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Imperial Petroleum Inc.

Imperial Petroleum Inc.IMPPEarnings & Financial Report

Nasdaq · Industrials · Deep Sea Foreign Transportation of Freight

Imperial Petroleum Inc. is an independent downstream energy firm registered in the Marshall Islands, focused on sourcing, transporting, and distributing refined petroleum products including gasoline, diesel, marine fuel and heating oil. It serves retail, commercial, marine and industrial customer segments primarily across North America and select international markets, prioritizing stable supply chains and competitive pricing.

What changed in Imperial Petroleum Inc.'s 20-F — 2022 vs 2023

Top changes in Imperial Petroleum Inc.'s 2023 20-F

631 paragraphs added · 599 removed · 448 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

182 edited+72 added−73 removed269 unchanged
Despite turbulence in the world economy at times in recent years, worldwide demand for oil and oil products has continued to rise; however, the COVID-19 pandemic has caused demand for oil and oil products to stagnant.
Despite turbulence in the world economy at times in recent years, worldwide demand for oil and oil products has continued to rise; however, the COVID-19 pandemic caused demand for oil and oil products to stagnant.
Customers have a high and increasing focus on quality, emissions and compliance standards with their suppliers across the entire value chain, including shipping and transportation. There is also increasing focus on the environmental footprint of marine transportation.
Customers have a high focus on quality, emissions and compliance standards with their suppliers across the entire value chain, including shipping and transportation. There is also increasing focus on the environmental footprint of marine transportation.
In addition, we may elect to sell one or more of our vessels or vessel-owning subsidiaries, conduct a spinoff of such vessels or subsidiaries, or contribute such vessels or vessel-owning subsidiaries to a joint venture, master limited partnership or other entity on terms with which you do not agree.
In addition, we may elect to sell one or more of our vessels or vessel-owning subsidiaries, conduct a spinoff of such vessels or subsidiaries, or contribute such vessels or vessel-owning subsidiaries to a joint venture, master limited partnership or other entity on terms with which you do not agree.
Any such transfer may reduce our asset base and our rights to cash flows related to the transferred assets.
Any such transfer may reduce our asset base and our rights to cash flows related to the transferred assets.
Currently, our corporate governance practices comply with the Nasdaq corporate governance standards applicable to U.S. listed companies other than that we only have two members on our audit committee whereas a domestic U.S. company would be required to have three members on its audit committee and, in lieu of obtaining stockholder approval prior to the issuance of certain designated securities issuances, the Company will comply with provisions of the Marshall Islands Business Corporations Act providing that the Board of Directors approves share issuances.
Currently, our corporate governance practices comply with the Nasdaq corporate governance standards applicable to U.S. listed companies other than that we only have two independent members on our audit committee whereas a domestic U.S. company would be required to have three independent members on its audit committee and, in lieu of obtaining stockholder approval prior to the issuance of certain designated securities issuances, the Company will comply with provisions of the Marshall Islands Business Corporations Act providing that the Board of Directors approves share issuances.
The conflict may also impact various costs of operating our business, such as bunker expenses, for which we are responsible when our vessels operate in the spot market, which have increased with oil prices, war risk insurance premiums and crewing services, as Russia and the Ukraine are significant sources of crews, which may be disrupted or more expensive.
The conflict may also impact various costs of operating our business, such as bunker expenses, for which we are responsible when our vessels operate in the spot market, which have increased with higher oil prices, war risk insurance premiums and crewing services, as Russia and the Ukraine are significant sources of crews, which may be disrupted or more expensive.
Furthermore, if ships managed by Stealth Maritime or Brave Maritime, including those not owned by us, and ships owned by an affiliated entity of Stealth Maritime or Brave Maritime, including StealthGas, were deemed to have violated sanctions or other laws and regulations, we could face similar consequences, including an inability to charter, insure or sell our ships, if we, such affiliated entities or our ships are blacklisted by authorities.
Furthermore, if ships managed by Stealth Maritime or Brave Maritime, including those not owned by us, and ships owned by an affiliated entity of Stealth Maritime or Brave Maritime, including StealthGas and C3is were deemed to have violated sanctions or other laws and regulations, we could face similar consequences, including an inability to charter, insure or sell our ships, if we, such affiliated entities or our ships are blacklisted by authorities.
In addition, the fiduciary duties of our officers and directors may conflict with those of the officers and directors of StealthGas and/or its affiliates. Our Chief Executive Officer is involved in other business activities not associated with us, which may result in his spending less time than is appropriate or necessary to manage our business successfully. In particular, Mr.
In addition, the fiduciary duties of our officers and directors may conflict with those of the officers and directors of StealthGas, C3is and/or its affiliates. Our Chief Executive Officer is involved in other business activities not associated with us, which may result in his spending less time than is appropriate or necessary to manage our business successfully. In particular, Mr.
For as long as we take advantage of the reduced reporting obligations, the information that we provide our stockholders may be different from information provided by other public companies. Our common stock ranks junior to the Series A Preferred Stock and Series C Preferred Stock with respect to dividends and amounts payable in the event of our liquidation.
For as long as we take advantage of the reduced reporting obligations, the information that we provide our stockholders may be different from information provided by other public companies. Our common stock ranks junior to the Series A Preferred Stock with respect to dividends and amounts payable in the event of our liquidation.
Factors that influence the supply of drybulk vessel capacity include: • the size of the newbuilding orderbook; • the prevailing and anticipated freight rates which in turn affect the rate of newbuilding; • availability of financing for new vessels; • the number of newbuild deliveries, including slippage in deliveries, which, among other factors, relates to the ability of shipyards to deliver newbuilds by contracted delivery dates and the ability of purchasers to finance such newbuilds; 7 Table of Contents • the scrapping rate of older vessels, depending, amongst other things, on scrapping rates and international scrapping regulations; • the COVID-19 pandemic and related factors, including port lockdowns, higher crew cost and travel restrictions imposed by governments around the world; • port and canal congestion; • the speed of vessel operation which may be influenced by several reasons including energy cost and environmental regulations; • sanctions; • the number of vessels that are in or out of service, delayed in ports for several reasons, laid-up, dry docked awaiting repairs or otherwise not available for hire, including due to vessel casualties; • changes in environmental and other regulations that may limit the useful lives of vessels or effectively cause reductions in the carrying capacity of vessels or early obsolescence of tonnage; and • ability of the Company to maintain ESG practices acceptable to customers, regulators and financing sources.
Factors that influence the supply of drybulk vessel capacity include: • the size of the newbuilding orderbook; • the prevailing and anticipated freight rates which in turn affect the rate of newbuilding; • availability of financing for new vessels; • the number of newbuild deliveries, including slippage in deliveries, which, among other factors, relates to the ability of shipyards to deliver newbuilds by contracted delivery dates and the ability of purchasers to finance such newbuilds; • the scrapping rate of older vessels, depending, amongst other things, on scrapping rates and international scrapping regulations; 7 Table of Contents • health crises, such as the COVID-19 pandemic, and related factors, including port lockdowns, higher crew cost and travel restrictions imposed by governments around the world; • port and canal congestion; • the speed of vessel operation which may be influenced by several reasons including energy cost and environmental regulations; • sanctions; • the number of vessels that are in or out of service, delayed in ports for several reasons, laid-up, dry docked awaiting repairs or otherwise not available for hire, including due to vessel casualties; • changes in environmental and other regulations that may limit the useful lives of vessels or effectively cause reductions in the carrying capacity of vessels or early obsolescence of tonnage; and • ability of the Company to maintain ESG practices acceptable to customers, regulators and financing sources.
In addition, in such a case or if our management agreement were to be terminated we might not be able to find a replacement manager on terms as favorable as those currently in place with Stealth Maritime. Further, we expect that we will need to seek approval from our lenders to change our manager.
In addition, in such a case or if our management agreement were to be terminated we might not be able to find a replacement manager on terms as favorable as those currently in place with Stealth Maritime. Further, we expect that we will need to seek approval from our future lenders to change our manager.
Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to ESG policies may impose additional costs on us or expose us to additional risks. Companies across all industries, including the shipping industry, are facing increased scrutiny relating to their ESG policies.
Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our ESG policies may impose additional costs on us or expose us to additional risks. Companies across all industries, including the shipping industry, are facing increased scrutiny relating to their ESG policies.
Our continuous compliance with existing and new standards and quality requirements is vital for our operations. Related risks could materialize in multiple ways, including a sudden and unexpected breach in quality and/or compliance concerning one or more vessels and/or a continuous decrease in the quality concerning one or more tankers occurring over time.
Our continuous compliance with existing and new standards and quality requirements is vital for our operations. Related risks could materialize in multiple ways, including a sudden and unexpected breach in quality and/or compliance concerning one or more vessels and/or a continuous decrease in the quality concerning one or more vessels occurring over time.
In addition, high oil prices could reduce demand for oil and refined petroleum products, including in the event of any slowdown in the global economy due such high oil prices or the impact of economic sanctions or geopolitical tensions and uncertainty, and in turn reduce demand for tankers and tanker charter rates.
In addition, higher oil prices could reduce demand for oil and refined petroleum products, including in the event of any slowdown in the global economy due such high oil prices or the impact of economic sanctions or geopolitical tensions and uncertainty, and in turn reduce demand for tankers and tanker charter rates.
The factors that influence demand for tanker capacity include: • supply and demand for energy resources and oil and petroleum products; • regional availability of refining capacity and inventories compared to geographies of oil production regions; • national policies regarding strategic oil inventories (including if strategic reserves are set at a lower level in the future as oil decreases in the energy mix); • global and regional economic and political conditions, including armed conflicts, terrorist activities, embargoes and strikes; 5 Table of Contents • currency exchange rates; • the distance over which oil and oil products are to be moved by sea; • changes in seaborne and other transportation patterns; • changes in governmental or maritime self-regulatory organizations’ rules and regulations or actions taken by regulatory authorities; • environmental and other legal and regulatory developments; • weather and natural disasters; • developments in international trade, including those relating to the imposition of tariffs; • competition from alternative sources of energy; and • international sanctions, embargoes, import and export restrictions, nationalizations and wars.
The factors that influence demand for tanker capacity include: • supply and demand for energy resources and oil and petroleum products; • regional availability of refining capacity and inventories compared to geographies of oil production regions; • national policies regarding strategic oil inventories (including if strategic reserves are set at a lower level in the future as oil decreases in the energy mix); • global and regional economic and political conditions, including armed conflicts, terrorist activities, embargoes and strikes; • currency exchange rates; • the distance over which oil and oil products are to be moved by sea; • changes in seaborne and other transportation patterns; • changes in governmental or maritime self-regulatory organizations’ rules and regulations or actions taken by regulatory authorities; • environmental and other legal and regulatory developments; • weather and natural disasters; • developments in international trade, including those relating to the imposition of tariffs; • competition from alternative sources of energy; and • international sanctions, embargoes, import and export restrictions, nationalizations and wars.
We cannot predict the effect that future sales of our common stock or other equity-related securities would have on the market price of our common stock. Our Class A Warrants, Class B Warrants, Class C Warrants and Class D Warrants are speculative in nature.
We cannot predict the effect that future sales of our common stock or other equity-related securities would have on the market price of our common stock. Our Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants are speculative in nature.
Among the factors that could affect our stock price are: • actual or anticipated fluctuations in quarterly and annual variations in our results of operations; • changes in market valuations or sales or earnings estimates or publication of research reports by analysts; • changes in earnings estimates or shortfalls in our operating results from levels forecasted by securities analysts; • speculation in the press or investment community about our business or the shipping industry, and the product and crude oil tanker sector in particular; • changes in market valuations of similar companies and stock market price and volume fluctuations generally; • payment of dividends; • strategic actions by us or our competitors such as mergers, acquisitions, joint ventures, strategic alliances or restructurings; • changes in government and other regulatory developments; • additions or departures of key personnel; • general market conditions and the state of the securities markets; and • domestic and international economic, market and currency factors unrelated to our performance.
Among the factors that could affect our stock price are: • actual or anticipated fluctuations in quarterly and annual variations in our results of operations; • changes in market valuations or sales or earnings estimates or publication of research reports by analysts; • changes in earnings estimates or shortfalls in our operating results from levels forecasted by securities analysts; • speculation in the press or investment community about our business or the shipping industry, and the product and crude oil tanker and drybulk sectors in particular; • changes in market valuations of similar companies and stock market price and volume fluctuations generally; • payment of dividends; • strategic actions by us or our competitors such as mergers, acquisitions, joint ventures, strategic alliances or restructurings; • changes in government and other regulatory developments; • additions or departures of key personnel; • general market conditions and the state of the securities markets; and • domestic and international economic, market and currency factors unrelated to our performance.
Our ability to obtain additional debt financing may be dependent on the performance of our then existing charters and the creditworthiness of our charterers, as well as the perceived impact of emissions by our vessels on the climate.
Our ability to obtain debt financing may be dependent on the performance of our then existing charters and the creditworthiness of our charterers, as well as the perceived impact of emissions by our vessels on the climate.
Historically, the world oil and petroleum markets have been volatile and cyclical because of the many conditions and events that affect the supply, price, production and transport of oil, including: • increases and decreases in the demand and price for crude oil and petroleum products; • availability of crude oil and petroleum products; • demand for crude oil and petroleum product substitutes, such as natural gas, coal, hydroelectric power and other alternate sources of energy that may, among other things, be affected by environmental regulation; 10 Table of Contents • actions taken by OPEC and major oil producers and refiners; • political turmoil in or around oil producing nations; • global and regional political and economic conditions; • developments in international trade; • international trade sanctions; • environmental factors; • natural catastrophes; • terrorist acts; • weather; and • changes in seaborne and other transportation patterns.
Historically, the world oil and petroleum markets have been volatile and cyclical because of the many conditions and events that affect the supply, price, production and transport of oil, including: • increases and decreases in the demand and price for crude oil and petroleum products; • availability of crude oil and petroleum products; • demand for crude oil and petroleum product substitutes, such as natural gas, coal, hydroelectric power and other alternate sources of energy that may, among other things, be affected by environmental regulation; • actions taken by OPEC and major oil producers and refiners; • political turmoil in or around oil producing nations; • global and regional political and economic conditions; • developments in international trade; • international trade sanctions; • environmental factors; • natural catastrophes; • terrorist acts; • weather; and • changes in seaborne and other transportation patterns.
Our common stock ranks junior to our Series A Preferred Stock and Series C Preferred Stock with respect to the payment of dividends and amounts payable in the event of our liquidation, dissolution or winding-up.
Our common stock ranks junior to our Series A Preferred Stock with respect to the payment of dividends and amounts payable in the event of our liquidation, dissolution or winding-up.
Specifically, we may face increasing pressures from investors, lenders and other market participants, who are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability. Additionally, certain investors and lenders may exclude tanker and drybulk shipping companies, such as us, from their investing portfolios altogether due to environmental, social and governance factors.
Specifically, we may face increasing pressures from investors, lenders and other market participants, who are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability. Additionally, certain investors and lenders may exclude shipping companies, such as us, from their investing portfolios altogether due to environmental, social and governance factors.
This would adversely impact our operations and revenues. 14 Table of Contents Changes in fuel, or bunker, prices may adversely affect profits. While we do not bear the cost of fuel or bunkers under time and bareboat charters, fuel is a significant expense in our shipping operations when vessels are deployed under spot charters.
This would adversely impact our operations and revenues. 16 Table of Contents Changes in fuel, or bunker, prices may adversely affect profits. While we do not bear the cost of fuel or bunkers under time and bareboat charters, fuel is a significant expense in our shipping operations when vessels are deployed under spot charters.
Holders of our Class A Warrants, Class B Warrants, Class C Warrants and Class D Warrants will not have any rights of common stockholders until such Class A Warrants, Class B Warrants, Class C Warrants and Class D Warrants are exercised.
Holders of our Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants will not have any rights of common stockholders until such Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants are exercised.
Should these beliefs turn out to be incorrect, then we and certain of our subsidiaries could be treated as PFICs for 2022. There can be no assurance that the IRS or a court will not determine values for our assets that would cause us to be treated as a PFIC for 2022 or a subsequent year.
Should these beliefs turn out to be incorrect, then we and certain of our subsidiaries could be treated as PFICs for 2023. There can be no assurance that the IRS or a court will not determine values for our assets that would cause us to be treated as a PFIC for 2023 or a subsequent year.
The announcement of such tariffs has triggered retaliatory actions from foreign governments, including China, and may trigger retaliatory actions by other foreign governments, resulting in a “trade war.” The trade war has had the effect of reducing the supply of goods available for import or export and has therefore resulted in a decrease in demand for shipping.
The announcement of such tariffs has triggered retaliatory actions from foreign governments, including China, and may trigger retaliatory actions by other foreign governments, which resulted in a “trade war.” The trade war has had the effect of reducing the supply of goods available for import or export and has therefore resulted in a decrease in demand for shipping.
Any such actual or alleged environmental laws 13 Table of Contents regulations and policies violation, under negligence, willful misconduct or fault, could result in substantial fines, civil and/or criminal penalties or curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition.
Any such actual or alleged environmental laws regulations and policies violation, under negligence, willful misconduct or fault, could result in substantial fines, civil and/or criminal penalties or curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial 15 Table of Contents condition.
It is possible that StealthGas, Stealth Maritime or other companies affiliated with the Vafias family or Stealth Maritime, including Brave Maritime, could, in the future, agree to acquire or manage additional vessels that compete directly with ours and may face conflicts between their own interests and their obligations to us.
It is possible that StealthGas, C3is Inc., Stealth Maritime or other companies affiliated with the Vafias family or Stealth Maritime, including Brave Maritime, could, in the future, agree to acquire or manage additional vessels that compete directly with ours and may face conflicts between their own interests and their obligations to us.
The market values of our vessels are subject to potential significant fluctuations depending on a number of factors including: • general economic and market conditions affecting the shipping industry; • age, sophistication and condition of our vessels; • types and sizes of vessels; • availability of other modes of transportation; • cost and delivery of schedules for new-buildings; • governmental and other regulations; • supply and demand for refined petroleum products; • the prevailing level of product tanker charter rates and crude oil tanker rates; and • technological advances.
The market values of our vessels are subject to potential significant fluctuations depending on a number of factors including: • general economic and market conditions affecting the shipping industry; • age, sophistication and condition of our vessels; • types and sizes of vessels; • availability of other modes of transportation; • cost and delivery of schedules for new-buildings; • governmental and other regulations; 13 Table of Contents • supply and demand for refined petroleum products; • the prevailing level of product tanker charter rates and crude oil tanker rates; and • technological advances.
This means that, unless accumulated dividends have been paid or set aside for payment on all of our outstanding Series A Preferred Stock and Series C Preferred Stock for all past completed dividend periods, no dividends may be declared or paid on our common stock subject to limited exceptions.
This means that, unless accumulated dividends have been paid or set aside for payment on all of our outstanding Series A Preferred Stock for all past completed dividend periods, no dividends may be declared or paid on our common stock subject to limited exceptions.
Conversely, spot rates are volatile and cyclical and may decline substantially. 18 Table of Contents Charters at attractive rates may not be available when the charters for our vessels expire, which would have an adverse impact on our revenues and financial condition.
Conversely, spot rates are volatile and cyclical and may decline substantially. 21 Table of Contents Charters at attractive rates may not be available when the charters for our vessels expire, which would have an adverse impact on our revenues and financial condition.
As a result, these individuals have fiduciary duties to manage the business of StealthGas and its affiliates in a manner beneficial to such entities and their stockholders. Consequently, these officers and directors may encounter situations in which their fiduciary obligations to StealthGas and us are in conflict.
As a result, these individuals have fiduciary duties to manage the business of StealthGas, C3is Inc. and its affiliates in a manner beneficial to such entities and their stockholders. Consequently, these officers and directors may encounter situations in which their fiduciary obligations to StealthGas, C3is Inc. and us are in conflict.
Our outstanding Class A Warrants, Class B Warrants, Class C Warrants and Class D Warrants do not confer any rights of common stock ownership on their holders, such as voting rights, but rather merely represent the right to acquire common stock at a fixed price.
Our Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants do not confer any rights of common stock ownership on their holders, such as voting rights, but rather merely represent the right to acquire common stock at a fixed price.
We note that there is no direct authority on this point and it is possible that the IRS may disagree with our position. On the basis of the foregoing assumptions, we do not believe that we will be a PFIC for 2022.
We note that there is no direct authority on this point and it is possible that the IRS may disagree with our position. On the basis of the foregoing assumptions, we do not believe that we will be a PFIC for 2023.
If we or our manager, or other affiliated entities, including Stealth Maritime, or StealthGas, are rated low or otherwise perform poorly on Rightship evaluations or other vetting processes conducted by charterers, it could lead to the loss of approval to conduct business with us and in turn the loss of revenue under existing charters or future chartering opportunities.
