PYXIS TKRS.EQ.WARRT(PXSAW) - 2022 Q4 - Annual Report

Introduction Defines 'Pyxis' and its subsidiaries, stating financial statements follow U.S. GAAP and all monetary values are in U.S. dollars Company Definition and Accounting Standards Defines 'Pyxis' and its subsidiaries, stating financial statements follow U.S. GAAP and all monetary values are in U.S. dollars - The terms 'Pyxis,' 'the Company,' 'we,' 'us,' and 'our' refer to Pyxis Tankers Inc. and its consolidated subsidiaries[13] - Audited consolidated financial statements are prepared in accordance with U.S. GAAP[13] - All monetary references ($, US$, U.S.$, U.S. dollars, dollars, USD) mean U.S. dollars, unless otherwise noted[14] Special Note Regarding Forward-Looking Statements This section cautions investors that forward-looking statements are speculative and subject to risks that could cause actual results to differ materially - Forward-looking statements cover future operating or financial results, global and regional economic/political conditions, business strategy, capital spending, competition, shipping market trends, financial condition, liquidity, and vessel availability/useful lives[16] - Factors that might cause future results to differ include changes in governmental regulations, economic and competitive conditions, central bank policies, borrowing availability, operating expenses (bunker fuel, crewing, dry-docking), ability to fund capital expenditures, acquisitions and divestitures, vessel breakdowns, litigation, cybersecurity breaches, world trade disruptions, interest and foreign exchange rates, natural disasters, and ESG policies[17][19] - Investors should not place undue reliance on forward-looking statements as they are not guarantees of future performance, and actual results may vary materially[18] Part I Item 1. Identity of Directors, Senior Management and Advisers This item is not applicable, indicating no information on directors, senior management, or advisers is provided - Information for this item is not applicable[21] Item 2. Offer Statistics and Expected Timetable This item is not applicable, indicating no offer statistics or expected timetable information is provided - Information for this item is not applicable[22] Item 3. Key Information This section provides crucial information on capitalization, indebtedness, offer reasons, use of proceeds, and comprehensive risk factors A. [Reserved] This sub-item is reserved, indicating no specific content is provided under this heading - This section is reserved[23] B. Capitalization and Indebtedness This sub-item is not applicable, meaning detailed capitalization and indebtedness information is not presented here - Information for this item is not applicable[23] C. Reasons for the Offer and Use of Proceeds This sub-item is not applicable, indicating no specific reasons for an offer or details on the use of proceeds are discussed - Information for this item is not applicable[24] D. Risk Factors This section outlines significant risks associated with investing in the company's securities, covering industry, operational, tax, and common stock factors Risks Related to Our Industry The company operates in a cyclical and volatile product tanker market, susceptible to global economic conditions, geopolitical events, and environmental regulations - World events, including the ongoing hostilities between Russia and Ukraine, could adversely affect the company's results of operations and financial condition, causing uncertainty in global financial and energy markets and potentially disrupting supply chains[29] - The company's revenues are derived substantially from the product tanker segment, where charter hire rates are cyclical and volatile, making financial results dependent on market conditions and changes in supply and demand for vessel capacity[33][34] - The continuation of the COVID-19 pandemic and the emergence of other epidemic or pandemic crises could have material adverse effects on the business, results of operations, or financial condition due to trade disruptions, reduced economic activity, and increased operational costs[40][42][43] - An over-supply of product tanker capacity, influenced by newbuilding deliveries and eco-efficient vessel designs, may lead to reductions in charter rates, vessel values, and profitability, particularly for older, less efficient vessels[48][49][50] - Macroeconomic conditions, including rising inflation, interest rates, market volatility, and supply chain constraints, adversely affect the business by increasing labor and operating costs and impacting the ability to raise capital[38][63] - The company is subject to increasingly complex environmental and safety laws and regulations (e.g., OPA, MARPOL, BWM Convention, EEXI, CII), which expose it to liability, significant expenditures for compliance (costly equipment, vessel modifications), and can adversely affect insurance coverage and access to certain ports[73][74][76] - A shift in consumer demand from oil products towards other energy sources (e.g., electricity, natural gas) or changes to trade patterns for refined petroleum products may have a material adverse effect on the demand for the company's vessels and its future financial performance[90][91][92] - Technological innovation and evolving quality/efficiency requirements from customers could reduce charter hire income and vessel values, especially as more technologically advanced and environmentally friendly vessels are introduced[93] Risks Related to Our Business and Operations The company faces intense competition, customer concentration, reliance on third-party managers, and substantial capital expenditure requirements - The product tanker industry is highly fragmented and competitive, with competition based on price, vessel location, size, age, condition, and operator reputation, which could erode the company's competitive position[94] - A substantial portion of the company's revenues is derived from a limited number of customers (56% from three in 2021, 69% from two in 2022), making the loss of any significant customer a potential cause for significant revenue and cash flow loss[100] - The company's operational success depends significantly on the satisfactory performance of International Tanker Management (ITM) and Pyxis