PYXIS TANKERS INC., 20-F filed on 3/31/2020
Annual and Transition Report (foreign private issuer)
v3.20.1
Document and Entity Information
12 Months Ended
Dec. 31, 2019
shares
Document And Entity Information  
Entity Registrant Name Pyxis Tankers Inc.
Entity Central Index Key 0001640043
Document Type 20-F
Document Period End Date Dec. 31, 2019
Amendment Flag false
Current Fiscal Year End Date --12-31
Entity a Well-known Seasoned Issuer No
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Interactive Data Current Yes
Entity Filer Category Non-accelerated Filer
Entity Emerging Growth Company true
Entity Ex Transition Period false
Entity Shell Company false
Document Annual Report true
Document Transition Report false
Document Shell Company false
Entity Common Stock, Shares Outstanding 21,370,280
Document Fiscal Year Focus 2019
Document Fiscal Period Focus FY
v3.20.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
CURRENT ASSETS:    
Cash and cash equivalents $ 1,441 $ 545
Restricted cash, current portion 535 255
Inventories 501 807
Trade accounts receivable, net 1,243 2,585
Vessel held-for-sale 13,190
Prepayments and other assets 325 115
Total current assets 17,235 4,307
FIXED ASSETS, NET:    
Vessels, net 87,507 107,992
Total fixed assets, net 87,507 107,992
OTHER NON-CURRENT ASSETS:    
Restricted cash, net of current portion 3,200 3,404
Financial derivative instrument 1 28
Deferred charges, net 779 740
Prepayments and other assets 47 146
Total other non-current assets 4,027 4,318
Total assets 108,769 116,617
CURRENT LIABILITIES:    
Current portion of long-term debt, net of deferred financing costs 8,984 4,333
Trade accounts payable 4,538 4,746
Due to related parties 6,849 3,402
Hire collected in advance 1,415 422
Accrued and other liabilities 750 642
Total current liabilities 22,536 13,545
NON-CURRENT LIABILITIES:    
Long-term debt, net of current portion and deferred financing costs, non-current 49,233 58,129
Promissory note 5,000 5,000
Total non-current liabilities 54,233 63,129
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:    
Preferred stock ($0.001 par value; 50,000,000 shares authorized; none issued)
Common stock ($0.001 par value; 450,000,000 shares authorized; 21,060,190 and 21,370,280 shares issued and outstanding as of December 31, 2018 and 2019, respectively) 21 21
Additional paid-in capital 75,154 74,767
Accumulated deficit (43,175) (34,845)
Total stockholders' equity 32,000 39,943
Total liabilities and stockholders' equity $ 108,769 $ 116,617
v3.20.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2019
Dec. 31, 2018
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 50,000,000 50,000,000
Preferred stock, shares issued 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 450,000,000 450,000,000
Common stock, shares issued 21,370,280 21,060,190
Common stock, shares outstanding 21,370,280 21,060,190
v3.20.1
Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Statement [Abstract]      
Revenues, net $ 27,753 $ 28,457 $ 29,579
Expenses:      
Voyage related costs and commissions (5,122) (11,817) (8,463)
Vessel operating expenses (12,756) (12,669) (12,761)
General and administrative expenses (2,407) (2,404) (3,188)
Management fees, related parties (724) (720) (712)
Management fees, other (930) (930) (930)
Amortization of special survey costs (240) (133) (73)
Depreciation (5,320) (5,500) (5,567)
Vessel impairment charge (2,282)
Loss on vessel held-for-sale (2,756)
Bad debt provisions (26) (13) (231)
Operating loss (2,528) (8,011) (2,346)
Other income / (expenses):      
Gain from debt extinguishment 4,306
Loss from financial derivative instrument (27) (19)
Interest and finance costs, net (5,775) (4,490) (2,897)
Total other expenses, net (5,802) (203) (2,897)
Net loss $ (8,330) $ (8,214) $ (5,243)
Loss per common share, basic and diluted $ (0.39) $ (0.39) $ (0.28)
Weighted average number of shares, basic and diluted 21,161,164 20,894,202 18,461,455
v3.20.1
Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Total
Balance at Dec. 31, 2016 $ 18 $ 70,123 $ (21,388) $ 48,753
Balance, shares at Dec. 31, 2016 18,277,893      
Issuance of common stock $ 3 4,288   4,291
Issuance of common stock, shares 2,400,000      
Issuance of common stock - EIP, shares 200,000      
Stock compensation   355   355
Net loss     (5,243) (5,243)
Balance at Dec. 31, 2017 $ 21 74,766 (26,631) 48,156
Balance, shares at Dec. 31, 2017 20,877,893      
Net proceeds from the issuance of common stock   1   1
Net proceeds from the issuance of common stock, shares 182,297      
Net loss     (8,214) (8,214)
Balance at Dec. 31, 2018 $ 21 74,767 (34,845) 39,943
Balance, shares at Dec. 31, 2018 21,060,190      
Net proceeds from the issuance of common stock   274   274
Net proceeds from the issuance of common stock, shares 214,828      
Issuance of common stock under the promissory note   113   113
Issuance of common stock under the promissory note, shares 95,262      
Net loss     (8,330) (8,330)
Balance at Dec. 31, 2019 $ 21 $ 75,154 $ (43,175) $ 32,000
Balance, shares at Dec. 31, 2019 21,370,280      
v3.20.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Cash flows from operating activities:      
Net loss $ (8,330) $ (8,214) $ (5,243)
Adjustments to reconcile net loss to net cash from operating activities:      
Depreciation 5,320 5,500 5,567
Amortization of special survey costs 240 133 73
Amortization and write-off of financing costs 258 386 153
Vessel impairment charge 2,282
Gain from debt extinguishment (4,306)
Loss from financial derivative instrument 27 19
Loss on vessel held-for-sale 2,756
Stock compensation 355
Bad debt provisions 26 13 231
Issuance of common stock under the promissory note 113
Changes in assets and liabilities:      
Inventories 306 209 157
Trade accounts receivable, net 1,316 (1,895) 747
Prepayments and other assets (210) 227 62
Special surveys cost (435) (588)
Trade accounts payable (274) 2,499 (858)
Due to related parties 3,447 1,277 2,672
Hire collected in advance 993 422 (415)
Accrued and other liabilities 108 (167) 176
Net cash provided by / (used in) operating activities 5,661 (2,203) 3,677
Cash flows from investing activities:      
Advances for ballast water treatment system (47)
Ballast water treatment system installation (470) (99)
Net cash used in investing activities (517) (99)
Cash flows from financing activities:      
Proceeds from long-term debt 44,500
Repayment of long-term debt (4,503) (43,640) (6,963)
Gross proceeds from issuance of common stock 354 315 4,800
Common stock offerings costs (23) (407) (414)
Payment for financial derivative instrument (47)
Payment of financing costs (908) (190)
Net cash used in financing activities (4,172) (187) (2,767)
Net increase / (decrease) in cash and cash equivalents and restricted cash 972 (2,489) 910
Cash and cash equivalents and restricted cash at the beginning of the year 4,204 6,693 5,783
Cash and cash equivalents and restricted cash at end of the year 5,176 4,204 6,693
SUPPLEMENTAL INFORMATION:      
Cash paid for interest 5,163 4,283 2,549
Non-cash financing activities - increase in promissory note 2,500
Non-cash financing activities - issuance of common stock under the promissory note 113
Unpaid portion of ballast water treatment system installation 56
Unpaid portion for Common stock offering costs $ 57
v3.20.1
Basis of Presentation and General Information
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation and General Information

1. Basis of Presentation and General Information

 

PYXIS TANKERS INC. (“Pyxis”) is a corporation incorporated in the Republic of the Marshall Islands on March 23, 2015. As of December 31, 2019 Pyxis owns 100% ownership interest in the following six vessel-owning companies:

 

SECONDONE CORPORATION LTD, established under the laws of the Republic of Malta (“Secondone”);
   
THIRDONE CORPORATION LTD, established under the laws of the Republic of Malta (“Thirdone”);
   
FOURTHONE CORPORATION LTD, established under the laws of the Republic of Malta (“Fourthone”);
   
SIXTHONE CORP., established under the laws of the Republic of the Marshall Islands (“Sixthone”);
   
SEVENTHONE CORP., established under the laws of the Republic of the Marshall Islands (“Seventhone”); and
   
EIGHTHONE CORP., established under the laws of the Republic of the Marshall Islands (“Eighthone,” and collectively with Secondone, Thirdone, Fourthone, Sixthone and Seventhone, the “Vessel-owning companies”).

 

All of the Vessel-owning companies are engaged in the marine transportation of liquid cargoes through the ownership and operation of tanker vessels, as listed below:

 

Vessel-owning

company

 

Incorporation

date

  Vessel   DWT    

Year

built

 

Acquisition

date

Secondone   05/23/2007   Northsea Alpha     8,615     2010   05/28/2010
Thirdone   05/23/2007   Northsea Beta     8,647     2010   05/25/2010
Fourthone   05/30/2007   Pyxis Malou     50,667     2009   02/16/2009
Sixthone   01/15/2010   Pyxis Delta     46,616     2006   03/04/2010
Seventhone   05/31/2011   Pyxis Theta     51,795     2013   09/16/2013
Eighthone   02/08/2013   Pyxis Epsilon     50,295     2015   01/14/2015

 

Secondone, Thirdone and Fourthone were initially established under the laws of the Republic of the Marshall Islands, under the names SECONDONE CORP., THIRDONE CORP. and FOURTHONE CORP., respectively. In March and April 2018, these vessel-owning companies completed their re-domiciliation under the jurisdiction of the Republic of Malta and were renamed as mentioned above. For further information, please refer to Note 7.

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of Pyxis and its wholly-owned subsidiaries (collectively the “Company”), as of December 31, 2018 and 2019 and for the years ended December 31, 2017, 2018 and 2019.

 

All of the Company’s vessels are double-hulled and are engaged in the transportation of refined petroleum products and other liquid bulk items, such as organic chemicals and vegetable oils. The vessels Northsea Alpha and Northsea Beta are smaller tanker sister ships and Pyxis Malou, Pyxis Delta, Pyxis Theta and Pyxis Epsilon, are medium-range tankers.

 

Prior to the consummation of the transactions discussed below, Mr. Valentios (“Eddie”) Valentis was the sole ultimate stockholder of Pyxis and the Vessel-owning companies, holding all of their issued and outstanding share capital through MARITIME INVESTORS CORP. (“Maritime Investors”). Maritime Investors owned directly 100% of Pyxis, Secondone and Thirdone, and owned indirectly (through the intermediate holding company PYXIS HOLDINGS INC. (“Holdings”)) 100% of Fourthone, Sixthone, Seventhone and Eighthone.

 

On March 25, 2015, Pyxis caused MARITIME TECHNOLOGIES CORP., a Delaware corporation (“Merger Sub”), to be formed as its wholly-owned subsidiary and to be a party to the agreement and plan of merger discussed below.

 

On April 23, 2015, Pyxis and Merger Sub entered into an agreement and plan of merger (the “Agreement and Plan of Merger”) (further amended on September 22, 2015) with among others, LOOKSMART LTD. (“LS”), a digital advertising solutions company listed on NASDAQ. Merger Sub served as the entity into which LS was merged in accordance with the Agreement and Plan of Merger (the “Merger”). Upon execution of the Agreement and Plan of Merger, Pyxis paid LS a cash consideration of $600.

 

Prior to the Merger, on October 26, 2015, Holdings and Maritime Investors transferred all of their shares in the Vessel-owning companies to Pyxis as a contribution in kind, at no consideration. Since there was no change in ultimate ownership or control of the business of the Vessel-owning companies, the transaction constituted a reorganization of companies under common control and was accounted for in a manner similar to a pooling of interests. Accordingly, upon the transfer of the assets and liabilities of the Vessel-owning companies, the financial statements of the Company were presented using combined historical carrying amounts of the assets and liabilities of the Vessel-owning companies.

 

On October 28, 2015, in accordance with the terms of the Agreement and Plan of Merger, LS, after having divested of its business and all of its assets and liabilities, merged with and into the Merger Sub, with Merger Sub surviving the Merger and continuing to be a wholly-owned subsidiary of Pyxis.

 

On October 28, 2015, the Merger was consummated and the Company’s shares commenced their listing on the NASDAQ Capital Markets thereafter.

 

Pyxis was both the legal and accounting acquirer of LS. The acquisition by Pyxis of LS was not an acquisition of an operating company as the business, assets and liabilities of LS were spun-off prior to the Merger. As such, for accounting purposes, the Merger between Merger Sub and LS was accounted for as a capital transaction rather than as a business combination.

 

PYXIS MARITIME CORP. (“Maritime”), a corporation established under the laws of the Republic of the Marshall Islands, which is beneficially owned by Mr. Valentis, provides certain ship management services to the Vessel-owning companies (Note 3).

 

With effect from the delivery of each vessel, the crewing and technical management of the vessels were contracted to INTERNATIONAL TANKER MANAGEMENT LTD. (“ITM”) with permission from Maritime. ITM is an unrelated third party technical manager, represented by its branch based in Dubai, UAE. Each ship-management agreement with ITM is in force until it is terminated by either party. The ship-management agreements can be cancelled either by the Company or ITM for any reason at any time upon three months’ advance notice.

 

As of December 31, 2019, Mr. Valentis beneficially owned approximately 80.2% of the Company’s common stock.

v3.20.1
Significant Accounting Policies
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Significant Accounting Policies

2. Significant Accounting Policies:

 

(a) Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP. The consolidated financial statements include the accounts of Pyxis and its wholly-owned subsidiaries (the Vessel-owning companies and Merger Sub). All intercompany balances and transactions have been eliminated upon consolidation.

 

Pyxis, as the holding company, determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity. Under Accounting Standards Codification (“ASC”) 810 “Consolidation” a voting interest entity is an entity in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make financial and operating decisions. Pyxis consolidates voting interest entities in which it owns all, or at least a majority (generally, greater than 50%), of the voting interest. Variable interest entities (“VIE”) are entities as defined under ASC 810-10, that in general either do not have equity investors with voting rights or that have equity investors that do not provide sufficient financial resources for the entity to support its activities. A controlling financial interest in a VIE is present when a company absorbs a majority of an entity’s expected losses, receives a majority of an entity’s expected residual returns, or both. The company with a controlling financial interest, known as the primary beneficiary, is required to consolidate the VIE. Pyxis evaluates all arrangements that may include a variable interest in an entity to determine if it may be the primary beneficiary, and would be required to include assets, liabilities and operations of a VIE in its consolidated financial statements. As of December 31, 2019, no such interest existed.

 

(b) Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from these estimates.

 

(c) Comprehensive Income / (Loss): The Company follows the provisions of ASC 220 “Comprehensive Income”, which requires separate presentation of certain transactions which are recorded directly as components of equity. The Company had no transactions which affect comprehensive loss during the years ended December 31, 2017, 2018 and 2019 and, accordingly, comprehensive loss was equal to net loss.

 

(d) Foreign Currency Translation: The functional currency of the Company is the U.S. dollar as the Company’s vessels operate in international shipping markets and, therefore, primarily transact business in U.S. dollars. The Company’s accounting records are maintained in U.S. dollars. Transactions involving other currencies during the year are converted into U.S. dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Resulting gains or losses are included in Vessel operating expenses in the accompanying consolidated statements of comprehensive loss. All amounts in the financial statements are presented in thousand U.S. dollars rounded to the nearest thousand.

