum liquidity and a MSC. The facility imposes certain customary covenants and restrictions
with respect to, among other things, the borrower’s ability to distribute dividends, incur additional indebtedness, create liens,
change its share capital, engage in mergers, or sell the vessel and a minimum collateral value to outstanding loan principal. Certain
major covenants include, as defined in such agreement:
Covenants:
| ● | The
borrower undertakes to maintain minimum deposit with the bank of $500 at all times. |
| ● | The
ratio of the corporate guarantor’s total liabilities (exclusive of the Promissory Note)
to market adjusted total assets is not to exceed 75%. This requirement is only applicable
in order to assess whether the borrower is entitled to distribute dividends to Pyxis. As
of March 31, 2023, the requirement was met as such ratio was 35.5%, or 39.5% lower than the
required threshold. |
| ● | MSC
is to be at least 125% of the respective outstanding loan balance. |
| ● | No
change shall be made directly or indirectly in the ownership, beneficial ownership, control
or management of Seventhone or of the Company or any share therein or the “Pyxis
Theta”, as a result of which less than 100% of the shares and voting rights in
Seventhone or less than 20% of the shares and voting rights in the corporate guarantor remain
in the ultimate legal and beneficial ownership of the beneficial shareholders. |
(c)
As of March 31, 2023, the outstanding balance of Eighthone loan amounted to $14,600 and is repayable in 12 quarterly installments
of $300 each, the first due in June 2023, and the last installment accompanied by a balloon payment of $11,000 due in March 2026. The
loan bears interest at SOFR plus a margin of 3.35% per annum.
Standard
loan covenants include, among others, a minimum liquidity and a MSC. The facility imposes certain customary covenants and restrictions
with respect to, among other things, the borrower’s ability to distribute dividends, incur additional indebtedness, create liens,
change its share capital, engage in mergers, or sell the vessel and a minimum collateral value to outstanding loan principal. Certain
major covenants include, as defined in such agreement:
| ● | The
borrower undertakes to maintain minimum deposit with the bank of $500 at all times. |
| ● | The
ratio of the corporate guarantor’s total liabilities (exclusive of the Promissory Note)
to market adjusted total assets is not to exceed 75%. This requirement is only applicable
in order to assess whether the borrower is entitled to distribute dividends to Pyxis. As
of March 31, 2023, the requirement was met as such ratio was 35.5%, or 39.5% lower than the
required threshold. |
| ● | MSC
is to be at least 125% of the respective outstanding loan balance. |
| ● | No
change shall be made directly or indirectly in the ownership, beneficial ownership, control
or management of Eighthone or of Pyxis or any share therein or the “Pyxis Epsilon”,
as a result of which less than 100% of the shares and voting rights in Eighthone or less
than 20% of the shares and voting rights in Pyxis remain in the ultimate legal and beneficial
owners disclosed at the negotiation of this loan agreement. |
(d)
On March 13, 2023 Tenthone concluded a loan agreement with Piraeus Bank in order to refinance the existing facility of the “Pyxis
Karteria”. On the same date, Tenthone drew down an amount of $15,500 and fully settled the previous loan facility outstanding balance
of $11,500. As of March 31, 2023, the outstanding balance of the Tenthone loan of $15,500 is repayable in 4 quarterly installments of
$450,000, followed by 16 quarterly installments of $300,000 each, the first falling due in June 13, 2023, and the last installment accompanied
by a balloon payment of $8,900 falling due in March 2028.
Standard
loan covenants of the Tenthone loan include, among others, a minimum liquidity and a MSC. Certain major covenants include, as defined
in such agreement:
| ● | The
borrower undertakes to maintain minimum deposit with the bank of $ $900,000 reduced to $500,000
after 6 months. |
| ● | The
ratio of the corporate guarantor’s total liabilities (exclusive of the Promissory Note)
to market adjusted total assets is not to exceed 75%. This requirement is only applicable
in order to assess whether the borrower is entitled to distribute dividends to Pyxis. As
of March 31, 2023, the requirement was met as such ratio was 35.5%, or 39.5% lower than the
required threshold. |
PYXIS TANKERS INC.