If we or our manager, or other affiliated entities, including Stealth Maritime, Brave Maritime, StealthGas or C3is Inc., are rated low or otherwise perform poorly on RightShip evaluations or other vetting processes conducted by charterers, it could lead to the loss of approval to conduct business with us and in turn the loss of revenue under existing charters or future chartering opportunities.
It is possible that such cargoes, despite our belief that they are compliant with applicable sanctions, are alleged to have originated from sources that are not in compliance with such sanctions, which could result in penalties against us, including blacklisting of a vessel which would preclude chartering or selling such vessel, and negatively impact our acceptability to potential charterers and harm our business.
It is possible that such cargoes, despite our belief that they are compliant with applicable sanctions, are alleged to have originated from sources that are not in compliance with such sanctions, which could result in penalties against us, including blacklisting of a vessel which would preclude chartering or selling such vessel, and 31 Table of Contents negatively impact our acceptability to potential charterers and harm our business.
These anti-takeover provisions, either individually or in the aggregate, 33 Table of Contents may discourage, delay or prevent (1) our merger or acquisition by means of a tender offer, a proxy contest or otherwise, that a stockholder may consider in its best interest, (2) the removal of incumbent directors and officers, and (3) the ability of public stockholders to benefit from a change in control.
These anti-takeover provisions, either individually or in the aggregate, may discourage, delay or prevent (1) our merger or acquisition by means of a tender offer, a proxy contest or otherwise, that a stockholder may consider in its best interest, (2) the removal of incumbent directors and officers, and (3) the ability of public stockholders to benefit from a change in control.
In addition, although we do not believe that we will be a PFIC for 2022, we may choose to operate our business in the current or in future taxable years in a manner that could cause us to become a PFIC for those years.
In addition, although we do not believe that we will be a PFIC for 2023, we may choose to operate our business in the current or in future taxable years in a manner that could cause us to become a PFIC for those years.
Furthermore, if vessel values or anticipated future cash flows experience further declines, we may have to record an impairment adjustment in our financial statements, which would also result in a reduction in our profits.
Furthermore, if vessel values or anticipated future cash flows experience further declines, we may have to record an impairment charge in our financial statements, which would also result in a reduction in our profits.
These payments limit funds otherwise available for working capital, capital expenditures, and other purposes, including any distributions of cash to our stockholders, and our inability to service our debt could lead to acceleration of our debt and foreclosure on our fleet.
These payments would limit funds otherwise available for working capital, capital expenditures, and other purposes, including any distributions of cash to our stockholders, and our inability to service any such debt could lead to acceleration of such debt and foreclosure on our fleet.
We do not maintain “key man” life insurance on any of our officers. In the highly competitive international product tanker and crude oil tanker markets, we may not be able to compete for charters with new entrants or established companies with greater resources. We deploy our vessels in highly competitive markets that are capital intensive.
We do not maintain “key man” life insurance on any of our officers. 29 Table of Contents In the highly competitive international product tanker and crude oil tanker markets, we may not be able to compete for charters with new entrants or established companies with greater resources. We deploy our vessels in highly competitive markets that are capital intensive.
Similar rules would apply to holders of our Class A Warrants, Class B Warrants, Class C Warrants and Class D Warrants.
Similar rules would apply to holders of our Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants.
There is also substantial doubt that the courts of the Marshall Islands would enter judgments in original actions brought in those courts predicated on U.S., federal or state securities laws. 30 Table of Contents Risks Related To Our Common Stock Our common stock were not publicly traded prior to the completion of the Spin-Off on December 3, 2021.
There is also substantial doubt that the courts of the Marshall Islands would enter judgments in original actions brought in those courts predicated on U.S., federal or state securities laws. Risks Related To Our Common Stock Our common stock were not publicly traded prior to the completion of the Spin-Off on December 3, 2021.
We may elect to sell one or more of our vessels or vessel-owning subsidiaries, conduct a spin-off of such vessels or subsidiaries, or contribute such vessels or vessel-owning subsidiaries to a joint venture, master limited partnership or other entity on terms with which you do not agree or that are not in the best interests of the holders of Series A Preferred Stock.
We may elect to sell one or more of our vessels or vessel-owning subsidiaries, conduct a spin-off of such vessels or subsidiaries, or contribute such vessels or vessel-owning 42 Table of Contents subsidiaries to a joint venture, master limited partnership or other entity on terms with which you do not agree or that are not in the best interests of the holders of Series A Preferred Stock.
As a result, older vessels are generally less desirable to charterers, particularly oil majors and other top tier charterers. 19 Table of Contents Unless we set aside reserves for vessel replacement, at the end of a vessel’s useful life, our revenue will decline, which would adversely affect our cash flows and income.
As a result, older vessels are generally less desirable to charterers, particularly oil majors and other top tier charterers. Unless we set aside reserves for vessel replacement, at the end of a vessel’s useful life, our revenue will decline, which would adversely affect our cash flows and income.
If the shipbuilders or refund guarantors are unable or unwilling to meet their obligations to the sellers of the vessels, this may impact our acquisition of vessels and may materially and adversely affect our operations and our obligations under our credit facilities.
If the shipbuilders or refund guarantors are unable or unwilling to meet their obligations to the sellers of the vessels, this may impact our acquisition of vessels and may materially and adversely affect our operations and our obligations under any of our future credit facilities.
Under the Phase One Deal the U.S. has committed to reduce tariffs from 15 % to 7.5% on US$120 billion worth of goods and China has agreed to halve tariffs on 1,717 U.S. goods, lowering the tariff on some items from 10% to 5%, and others from 5 % to 2.5 %, which both took effect on February 14, 2020.
Under the Phase One Deal the U.S. has committed to reduce tariffs from 15 % to 7.5% on US$120 billion worth of goods and China has agreed to halve tariffs on 1,717 U.S. goods, 9 Table of Contents lowering the tariff on some items from 10% to 5%, and others from 5 % to 2.5 %, which both took effect on February 14, 2020.
In the event that this recent softness persists and the long-term trend falters, the production of and demand for crude oil and petroleum products will encounter pressure which could lead to a decrease in shipments of these products and consequently this would have an adverse impact on the employment of our vessels and the charter rates that they command.
In the event that the long-term trend falters, the production of and demand for crude oil and petroleum products will encounter pressure which could lead to a decrease in shipments of these products and consequently this would have an adverse impact on the employment of our vessels and the charter rates that they command.
These risks include the possibility of: • marine accident or disaster; • piracy and terrorism; • explosions; • environmental accidents; • pollution; • loss of life; • cargo and property losses or damage; and • business interruptions caused by mechanical failure, human error, war, political action in various countries, labor strikes or adverse weather conditions.
These risks include the possibility of: • marine accident or disaster; • piracy and terrorism; • explosions; • environmental accidents; • pollution; • loss of life; 17 Table of Contents • cargo and property losses or damage; and • business interruptions caused by mechanical failure, human error, war, political action in various countries, labor strikes or adverse weather conditions.
Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management. 17 Table of Contents A cyber-attack could materially disrupt our business. Our business operations could be targeted by individuals or groups seeking to sabotage or disrupt our information technology systems and networks, or to steal data.
Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management. A cyber-attack could materially disrupt our business. Our business operations could be targeted by individuals or groups seeking to sabotage or disrupt our information technology systems and networks, or to steal data.
If our vessels are employed on time or bareboat charters during a period of rising spot market charter rates, we would be unable to pursue opportunities to charter our vessels at such higher charter rates.
If our vessels are employed on time or bareboat charters durng a period of rising spot market charter rates, we would be unable to pursue opportunities to charter our vessels at such higher charter rates.
The loss of Stealth Maritime’s services or its failure to perform its obligations to us properly for financial or other reasons could materially and adversely affect our business and the results of our operations, including the potential loss of oil major approvals to conduct business with us and in turn our ability to employ our vessels our charters with such oil majors.
The loss of Stealth Maritime’s services or its failure to perform its obligations to us properly for financial or other reasons could materially and adversely affect our business and the results of our operations, including the 26 Table of Contents potential loss of oil major approvals to conduct business with us and in turn our ability to employ our vessels our charters with such oil majors.
We cannot predict the effect that future sales of common stock or other equity-related securities would have on the market price of our common stock. Our Restated Articles of Incorporation, as amended, authorizes our Board, to, among other things, issue additional shares of common or preferred stock or securities convertible or exchangeable into equity securities, without stockholder approval.
We cannot predict the effect that future sales of common stock or other equity-related securities would have on the market price of our common stock. 38 Table of Contents Our Restated Articles of Incorporation, as amended, authorizes our Board, to, among other things, issue additional shares of common or preferred stock or securities convertible or exchangeable into equity securities, without stockholder approval.
Even if our insurance coverage is adequate, we may not be able to timely obtain a replacement vessel in the event of a loss. Our insurance policies contain deductibles for which we will be responsible and limitations and exclusions which may increase our costs or lower our revenue.
Even if our insurance coverage is adequate, we may not be able to timely obtain a replacement vessel in the event of a loss. Our insurance policies 30 Table of Contents contain deductibles for which we will be responsible and limitations and exclusions which may increase our costs or lower our revenue.
In addition, sanctions against oil exporting countries such as Iran, Syria and Venezuela, and the events in Ukraine and related sanctions against Russia and regions of Ukraine, may also impact the availability of crude oil and petroleum products and which would increase the availability of applicable vessels, thereby impacting negatively charter rates.
In addition, sanctions against oil exporting 18 Table of Contents countries such as Iran, Syria and Venezuela, and the events in Ukraine and related sanctions against Russia and regions of Ukraine, may also impact the availability of crude oil and petroleum products and which would increase the availability of applicable vessels, thereby impacting negatively charter rates.
United States stockholders of a PFIC (and holders of warrants in a PFIC) are subject to a disadvantageous United States federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.
United States stockholders of a PFIC (and holders of warrants 34 Table of Contents in a PFIC) are subject to a disadvantageous United States federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.
We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations, and are subject vetting processes conducted by prospective charterers.
We are required to maintain operating standards for all of our vessels that 14 Table of Contents emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations, and are subject vetting processes conducted by prospective charterers.
While currently the orderbook for tankers is at low levels compared to historical standards, if the capacity of new tankers delivered exceeds the capacity of such vessel types being scrapped and converted to non-trading vessels, global fleet capacity will increase.
While currently the orderbook for tankers is at low levels compared to historical standards, if the capacity of new tankers delivered exceeds the capacity of such vessel types being scrapped and converted to non-trading vessels, global fleet capacity will 12 Table of Contents increase.
These anti-takeover provisions could substantially impede the ability of stockholders to benefit from a change in control and, as a result, may adversely affect the market price of our common stock and stockholders’ ability to realize any potential change of control premium.
These anti-takeover provisions could substantially impede the ability of stockholders to benefit from a change in control and, as a 39 Table of Contents result, may adversely affect the market price of our common stock and stockholders’ ability to realize any potential change of control premium.
Under Section 404 of Sarbanes-Oxley, we are required to include in each of our annual reports on Form 20-F, a report containing our management’s assessment of the effectiveness of our internal control over financial reporting.
Under Section 404 of Sarbanes-Oxley, we are required to include in each of our annual reports on Form 20-F, a report containing our management’s assessment of the effectiveness of our internal control over 32 Table of Contents financial reporting.
The lack of an active trading market on Nasdaq and low trading volume for our common stock may make it more difficult for you to sell our common stock and could lead to our share price becoming depressed or volatile.
The lack of an active trading market on Nasdaq and low trading volume for our common 36 Table of Contents stock may make it more difficult for you to sell our common stock and could lead to our share price becoming depressed or volatile.
If the value of our vessels deteriorates, we may have to record an impairment adjustment in our financial statements which would adversely affect our financial results and could further hinder our ability to raise capital.
If the value of our vessels deteriorates, we may have to record an impairment charge e in our financial statements which would adversely affect our financial results and could further hinder our ability to raise capital.
Our financial condition could also be materially adversely affected to the extent we do not hedge our exposure to interest rate fluctuations under our financing arrangements under which loans have been advanced at a floating rate.
Our financial condition could also be materially adversely affected to the extent we do not hedge our exposure to interest rate fluctuations under our financing arrangements under which loans may be advanced at a floating rate.
In addition, the Series A Preferred Stock ranks junior to all our indebtedness and other liabilities, and to any other senior securities we may issue in the future with respect to assets available to satisfy claims against us.
In addition, the Series A Preferred Stock ranks junior to any potential indebtedness and other liabilities, and to any other senior securities we may issue in the future with respect to assets available to satisfy claims against us.
The Series A Preferred Stock represents perpetual equity interests in us and, unlike our indebtedness, will not give rise to a claim for payment of a principal amount at a particular date.
The Series A Preferred Stock represents perpetual equity interests in us and, unlike any future indebtedness, will not give rise to a claim for payment of a principal amount at a particular date.
Although this would delay our funding requirements for the installment payments to purchase these vessels, it would also delay our receipt of revenues under any charters we arrange for such vessels.
Although this would delay our funding requirements for the installment payments to purchase these vessels, it would also delay our receipt of revenues under any charters we 28 Table of Contents arrange for such vessels.
For these purposes, our shares of common stock will be treated as closely held during a taxable year if, for more than one-half the number of days in such taxable year, one or more persons each of whom owns either directly or under applicable attribution rules, at least 5% of our shares of common stock, own, in the aggregate, 50% or more of our shares of common stock, unless we can establish, in accordance with applicable documentation requirements, that a sufficient number of the shares of common stock in the closely-held block are owned, directly or indirectly, by persons that are residents of foreign jurisdictions that provide United States shipping companies with an exemption from tax that is equivalent to that provided by Section 883 to preclude other stockholders in the closely-held block from owning 50% or more of the closely-held block of shares of common stock. 28 Table of Contents We believe that it will be the case, and may also be the case in the future, that, one or more persons each of whom owns, either directly or under applicable attribution rules, at least 5% of our shares of common stock own, in the aggregate, 50% or more of our shares of common stock.
For these purposes, our shares of common stock will be treated as closely held during a taxable year if, for more than one-half the number of days in such taxable year, one or more persons each of whom owns either directly or under applicable attribution rules, at least 5% of our shares of common stock, own, in the aggregate, 50% or more of our shares of common stock, unless we can establish, in accordance with applicable documentation requirements, that a sufficient number of the shares of common stock in the closely-held block are owned, directly or indirectly, by persons that are residents of foreign jurisdictions that provide United States shipping companies with an exemption from tax that is equivalent to that provided by Section 883 to preclude other stockholders in the closely-held block from owning 50% or more of the closely-held block of shares of common stock.
Our inability to obtain additional financing, or obtain financing at a higher than anticipated cost may materially affect our results of operation and our ability to implement our business strategy.
Our inability to obtain additional financing, or 24 Table of Contents obtain financing at a higher than anticipated cost may materially affect our results of operation and our ability to implement our business strategy.
There is no public market for the Class A Warrants, Class B Warrants, Class C Warrants or Class D Warrants and we do not expect one to develop. There is presently no established public trading market for our Class A Warrants, Class B Warrants, Class C Warrants or Class D Warrants and we do not expect a market to develop.
There is presently no established public trading market for our Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants or Class E Warrants and we do not expect a market to develop.
Factors that influence demand for drybulk vessel capacity include: • demand for and production of drybulk products; • supply of and demand for energy resources and commodities; • the COVID-19 pandemic and related factors; • global and regional economic and political conditions, including weather, natural or other disasters (including the COVID-19 pandemic), armed conflicts (including the Ukraine conflict), terrorist activities and strikes; • environmental and other regulatory developments; • the location of regional and global exploration, production and manufacturing facilities and the distance drybulk cargoes are to be moved by sea; • changes in seaborne and other transportation patterns including shifts in the location of consuming regions for energy resources, commodities, and transportation demand for drybulk transportation; • international sanctions, embargoes, import and export restrictions, nationalizations and wars, including the conflict in Ukraine; • natural disaster and weather; • trade disputes or the imposition of tariffs on various commodities or finished goods tariffs on imports and exports that could affect the international trade; and • currency exchange rates.
Factors that influence demand for drybulk vessel capacity include: • demand for and production of drybulk products; • supply of and demand for energy resources and commodities; • global and regional economic and political conditions, including weather, natural or other disasters (such as the COVID-19 pandemic), armed conflicts (including the conflicts in Ukraine and Gaza and Houthi attacks in the Red Sea and Gulf of Aden), terrorist activities and strikes; • environmental and other regulatory developments; • the location of regional and global exploration, production and manufacturing facilities of the sourcing materials and the distance drybulk cargoes are to be moved by sea; • changes in seaborne and other transportation patterns including shifts in the location of consuming regions for energy resources, commodities, and transportation demand for drybulk transportation; • international sanctions, embargoes, import and export restrictions, nationalizations and wars, including the conflict in Ukraine and Gaza; • natural disaster and weather; • trade disputes or the imposition of tariffs on various commodities or finished goods tariffs on imports and exports that could affect the international trade; and • currency exchange rates.
In addition, if we find it necessary to sell our vessels at a time when vessel prices are low, we will recognize losses and a reduction in our earnings, which could affect our ability to raise additional capital necessary for us to comply with our loan agreements.
In addition, if we find it necessary to sell our vessels at a time when vessel prices are low, we will recognize losses and a reduction in our earnings, which could affect our ability to raise additional capital necessary for us to comply with loan agreements for debt we may incur in the future.
As a result, there could be material competition for the time and effort of our officers who also provide services to StealthGas and its affiliates, which could have a material adverse effect on our business, results of operations and financial condition. See “Item 6.
As a result, there could be material competition for the time and effort of our officers who also provide services to StealthGas, C3is and its affiliates, which could have a material adverse effect on our business, results of operations and financial condition. See “Item 6. Directors, Senior Management and Employees”.
The agreements for this indebtedness restrict our ability to pay dividends on or redeem preferred shares if an event of default has occurred or is continuing. Our future indebtedness may impose similar or greater restrictions on our ability to pay dividends or redeem our preferred shares.
Any future agreements for indebtedness, will restrict our ability to pay dividends on or redeem preferred shares if an event of default has occurred or is continuing. Our future indebtedness may impose similar or greater restrictions on our ability to pay dividends or redeem our preferred shares.
Vafias, who functions as our Chief Executive Officer and President, also provides services in similar capacities for StealthGas and is a significant stockholder of StealthGas. Our officers are not required to work full-time on our affairs and also perform services for StealthGas and its affiliates.
Vafias, who functions as our Chief Executive Officer and President, also provides services in similar capacities for StealthGas and is a significant stockholder of StealthGas, and is the Non-Executive Chairman of C3is Inc. Our officers are not required to work full-time on our affairs and also perform services for StealthGas, C3is Inc. and its affiliates.
As a newly-incorporated company that became publicly traded on December 3, 2021, there is currently no analyst coverage of the Company. The trading market for our common stock and Series A Preferred Stock will depend, in part, upon the research and reports that securities or industry analysts publish about us or our business.
As a newly-incorporated company that became publicly traded on December 3, 2021, there is currently only one analyst covering the Company. The trading market for our common stock and Series A Preferred Stock will depend, in part, upon the research and reports that securities or industry analysts publish about us or our business.
Moreover, the market value of the Class A Warrants, Class B Warrants, Class C Warrants and Class D Warrants is uncertain and there can be no assurance that the market value of the Class A Warrants, Class B Warrants, Class C Warrants and Class D Warrants will equal or exceed their public offering price.
Moreover, the market value of the Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants is uncertain and there can be no assurance that the market value of the Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants will equal or exceed their exercise price.
In addition, since the securities have no stated maturity date, investors seeking liquidity will be limited to selling their shares in the secondary market absent redemption by us.
In addition, 41 Table of Contents since the securities have no stated maturity date, investors seeking liquidity will be limited to selling their shares in the secondary market absent redemption by us.
Entities affiliated with other members of the Vafias family own vessels that operate in various sectors of the shipping industry, including a number of product and crude oil tankers and drybulk carriers, which are managed by Stealth Maritime and/or Brave Maritime.
Stealth Maritime and Brave Maritime, may manage or acquire vessels that compete with our fleet. Entities affiliated with other members of the Vafias family own vessels that operate in various sectors of the shipping industry, including a number of product and crude oil tankers and drybulk carriers, which are managed by Stealth Maritime and/or Brave Maritime.
To finance our future fleet expansion program beyond our current fleet, we expect to incur additional secured debt. We have to dedicate a portion of our cash flow from operations to pay the principal and interest on our debt.
To finance our future fleet expansion program beyond our current fleet, we may incur secured debt. We would have to dedicate a portion of our cash flow from operations to pay the principal and interest on such future debt.