Maritime Corp. (Maritime) for technical, commercial, and administrative services, and failure to perform could harm the business[107][108] - Controlling operating and voyage expenses is critical, but these costs are subject to unpredictable factors like crew wages, insurance, spare parts, dry-dock repairs, and bunker fuel prices, which have been increasing[109] - Substantial capital expenditures are required for fleet maintenance (e.g., dry-docking, upgrades) and expansion (e.g., vessel acquisitions), for which the company may be dependent on additional financing that may not be available on acceptable terms[110][111][112] - The company does not plan to install scrubbers, which means it will have to pay more for low sulfur fuel, potentially making its vessels less competitive and adversely affecting business, results of operations, and financial condition[115][117][118] - The company's founder, Chairman, and Chief Executive Officer has affiliations with Maritime, which may create conflicts of interest in business decisions that may not be resolved in the company's favor[138][140][141] - Insurance coverage may be insufficient to cover all losses from operations, and certain risks like 'loss of hire' and 'strikes' are uninsured due to disproportionate costs, potentially leading to significant financial impact[144][145][146] - Reliance on information technology systems and networks exposes the business to cyber-attacks, which could materially disrupt operations, lead to data breaches, and incur significant expenses, as the company does not maintain cyber-liability insurance[153][154][155] Risks Related to our Indebtedness The company's ability to meet debt obligations depends on volatile cash flow, with restrictive covenants and market vessel values posing significant risks - The company's ability to make scheduled payments on its indebtedness depends on generating sufficient cash from future operations, which is affected by economic, financial, competitive, and regulatory factors beyond its control, particularly charter rates[159] - Amounts borrowed under bank loan agreements bear variable interest rates (e.g., LIBOR), and increases in these rates could significantly increase debt service costs, reducing net income and cash flows[160][172][174] - The market values of tanker vessels are highly volatile; declines could lead to impairment charges, breaches of loan covenants (e.g., minimum security collateral cover), and difficulties in refinancing debt or obtaining additional financing[163][164] - Restrictive covenants in current and future loan agreements impose financial and other restrictions, such as limitations on dividend payments, incurring additional indebtedness, encumbering vessels, and changes in ownership or management, which could limit business flexibility[165][166] - Breaching loan covenants could result in lenders accelerating debt repayment and foreclosing on collateral vessels, materially adversely impacting the company's business, results of operations, and financial condition[169] Risks Related to our Common Stock The common stock market price is volatile, future sales and conversions will dilute ownership, and non-compliance with NASDAQ rules could lead to delisting - The market price of the company's common stock has fluctuated widely and may continue to be volatile due to operating performance, industry prospects, economic conditions, analyst projections, and broader market factors, potentially leading to substantial losses for investors[175][176][177] - Future sales of common shares by existing shareholders or the issuance of additional equity securities (e.g., for acquisitions, debt repayment, incentive plans) could dilute ownership interests and depress the market price of common stock[179][184][185] - Conversion of Series A Convertible Preferred Shares and exercise of outstanding warrants will dilute the ownership interest of existing common shareholders by up to 23.5%[181] - Failure to meet NASDAQ's minimum share price requirement (e.g., $1.00 per share) and inability to cure such deficiency could result in delisting, significantly reducing liquidity and impairing the ability to raise additional capital[196][197][198] - Anti-takeover provisions in the Articles of Incorporation and Bylaws (e.g., classified board, 'blank check' preferred stock, restrictions on shareholder actions, business combination limitations) could make it difficult for stockholders to change the board or discourage acquisitions, potentially affecting the market price of common stock[202][203][209] - The company is a holding company, and its ability to meet financial obligations and pay dividends depends on its subsidiaries' performance and their ability to distribute funds, which can be restricted by loan agreements or Marshall Islands/Maltese law[191] - The company does not intend to pay common stock dividends in the near future, and future payments are not guaranteed, being subject to board discretion and compliance with legal, fiduciary, and contractual requirements[192][193][194] Tax Risks The company may face U.S. federal income tax on shipping income, and classification as a PFIC or CFC could lead to adverse tax consequences for U.S. holders - The company may have to pay a 4% U.S. federal income tax on 50% of its gross shipping income attributable to voyages beginning or ending in the United States, unless it qualifies for exemption under Section 883 of the Code or an applicable U.S. income tax treaty[204][207][555] - If the company or one of its subsidiaries were treated as a 'passive foreign investment company' (PFIC), U.S. holders could face adverse U.S. federal income tax consequences, including higher tax rates and interest charges on 'excess distributions' and gains from the sale of shares[211][212][582] - If the company were treated as a 'controlled foreign corporation' (CFC), certain U.S. investors (owning 10% or more of voting power or value) may face adverse U.S. federal income tax consequences and information reporting obligations[213] - Disagreements with the IRS or other taxing authorities regarding tax positions, or changes in tax rules, laws, or regulations, could result in additional tax liability, including interest and penalties, and increase the company's effective tax rate[208] Item 