Notes to the Unaudited Interim Condensed Consolidated
Financial Statements
(Expressed in thousands of U.S. Dollars,
except for share and per share data)
| 7. | Long-term
Debt: – Continued: |
| ● | MSC
is to be at least 125% of the respective outstanding loan balance. |
| ● | Minimum
cash and cash equivalent shall not be less than the greater of (i) $2 million and (ii) 3%
of the total debt excluding any promissory note. |
Amounts
presented in Restricted cash, current and non-current, in the Consolidated Balance Sheets are related to minimum cash and the retention
account requirements imposed by the Company’s debt agreements.
The
annual principal payments required to be made after March 31, 2023, are as follows:
| To March 31, | |
Amount | |
| 2024 | |
$ | 5,927 | |
| 2025 | |
| 5,327 | |
| 2026 | |
| 24,977 | |
| 2027 and thereafter | |
| 24,803 | |
| Total | |
$ | 61,034 | |
Total
interest expense on long-term debt and the Promissory Note for the three months ended March 31, 2022, and 2023, amounted to $810, and
$1,405, respectively, and is included in Interest and finance costs, net (Note 12) in the accompanying Consolidated Statements of Comprehensive
Income/(Loss). The Company’s weighted average interest rate (including the margin) for the three months ended March 31, 2022 and
2023, was 4.04% and 8.15% per annum, including the Promissory Note discussed in Note 3, respectively.
As
of March 31, 2023, the Company was in compliance with all of the loan covenants in its loan agreements and there was no amount available
to be drawn down under the existing loan agreements.
| 8. |
Equity Capital Structure and Equity Incentive Plan: |
Effective
May 13, 2022, the Company effected a four-for-one reverse stock split on its issued and outstanding common stock. All share and per share
amounts disclosed in the accompanying financial statements give effect to this reverse stock split retroactively, for all periods presented.
The
Company’s authorized common and preferred stock consists of 450,000,000 common shares, 50,000,000 preferred shares of which 1,000,000
are authorized as Series A Preferred Shares.
As
of December 31, 2022 and March 31, 2023, the Company had a total of 10,614,319 and 10,745,654 common shares issued and outstanding, respectively
and 449,473 and 420,085 Series A Convertible Preferred Shares (trading symbol - PXSAP), which have a conversion price of $5.60, issued
and outstanding, respectively, each with a par value of USD 0.001 per share.
Furthermore,
as of December 31, 2022 and March 31, 2023, the Company had outstanding warrants which amounted to 1,590,540, (PXSAW), which have an
exercise price of $5.60, (exclusive of 4,683 underwriter’s warrants to purchase 4,683 Series A Convertible Preferred Shares at
an average exercise price of $24.97 and 16,000 underwriter’s warrant to purchase 16,000 common shares with exercise price $5.60.
The Company has also issued to the placement agent 428,571 non-tradeable warrants for the purchase of common shares, which can be exercised
commencing one hundred eighty (180) days after the closing date, or on August 23, 2021 and expire on the five-year anniversary of the
closing date, or on February 24, 2026. The initial exercise price per common share was $8.75, or 125% of the offering price of the shares.
As of December 31, 2022 and March 31, 2023 all the respective non-tradeable underwriter’s warrants remain outstanding.
During
the first quarter of 2023, an aggregate of 29,388 of Series A Convertible Preferred Shares were converted into 131,335 registered common
shares of the Company while no Warrants were exercised. After March 31, 2023 and up to the date of these Unaudited Interim Condensed
Consolidated Financial Statements, further 16,254 Series A Convertible Preferred Shares had been converted, resulting in the issuance
of 72,589 PXS common shares. At March 31, 2023, the Company had 420,085 outstanding Series A Convertible Preferred Shares and 1,590,540
Warrants (exclusive of 4,683 underwriter’s Warrants to purchase 4,683 Series A Convertible Preferred Shares and 16,000 underwriter’s
warrant to purchase 16,000 common shares which remained outstanding as of March 31, 2023).
