Form 20-F ☒   Form 40-F ☐

 

 

 

 

*****

Form 6-K

Form F-3

(Reg. No. 333-268663)

The following is a discussion of our financial condition and results of operations for the period ended June 30, 2023. Unless otherwise specified herein, references to the “Company” or “we” shall include Imperial Petroleum Inc. and its subsidiaries. You should read the following discussion and analysis together with the unaudited interim condensed consolidated financial statements and related notes included elsewhere in this report. For additional information relating to our management’s discussion and analysis of financial condition and results of operations, please see our annual report on Form for the year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission on April 3, 2023 (the “Annual Report”). All share amounts of our common stock effected by the Company on April 28, 2023.

On June 21, 2023, previously wholly-owned subsidiary, C3is Inc., the holding company for two drybulk carriers, the and the, each with an aggregate capacity of 64,000 dwt. Imperial Petroleum stockholders and warrantholders received one C3is common share for every eight shares of Imperial Petroleum’s common stock owned, or in the case of holders of Imperial Petroleum’s outstanding Warrants that they have the right to purchase pursuant to Warrants owned, at the close of business on June 13, 2023. We retain an interest in C3is Inc. through our ownership of Series A Convertible Preferred Stock of C3is Inc., which has an aggregate liquidation preference of $15 million, a conversion price of $1.05 currently, and a dividend rate of 5.0% per annum.

In July 2023, we sold the , an Aframax oil tanker, built at Samsung shipyard, South Korea in 2010, with a cargo carrying capacity of 115,804 dwt, to C3is Inc., an affiliated company, for $43 million.

In September 2023, we entered into an agreement with entities affiliated with the family of our Chief Executive Officer to acquire two tanker vessels, the Aframax tanker , built in 2009 and the product tanker built in 2008, with an aggregate capacity of approximately 163,716 dwt. The aggregate purchase price for these acquisitions is $71 million. Both vessels will be delivered on a charter-free basis by the end of January 2024.

- Total revenues for the six months ended June 30, 2023 amounted to $124.5 million, an increase of $108.0 million, or 654.5%, compared to revenues of $16.5 million for the six months ended June 30, 2022, primarily due to the increase in the average number of our vessels and improved market conditions resulting in higher rates particularly in the spot tanker market.

Total voyage expenses for the six months ended June 30, 2023 were $36.1 million compared to $4.9 million for the six months ended June 30, 2022. The $31.2 million increase in voyage expenses is mainly due to the increase in the spot days of our fleet by 1,009 days (458.6%).

Total vessels’ operating expenses for the six months ended June 30, 2023 were $13.9 million compared to $5.1 million for the six months ended June 30, 2022. The $8.8 million increase in vessels’ operating expenses was primarily due to the increase in the average number of our vessels in our fleet by approximately six vessels.

- Total drydocking costs for the six months ended June 30, 2023 and 2022 were $1.3 million and nil, respectively. This increase is due to the fact that during the six months ended June 30, 2023 two of our Handysize drybulk carriers underwent drydocking.

Management fees were $0.9 million for the six months ended June 30, 2023 compared to $0.3 million for the six months ended June 30, 2022. The increase in management fees in the six months ended June 30, 2023 is attributed to the increase of our fleet by approximately six vessels.

— General and administrative expenses for the six months ended June 30, 2023 and 2022 were $2.5 million and $0.5 million, respectively. This rise of $2.0 million is mainly attributed to $1.1 million of stock-based compensation expense along with a rise in reporting costs related to our project.

— Depreciation for the six months ended June 30, 2023, was $8.7 million, a $3.8 million increase from $4.9 million for the same period of last year, due to the increase in the average number of our vessels.

— for the six months ended June 30, 2023 and 2022 were $1.8 million and $0.5 million, respectively. The $1.8 million of costs for the six months ended June 30, 2023 relates mainly to $1.3 million of interest charges incurred up to the full repayment of all outstanding loans concluded in April 2023 along with the full amortization of $0.5 million of loan related charges following the repayment of the Company’s outstanding debt. Interest and finance costs increased by $1.3 million during the six months ended June 30, 2023 compared to the six months ended June 30, 2022 mainly due to the increase in the average loan outstanding balance during the current period compared to the prior period. No debt was outstanding at June 30, 2023.

- for the six months ended June 30, 2023 and 2022 was $2.1 million and $0.04 million, respectively. The increase is attributed to our time deposits during the period at favourable time deposit rates.

- for the six months period ended June 30, 2023 stood at $9.0 million, and related to the of two of our four drybulk carriers to C3is Inc. The decline of drybulk vessels’ fair values compared to one year ago when these vessels were acquired resulted in the incurrence of impairment loss.

— As a result of the above, net income for the six months ended June 30, 2023 amounted to $52.6 million, compared to a net income of $0.3 million for the six months ended June 30, 2022.

— was $63.8 million for the six months ended June 30, 2023, compared to $1.3 million for the six months ended June 30, 2022. The increase in net cash provided by operating activities was mainly attributed to the increase in cash flows relating to the increased revenues partly offset by the increased cash outflows relating to our expenses as a result of the increase in average number of our vessels by approximately six vessels.

— was $20.2 million for the six months ended June 30, 2023. This amount mainly represents the aggregate consideration paid for the acquisition of two Handysize dry vessels offset by the net change of funds under time deposits. Net cash used in investing activities for the six months ended June 30, 2022 amounting to $79.0 million related to the acquisition of four tanker vessels.

— was an outflow of $64.4 million for the six months ended June 30, 2023, consisting mainly of $70.4 million utilized for loan repayments, $5.0 million of cash retained by C3is Inc. at its and $0.9 million paid for dividends on our Series A preferred shares partially offset by the $11.9 million of net proceeds from equity offerings. Net cash provided by financing activities for the six months ended June 30, 2022 amounted to $153.5 million and related mostly to $167.6 million raised from equity offerings partially offset by the $10.8 million of stock issuance costs and by the $2.4 million relating to loan repayments.

As of June 30, 2023, we had cash and cash equivalents of $36.7 million and $61.9 million under time deposits. In August 2023, we completed an offering of 5,400,000 shares of common stock, 3,099,999 warrants with an exercise price of $0.01 per share, of which 2,122,471 have subsequently been exercised, and 8,499,999 Class E Warrants with an exercise price of $2.00 per share, resulting in gross proceeds, before placement agent fees and transaction expenses, to us of approximately $17.0 million.

Our liquidity needs, as of June 30, 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. In August 2023, we entered into agreements to acquire two tankers for an aggregate purchase price of $71 million, which are scheduled to be delivered on a charter-free basis by the end of January 2024.

As of June 30, 2023, we had no outstanding debt, as within the first and second quarter of 2023 we repaid all our then outstanding loans amounting to $69.1 million.

Matters discussed in this report may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, the conflict in Ukraine and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking statements in this report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the impact of any lingering impact efforts throughout the world to contain its spread, the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, supply and demand for oil and oil products, charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydockings, shipyard performance, changes in our operating expenses, including bunker prices, drydocking and insurance costs, ability to obtain financing and comply with covenants in our financing arrangements, the ability to consummate the acquisition of our two contracted vessels and operate them profitably, performance of counterparty to our vessel sale agreement, , potential liability from pending or future litigation or actions taken by regulatory authorities, domestic and international political conditions, the conflict in Ukraine and related sanctions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. Risks and uncertainties are further described in the Annual Report and other reports we file with the U.S. Securities and Exchange Commission.

---

---

---

---

---

---