4. Information on the Company This section provides an overview of Pyxis Tankers Inc., including its history, business operations, fleet details, management structure, and property A. History and Development of the Company Pyxis Tankers Inc. was incorporated in Marshall Islands in 2015, focusing on international maritime transportation, with recent vessel sales and loan refinancing - Pyxis Tankers Inc. was incorporated on March 23, 2015, in the Marshall Islands and commenced trading on the NASDAQ Capital Market under the symbol 'PXS' in October 2015 after a merger with LookSmart[214][215] - As of March 31, 2023, the company owns its current fleet of vessels through four separate wholly-owned subsidiaries incorporated in the Marshall Islands[215] - The company periodically assesses the value of its fleet, potential strategic opportunities (vessel acquisitions or dispositions), and equity and debt capital raises[216] - Recent Developments: - Sold the vessel 'Pyxis Malou' (2009-built MR product tanker) for $24.8 million in cash on March 23, 2023, resulting in approximately $18.9 million net cash proceeds after debt repayment and transaction costs, and an expected gain of approximately $8.0 million ($0.75 per outstanding common share) for Q1 2023[217] - Refinanced the debt associated with the 'Pyxis Karteria' (2013-built vessel) on March 13, 2023, with a new $15.5 million, five-year secured loan from Piraeus Bank, S.A. The net proceeds were used to repay bank debt and the remaining $3.0 million outstanding under the Promissory Note due to Maritime Investors Corp[218] - Paid monthly cash dividends of $0.1615 per Series A Convertible Preferred Share on January 20, February 21, and March 20, 2023[219] - The ongoing military conflict in Ukraine has significantly impacted the trade of refined petroleum products, leading to sanctions against Russia and volatility in oil prices. While current charter contracts and operations have not been negatively affected, future impacts on financial condition, results of operations, and performance are possible[220] B. Business Overview Pyxis Tankers Inc. is an international maritime transportation company specializing in product tankers, operating an eco-efficient MR fleet with a focus on maximizing revenues - As of March 31, 2023, the fleet consists of four double hull product tankers (MRs) with an average age of 8.4 years (excluding the 'Pyxis Malou' sold on March 23, 2023) and a total cargo carrying capacity of 198,882 dwt. All vessels are eco-efficient designed MR tankers[221] - The company's principal objective is to own and operate its fleet to benefit from short- and long-term trends in the product tanker sector and maximize revenues, intending to expand the fleet through selective acquisitions of modern MR tankers and employ vessels through time charters and the spot market[222] Fleet Summary Information (as of March 31, 2023) | Vessel Name | Shipyard | Vessel type | Carrying Capacity (dwt) | Year Built | Type of charter | Charter Rate (per day) | Anticipated Earliest Redelivery Date | | :------------ | :--------------- | :---------- | :---------------------- | :--------- | :-------------- | :--------------------- | :---------------------------------- | | Pyxis Lamda | SPP / S. Korea | MR | 50,145 | 2017 | Time | $40,000 | Apr 2023 | | Pyxis Epsilon | SPP / S. Korea | MR | 50,295 | 2015 | Time | 30,000 | Sep 2023 | | Pyxis Theta | SPP / S. Korea | MR | 51,795 | 2013 | Time | 18,500 | Jun 2023 | | Pyxis Karteria | Hyundai / S. Korea | MR | 46,652 | 2013 | Time | DD | May 2023 | | Total | | | 198,887 | | | | | - The company generates revenues from time charters (fixed daily rate, charterer pays voyage expenses) and spot charters (per-ton basis for single voyage, owner pays all expenses). It may also use pooling arrangements or bareboat charters[226][227][230] - Competitive strengths include a high-quality fleet of modern tankers (average age 8.4 years), established relationships with leading charterers, a competitive cost structure, and an experienced management team[230][231] - Business strategy includes maintaining a high-quality fleet (average age ≤ 10 years), growing opportunistically through acquisitions of IMO II and III class eco-MR tankers, optimizing operating efficiency through vessel modifications (e.g., BWTS, ESDs), utilizing a portfolio approach for commercial employment, preserving a strong safety record, maintaining financial flexibility, and supporting good Environmental, Social & Governance (ESG) standards[231][232][234] - Ship operations, administration, and safety are managed by Maritime (affiliated, for commercial and administrative services) and ITM (unaffiliated, for day-to-day technical management and crewing)[235][236][238] - The company's vessels are subject to classification by societies like NKK and DNV GL, requiring regular surveys (annual, intermediate, special) and dry-dockings every 30-36 months to maintain 'in-class' status and comply with regulations[242][243][245][247][248] - Risk management includes maintaining hull and machinery, war risk, and protection and indemnity (P&I) insurance, with P&I pollution liability limited to $1.0 billion per vessel per incident. Certain risks like 'loss of hire' and 'strikes' are uninsured[251][253][254][255][256][257] - The product tanker shipping industry is highly competitive and fragmented, with competition based on price, vessel characteristics, and operator reputation. Key customers include international commodity trading companies and major oil/gas companies[259][260][261] - The company is committed to ESG practices, including fleet renewal for energy efficiency, performance optimization software, installation of energy-saving devices and BWTS, compliance with IMO fuel regulations, and transparent reporting of emissions and hazardous materials[263][264][265][266] - Seaborne trade in refined petroleum products grew by 1.3% CAGR between 2013 and 2022, driven by U.S. exports and shifting refinery capacity to Asia and the Middle East. The Russia-Ukraine conflict has further altered trade patterns, increasing ton-mile demand[269][270][274][275][276] - The global product tanker fleet's orderbook is low (5.2% of existing fleet by units as of Feb 28, 2023), with significant slippage in newbuilding