Risks Related To Our Industry • The cyclical nature of the demand for seaborne transportation of oil and petroleum products may lead to significant changes in our chartering and vessel utilization, which may result in difficulty finding profitable charters for our vessels. • Charter rates for dry bulk vessels are volatile and may remain at currently low levels or decrease in the future, which may adversely affect our results of operations and financial condition. • Economic and political factors, including increased trade protectionism and tariffs and health pandemics, such as the COVID-19 pandemic, could materially adversely affect our business, financial position and results of operations. • The COVID-19 pandemic may continue to have negative consequences for the shipping industry, including demand for oil and charter rates, which may continue to negatively affect our results of operations. • The tanker industry is highly dependent upon the crude oil and petroleum products industries, with the level of availability and demand for oil and petroleum products. • An over-supply of tankers or drybulk carriers may lead to a reduction in charter rates, vessel values and profitability. • Our operations outside the United States expose us to global risks, such as political conflict, terrorism and public health concerns, including the conflict in Ukraine and related sanctions, which may interfere with the operation of our vessels. • We are subject to regulation and liability under environmental, health and safety laws that could require significant expenditures. • The market values of tankers and drybulk carriers are volatile and over time may fluctuate significantly. • Technological innovation could reduce our charter hire income and the value of our vessels. • Changes in fuel, or bunker, prices may adversely affect profits. 3 Table of Contents • Risks involved with operating ocean-going vessels could affect our business and reputation, which would adversely affect our revenues and stock price. • Governments could requisition our vessels during a period of war or emergency, and maritime claimants could arrest our vessels.
Risks Related To Our Industry • The cyclical nature of the demand for seaborne transportation of oil and petroleum products may lead to significant changes in our chartering and vessel utilization, which may result in difficulty finding profitable charters for our vessels. • Charter rates for dry bulk vessels are volatile and may remain at currently low levels or decrease in the future, which may adversely affect our results of operations and financial condition. • Economic and political factors, including increased trade protectionism and tariffs, imposed sanctions such as the sanctions imposed on Russian oil trade and health crises, such as the COVID-19 pandemic, could materially adversely affect our business, financial position and results of operations. • The tanker industry is highly dependent upon the crude oil and petroleum products industries, with the level of availability and demand for oil and petroleum products. • An over-supply of tankers or drybulk carriers may lead to a reduction in charter rates, vessel values and profitability. • Our operations outside the United States expose us to global risks, such as political conflict, terrorism and public health concerns, including the conflict in Ukraine and related sanction, the war in Gaza and attacks by Houthi Rebels in the Red Sea and Gulf of Aden, which may interfere with the operation of our vessels. • We are subject to regulation and liability under environmental, health and safety laws that could require significant expenditures. • The market values of tankers and drybulk carriers are volatile and over time may fluctuate significantly. • Technological innovation could reduce our charter hire income and the value of our vessels. • Changes in fuel, or bunker, prices may adversely affect profits. • Risks involved with operating maritime vessels could affect our business and reputation, which would adversely affect our revenues and stock price. • Governments could requisition our vessels during a period of war or emergency, and maritime claimants could arrest our vessels.
The factors affecting supply and demand for tankers, crude oil and refined petroleum products are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable. As of March 28, 2023, nine of our vessels were operating in the spot market.
The factors affecting supply and demand for tankers, crude oil and refined petroleum products are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable. As of April 1, 2024, nine of our vessels were operating in the spot market.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Environmental Regulations—International Maritime Organization (“IMO”) The IMO, the United Nations agency for maritime safety and the prevention of pollution by ships, has negotiated international conventions relating to pollution by ships. In 1973, IMO adopted the MARPOL, which has been periodically updated with relevant amendments.
Environmental Regulations—International Maritime Organization (the “IMO”) The IMO, the United Nations agency for maritime safety and the prevention of pollution by ships, has negotiated international conventions relating to pollution by ships. In 1973, the IMO adopted the MARPOL, which has been periodically updated with relevant amendments.
The SDR is an International Monetary Fund unit pegged to a basket of currencies. The right to limit liability under the CLC is forfeited where the spill is caused by the owner’s actual fault and, under the 1992 Protocol, where the spill is caused by the owner’s intentional or reckless conduct.
SDR is an International Monetary Fund unit pegged to a basket of currencies. The right to limit liability under the CLC is forfeited where the spill is caused by the owner’s actual fault and, under the 1992 Protocol, where the spill is caused by the owner’s intentional or reckless conduct.
While we believe that our present insurance coverage is adequate, not all risks can be insured, and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates.
While we believe that our present insurance coverage is adequate, not all risks can be insured, and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates.
The United States has also enacted the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, which applies to the discharge of hazardous substances other than oil, whether on land or at sea. OPA and CERCLA both define “owner and operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel.
The United States has also enacted the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), which applies to the discharge of hazardous substances other than oil, whether on land or at sea. OPA and CERCLA both define “owner and operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel.
Accordingly, if one of our ships, or other ships managed by Brave Maritime or Stealth Maritime and owned by an affiliated entity of Brave Maritime or Stealth Maritime, including StealthGas, were to incur significant costs from an accident, spill or other environmental liability or were subject to insurance fraud or other incident, our insurance premiums and costs could increase significantly or we may not be able to obtain insurance for our ships.
Accordingly, if one of our ships, or other ships managed by Brave Maritime or Stealth Maritime and owned by an affiliated entity of Brave Maritime or Stealth Maritime, including StealthGas and C3is, were to incur significant costs from an accident, spill or other environmental liability or were subject to insurance fraud or other incident, our insurance premiums and costs could increase significantly or we may not be able to obtain insurance for our ships.
These entities include the local port authorities (United States Coast Guard, harbor master or equivalent), classification societies, flag state administration (country of registry), charterers and particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and financial assurances for the operation of our vessels.
These entities include the local port authorities (United States Coast Guard (the “USCG”), harbor master or equivalent), classification societies, flag state administration (country of registry), charterers and particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and financial assurances for the operation of our vessels.
Draft MARPOL amendments released in November 2020 and adopted in June 2021 built on the EEDI and SEEMP by requiring ships to reduce carbon intensity based on a new Energy Efficiency Existing Ship Index (EEXI) and reduce operational carbon intensity reductions based on a new operational carbon intensity indicator, in line with the IMO strategy which aims to reduce carbon intensity of international shipping by 40% by 2030.
Draft MARPOL amendments released in November 2020 and adopted in June 2021 built on the EEDI and SEEMP by requiring ships to reduce carbon intensity based on a new Energy Efficiency Existing Ship Index (“EEXI”) and reduce operational carbon intensity reductions based on a new operational carbon intensity indicator, in line with the IMO strategy which aims to reduce carbon intensity of international shipping by 40% by 2030.
One estimate suggests that PM emissions from maritime shipping led to 87,000 premature deaths worldwide in 2012. 49 Table of Contents Vessel chartering Product tankers and crude oil tankers are ordinarily chartered either through a voyage charter or a time charter, under a longer term contract of affreightment (“COA”) or in pools.
One estimate suggests that PM emissions from maritime shipping led to 87,000 premature deaths worldwide in 2012. 62 Table of Contents Vessel chartering Product tankers and crude oil tankers are ordinarily chartered either through a voyage charter or a time charter, under a longer term contract of affreightment (“COA”) or in pools.
Business Overview Our fleet consists of (1) five MR refined petroleum product tankers that carry refined petroleum products such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, (2) one aframax tanker and two suezmax tankers that carry crude oil and (3) four handysize drybulk carriers that transport major bulks such as iron ore, coal and grains, and minor bulks such as bauxite, phosphate and fertilizers.
Business Overview Our fleet consists of (1) six MR refined petroleum product tankers that carry refined petroleum products such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, (2) one aframax tanker and two suezmax tankers that carry crude oil and (3) two handysize drybulk carriers that transport major bulks such as iron ore, coal and grains, and minor bulks such as bauxite, phosphate and fertilizers.
Under the self-insurance provisions, the ship owner or operator must have a net worth and working capital, measured in assets located in the United States against liabilities located anywhere in the world, that exceeds the applicable amount of financial responsibility. We have complied with the United States Coast Guard regulations by providing a financial guaranty evidencing sufficient self-insurance.
Under the self-insurance provisions, the ship owner or operator must have a net worth and working capital, measured in assets located in the United States against liabilities located anywhere in the world, that exceeds the applicable amount of financial responsibility. We have complied with the USCG regulations by providing a financial guaranty evidencing sufficient self-insurance.
Among the various requirements are: • on-board installation of automatic information systems, or AIS, to enhance vessel-to-vessel and vessel-to-shore communications; • on-board installation of ship security alert systems; • the development of vessel security plans; and • compliance with flag state security certification requirements.
Among the various requirements are: • on-board installation of automatic information systems to enhance vessel-to-vessel and vessel-to-shore communications; • on-board installation of ship security alert systems; • the development of vessel security plans; and • compliance with flag state security certification requirements.
The United States Coast Guard regulation’s aim to align with international maritime security standards exempted non-United States vessels from MTSA vessel security measures provided such vessels have on board, by July 1, 2004, a valid International Ship Security Certificate (“ISSC”) that attests to the vessel’s compliance with SOLAS security requirements and the ISPS Code.
The USCG regulation’s aim to align with international maritime security standards exempted non-United States vessels from MTSA vessel security measures provided such vessels have on board, by July 1, 2004, a valid International Ship Security Certificate (“ISSC”) that attests to the vessel’s compliance with SOLAS security requirements and the ISPS Code.
Under our management agreement with Stealth Maritime, which we entered into in conjunction with the Spin-Off, we pay Stealth Maritime a fixed management fee of $440 per vessel operating under a voyage or time charter per day on a monthly basis in advance, pro-rated for the calendar days we own the vessels.
Under our management agreement with Stealth Maritime, which we entered into in conjunction with the Spin-Off, we pay Stealth Maritime a fixed management fee of $440 per vessel operating under a voyage 46 Table of Contents or time charter per day on a monthly basis in advance, pro-rated for the calendar days we own the vessels.
We believe that the heightened level of environmental and quality concerns among insurance underwriters, regulators and charterers is leading to greater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the industry. Increasing environmental concerns have created a demand for vessels that conform to the stricter environmental standards.
We believe that the heightened level of environmental and quality concerns among insurance underwriters, regulators and charterers is leading to greater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the industry. Increasing environmental concerns have created 48 Table of Contents a demand for vessels that conform to the stricter environmental standards.
The failure of a ship owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, decrease available insurance coverage for the affected vessels and result in a denial of access to, or detention in, certain ports. Currently, each of the vessels in our fleet is ISM code-certified.
The failure of a ship owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, decrease available insurance 51 Table of Contents coverage for the affected vessels and result in a denial of access to, or detention in, certain ports. Currently, each of the vessels in our fleet is ISM code-certified.
Any passage of climate control initiatives by the IMO, the EU or the individual countries in which we operate that limit greenhouse gas emissions from vessels could require us to limit our operations or make significant financial expenditures that we cannot predict with certainty at this time.
Any passage of climate control initiatives by 56 Table of Contents the IMO, the EU or the individual countries in which we operate that limit greenhouse gas emissions from vessels could require us to limit our operations or make significant financial expenditures that we cannot predict with certainty at this time.
We also maintain Increased Value insurance. Under the Increased Value insurance, in case of total loss of a vessel, we will be able to recover the sum insured under the Increased Value policy in addition to the sum insured under the Hull and Machinery policy.
Under the Increased Value insurance, in case of total loss of a vessel, we will be able to recover the sum insured under the Increased Value policy in addition to the sum insured under the Hull and Machinery policy.
The cyclicality of charter rates is also reflected in vessel values. The Drybulk Shipping Industry The global drybulk vessel fleet is divided into four principal categories based on a vessel’s carrying capacity. These categories are: Capesize. Capesize vessels have a carrying capacity of exceeding 100,000 dwt.
The cyclicality of charter rates is also reflected in vessel values. 63 Table of Contents The Drybulk Shipping Industry The global drybulk vessel fleet is divided into four principal categories based on a vessel’s carrying capacity. These categories are: Capesize. Capesize vessels have a carrying capacity of exceeding 100,000 dwt.
Stealth Maritime will also earn a fee equal to 1.0% of the contract price of any vessel bought or sold by them on our behalf. 38 Table of Contents The initial term of our management agreement with Stealth Maritime will expire on December 31, 2025.
Stealth Maritime will also earn a fee equal to 1.0% of the contract price of any vessel bought or sold by them on our behalf. The initial term of our management agreement with Stealth Maritime will expire on December 31, 2025.
Many oil companies and other oil trading companies, the principal charterers of our product tankers and crude oil tankers, also operate their own vessels and transport oil for themselves and third-party charterers in direct competition with independent owners and operators.
Many oil companies and other oil trading companies, the principal charterers of our product tankers and crude oil tankers, also operate their own vessels and transport oil for themselves and third-party charterers in direct competition with independent owners 60 Table of Contents and operators.
However, the impact of such regulations is difficult to predict at this time. 45 Table of Contents Vessel Security Regulations Since the terrorist attacks of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security. On November 25, 2002, the Maritime Transportation Security Act of 2002, or MTSA, came into effect in the United States.
However, the impact of such regulations is difficult to predict at this time. 57 Table of Contents Vessel Security Regulations Since the terrorist attacks of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security. On November 25, 2002, the Maritime Transportation Security Act of 2002 “MTSA”) came into effect in the United States.
The ISM Code requires ship owners and bareboat charterers to develop and maintain an extensive SMS that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies.
The ISM Code requires ship owners and bareboat charterers to develop and maintain an extensive Safety Management System (“SMS”) that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies.
To implement certain portions of the MTSA, in July 2003, the United States Coast Guard issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States.
To implement certain portions of the MTSA, in July 2003, the USCG issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States.
Similarly, in December 2002, amendments to the International Convention for the Safety of Life at Sea, or SOLAS, created a new chapter of the convention dealing specifically with maritime security.
Similarly, in December 2002, amendments to the International Convention for the Safety of Life at Sea (“SOLAS”), created a new chapter of the convention dealing specifically with maritime security.
The Series C Convertible Preferred Stock has a dividend rate of 5.00% per annum per $1,000 liquidation preference per share, which is payable in cash or additional shares of Series C Convertible Preferred Stock at the Company’s election, and is convertible, at the holder’s option, after the six-month anniversary of issuance into shares of the Company’s common stock at a conversion price equal to the lower of $0.50 and the ten-day volume weighted average price of the common stock.
The Series C Convertible Preferred Stock had a dividend rate of 5.00% per annum per $1,000 liquidation preference per share, payable in cash or additional shares of Series C Convertible Preferred Stock at the Company’s election, and was convertible, at the holder’s option, after the six-month anniversary of issuance into shares of the Company’s common stock at a conversion price equal to the lower of $7.50 and the ten-day volume weighted average price of the common stock.
We intend to comply with all applicable state regulations in the ports where our vessels call. 43 Table of Contents Environmental Regulations—Other Environmental Initiatives The EU has adopted legislation that: (1) requires member states to refuse access to their ports to certain sub-standard vessels, according to vessel type, flag and number of previous detentions; (2) creates an obligation on member states to inspect at least 25% of vessels using their ports annually and provides for increased surveillance of vessels posing a high risk to maritime safety or the marine environment; (3) provides the EU with greater authority and control over classification societies, including the ability to seek to suspend or revoke the authority of negligent societies; and (4) requires member states to impose criminal sanctions for certain pollution events, such as the unauthorized discharge of tank washings.
Environmental Regulations—Other Environmental Initiatives The EU has adopted legislation that: (1) requires member states to refuse access to their ports to certain sub-standard vessels, according to vessel type, flag and number of previous detentions; (2) creates an obligation on member states to inspect at least 25% of vessels using their ports annually and provides for increased surveillance of vessels posing a high risk to maritime safety or the marine environment; (3) provides 53 Table of Contents the EU with greater authority and control over classification societies, including the ability to seek to suspend or revoke the authority of negligent societies; and (4) requires member states to impose criminal sanctions for certain pollution events, such as the unauthorized discharge of tank washings.
The United States Coast Guard and the EPA have entered into a memorandum of understanding which provides for collaboration on the enforcement of the VGP requirements. As a result, the United States Coast Guard includes the VGP as part of its normal Port State Control inspections. The EPA issued a VGP that became effective in December 2013.
The USCG and the EPA have entered into a memorandum of understanding which provides for collaboration on the enforcement of the VGP requirements. As a result, the USCG includes the VGP as part of its normal Port State Control inspections. The EPA issued a VGP that became effective in December 2013.
The total cargo carrying capacity of our ten-vessel fleet is 807,804 dwt. We are managed by Stealth Maritime, a privately owned company controlled by the Vafias Group, which has been active in shipping for over 50 years and is controlled by the Vafias family, of which Harry Vafias, our Chief Executive Officer, is a member.
The total cargo carrying capacity of our eleven-vessel fleet is 791,000 dwt. We are managed by Stealth Maritime, a privately owned company controlled by the Vafias Group, which has been active in shipping for over 50 years and is controlled by the Vafias family, of which Harry Vafias, our Chief Executive Officer, is a member.
We believe that our protection and indemnity insurance will cover any liability under the CLC. In 2001, the IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, or the Bunker Convention, which imposes strict liability on ship owners for pollution damage caused by discharges of bunker oil in jurisdictional waters of ratifying states.
We believe that our protection and indemnity insurance will cover any liability under the CLC. 50 Table of Contents In 2001, the IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the “Bunker Convention”), which imposes strict liability on ship owners for pollution damage caused by discharges of bunker oil in jurisdictional waters of ratifying states.
Hull and Machinery Insurance We have in place Fleet Marine Hull and Machinery and Fleet War Risk insurance policies, providing cover for particular damage to the vessel, salvage and towage costs following a casualty as well as for vessel Actual or Constructive Total Loss, subject to a deductible of $150,000 or $200,000 (depending on the ship) per incident.
Hull and Machinery Insurance We have in place Fleet Marine Hull and Machinery and Fleet War Risk insurance policies, providing cover for particular damage to the vessel, salvage and towage costs following a casualty as well as for vessel Actual or Constructive Total Loss, subject to a deductible of $150,000 or $200,000 (depending on the ship) per incident. 59 Table of Contents We also maintain Increased Value insurance.
OPA and CERCLA both require owners and operators of vessels to establish and maintain with the United States Coast Guard evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject as discussed above.
OPA and CERCLA both require owners and operators of vessels to establish and maintain with the USCG evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject as discussed above.
Our common stock currently trade on the Nasdaq Capital Market under the symbol “IMPP” and our Series A Preferred Stock currently trade on the Nasdaq Capital Market under the symbol “IMPPP.” On February 2, 2022, we completed an underwritten public offering of 11,040,000 units for $1.25 per unit, each unit consisting of (i) one share of common stock of the Company and (ii) one Class A Warrant (a “Class A Warrant”) to purchase one share of common stock at an exercise price of $1.25 per share.
Our common stock currently trade on the Nasdaq Capital Market under the symbol “IMPP” and our Series A Preferred Stock currently trade on the Nasdaq Capital Market under the symbol “IMPPP.” On February 2, 2022, we completed an underwritten public offering of 736,000 units for $18.75 per unit, each unit consisting of (i) one share of common stock of the Company and (ii) fifteen Class A Warrant (a “Class A Warrant”) to purchase one share of common stock at an exercise price of $18.75 per share.
Charter rates improved in the first half of 2020; before declining sharply in the second half of 2020 and remaining at low levels in 2021 and early 2022, before significantly improving in the second half of 2022 and the first quarter of 2023.
Charter rates improved in the first half of 2020; before declining sharply in the second half of 2020 and remaining at low levels in 2021 and early 2022, before significantly improving in the second half of 2022 and the first quarter of 2023 and remained at high levels for the majority of 2023.
Our business strategy is focused on providing consistent stockholder returns by carefully selecting the timing and the structure of our investments in vessels and by reliably, safely and competitively operating the vessels we own, through our affiliate, Stealth Maritime. 37 Table of Contents Our Fleet As of March 28, 2023, the profile and deployment of our fleet is the following: Name Year Built Country Built Vessel Size (dwt) Vessel Type Employment Status Daily Charter Rate Expiration of Charter(1) Tankers Magic Wand 2008 Korea 47,000 MR product tanker Time Charter $ 14,500 May 2023 Clean Thrasher 2008 Korea 47,000 MR product tanker Spot Clean Sanctuary (ex.
Our business strategy is focused on providing consistent stockholder returns by carefully selecting the timing and the structure of our investments in vessels and by reliably, safely and competitively operating the vessels we own, through our affiliate, Stealth Maritime. 45 Table of Contents Our Fleet As of April 1, 2024, the profile and deployment of our fleet is the following: Name Year Built Country Built Vessel Size (dwt) Vessel Type Employment Status Daily Charter Rate Expiration of Charter(1) Tankers Magic Wand 2008 Korea 47,000 MR product tanker Spot Clean Thrasher 2008 Korea 47,000 MR product tanker Spot Clean Sanctuary (ex.
A list of our subsidiaries, including their respective jurisdiction of incorporation, as of March 28, 2023, all of which are wholly-owned by us other is set forth in Exhibit 8 to this Annual Report on Form 20-F. B.
A list of our subsidiaries, including their respective jurisdiction of incorporation, as of April 1, 2024, all of which are wholly-owned by us other is set forth in Exhibit 8 to this Annual Report on Form 20-F. B.