 

(e) Commitments and Contingencies: Provisions are recognized when: the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate of the amount of the obligation can be made. Provisions are reviewed at each balance sheet date.

 

(f) Insurance Claims Receivable: The Company records insurance claim recoveries for insured losses incurred on damage to fixed assets and for insured crew medical expenses. Insurance claim recoveries are recorded, net of any deductible amounts, at the time the Company’s fixed assets suffer insured damages or when crew medical expenses are incurred, recovery is probable under the related insurance policies and the claim is not subject to litigation.

 

(g) Concentration of Credit Risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts receivable. The Company places its cash and cash equivalents, consisting mostly of deposits, with qualified financial institutions with high creditworthiness. The Company performs periodic evaluations of the relative creditworthiness of those financial institutions that are considered in the Company’s investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its accounts receivable.

 

(h) Cash and Cash Equivalents and Restricted Cash: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents. Restricted cash is associated with pledged retention accounts in connection with the loan repayments and minimum liquidity requirements under the loan agreements discussed in Note 7 and is presented separately in the accompanying consolidated balance sheets.

 

(i) Income Taxation: Under the laws of the Republic of the Marshall Islands, the country of incorporation of certain of the Company’s vessel-owning companies, and/or the vessels’ registration, the vessel-owning companies are not liable for any income tax on their income derived from shipping operations. Instead, a tax is levied depending on the countries where the vessels trade based on their tonnage, which is included in Vessel operating expenses in the accompanying consolidated statements of comprehensive loss. The vessel-owning companies with vessels that have called on the United States during the relevant year of operation are obliged to file tax returns with the Internal Revenue Service. The applicable tax is 50% of 4% of U.S. related gross transportation income unless an exemption applies. The Company believes that based on current legislation the relevant vessel-owning companies are entitled to an exemption because they satisfy the relevant requirements, namely that (i) the related vessel-owning companies are incorporated in a jurisdiction granting an equivalent exemption to U.S. corporations and (ii) over 50% of the ultimate stockholders of the vessel-owning companies are residents of a country granting an equivalent exemption to U.S. persons.

 

Under the laws of the Republic of Malta, the country of incorporation of certain of the Company’s vessel-owning companies, and/or the vessels’ registration, these vessel-owning companies are not liable for any income tax on their income derived from shipping operations. The Republic of Malta is a country that has an income tax treaty with the United States. Accordingly, income earned by vessel-owning companies organized under the laws of the Republic of Malta may qualify for a treaty-based exemption. Specifically, Article 8 (Shipping and Air Transport) of the treaty sets out the relevant rule to the effect that profits of an enterprise of a Contracting State from the operation of ships in international traffic shall be taxable only in that State.

 

(j) Inventories: Inventories consist of lubricants and bunkers (where applicable) on board the vessels, which are stated at the lower of cost and net realizable value. Cost is determined by the first-in, first-out (“FIFO”) method.

 

(k) Trade Accounts Receivable, Net: Under spot charters, the Company normally issues its invoices to charterers at the completion of the voyage. Invoices are due upon issuance of the invoice. Since the Company satisfies its performance obligation over the time of the spot charter, the Company recognizes its unconditional right to consideration in trade accounts receivable, net of a provision for doubtful accounts, if any. Trade accounts receivable from spot charters as of December 31, 2018 and 2019, amounted to $2,581 and $743, respectively. The allowance for doubtful accounts at December 31, 2018 and 2019, was nil and $26, respectively. Under time charter contracts, the Company normally issues invoices on a monthly basis 30 days in advance of providing its services. Trade accounts receivable from time charters as of December 31, 2018 and 2019, amounted to $4 and $500, respectively. Hire collected in advance includes cash received in advance of performance under the contract prior to the balance sheet date and is realized when the associated revenue is recognized under the contract in periods after such date. The hire collected in advance as of December 31, 2018 and 2019 was $422 and $1,415 respectively and concerns hire received in advance from time charters.

 

(l) Vessels, Net: Vessels are stated at cost, which consists of the contract price and any material expenses incurred in connection with the acquisition (initial repairs, improvements, delivery expenses and other expenditures to prepare the vessel for her initial voyage, as well as professional fees directly associated with the vessel acquisition). Subsequent expenditures for major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise, these amounts are expensed as incurred.

 

The cost of each of the Company’s vessels is depreciated from the date of acquisition on a straight-line basis over the vessels’ remaining estimated economic useful life, after considering the estimated residual value. A vessel’s residual value is equal to the product of its lightweight tonnage and estimated scrap rate of $0.300 per ton. The Company estimates the useful life of the Company’s vessels to be 25 years from the date of initial delivery from the shipyard. In the event that future regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life will be adjusted at the date such regulations are adopted.

 

(m) Impairment of Long Lived Assets: The Company reviews its long lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable.

 

In developing estimates of future undiscounted cash flows, the Company makes assumptions and estimates about the vessels’ future performance, with the significant assumptions relating to time charter equivalent rates by vessel type, vessels’ operating expenses, management fees, vessels’ capital expenditures, vessels’ residual value, fleet utilization and the estimated remaining useful life of each vessel. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends as well as future expectations.

 

To the extent impairment indicators are present, the projected net operating cash flows are determined by considering the charter revenues from existing time charters for the fixed days and an estimated daily time charter rate for the unfixed days (based on the most recent seven year historical average rates over the remaining estimated useful life of the vessels), expected outflows for vessels’ operating expenses, planned dry-docking and special survey expenditures, management fees expenditures which are adjusted every year, pursuant to the Company’s existing group management agreement, and fleet utilization of 75.0% to 98.6% (depending on the type of the vessel) or 70% to 93.0%, including scheduled off-hire days for planned dry-dockings and vessel surveys, based on historical experience. The residual value used in the impairment test is estimated to be approximately $0.3 per lightweight ton in accordance with the vessels’ depreciation policy.

 

As of December 31, 2017, the Company obtained market valuations for all its vessels from reputable marine appraisers. Based on these valuations, the Company identified impairment indications for certain of its vessels. More specifically, the market values of these vessels were, in aggregate, $8,299 lower than their carrying values, including any unamortized deferred charges relating to special survey costs, as of that date. In this respect, the Company performed an impairment analysis to estimate the future undiscounted cash flows for each of these vessels. The analysis resulted in higher undiscounted cash flows than each vessel’s carrying value as of December 31, 2017 and, accordingly, no adjustment to the vessels’ carrying values was required.

 

As of December 31, 2018, the Company obtained market valuations for all its vessels from reputable marine appraisers. Based on these valuations, the Company identified impairment indications for all of its vessels, except for the Pyxis Epsilon. More specifically, the market values of these vessels were, in aggregate, $9,987 lower than their carrying values, including any unamortized deferred charges relating to special survey costs, as of that date. In this respect, the Company performed an impairment analysis to estimate the future undiscounted cash flows for each of these vessels. The analysis resulted in higher undiscounted cash flows than each vessel’s carrying value as of December 31, 2018, except for the Northsea Alpha and the Northsea Beta, for which a total Vessel impairment charge of $2,282 was recorded as of December 31, 2018, against Vessels, net (Notes 5, 6 and 10).

 

As of December 31, 2019, the Company obtained market valuations for all its vessels from reputable marine appraisers. Based on these valuations, the Company identified impairment indications for two of its vessels. More specifically, the market values of these vessels were, in aggregate, $3,354 lower than their carrying values, including any unamortized deferred charges relating to special survey costs, as of that date. In this respect, the Company performed an impairment analysis to estimate the future undiscounted cash flows for each of these vessels. The analysis resulted in higher undiscounted cash flows than each vessel’s carrying value as of December 31, 2019, and, accordingly, no adjustment to the vessels’ carrying values was required.

 

(n) Long-lived Assets Classified as Held for Sale: The Company classifies long lived assets and disposal groups as being held-for-sale in accordance with ASC 360, “Property, Plant and Equipment”, when: (i) management, having the authority to approve the action, commits to a plan to sell the asset; (ii) the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; (iii) an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; (iv) the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year; (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Long lived assets classified as held-for-sale are measured at the lower of their carrying amount or fair value less costs to sell. According to ASC 360-10-35, the fair value less costs to sell of the long-lived asset (disposal group) should be assessed at each reporting period it remains classified as held-for-sale. Subsequent changes in the long-lived asset’s fair value less costs to sell (increase or decrease) would be reported as an adjustment to its carrying amount, not exceeding the carrying amount of the long-lived asset at the time it was initially classified as held-for-sale. These long-lived assets are not depreciated once they meet the criteria to be classified as held-for-sale and are classified in current assets on the consolidated balance sheet (Notes 5, 6).

 

(o) Financial Derivative Instruments: The Company enters into interest rate derivatives to manage its exposure to fluctuations of interest rate risk associated with its borrowings. All derivatives are recognized in the consolidated financial statements at their fair value. The fair value of the interest rate derivatives is based on a discounted cash flow analysis. When such derivatives do not qualify for hedge accounting, the Company recognizes their fair value changes in current period earnings. When the derivatives qualify for hedge accounting, the Company recognizes the effective portion of the gain or loss on the hedging instrument directly in other comprehensive income / (loss), while the ineffective portion, if any, is recognized immediately in current period earnings. The Company, at the inception of the transaction, documents the relationship between the hedged item and the hedging instrument, as well as its risk management objective and the strategy of undertaking various hedging transactions. The Company also assesses at hedge inception whether the hedging instruments are highly effective in offsetting changes in the cash flows of the hedged items.

 

The Company discontinues cash flow hedge accounting if the hedging instrument expires and it no longer meets the criteria for hedge accounting or its designation is revoked by the Company. At that time, any cumulative gain or loss on the hedging instrument recognized in equity is kept in equity until the forecasted transaction occurs. When the forecasted transaction occurs, any cumulative gain or loss on the hedging instrument is recognized in the consolidated statement of comprehensive loss. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in equity is transferred to the current period’s consolidated statement of comprehensive loss as financial income or expense.

 

(p) Accounting for Special Survey and Dry-docking Costs: The Company follows the deferral method of accounting for special survey and dry-docking costs, whereby actual costs incurred at the yard and parts used in the dry-docking or special survey, are deferred and are amortized on a straight-line basis over the period through the date the next survey is scheduled to become due. Costs deferred are limited to actual costs incurred at the shipyard and costs incurred in the dry-docking or special survey. If a dry-dock or a survey is performed prior to the scheduled date, any remaining unamortized balances of the previous dry-dock and survey are immediately written-off. Unamortized dry-dock and survey balances of vessels that are sold are written-off and included in the calculation of the resulting gain or loss in the period of the vessel’s sale.

 

Furthermore, unamortized dry-docking and special survey balances of vessels that are classified as Assets held-for-sale and are not recoverable as of the date of such classification are immediately written-off in the consolidated statement of comprehensive loss.

 

(q) Financing Costs: Costs associated with new loans or refinancing of existing loans, including fees paid to lenders or required to be paid to third parties on the lender’s behalf for obtaining new loans or refinancing existing loans, are recorded as a direct deduction from the carrying amount of the debt liability. Such costs are deferred and amortized to Interest and finance costs in the consolidated statements of comprehensive loss during the life of the related debt using the effective interest method. Unamortized costs relating to loans repaid or refinanced, meeting the criteria of debt extinguishment, are expensed in the period the repayment or refinancing is made. Commitment fees relating to undrawn loan principal are expensed as incurred.

 

(r) Fair Value Measurements: The Company follows the provisions of Accounting Standard Update (“ASU”) 2015-07 “Fair Value Measurements and Disclosures”, Topic 820, which defines and provides guidance as to the measurement of fair value. This standard creates a hierarchy of measurement and indicates that, when possible, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets and the lowest priority (Level 3) to unobservable data, for example, the reporting entity’s own data. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy (Note 10).

 

(s) Segment Reporting: The Company reports financial information and evaluates its operations by charter revenues and not by the length of ship employment for its customers, i.e., spot or time charters. The Company does not use discrete financial information to evaluate the operating results for each such type of charter. Although revenue can be identified for these types of charters, management cannot and does not identify expenses, profitability or other financial information for these charters. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide (subject to certain agreed exclusions) and, as a result, the disclosure of geographic information is impracticable. As a result, management, reviews operating results solely by revenue per day and operating results of the fleet and thus the Company has determined that it operates under one reportable segment.

 

(t) Earnings / (loss) per Share: Basic earnings / (loss) per share are computed by dividing net income / (loss) attributable to common equity holders by the weighted average number of shares of common stock outstanding.

 

The computation of diluted earnings / (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised and is performed using the treasury stock method. The Company had no dilutive securities outstanding during the three-year period ended December 31, 2019.

 

(u) Stock Compensation: The Company has a stock based incentive plan that covers directors and officers of the Company and its affiliates and its consultants and service providers. Awards granted are valued at fair value and compensation cost is recognized on a straight-line basis, net of estimated forfeitures, over the requisite service period of each award. The fair value of restricted stock awarded at the grant date is equal to the closing stock price on that date and is amortized over the applicable vesting period using the straight-line method.

 

(v) Going Concern: The Company performs cash flow projections on a regular basis to evaluate whether it will be in a position to cover its liquidity needs for the next 12-month period and in compliance with the financial and security collateral cover ratio covenants under its existing debt agreements. In developing estimates of future cash flows, the Company makes assumptions about the vessels’ future performance, with significant assumptions relating to time charter equivalent rates by vessel type, vessels’ operating expenses, vessels’ capital expenditures, fleet utilization, the Company’s management fees and general and administrative expenses, and cash flow requirements for debt servicing. The assumptions used to develop estimates of future cash flows are based on historical trends as well as future expectations.

 

As of December 31, 2019, the Company had a working capital deficit of $5,301, defined as current assets minus current liabilities. The Company considered such deficit in conjunction with the future market prospects and potential future financings. As of the filing date of these consolidated financial statements, the Company believes that it will be in a position to cover its liquidity needs for the next 12-month period through operating cash flows, management of working capital, sale of assets, refinancing indebtedness or raising additional equity capital, or a combination thereof. The Company believes that will be in compliance with the financial and security collateral cover ratio covenants under its existing debt agreements for the next 12-month period.

 

(w) Revenues, net: The Company generates its revenues from charterers. The vessels are chartered using either spot charters, where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified charter rate, or time charters, where a contract is entered into for the use of a vessel for a specific period of time and a specified daily charter hire rate.