deliveries. High charter rates in 2022 curbed demolitions, and second-hand vessel prices increased[277][278][279][282] - Increasing environmental regulations (e.g., EEXI, CII, IMO 2020 sulfur cap, BWM Convention) are expected to squeeze tonnage availability, particularly for older, less efficient vessels, and may lead to increased scrapping and fleet renewal[273][287][288][289][290][291][292][294][295][297][298][299][301][302][303][312][313][314][315][317][319][320][322][334][335][337][338][339][340][341][342][343][344] C. Organizational Structure Pyxis Tankers Inc. is a Marshall Islands holding company, owning its fleet through four wholly-owned subsidiaries, with recent re-domiciliations and vessel sales - Pyxis Tankers Inc. was incorporated under the laws of the Republic of the Marshall Islands on March 23, 2015[356] - As of March 31, 2023, the company owns its fleet through four separate wholly-owned subsidiaries incorporated in the Republic of Marshall Islands[356] List of Subsidiaries (as of December 31, 2022) | Name of Company | Country of Incorporation | Principal Activities | Ownership | | :-------------------------- | :----------------------- | :----------------------- | :-------- | | SECONDONE CORPORATION LTD | Marshall Islands | Non-operating subsidiary | 100% | | THIRDONE CORPORATION LTD. | Marshall Islands | Non-operating subsidiary | 100% | | FOURTHONE CORPORATION LTD.* | Malta | Non-operating subsidiary | 100% | | SIXTHONE CORP. * | Marshall Islands | Non-operating subsidiary | 100% | | SEVENTHONE CORP. | Marshall Islands | Ship ownership and operations | 100% | | EIGHTHONE CORP. | Marshall Islands | Ship ownership and operations | 100% | | TENTHONE CORP. | Marshall Islands | Ship ownership and operations | 100% | | ELEVENTHONE CORP. | Marshall Islands | Ship ownership and operations | 100% | | MARITIME TECHNOLOGIES CORP. | Delaware | Non-operating subsidiary | 100% | - The vessels 'Pyxis Delta', 'Northsea Alpha', 'Northsea Beta', and 'Pyxis Malou' were sold to unaffiliated third parties on January 13, 2020, January 28, 2022, March 1, 2022, and March 23, 2023, respectively[357] - Secondone and Thirdone re-domiciled to the Republic of the Marshall Islands in December 2022, after previously being in Malta[698] D. Property, Plants and Equipment The company's primary material property consists of its vessels, with office space and administrative services provided by its affiliated ship management company - Other than its vessels, the company does not own any material property[358] - Office space is provided by Maritime, the affiliated ship management company, as part of the administrative services under the Head Management Agreement[358] Item 4A. Unresolved Staff Comments This item is not applicable, indicating no unresolved staff comments from the SEC to disclose in this report - Information for this item is not applicable[359] Item 5. Operating and Financial Review and Prospects This section discusses the company's financial condition and results of operations, highlighting global event impacts, key financial terms, and liquidity management - The COVID-19 pandemic caused substantial disruptions, lower charter activity, reduced profitability, and higher crewing/dry-docking costs in 2021. In 2022, its effects were primarily felt in Asia, particularly China, leading to low economic activity[360][361][362] - The Russian-Ukrainian war created further uncertainty for the global economic outlook, especially in Europe, leading to increased crude oil and bunker fuel prices and potential inflationary pressures, though no direct operational disruption has occurred to date[364] - The company sold the 'Northsea Alpha' and 'Northsea Beta' in early 2022, and the 'Pyxis Malou' in March 2023, to streamline its fleet to four MRs, citing attractive market conditions for older vessels, high operating costs, and greater emissions[365] - Key financial and operational terms include Voyage Revenues (net of address commissions), Spot Charters (revenue recognized load-to-discharge), Time Charters (stable cash flows, owner pays operating expenses), Voyage Related Costs and Commissions (owner pays for spot charters), Vessel Operating Expenses, General and Administrative Expenses, Management Fees, Depreciation (25-year useful life, $340/ton scrap rate), Special Survey and Drydocking (costs deferred and amortized), and Interest and Finance Costs (variable rates, hedging)[367][368][369][370][372][373][374][375][376][377][378][379][380] - As of December 31, 2022, the company had a working capital surplus of $8.6 million and expects to cover its liquidity needs for the next 12 months through generated cash from vessel operations and proceeds from the 'Pyxis Malou' sale, while remaining compliant with debt covenants[433][436][747] - The company's business is capital intensive, and future success depends on maintaining a high-quality fleet through opportunistic acquisitions and sales, subject to market conditions and access to cost-effective capital[434] - The company does not intend to pay dividends to common shareholders in the near future, expecting to retain cash flows for vessel operating costs, dry-docking, debt service, general corporate expenses, and reinvestment in the business[435] - Critical accounting policies include Vessel Impairment (reviewing carrying amounts against future cash flows and fair market value, with no impairment recorded in 2022), Vessel Lives and Depreciation (25-year useful life, $340/ton scrap rate), and Revenue Recognition (spot charters load-to-discharge, time charters as operating leases)[453][454][455][456][457][458][459][460][461][463][728][729][730][731][732][733][734][735][748][749][750][751][753] A. Operating Results In 2022, the company achieved a significant turnaround with a net income of $12.5 million, driven by a 130% increase in net revenues from higher spot charter rates - As of December 31, 2022, three vessels were employed on time charters and two vessels were operating in the spot market[387] Revenues, Net (in thousands of U.S. dollars) | | Year ended December 31, 2021 | Year ended December 31, 2022 | Change ($) | Change (%) | | :------------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Revenues derived from spot charters, net | $13,711 | $39,099 | $25,388 | 