The 2010 HNS Convention has not been ratified by a sufficient number of countries to enter into force, and at this time we cannot estimate with any certainty the costs of compliance with its requirements should it enter into force. The IMO adopted the BWM Convention in February 2004.
The 2010 HNS Convention has not been ratified by a sufficient number of countries to enter into force, and at this time we cannot estimate with any certainty the costs of compliance with its requirements should it enter into force.
This measure accounts for the vessel’s engine power, fuel consumption and CO2 conversion capacity, all of which make it impossible to effect EEXI compliance by merely reducing the ship’s speed or cargo load. Alongside the EEXI, a mandatory Carbon Intensity Indicator (“CII”) was introduced on January 1, 2023.
This measure accounts for the vessel’s engine power, fuel consumption and CO2 conversion capacity, all of which make it impossible to effect EEXI compliance by merely reducing the ship’s speed or cargo load. Alongside the EEXI, a mandatory Carbon Intensity Indicator (“CII”) was introduced on January 1, 2023. CII requirements are set to become particularly stringent by 2030.
As of March 28, 2023, we owned and operated a fleet of five medium range (“MR”) refined petroleum product tankers that carry refined petroleum products such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, one aframax tanker and two suezmax tankers that carry crude oil and four handysize drybulk carriers that transport major bulks such as iron ore, coal and grains, and minor bulks such as bauxite, phosphate and fertilizers.
As of April 1, 2024, we owned and operated a fleet of six medium range (“MR”) refined petroleum product tankers that carry refined petroleum products such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, one aframax tanker and two suezmax tankers that carry crude oil and two handysize drybulk carriers that transport major bulks such as iron ore, coal and grains, and minor bulks such as bauxite, phosphate and fertilizers.
The Convention creates a regime of liability and compensation for damage from hazardous and noxious substances (or HNS).
The 2010 HNS Convention creates a regime of liability and compensation for damage from hazardous and noxious substances (“HNS”).
Clean Water Act (“CWA”) prohibits the discharge of oil or hazardous substances in navigable waters and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA.
Environmental Protection Agency (“EPA”) regulations. The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil or hazardous substances in navigable waters and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA.
Accordingly, both OPA and CERCLA impact our operations. 42 Table of Contents Under OPA, vessel owners, operators and bareboat charterers are “responsible parties” and are jointly, severally and strictly liable (unless the discharge of pollutants results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of pollutants from their vessels.
Under OPA, vessel owners, operators and bareboat charterers are “responsible parties” and are jointly, severally and strictly liable (unless the discharge of pollutants results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of pollutants from their vessels.
Effective March 23, 2023, the current limits of OPA liability for double-hulled tank vessels larger than 3,000 gross tons are the greater of $2,500 per gross ton or $21,521,000, subject to adjustment for inflation by the United States Coast Guard every three years.
Effective March 23, 2023, the current limits of OPA liability for double-hulled tank vessels larger than 3,000 gross tons are the greater of $2,500 per gross ton or 52 Table of Contents $21,521,000, subject to adjustment for inflation by the USCG every three years.
This permit, which the EPA has designated as the Vessel General Permit for Discharges Incidental to the Normal Operation of Vessels, or VGP, incorporates the current United States Coast Guard requirements for ballast water management, as well as supplemental ballast water requirements, and includes requirements applicable to 26 specific discharge streams, such as deck runoff, bilge water and gray water.
This permit, which the EPA has designated as the Vessel General Permit for Discharges Incidental to the Normal Operation of Vessels (“VGP”), incorporates the current USCG requirements for ballast water management, as well as supplemental ballast water requirements, and includes requirements applicable to 26 specific discharge streams, such as deck runoff, bilge water and gray water.
In 2021 and 2022, Hellenic Manning Overseas Inc, formerly known as Navis Maritime Services Inc., based in Manila, was responsible for providing the crewing of our fleet, under Stealth Maritime’s technical management (excluding our Aframax tanker for which crew management is provided by Bernard Schulte Management and one of our product tankers for which Bernard Schulte was the crew manager up to the first quarter of 2023), to the extent that these vessels were not deployed on bareboat charters.
Since 2021, Hellenic Manning Overseas Inc (HMO), formerly known as Navis Maritime Services Inc., based in Manila, is responsible for providing the crewing of our fleet, under Stealth Maritime’s technical management excluding our Aframax tanker for which up to April 2023 crew management was provided by Bernard Schulte Management and afterwards up until its sale to C3is was managed by HMO and one of our product tankers for which Bernard Schulte was the crew manager up to February of 2023, to the extent that these vessels were not deployed on bareboat charters.
Similar restrictions apply in Icelandic and inland Chinese waters. Specifically, as of January 1, 2019, China expanded the scope of its Domestic Emission Control Areas to include all coastal waters within 12 nautical miles of the mainland. Vessels operating within an ECA or an area with equivalent standards must use fuel with a sulfur content that does not exceed 0.10%.
Specifically, as of January 1, 2019, China expanded the scope of its Domestic ECAs to include all coastal waters within 12 nautical miles of the mainland. Vessels operating within an ECA or an area with equivalent standards must use fuel with a sulfur content that does not exceed 0.10%.
This insurance aims to respond towards third-party liability claims and other related expenses arising amongst others from injury or death of crew, shore personnel working on board the ships during cargo operations and other third parties, loss of or damage to cargoes, claims arising from collisions with other vessels, damage to third-party properties, pollution arising from oil or other substances, salvage costs to the extent that they aim to control or mitigate the environmental effect following a casualty, Wreck removal and other discretionary costs. 47 Table of Contents Our current Protection and Indemnity insurance provides cover for Oil Pollution up to $1.0 billion per vessel per incident.
This insurance aims to respond towards third-party liability claims and other related expenses arising amongst others from injury or death of crew, shore personnel working on board the ships during cargo operations and other third parties, loss of or damage to cargoes, claims arising from collisions with other vessels, damage to third-party properties, pollution arising from oil or other substances, salvage costs to the extent that they aim to control or mitigate the environmental effect following a casualty, Wreck removal and other discretionary costs.
Coast Guard is working to implement the amended provisions of MARPOL Annex VI, chiefly through proposed rule 1625-AC78, which remains at the proposed rule stage since its original publication in October of 2022. The amended MARPOL provisions and the rules proposed by the U.S.
The USCG is working to implement the amended provisions of MARPOL Annex VI, chiefly through proposed rule 1625-AC78, which remains at the proposed rule stage since its original publication in October of 2022.
The period between two subsequent surveys of each area must not exceed five years. Vessels are dry docked for the special survey for inspection of the underwater parts and for repairs related to inspections. If any defects are found, the classification surveyor will issue a “recommendation” which must be rectified by the ship owner within the prescribed time limits.
Vessels are dry docked for the special survey for inspection of the underwater parts and for repairs related to inspections. If any defects are found, the classification surveyor will issue a “recommendation” which must be rectified by the ship owner within the prescribed time limits.
The total cargo carrying capacity of our 12-vessel fleet is 807,804 dwt. Please see information in the section “Our Fleet”, below. During 2020, 2021 and 2022, our fleet (owned by StealthGas until December 2, 2021) had a fleet operational utilization of 95.7%, 90.5% and 84.8%, respectively, and we generated voyage revenues of $20.3 million, $17.4 million and $97.0 million, respectively.
The total cargo carrying capacity of our 11-vessel fleet is 791,000 dwt. Please see information in the section “Our Fleet”, below. During 2021, 2022 and 2023, our fleet (owned by StealthGas until December 2, 2021) had a fleet operational utilization of 90.5%, 84.8% and 75.1%, respectively, and we generated voyage revenues of $17.4 million, $97.0 million and $183.7 million, respectively.
This measure of annual efficiency is used to rate vessels based on the grams of CO2 they emit per dwt-mile, giving all cargo vessels above 5,000 GT a rating of A to E every year. The rating thresholds will become increasingly stringent towards 2030.
The USCG plans to develop and propose regulations to implement these provisions in the United States. This measure of annual efficiency is used to rate vessels based on the grams of CO2 they emit per dwt-mile, giving all cargo vessels above 5,000 GT a rating of A to E every year. The rating thresholds will become increasingly stringent towards 2030.
In March 2022, we completed an underwritten public offering, including the full exercise of the underwriter’s overallotment option, of 43,124,950 units for $1.60 per unit, each unit consisting of (i) one share of common stock of the Company (or pre-funded warrants, all of which were subsequently exercised for common stock, in the case of 3,900,000 units) and (ii) one Class B Warrant 36 Table of Contents (a “Class B Warrant”) to purchase one share of common stock at an exercise price of $1.60 per share.
In March 2022, we completed an underwritten public offering, including the full exercise of the underwriter’s overallotment option, of 2,874,997 units for $24.00 per unit, each unit consisting of (i) one share of common stock of the Company (or pre-funded warrants, all of which were subsequently exercised for common stock, in the case of 260,000 units) and (ii) fifteen Class B Warrant (a “Class B Warrant”) to purchase one share of common stock at an exercise price of $24.00 per share.
The Pool provides a mechanism for sharing all claims in excess of US$10 million up to, approximately US$3.1 billion. Under the current structure, clubs’ contributions to claims in the lower pool layer i.e from $10 million to $30 million are assessed on a tripartite formula which takes account of each club’s contributing tonnage, premium and claims record.
Under the current structure, clubs’ contributions to claims in the lower pool layer i.e from $10 million to $30 million are assessed on a tripartite formula which takes account of each club’s contributing tonnage, premium and claims record.
The Convention’s implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits. The BWM Convention took effect on September 8, 2017.
The IMO adopted International Convention for the Control and Management of Ships’ Ballast Water and Sediments (the “BWM Convention”) in February 2004. The BWM Convention’s implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits. The BWM Convention took effect on September 8, 2017.
The information contained on or linked to from our website is not incorporated herein by reference. Our company operates through a number of subsidiaries which directly own the vessels in our fleet.
Our telephone number from the United States is 011 30 210 625 0001. Our website address is www.imperialpetro.com. The information contained on or linked to from our website is not incorporated herein by reference. Our company operates through a number of subsidiaries which directly own the vessels in our fleet.
OPA affects all owners and operators whose vessels trade in the United States, its territories and possessions or whose vessels operate in United States waters, which include the United States’ territorial sea and its two hundred nautical mile exclusive economic zone.
OPA applies to discharges of any oil from a vessel, including discharges of fuel oil (bunkers) and lubricants. OPA affects all owners and operators whose vessels trade in the United States, its territories and possessions or whose vessels operate in United States waters, which include the United States’ territorial sea and its two hundred nautical mile exclusive economic zone.
We also issued 552,000 underwriter warrants to the representative of the underwriters to purchase up to an aggregate of 552,000 shares of common stock at an exercise price of $1.375 per share. As of March 28, 2023, an aggregate of 10,997,000 Class A Warrants had been exercised for 10,997,000 of our common stock, resulting in proceeds to us of $13,746,250.
We also issued underwriter warrants to the representative of the underwriters to purchase up to an aggregate of 36,800 shares of common stock at an exercise price of $20.625 per share. As of April 1, 2024, Class A Warrants had been exercised for 733,133 shares of our common stock, resulting in proceeds to us of $13,746,250.
The Company also issued 2,090,909 warrants to the representative of the underwriters (the “May 2022 Representative Purchase Warrants”) to purchase up to an aggregate of 2,090,909 share of common stock at an exercise price of $0.6875 per share.
The Company also issued warrants to the representative of the underwriters (the “May 2022 Representative Purchase Warrants”) to purchase up to an aggregate of 139,394 shares of common stock at an exercise price of $10.3125 per share.
In November 2022, amendments to MARPOL Annex VI adopted by the IMO came into effect. These amendments require ships to improve their energy efficiency with a view to reducing their greenhouse gas emissions, with a particular focus on carbon emissions, both through changes in technical specifications as well as in modifications in vessels’ operational parameters. The U.S.
These amendments require ships to improve their energy efficiency with a view to reducing their greenhouse gas emissions, with a particular focus on carbon emissions, both through changes in technical specifications as well as in modifications in vessels’ operational parameters.
This regulation also contains additional requirements for Chinese-flagged vessels (domestic and international) and other non-Chinese-flagged international navigating vessels. In November 2022, the China MSA published an additional Regulation of Administrative Measures of Ship Energy Consumption Data and Carbon Intensity, which came into effect on December 22, 2022.
In November 2022, the China MSA published an additional Regulation of Administrative Measures of Ship Energy Consumption Data and Carbon Intensity, which came into effect on December 22, 2022.
The exercising holders also received an aggregate of 31,150,000 Class D Warrants to purchase up to an aggregate of 31,150,000 shares of Common Stock in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.
The exercising holders also received Class D Warrants to purchase up to an aggregate of 2,076,667 shares of Common Stock in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. In the fourth quarter of 2023, we repurchased Class D Warrants exercisable for an aggregate of 1,903,333 shares of common stock.
In October 2008, the IMO adopted amendments to Annex VI, and the United States ratified the Annex VI amendments in October 2008. Beginning in 2011 the amendments required a progressive reduction of sulfur levels in bunker fuels to be phased in by 2020 and imposed more stringent NOx emission standards on marine diesel engines, depending on their date of installation.
The amendments required a progressive reduction of sulfur levels in bunker fuels to be phased in by 2020 and imposed more stringent NOx emission standards on marine diesel engines, depending on their date of installation. The Annex VI amendments have also established tiers of stringent NOx emissions standards for new marine engines, depending on their dates of installation.
By 2025, all new ships built must be 30% more energy efficient than those built in 2014, but it is likely that the IMO will increase these requirements such that new ships must be up to 50% more energy efficient than those built in 2014 by 2022. These new requirements could cause us to incur additional costs to comply.
Currently operating vessels must develop and implement Ship Energy Efficiency Plans. By 2025, all new ships built must be 30% more energy efficient than those built in 2014, but it is likely that the IMO will increase these requirements such that new ships must be up to 50% more energy efficient than those built in 2014 by 2022.
However, because demand for larger drybulk vessels is affected by the volume and pattern of trade in a relatively small number of commodities, charter hire rates (and vessel values) of larger ships tend to be more volatile than those for smaller vessels.
However, because demand for larger drybulk vessels is affected by the volume and pattern of trade in a relatively small number of commodities, charter hire rates (and vessel values) of larger ships tend to be more volatile than those for smaller vessels. 64 Table of Contents In the time charter market, rates vary depending on the length of the charter period and vessel specific factors such as age, speed and fuel consumption.
This grades the excellence of a company’s SMS against measurable expectations and targets without involving the burdens of excessive inspections. This standard is not meant to replace any pre-existing system or rule but rather to enhance their existing application and raise the levels of excellence achieved.
This standard is not meant to replace any pre-existing system or rule but rather to enhance their existing application and raise the levels of excellence achieved.
These vessels are designed to meet the physical restrictions of the Panama Canal locks (hence their name “Panamax” — the largest vessels able to transit the Panama Canal prior to its 2016 expansion, making them more versatile than larger vessels).
These vessels are designed to meet the physical restrictions of the Panama Canal locks (hence their name “Panamax” — the largest vessels able to transit the Panama Canal prior to its 2016 expansion, making them more versatile than larger vessels). These vessels carry coal, grains, and, to a lesser extent, minerals such as bauxite/alumina and phosphate rock. Handymax/Supramax .
As of March 28, 2023, we had one of our tankers under time charter employment expiring in May 2023 and two handysize drybulk carriers under time charter employment expiring in April 2023, respectively, and nine vessels operating in the spot market. Our vessels trade globally.
As of April 1, 2024, we had our handysize drybulk carriers under time charter employment both expiring in April 2024, respectively, and all of our tanker vessels operating in the spot market. Our vessels trade globally.
In June 2022, several existing holders of Class B Warrants exercised 31,150,000 outstanding Class B Warrants to purchase an aggregate of 31,150,000 shares of Common Stock for cash, at an exercise price reduced by the Company from $1.60 per share to $0.70 per share, resulting in gross proceeds to us of $21.8 million, and net proceeds of approximately $20.9 million.
In June 2022, several existing holders of Class B Warrants exercised outstanding Class B Warrants to purchase an aggregate of 2,076,667 shares of Common Stock for cash, at an exercise price reduced by the Company from $24.00 per share to $10.50 per share, resulting in gross proceeds to us of $21,805,000.
Coast Guard to implement them, in addition to any other new or more stringent air emission regulations which may be adopted, could require significant capital expenditures to retrofit vessels and could otherwise increase our investment and operating costs. As of March 28, 2023, six of our 12 vessels have ballast water treatment systems installed.
The amended MARPOL provisions and the rules proposed by the USCG to implement them, in addition to any other new or more stringent air emission regulations which may be adopted, could require significant capital expenditures to retrofit vessels and could otherwise increase our investment and operating costs. 49 Table of Contents As of April 1, 2024, nine of our eleven vessels have ballast water treatment systems installed.
These vessels carry coal, grains, and, to a lesser extent, minerals such as bauxite/alumina and phosphate rock. 50 Table of Contents Handymax/Supramax . Handymax vessels have a carrying capacity of between 40,000 and 60,000 dwt. These vessels operate on a large number of geographically dispersed global trade routes, carrying primarily grains and minor bulks.
Handymax vessels have a carrying capacity of between 40,000 and 60,000 dwt. These vessels operate on a large number of geographically dispersed global trade routes, carrying primarily grains and minor bulks.
In these circumstances, we may also be forced to charter our vessels to less creditworthy charterers, either because the oil majors, industrial users and commodity producers and traders and other top tier charters will not charter older and less technologically advanced vessels or will only charter such vessels at lower contracted charter rates than we are able to obtain from other charterers. 39 Table of Contents Dry-BMS (RightShip Standards) This program is designed to allow ship managers to measure their SMS against agreed industry standards, with the aim of improving fleet performance and risk management.
In these circumstances, we may also be forced to charter our vessels to less creditworthy charterers, either because the oil majors, industrial users and commodity producers and traders and other top tier charters will not charter older and less technologically advanced vessels or will only charter such vessels at lower contracted charter rates than we are able to obtain from other charterers.
We may need to make certain expenditures to comply with these amendments. Environmental Regulations—The United States Oil Pollution Act of 1990 (“OPA”) and the U.S.
We may need to make certain expenditures to comply with these amendments. Environmental Regulations—The United States Oil Pollution Act of 1990 and the U.S. Comprehensive Environmental Response, Compensation, and Liability Act The United States Oil Pollution Act of 1990 (“OPA”), established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills.
Compliance with the EPA and United States Coast Guard ballast water management regulations could require the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements at potentially substantial cost, or may otherwise restrict our vessels from entering United States waters.
Compliance with the EPA and USCG ballast water management regulations could require the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements at potentially substantial cost, or may otherwise restrict our vessels from entering United States waters. 55 Table of Contents Climate Control Initiatives Although the Kyoto Protocol requires adopting countries to implement national programs to reduce emissions of greenhouse gases, emissions of greenhouse gases from international shipping are not currently subject to the Kyoto Protocol.
Vessels also may be required, as part of the intermediate survey process, to be drydocked every 30 to 36 months for inspection of the underwater parts of the vessel and for necessary repairs related to such inspection; alternatively, such requirements may be dealt concurrently with the special survey. 46 Table of Contents In addition to the classification inspections, many of our customers, including the major oil companies, regularly inspect our vessels as a pre-condition to chartering voyages on these vessels.
Vessels also may be required, as part of the intermediate survey process, to be drydocked every 30 to 36 months for inspection of the underwater parts of the vessel and for necessary repairs related to such inspection; alternatively, such requirements may be dealt concurrently with the special survey.
All provisions of the 2013 VGP will remain in force and effect until the United States Coast Guard regulations under VIDA are finalized. On October 26, 2020, the EPA published a Notice of Proposed Rulemaking – Vessel Incident Discharge National Standards of Performance in the Federal Register for public comment. The comment period closed on November 25, 2020.
On October 26, 2020, the EPA published a Notice of Proposed Rulemaking – Vessel Incident Discharge National Standards of Performance in the Federal Register for public comment. The comment period closed on November 25, 2020.
However, there can be no assurance that such certification will be maintained indefinitely. The operations of our product tankers are subject to compliance with the IMO’s International Code for the Construction and Equipment of Ships carrying Dangerous Chemicals in Bulk (“IBC Code”) for chemical tankers built after July 1, 1986.
The operations of our product tankers are subject to compliance with the IMO’s International Code for the Construction and Equipment of Ships carrying Dangerous Chemicals in Bulk (the “IBC Code”) for chemical tankers built after July 1, 1986. The IBC Code includes ship design, construction and equipment requirements and other standards for the bulk transport of certain liquid chemicals.
In jurisdictions where the Bunker Convention has not been adopted, such as the United States, liability for spill or releases of oil from ship’s bunkers typically is determined by national or other domestic laws in the jurisdiction where the events occur. 41 Table of Contents Our vessels may also become subject to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea adopted in 1996 as amended by the Protocol to the HNS Convention, adopted in April 2010 (2010 HNS Protocol) (collectively, the “2010 HNS Convention”), if it enters into force.