PYXIS TANKERS INC.
Notes to the Unaudited Interim Condensed Consolidated
Financial Statements
(Expressed in thousands of U.S. Dollars,
except for share and per share data)
| 8. |
Equity Capital
Structure and Equity Incentive Plan: - Continued: |
During
the months of January through March, 2023 the Company paid monthly cash dividends of $0.1615 for each outstanding Series A Preferred
Share, which aggregated to $207 for the three months ended as of March 31, 2023. As of that date, Mr. Valentis beneficially owned 5,731,942
or approximately 53.3% of our outstanding shares.
| 9. | Income
/(Loss) per Common Share: |
| | |
Three months ended March 31, | |
| | |
2022 | | |
2023 | |
| Net income/(loss) available to common stockholders, basic | |
$ | (3,661 | ) | |
$ | 8,696 | |
| Weighted average number of common shares, basic | |
| 10,613,424 | | |
| 10,706,972 | |
| Net income/(loss) per common share, basic | |
$ | (0.34 | ) | |
$ | 0.81 | |
| | |
| | | |
| | |
| Net income / (loss) available to common stockholders, diluted | |
$ | (3,661 | ) | |
$ | 8,915 | |
| Weighted average number of common shares, diluted | |
| 10,613,424 | | |
| 12,602,547 | |
| Net income/(loss) per common share, diluted | |
$ | (0.34 | ) | |
$ | 0.71 | |
As
of March 31, 2022, securities that could potentially dilute basic loss per share in the future that were not included in the computation
of diluted loss per share, because to do so would have anti-dilutive effect, were any incremental shares of the unexercised warrants,
calculated with the treasury stock method, as well as shares assumed to be converted with respect to the Series A Convertible Preferred
Shares calculated with the if-converted method. At March 31, 2022, there were no securities that could potentially dilute basic loss
per share. These securities consist of outstanding warrants which amounted to 1,590,540, (PXSAW), which have an exercise price of $5.60,
(exclusive of 4,683 underwriter’s warrants to purchase 4,683 Series A Convertible Preferred Shares at an average exercise price
of $24.97 and 16,000 underwriter’s warrant to purchase 16,000 common shares with exercise price $5.60. The Company has also issued
to the placement agent 428,571 non-tradeable warrants for the purchase of common shares, which can be exercised commencing one hundred
eighty (180) days after the closing date, or on August 23, 2021 and expire on the five-year anniversary of the closing date, or on February
24, 2026. The initial exercise price per common share was $8.75, or 125% of the offering price of the shares.
| 10. | Risk
Management and Fair Value Measurements: |
The
principal financial assets of the Company consist of cash and cash equivalents, trade accounts receivable due from charterers and amounts
due from related parties. The principal financial liabilities of the Company consist of long-term bank loans and trade accounts payable.
Interest
rate risk: The Company’s loan interest rates are calculated at LIBOR/SOFR plus a margin, as described in Note 7 above,
hence, the Company is exposed to movements in LIBOR and SOFR. In order to hedge its variable interest rate exposure, on January 19, 2018,
the Company, via one of its vessel-owning subsidiaries, purchased an interest rate cap with one of its lenders for a notional amount
of $10.0 million with a cap rate on LIBOR of 3.5%. The interest rate cap terminated on July 18, 2022. Similarly, on July 16, 2021, the
same subsidiary purchased an additional interest rate cap for the amount of $9.6 million at a cap rate on LIBOR of 2% with a termination
date of July 8, 2025. This cap was sold on January 25, 2023 and we realized a net cash gain of $0.5 million. In the future, we may consider
the use of additional financial hedging products to further limit our interest rate exposure.
Credit
risk: Credit risk is minimized since trade accounts receivable from charterers are presented net of the expected credit losses.
The Company places its cash and cash equivalents, primarily with high credit qualified financial institutions. The Company performs periodic
evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy.
On the balance sheet date there were no significant concentrations on credit risk. The maximum exposure to credit risk is represented
by the carrying amount of each financial asset on the Consolidated Balance Sheets.