185.2% | | Revenues derived from time charters, net | $11,630 | $19,245 | $7,615 | 65.5% | | Revenues, net | $25,341 | $58,344 | $33,003 | 130.2% | MR Fleet Operating Data | MR Fleet Operating Data | 2021 | 2022 | Change | | :---------------------------------- | :----- | :----- | :------- | | Ownership days | 1,276 | 1,825 | +549 | | Available days | 1,264 | 1,811 | +547 | | Operating days | 1,160 | 1,584 | +424 | | Utilization % | 91.8% | 87.5% | -4.3% | | Daily time charter equivalent rate | $10,195 | $25,739 | +$15,544 | | Daily vessel operating expenses | $6,916 | $6,754 | -$162 | | Average number of vessels | 3.5 | 5.0 | +1.5 | | Number of vessels at period end | 4 | 5 | +1 | | Weighted average age of vessels at period end | 8.3 | 9.3 | +1.0 | Daily TCE Rate Calculation (in thousands of U.S. dollars) | | Year ended December 31, 2021 | Year ended December 31, 2022 | | :-------------------------------- | :--------------------------- | :--------------------------- | | MR Revenues, net | $17,717 | $57,749 | | MR Voyage related costs and commissions | $(5,891) | $(16,979) | | MR Time charter equivalent revenues | $11,826 | $40,770 | | MR Operating days for fleet | 1,160 | 1,584 | | MR Daily TCE rate | $10,195 | $25,739 | - The daily TCE rate increased significantly in 2022 compared to 2021, primarily due to higher spot charter rates and more operating days from the acquisition of 'Pyxis Karteria' and 'Pyxis Lamda', partially offset by higher voyage-related costs and slightly lower utilization[391] Net Income / (Loss) Attributable to Common Shareholders (in thousands of U.S. dollars) | | Year ended December 31, 2021 | Year ended December 31, 2022 | Change ($) | Change (%) | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net income / (loss) attributable to common shareholders | $(12,893) | $12,507 | $25,400 | 197.0% | | Income / (loss) per common share, basic | $(1.43) | $1.18 | $2.61 | 182.5% | | Income / (loss) per common share, diluted | $(1.43) | $1.06 | $2.49 | 174.1% | - Key financial changes in 2022 compared to 2021 include a $33.0 million (130%) increase in net revenues, a $7.8 million (81.0%) increase in voyage-related costs and commissions, flat vessel operating expenses, a $1.2 million (24.5%) increase in depreciation, a $0.6 million gain from financial derivative instruments, and a $1.2 million increase in net interest and finance costs[393][398][399][400][402][406][407] B. Liquidity and Capital Resources The company's liquidity is sourced from operations, bank debt, and equity, with future needs focused on debt service, operating expenses, and fleet expansion - Principal sources of liquidity are cash flows from operations, borrowings of bank debt, proceeds from equity issuances, and expected future selective vessel sales. Future liquidity requirements relate primarily to debt service, vessel operating expenses, management fees, cash reserves for loan covenants, and potential vessel acquisitions[409][416] - In October 2020, the company issued 200,000 Units ($25.00/Unit), each separable into one 7.75% Series A Cumulative Convertible Preferred Share and eight warrants (exercisable at $5.60/share). A follow-on public offering of 308,487 Series A Convertible Preferred Shares was completed in July 2021 for $5.56 million net proceeds[409][425][533][537] - As of December 31, 2022, 449,473 Series A Preferred Shares and 1,590,540 Warrants were outstanding. By March 31, 2023, 29,388 additional Series A Preferred Shares had been converted, resulting in the issuance of 131,335 common shares[432][539][828] - Key transactions include a $25.0 million private placement of common stock in February 2021, the acquisition of 'Pyxis Karteria' in July 2021 (partially funded by a $13.5 million loan), and the acquisition of 'Pyxis Lamda' in December 2021 for $31.17 million (funded by a $21.68 million loan, $3.0 million Promissory Note, common shares, and cash)[423][424][427][428] - The company sold 'Northsea Alpha' and 'Northsea Beta' in early 2022 for an aggregate of $8.9 million, repaying $5.8 million in outstanding debt. The 'Pyxis Malou' was sold on March 23, 2023, for $24.8 million, yielding approximately $18.9 million net cash after debt repayment[429][784][787][860] - The $6.0 million Promissory Note due to Maritime Investors Corp. was fully repaid by March 14, 2023, following a $3.0 million repayment in February 2023 and the refinancing of the 'Pyxis Karteria' loan in March 2023[218][449][509][777][861] - A one-for-four reverse stock split was implemented on May 13, 2022, to meet NASDAQ's minimum bid price requirement[430][837] Consolidated Cash Flows (in thousands of U.S. dollars) | Statements of Cash Flows Data | 2021 | 2022 | | :------------------------------------------ | :----- | :----- | | Net cash provided by / (used in) operating activities | $(896) | $8,274 | | Net cash (used in) / provided by investing activities | $(43,194) | $4,953 | | Net cash provided by / (used in) financing activities | $49,927 | $(12,912) | | Change in cash and cash equivalents and restricted cash | $5,837 | $315 | - As of December 31, 2022, the company had a working capital surplus of $8.6 million, an improvement from a $3.7 million deficit in 2021. Cash and cash equivalents and restricted cash amounted to $10.2 million[436][747] Long-term Debt (in thousands of U.S. dollars) | Vessel (Borrower) | December 31, 2021 | December 31, 2022 | | :------------------------ | :------------------ | :------------------ | | 'Northsea Alpha' (Secondone) | $2,890 | $— | | 'Northsea Beta' (Thirdone) | $2,890 | $— | | 'Pyxis Malou' (Fourthone) | $7,320 | $6,616 | | 'Pyxis Theta' (Seventhone) | $13,750 | $12,550 | | 'Pyxis Epsilon' (Eighthone) | $16,100 | $14,900 | | 'Pyxis Karteria' (Tenthone) | $13,150 | $11,800 | | 'Pyxis Lamda' (Eleventhone) | $21,680 | $19,884 | | Total | $77,780 | $65,750 | | Current portion | $12,030 | $6,100 | | Less: Current portion of deferred financing costs | $(335) | $(271) | | Current portion of long-term debt, net | $11,695 | $5,829 | | Long-term portion | $65,750 | $59,650 | | Less: Non-current portion of deferred financing costs | $(870) | $(603) | | Long-term debt, net of current portion and deferred financing costs, non-current | $64,880 | $59,047 | - The company was in compliance with all financial