 

The following table presents the Company’s revenue disaggregated by revenue source, net of commissions, for the years ended December 31, 2017, 2018 and 2019:

 

   

December 31,

2017

   

December 31,

2018

   

December 31,

2019

 
Revenues derived from spot charters, net   $ 16,668     $ 16,990     $ 8,067  
Revenues derived from time charters, net     12,911       11,467       19,686  
Revenues, net   $ 29,579     $ 28,457     $ 27,753  

 

Revenue from customers (ASC 606): As of January 1, 2018, the Company adopted Accounting Standard Update (“ASU”) 2014-09 “Revenue from Contracts with Customers (Topic 606)”. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The Company analyzed its contracts with charterers at the adoption date and has determined that its spot charters fall under the provisions of ASC 606, while its time charter agreements are lease agreements that fall under the provisions of ASC 842 and that contain certain non-lease components. The Company elected to adopt ASC 606 by applying the modified retrospective transition method, recognizing the cumulative effect of adopting this guidance as an adjustment to the 2018 opening balance of accumulated deficit. As of December 31, 2017, there were no vessels employed under spot charters and as a result, the Company has not included any adjustments to the 2018 opening balance of accumulated deficit and prior periods were not retrospectively adjusted.

 

The Company assessed its contracts with charterers for spot charters and concluded that there is one single performance obligation for its spot charter, which is to provide the charterer with a transportation service within a specified time period. In addition, the Company has concluded that a spot charter meets the criteria to recognize revenue over time as the charterer simultaneously receives and consumes the benefits of the Company’s performance. The adoption of this standard resulted in a change whereby the Company’s method of revenue recognition changed from discharge-to-discharge (assuming a new charter has been agreed before the completion of the previous spot charter) to load-to-discharge. This resulted in no revenue being recognized from discharge of the prior spot charter to loading of the current spot charter and all revenue being recognized from loading of the current spot charter to discharge of the current spot charter. This change results in revenue being recognized later in the voyage, which may cause additional volatility in revenues and earnings between periods. Demurrage income represents payments by a charterer to a vessel owner when loading or discharging time exceeds the stipulated time in the spot charter. The Company has determined that demurrage represents a variable consideration and estimates demurrage at contract inception. Demurrage income estimated, net of address commission, is recognized over the time of the charter as the performance obligation is satisfied.

 

Under a spot charter, the Company incurs and pays for certain voyage expenses, primarily consisting of brokerage commissions, port and canal costs and bunker consumption, during the spot charter (load-to-discharge) and during the ballast voyage (date of previous discharge to loading, assuming a new charter has been agreed before the completion of the previous spot charter). Before the adoption of ASC 606, all voyage expenses were expensed as incurred, except for brokerage commissions. Brokerage commissions are deferred and amortized over the related voyage period in a charter to the extent revenue has been deferred since commissions are earned as the Company’s revenues are earned. Under ASC 606 and after the implementation of ASC 340-40 “Other assets and deferred costs” for contract costs, incremental costs of obtaining a contract with a customer and contract fulfillment costs, should be capitalized and amortized as the performance obligation is satisfied, if certain criteria are met. The Company assessed the new guidance and concluded that voyage costs during the ballast voyage represented costs to fulfil a contract which give rise to an asset and should be capitalized and amortized over the spot charter, consistent with the recognition of voyage revenues from spot charter from load-to-discharge, while voyage costs incurred during the spot charter should be expensed as incurred. With respect to incremental costs, the Company has selected to adopt the practical expedient in the guidance and any costs to obtain a contract will be expensed as incurred, for the Company’s spot charters that do not exceed one year. Vessel operating expenses are expensed as incurred.

 

In addition, pursuant to this standard and the new Leases standard (discussed below), as of January 1, 2018, the Company elected to present Revenues net of address commissions. Address commissions represent a discount provided directly to the charterers based on a fixed percentage of the agreed upon charter. Since address commissions represent a discount (sales incentive) on services rendered by the Company and no identifiable benefit is received in exchange for the consideration provided to the charterer, these commissions are presented as a reduction of revenue in the accompanying consolidated statements of comprehensive loss. In this respect, for the year ended December 31, 2017, Revenues, net and Voyage related costs and commissions each decreased by $247. This reclassification has no impact on the Company’s consolidated financial position and results of operations for any of the periods presented.

 

The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less, in accordance with the optional exception in ASC 606.

 

Revenues for the years ended December 31, 2017, 2018 and 2019, deriving from significant charterers individually accounting for 10% or more of revenues (in percentages of total revenues), were as follows:

 

Charterer   2017     2018     2019  
A     15 %            
B     16 %            
C     18 %            
D           23 %     71 %
E           15 %      
      49 %     38 %     71 %

 

Leases: The Company elected to early adopt the new lease standard “Leases” ASC 842 as of September 30, 2018 with adoption reflected as of January 1, 2018. The Company adopted the standard by using the modified retrospective method and selected the additional optional transition method. Also, the Company elected to apply a package of practical expedients under ASC 842, which allowed the Company, not to reassess (i) whether any existing contracts, on the date of adoption, contained a lease, (ii) lease classification of existing leases classified as operating leases in accordance with ASC 840 and (iii) initial direct costs for any existing leases. In this respect no cumulative-effect adjustment was recognized to the 2018 opening balance of accumulated deficit. The Company assessed its new time charter contracts at the adoption date under the new guidance and concluded that these contracts contain a lease with the related executory costs (insurance), as well as non-lease components to provide other services related to the operation of the vessel, with the most substantial service being the crew cost to operate the vessel. The Company concluded that the criteria for not separating the lease and non-lease components of its time charter contracts are met, since (i) the time pattern of recognizing revenues for crew and other services for the operation of the vessels, is similar to the time pattern of recognizing rental income, (ii) the lease component of the time charter contracts, if accounted for separately, would be classified as an operating lease, and (iii) the predominant component in its time charter agreements is the lease component. Brokerage and address commissions on time charter revenues are deferred and amortized over the related voyage period, to the extent revenue has been deferred, since commissions are earned as revenues earned, and are presented in voyage expenses and as a reduction to voyage revenues (see above), respectively. Vessel operating expenses are expensed as incurred. By taking the practical expedients, existing time charters at January 1, 2018 continued to be accounted for under ASC 840 while new time charters commencing in 2018 and onwards are accounted for under ASC 842. The adoption of ASC 842 had no effect on the Company’s consolidated financial position and results of operations for the year ended December 31, 2018.

 

(x) Restricted Cash: As of January 1, 2018, the Company adopted the ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash”, which requires that the statement of cash flows explain the change in the total of cash and cash equivalents and restricted cash. ASU 2016-18 was adopted retrospectively for the years ended December 31, 2017, 2018 and 2019, and restricted cash of $5,000, $3,659 and $3,735, respectively, has been aggregated with cash and cash equivalents in both the beginning-of-period and end-of-period line items of the consolidated statements of cash flows for each of the periods presented. The implementation of this update has no impact on the Company’s consolidated balance sheet and consolidated statement of comprehensive loss.

 

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the accompanying consolidated balance sheets that are presented in the accompanying consolidated statement of cash flows for the years ended December 31, 2017, 2018 and 2019.

 

   

December 31,

2017

   

December 31,

2018

    December 31, 2019  
Cash and cash equivalents   $ 1,693     $ 545     $ 1,441  
Restricted cash, current portion     141       255       535  
Restricted cash, net of current portion     4,859       3,404       3,200  
Total cash and cash equivalents and restricted cash   $ 6,693     $ 4,204     $ 5,176  

 

(y) Business combinations: As of January 1, 2018, the Company adopted the ASU No. 2017-01, “Business Combinations” (Topic 805) which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisition (or disposals) of assets or businesses. Under current implementation guidance, the existence of an integrated set of acquired activities (inputs and processes that generate outputs) constitutes an acquisition of business. This ASU provides a screen to determine when a set of assets and activities does not constitute a business. The implementation of this update had no effect on the Company’s consolidated financial position and results of operations for the year ended December 31, 2018.

 

(z) New Accounting Pronouncements – Adopted

 

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): Part I. Accounting for Certain Financial Instruments with Down Round Features; Part II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception, (ASU No. 2017-11). Part I of this Update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this Update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this Update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The implementation of this update had no effect on the Company’s consolidated financial position and results of operations for the year ended December 31, 2019.

 

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (ASU No. 2017-12), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Furthermore, in October 2018, the FASB issued ASU 2018-16, “Derivatives and Hedging (Topic 815)—Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes”, which permits the use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the UST, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate and the SIFMA Municipal Swap Rate. The amendments in this Update apply to all entities that elect to apply hedge accounting to benchmark interest rate hedges under Topic 815. For entities that have not already adopted Update 2017-12, the amendments in this Update are required to be adopted concurrently with the amendments in Update 2017-12. Early adoption is permitted in any interim period upon issuance of this Update if an entity already has adopted Update 2017-12. The amendments should be adopted on a prospective basis for qualifying new or redesignated hedging relationships entered into on or after the date of adoption. The implementation of this update had no effect on the Company’s consolidated financial position and results of operations for the year ended December 31, 2019.

 

In June 2018, the FASB issued ASU No. 2018-07, Improvements to Non-Employee Share-Based Payment Accounting (Topic 718): ASU No. 2018-07 simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. For public business entities, the amendments in ASU No. 2018-07 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The implementation of this update had no effect on the Company’s consolidated financial position and results of operations for the year ended December 31, 2019.

 

(aa) New Accounting Pronouncements – Not Yet Adopted:

 

In June 2016, the FASB issued ASU No. 2016-13—Financial Instruments—Credit Losses (Topic 326) —Measurement of Credit Losses on Financial Instruments. ASU No. 2016-13 amended guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For public entities, the amendments of this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early application is permitted. Furthermore, in November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses”. The amendments clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. In addition, in April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 Financial Instruments”, the amendments of which clarify the modification of accounting for available for sale debt securities excluding applicable accrued interest, which must be individually assessed for credit losses when fair value is less than the amortized cost basis. In May 2019, the FASB issued ASU 2019-05, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 Financial Instruments”, the amendments of which provide entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments—Overall, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. An entity that elects the fair value option should subsequently apply the guidance in Subtopics 820-10, Fair Value Measurement—Overall, and 825-10. The effective date and transition requirements for the amendments in these Updates are the same as the effective dates and transition requirements in Update 2016-13, as amended by these Updates. The Company has assessed all the expected credit losses of its financial assets and the adoption of this ASU does not have a material impact on the Company’s consolidated financial statements.

 

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820)—Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”, which improves the effectiveness of fair value measurement disclosures. In particular, the amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements, including the consideration of costs and benefits. The amendments in the Update apply to all entities that are required under existing GAAP to make disclosures about recurring and non-recurring fair value measurements. ASU 2018-13 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. The Company has assessed the impact of this new accounting guidance and the adoption of this ASU does not have a material impact on its consolidated financial statements and related disclosures.

 

In October 2018, the FASB issued ASU 2018-17, “Consolidation (Topic 810)—Targeted Improvements to Related Party Guidance for Variable Interest Entities”. The FASB is issuing this Update in response to stakeholders’ observations that Topic 810, Consolidation, could be improved in the following areas: (i) applying the variable interest entity (VIE) guidance to private companies under common control and (ii) considering indirect interests held through related parties under common control for determining whether fees paid to decision makers and service providers are variable interests. The amendments in this Update improve the accounting for those areas, thereby improving general purpose financial reporting. ASU 2018-17 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. All entities are required to apply the amendments in this update retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements and related disclosures.

v3.20.1
Transactions with Related Parties
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Transactions with Related Parties

3. Transactions with Related Parties:

 

The Company uses the services of Maritime, a ship management company with its principal office in Greece and an office in the U.S.A. Maritime is engaged under separate management agreements directly by the Company’s respective subsidiaries to provide a wide range of shipping services, including but not limited to, chartering, sale and purchase, insurance, operations and dry-docking and construction supervision, all provided at a fixed daily fee per vessel. For the ship management services, Maritime charges a fee payable by each subsidiary of $0.325 per day per vessel while the vessel is in operation including any pool arrangements and $0.450 per day per vessel while the vessel is under construction, as well as an additional daily fee (which is dependent on the seniority of the personnel) to cover the cost of engineers employed to conduct the supervision of the newbuilding (collectively the “Ship-management Fees”). In addition, Maritime charges the Company a commission rate of 1.25% on all charter hire agreements arranged by Maritime.

 

The management agreements for the vessels have an initial term of five years. For the Northsea Alpha, Northsea Beta and Pyxis Delta the base term expired on December 31, 2015, for Pyxis Theta it expired on December 31, 2017 and for the Pyxis Epsilon and the Pyxis Malou it expired on December 31, 2018. Following their initial expiration dates, the management agreements are automatically renewed for consecutive five year periods, or until terminated by either party on three months’ notice.

 

The Head Management Agreement (the “Head Management Agreement”) with Maritime commenced on March 23, 2015 and continued through March 23, 2020. Following the initial expiration date, the Head Management Agreement is automatically renewed for a five-year period (unless terminated by either party on 90 days’ notice). Maritime provides administrative services to the Company, which include, among other, the provision of the services of the Company’s Chief Executive Officer, Chief Financial Officer, General Counsel and Corporate Secretary, Chief Operating Officer, one or more internal auditor(s) and a secretary, as well as the use of office space in Maritime’s premises. Under the Head Management Agreement, the Company pays Maritime a fixed fee of $1,600 annually (the “Administration Fees”). In the event of a change of control of the Company during the management period or within 12 months after the early termination of the Head Management Agreement, then the Company will pay to Maritime an amount equal to 2.5 times the then annual Administration Fees. Pursuant to the amendment of this agreement on March 18, 2020, in the event of such change of control and termination, the Company shall also pay to Maritime an amount equal to 12 months of the then daily Ship-management Fees.

 

The Ship-management Fees and the Administration Fees are adjusted annually according to the official inflation rate in Greece or such other country where Maritime was headquartered during the preceding year. On August 9, 2016, the Company amended the Head Management Agreement with Maritime to provide that in the event that the official inflation rate for any calendar year is deflationary, no adjustment shall be made to the Ship-management Fees and the Administration Fees, which will remain, for the particular calendar year, as per the previous calendar year. Effective January 1, 2018, 2019 and 2020, the Ship-management Fees and the Administration Fees were increased by 1.12%, 0.62% and 0.26%, respectively in line with the average inflation rate in Greece in 2017, 2018 and 2019, respectively.

 

The following amounts were charged by Maritime pursuant to the head management and ship-management agreements with the Company, and are included in the accompanying consolidated statements of comprehensive loss:

 

    Year Ended December 31,  
    2017     2018     2019  
Included in Voyage related costs and commissions                        
Charter hire commissions   $ 368     $ 354     $ 351  
                         
Included in Management fees, related parties                        
Ship-management Fees     712       720       724  
                         
Included in General and administrative expenses                        
Administration Fees     1,600       1,618       1,628  
                         
Total   $ 2,680     $ 2,692     $ 2,703  

 

On October 28, 2015 the Company issued a promissory note in favor of Maritime Investors in the amount of $2.5 million, with an interest rate payable of 2.75% and maturity of January 15, 2017. Certain amendments were made increasing the principal balance to $5.0 million, extending the maturity date to March 31, 2020 and the interest rate to 4.5%. On May 14, 2019, the Company entered into a second amendment to the Amended & Restated Promissory Note which (i) extended the repayment of the outstanding principal, in whole or in part, until the earlier of a) one year after the repayment of the credit facility of Eighthone with Entrust Global (the “Credit Facility”) on September 2023 (see Note 7), b) January 15, 2024 and c) repayment of any Paid-In-Kind (“PIK”) interest and principal deficiency amount under the Credit Facility, and (ii) increased the interest rate to 9.0% per annum of which 4.5% shall be paid in cash and 4.5% shall be paid in common shares of the Company calculated on the volume weighted average closing share price for the 10 day period immediately prior to each quarter end. The new interest rate was effective from April 1, 2019. After the repayment restrictions have been lifted per the Credit Facility, the Company, at its option, may continue to pay interest on the Amended & Restated Promissory Note in the afore-mentioned combination of cash and shares or pay all interest costs in cash. The Company considered the guidance under ASC 470-50 “Debt Modifications and Extinguishments”, and concluded that the transaction should be accounted for as debt extinguishment.