Currency
risk: The Company’s transactions are denominated primarily in U.S. dollars; therefore, overall currency exchange risk is
limited. Balances in foreign currency other than U.S. dollars are not considered significant.
PYXIS TANKERS INC.
Notes to the Unaudited Interim Condensed Consolidated
Financial Statements
(Expressed in thousands of U.S. Dollars,
except for share and per share data)
| 10. | Risk
Management and Fair Value Measurements: - Continued: |
Fair
value: The Management has determined that the fair values of the assets and liabilities as of March 31, 2023, are as follows:
| | |
Carrying Value | | |
Fair Value | |
| Cash and cash equivalents (including restricted cash) | |
$ | 30,545 | | |
$ | 30,545 | |
| Trade accounts receivable | |
$ | 4,987 | | |
$ | 4,987 | |
| Trade accounts payable | |
$ | 2,676 | | |
$ | 2,676 | |
| Long-term debt with variable interest rates, net | |
$ | 61,034 | | |
$ | 61,034 | |
| Due to related parties | |
$ | 1,107 | | |
$ | 1,107 | |
The
Company performs an impairment exercise whenever there are indicators of impairment. No impairment loss was recognized for the three
months ended March 31, 2023. As of December 31, 2022 and March 31, 2023, the Company did not have any other assets or liabilities measured
at fair value on a non- recurring basis.
Assets
measured at fair value on a recurring basis: Interest rate cap
The
Company’s interest rate cap does not qualify for hedge accounting. The Company adjusts its interest rate cap contract to fair market
value at the end of every period and records the resulting gain or loss during the period in the Consolidated Statements of Comprehensive
Income / (Loss). Information on the classification, the derivative fair value and the gain/(loss) from financial derivative instruments
included in the Consolidated Financial Statements is shown below:
| | |
December 31, | | |
March 31, | |
| Consolidated Balance Sheets – Location | |
2022 | | |
2023 | |
| Financial derivative instrument – Other non-current assets | |
$ | 619 | | |
$ | — | |
| | |
Three months ended March 31, | |
| Consolidated Statements of Comprehensive Loss – Location | |
2022 | | |
2023 | |
| Financial derivative instrument – Fair value at the beginning of the period | |
$ | 74 | | |
$ | 619 | |
| Financial derivative instrument – Additions of the period | |
| — | | |
| — | |
| Financial derivative instrument – Amounts received | |
| — | | |
| (560 | ) |
| Financial derivative instrument – Fair value as at period end | |
| 308 | | |
| — | |
| Gain/(Loss) from financial derivative instrument | |
$ | 234 | | |
$ | (59 | ) |
The
derivative instrument – interest rate cap was sold on January 25, 2023 and we realized a net cash gain of $0.6 million. In the
future, we may consider the use of additional financial hedging products to further limit our interest rate exposure.
Assets
measured at fair value on a recurring basis: Interest rate cap
The
fair value of the Company’s interest rate cap agreement is determined based on market-based LIBOR rates. LIBOR rates are observable
at commonly quoted intervals for the full term of the cap and therefore, are considered Level 2 items in accordance with the fair value
hierarchy.
Assets
measured at fair value on a non-recurring basis: Long lived assets held and used and held for sale
As
of December 31, 2022 and March 31, 2023, the Company reviewed the carrying amount in connection with the estimated recoverable amount
for each of its vessels held and used. This review indicated that such carrying amount was fully recoverable for the Company’s
vessels held and used. No impairment loss was recognized for the three months ended March 31, 2022 and 2023.
As
of December 31, 2022 and March 31, 2023, the Company did not have any other assets or liabilities measured at fair value on a non-recurring
basis.
PYXIS TANKERS INC.
Notes to the Unaudited Interim Condensed Consolidated
Financial Statements
(Expressed in thousands of U.S. Dollars, except
for share and per share data)
| 11. | Commitments
and Contingencies: |
Minimum
contractual charter revenues: The Company employs certain of its vessels under lease agreements. Time charters typically may
provide for variable lease payments, charterers’ options to extend the lease terms at higher rates and termination clauses. The
Company’s contracted time charters as of March 31, 2023, range from one to six months, with varying extension periods at the charterers’
option and do not provide for variable lease payments. Our time charters contain customary termination clauses which protect either the
Company or the charterers from material adverse situations.