covenants of its loan agreements as of December 31, 2022. The weighted average interest rate (including margin) for long-term debt and the Promissory Note was 5.41% in 2022, up from 5.04% in 2021[447][811] C. Research and Development, Patents and Licenses, etc. This item is not applicable, indicating no specific disclosures regarding research and development, patents, or licenses - Information for this item is not applicable[464] D. Trend Information Operating results are driven by volatile charter hire rates in the cyclical product tanker market, influenced by supply, demand, and global events - The company's results of operations depend primarily on charter hire rates, which are influenced by the supply and demand dynamics of the highly cyclical product tanker market[465] - Recent trends affecting the business include the unpredictable and uneven travel restrictions related to the COVID-19 pandemic and the war between Russia and Ukraine, both creating uncertainty in demand for product tankers and impacting charter rates[465][466] E. Critical Accounting Estimates This section refers to Note 2 of the financial statements for critical accounting estimates regarding vessels and impairment of long-lived assets - Critical accounting estimates are discussed in Note 2 of the consolidated financial statements, specifically 'Note 2 – Significant Accounting Policies - (m) Vessels, Net:' and 'Note 2 – Significant Accounting Policies - (n) Impairment of Long-Lived Assets'[467] - The preparation of financial statements requires management to make estimates and judgments that affect reported amounts of assets, liabilities, revenues, and expenses, with actual results potentially differing under various assumptions and conditions[453] Item 6. Directors, Senior Management and Employees This section provides information on the company's executive officers and directors, their compensation, board practices, and employee structure - The company has no direct employees; the services of its executive officers, internal auditors, and secretary are provided by Maritime[479][494] - The management team, led by Chairman and CEO Mr. Eddie Valentis, possesses over 100 years of combined industry experience[231][470][471][472] - The board of directors consists of four directors, with three independent members (Robin P. Das, Basil G. Mavroleon, Aristides J. Pittas) serving staggered three-year terms[491] - The audit committee comprises three independent, non-executive directors, with Mr. Robin Das qualifying as an audit committee financial expert[492][640] - Non-executive directors receive an aggregate annual compensation of $125,000, plus reimbursements for expenses[480] - The company has an Equity Incentive Plan (EIP) adopted in 2015, allowing for various equity-based awards (stock options, restricted stock, etc.) to employees, officers, directors, and consultants, with a maximum aggregate of 15% of outstanding common stock[481][482][484][485][486][487][488] - The company has entered into agreements to indemnify its directors, executive officers, and other employees for related expenses, including legal fees, judgments, and settlement amounts[495] A. Directors and Senior Management This section lists the names, ages, and positions of the company's executive officers and directors, highlighting their extensive industry experience Executive Officers and Directors | Name | Age | Position | | :------------------------ | :-- | :------------------------------------- | | Valentios "Eddie" Valentis | 56 | Chairman, Chief Executive Officer and Class I Director | | Henry P. Williams | 67 | Chief Financial Officer and Treasurer | | Konstantinos Lytras | 58 | Chief Operating Officer and Secretary | | Robin P. Das | 50 | Class III Director | | Basil G. Mavroleon | 74 | Class III Director | | Aristides J. Pittas | 63 | Class II Director | - Mr. Valentios 'Eddie' Valentis has over 26 years of shipping industry experience, including owning, operating, and managing tankers, and is the founder and president of Pyxis Maritime Corp[470] - Mr. Henry P. Williams, Chief Financial Officer and Treasurer, has over 35 years of commercial, investment, and merchant banking experience[471] - Mr. Konstantinos Lytras, Chief Operating Officer and Secretary, has served as Maritime's Financial Director since 2008 and has extensive experience in shipping finance and management[472] - There are no familial relationships among any of the executive officers or directors[476] - The board diversity matrix indicates 4 male directors and 1 underrepresented individual in their home country jurisdiction (Robin P. Das from the United Kingdom)[478] B. Compensation Executive officer services are provided by Maritime for an annual fee, non-executive directors receive annual compensation, and an Equity Incentive Plan is in place - The services of executive officers, internal auditors, and secretary are provided by Maritime, for which the company pays approximately $1.8 million per year for administrative services[479] - Non-executive directors receive an aggregate annual compensation of $125,000, plus reimbursements for actual expenses[480] - The Pyxis Tankers Inc. 2015 Equity Incentive Plan (EIP) allows for granting stock options, stock appreciation rights, restricted stock grants, restricted stock units, unrestricted stock grants, and dividend equivalents to employees, officers, directors, and consultants[481] - The maximum aggregate number of common stock shares that may be delivered under the EIP is 15% of the then-issued and outstanding shares[482] - The exercise price for options and stock appreciation rights cannot be less than 100% of the fair market value on the date of grant, with a maximum term of ten years[484][485] C. Board Practices The board consists of four members, with three independent directors serving staggered terms, and audit and nominating committees overseeing governance - The board of directors consists of four directors, three of whom are independent (Robin P. Das, Basil G. Mavroleon, and Aristides J. Pittas) under NASDAQ and SEC rules[491] - Directors are elected by common shareholders and are divided into three classes serving staggered three-year terms[491] - The audit committee comprises three independent, non-executive directors (Robin Das, Basil