 

With respect to the portion of interest that will be settled in common shares, the Company considered the guidance in ASC 480 that requires obligations that can be settled in shares with a fixed monetary value at settlement (e.g., share-settled debt) and followed the guidance in ASC 835-30 to accrue the liability to the redemption amount using the interest method.

 

Interest charged on the Amended & Restated Promissory Note for the years ended December 31, 2017, 2018 and 2019, amounted to $70 and $213 and $395, respectively, and is included in Interest and finance costs, net (Note 12) in the accompanying consolidated statements of comprehensive loss. Out of the total interest charged on the Amended & Restated Promissory Note during the year ended December 31, 2019, $225 is payable in cash and the remaining amount of $170 is settled in common shares. Of the amount settled in common shares, $113 was settled in common shares during 2019 and the remaining amount of $57 were settled in January 2020.

 

The amount of $5,000 is separately reflected in the accompanying consolidated balance sheets under non-current liabilities.

 

As of December 31, 2018 and 2019, the balances due to Maritime were $3,402 and $6,849, respectively, and are reflected in Due to related parties in the accompanying consolidated balance sheets. The balance with Maritime is interest free and with no specific repayment terms.

v3.20.1
Inventories
12 Months Ended
Dec. 31, 2019
Inventory Disclosure [Abstract]  
Inventories

4. Inventories:

 

The amounts in the accompanying consolidated balance sheets are analyzed as follows:

 

    December 31, 2018     December 31, 2019  
Lubricants   $ 428     $ 403  
Bunkers     379       98  
Total   $ 807     $ 501  

v3.20.1
Vessels, Net
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Abstract]  
Vessels, Net

5. Vessels, net:

 

The amounts in the accompanying consolidated balance sheets are analyzed as follows:

 

    Vessel     Accumulated     Net Book
    Cost     Depreciation     Value
Balance January 1, 2017   $ 138,060       (16,719)     $ 121,341
Depreciation           (5,567)       (5,567)
Balance December 31, 2017     138,060       (22,286)       115,774
Depreciation           (5,500)       (5,500)
Vessel impairment charge     (3,750)       1,468       (2,282)
Balance December 31, 2018   $ 134,310     $ (26,318)     $ 107,992
Depreciation           (5,320)       (5,320)
Additions     625       -       625
Reclassification of vessel as held-for-sale     (26,412)       10,622       (15,790)
Balance December 31, 2019   $ 108,523     $ (21,016)     $ 87,507

As of December 31, 2018, the Company reviewed the carrying amount in connection with the estimated recoverable amount for each of its vessels. This review indicated that such carrying amount was not fully recoverable for the Company’s vessels Northsea Alpha and Northsea Beta. Consequently, the carrying value of these vessels was written down resulting in a total impairment charge of $2,282 that was charged against Vessels, net, based on level 2 inputs of the fair value hierarchy, as discussed in Notes 2 and 10. No impairment charge was deemed necessary for the year ended December 31, 2019.

All of the Company’s vessels have been pledged as collateral to secure the bank loans discussed in Note 7.

On November 13, 2019, the Company decided to make arrangements to sell Pyxis Delta and the Company concluded that all the criteria required by the relevant accounting standard, ASC 360-10-45-9, for the classification of the vessel Pyxis Delta as “held for sale” were met. On December 11, 2019, the Company entered into an agreement with a third-party to sell the vessel. As at December 31, 2019, the amount of $13,190 was separately reflected in Vessel held-for-sale on the consolidated balance sheet, representing the estimated fair market value of the vessel based on the vessel’s sale price, net of costs to sell. The difference between the estimated fair value less costs to sell the vessel and the vessel's carrying value (including the unamortized balance of its associated dry-docking cost), amounting to $2,756, was written-off and included in the consolidated statement of comprehensive loss for the year ended December 31, 2019 and classified as Loss on vessel held-for-sale. The total net proceeds from the sale of the vessel were approximately $13.2 million, $5.7 million out of which was used for the prepayment of Pyxis Delta and Pyxis Theta loan facility and $7.5 million for the repayment of the Company's liabilities to its related party (Maritime) and for the repayment of obligations to its trade creditors.

As of December 31, 2019, additions of $625 relate to the ballast water treatment system installation of Pyxis Malou, out of which $569 has been paid and $56 is accrued and remains unpaid.

v3.20.1
Deferred Charges, Net
12 Months Ended
Dec. 31, 2019
Deferred Charges Net Abstract  
Deferred Charges, Net

6. Deferred charges, net:

 

The movement in the deferred charges, net in the accompanying consolidated balance sheets are as follows:

 

    Dry docking costs  
Balance, January 1, 2017   $ 358  
Amortization     (73 )
Balance, December 31, 2017     285  
Additions     588  
Amortization     (133 )
Balance, December 31, 2018     740  
Additions     435  
Amortization     (240 )
Transfer to vessel held-for-sale     (156 )
Balance, December 31, 2019   $ 779  

 

The amortization of the dry-docking costs is separately reflected in the accompanying consolidated statements of comprehensive loss.

v3.20.1
Long-term Debt
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Long-term Debt

7. Long-term Debt:

 

The amounts shown in the accompanying consolidated balance sheets at December 31, 2018 and 2019, are analyzed as follows:

 

Vessel (Borrower)   December 31, 2018     December 31, 2019  
(a) Northsea Alpha (Secondone)   $ 4,055     $ 3,690  
(a) Northsea Beta (Thirdone)     4,055       3,690  
(b) Pyxis Malou (Fourthone)     11,190       10,020  
(c) Pyxis Delta (Sixthone)     5,400       4,050  
(c) Pyxis Theta (Seventhone)     14,722       13,469  
(d) Pyxis Epsilon (Eighthone)     24,000       24,000  
Total   $ 63,422     $ 58,919  
                 
Current portion   $ 4,503     $ 9,241  
Less: Current portion of deferred financing costs     (170 )     (257 )
Current portion of long-term debt, net of deferred financing costs, current   $ 4,333     $ 8,984  
                 
Long-term portion   $ 58,919     $ 49,678  
Less: Non-current portion of deferred financing costs     (790 )     (445 )
Long-term debt, net of current portion and deferred financing costs, non-current   $ 58,129     $ 49,233  

 

(a) On September 26, 2007, Secondone and Thirdone jointly entered into a loan agreement with a financial institution for an amount of up to $24,560, in order to partly finance the acquisition cost of the vessels Northsea Alpha and Northsea Beta.
   
(b) Based on a loan agreement concluded on December 12, 2008, Fourthone borrowed $41,600 in February 2009 in order to partly finance the acquisition cost of the Pyxis Malou.

 

On February 28, 2018, the Company refinanced the then existing indebtedness of $26,906 under the Secondone, Thirdone and Fourthone loan agreements with a new 5-year secured loan of $20,500 and cash of $2,100. The remaining balance of $4,306 was written-off by the previous lender at closing, which was recorded as gain from debt extinguishment in the 2018 consolidated statement of comprehensive loss.

 

Each of Secondone’s and Thirdone’s outstanding loan balance at December 31, 2019, amounting to $3,690, is repayable in 13 remaining quarterly installments of $100 each amounting to $1,300 in the aggregate, the first falling due in February 2020, and the last installment accompanied by a balloon payment of $2,390 falling due in February 2023.

 

As of December 31, 2019, the outstanding balance of the Fourthone loan of $10,020 is repayable in 13 quarterly installments amounting to $4,620, the first falling due in February 2020, and the last installment accompanied by a balloon payment of $5,400 falling due in February 2023. The first installment, amounting to $300, is followed by four amounting to $330 each, four amounting to $360 each and four amounting to $390.

 

The loan bears interest at LIBOR plus a margin of 4.65% per annum.

 

As a condition subsequent to the execution of this loan agreement, the borrowers, Secondone, Thirdone and Fourthone, were required to re-domicile to the jurisdiction of the Republic of Malta. In March and April 2018, these vessel-owning companies completed their re-domiciliation and were renamed to SECONDONE CORPORATION LTD., THIRDONE CORPORATION LTD. and FOURTHONE CORPORATION LTD., respectively.

 

Standard loan covenants include, among others, a minimum liquidity and a minimum required Security Cover Ratio (“MSC”).

 

Covenants:

 

The Company undertakes to maintain minimum deposits with the bank of $1,450 at all times, plus Maintenance Account of $60 per quarter ($30 for each of Secondone and Thirdone) until next special survey.
   
MSC is to be at least 140% of the respective outstanding loan balance until February 2020, at least 150% until February 2022 and at least 155% thereafter.

 

(c) On October 12, 2012, Sixthone and Seventhone concluded as joint and several borrowers a loan agreement with a financial institution in order to partly finance the acquisition and construction cost of the Pyxis Delta and the Pyxis Theta, respectively. In February 2013, Sixthone drew down an amount of $13,500, while in September 2013, Seventhone drew down an amount of $21,300 (“Tranche A” and “Tranche B”, respectively). On September 29, 2016, the Company agreed with the lender of Sixthone to extend the maturity of Tranche A from May 2017 to September 2018, under the same amortization schedule and applicable margin. In addition, on June 6, 2017, the lender of Sixthone and Seventhone agreed to further extend the maturity of its respective loans from September 2018 to September 2022 under the same applicable margin, but with an extended amortization schedule.

 

On November 13, 2019, the Company decided to make arrangements to sell Pyxis Delta, and the Company concluded that all the criteria required by the relevant accounting standard, ASC 360-10-45-9, for the classification of the vessel Pyxis Delta as “held for sale” were met. As at December 31, 2019, upon classification of Pyxis Delta as vessel held-for-sale, the total outstanding balance of Tranche A of $4,050 was classified in the consolidated balance sheet under the line item “Current portion of long-term debt, net of deferred financing costs”. According to the loan agreement, the early prepayment of the outstanding balance of Tranche A obliges the Company to make a prepayment of $1,624 for Tranche B so that the required security cover ratio of the facility remains the same as the ratio applied immediately prior to the sale. As of December 31, 2019, the amount of $1,624 of Tranche B, that is due to be prepaid upon the early prepayment of Tranche A, has also been classified in the consolidated balance sheet under the line item “Current portion of long-term debt, net of deferred financing costs”.

 

After the prepayment of $1,624 of Tranche B for Pyxis Theta, the outstanding balance will be $11,845 which will be repayable in 11 remaining quarterly installments of $275 each, amounting to $3,025 in the aggregate, the first falling due in March 2020, and the last installment accompanied by a balloon payment of $8,820 falling due in September 2022.

 

The main terms and conditions of the loan agreement dated October 12, 2012, as subsequently amended, are as follows:

 

The loan bears interest at LIBOR, plus a margin of 3.35% per annum.

 

Covenants:

 

The Company undertakes to maintain minimum deposits with the bank of $1,000 at all times.
   
The ratio of the Company’s total liabilities to market value adjusted total assets is not to exceed 65%. This requirement is only applicable in order to assess whether the two Vessel-owning companies are entitled to distribute dividends to Pyxis. As of December 31, 2018 and 2019, the requirement was not met as such ratio was 68%, or 3% higher than the required threshold.
   
MSC is to be at least 130% of the respective outstanding loan balance.

 

(d) Based on a loan agreement concluded on January 12, 2015, Eighthone borrowed $21,000 on the same date in order to partly finance the construction cost of the Pyxis Epsilon. The outstanding balance of the loan at December 31, 2017, was $16,900.

 

On September 27, 2018, Eighthone entered into a new $24,000 loan agreement, for the purpose of refinancing the outstanding indebtedness of $16,000 under the previous loan facility and for general corporate purposes. The new facility matures in September 2023 and is secured by a first priority mortgage over the vessel, general assignment covering earnings, insurances and requisition compensation, an account pledge agreement and a share pledge agreement concerning the respective vessel-owning subsidiary and technical and commercial managers’ undertakings.

 

The new loan facility bears an interest rate of 11% of which 1.0% can be paid as PIK interest per annum for the first two years, and 11.0% per annum thereafter and incurs fees due upfront and upon early prepayment or final repayment of outstanding principal.

 

The principal obligation amortizes in 14 quarterly installments starting in March 29, 2020, equal to the lower of $400 and excess cash computed through a cash sweep mechanism, plus a balloon payment due at maturity. As of December 31, 2019, the outstanding balance of Eighthone loan is $24,000. Management cannot currently assess with any certainty that any amount under the cash sweep will be made prior to loan maturity.

 

The facility also imposes certain customary covenants and restrictions with respect to, among other things, the borrower’s ability to distribute dividends, incur additional indebtedness, create liens, change its share capital, engage in mergers, or sell the vessel and a minimum collateral value to outstanding loan principal.

 

Covenants:

 

The Company undertakes to maintain minimum deposits with the bank of $750 at all times, plus an additional Dry Docking and Special Survey Reserve of $0.25 per day accumulated quarterly.
   
MSC is to be at least 115% of the respective outstanding loan balance until September, 2020 and at least 125% thereafter.

 

Under the facility, a deferred fee may be payable on the occurrence of certain events including, among others, the sale of the vessel or on repayment or maturity of the loan. If payable, the amount due is calculated as the lesser of (a) 15% of the amount of the loan borrowed under the facility agreement and (b) 15% of the difference between (i) the charter-free fair market value of the vessel plus any dry dock reserve account balance and (ii) any outstanding loan amount at the time of the repayment or maturity of the facility. In the event that the deferred fee and the prepayment fee become simultaneously payable, only the higher of the prepayment fee or the deferred fee will be payable. Management has assessed this deferred fee as a contingent liability under ASC 450 and concluded that such loss contingency shall not be accrued by a charge in the consolidated statements of comprehensive loss, since information available does not indicate that is probable that the liability has been incurred as of the balance sheet date at December 31, 2019 and cannot be reliably estimated.

 

Each loan is secured by a first priority mortgage over the respective vessel and a first priority assignment of the vessel’s insurances and earnings. Each loan agreement contains customary ship finance covenants including restrictions as to changes in management and ownership of the vessel and in dividend distributions when certain financial ratios are not met.

 

As of December 31, 2019, the Company was in compliance with all of its financial and MSC covenants with respect to its loan agreements, other than the ratio of total liabilities over the market value of the Company’s adjusted total assets with one of its lenders, which only restricts the ability of two vessel-owning companies to distribute dividends to Pyxis as discussed above in 7(c). In addition, as of December 31, 2019, there was no amount available to be drawn down by the Company under its existing loan agreements.