Future
minimum contractual charter revenues, gross of 1.25% address commission and 1.25% brokerage commissions to Maritime and of any other
brokerage commissions to third parties, based on the vessels’ committed, non-cancelable, long-term time charter contracts as of
March 31, 2023, are $10,213.
Other:
Various claims, suits and complaints, including those involving government regulations and environmental liability, arise in the ordinary
course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with
suppliers relating to the operations of the Company’s vessels. Currently, management is not aware of any such claims not covered
by insurance or contingent liabilities, which should be disclosed, or for which a provision has not been established in the accompanying
Consolidated Financial Statements.
The
Company accrues for the cost of environmental and other liabilities when management becomes aware that a liability is probable and is
able to reasonably estimate the probable exposure. As of March 31, 2023 and as of the date of the issuance of the Unaudited Interim Condensed
Consolidated Financial Statements, management is not aware of any other claims or contingent liabilities, which should be disclosed or
for which a provision should be established in the accompanying Unaudited Interim Condensed Consolidated Financial Statements. The Company
is covered for liabilities associated with the individual vessels’ actions to the maximum limits as provided by Protection and
Indemnity (P&I) Clubs, members of the International Group of P&I Clubs.
| 12. | Interest
and Finance Costs, net: |
The
amounts in the accompanying unaudited interim Consolidated Statements of Comprehensive Income / (Loss) are analyzed as follows:
| | |
Three months ended March 31, | |
| | |
2022 | | |
2023 | |
| Interest on long-term debt (Note 7) | |
$ | 699 | | |
$ | 1,336 | |
| Interest on Promissory Note (Note 3) | |
| 111 | | |
| 69 | |
| Amortization of financing costs | |
| 81 | | |
| 69 | |
| Financing fees and charges | |
| (17 | ) | |
| 17 | |
| Interest from time deposits | |
| — | | |
| (61 | ) |
| Total | |
$ | 874 | | |
$ | 1,430 | |
The
Company disaggregates its revenue from contracts with customers by the type of charter (time charters and spot charters). The following
table presents the Company’s revenue disaggregated by revenue source for the three month periods ended March 31, 2022 and 2023:
| | |
Three months ended March 31, | |
| | |
2022 | | |
2023 | |
| Revenues derived from spot charters, net | |
$ | 4,315 | | |
$ | 3,055 | |
| Revenues derived from time charters, net | |
| 2,591 | | |
| 8,561 | |
| Revenues, net | |
$ | 6,906 | | |
$ | 11,616 | |
The
Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year
or less, in accordance with the optional exception in ASC 606.
The
following table presents the Company’s net trade accounts receivable disaggregated by revenue source as December 31, 2022 and March
31, 2023:
| | |
December 31,
2022 | | |
March 31,
2023 | |
| Accounts receivable trade from spot charters | |
$ | 10,598 | | |
$ | 5,151 | |
| Accounts receivable trade from time charters | |
| 35 | | |
| — | |
| Less: Bad debt provisions | |
| (26 | ) | |
| (26 | ) |
| Less: Allowance for credit losses | |
| (138 | ) | |
| (138 | ) |
| Total | |
$ | 10,469 | | |
$ | 4,987 | |
Dividend
payment: During April 2023, the Company paid monthly cash dividends of $0.1615 per share on its outstanding Series A Preferred
Shares, amounting to $68. Similarly, on May 2, 2023, the board of directors of Pyxis declared a monthly dividend of $0.1615 per share,
for the month of May 2023. The cash dividend of $68 will be payable on May 22, 2023, to holders of record as of May 15, 2023.
Annual
shareholder meeting: At the scheduled annual 2023 shareholder meeting, held on May 11, 2023, the Company’s shareholders
re-elected Mr. Basil Mavroleon and Mr. Robin Das as Class III Directors to serve for a term of three years until the 2026 annual meeting.