Mavroleon, and Aristides Pittas), with Robin Das qualifying as an audit committee 'financial expert'[492] - The nominating and corporate governance committee is responsible for recommending director nominees and advising on corporate governance practices[493] D. Employees The company has no direct employees; executive officers and administrative services are provided by Maritime under a Head Management Agreement - The company has no direct employees[494] - The services of executive officers, internal auditors, and secretary are provided by Maritime under a Head Management Agreement, with an annual payment of approximately $1.8 million for these and other administrative services[494] E. Share Ownership This section refers to 'Item 7. Major Shareholders and Related Party Transactions – A. Major Shareholders' for details on common stock ownership by officers and directors - Information regarding the total amount of common stock owned by all officers and directors as a group is provided in 'Item 7. Major Shareholders and Related Party Transactions – A. Major Shareholders'[496] F. Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation This item is not applicable, indicating no disclosure is required regarding actions to recover erroneously awarded compensation - Information for this item is not applicable[496] Item 7. Major Shareholders and Related Party Transactions This section details beneficial ownership, particularly Mr. Valentis's significant control, outlines material related party transactions, and discusses the dividend policy A. Major Shareholders As of March 31, 2023, Mr. Valentios 'Eddie' Valentis, through Maritime Investors Corp., beneficially owned 53.3% of the company's outstanding common stock Beneficial Ownership of Common Stock (as of March 31, 2023) | Identity of person or group | Number of Shares Beneficially Owned | Percentage (%) | | :------------------------------------ | :--------------------------------- | :------------- | | Valentios "Eddie" Valentis (Maritime Investors Corp.) | 5,731,942 | 53.3% | | Henry P. Williams | 45,061 | * | | Konstantinos Lytras | 15,094 | * | | All directors and executive officers as a group (8 persons) | 5,792,097 | 53.9% | (* Less than 1% of outstanding shares) - Each share of common stock entitles the holder to one vote on all matters submitted to a vote of shareholders[497] - As of March 31, 2023, 77 U.S. shareholders of record held an aggregate of 6,315,472 shares of common stock, representing 58.8% of outstanding shares. However, CEDE & CO., a nominee, held a significant portion, potentially including non-U.S. beneficial owners[501] B. Related Party Transactions The company has significant related party transactions with Maritime for management services and with Maritime Investors for a Promissory Note, both controlled by Mr. Valentis - The company's vessels are managed by Maritime, an affiliated ship management company controlled by Mr. Valentis, under a Head Management Agreement and separate management agreements with vessel-owning subsidiaries[502] - Maritime provides commercial, sale and purchase, insurance, operations, dry-docking, construction supervision, and administrative services (including executive officers)[504] - The Head Management Agreement was automatically renewed for a five-year period through March 23, 2025. Fees include a daily ship-management fee ($325/day per vessel in operation, $450/day under construction), 1.00% on vessel sales, 1.25% on chartering revenue, and an annual administrative fee ($1.6 million, adjusted for inflation)[504] Amounts Charged by Maritime (in thousands of U.S. dollars) | | Year ended December 31, 2020 | Year ended December 31, 2021 | Year ended December 31, 2022 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | | Charter hire commissions | $276 | $322 | $735 | | Ship-Management Fees | $637 | $716 | $702 | | Administration Fees | $1,632 | $1,632 | $1,652 | | Total | $2,545 | $2,670 | $3,089 | - As of December 31, 2022, there was a balance due to Maritime of $1.028 million (interest-free, no specific repayment terms)[511][774] - The company had a Promissory Note with Maritime Investors (an affiliate of Mr. Valentis) with an outstanding principal balance of $6.0 million as of December 31, 2022, bearing 7.5% annual interest, maturing April 1, 2024. This note was fully repaid by March 14, 2023[508][509][777][780][861] - Interest charged on the Promissory Note was $452 thousand in 2020, $335 thousand in 2021, and $450 thousand in 2022[510][778][189] - The acquisition of the 'Pyxis Lamda' in December 2021 from an entity related to Mr. Valentis included $3.0 million in additional principal under the Amended and Restated Promissory Note as part of the $31.17 million purchase consideration[512][776][783] C. Interests of Experts and Counsel This item is not applicable, indicating no specific disclosures regarding the interests of experts and counsel are required - Information for this item is not applicable[514] Item 8. Financial Information This section refers to the consolidated financial statements in Item 18, addresses legal proceedings, and outlines the company's dividend policy - Consolidated financial statements and other financial information are provided in Item 18 of this Annual Report[515][659][660] - The company may be involved in litigation and claims in the ordinary course of business, but is not aware of any proceedings that could have significant effects on its financial position or profitability not covered by insurance[516] - The company does not intend to pay common stock dividends in the near future. Any future dividend payments are at the sole discretion of the board of directors and subject to legal, fiduciary, and contractual requirements, including loan agreements[517] - As of December 31, 2022, the ratio of total liabilities to market value adjusted total assets was 37% (below the 75% threshold), permitting related subsidiaries to distribute dividends under the Alpha Bank Facilities[517] A. Consolidated Statements and Other Financial Information This section directs the reader to Item 18 for the company's consolidated financial statements - Please refer to Item 18 for the company's consolidated statements and other financial information[515] B. Significant Changes This