 

The annual principal payments required to be made after December 31, 2019, are as follows:

 

To December 31,   Amount  
2020 *   $ 9,241  
2021     3,312  
2022     11,971  
2023     34,395  
2024 and thereafter     -  
Total   $ 58,919  

 

* $5,674 relate to prepayments for Pyxis Delta and Pyxis Theta loan facility (as discussed earlier in this Note). The scheduled principal payments in 2020 are $3,192

 

Total interest expense on long-term debt for the years ended December 31, 2017, 2018 and 2019, amounted to $2,674, $3,835 and $5,122 respectively, and is included in Interest and finance costs, net (Note 12) in the accompanying consolidated statements of comprehensive loss. The Company’s weighted average interest rate (including the margin) for the years ended December 31, 2017, 2018 and 2019, was 3.74%, 6.00% and 8.2% per annum, including the promissory note discussed in Note 3, respectively.

v3.20.1
Equity Capital Structure and Equity Incentive Plan
12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Equity Capital Structure and Equity Incentive Plan

8. Equity Capital Structure and Equity Incentive Plan:

 

The Company’s authorized common and preferred stock consists of 450,000,000 common shares and 50,000,000 preferred shares with a par value of USD 0.001 per share.

 

The amounts shown in the accompanying consolidated balance sheets as Additional paid-in capital represent contributions made by the stockholders at various dates to finance vessel acquisitions in excess of the amounts of bank loans obtained and advances for working capital purposes, net of subsequent distributions primarily from re-imbursement of certain payments to shipyards in respect to the construction of new-built vessels. There was no paid-in capital re-imbursement for the years ended December 31, 2018 and 2019.

 

On October 28, 2015, the Company’s board of directors approved an equity incentive plan (the “EIP”), providing for the granting of share-based awards to directors, officers and employees of the Company and its affiliates and to its consultants and service providers. The maximum aggregate number of shares of common stock of the Company that may be delivered pursuant to awards granted under the EIP, shall be equal to 15% of the then issued and outstanding number of shares of common stock. On the same date the Company’s board of directors approved the issuance of 33,222 restricted shares of the Company’s common stock to certain of its officers that were issued later in 2016. On November 15, 2017, 200,000 restricted shares of the Company’s common stock were granted and issued to a senior officer of the Company, which were vested immediately upon issuance. The fair value of such restricted shares based on the average of the high-low trading price of the shares on November 15, 2017, was $355, which was recorded as a non-cash stock compensation and included in the consolidated statement of comprehensive loss under General and administrative expenses for the year ended December 31, 2017. During the year ended December 31, 2018 and 2019, no additional shares were granted under the EIP and as of December 31, 2018 and 2019, there was no unrecognized compensation cost.

 

On December 6, 2017, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which the Company, in a private placement, agreed to issue and sell to the Investors an aggregate of 2,400,000 shares of its common stock at a price per share of $2.00 (the “Private Placement”). As a condition of the Purchase Agreement, the Company, Maritime Investors and each of the Company’s directors and executive officers entered into lock-up agreements pursuant to which they could not, among other things, offer or sell shares of the Company’s common stock until the earlier of i) 30 days after effective date (as defined therein) and ii) the disposition by the Investors of all of the shares of common stock they received in the Private Placement. In connection with the Private Placement, the Company also entered into a registration rights agreement with the Investors, pursuant to which the Company was obligated to prepare and file with the Securities and Exchange Commission (“SEC”) a registration statement to register for resale the registrable securities (as defined therein) on or prior to December 21, 2017. The Private Placement closed on December 8, 2017, resulting in gross proceeds of $4,800, before deducting offering expenses of approximately $509, which were used for general corporate purposes, including the repayment of outstanding indebtedness. On December 19, 2017, the Company filed with the SEC a registration statement on Form F-3 to register for resale the shares of common stock issued under the Purchase Agreement, which was declared effective on January 3, 2018.

 

On February 2, 2018, the Company filed with the SEC a registration statement on Form F-3, under which it may sell from time to time common stock, preferred stock, debt securities, warrants, purchase contracts and units, each as described therein, in any combination, in one or more offerings up to an aggregate dollar amount of $100,000. In addition, the selling stockholders referred to in the registration statement may sell in one of more offerings up to 5,233,222 shares of the Company’s common stock from time to time as described therein. The registration statement was declared effective by the SEC on February 12, 2018. On March 30, 2018, the Company filed a prospectus supplement to the Shelf Registration Statement related to an At-The-Market Program (“ATM Program”) under which it may, from time to time, issue and sell shares of its common stock up to an aggregate offering of $2,300 through a sales agent as either agent or principal. No shares were sold under this initial ATM Program, but on November 19, 2018, the prospectus supplement was amended to increase the offering to $3,675.

 

As of December 31, 2018, following the issuance and sale of 182,297 shares of common stock under the ATM Program, the Company’s outstanding common shares increased from 20,877,893 to 21,060,190. During the year ended December 31, 2019, the Company offered and sold an additional 214,828 common shares under this program to raise $354 at an average (gross) price of $1.65/share. Furthermore, during the same period, the Company issued 95,262 of common shares to settle the interest charged on the Amended & Restated Promissory Note, discussed in Note 3. At December 31, 2019, the Company had a total of 21,370,280 common shares issued and outstanding.

v3.20.1
Loss Per Common Share
12 Months Ended
Dec. 31, 2019
Earnings Per Share [Abstract]  
Loss Per Common Share

9. Loss per Common Share:

 

    For the years ended December 31,  
    2017     2018     2019  
Net loss available to common stockholders   $ (5,243 )   $ (8,214 )   $ (8,330 )
                         
Weighted average number of common shares, basic and diluted     18,461,455       20,894,202       21,161,164  
                         
Loss per common share, basic and diluted   $ (0.28 )   $ (0.39 )   $ (0.39 )

v3.20.1
Risk Management and Fair Value Measurements
12 Months Ended
Dec. 31, 2019
Risk Management And Fair Value Measurements  
Risk Management and Fair Value Measurements

10. Risk Management and Fair Value Measurements:

 

The principal financial assets of the Company consist of cash and cash equivalents and trade accounts receivable due from charterers. The principal financial liabilities of the Company consist of long-term bank loans, trade accounts payable, amounts due to related parties and a promissory note.

 

Interest rate risk: The Company’s interest rates are calculated at LIBOR plus a margin, as discussed in Note 7 and hence the Company is exposed to movements in LIBOR. In order to hedge its variable interest rate exposure, on January 19, 2018, the Company, via one of its vessel-ownings subsidiaries, entered into an interest rate cap agreement with one of its lenders for a notional amount of $10,000 and a cap rate of 3.5%. The interest rate cap will terminate on July 18, 2022.

 

Credit risk: Credit risk is minimized since trade accounts receivable from charterers are presented net of the relevant provision for uncollectible amounts, whenever required. On the balance sheet date there were no significant concentrations on credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset on the balance sheet.

 

Currency risk: The Company’s transactions are denominated primarily in U.S. dollars; therefore overall currency exchange risk is limited. Balances in foreign currency other than U.S. dollars are not considered significant.

 

Fair value: The Management has determined that the fair values of the assets and liabilities as of December 31, 2019 are as follows:

 

   

Carrying

Value

   

Fair

Value

 
Cash and cash equivalents   $ 5,176     $ 5,176  
Trade accounts receivable, net   $ 1,243     $ 1,243  
Trade accounts payable   $ 4,538     $ 4,538  
Long-term debt with variable interest rates, net   $ 34,919     $ 34,919  
Long-term loans and promissory note with non-variable interest rates, net   $ 29,000     $ 29,000  

 

Assets measured at fair value on a recurring basis: Interest rate cap

 

The Company’s interest rate cap does not qualify for hedge accounting. The Company adjusts its interest rate cap contract to fair market value at the end of every period and records the resulting gain or loss during the period in the consolidated statements of comprehensive loss. Information on the classification, the derivative fair value and the loss from financial derivative instrument included in the consolidated financial statements is shown below:

 

Consolidated Balance Sheets – Location   December 31, 2018     December 31, 2019  
Financial derivative instrument – Other non-current assets   $           28     $          1  
                 

 

Consolidated Statements of Comprehensive Loss - Location   December 31, 2018     December 31, 2019  
Financial derivative instrument – Fair value at the beginning of the period   $          (47 )   $          (28 )
Financial derivative instrument – Fair value as at period end     28       1  
Loss from financial derivative instrument   $ (19 )   $ (27 )

 

Assets measured at fair value on a recurring basis: Interest rate cap

 

The fair value of the Company’s interest rate cap agreement is determined based on market-based LIBOR rates. LIBOR rates are observable at commonly quoted intervals for the full term of the cap and therefore, are considered Level 2 items in accordance with the fair value hierarchy.

 

Assets measured at fair value on a non-recurring basis: Long lived assets held and used and Held for sale

 

As of December 31, 2018, the Company reviewed the carrying amount in connection with the estimated recoverable amount for each of its vessels. This review indicated that such carrying amount was not fully recoverable for the Company’s vessels Northsea Alpha and Northsea Beta. Consequently, the carrying value of these vessels was written-down to their respective fair values as presented in the table below.

 

Vessel   Significant Other
Observable Inputs
(Level 2)
    Vessel Impairment
Charge (charged against
Vessels, net)
 
Northsea Alpha   $ 6,125     $ 1,142  
Northsea Beta     6,125       1,140  
TOTAL   $ 12,250     $ 2,282  

 

The fair value is based on level 2 inputs of the fair value hierarchy and reflects the Company’s best estimate of the value of each vessel on a time charter free basis and is supported by a vessel valuation of an independent shipbroker which is mainly based on recent sales and purchase transactions of similar vessels.

 

The Company performs an impairment exercise whenever there are indicators of impairment.

 

The Company recognized the total Vessel impairment charge of $2,282 which is included in the accompanying consolidated statements of comprehensive loss for the year ended December 31, 2018.

 

No impairment loss was recognized for the years ended December 31, 2017 and 2019.

 

On November 13, 2019, the Company decided to make arrangements to sell Pyxis Delta, and the Company concluded that all the criteria required by the relevant accounting standard, ASC 360-10-45-9, for the classification of the vessel as “held for sale”, were met. Long lived assets classified as held-for-sale are measured at the lower of their carrying amount or fair value less costs to sell. As at December 31, 2019, the Company has classified Pyxis Delta under Vessel held-for-sale on the consolidated balance sheet, at a value of $13,190 representing the estimated fair market value of the vessel, net of costs to sell, based on the gross selling price of the agreement signed with a third party to sell the vessel, on December 11, 2019. (Level 2 inputs of the fair value hierarchy).

 

As of December 31, 2018 and 2019, the Company did not have any other assets or liabilities measured at fair value on a non- recurring basis.

v3.20.1
Commitments and Contingencies
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

11. Commitments and Contingencies:

 

Minimum contractual charter revenues:

 

The Company employs certain of its vessels under lease agreements. Time charters typically may provide for variable lease payments, charterers’ options to extend the lease terms at higher rates and termination clauses. The Company’s contracted time charters as of December 31, 2019, range from one to three months, with varying extension periods at the charterers’ option and do not provide for variable lease payments. Our time charters contain customary termination clauses which protect either the Company or the charterers from material adverse situations.

 

Future minimum contractual charter revenues, gross of 1.25% address commission and 1.25% brokerage commissions to Maritime and of any other brokerage commissions to third parties, based on the vessels’ committed, non-cancelable, long-term time charter contracts as of December 31, 2019, are as follows:

 

Year ending December 31,   Amount  
2020   $ 3,894  
    $ 3,894  

 

Other: Various claims, suits and complaints, including those involving government regulations and environmental liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company’s vessels. Currently, management is not aware of any such claims not covered by insurance or contingent liabilities, which should be disclosed, or for which a provision has not been established in the accompanying consolidated financial statements.

 

The Company accrues for the cost of environmental and other liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Currently, management is not aware of any other claims or contingent liabilities, which should be disclosed or for which a provision should be established in the accompanying consolidated financial statements. The Company is covered for liabilities associated with the individual vessels’ actions to the maximum limits as provided by Protection and Indemnity (P&I) Clubs, members of the International Group of P&I Clubs.

v3.20.1
Interest and Finance Costs, Net
12 Months Ended
Dec. 31, 2019
Interest And Finance Costs Net  
Interest and Finance Costs, Net

12. Interest and Finance Costs, net:

 

The amounts in the accompanying consolidated statements of comprehensive loss are analyzed as follows:

 

    For the years ended December 31,  
    2017     2018     2019  
Interest on long-term debt (Note 7)   $ 2,674     $ 3,835     $ 5,122  
Interest on promissory note (Note 3)     70       213       395  
Long-term debt prepayment fees           56        
Amortization and write-off of financing costs     153       386       258  
Total   $ 2,897     $ 4,490     $ 5,775  

v3.20.1
Subsequent Events
12 Months Ended
Dec. 31, 2019
Subsequent Events [Abstract]  
Subsequent Events

13. Subsequent Events:

 

Sale of vessel: On December 11, 2019, the Company entered into an agreement to sell Pyxis Delta (Note 5), at a gross sales price of $13,500. The vessel was delivered to its buyers on January 13, 2020. The total net proceeds from the sale of the vessel were approximately $13.2 million, $5.7 million out of which was used for the prepayment of Pyxis Delta and Pyxis Theta loan facility and $7.5 million for the repayment of the Company's liabilities to its related party (Maritime) and for the repayment of obligations to its trade creditors.

 

Loan prepayment: Following the sale of Pyxis Delta, the Company prepaid the aggregate amount of $5,674 of outstanding debt in accordance with the terms of the loan agreement as discussed in more detail in Note 7.

 

Issuance of shares: On January 2, 2020, following the second amendment to the Amended & Restated Promissory Note dated May 14, 2019, the Company issued 50,188 of common shares at the volume weighted average closing share price for the 10-day period immediately prior to the quarter end, as discussed in Note 8.