Our vessels may also become subject to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea adopted in 1996 as amended by the Protocol to the HNS Convention, adopted in April 2010 (2010 HNS Protocol) (collectively, the “2010 HNS Convention”), if it enters into force.
Refineries underwent maintenance in the first half of 2019 to prepare for low sulfur fuel oil and MGO demand related with IMO 2020 regulations on the control of Sulphur emission, while refinery runs were lower in the second half of 2019 due to weaker economic growth.
Refineries underwent maintenance in the first half of 2019 to prepare for low sulfur fuel oil and MGO demand related with IMO 2020 regulations on the control of Sulphur emission, while refinery runs were lower in the second half of 2019 due to weaker economic growth. 61 Table of Contents The outbreak of COVID-19 severely affected the demand for crude oil and refined petroleum products in 2020 and 2021 as several major economies enforced lockdowns to contain the spread of the virus and mitigate the damage caused by the pandemic.
OPA requires owners and operators of vessels over 300 gross tons to establish and maintain with the United States Coast Guard evidence of financial responsibility sufficient to meet their potential liabilities under the OPA.
OPA requires owners and operators of vessels over 300 gross tons to establish and maintain with the USCG evidence of financial responsibility sufficient to meet their potential liabilities under the OPA. Under the USCG regulations implementing OPA, vessel owners and operators may evidence their financial responsibility by showing proof of insurance, surety bond, self-insurance, or guaranty.
We have obtained International Air Pollution Prevention Certificates for all of our vessels and believe they are compliant in all material respects with current Annex VI requirements.
Annex VI has been ratified by some, but not all IMO member states. Vessels that are subject to Annex VI must obtain an International Air Pollution Prevention Certificate evidencing compliance with Annex VI. We have obtained International Air Pollution Prevention Certificates for all of our vessels and believe they are compliant in all material respects with current Annex VI requirements.
The IMO’s Marine Environment Protection Committee adopted two sets of mandatory requirements to address greenhouse gas emissions from shipping that entered into force in January 2013.
The IMO’s Marine Environment Protection Committee adopted two sets of mandatory requirements to address greenhouse gas emissions from shipping that entered into force in January 2013. The Energy Efficiency Design Index establishes minimum energy efficiency levels per capacity mile and applies to new vessels of 400 gross tons or greater.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Specifically, crude tanker dwt demand is estimated to have increased by 6.6% in 2022 and is currently expected to increase by 6.7% in 2023, and product tanker demand is estimated to have increased by approximately 3.1% in 2022 supported by increasing demand for oil products and is currently expected to increase by around 10.1% in 2023 as demand for oil transportation recovers further, refinery capacity in key exporting regions further expands and Russia looks for alternative markets to outsource its refined petroleum products.
Specifically, crude tanker dwt demand is estimated to have increased by 6.6% in 2022 and is currently estimated to have increased by 6.7% in 2023, and product tanker demand is estimated to have increased by approximately 3.1% in 2022 supported by increasing demand for oil products and is currently expected to have increased by around 10% in 2023 as demand for oil transportation recovers further, refinery capacity in key exporting regions further expands and Russia looks for alternative markets to outsource its refined petroleum products.
Operating vessels in the spot market, however, can result in decreased utilization, revenues and profitability in weak charter markets, as compared to periods of stronger markets or employment on period charters entered into during more favorable market conditions.
Operating vessels in the spot market, can result in decreased utilization, revenues and profitability in weak charter markets, as compared to periods of stronger markets or employment on period charters entered into during more favorable market conditions.
Set forth below is an analysis, as of December 31, 2022, of the percentage difference between the current average rates for our fleet compared with the base rates used in the impairment test as described above, as well as an analysis of the impact on our impairment analysis if we were to utilize the most recent five-year, three-year and one-year historical average rates, which shows the number of vessels whose carrying value would not have been recovered and the related impairment charge.
Set forth below is an analysis, as of December 31, 2023, of the percentage difference between the current average rates for our fleet compared with the base rates used in the impairment test as described above, as well as an analysis of the impact on our impairment analysis if we were to utilize the most recent five-year, three-year and one-year historical average rates, which shows the number of vessels whose carrying value would not have been recovered and the related impairment charge.
For a description of our significant accounting policies, see Note 2 to our consolidated financial statements included elsewhere herein. 58 Table of Contents Impairment of long-lived assets : We follow the Accounting Standards Codification (“ASC”) Subtopic 360-10, “Property, Plant and Equipment” (“ASC 360-10”), which requires long-lived assets used in operations be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
For a description of our significant accounting policies, see Note 2 to our consolidated financial statements included elsewhere herein. 72 Table of Contents Impairment of long-lived assets : We follow the Accounting Standards Codification (“ASC”) Subtopic 360-10, “Property, Plant and Equipment” (“ASC 360-10”), which requires long-lived assets used in operations be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
These rates remain the same after the Spin-Off, under our new management agreement with Stealth Maritime. Our Manager also receives a fee equal to 1.0% calculated on the price stated in the relevant memorandum of agreement for any vessel bought or sold by them on our behalf.
These rates remained the same after the Spin-Off, under our new management agreement with Stealth Maritime. Our Manager also receives a fee equal to 1.0% calculated on the price stated in the relevant memorandum of agreement for any vessel bought or sold by them on our behalf.
Management Fees During each of the years ended December 31, 2020, 2021 and 2022, we paid Stealth Maritime, our fleet manager, a fixed rate management fee of $440 per day for each vessel in our fleet under spot or time charter and a fixed rate fee of $125 per day for each of the vessels operating on bareboat charter.
Management Fees During each of the years ended December 31, 2021, 2022 and 2023, we paid Stealth Maritime, our fleet manager, a fixed rate management fee of $440 per day for each vessel in our fleet under spot or time charter and a fixed rate fee of $125 per day for each of the vessels operating on bareboat charter.
Vessels operating in the spot charter market generate revenues that are less predictable but may enable us to capture increased profit margins during periods of high rates in the charter market, although we are exposed to the risk of having to seek to employ our vessels at low prevailing rates in weak market conditions, and may have a materially adverse impact on our overall financial performance.
Vessels operating in the spot charter market generate revenues that are less predictable but may enable us to capture increased profit margins during 70 Table of Contents periods of high rates in the charter market, although we are exposed to the risk of having to seek to employ our vessels at low prevailing rates in weak market conditions, and may have a materially adverse impact on our overall financial performance.
For periods up to December 3, 2021, the accompanying financial statements reflect the financial position and results of the carve-out operations of the subsidiaries that were contributed to Imperial Petroleum Inc. 52 Table of Contents We are a provider of international seaborne transportation services to oil producers, refineries and commodities traders and producers, as well as industrial users of drybulk cargoes.
For periods up to December 3, 2021, the accompanying financial statements reflect the financial position and results of the carve-out operations of the subsidiaries that were contributed to Imperial Petroleum Inc. We are a provider of international seaborne transportation services to oil producers, refineries and commodities traders and producers, as well as industrial users of drybulk cargoes.
Time charter equivalent revenues and average time charter equivalent daily rate are non-GAAP measures which provide additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure to time charter equivalent revenues, because they assist Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance.
Time charter equivalent revenues and average time charter equivalent daily rate are non-GAAP measures which provide additional meaningful information in conjunction with voyage revenues, the most directly 69 Table of Contents comparable GAAP measure to time charter equivalent revenues, because they assist Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance.
The impairment test is highly sensitive to variances in future charter rates. When we conducted the analysis of the impairment test as of December 31, 2022 we also performed a sensitivity analysis related to the future cash flow estimates.
The impairment test is highly sensitive to variances in future charter rates. When we conducted the analysis of the impairment test as of December 31, 2023 we also performed a sensitivity analysis related to the future cash flow estimates.
According to preliminary industry estimates, the total size of the drybulk fleet is expected to rise by about 1.9% in 2023, compared to tonne-mile demand growth of 2.2%. Meanwhile, the war in Ukraine has amplified the volatility in the drybulk market with the BDI ranging between 965 and 3,369 in 2022.
According to preliminary industry estimates,the total size of the drybulk fleet is expected to have risen by about 1.9% in 2023, compared to tonne-mile demand growth of 2.2%. Meanwhile, the war in Ukraine has amplified the volatility in the drybulk market with the BDI ranging between 965 and 3,369 in 2022.
If the carrying value of the related asset exceeds the undiscounted cash flows and the fair market value of the asset, the carrying value is reduced to its fair value and the difference is recorded as an impairment loss in the consolidated statement of operations.
If the carrying value of the related vessel exceeds the undiscounted cash flows and the fair market value of the vessel, the carrying value is reduced to its fair value and the difference is recorded as an impairment loss in the consolidated statement of operations.
Specifically, in the period from 2010 to 2020, the size of the fleet in terms of deadweight tons grew by an annual average of about 6.0% while the corresponding growth in tonne-mile demand for drybulk carriers grew by 4.2%, resulting in a drop of about 61% in the value of the BDI over the period.
Specifically, in the period from 2010 to 2020, the size of the fleet in terms of deadweight tons grew by an annual average of about 6.0% while the corresponding growth in tonne-mile demand for drybulk carriers grew by 80 Table of Contents 4.2%, resulting in a drop of about 61% in the value of the BDI over the period.
Please see “—Critical Accounting Estimates” below, for a further discussion of the consequences of selling our vessels for amounts below their carrying values. 53 Table of Contents Factors Affecting Our Results of Operations We believe that the important measures for analyzing trends in the results of our operations consist of the following: • Calendar days.
Please see “—Critical Accounting Estimates” below, for a further discussion of the consequences of selling our vessels for amounts below their carrying values. Factors Affecting Our Results of Operations We believe that the important measures for analyzing trends in the results of our operations consist of the following: • Calendar days.
(7) Fleet operational utilization is the percentage of time that our vessels generated revenue, and is determined by dividing voyage days (excluding commercially idle days) by fleet calendar days for the relevant period. (8) Average time charter equivalent daily rate is a measure of the average daily revenue performance of a vessel on a per voyage basis.
(7) Fleet operational utilization is the percentage of time that our vessels generated revenue, and is determined by dividing voyage days, excluding commercially idle days, by fleet calendar days for the relevant period. (8) Average time charter equivalent daily rate is a measure of the average daily revenue performance of a vessel.
Item 5. Operating and Financial Review and Prospects The following presentation of management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements, accompanying notes thereto and other financial information, appearing elsewhere in this annual report.
Item 5. Operating and Financial Review and Prospects The following presentation of management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements, accompanying notes thereto 65 Table of Contents and other financial information, appearing elsewhere in this annual report.
We will also incur financing costs in connection with establishing those facilities, which will be deferred and amortized over the period of the facility, which we will also include in interest expense.
We would also incur financing costs in connection with establishing those facilities, which would be deferred and amortized over the period of the facility, which we would also include in interest expense.
Results of Operations Year ended December 31, 2022 compared to year ended December 31, 2021 The average number of vessels in our fleet was 6.99 for the year ended December 31, 2022 and 4.0 for the year ended December 31, 2021, respectively.
Year ended December 31, 2022 compared to year ended December 31, 2021 The average number of vessels in our fleet was 6.99 for the year ended December 31, 2022 and 4.0 for the year ended December 31, 2021, respectively.
The proportion of time our fleet operates on bareboat charters versus time charters affects our revenues and expenses, as vessels employed on bareboat charters generate lower revenues and expenses, because under bareboat charters we are not responsible for either voyage expenses or, unlike time charters, operating expenses, and the charter rates for bareboat charters are correspondingly lower.
The proportion of time our fleet operates on bareboat charters versus time charters and in the spot market affects our revenues and expenses, as vessels employed on bareboat charters generate lower revenues and expenses, because under bareboat charters we are not responsible for either voyage expenses or, unlike time charters, operating expenses, and the charter rates for bareboat charters are correspondingly lower.
Based on the carrying value of each of our vessels held for use as of December 31, 2022 and as of December 31, 2021 and what we believe the charter-free market values of each of these vessels was as of these dates, five of our owned vessels in the water had current carrying values above their market values.
Based on the carrying value of each of our vessels held for use as of December 31, 2023 and what we believe the charter-free market values of each of these vessels was as of these dates, four of our owned vessels in the water had current carrying values above their market values (2022: five).
Our general and administrative expenses also include our direct compensation expenses and the value of non-cash executive services 57 Table of Contents provided through, and other expenses arising from, our management agreement with Stealth Maritime, our directors’ compensation and the value of the lease expense for the space we rent from Stealth Maritime.
Our general and administrative expenses also include our direct compensation expenses and the value of non-cash executive services provided through, and other expenses arising from, our management agreement with Stealth Maritime, our directors’ compensation and the value of the lease expense for the space we rent from Stealth Maritime.
If, at the time of sale, the carrying value is lower than the sales price, we will realize a gain on sale, which will increase our earnings, but if, at the time of sale, the carrying value of a vessel is more than the sales price, we will realize a loss on sale, which will negatively impact our earnings.
If, at the time of sale, the carrying value is lower than the sales price, we will realize a gain on sale, 67 Table of Contents which will increase our earnings, but if, at the time of sale, the carrying value of a vessel is more than the sales price, we will realize a loss on sale, which will negatively impact our earnings.
The total cargo carrying capacity of our twelve-vessel fleet is 807,804 dwt. We will actively manage the deployment of our fleet on a mix of period charters, including time and bareboat charters which can last up to twelve years, and spot market charters, which generally last from one to six months, according to our assessment of market conditions.
The total cargo carrying capacity of our eleven-vessel fleet is 791,000 dwt. We will actively manage the deployment of our fleet on a mix of period charters, including time and bareboat charters which can last up to twelve years, and spot market charters, which generally last from one to six months, according to our assessment of market conditions.
With any improvement in market conditions we may seek to employ our vessels in the spot market to take advance of higher charter rates, as we have generally done with our tankers in the fourth quarter of 2022 and early 2023, or on a higher percentage of period charters, principally time charters, if attractive rates become available.
In general, with any improvement in market conditions we may seek to employ our vessels in the spot market to take advantage of higher charter rates, as we have generally done with our tankers in the fourth quarter of 2022 and throughout 2023, or on a higher percentage of period charters, principally time charters, if attractive rates become available.
Vessels operating on period charters, principally time and bareboat 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.
Vessels operating on period charters, principally time and bareboat charters, provide more predictable cash flows but can yield lower profit margins than vessels operating in the spot market during periods characterized 66 Table of Contents by favorable market conditions.
The term of our management agreement with Stealth Maritime will expire in December 2025, but is extended on a year-to-year basis thereafter, unless six months’ written notice is provided prior to the expiration of the term.
The term of our management agreement with Stealth Maritime will expire in December 2025, but is extended on a year-to-year basis thereafter, unless six months’ written notice is provided prior to the expiration of the term or if a vessel is sold.
We have 795,878 shares of Series A Preferred Stock outstanding, which have a dividend rate of 8.75% per annum per $25.00 of liquidation preference per share, with respect to which we paid aggregate dividends of $1.7 million in the year ended December 31, 2022.
We have 795,878 shares of Series A Preferred Stock outstanding, which have a dividend rate of 8.75% per annum per $25.00 of liquidation preference per share, with respect to which we paid aggregate dividends of $1.7 million in each of the years ended December 31, 2023 and 2022.
On the supply side, the crude tanker trading fleet is expected to grow by approximately 2.0% in 2023 while the product tanker fleet is expected to grow by approximately 0.5%. Drybulk Carriers Over the course of 2022, the BDI registered a low of 965 on August 31, 2022 and a high of 3,369 on May 23, 2022.
On the supply side, the crude tanker trading fleet is estimated to have increased by 2.0% in 2023 while the product tanker fleet is estimated to have increased by approximately 0.5%. Drybulk Carriers Over the course of 2022, the BDI registered a low of 965 on August 31, 2022 and a high of 3,369 on May 23, 2022.
As of March 28, 2023, we owned and operated a fleet of five MR refined petroleum product tankers that carry refined petroleum products such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, one aframax tanker and two suezmax tankers that carry crude oil and four handysize drybulk carriers that transport major bulks such as iron ore, coal and grains, and minor bulks such as bauxite, phosphate and fertilizers.
As of April 1, 2024, we owned and operated a fleet of six MR refined petroleum product tankers that carry refined petroleum products such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, one aframax tanker and two suezmax tankers that carry crude oil and two handysize drybulk carriers that transport major bulks such as iron ore, coal and grains, and minor bulks such as bauxite, phosphate and fertilizers.
Stealth Maritime receives a fixed brokerage commission of 1.25% on freight, hire and demurrage for each vessel based on our management agreement. As of March 28, 2023, we had 9 vessels operating in the spot market.
Stealth Maritime receives a fixed brokerage commission of 1.25% on freight, hire and demurrage for each vessel based on our management agreement. As of April 1, 2024, we had nine vessels operating in the spot market.
Furthermore, the ongoing war in Ukraine and the embargo imposed by the European Union to Russian crude oil and refined petroleum products is creating shifts in trade patterns, benefiting longer-haul routes and thus supporting tanker tonne-mile demand and tanker vessel charter rates.
The ongoing war in Ukraine and the embargo imposed by the European Union to Russian crude oil and refined petroleum products along with the crisis in the Middle East are creating shifts in trade patterns, benefiting longer-haul routes and thus supporting tanker tonne-mile demand and tanker vessel charter rates.
The pressure on energy prices brought upon by the Russian invasion in Ukraine has resulted in inflationary effects mainly on financing expenses and operating expenses, as well as bunker costs for which we are responsible when our vessels operate in the spot market or are unemployed.
In general, the pressure on energy prices brought upon by the Russian invasion in Ukraine has resulted in inflationary effects mainly on financing expenses, prior to the repayment of our debt in the first half of 2023, and operating expenses, as well as bunker costs for which we are responsible when our vessels operate in the spot market or are unemployed.
Research and Development, Patents and Licenses None. D. Trend Information Tankers The tanker industry is both cyclical and volatile in terms of charter rates and profitability while geopolitical events affect the demand for seaborne transportation.
Trend Information Tankers The tanker industry is both cyclical and volatile in terms of charter rates and profitability while geopolitical events affect the demand for seaborne transportation.
Accordingly, none of StealthGas’s cash and cash equivalents or debt at the corporate level had been assigned to us. Net Parent Investment represented StealthGas’s interest in our net assets and includes our cumulative losses as adjusted for cash distributions to and cash contributions from StealthGas.
Accordingly, none of StealthGas’s cash and cash equivalents or debt at the corporate level had been assigned to us. Net Parent Investment represented StealthGas’s interest in our net assets and includes our cumulative losses as adjusted for cash distributions to and cash contributions from StealthGas. The related transactions with StealthGas were reflected as cash flows as a financing activity.
NET LOSS—As a result of the above factors, we recorded a net loss of $3.6 million for the year ended December 31, 2021, compared to a net loss of $0.4 million for the year ended December 31, 2020. Recent Accounting Pronouncements Please refer to Note 2 of the financial statements included elsewhere in this report.
NET PROFIT/LOSS—As a result of the above factors, we recorded a net profit of $29.5 million for the year ended December 31, 2022 and a net loss of $3.6 million for the year ended December 31, 2021. Recent Accounting Pronouncements Please refer to Note 2 of the financial statements included elsewhere in this report.
For our compensation expenses, pursuant to our management agreement, we will initially reimburse Stealth Maritime for its payment of the compensation of our executive officers for the first 12 months following the spin- off and then our Board will agree upon any further management compensation.
For our compensation expenses, pursuant to our management agreement, we initially reimbursed Stealth Maritime for its payment of the compensation of our executive officers for the first 12 months following the spin-off and thereafter our Board agrees any further management compensation.
For the year ended December 31, 2020 voyage expenses also included port expenses of $0.8 million corresponding to 25% of total voyage expenses, and commission to third parties which were $0.5 million, equivalent to 15.6% of total voyage expenses for the year 2020.
Voyage expenses also included port expenses of $15.8 million for the year ended December 31, 2023, corresponding to 25.3% of total voyage expenses, and commission to third parties which were $7.3 million, equivalent to 11.7% of total voyage expenses for year 2023.
We believe that, unless there is a major and sustained downturn in market conditions applicable to our specific shipping industry segment, our internally generated cash flows will be sufficient to fund our operations, including working capital requirements, for at least 12 months taking into account any possible capital commitments, and related financing, and debt service requirements.
We believe that, unless there is a major and sustained downturn in market conditions applicable to our specific shipping industry sectors, our internally generated cash flows will be sufficient to fund our operations, including working capital requirements, for at least 12 months.
Percentage difference between our average 2022 rates as compared with the base rates 5-year historical average rate 3-year historical average rate 1-year historical average rate No. of vessels Amount ($ million) No. of vessels Amount ($ million) No. of vessels Amount ($ million) Product Tankers 61.81 % — — — — — — Handysize Drybulk Carriers 151.10 % — — — — — — Although we believe that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective.