item is not applicable, indicating no significant changes to disclose in this section - Information for this item is not applicable[518] Item 9. The Offer and Listing This section details the company's securities listing on the NASDAQ Capital Market, including common stock, preferred shares, and warrants - The company's Common Stock, Series A Cumulative Convertible Preferred Shares ('PXSAP'), and Warrants ('PXSAW') are listed and traded on the NASDAQ Capital Market[519] - As of March 31, 2023, the common stock price was $4.91[520] - The company refers to 'Item 3. Key Information – D. Risk Factors' for discussions on the risk of delisting if the common stock does not meet NASDAQ's minimum share price requirement[520] A. Offer and Listing Details The company's common stock, Series A Convertible Preferred Shares, and warrants are listed and traded on the NASDAQ Capital Market - The company's common stock ('PXS'), Series A Cumulative Convertible Preferred Shares ('PXSAP'), and warrants ('PXSAW') are listed on the NASDAQ Capital Market[519] B. Plan of Distribution This item is not applicable, indicating no specific plan of distribution to disclose - Information for this item is not applicable[521] C. Markets This section refers to 'Item 9. The Offer and Listing - A. Offer and Listing Details' for information on the markets where the company's securities are traded - Please refer to 'Item 9. The Offer and Listing - A. Offer and Listing Details' for information on the markets where the company's securities are traded[521] D. Selling Shareholders This item is not applicable, indicating no selling shareholders to disclose - Information for this item is not applicable[522] E. Dilution This item is not applicable, indicating no specific dilution information to disclose in this section - Information for this item is not applicable[523] F. Expenses of the Issue This item is not applicable, indicating no specific expenses of the issue to disclose - Information for this item is not applicable[524] Item 10. Additional Information This section provides further details on share capital, corporate governance, material contracts, exchange controls, and significant tax considerations A. Share Capital This item is not applicable, indicating no specific share capital information to disclose in this section - Information for this item is not applicable[525] B. Memorandum and Articles of Association The company's corporate affairs are governed by its Articles of Incorporation, Bylaws, and Marshall Islands law, detailing authorized capital and equity issuances - The company's corporate affairs are governed by its Articles of Incorporation, Bylaws, and the Marshall Islands Business Corporations Act (BCA)[527] - Authorized capital consists of 450,000,000 common shares and 50,000,000 preferred shares, of which 1,000,000 are authorized as Series A Preferred Shares[528] - As of December 31, 2022, there were 10,613,424 common shares and 449,473 Series A Preferred Shares issued and outstanding[528] - Key equity issuances include 200,000 Units in October 2020 (each with one Series A Convertible Preferred Share and eight warrants), a private placement of 3,571,429 common shares in February 2021, and a follow-on public offering of 308,487 Series A Convertible Preferred Shares in July 2021[533][535][537] - Common stock holders are entitled to one vote per share, ratable dividends (if declared), and pro-rata distribution of remaining assets upon dissolution or liquidation after preferred stock payments[540] - The board of directors has the authority to issue preferred stock with various voting powers, designations, preferences, and restrictions without shareholder approval[541] - Anti-takeover provisions in the articles of incorporation and bylaws, such as a classified board, 'blank check' preferred stock, and restrictions on shareholder actions, are designed to make acquisitions and changes in control more difficult[547][548][549] C. Material Contracts Material contracts not in the ordinary course of business are filed as exhibits and described elsewhere, with no other material contracts in the past two years - Material contracts not in the ordinary course of business are filed as exhibits to this Annual Report and are described in 'Item 4. Information on the Company', 'Item 5. Operating and Financial Review and Prospects', 'Item 7. Major Shareholders and Related Party Transactions', and in Notes 3 and 7 to the consolidated financial statements[549] - No other material contracts were entered into in the two years immediately preceding the date of this Annual Report, other than contracts in the ordinary course of business[549] D. Exchange Controls Under Marshall Islands law, there are no restrictions on capital export or import, including foreign exchange controls or dividend remittances to non-resident holders - Under current Marshall Islands law, there are no restrictions on the export or import of capital, including foreign exchange controls[550] - There are no restrictions that affect the remittance of dividends, interest, or other payments to non-resident holders of the company's common shares[550] E. Taxation This section summarizes U.S. federal income tax consequences for the company and U.S. holders, including Section 883 exemption, PFIC/CFC implications, and non-U.S. tax laws - The company may be subject to a 4% U.S. federal income tax on 50% of its gross U.S.-source shipping income, unless it qualifies for exemption under Section 883 of the Code or an applicable U.S. income tax treaty[555][556][558] - The company intends to qualify for the Section 883 Exemption, which requires being organized in a 'qualified foreign country' (Marshall Islands and Malta are recognized) and satisfying either the 50% Ownership Test or the Publicly-Traded Test[560][561][563] - For U.S. Holders, distributions on common stock are generally treated as dividends (ordinary income or qualified dividend income) and are typically non-U.S. source 'passive category income' for foreign tax credit purposes[573][575][576] - If the company were treated as a Passive Foreign Investment Company (PFIC), U.S. Holders would be subject to special, disadvantageous tax rules unless they make a timely 'qualified electing fund' (QEF) or 'mark-to-market' election[582][584](