 

COVID-19 outbreak: The Company’s financial and operating performance may be adversely affected by the recent COVID-19 outbreak. Any prolonged restrictive measures in order to control the spread of COVID-19 or other adverse public health development in Asia or the Company’s targeted markets may have a material and adverse effect on the Company’s business operations, and demand for its vessels and financial condition.

v3.20.1
Schedule I - Condensed Financial Information of PYXIS TANKERS INC. (Parent Company Only)
12 Months Ended
Dec. 31, 2019
Condensed Financial Information Disclosure [Abstract]  
Schedule I - Condensed Financial Information of PYXIS TANKERS INC. (Parent Company Only)

Schedule I – Condensed Financial Information of PYXIS TANKERS INC. (Parent Company Only)

Balance Sheets

As at December 31, 2018 and 2019

(Expressed in thousands of U.S. Dollars, except for share and per share data)

 

    2018   2019
ASSETS            
             
CURRENT ASSETS:            
Cash and cash equivalents   $ 17   $ 1
Due from related parties*     9,578     7,696
Prepayments and other assets     29     2
Total current assets     9,624     7,699
             
NON-CURRENT ASSETS:            
Investment in subsidiaries*     35,598     29,944
Total non-current assets     35,598     29,944
Total assets   $ 45,222   $ 37,643
             
LIABILITIES AND STOCKHOLDERS’ EQUITY            
             
CURRENT LIABILITIES:            
Accounts payable   $ 162   $ 251
Accrued and other liabilities     117     392
Total current liabilities     279     643
             
NON-CURRENT LIABILITIES:            
Promissory note     5,000     5,000
Total non-current liabilities     5,000     5,000
             
COMMITMENTS AND CONTINGENCIES        
             
STOCKHOLDERS’ EQUITY:            
Preferred stock ($0.001 par value; 50,000,000 shares authorized; none issued)        
Common stock ($0.001 par value; 450,000,000 shares authorized; 21,060,190 and 21,370,280 shares issued and outstanding as of December 31, 2018 and 2019, respectively)     21     21
Additional paid-in capital     74,767     75,154
Accumulated deficit     (34,845)     (43,175)
Total stockholders’ equity     39,943     32,000
Total liabilities and stockholders’ equity   $ 45,222   $ 37,643

 

* Eliminated on consolidation

 

Schedule I – Condensed Financial Information of PYXIS TANKERS INC. (Parent Company Only)

Statements of Comprehensive Loss

For the years ended December 31, 2017, 2018 and 2019

(Expressed in thousands of U.S. Dollars, except for share and per share data)

 

    2017   2018   2019
Expenses:                  
General and administrative expenses   $ (3,121)   $ (2,314)   $ (2,282)
Operating loss     (3,121)     (2,314)     (2,282)
                   
Other expenses:                  
Interest and finance costs, net     (73)     (215)     (395)
Total other expenses, net     (73)     (215)     (395)
                   
Equity in loss of subsidiaries*     (2,049)     (5,685)     (5,653)
                   
Net loss   $ (5,243)   $ (8,214)   $ (8,330)
                   
Loss per common share, basic and diluted   $ (0.28)   $ (0.39)   $ (0.39)
                   
Weighted average number of shares, basic and diluted     18,461,455     20,894,202     21,161,164

 

* Eliminated on consolidation

 

Schedule I – Condensed Financial Information of PYXIS TANKERS INC. (Parent Company Only)

Statements of Stockholders’ Equity

For the years ended December 31, 2017, 2018 and 2019

(Expressed in thousands of U.S. Dollars, except for share and per share data)

 

    Common Stock   Additional
Paid-in
  Accumulated   Total
Stockholders’
    # of Shares     Par value   Capital   Deficit   Equity
BALANCE, January 1, 2017     18,277,893     $ 18   $ 70,123   $ (21,388)   $ 48,753
Issuance of common stock     2,400,000       3     4,288         4,291
Issuance of common stock – EIP     200,000                    —
Stock compensation               355         355
Net loss                   (5,243)     (5,243)
BALANCE, December 31, 2017     20,877,893     $ 21   $ 74,766   $ (26,631)   $ 48,156
Net proceeds from the issuance of common stock     182,297           1         1
Net loss                   (8,214)     (8,214)
BALANCE, December 31, 2018     21,060,190     $ 21   $ 74,767   $ (34,845)   $ 39,943
Net proceeds from the issuance of common stock     214,828           274         274
Issuance of common stock under the promissory note     95,262           113         113
Net loss                   (8,330)     (8,330)
BALANCE, December 31, 2019     21,370,280     $ 21   $ 75,154   $ (43,175)   $ 32,000

 

Schedule I – Condensed Financial Information of PYXIS TANKERS INC. (Parent Company Only)

Statements of Cash Flows

For the years ended December 31, 2017, 2018 and 2019

(Expressed in thousands of U.S. Dollars)

 

    2017   2018   2019
Cash flows from operating activities:                  
Net loss   $ (5,243)   $ (8,214)   $ (8,330)
Adjustments to reconcile net loss to net cash from operating activities:                  
Stock compensation     355        
Equity in loss of subsidiaries *     2,049     5,685     5,653
Issuance of common stock under the promissory note             113
                   
Changes in assets and liabilities:                  
Due from related parties     (572)     (206)     1,882
Prepayments and other assets     (77)     13     27
Accounts payable     (34)     182     33
Due to related parties     1,678        
Accrued and other liabilities     22     (46)     275
Net cash used in operating activities   $ (1,822)   $ (2,586)   $ (347)
                   
Cash flows from investing activities:                  
Net cash provided by investing activities   $   $   $
                   
Cash flows from financing activities:                  
Gross proceeds from issuance of common stock     4,800     315     354
Common stock offering costs     (414)     (407)     (23)
Net cash provided by / (used in) financing activities   $ 4,386   $ (92)   $ 331
                   
Net increase / (decrease) in cash and cash equivalents and restricted cash     2,564     (2,678)     (16)
                   
Cash and cash equivalents and restricted cash at the beginning of the year     131     2,695     17
                   
Cash and cash equivalents and restricted cash at the end of the year   $ 2,695   $ 17   $ 1
                   
SUPPLEMENTAL INFORMATION:                  
Cash paid for interest   $ 69   $ 174   $ -
Non-cash financing activities – increase in promissory note     2,500     -     -
Non-cash financing activities – issuance of common stock under the promissory note     -     -     113
Unpaid portion for Common stock offering costs     -     -     57

 

* Eliminated in consolidation

 

Schedule I – Condensed Financial Information of PYXIS TANKERS INC. (Parent Company Only)

For years ended December 31, 2017, 2018 and 2019

(Expressed in thousands of U.S. Dollars, except for share and per share data)

 

In the condensed financial information of Pyxis, Pyxis’ investment in subsidiaries is stated at cost plus equity in undistributed earnings / losses of subsidiaries. During the years ended December 31, 2017, 2018 and 2019, Pyxis did not receive any dividend distributions from its subsidiaries.

 

The lender of Sixthone and Seventhone requires the ratio of the Company’s total liabilities to market value adjusted total assets not to exceed 65%. This requirement is only applicable in order to assess whether the two Vessel-owning companies are entitled to distribute dividends to Pyxis. As of December 31, 2018 and 2019, the requirement was not met as such ratio was 68%, or 3% higher than the required threshold. The aggregate net assets of Sixthone and Seventhone as at December 31, 2019 were approximately $26.6 million. The restrictions on the net assets will be lifted upon full repayment of the debt to the lender or if we are in compliance with the market value adjusted total assets covenant. As discussed in Note 7, until the Company cures such non-compliance, neither Sixthone nor Seventhone will be permitted to make dividend distributions. Other than the above, there are no legal or regulatory restrictions on Pyxis’ ability to obtain funds from its subsidiaries through dividends, loans or advances.

 

The condensed financial information of Pyxis, as parent company only, should be read in conjunction with the Company’s consolidated financial statements.

v3.20.1
Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Principles of Consolidation

(a) Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP. The consolidated financial statements include the accounts of Pyxis and its wholly-owned subsidiaries (the Vessel-owning companies and Merger Sub). All intercompany balances and transactions have been eliminated upon consolidation.

 

Pyxis, as the holding company, determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity. Under Accounting Standards Codification (“ASC”) 810 “Consolidation” a voting interest entity is an entity in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make financial and operating decisions. Pyxis consolidates voting interest entities in which it owns all, or at least a majority (generally, greater than 50%), of the voting interest. Variable interest entities (“VIE”) are entities as defined under ASC 810-10, that in general either do not have equity investors with voting rights or that have equity investors that do not provide sufficient financial resources for the entity to support its activities. A controlling financial interest in a VIE is present when a company absorbs a majority of an entity’s expected losses, receives a majority of an entity’s expected residual returns, or both. The company with a controlling financial interest, known as the primary beneficiary, is required to consolidate the VIE. Pyxis evaluates all arrangements that may include a variable interest in an entity to determine if it may be the primary beneficiary, and would be required to include assets, liabilities and operations of a VIE in its consolidated financial statements. As of December 31, 2019, no such interest existed.

Use of Estimates

(b) Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from these estimates.

Comprehensive Income / (Loss)

(c) Comprehensive Income / (Loss): The Company follows the provisions of ASC 220 “Comprehensive Income”, which requires separate presentation of certain transactions which are recorded directly as components of equity. The Company had no transactions which affect comprehensive loss during the years ended December 31, 2017, 2018 and 2019 and, accordingly, comprehensive loss was equal to net loss.

Foreign Currency Translation

(d) Foreign Currency Translation: The functional currency of the Company is the U.S. dollar as the Company’s vessels operate in international shipping markets and, therefore, primarily transact business in U.S. dollars. The Company’s accounting records are maintained in U.S. dollars. Transactions involving other currencies during the year are converted into U.S. dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Resulting gains or losses are included in Vessel operating expenses in the accompanying consolidated statements of comprehensive loss. All amounts in the financial statements are presented in thousand U.S. dollars rounded to the nearest thousand.

Commitments and Contingencies

(e) Commitments and Contingencies: Provisions are recognized when: the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate of the amount of the obligation can be made. Provisions are reviewed at each balance sheet date.

Insurance Claims Receivable

(f) Insurance Claims Receivable: The Company records insurance claim recoveries for insured losses incurred on damage to fixed assets and for insured crew medical expenses. Insurance claim recoveries are recorded, net of any deductible amounts, at the time the Company’s fixed assets suffer insured damages or when crew medical expenses are incurred, recovery is probable under the related insurance policies and the claim is not subject to litigation.

Concentration of Credit Risk

(g) Concentration of Credit Risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts receivable. The Company places its cash and cash equivalents, consisting mostly of deposits, with qualified financial institutions with high creditworthiness. The Company performs periodic evaluations of the relative creditworthiness of those financial institutions that are considered in the Company’s investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its accounts receivable.

Cash and Cash Equivalents and Restricted Cash

(h) Cash and Cash Equivalents and Restricted Cash: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents. Restricted cash is associated with pledged retention accounts in connection with the loan repayments and minimum liquidity requirements under the loan agreements discussed in Note 7 and is presented separately in the accompanying consolidated balance sheets.

Income Taxation

(i) Income Taxation: Under the laws of the Republic of the Marshall Islands, the country of incorporation of certain of the Company’s vessel-owning companies, and/or the vessels’ registration, the vessel-owning companies are not liable for any income tax on their income derived from shipping operations. Instead, a tax is levied depending on the countries where the vessels trade based on their tonnage, which is included in Vessel operating expenses in the accompanying consolidated statements of comprehensive loss. The vessel-owning companies with vessels that have called on the United States during the relevant year of operation are obliged to file tax returns with the Internal Revenue Service. The applicable tax is 50% of 4% of U.S. related gross transportation income unless an exemption applies. The Company believes that based on current legislation the relevant vessel-owning companies are entitled to an exemption because they satisfy the relevant requirements, namely that (i) the related vessel-owning companies are incorporated in a jurisdiction granting an equivalent exemption to U.S. corporations and (ii) over 50% of the ultimate stockholders of the vessel-owning companies are residents of a country granting an equivalent exemption to U.S. persons.

 

Under the laws of the Republic of Malta, the country of incorporation of certain of the Company’s vessel-owning companies, and/or the vessels’ registration, these vessel-owning companies are not liable for any income tax on their income derived from shipping operations. The Republic of Malta is a country that has an income tax treaty with the United States. Accordingly, income earned by vessel-owning companies organized under the laws of the Republic of Malta may qualify for a treaty-based exemption. Specifically, Article 8 (Shipping and Air Transport) of the treaty sets out the relevant rule to the effect that profits of an enterprise of a Contracting State from the operation of ships in international traffic shall be taxable only in that State.

Inventories

(j) Inventories: Inventories consist of lubricants and bunkers (where applicable) on board the vessels, which are stated at the lower of cost and net realizable value. Cost is determined by the first-in, first-out (“FIFO”) method.

Trade Accounts Receivable, Net

(k) Trade Accounts Receivable, Net: Under spot charters, the Company normally issues its invoices to charterers at the completion of the voyage. Invoices are due upon issuance of the invoice. Since the Company satisfies its performance obligation over the time of the spot charter, the Company recognizes its unconditional right to consideration in trade accounts receivable, net of a provision for doubtful accounts, if any. Trade accounts receivable from spot charters as of December 31, 2018 and 2019, amounted to $2,581 and $743, respectively. The allowance for doubtful accounts at December 31, 2018 and 2019, was nil and $26, respectively. Under time charter contracts, the Company normally issues invoices on a monthly basis 30 days in advance of providing its services. Trade accounts receivable from time charters as of December 31, 2018 and 2019, amounted to $4 and $500, respectively. Hire collected in advance includes cash received in advance of performance under the contract prior to the balance sheet date and is realized when the associated revenue is recognized under the contract in periods after such date. The hire collected in advance as of December 31, 2018 and 2019 was $422 and $1,415 respectively and concerns hire received in advance from time charters.

Vessels, Net

(l) Vessels, Net: Vessels are stated at cost, which consists of the contract price and any material expenses incurred in connection with the acquisition (initial repairs, improvements, delivery expenses and other expenditures to prepare the vessel for her initial voyage, as well as professional fees directly associated with the vessel acquisition). Subsequent expenditures for major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise, these amounts are expensed as incurred.

 

The cost of each of the Company’s vessels is depreciated from the date of acquisition on a straight-line basis over the vessels’ remaining estimated economic useful life, after considering the estimated residual value. A vessel’s residual value is equal to the product of its lightweight tonnage and estimated scrap rate of $0.300 per ton. The Company estimates the useful life of the Company’s vessels to be 25 years from the date of initial delivery from the shipyard. In the event that future regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life will be adjusted at the date such regulations are adopted.

Impairment of Long Lived Assets

(m) Impairment of Long Lived Assets: The Company reviews its long lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable.

 

In developing estimates of future undiscounted cash flows, the Company makes assumptions and estimates about the vessels’ future performance, with the significant assumptions relating to time charter equivalent rates by vessel type, vessels’ operating expenses, management fees, vessels’ capital expenditures, vessels’ residual value, fleet utilization and the estimated remaining useful life of each vessel. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends as well as future expectations.

 

To the extent impairment indicators are present, the projected net operating cash flows are determined by considering the charter revenues from existing time charters for the fixed days and an estimated daily time charter rate for the unfixed days (based on the most recent seven year historical average rates over the remaining estimated useful life of the vessels), expected outflows for vessels’ operating expenses, planned dry-docking and special survey expenditures, management fees expenditures which are adjusted every year, pursuant to the Company’s existing group management agreement, and fleet utilization of 75.0% to 98.6% (depending on the type of the vessel) or 70% to 93.0%, including scheduled off-hire days for planned dry-dockings and vessel surveys, based on historical experience. The residual value used in the impairment test is estimated to be approximately $0.3 per lightweight ton in accordance with the vessels’ depreciation policy.

 

As of December 31, 2017, the Company obtained market valuations for all its vessels from reputable marine appraisers. Based on these valuations, the Company identified impairment indications for certain of its vessels. More specifically, the market values of these vessels were, in aggregate, $8,299 lower than their carrying values, including any unamortized deferred charges relating to special survey costs, as of that date. In this respect, the Company performed an impairment analysis to estimate the future undiscounted cash flows for each of these vessels. The analysis resulted in higher undiscounted cash flows than each vessel’s carrying value as of December 31, 2017 and, accordingly, no adjustment to the vessels’ carrying values was required.