Percentage difference between our actual average 2023 rates as compared with the base rates 5-year historical average rate 3-year historical average rate 1-year historical average rate No. of vessels Amount ($ million) No. of vessels Amount ($ million) No. of vessels Amount ($ million) Product Tankers 103.62 % — — — — — — Handysize Drybulk Carriers (4.06 %)% — — — — — — 73 Table of Contents Although we believe that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective.
Year Ended December 31, 2020 2021 2022 FLEET DATA Average number of vessels(1) 4.0 4.0 6.99 Total voyage days for fleet(2) 1,417 1,428 2,464 Total time charter days for fleet(3) 615 762 1,099 Total bareboat charter days for fleet(3) 446 365 249 Total spot market days for fleet(4) 356 301 1,116 Total calendar days for fleet(5) 1,464 1,460 2,552 Fleet utilization(6) 96.8 % 97.8 % 96.6 % Fleet operational utilization(7) 95.7 % 90.5 % 84.8 % AVERAGE DAILY RESULTS Average Time Charter Equivalent daily rate(8) $ 12,073 $ 9,649 $ 25,654 Vessel operating expenses(9) 4,891 5,091 6,424 General and administrative expenses(10) 150 421 695 Management fees(11) 344 361 410 Total daily operating expenses(12) $ 5,041 $ 5,512 $ 7,119 (1) Average number of vessels is the number of owned vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.
Year Ended December 31, Fleet Data 2021 2022 2023 Average number of vessels(1) 4.0 7.0 10.0 Total voyage days for fleet(2) 1,428 2,464 3,481 Total time charter days for fleet(3) 762 1,099 1,058 Total bareboat charter days for fleet(3) 365 249 0 Total spot market days for fleet(4) 301 1,116 2,423 Total calendar days for fleet(5) 1,460 2,552 3,650 Fleet utilization(6) 97.8 % 96.6 % 95.4 % Fleet operational utilization(7) 90.5 % 84.8 % 75.1 % Average Daily Results (In U.S. dollars per day per vessel) Adjusted average charter rate(8) 9,649 25,654 34,816 Vessel operating expenses(9) 5,091 6,424 7,025 General and administrative expenses(10) 421 695 1,352 Management fees (11) 361 410 440 Total daily operating expenses(12) 5,512 7,119 8,377 (1) Average number of vessels is the number of owned vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.
The remaining unrecognized stock-based compensation cost relating to the $1,000,000 of restricted shares of common stock granted under our equity compensation plan in 2022, amounting to $882,744 as of December 31, 2022, is expected to be recognized over the remaining period of 1.5 years, according to the contractual terms of those non-vested share awards.
The remaining unrecognized stock-based compensation cost relating to the 2,407,037 restricted shares of common stock and options to purchase common stock granted under our equity compensation plan in 2022 and 2023, amounting to $2,999,360 as of December 31, 2023, is expected to be recognized over the remaining period of 1.2 years, according to the contractual terms of those non-vested share awards.
On a quarterly basis, in case an impairment indicator exists, we perform an analysis of the anticipated undiscounted future net cash flows of our long-lived assets.
On a quarterly basis, in case an impairment indicator exists for a vessel, we perform an analysis of the anticipated undiscounted future net cash flows for such vessel.
Voyage expenses also included port expenses of $1.0 million for the year ended December 31, 2021, corresponding to 27.8% of total voyage expenses, and commission to third parties which were $0.5 million, equivalent to 13.9% of total voyage expenses for year 2021.
For the year ended December 31, 2021, voyage expenses included bunker charges of $2.0 million corresponding to 55.6% of total voyage expenses, port expenses of $1.0 million corresponding to 27.8% of total voyage expenses, and commission to third parties of $0.5 million corresponding to 13.9% of total voyage expenses.
Under bareboat charters, we are not responsible for either voyage expenses, unlike spot charters, or vessel operating expenses, unlike spot charters and time charters; Reconciliation of time charter equivalent revenues as reflected in the consolidated statements of operations and calculation of average time charter equivalent daily rate follow: 55 Table of Contents Year Ended December 31, 2020 2021 2022 Voyage revenues $ 20,302,052 $ 17,362,669 $ 97,019,878 Voyage expenses $ 3,194,312 $ 3,584,415 $ 33,807,342 Time Charter Equivalent revenues $ 17,107,740 $ 13,778,254 $ 63,212,536 Total voyage days for fleet 1,417 1,428 2,464 Average Time Charter Equivalent daily rate $ 12,073 $ 9,649 $ 25,654 (9) Vessel operating expenses, including related party vessel operating expenses, consist of crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.
Under bareboat charters, we are not responsible for either voyage expenses, unlike spot charters, or vessel operating expenses, unlike spot charters and time charters; Reconciliation of time charter equivalent revenues as reflected in the consolidated statements of operations and calculation of average time charter equivalent daily rate follow: 2021 2022 2023 Voyage revenues $ 17,362,669 $ 97,019,878 $ 183,725,820 Voyage expenses $ 3,584,415 $ 33,807,342 $ 62,530,941 Charter equivalent revenues $ 13,778,254 $ 63,212,536 $ 121,194,879 Total voyage days for fleet 1,428 2,464 3,481 Adjusted average charter rate $ 9,649 $ 25,654 $ 34,816 (9) Vessel operating expenses, including related party vessel operating expenses, consist of crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.
Dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.
We use the term deadweight ton, or dwt, in describing the size of vessels. Dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.
Factors beyond our control, such as developments relating to market premiums for insurance and the value of the U.S. dollar compared to currencies in which certain of our expenses, primarily crew wages are denominated, can also cause our vessel operating expenses to increase.
Factors beyond our control, such as developments relating to market premiums for insurance and the value of the U.S. dollar compared to currencies in which certain of our expenses, primarily crew wages are denominated, can also cause our vessel operating expenses to increase. In addition, our net income is affected by any financing arrangements, including any interest rate swap arrangements.
VESSEL OPERATING EXPENSES—Vessel operating expenses were $7.4 million for the year ended December 31, 2021 compared to $7.2 million for the year ended December 31, 2020, an increase of $0.2 million, or 2.8%.
VESSEL OPERATING EXPENSES—Vessel operating expenses were $16.4 million for the year ended December 31, 2022 compared to $7.4 million for the year ended December 31, 2021, an increase of $9.0 million, or 121.6%.
Our liquidity needs, as of December 31, 2022, primarily relate to funding expenses for operating our vessels, any vessel improvements that may be required and general and administrative expenses, as well as the cost for any additional vessels we agree to acquire.
Our liquidity needs, as of December 31, 2023, primarily relate to funding expenses for operating our vessels, any vessel acquisition and vessel improvements that may be required and general and administrative expenses.
We expense costs associated with drydockings and special and intermediate surveys as incurred which may affect the volatility of our results. During 2021, we did not drydock any vessels, while in 2020 we drydocked our Aframax tanker at a total cost of $0.9 million.
We expense costs associated with drydockings and special and intermediate surveys as incurred which may affect the volatility of our results. During 2021, we did not drydock any vessels. In 2022, we drydocked one Suezmax tanker, the Suez Enchanted and one Handysize drybulk vessel, the Eco Angelbay, at a total cost of $1.9 million.
In September and November 2022, we entered into senior secured credit facilities to refinance part of the purchase price for the other four tankers in our fleet, which we acquired earlier in 2022.
In September and November 2022, we entered into senior secured credit facilities to refinance part of the purchase price for the other four tankers in our fleet, which we acquired earlier in 2022. In the first and second quarter of 2023 we repaid all of our then outstanding loans amounting to $70 million.
Historically, a positive relationship is registered between global inflation and drybulk vessel freight rates, and therefore the inflationary trends have not, and we do not expect them to have, a material impact on our results of operations.
If these conditions are sustained, the longer-term net impact on the drybulk freight market and our business would be difficult to predict. Historically, a positive relationship is registered between global inflation and drybulk vessel freight rates, and therefore the inflationary trends have not, and we do not expect them to have, a material impact on our results of operations.
NET PROFIT/LOSS—As a result of the above factors, we recorded a net profit of $29.5 million for the year ended December 31, 2022 and a net loss of $3.6 million for the year ended December 31, 2021.
NET PROFIT/LOSS—As a result of the above factors, we recorded a net income of $71.1 million for the year ended December 31, 2023 compared to a net income of $29.5 million for the year ended December 31, 2022.
Under period charters, these charges and expenses, including bunkers (fuel oil) but excluding commissions which are always paid by the vessel owner, are paid by the charterer.
Under period charters, these charges and expenses, including bunkers (fuel oil) but excluding commissions which are always paid by the vessel owner, are paid by the charterer. Commissions on hire are paid to our manager Stealth Maritime and/or third-party brokers.
Each of our senior secured credit facilities also contains cross-default clauses. Capital Expenditures We may make capital expenditures from time to time in connection with our vessel acquisitions and improvements. Please refer to section above “Liquidity and Capital Resources – Cash Flows” for a discussion of how we plan to cover our working capital requirements and possible capital commitments. C.
Capital Expenditures We may make capital expenditures from time to time in connection with our vessel acquisitions and improvements. Please refer to section above “Liquidity and Capital Resources –Cash Flows” for a discussion of how we plan to cover our working capital requirements and possible capital commitments. 79 Table of Contents C. Research and Development, Patents and Licenses None. D.
Net cash used in investing activities increased in the year ended December 31, 2022 compared to the year ended December 31, 2021, as within the year, an amount of $118.7 million were utilized for the acquisition of six vessels while $68 million of available funds were placed into time deposits.
We also received net proceeds of $3.9 million from the sale of one of our vessels. Net cash used in investing activities in the year ended December 31, 2022 comprised an amount of $118.7 million utilized for the acquisition of six vessels while $68 million of available funds were placed into time deposits.
This was the case for those of our tankers operating in the spot market in the first months of 2022 until conditions in the crude oil and product tanker charter markets began to improve substantially, particularly in the second half of 2022, and may be the case for our drybulk carriers operating in the spot market in 2023, as conditions in the drybulk charter market have deteriorated significantly from the strong markets experienced from late 2020 to the latter part of 2022.
This was the case for those of our tankers operating in the spot market in the first months of 2022 until conditions in the crude oil and product tanker charter markets began to improve substantially, particularly in the second half of 2022 and remained favorable throughout the majority of 2023 as well.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth in the section entitled “Risk Factors” and elsewhere in this report.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth in the section entitled “Risk Factors” and elsewhere in this report. You should also carefully read the following discussion with “Risk Factors” and “Forward-Looking Statements.” The financial statements have been prepared in accordance with U.S. GAAP.
The decrease in the cash outflows for financing activities for the year ended December 31, 2021 by $2.9 million compared to the year ended December 31, 2020 is mainly attributed to the inflows amounting to $28.0 million from our senior secured term loan facility with DNB which was offset by net distributions to StealthGas amounting to $33.5 million in the year ended December 31, 2021.
During the year ended December 31, 2021, we had inflows amounting to $28.0 million from our senior secured term loan facility with DNB which was offset by net distributions to StealthGas amounting to $33.5 million.
See “—Liquidity and Capital Resources—Credit Facilities.” We will incur interest expenses under these credit facilities and any new credit facilities we enter into to finance or refinance the purchase price of additional vessels, as described in the “—Liquidity and Capital Resources” section below.
We incurred interest expense under these credit facilities in 2021, 2022 and the first half of 2023 and will incur interest expense under any new credit facilities we enter into to finance new acquisitions or existing vessels, as described in the “—Liquidity and Capital Resources” section below.
Net cash used in investing activities —was $186.7 million for the year ended December 31, 2022 and $0.1 million for the year ended December 31, 2021.
Net cash provided by investing activities — was $12.3 million for the year ended December 31 2023, while for the year ended December 31, 2022 net cash used in investing activities was $186.7 million.
Although these impacts have normalized, a resumption of increased inflationary pressures would increase our financing, operating voyage and administrative expenses further. Depreciation and Dry docking The carrying value of our vessels includes the original cost of the vessels plus capitalized expenses since acquisition relating to improvements and upgrading of the vessels, less accumulated depreciation and less any impairment.
Depreciation and Dry docking The carrying value of our vessels includes the original cost of the vessels plus capitalized expenses since acquisition relating to improvements and upgrading of the vessels, less accumulated depreciation and less any impairment.
Overall, the BDI declined significantly in the second half of 2022, which was attributed in part to the easing of port congestion which positively affected the drybulk carrier demand in 2021 as well as to the weakening Chinese demand for drybulk commodities, a trend which is currently expected to continue in 2023.
Overall, the BDI declined significantly in the second half of 2022, which was attributed in part to the easing of port congestion which positively affected the drybulk carrier demand in 2021 as well as to the weakening Chinese demand for drybulk commodities, a trend which was expected to continue in 2023 but the Gaza war and the resulting upscaling of hostilities in Suez Canal at Gulf of Aden proved otherwise, pushing BDI to higher numbers, especially during the fourth quarter of 2023.
In addition, interest rates, which were at low levels in 2020 and 2021 in part due to actions taken by central banks to stimulate economic activity in the face of the pandemic, increased significantly in 2022 and may increase further, as central banks have repeatedly increased benchmark rates in an effort to combat inflation. 56 Table of Contents Basis of Presentation and General Information Revenues Our voyage revenues are driven primarily by the number of vessels in our fleet, the number of voyage days during which our vessels generate revenues, the mix of charters our vessels are employed on and hire that our vessels earn under charters which, in turn, are affected by a number of factors, including our decisions relating to vessel acquisitions and disposals, the amount of time that we spend positioning our vessels, the amount of time that our vessels spend in drydock undergoing repairs, maintenance and upgrade work, the age, condition and specifications of our vessels and the levels of supply and demand in the product tanker and crude oil tanker charter markets and, since our acquisition of two drybulk carriers in the third and fourth quarter of 2022, the drybulk carrier charter markets.
Basis of Presentation and General Information Revenues Our voyage revenues are driven primarily by the number and type of vessels in our fleet, the number of voyage days during which our vessels generate revenues, the mix of charters our vessels are employed on and hire that our vessels earn under charters which, in turn, are affected by a number of factors, including our decisions relating to vessel acquisitions and disposals, the amount of time that we spend positioning our vessels, the amount of time that our vessels spend in drydock undergoing repairs, maintenance and upgrade work, the age of our vessels, condition and specifications of our vessels and the levels of supply and demand in the product tanker and crude oil tanker charter markets and the drybulk carrier charter markets.
The aggregate cash compensation to our officers in 2022 was $0.3 million, and we expect such cash compensation to be approximately $0.4 million in 2023.
The aggregate cash compensation to our officers in 2023 and 2022 was $0.4 million and $0.3 million, respectively, and we expect such cash compensation to be approximately $0.4 million in 2024. DEPRECIATION—Depreciation expenses for the year ended December 31, 2023 were $15.6 million while for the year ended December 31, 2022 depreciation expenses were $12.3 million.
Year ended December 31, 2021 compared to year ended December 31, 2020 The average number of vessels in our fleet was 4.0 for the year ended December 31, 2021 and the year ended December 31, 2020, respectively.
Results of Operations Year ended December 31, 2023 compared to year ended December 31, 2022 The average number of vessels in our fleet was 10.00 for the year ended December 31, 2023 and 6.99 for the year ended December 31, 2022, respectively.
GENERAL AND ADMINISTRATIVE EXPENSES—General and administrative expenses for the year ended December 31, 2022 were $1.8 million compared to $0.6 million for the year ended December 31, 2021, an increase of $1.2 million or 200%, mainly due to the increased reporting costs related to being a public reporting company.
The daily management fees per vessel did not change during these periods and remained at $440 per day for vessels under time and spot charter and $125 per day for vessels under bareboat charter. 76 Table of Contents GENERAL AND ADMINISTRATIVE EXPENSES—General and administrative expenses for the year ended December 31, 2022 were $1.8 million compared to $0.6 million for the year ended December 31, 2021, an increase of $1.2 million or 200%, mainly due to the increased reporting costs related to being a public reporting company.
As and when we identify assets that we believe will provide attractive returns, we generally expect to enter into specific term loan facilities and borrow amounts under these facilities as the vessels are delivered to us.
As and when we identify assets that we believe will provide attractive returns, we may enter into specific term loan facilities and borrow amounts under these facilities as the vessels are delivered to us. Aside from the proceeds of equity offerings, this is the primary driver of the timing and amount of cash provided to us by our financing activities.
For periods up to December 3, 2021, an allocation of general and administrative expenses incurred by StealthGas Inc. has been included in General and administrative expenses based on the number of calendar days the vessels to be contributed operated under StealthGas Inc.’s fleet compared to the number of calendar days of the total StealthGas Inc.’s fleet.
For periods up to December 3, 2021, an allocation of general and administrative expenses incurred by StealthGas Inc. has been included in General and administrative expenses based on the number of calendar days the vessels to be contributed operated under StealthGas Inc.’s fleet compared to the number of calendar days of the total StealthGas Inc.’s fleet. 71 Table of Contents Inflation Inflation has had only a moderate effect on our expenses in 2021 however the effect became more intense in early 2022 following the outbreak of Russian war against Ukraine and had a milder impact on our expenses throughout 2023 as well.
In addition, our net income is affected by any financing arrangements, including any interest rate swap arrangements. 54 Table of Contents Below please see data regarding our fleet and average daily results for the years ended December 31, 2020, 2021 and 2022, which we use in analyzing our performance.
Below please see data regarding our fleet and average daily results for the years ended December 31, 2021, 2022 and 2023, which we use in analyzing our performance.
Cash Flows As of December 31, 2022, we had a working capital surplus of $109.5 million. Our cash balance including time deposits amounted to $118.9 million, as of December 31, 2022. Net cash provided by operating activities —was $40.9 million for the year ended December 31, 2022 and $5.2 million for the year ended December 31, 2021.
Cash Flows As of December 31, 2023, we had a working capital surplus of $168.7 million. Net cash provided by operating activities —was $79.5 million for the year ended December 31, 2023 and $40.9 million for the year ended December 31, 2022. This mainly represents the net amount of cash, after expenses, generated by chartering our vessels.
For the year ended December 31, 2021, voyage expenses included bunker charges of $2.0 million corresponding to 55.6% of total voyage expenses, port expenses of $1.0 million corresponding to 27.8% of total voyage expenses, and commission to third parties of $0.5 million corresponding to 13.9% of total voyage expenses. 60 Table of Contents VESSEL OPERATING EXPENSES—Vessel operating expenses were $16.4 million for the year ended December 31, 2022 compared to $7.4 million for the year ended December 31, 2021, an increase of $9.0 million, or 121.6%.
For the year ended December 31, 2022, voyage expenses included bunker charges of $24.2 million corresponding to 71.6% of total voyage expenses, port expenses of $5.2 million corresponding to 15.4% of total voyage expenses, and commission to third parties of $3.1 million corresponding to 9.2% of total voyage expenses.
Net cash used in investing activities was an outflow of $0.1 million in 2021, while net cash used in investing activities was an outflow of $0.7 million for the year ended December 31, 2020.
During the year ended December 31, 2021, net cash used in investing activities amounted to $0.1 million and related to cash outflows for improvement of vessels.
We will maintain debt levels we consider prudent based on our market expectations, cash flow, interest coverage and percentage of debt to capital. StealthGas, and the subsidiaries that owned the four tankers that comprised our fleet, entered into credit facilities in connection with financing the acquisition of these vessels.
StealthGas, and the subsidiaries that owned the four tankers that comprised our initial fleet, entered into credit facilities in connection with financing the acquisition of these vessels.
DRY DOCKING COSTS—Dry docking costs were $0.01 million for the year ended December 31, 2021 compared to $0.9 million for the year ended December 31, 2020, a decrease of $0.89 million.
DRY DOCKING COSTS—Dry docking costs were $6.6 million for the year ended December 31, 2023 compared to $1.9 million for the year ended December 31, 2022.
For example, the price of a 5-year-old Aframax tanker fluctuated between $27.0 million and $60.0 million during the ten-year period from the first quarter of 2013 through the fourth quarter of 2022 while the price of a 5-year-old MR tanker ranged between $22.0 million and $40.0 million over the same period. 65 Table of Contents In late 2019 and during the first half of 2020, tanker shipping charter rates reached near record highs driven mainly by extraordinary floating storage demand and dropped to less than operating cost levels by the end of the year.
For example, the price of a 5-year-old Aframax tanker fluctuated between $27.0 million and $60.0 million during the ten-year period from the first quarter of 2013 through the fourth quarter of 2022 while the price of a 5-year-old MR tanker ranged between $22.0 million and $40.0 million over the same period.
Total calendar days for our fleet were 1,460 for the year ended December 31, 2021 compared to 1,464 for the year ended December 31, 2020. Of the total calendar days in 2021, 365 or 25.0% were bareboat charter days, 762 or 52.2% were time charter days and 301 or 20.6% were spot days.