 

As of December 31, 2018, the Company obtained market valuations for all its vessels from reputable marine appraisers. Based on these valuations, the Company identified impairment indications for all of its vessels, except for the Pyxis Epsilon. More specifically, the market values of these vessels were, in aggregate, $9,987 lower than their carrying values, including any unamortized deferred charges relating to special survey costs, as of that date. In this respect, the Company performed an impairment analysis to estimate the future undiscounted cash flows for each of these vessels. The analysis resulted in higher undiscounted cash flows than each vessel’s carrying value as of December 31, 2018, except for the Northsea Alpha and the Northsea Beta, for which a total Vessel impairment charge of $2,282 was recorded as of December 31, 2018, against Vessels, net (Notes 5, 6 and 10).

 

As of December 31, 2019, the Company obtained market valuations for all its vessels from reputable marine appraisers. Based on these valuations, the Company identified impairment indications for two of its vessels. More specifically, the market values of these vessels were, in aggregate, $3,354 lower than their carrying values, including any unamortized deferred charges relating to special survey costs, as of that date. In this respect, the Company performed an impairment analysis to estimate the future undiscounted cash flows for each of these vessels. The analysis resulted in higher undiscounted cash flows than each vessel’s carrying value as of December 31, 2019, and, accordingly, no adjustment to the vessels’ carrying values was required.

Long-lived Assets Classified as Held for Sale

(n) Long-lived Assets Classified as Held for Sale: The Company classifies long lived assets and disposal groups as being held-for-sale in accordance with ASC 360, “Property, Plant and Equipment”, when: (i) management, having the authority to approve the action, commits to a plan to sell the asset; (ii) the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; (iii) an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; (iv) the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year; (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Long lived assets classified as held-for-sale are measured at the lower of their carrying amount or fair value less costs to sell. According to ASC 360-10-35, the fair value less costs to sell of the long-lived asset (disposal group) should be assessed at each reporting period it remains classified as held-for-sale. Subsequent changes in the long-lived asset’s fair value less costs to sell (increase or decrease) would be reported as an adjustment to its carrying amount, not exceeding the carrying amount of the long-lived asset at the time it was initially classified as held-for-sale. These long-lived assets are not depreciated once they meet the criteria to be classified as held-for-sale and are classified in current assets on the consolidated balance sheet (Notes 5, 6).

Financial Derivative Instruments

(o) Financial Derivative Instruments: The Company enters into interest rate derivatives to manage its exposure to fluctuations of interest rate risk associated with its borrowings. All derivatives are recognized in the consolidated financial statements at their fair value. The fair value of the interest rate derivatives is based on a discounted cash flow analysis. When such derivatives do not qualify for hedge accounting, the Company recognizes their fair value changes in current period earnings. When the derivatives qualify for hedge accounting, the Company recognizes the effective portion of the gain or loss on the hedging instrument directly in other comprehensive income / (loss), while the ineffective portion, if any, is recognized immediately in current period earnings. The Company, at the inception of the transaction, documents the relationship between the hedged item and the hedging instrument, as well as its risk management objective and the strategy of undertaking various hedging transactions. The Company also assesses at hedge inception whether the hedging instruments are highly effective in offsetting changes in the cash flows of the hedged items.

 

The Company discontinues cash flow hedge accounting if the hedging instrument expires and it no longer meets the criteria for hedge accounting or its designation is revoked by the Company. At that time, any cumulative gain or loss on the hedging instrument recognized in equity is kept in equity until the forecasted transaction occurs. When the forecasted transaction occurs, any cumulative gain or loss on the hedging instrument is recognized in the consolidated statement of comprehensive loss. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in equity is transferred to the current period’s consolidated statement of comprehensive loss as financial income or expense.

Accounting for Special Survey and Dry-docking Costs

(p) Accounting for Special Survey and Dry-docking Costs: The Company follows the deferral method of accounting for special survey and dry-docking costs, whereby actual costs incurred at the yard and parts used in the dry-docking or special survey, are deferred and are amortized on a straight-line basis over the period through the date the next survey is scheduled to become due. Costs deferred are limited to actual costs incurred at the shipyard and costs incurred in the dry-docking or special survey. If a dry-dock or a survey is performed prior to the scheduled date, any remaining unamortized balances of the previous dry-dock and survey are immediately written-off. Unamortized dry-dock and survey balances of vessels that are sold are written-off and included in the calculation of the resulting gain or loss in the period of the vessel’s sale.

 

Furthermore, unamortized dry-docking and special survey balances of vessels that are classified as Assets held-for-sale and are not recoverable as of the date of such classification are immediately written-off in the consolidated statement of comprehensive loss.

Financing Costs

(q) Financing Costs: Costs associated with new loans or refinancing of existing loans, including fees paid to lenders or required to be paid to third parties on the lender’s behalf for obtaining new loans or refinancing existing loans, are recorded as a direct deduction from the carrying amount of the debt liability. Such costs are deferred and amortized to Interest and finance costs in the consolidated statements of comprehensive loss during the life of the related debt using the effective interest method. Unamortized costs relating to loans repaid or refinanced, meeting the criteria of debt extinguishment, are expensed in the period the repayment or refinancing is made. Commitment fees relating to undrawn loan principal are expensed as incurred.

Fair Value Measurements

(r) Fair Value Measurements: The Company follows the provisions of Accounting Standard Update (“ASU”) 2015-07 “Fair Value Measurements and Disclosures”, Topic 820, which defines and provides guidance as to the measurement of fair value. This standard creates a hierarchy of measurement and indicates that, when possible, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets and the lowest priority (Level 3) to unobservable data, for example, the reporting entity’s own data. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy (Note 10).

Segment Reporting

(s) Segment Reporting: The Company reports financial information and evaluates its operations by charter revenues and not by the length of ship employment for its customers, i.e., spot or time charters. The Company does not use discrete financial information to evaluate the operating results for each such type of charter. Although revenue can be identified for these types of charters, management cannot and does not identify expenses, profitability or other financial information for these charters. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide (subject to certain agreed exclusions) and, as a result, the disclosure of geographic information is impracticable. As a result, management, reviews operating results solely by revenue per day and operating results of the fleet and thus the Company has determined that it operates under one reportable segment.

Earnings / (loss) Per Share

(t) Earnings / (loss) per Share: Basic earnings / (loss) per share are computed by dividing net income / (loss) attributable to common equity holders by the weighted average number of shares of common stock outstanding.

 

The computation of diluted earnings / (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised and is performed using the treasury stock method. The Company had no dilutive securities outstanding during the three-year period ended December 31, 2019.

Stock Compensation

(u) Stock Compensation: The Company has a stock based incentive plan that covers directors and officers of the Company and its affiliates and its consultants and service providers. Awards granted are valued at fair value and compensation cost is recognized on a straight-line basis, net of estimated forfeitures, over the requisite service period of each award. The fair value of restricted stock awarded at the grant date is equal to the closing stock price on that date and is amortized over the applicable vesting period using the straight-line method.

Going Concern

(v) Going Concern: The Company performs cash flow projections on a regular basis to evaluate whether it will be in a position to cover its liquidity needs for the next 12-month period and in compliance with the financial and security collateral cover ratio covenants under its existing debt agreements. In developing estimates of future cash flows, the Company makes assumptions about the vessels’ future performance, with significant assumptions relating to time charter equivalent rates by vessel type, vessels’ operating expenses, vessels’ capital expenditures, fleet utilization, the Company’s management fees and general and administrative expenses, and cash flow requirements for debt servicing. The assumptions used to develop estimates of future cash flows are based on historical trends as well as future expectations.

 

As of December 31, 2019, the Company had a working capital deficit of $5,301, defined as current assets minus current liabilities. The Company considered such deficit in conjunction with the future market prospects and potential future financings. As of the filing date of these consolidated financial statements, the Company believes that it will be in a position to cover its liquidity needs for the next 12-month period through operating cash flows, management of working capital, sale of assets, refinancing indebtedness or raising additional equity capital, or a combination thereof. The Company believes that will be in compliance with the financial and security collateral cover ratio covenants under its existing debt agreements for the next 12-month period.

Revenues, Net

(w) Revenues, net: The Company generates its revenues from charterers. The vessels are chartered using either spot charters, where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified charter rate, or time charters, where a contract is entered into for the use of a vessel for a specific period of time and a specified daily charter hire rate.

 

The following table presents the Company’s revenue disaggregated by revenue source, net of commissions, for the years ended December 31, 2017, 2018 and 2019:

 

   

December 31,

2017

   

December 31,

2018

   

December 31,

2019

 
Revenues derived from spot charters, net   $ 16,668     $ 16,990     $ 8,067  
Revenues derived from time charters, net     12,911       11,467       19,686  
Revenues, net   $ 29,579     $ 28,457     $ 27,753  

 

Revenue from customers (ASC 606): As of January 1, 2018, the Company adopted Accounting Standard Update (“ASU”) 2014-09 “Revenue from Contracts with Customers (Topic 606)”. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The Company analyzed its contracts with charterers at the adoption date and has determined that its spot charters fall under the provisions of ASC 606, while its time charter agreements are lease agreements that fall under the provisions of ASC 842 and that contain certain non-lease components. The Company elected to adopt ASC 606 by applying the modified retrospective transition method, recognizing the cumulative effect of adopting this guidance as an adjustment to the 2018 opening balance of accumulated deficit. As of December 31, 2017, there were no vessels employed under spot charters and as a result, the Company has not included any adjustments to the 2018 opening balance of accumulated deficit and prior periods were not retrospectively adjusted.

 

The Company assessed its contracts with charterers for spot charters and concluded that there is one single performance obligation for its spot charter, which is to provide the charterer with a transportation service within a specified time period. In addition, the Company has concluded that a spot charter meets the criteria to recognize revenue over time as the charterer simultaneously receives and consumes the benefits of the Company’s performance. The adoption of this standard resulted in a change whereby the Company’s method of revenue recognition changed from discharge-to-discharge (assuming a new charter has been agreed before the completion of the previous spot charter) to load-to-discharge. This resulted in no revenue being recognized from discharge of the prior spot charter to loading of the current spot charter and all revenue being recognized from loading of the current spot charter to discharge of the current spot charter. This change results in revenue being recognized later in the voyage, which may cause additional volatility in revenues and earnings between periods. Demurrage income represents payments by a charterer to a vessel owner when loading or discharging time exceeds the stipulated time in the spot charter. The Company has determined that demurrage represents a variable consideration and estimates demurrage at contract inception. Demurrage income estimated, net of address commission, is recognized over the time of the charter as the performance obligation is satisfied.

 

Under a spot charter, the Company incurs and pays for certain voyage expenses, primarily consisting of brokerage commissions, port and canal costs and bunker consumption, during the spot charter (load-to-discharge) and during the ballast voyage (date of previous discharge to loading, assuming a new charter has been agreed before the completion of the previous spot charter). Before the adoption of ASC 606, all voyage expenses were expensed as incurred, except for brokerage commissions. Brokerage commissions are deferred and amortized over the related voyage period in a charter to the extent revenue has been deferred since commissions are earned as the Company’s revenues are earned. Under ASC 606 and after the implementation of ASC 340-40 “Other assets and deferred costs” for contract costs, incremental costs of obtaining a contract with a customer and contract fulfillment costs, should be capitalized and amortized as the performance obligation is satisfied, if certain criteria are met. The Company assessed the new guidance and concluded that voyage costs during the ballast voyage represented costs to fulfil a contract which give rise to an asset and should be capitalized and amortized over the spot charter, consistent with the recognition of voyage revenues from spot charter from load-to-discharge, while voyage costs incurred during the spot charter should be expensed as incurred. With respect to incremental costs, the Company has selected to adopt the practical expedient in the guidance and any costs to obtain a contract will be expensed as incurred, for the Company’s spot charters that do not exceed one year. Vessel operating expenses are expensed as incurred.

 

In addition, pursuant to this standard and the new Leases standard (discussed below), as of January 1, 2018, the Company elected to present Revenues net of address commissions. Address commissions represent a discount provided directly to the charterers based on a fixed percentage of the agreed upon charter. Since address commissions represent a discount (sales incentive) on services rendered by the Company and no identifiable benefit is received in exchange for the consideration provided to the charterer, these commissions are presented as a reduction of revenue in the accompanying consolidated statements of comprehensive loss. In this respect, for the year ended December 31, 2017, Revenues, net and Voyage related costs and commissions each decreased by $247. This reclassification has no impact on the Company’s consolidated financial position and results of operations for any of the periods presented.

 

The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less, in accordance with the optional exception in ASC 606.

 

Revenues for the years ended December 31, 2017, 2018 and 2019, deriving from significant charterers individually accounting for 10% or more of revenues (in percentages of total revenues), were as follows:

 

Charterer   2017     2018     2019  
A     15 %            
B     16 %            
C     18 %            
D           23 %     71 %
E           15 %      
      49 %     38 %     71 %

 

Leases: The Company elected to early adopt the new lease standard “Leases” ASC 842 as of September 30, 2018 with adoption reflected as of January 1, 2018. The Company adopted the standard by using the modified retrospective method and selected the additional optional transition method. Also, the Company elected to apply a package of practical expedients under ASC 842, which allowed the Company, not to reassess (i) whether any existing contracts, on the date of adoption, contained a lease, (ii) lease classification of existing leases classified as operating leases in accordance with ASC 840 and (iii) initial direct costs for any existing leases. In this respect no cumulative-effect adjustment was recognized to the 2018 opening balance of accumulated deficit. The Company assessed its new time charter contracts at the adoption date under the new guidance and concluded that these contracts contain a lease with the related executory costs (insurance), as well as non-lease components to provide other services related to the operation of the vessel, with the most substantial service being the crew cost to operate the vessel. The Company concluded that the criteria for not separating the lease and non-lease components of its time charter contracts are met, since (i) the time pattern of recognizing revenues for crew and other services for the operation of the vessels, is similar to the time pattern of recognizing rental income, (ii) the lease component of the time charter contracts, if accounted for separately, would be classified as an operating lease, and (iii) the predominant component in its time charter agreements is the lease component. Brokerage and address commissions on time charter revenues are deferred and amortized over the related voyage period, to the extent revenue has been deferred, since commissions are earned as revenues earned, and are presented in voyage expenses and as a reduction to voyage revenues (see above), respectively. Vessel operating expenses are expensed as incurred. By taking the practical expedients, existing time charters at January 1, 2018 continued to be accounted for under ASC 840 while new time charters commencing in 2018 and onwards are accounted for under ASC 842. The adoption of ASC 842 had no effect on the Company’s consolidated financial position and results of operations for the year ended December 31, 2018.

Restricted Cash

(x) Restricted Cash: As of January 1, 2018, the Company adopted the ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash”, which requires that the statement of cash flows explain the change in the total of cash and cash equivalents and restricted cash. ASU 2016-18 was adopted retrospectively for the years ended December 31, 2017, 2018 and 2019, and restricted cash of $5,000, $3,659 and $3,735, respectively, has been aggregated with cash and cash equivalents in both the beginning-of-period and end-of-period line items of the consolidated statements of cash flows for each of the periods presented. The implementation of this update has no impact on the Company’s consolidated balance sheet and consolidated statement of comprehensive loss.

 

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the accompanying consolidated balance sheets that are presented in the accompanying consolidated statement of cash flows for the years ended December 31, 2017, 2018 and 2019.