Total calendar days for our fleet were 3,650 for the year ended December 31, 2023 compared to 2,522 for the year ended December 31, 2022. Of the total calendar days in 2023, nil or 0.0% were bareboat charter days, 1,058 or 29.0% were time charter days and 2,423 or 66.4% were spot days.
While the global economy has begun to recover in parts of the world, driven in part by the availability of COVID-19 vaccines, the success and timing of COVID-19 containment strategies remain uncertain, particularly in light of the potential emergence of variants, and charter rates face significant downside risks, including in the event of renewed weakness in the global economy and lower demand for the seaborne transport of refined petroleum products, crude oil or drybulk cargoes, particularly resulting from failure to contain the COVID-19 pandemic.
While the global economy has begun to recover in parts of the world, in the event of renewed weakness in the global economy charter rates face significant downside risks, as a weaker global economy may lead to lower demand for the seaborne transport of refined petroleum products, crude oil or drybulk cargoes.
In 2023, we expect to drydock three MR product tankers, namely the Clean Thrasher , the Magic Wand and the Clean Nirvana, one Suezmax tanker, the Suez Protopia , and two drybulk handysize vessel the Eco Glorieuse and the Eco Wildfire . Five of these vessels will be installed with ballast water treatment systems as part of their drydocking.
In 2023, we drydocked three MR product tankers, namely the Clean Thrasher , the Magic Wand and the Clean Nirvana, one Suezmax tanker, the Suez Protopia , and two drybulk handysize vessels, the Eco Glorieuse and the Eco Wildfire, at a total cost of $6.6 million.
Regarding the possible impact of supply chain disruptions that have or may emanate from the military conflict in Ukraine, our operations have not been affected materially and we do not expect them to be in the future. Our vessels have made three voyages in 2022 carrying cargoes originating in the Russian ports of St.
Regarding the possible impact of supply chain disruptions that have or may emanate from the military conflict in Ukraine, our operations have not been affected materially and we do not expect them to be in the future. See “Business—The Tanker Industry” and “Business—The Drybulk Carrier Industry.” E. Critical Accounting Estimates Please see “—Critical Accounting Estimates” above. 81 Table of Contents
Net cash provided by operating activities was $5.2 million for the year ended December 31, 2021 and $8.9 million for the year ended December 31, 2020. Net cash provided by operating activities decreased in 2021 compared to 2020 by $3.7 million mainly due to the decrease of our charter equivalent revenues.
Net cash provided by operating activities was $40.9 million for the year ended December 31, 2022 and $5.2 million for the year ended December 31, 2021.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

24 edited+5 added−6 removed25 unchanged
The Audit Committee is appointed by the Board and is responsible for, among other matters overseeing the: • integrity of the Company’s financial statements, including its system of internal controls; 69 Table of Contents • Company’s compliance with legal and regulatory requirements; • independent auditor’s qualifications and independence; • retention, setting of compensation for, termination and evaluation of the activities of the Company’s independent auditors, subject to any required stockholder approval; and • performance of the Company’s independent audit function and independent auditors, Nominating and Corporate Governance Committee The Nominating and Corporate Governance Committee is appointed by the Board and is responsible for, among other matters: • reviewing the Board structure, size and composition and making recommendations to the Board with regard to any adjustments that are deemed necessary; • identifying candidates for the approval of the Board to fill Board vacancies as and when they arise as well as developing plans for succession, in particular, of the chairman and executive officers; • overseeing the Board’s annual evaluation of its own performance and the performance of other Board committees; • retaining, setting compensation and retentions terms for and terminating any search firm to be used to identify candidates; and • developing and recommending to the Board for adoption a set of Corporate Governance Guidelines applicable to the Company and to periodically review the same.
The Audit Committee is appointed by the Board and is responsible for, among other matters overseeing the: • integrity of the Company’s financial statements, including its system of internal controls; • Company’s compliance with legal and regulatory requirements; • independent auditor’s qualifications and independence; • retention, setting of compensation for, termination and evaluation of the activities of the Company’s independent auditors, subject to any required stockholder approval; and • performance of the Company’s independent audit function and independent auditors, Nominating and Corporate Governance Committee The Nominating and Corporate Governance Committee is appointed by the Board and is responsible for, among other matters: • reviewing the Board structure, size and composition and making recommendations to the Board with regard to any adjustments that are deemed necessary; • identifying candidates for the approval of the Board to fill Board vacancies as and when they arise as well as developing plans for succession, in particular, of the chairman and executive officers; • overseeing the Board’s annual evaluation of its own performance and the performance of other Board committees; • retaining, setting compensation and retentions terms for and terminating any search firm to be used to identify candidates; and • developing and recommending to the Board for adoption a set of Corporate Governance Guidelines applicable to the Company and to periodically review the same.
A vacancy on the board created by death, resignation, removal (which may only be for cause), or failure of the 68 Table of Contents stockholders to elect the entire class of directors to be elected at any election of directors or for any other reason, may be filled only by an affirmative vote of a majority of the remaining directors then in office, even if less than a quorum, at any special meeting called for that purpose or at any regular meeting of the board of directors.
A vacancy on the board created by death, resignation, removal (which may only be for cause), or failure of the stockholders to elect the entire class of directors to be elected at any election of directors or for any other reason, may be filled only by 83 Table of Contents an affirmative vote of a majority of the remaining directors then in office, even if less than a quorum, at any special meeting called for that purpose or at any regular meeting of the board of directors.
Stealth Maritime compensates each of these individuals for their services and we, in turn, reimburse Stealth Maritime for their compensation. The aggregate cash compensation to our officers in 2022 was $0.3 million, and we expect such cash compensation to be approximately $0.4 million in 2023.
Stealth Maritime compensates each of these individuals for their services and we, in turn, reimburse Stealth Maritime for their compensation. The aggregate cash compensation to our officers in 2022 and 2023 was $0.3 million and $0.4 million respectively, and we expect such cash compensation to be approximately $0.4 million in 2024.
Sakellari was employed for seven years with Piraeus Bank where she held positions in both its credit departments (corporate and project finance) and in its private equity investment arm. Ms. Sakellari holds a Bachelor Degree in Management Sciences from the London School of Economics and a Masters Degree in finance from SDA Bocconi.
Prior to this, Ms. Sakellari was employed for seven years with Piraeus Bank where she held positions in both its credit departments (corporate and project finance) and in its private equity investment arm. Ms. Sakellari holds a Bachelor Degree in Management Sciences from the London School of Economics and a Masters Degree in finance from SDA Bocconi.
Vafias graduated from City University Business School in the City of London in 1999 with a B.A. in Management Science and from Metropolitan University in 2000 with a Masters degree in Shipping, Trade and Transport. 67 Table of Contents John Kostoyannis has been a member of our Board of Directors since November 2021.
Vafias graduated from City University Business School in the City of London in 1999 with a B.A. in Management Science and from Metropolitan University in 2000 with a Masters degree in Shipping, Trade and Transport. John Kostoyannis has been a member of our Board of Directors since November 2021.
The members of the Compensation Committee are George Xiradakis (Chairman) and John Kostoyannis. Each of the directors on the Audit Committee has been determined by our Board of Directors to be independent. Audit Committee The Audit Committee is governed by a written charter, which is approved and annually adopted by the Board.
The members of the Compensation Committee are George Xiradakis (Chairman) and John Kostoyannis. Each of the directors on the Audit Committee has been determined by our Board of Directors to be independent. 84 Table of Contents Audit Committee The Audit Committee is governed by a written charter, which is approved and annually adopted by the Board.
The current term of our Class I director expires in 2024, the term of our Class II director expires in 2023 and the term of our Class III director expires in 2025.
The current term of our Class I director expires in 2024, the term of our Class II director expires in 2026 and the term of our Class III director expires in 2025.
He served as the President of the International Propeller Club, Port of Piraeus from 2013 to 2019 and he acted as a VP of the International Propeller Club of the United States.
He served as the President of the International Propeller Club, Port of Piraeus from 2013 to 2019 and he acted as a VP of the International Propeller Club of the 82 Table of Contents United States.
Equity Compensation Plan We have an equity compensation plan administered by our Board of Directors which can make awards totaling in aggregate up to 10% of the number of shares of common stock outstanding at the time any award is granted.
Equity Compensation Plan We have an equity compensation plan, the 2024 Equity Compensation Plan, which was adopted in April 2024 and is administered by our Board of Directors which can make awards totaling in aggregate up to 10% of the number of shares of common stock outstanding at the time any award is granted.
Item 6. Directors, Senior Management and Employees A. Directors, Senior Management and Employees The following table sets forth, as of March 28, 2023, information for each of our directors and executive officers. Name Age Positions Year Became Director Year Director’s Current Term Expires Harry N.
Item 6. Directors, Senior Management and Employees A. Directors, Senior Management and Employees The following table sets forth, as of April 1, 2024, information for each of our directors and executive officers. Name Age Positions Year Became Director Year Director’s Current Term Expires Harry N.
Our manager employs and provides us with the services of our Chief Executive Officer, Interim Chief Financial Officer and any other management executives the Company may require. In each case their services are provided under the management agreement with Stealth Maritime.
D. Employees We have no salaried employees. Our manager employs and provides us with the services of our Chief Executive Officer, Interim Chief Financial Officer and any other management executives the Company may require. In each case their services are provided under the management agreement with Stealth Maritime.
Vafias 44 Chief Executive Officer, President and Class III Director 2021 2024 John Kostoyannis 55 Class II Director 2021 2023 George Xiradakis 58 Class I Director 2021 2025 Ifigeneia (Fenia) Sakellari 42 Interim Chief Financial Officer Certain biographical information about each of these individuals is set forth below. Harry N.
Vafias 45 Chief Executive Officer, President and Class III Director 2021 2024 John Kostoyannis 56 Class II Director 2021 2026 George Xiradakis 59 Class I Director 2021 2025 Ifigeneia (Fenia) Sakellari 43 Interim Chief Financial Officer Certain biographical information about each of these individuals is set forth below. Harry N.
Mr. Vafias has been actively involved in the tanker and gas shipping industry since 1999. Mr. Vafias worked at Seascope, a leading ship brokering firm specializing in sale and purchase of vessels and chartering of oil tankers. Mr. Vafias also worked at Braemar, a leading ship brokering firm, where he gained extensive experience in tanker and dry cargo chartering.
Vafias worked at Seascope, a leading ship brokering firm specializing in sale and purchase of vessels and chartering of oil tankers. Mr. Vafias also worked at Braemar, a leading ship brokering firm, where he gained extensive experience in tanker and dry cargo chartering.
Xiradakis is the founder and Managing Director of XRTC Business Consultants Ltd. (“XRTC”) (January 1999). The company was established in order to represent financial institutions in the Greek territory and initially acted as the exclusive Shipping Representative of Credit Lyonnais Group in Greece.
George Xiradakis has been a member of our Board of Directors since November 2021. Mr. Xiradakis is the founder and Managing Director of XRTC Business Consultants Ltd. (“XRTC”) (January 1999). The company was established in order to represent financial institutions in the Greek territory and initially acted as the exclusive Shipping Representative of Credit Lyonnais Group in Greece.
He is now Emeritus President of International Propeller Club, Port of Piraeus, Emeritus Member of The Piraeus Chamber of Commerce & Industry, Member of the Mediterranean Committee of China Classification Society, Piraeus Marine Club, Hellenic Maritime Museum and Hellas Liberty Floating Museum. He has also been a Board Member of other US listed shipping companies.
He is now Emeritus President of International Propeller Club, Port of Piraeus, Emeritus Member of The Piraeus Chamber of Commerce & Industry, Member of the Mediterranean Committee of China Classification Society, Piraeus Marine Club, Hellenic Maritime Museum and Hellas Liberty Floating Museum.
Vafias has been a member of the Board of Directors and Chief Executive Officer and President of Imperial Petroleum since its inception on May 14, 2021. He has also been the President and Chief Executive Officer and a member of the Board of Directors of StealthGas since its inception in December 2004 and its Chief Financial Officer since January 2014.
Vafias has been a member of the Board of Directors and Chief Executive Officer and President of Imperial Petroleum since its inception on May 14, 2021.
Compensation Committee The Compensation Committee is appointed by the Board and is responsible for, among other matters: • establishing and periodically reviewing the Company’s compensation programs; • reviewing the performance of directors, officers and employees of the Company who are eligible for awards and benefits under any plan or program and adjust compensation arrangements as appropriate based on performance; • reviewing and monitoring management development and succession plans and activities; • reporting on compensation arrangements and incentive grants to the Board; • retaining, setting compensation and retention terms for, and terminating any consultants, legal counsel or other advisors that the Compensation Committee determines to employ to assist it in the performance of its duties; and • preparing any Compensation Committee report included in our annual proxy statement.
Compensation Committee The Compensation Committee is appointed by the Board and is responsible for, among other matters: • establishing and periodically reviewing the Company’s compensation programs; • reviewing the performance of directors, officers and employees of the Company who are eligible for awards and benefits under any plan or program and adjust compensation arrangements as appropriate based on performance; • reviewing and monitoring management development and succession plans and activities; • reporting on compensation arrangements and incentive grants to the Board; • retaining, setting compensation and retention terms for, and terminating any consultants, legal counsel or other advisors that the Compensation Committee determines to employ to assist it in the performance of its duties; and • preparing any Compensation Committee report included in our annual proxy statement. 85 Table of Contents Code of Ethics We have adopted a code of ethics that complies with the applicable guidelines issued by the SEC, copies of which are available on our website: www.imperialpetro.com under “Investor Relations” and upon written request by our stockholders at no cost.
We recognized non-cash stock-based compensation expense of $117,256 in 2022, relating to these stock awards. We have no service contracts with any of our directors that provide for benefits upon termination of employment. C. Board Practices We have three members on our board of directors.
Of these amounts of recognized non-cash stock-based compensation expense, $0.1 million in 2022 and $1.1 million in 2023 related to restricted share or option awards to our executive officers. We have no service contracts with any of our directors that provide for benefits upon termination of employment. C. Board Practices We have three members on our board of directors.
However, these officers and crew are not directly employed by the Company. E. Share Ownership The shares of common stock beneficially owned by our directors and senior managers and/or companies affiliated with these individuals are disclosed in “Item 7. Major Stockholders and Related Party Transactions” below.
As of December 31, 2023, 89 officers and 133 crew members served on board the vessels in our fleet. However, these officers and crew are not directly employed by the Company. E. Share Ownership The shares of common stock beneficially owned by our directors and senior managers and/or companies affiliated with these individuals are disclosed in “Item 7.
Kostoyannis worked in several prominent shipbroking houses in London and Piraeus. He is a member of the Hellenic Shipbrokers Association. Mr. Kostoyannis graduated from the City of London Polytechnic in 1988 where he studied Shipping and Economics. George Xiradakis has been a member of our Board of Directors since November 2021. Mr.
Kostoyannis worked in several prominent shipbroking houses in London and Piraeus. He is a member of the Hellenic Shipbrokers Association. Mr. Kostoyannis graduated from the City of London Polytechnic in 1988 where he studied Shipping and Economics. He is a director of C3is Inc., which is listed on the Nasdaq Capital Market.
Awards may be made under the expected equity compensation plan in the form of incentive stock options, non-qualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, unrestricted stock, restricted stock units and performance shares. On November 21, 2022, $1,000,000 of shares of common stock was granted to our Chief Executive Officer under our 2021 Equity Compensation Plan.
Awards may be made under the expected equity compensation plan in the form of incentive stock options, non-qualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, unrestricted stock, restricted stock units and performance shares. The 2024 Equity Plan replaced the 2021 Equity Plan, under which we will not grant any additional awards.
For our compensation expenses, pursuant to our management agreement, we reimburse Stealth Maritime for its payment of the compensation of our Chief Executive Officer and Interim Chief Financial Officer as described above. 70 Table of Contents As of December 31, 2022, 87 officers and 130 crew members served on board the vessels in our fleet.
Stealth Maritime compensates each of these individuals for their services and we, in turn, reimburse Stealth Maritime for their compensation. For our compensation expenses, pursuant to our management agreement, we reimburse Stealth Maritime for its payment of the compensation of our Chief Executive Officer and Interim Chief Financial Officer as described above.
Ifigeneia (Fenia) Sakellari is our Interim Chief Financial Officer. Ms. Sakellari has 18 years of experience in finance and has been a finance officer of StealthGas since 2015. Prior to this, Ms.
He is currently a director of C3is Inc., which is listed on the Nasdaq Capital Market, and has also been a Board Member of other US listed shipping companies. Ifigeneia (Fenia) Sakellari is our Interim Chief Financial Officer. Ms. Sakellari has 18 years of experience in finance and has been a finance officer of StealthGas since 2015.
Our executive officers and directors are also eligible to receive awards under our equity compensation plan described below under “—Equity Compensation Plan.” On November 21, 2022, we granted a total of $1,000,000 worth of shares of our common stock to our Chief Executive Officer under our 2021 Equity Compensation Plan.
Our executive officers and directors are also eligible to receive awards under our equity compensation plan described below under “—Equity Compensation Plan” We recognized non-cash stock-based compensation expense of $117,256 in 2022 and $2,434,855 in 2023, and had unrecognized non-cash stock-based compensation expense of $2,999,360 as of December 31, 2023, which we expect to recognize over a weighted average period of 1.2 years.
Removed
The number of shares granted was calculated based on the closing price of the Company’s share at the grant date. As a result, a total of 2,857,142 shares of restricted common stock were issued, 50% of which vest on July 17, 2023 and the remaining 50% of which vest on July 15, 2024, subject to satisfaction of the vesting terms.
Added
He has also been the President and Chief Executive Officer and a member of the Board of Directors of StealthGas, which is listed on the Nasdaq Global Select Market, since its inception in December 2004 and its Chief Financial Officer since January 2014. Mr.
Removed
Code of Ethics We have adopted a code of ethics that complies with the applicable guidelines issued by the SEC, copies of which are available on our website: www.imperialpetro.com under “Investor Relations” and upon written request by our stockholders at no cost. D. Employees We have no salaried employees.
Added
Vafias is also the Non-Executive Chairman of C3is Inc., which has been listed on the Nasdaq Capital Market since its spin-off from the Company in June 2023. Mr. Vafias has been actively involved in the tanker and gas shipping industry since 1999. Mr.
Removed
Stealth Maritime compensates each of these individuals for their services and we, in turn, reimburse Stealth Maritime for their compensation.
Added
In 2022, 2023 and 2024, we granted an aggregate of 2,944,290 awards under the 2021 Equity Plan.
Removed
The number of shares granted was calculated based on the closing price of the Company’s common stock on the grant date.
Added
This include grants of restricted shares to our Chief Executive Officer, in an aggregate amount of 1,568,026 shares, Interim Chief Financial Officer, our independent directors and employees of our manager providing services to us, including 247,286 restricted shares to Nikolas Vafias, the senior executive of our manager and father of our Chief Executive Officer.
Removed
As a result, a total of 2,857,142 shares of restricted common stock were issued, 50% of which vest on July 17, 2023 and the remaining 50% of which vest on July 15, 2024, subject to satisfaction of the vesting criteria.
Added
This also includes options to purchase 593,750, 25,000 and 12,500 shares of common stock granted to our Chief Executive Officer, Directors of our Board and Interim Chief Financial Officer, respectively, on October 30, 2023, each at an exercise price of $1.60 per share, the closing price of the Common Stock on October 30, 2023, and 50% of which vest on October 30, 2024 and 50% of which vest on October 30, 2025 and options to purchase 100,000, 10,000 and 3,000, shares of common stock granted to our Chief Executive Officer, Directors of our Board and Interim Chief Financial Officer, respectively, on April 12, 2024, each at an exercise price equal to the closing price of the Common Stock on April 12, 2024, and 50% of which vest on April 12, 2025 and 50% of which vest on April 12, 2026. 86 Table of Contents
Removed
On March 21, 2023, 4,205,882 shares of restricted common stock were issued under our 2021 Equity Compensation Plan, 50% of which vest on July 17, 2023 and the remaining 50% of which vest on July 15, 2024, to employees and individuals proving services to the Company.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

30 edited+10 added−2 removed25 unchanged
The Contribution Agreement provided that the Spin-Off and the transfer of StealthGas’ product and crude oil tanker vessel-owning subsidiaries to us, was subject to, among other things, the approval of StealthGas’ Board of Directors, our entry into our 2021 DNB Senior Secured Credit Facility and the application of borrowings thereunder to refinance the existing indebtedness of StealthGas securing the vessels comprising our fleet, approval of our request for our common stock and Series A Preferred Stock to be listed on Nasdaq and the effectiveness of the registration statement relating to the Spin-Off distribution.
The Contribution Agreement provided that the Spin-Off and the transfer of StealthGas’ product and crude oil tanker vessel-owning subsidiaries to us, was subject to, among other things, the approval of StealthGas’ Board of Directors, our entry into a Senior Secured Credit Facility with DNB and the application of borrowings thereunder to refinance the existing indebtedness of StealthGas securing the vessels comprising our fleet, approval of our request for our common stock and Series A Preferred Stock to be listed on Nasdaq and the effectiveness of the registration statement relating to the Spin-Off distribution.
Our Code of Business Conduct and Ethics requires our Audit Committee to review and approve any “related party” transaction as defined in Item 7.B of Form 20-F before it is consummated. Contribution Agreement We entered into the Contribution Agreement with StealthGas in connection with the Spin-Off.
Our Code of Business Conduct and Ethics requires our Audit Committee to review and approve any “related party” transaction as defined in Item 7.B of Form 20-F before it is consummated. Contribution Agreement In November 2021, we entered into the Contribution Agreement with StealthGas in connection with the Spin-Off.
Under our management agreement with Stealth Maritime which we entered into in conjunction with the Spin-Off, we pay management fees and commissions at the same rate. The above management fees for the years ended December 31, 2020, 2021 and 2022 were $0.5 million, $0.5 million and $1.0 million, respectively.
Under our management agreement with Stealth Maritime which we entered into in conjunction with the Spin-Off, we pay management fees and commissions at the same rate. The above management fees for the years ended December 31, 2021, 2022 and 2023 were $0.5 million, $1.0 million and $1.6 million, respectively.
In addition, 73 Table of Contents Stealth Maritime provides services for the chartering of our vessels and monitoring thereof, freight collection, and sale and purchase. In providing most of these services, Stealth Maritime pays third parties and receives reimbursement from us. Under the management agreement Stealth Maritime subcontracts certain of its obligations.
In addition, Stealth Maritime provides services for the chartering of our vessels and monitoring thereof, freight collection, and sale and purchase. In providing most of these services, Stealth Maritime pays third parties and receives reimbursement from us. Under the management agreement Stealth Maritime subcontracts certain of its obligations.
For our drybulk vessels, Stealth Maritime subcontracts these services to its affiliate Brave Maritime. Stealth Maritime also provides crew management services to certain of our vessels. The majority of these services have been subcontracted by Stealth Maritime to an affiliated ship-management company, Hellenic Manning Overseas Inc.
For our drybulk vessels, Stealth Maritime subcontracts these services to its affiliate Brave Maritime. 89 Table of Contents Stealth Maritime also provides crew management services to certain of our vessels. The majority of these services have been subcontracted by Stealth Maritime to an affiliated ship-management company, Hellenic Manning Overseas Inc.
As a result, these numbers may not accurately represent the number of beneficial owners in the United States. We are not aware of any arrangements the operation of which may at a subsequent date result in a change of control of the Company. 72 Table of Contents B.
As a result, these numbers may not accurately represent the number of beneficial owners in the United States. We are not aware of any arrangements the operation of which may at a subsequent date result in a change of control of the Company. B.
The Series C Convertible Preferred Stock has a dividend rate of 5.00% per annum per $1,000 liquidation preference per share, which is payable in cash or additional shares of Series C Convertible Preferred Stock at our election, and is convertible, at the holder’s option, after the six-month anniversary of issuance into shares of our common stock at a conversion price equal to the lower of $0.50 and the ten-day volume weighted average price of the common stock.
The Series C Convertible Preferred Stock had a dividend rate of 5.00% per annum per $1,000 liquidation preference per share, which is payable in cash or additional shares of Series C Convertible Preferred Stock at our election, and was convertible, at the holder’s option, after the six-month anniversary of issuance into shares of our common stock at a conversion price equal to the lower of $7.50 and the ten-day volume weighted average price of the common stock.
Pursuant to the Contribution Agreement, on the distribution date of December 3, 2021, StealthGas distributed to its stockholders all 4,775,272 of our common stock and all 795,878 of our Series A Preferred Stock, with one of our common stock and one of our Series A Preferred Stock being distributed for every eight shares and forty-eight shares, respectively, of StealthGas common stock held by StealthGas stockholders.
Pursuant to the Contribution Agreement, on the distribution date of December 3, 2021, StealthGas distributed to its stockholders all 318,351 shares of our common stock and all 795,878 shares of our Series A Preferred Stock, with one of our common stock and one of our Series A Preferred Stock being distributed for every eight shares and forty-eight shares, respectively, of StealthGas common stock held by StealthGas stockholders.
Major Stockholders The following table sets forth certain information regarding the beneficial ownership of our outstanding shares of common stock as of March 28, 2023 by: • each person or entity that we know beneficially owns 5% or more of our shares of common stock; • our Chief Executive Officer and our other executive officers; • each of our directors; and • all of our current directors and executive officers as a group.
Major Stockholders The following table sets forth certain information regarding the beneficial ownership of our outstanding shares of common stock as of April 1, 2024 by: • each person or entity that we know beneficially owns 5% or more of our shares of common stock; • our Chief Executive Officer and our other executive officers; • each of our directors; and • all of our current directors and executive officers as a group.
We also paid $0.01 million, $0.03 million and $0.03 million, respectively, in the years ended December 31, 2020, 2021 and 2022 related to onboard supervision which were included in our operating expenses – related party.
We also paid $0.03 million, $0.03 million and $0.06 million, respectively, in the years ended December 31, 2021, 2022 and 2023 related to onboard supervision which were included in our operating expenses – related party.
The transaction was approved by a committee comprised of independent directors, which received a fairness opinion from an independent financial advisor in connection with the issuance of the Series C Convertible Preferred Stock in the transaction. See “Item 10. Additional Information A.
The transaction was approved by a committee comprised of independent directors, which received a fairness opinion from an independent financial advisor in connection with the issuance of the Series C Convertible Preferred Stock in the transaction.
For the years ended December 31, 2020, 2021 and 2022, these crew management fees were $0.04 million, $0.06 million and $0.14 million, respectively.
For the years ended December 31, 2021, 2022 and 2023, these crew management fees were, $0.06 million, $0.14 million and $0.3 million, respectively.
For purposes of this table, shares subject to options, warrants or rights currently exercisable or exercisable within 60 days of March 28, 2023 are considered as beneficially owned by the person holding such options, warrants or rights.
For purposes of this table, shares subject to options, warrants or rights currently exercisable or exercisable within 60 days of April 1, 2024 are considered as beneficially owned by the person holding such options, warrants or rights.
However, the five United States stockholders of record include CEDEFAST, which, as nominee for The Depository Trust Company, is the record holder of 239,975,794 shares of common stock. Accordingly, we believe that the shares held by CEDEFAST include shares of common stock beneficially owned by both holders in the United States and non-United States beneficial owners.
However, the seven United States stockholders of record include CEDEFAST, which, as nominee for The Depository Trust Company, is the record holder of 21,062,691 shares of common stock. Accordingly, we believe that the shares held by CEDEFAST include shares of common stock beneficially owned by both holders in the United States and non-United States beneficial owners.
In the years ended December 31, 2020, 2021 and 2022, Stealth Maritime received a fixed management fee of $440 per vessel per day operating under a voyage or time charter, and a fixed fee of $125 per vessel per day for each of our vessels operating on bareboat charter, in each case, pro-rated for the calendar days vessels were owned, with respect to the vessels in our fleet.
In the years ended December 31, 2021, 2022 and 2023, Stealth Maritime received a fixed management fee of $440 per vessel per day operating under a voyage or time charter, and a fixed fee of $125 per vessel per day for each of our vessels operating on bareboat charter, with respect to the vessels in our fleet.
The management agreement will also terminate (1) upon an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of us or Stealth Maritime (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver is appointed, or if we or Stealth Maritime suspends payment, ceases to carry on business, or makes any special arrangement or composition with creditors or (2) in the case of the sale of all of our vessels or if all of our vessels become a total loss or are declared as a constructive or compromised or arranged total loss or are requisitioned. 74 Table of Contents Office Space Stealth Maritime provided our office space to us without charge for the first year after the completion of the Spin-Off, and thereafter the lease rate has been €5,000 per month.
The management agreement will also terminate (1) upon an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of us or Stealth Maritime (otherwise than for the purpose of reconstruction or amalgamation) or if a 90 Table of Contents receiver is appointed, or if we or Stealth Maritime suspends payment, ceases to carry on business, or makes any special arrangement or composition with creditors or (2) in the case of the sale of all of our vessels or if all of our vessels become a total loss or are declared as a constructive or compromised or arranged total loss or are requisitioned.
Information for certain holders is based on their latest filings with the Securities and Exchange Commission or information delivered to us. All of our stockholders, including the stockholders listed in this table, are entitled to one vote for each share of common stock held.
Information for certain holders is based on their latest filings with the Securities and Exchange Commission or information delivered to us. All of our stockholders, including the stockholders listed in this table, are entitled to one vote for each share of common stock held. Series A Preferred Stock generally have no voting rights, other than in very limited circumstances.
The Contribution Agreement sets forth the agreements between us and StealthGas regarding the contribution of the subsidiaries owning the vessels comprising our initial fleet and the refinancing of the existing indebtedness of StealthGas securing the vessels comprising our fleet with borrowings under our 2021 DNB Senior Secured Credit Facility, which were the principal transaction necessary to separate us from StealthGas.
The Contribution Agreement sets forth the agreements between us and StealthGas regarding the contribution of the subsidiaries owning the vessels comprising our initial fleet and the refinancing of the existing indebtedness of StealthGas securing the vessels comprising our fleet with borrowings under a Senior Secured Credit Facility with DNB, which were the principal transaction necessary to separate us from StealthGas. 88 Table of Contents The Contribution Agreement also provided for the settlement or extinguishment of certain liabilities and other obligations between us and StealthGas, if any.
The Contribution Agreement also provided for the settlement or extinguishment of certain liabilities and other obligations between us and StealthGas, if any. Following the Spin-Off, StealthGas and Imperial Petroleum will operate independently, and neither will have any ownership interest in the other nor will there be any ongoing relationships between StealthGas and Imperial Petroleum after the separation.
Following the Spin-Off, StealthGas and Imperial Petroleum will operate independently, and neither will have any ownership interest in the other nor will there be any ongoing relationships between StealthGas and Imperial Petroleum after the separation.
Share Capital – Description of Series C Convertible Preferred Stock.” Series B Preferred Stock On October 21, 2022, we entered into a stock purchase agreement and issued 16,000 shares of our newly-designated Series B Preferred Stock, par value $0.01 per share, to our Chairman and Chief Executive Officer, Harry Vafias, in return for cash consideration of $200,000.
The remaining balance bears interest at an implicit rate of 8.1% per annum and is payable in July 2024. 91 Table of Contents Series B Preferred Stock On October 21, 2022, we entered into a stock purchase agreement and issued 16,000 shares of our newly-designated Series B Preferred Stock, par value $0.01 per share, to our Chairman and Chief Executive Officer, Harry Vafias, in return for cash consideration of $200,000.
Additional vessels that we may acquire in the future may be managed by Stealth Maritime or other unaffiliated management companies.
We also reimburse Stealth Maritime for its payment for services related to our executive officers. Additional vessels that we may acquire in the future may be managed by Stealth Maritime or other unaffiliated management companies.
For the years ended December 31, 2020, 2021 and 2022, total brokerage commissions of 1.25% amounted to $0.25 million, $0.22 million and $1.2 million, respectively, and in each period were included in voyage expenses – related party. We also reimburse Stealth Maritime for its payment for services related to our executive officers.
For the years ended December 31, 2021, 2022 and 2023, total brokerage commissions of 1.25% amounted to $0.22 million, $1.2 million and $2.3 million, respectively, and in each period were included in voyage expenses – related party. For the years ended December 31, 2021, 2022 and 2023, commissions on vessels purchased/sold were nil, $1.2 million and $0.8 million, respectively.
As of March 28, 2023, all of our drybulk carriers, our product tankers and suezmax tankers were being manned by Hellenic Manning Overseas Inc., while for our Aframax tanker, crewing services were provided by Bernard Shulte Management with a lumpsum monthly fee of $0.1 million. We are not responsible for crewing vessels deployed on bareboat charters.
As of April 1, 2024, all of our vessels were being manned by Hellenic Manning Overseas Inc., while for our Aframax tanker sold in July 2023 and for one of our product tankers, crewing services were provided by Bernard Shulte Management up until April 2023 and February 2023 respectively with a lumpsum monthly fee of $0.1 million.
The applicable percentage of ownership for each stockholder is based on 243,891,313 shares of Common Stock and 795,878 8.75% Series A Cumulative Redeemable Perpetual Preferred Shares were issued and outstanding.
The applicable percentage of ownership for each stockholder is based on 33,257,291 issued and 29,441,660 outstanding shares of Common Stock and 795,878 8.75% Series A Cumulative Redeemable Perpetual Preferred Shares issued and outstanding, and giving effect to 436,253 restricted shares of common stock awarded on April 12, 2024.
The lease ends on January 1, 2024, and may be terminated by tenant upon eight weeks’ notice to landlord.
The lease rate for 2024 is €72,000 per year as per renewed contact effective from January 1, 2024 and may be terminated by tenant upon eight weeks’ notice to landlord.
Vafias(1) 3,889,524 1.6 % 172,063 21.6 % John Kostoyannis 1,412 * 235 * George Xiradakis — * — * Ifigeneia (Fenia) Sakellari(2) 30,399 * 66 * All executive officers and directors as a group (four persons) 3,921,335 1.6 % 172,364 21.7 % * Less than 1%.
Vafias(1)(2) 11,291,159 38.4 % 172,063 21.6 % John Kostoyannis 16,469 * 235 * George Xiradakis 19,375 * — * Ifigeneia (Fenia) Sakellari 24,166 * 66 * All executive officers and directors as a group (four persons) 11,351,169 38.6 % 172,364 21.7 % 87 Table of Contents * Less than 1%.
As of March 28, 2023, we had approximately 20 common stockholders of record. Five of the common stockholders of record were located in the United States and held in the aggregate 240,002,824 shares of common stock representing approximately 98.4% of our outstanding shares of common stock.
Seven of the common stockholders of record were located in the United States and held in the aggregate 21,066,988 shares of common stock representing approximately 70.7% of our outstanding shares of common stock.
(1) Includes 2,857,142 shares of restricted common stock, 50% of which vest on July 17, 2023 and the remaining 50% of which vest on July 15, 2024, subject to satisfaction of the vesting criteria. Harry N.
(2) Includes 1,472,788 shares of restricted common stock, of which 273,775 vest on May 15, 2024, 95,238 vest on July 15, 2024, 275,000 vest on October 30, 2024, 273,775 vest on May 15, 2025, 275,000 vest on October 30, 2025, 140,000 vest on April 12, 2025 and 140,000 vest on April 12, 2026, subject to satisfaction of the vesting criteria.
Series A Preferred Stock and Series C Preferred Stock generally have no voting rights, other than in very limited circumstances. See “Item 10. Additional Information—Authorized Capital—Description of Series A Preferred Stock.” Common Stock Beneficially Owned Series A Preferred Stock Beneficially Owned Name of Beneficial Owner Number Percentage Number Percentage Principal Stockholders None. Executive Officers and Directors Harry N.
See “Item 10. Additional Information—Authorized Capital—Description of Series A Preferred Stock.” Common Stock Beneficially Owned Series A Preferred Stock Beneficially Owned Name of Beneficial Owner Number Percentage Number Percentage Principal Stockholders Flawless Management Inc.(1) 6,991,255 23.7 % 148,030 18.6 % Arethusa Properties Ltd.(1) 2,680,991 9.1 % Hudson Bay Capital Management LP(3) 1,896,483 6.4 % Executive Officers and Directors Harry N.
(2) Includes 30,000 shares of restricted common stock, 50% of which vest on July 17, 2023 and the remaining 50% of which vest on July 15, 2024, subject to satisfaction of the vesting criteria. Our common stock and Series A Preferred Stock began regular-way trading on the Nasdaq Capital Market on December 6, 2021.
Our common stock and Series A Preferred Stock began regular-way trading on the Nasdaq Capital Market on December 6, 2021. As of April 1, 2024, we had approximately 57 common stockholders of record.
Removed
As of March 28, 2023, we also had outstanding Class A Warrants to purchase up to 43,000 shares of common stock at an exercise price of $1.25 per share, Class B Warrants to purchase up to 11,802,000 shares of common stock at an exercise price of $1.60 per share, Class C Warrants to purchase up to 78,278,862 shares of common stock at an exercise price of $0.55 per share, Class D Warrants to purchase up to 31,150,000 shares of common stock at an exercise price of $0.80 per share, and underwriters warrants to purchase up to 552,000 shares of common stock at an exercise price of $1.375 per share, 1,724,998 shares of common stock at an exercise price of $2.00 per share, and 2,090,909 shares of common stock at an exercise price of $0.6875 per share, and Series C Convertible Preferred Stock, which on and after September 28, 2023, will be 71 Table of Contents convertible, at their holder’s option, to our common stock, in whole or in part, at any time and from time to time after the six-month anniversary of the issuance date, at a conversion price equal to the lower of (i) $0.50 and (ii) the VWAP of our common stock over the 10 consecutive trading day period expiring on the trading day immediately prior to the date of delivery of written notice of the conversion; provided, that, in no event shall the conversion price be less than $0.10.
Added
As of April 1, 2024, we also had outstanding Class A Warrants to purchase up to 2,867 shares of common stock at an exercise price of $18.75 per share, Class B Warrants to purchase up to 786,800 shares of common stock at an exercise price of $24.00 per share, Class C Warrants to purchase up to 1,347,267 shares of common stock at an exercise price of $8.25 per share, Class D Warrants to purchase up to 173,334 shares of common stock at an exercise price of $12.00 per share, Class E Warrants to purchase up to 8,499,999 shares of common stock at an exercise price of $2.00 per share, and underwriters warrants to purchase up to 36,800 shares of common stock at an exercise price of $20.625 per share, 115,000 shares of common stock at an exercise price of $30.00 per share and 139,394 shares of common stock at an exercise price of $10.3125 per share.
Removed
Vafias, through Flawless Management Inc., also owns 13,875 shares of Series C Convertible Preferred Stock, which on and after September 28, 2023, will be convertible, at their holder’s option, into our common stock, in whole or in part, at any time and from time to time, at a conversion price equal to the lower of (i) $0.50 and (ii) the VWAP of our common stock over the 10 consecutive trading day period expiring on the trading day immediately prior to the date of delivery of written notice of the conversion; provided, that, in no event shall the conversion price be less than $0.10.
Added
(1) According to Amendment No. 2 to Schedule 13D jointly filed with the SEC on January 8, 2024 by Flawless Management Inc., Arethusa Properties LTD and Harry N. Vafias, Harry N. Vafias has sole voting power and sole dispositive power with respect to the aggregate 10,969,884 shares owned by Flawless Management Inc., Arethusa Properties LTD and Harry N. Vafias.
Added
Excludes (i) options exercisable to acquire 593,750 shares of Common Stock at an exercise price per share of $1.60, the closing price of the Common Stock on October 30, 2023, and an option expiration date of October 30, 2033, 50% of which options vest on October 30, 2024 and 50% of which options vest on October 30, 2025, subject to satisfaction of the time-based vesting terms and (ii) options exercisable to acquire 100,000 shares of Common Stock at an exercise price per share equal to the closing price of the Common Stock on April 12, 2024, and an option expiration date of April 12, 2034, 50% of which options vest on April 12, 2025 and 50% of which options vest on April 12, 2026, subject to satisfaction of the time-based vesting terms.
Added
(3) Based on a Schedule 13G jointly filed, on February 5, 2024, by Hudson Bay Capital Management LP and Sander Gerber, which indicates these shares of common stock are issuable upon exercise of outstanding warrants that contain a 9.99% blocker provision and that the reported number of shares gave effect to this blocker provision.
Added
We are not responsible for crewing vessels deployed on bareboat charters.
Added
Office Space Stealth Maritime provided our office space to us without charge for the first year after the completion of the Spin-Off, and thereafter the lease rate has been €5,000 per month. The lease ended on January 1, 2024.
Added
On December 21, 2023, all 13,875 shares of our Series Convertible Preferred Stock were converted by the holder, Flawless Management Inc., into 6,932,043 shares of our Common Stock. On September 5, 2023, we entered into an agreement with entities affiliated with the Vafias family to acquire two tanker vessels, the aframax tanker Gstaad Grace II (ex.
Added
Stealth Haralambos) , built in 2009 and the product tanker Aquadisiac built in 2008, with an aggregate capacity of approximately 164,000 dwt. The aggregate purchase price for these acquisitions is $71 million. Both vessels were delivered to us on a charter-free basis in February 2024. The transaction was approved by the Company’s audit committee comprised of independent directors.
Added
Vessel Sale to C3is Inc. On July 7, 2023, we entered into a memorandum of agreement for the disposal of the vessel “Stealth Berana” to C3is Inc., in which we hold an interest through Series A Convertible Preferred Stock, for $43,000,000. The vessel was delivered to her new owners in July 2023.
Added
Payment of 10% of the purchase price was effected at the time of delivery, with the remaining balance due no later than one year after delivery of the vessel, which took place on July 14, 2023.

Other IMPP 10-K year-over-year comparisons