 

   

December 31,

2017

   

December 31,

2018

    December 31, 2019  
Cash and cash equivalents   $ 1,693     $ 545     $ 1,441  
Restricted cash, current portion     141       255       535  
Restricted cash, net of current portion     4,859       3,404       3,200  
Total cash and cash equivalents and restricted cash   $ 6,693     $ 4,204     $ 5,176  

Business Combinations

(y) Business combinations: As of January 1, 2018, the Company adopted the ASU No. 2017-01, “Business Combinations” (Topic 805) which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisition (or disposals) of assets or businesses. Under current implementation guidance, the existence of an integrated set of acquired activities (inputs and processes that generate outputs) constitutes an acquisition of business. This ASU provides a screen to determine when a set of assets and activities does not constitute a business. The implementation of this update had no effect on the Company’s consolidated financial position and results of operations for the year ended December 31, 2018.

New Accounting Pronouncements - Adopted

(z) New Accounting Pronouncements – Adopted

 

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): Part I. Accounting for Certain Financial Instruments with Down Round Features; Part II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception, (ASU No. 2017-11). Part I of this Update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this Update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this Update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The implementation of this update had no effect on the Company’s consolidated financial position and results of operations for the year ended December 31, 2019.

 

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (ASU No. 2017-12), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Furthermore, in October 2018, the FASB issued ASU 2018-16, “Derivatives and Hedging (Topic 815)—Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes”, which permits the use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the UST, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate and the SIFMA Municipal Swap Rate. The amendments in this Update apply to all entities that elect to apply hedge accounting to benchmark interest rate hedges under Topic 815. For entities that have not already adopted Update 2017-12, the amendments in this Update are required to be adopted concurrently with the amendments in Update 2017-12. Early adoption is permitted in any interim period upon issuance of this Update if an entity already has adopted Update 2017-12. The amendments should be adopted on a prospective basis for qualifying new or redesignated hedging relationships entered into on or after the date of adoption. The implementation of this update had no effect on the Company’s consolidated financial position and results of operations for the year ended December 31, 2019.

 

In June 2018, the FASB issued ASU No. 2018-07, Improvements to Non-Employee Share-Based Payment Accounting (Topic 718): ASU No. 2018-07 simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. For public business entities, the amendments in ASU No. 2018-07 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The implementation of this update had no effect on the Company’s consolidated financial position and results of operations for the year ended December 31, 2019.

New Accounting Pronouncements - Not Yet Adopted

(aa) New Accounting Pronouncements – Not Yet Adopted:

 

In June 2016, the FASB issued ASU No. 2016-13—Financial Instruments—Credit Losses (Topic 326) —Measurement of Credit Losses on Financial Instruments. ASU No. 2016-13 amended guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For public entities, the amendments of this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early application is permitted. Furthermore, in November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses”. The amendments clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. In addition, in April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 Financial Instruments”, the amendments of which clarify the modification of accounting for available for sale debt securities excluding applicable accrued interest, which must be individually assessed for credit losses when fair value is less than the amortized cost basis. In May 2019, the FASB issued ASU 2019-05, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 Financial Instruments”, the amendments of which provide entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments—Overall, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. An entity that elects the fair value option should subsequently apply the guidance in Subtopics 820-10, Fair Value Measurement—Overall, and 825-10. The effective date and transition requirements for the amendments in these Updates are the same as the effective dates and transition requirements in Update 2016-13, as amended by these Updates. The Company has assessed all the expected credit losses of its financial assets and the adoption of this ASU does not have a material impact on the Company’s consolidated financial statements.

 

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820)—Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”, which improves the effectiveness of fair value measurement disclosures. In particular, the amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements, including the consideration of costs and benefits. The amendments in the Update apply to all entities that are required under existing GAAP to make disclosures about recurring and non-recurring fair value measurements. ASU 2018-13 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. The Company has assessed the impact of this new accounting guidance and the adoption of this ASU does not have a material impact on its consolidated financial statements and related disclosures.

 

In October 2018, the FASB issued ASU 2018-17, “Consolidation (Topic 810)—Targeted Improvements to Related Party Guidance for Variable Interest Entities”. The FASB is issuing this Update in response to stakeholders’ observations that Topic 810, Consolidation, could be improved in the following areas: (i) applying the variable interest entity (VIE) guidance to private companies under common control and (ii) considering indirect interests held through related parties under common control for determining whether fees paid to decision makers and service providers are variable interests. The amendments in this Update improve the accounting for those areas, thereby improving general purpose financial reporting. ASU 2018-17 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. All entities are required to apply the amendments in this update retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements and related disclosures.

v3.20.1
Basis of Presentation and General Information (Tables)
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Ownership and Operation of Tanker Vessels

All of the Vessel-owning companies are engaged in the marine transportation of liquid cargoes through the ownership and operation of tanker vessels, as listed below:

 

Vessel-owning

company

 

Incorporation

date

  Vessel   DWT    

Year

built

 

Acquisition

date

Secondone   05/23/2007   Northsea Alpha     8,615     2010   05/28/2010
Thirdone   05/23/2007   Northsea Beta     8,647     2010   05/25/2010
Fourthone   05/30/2007   Pyxis Malou     50,667     2009   02/16/2009
Sixthone   01/15/2010   Pyxis Delta     46,616     2006   03/04/2010
Seventhone   05/31/2011   Pyxis Theta     51,795     2013   09/16/2013
Eighthone   02/08/2013   Pyxis Epsilon     50,295     2015   01/14/2015

v3.20.1
Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Schedule of Revenue Disaggregated by Revenue Source

The following table presents the Company’s revenue disaggregated by revenue source, net of commissions, for the years ended December 31, 2017, 2018 and 2019:

 

   

December 31,

2017

   

December 31,

2018

   

December 31,

2019

 
Revenues derived from spot charters, net   $ 16,668     $ 16,990     $ 8,067  
Revenues derived from time charters, net     12,911       11,467       19,686  
Revenues, net   $ 29,579     $ 28,457     $ 27,753  

Summary of Revenue from Significant Charterers for 10% or More of Revenue

Revenues for the years ended December 31, 2017, 2018 and 2019, deriving from significant charterers individually accounting for 10% or more of revenues (in percentages of total revenues), were as follows:

 

Charterer   2017     2018     2019  
A     15 %            
B     16 %            
C     18 %            
D           23 %     71 %
E           15 %      
      49 %     38 %     71 %

Schedule of Reconciliation of Cash and Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the accompanying consolidated balance sheets that are presented in the accompanying consolidated statement of cash flows for the years ended December 31, 2017, 2018 and 2019.

 

   

December 31,

2017

   

December 31,

2018

    December 31, 2019  
Cash and cash equivalents   $ 1,693     $ 545     $ 1,441  
Restricted cash, current portion     141       255       535  
Restricted cash, net of current portion     4,859       3,404       3,200  
Total cash and cash equivalents and restricted cash   $ 6,693     $ 4,204     $ 5,176  

v3.20.1
Transactions with Related Parties (Tables)
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Schedule of Amounts Charged by Maritime Included in the Accompanying Consolidated Statements of Comprehensive Loss

The following amounts were charged by Maritime pursuant to the head management and ship-management agreements with the Company, and are included in the accompanying consolidated statements of comprehensive loss:

 

    Year Ended December 31,  
    2017     2018     2019  
Included in Voyage related costs and commissions                        
Charter hire commissions   $ 368     $ 354     $ 351  
                         
Included in Management fees, related parties                        
Ship-management Fees     712       720       724  
                         
Included in General and administrative expenses                        
Administration Fees     1,600       1,618       1,628  
                         
Total   $ 2,680     $ 2,692     $ 2,703  

v3.20.1
Inventories (Tables)
12 Months Ended
Dec. 31, 2019
Inventory Disclosure [Abstract]  
Schedule of Inventories

The amounts in the accompanying consolidated balance sheets are analyzed as follows:

 

    December 31, 2018     December 31, 2019  
Lubricants   $ 428     $ 403  
Bunkers     379       98  
Total   $ 807     $ 501  

v3.20.1
Vessels, Net (Tables)
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Abstract]  
Schedule of Vessels

The amounts in the accompanying consolidated balance sheets are analyzed as follows:

 

    Vessel     Accumulated     Net Book  
    Cost     Depreciation     Value  
Balance January 1, 2017   $ 138,060       (16,719 )   $ 121,341  
Depreciation           (5,567 )     (5,567 )
Balance December 31, 2017     138,060       (22,286 )     115,774  
Depreciation           (5,500 )     (5,500 )
Vessel impairment charge     (3,750 )     1,468       (2,282 )
Balance December 31, 2018   $ 134,310     $ (26,318 )   $ 107,992  
Depreciation           (5,320 )     (5,320 )
Additions     625       -       625  
Reclassification of vessel as held-for-sale     (26,412 )     10,622       (15,790 )
Balance December 31, 2019   $ 108,523     $ (21,016 )   $ 87,507  

v3.20.1
Deferred Charges, Net (Tables)
12 Months Ended
Dec. 31, 2019
Deferred Charges Net Abstract  
Schedule of Deferred Charges

The movement in the deferred charges, net in the accompanying consolidated balance sheets are as follows:

 

    Dry docking costs  
Balance, January 1, 2017   $ 358  
Amortization     (73 )
Balance, December 31, 2017     285  
Additions     588  
Amortization     (133 )
Balance, December 31, 2018     740  
Additions     435  
Amortization     (240 )
Transfer to vessel held-for-sale     (156 )
Balance, December 31, 2019   $ 779  

v3.20.1
Long-term Debt (Tables)
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Schedule of Long-Term Debt

The amounts shown in the accompanying consolidated balance sheets at December 31, 2018 and 2019, are analyzed as follows:

 

Vessel (Borrower)   December 31, 2018     December 31, 2019  
(a) Northsea Alpha (Secondone)   $ 4,055     $ 3,690  
(a) Northsea Beta (Thirdone)     4,055       3,690  
(b) Pyxis Malou (Fourthone)     11,190       10,020  
(c) Pyxis Delta (Sixthone)     5,400       4,050  
(c) Pyxis Theta (Seventhone)     14,722       13,469  
(d) Pyxis Epsilon (Eighthone)     24,000       24,000  
Total   $ 63,422     $ 58,919  
                 
Current portion   $ 4,503     $ 9,241  
Less: Current portion of deferred financing costs     (170 )     (257 )
Current portion of long-term debt, net of deferred financing costs, current   $ 4,333     $ 8,984  
                 
Long-term portion   $ 58,919     $ 49,678  
Less: Non-current portion of deferred financing costs     (790 )     (445 )
Long-term debt, net of current portion and deferred financing costs, non-current   $ 58,129     $ 49,233  

Schedule of Principal Payments

The annual principal payments required to be made after December 31, 2019, are as follows:

 

To December 31,   Amount  
2020 *   $ 9,241  
2021     3,312  
2022     11,971  
2023     34,395  
2024 and thereafter     -  
Total   $ 58,919  

 

* $5,674 relate to prepayments for Pyxis Delta and Pyxis Theta loan facility (as discussed earlier in this Note). The scheduled principal payments in 2020 are $3,192

v3.20.1
Loss Per Common Share (Tables)
12 Months Ended
Dec. 31, 2019
Earnings Per Share [Abstract]  
Schedule of Loss Per Common Share

    For the years ended December 31,  
    2017     2018     2019  
Net loss available to common stockholders   $ (5,243 )   $ (8,214 )   $ (8,330 )
                         
Weighted average number of common shares, basic and diluted     18,461,455       20,894,202       21,161,164  
                         
Loss per common share, basic and diluted   $ (0.28 )   $ (0.39 )   $ (0.39 )

v3.20.1
Risk Management and Fair Value Measurements (Tables)
12 Months Ended
Dec. 31, 2019
Risk Management And Fair Value Measurements  
Schedule of Fair Value of Assets and Liabilities

The Management has determined that the fair values of the assets and liabilities as of December 31, 2019 are as follows:

 

   

Carrying

Value

   

Fair

Value

 
Cash and cash equivalents   $ 5,176     $ 5,176  
Trade accounts receivable, net   $ 1,243     $ 1,243  
Trade accounts payable   $ 4,538     $ 4,538  
Long-term debt with variable interest rates, net   $ 34,919     $ 34,919  
Long-term loans and promissory note with non-variable interest rates, net   $ 29,000     $ 29,000  

Schedule of Financial Derivative Instrument Location

Information on the classification, the derivative fair value and the loss from financial derivative instrument included in the consolidated financial statements is shown below:

 

Consolidated Balance Sheets – Location   December 31, 2018     December 31, 2019  
Financial derivative instrument – Other non-current assets   $           28     $          1  

Schedule of Gains Losses on Derivative Instruments

Consolidated Statements of Comprehensive Loss - Location   December 31, 2018     December 31, 2019  
Financial derivative instrument – Fair value at the beginning of the period   $          (47 )   $          (28 )
Financial derivative instrument – Fair value as at period end     28       1  
Loss from financial derivative instrument   $ (19 )   $ (27 )

Schedule of Assets Measured at Fair Value on a Non-recurring Basis Long Lived Assets Held and Used and Held for Sale

As of December 31, 2018, the Company reviewed the carrying amount in connection with the estimated recoverable amount for each of its vessels. This review indicated that such carrying amount was not fully recoverable for the Company’s vessels Northsea Alpha and Northsea Beta. Consequently, the carrying value of these vessels was written-down to their respective fair values as presented in the table below.

 

Vessel   Significant Other
Observable Inputs
(Level 2)
    Vessel Impairment
Charge (charged against
Vessels, net)
 
Northsea Alpha   $ 6,125     $ 1,142  
Northsea Beta     6,125       1,140  
TOTAL   $ 12,250     $ 2,282  

v3.20.1
Commitments and Contingencies (Tables)
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Future Minimum Contractual Charter Revenues

Year ending December 31,   Amount  
2020   $ 3,894  
    $ 3,894  

v3.20.1
Interest and Finance Costs, Net (Tables)
12 Months Ended
Dec. 31, 2019
Interest And Finance Costs Net  
Schedule of Interest and Finance Costs

The amounts in the accompanying consolidated statements of comprehensive loss are analyzed as follows:

 

    For the years ended December 31,  
    2017     2018     2019  
Interest on long-term debt (Note 7)   $ 2,674     $ 3,835     $ 5,122  
Interest on promissory note (Note 3)     70       213       395  
Long-term debt prepayment fees           56        
Amortization and write-off of financing costs     153       386       258  
Total   $ 2,897     $ 4,490     $ 5,775  

v3.20.1
Basis of Presentation and General Information (Details Narrative)
$ in Thousands
Apr. 23, 2015
USD ($)
Dec. 31, 2019
Integer
Entity ownership interest   100.00%
Number of ownership interest entities | Integer   6
LOOKSMART LTD [Member]    
Expenses of merger | $ $ 600  
Mr. Valentis [Member]    
Percentage of beneficially owned common stock   80.20%
v3.20.1
Basis of Presentation and General Information - Schedule of Ownership and Operation of Tanker Vessels (Details) - Vessels [Member]
12 Months Ended
Dec. 31, 2019
Integer
Secondone Corporation Ltd [Member]  
Property, Plant and Equipment [Line Items]  
Entity incorporation date of incorporation May 23, 2007
Vessel Northsea Alpha
DWT 8,615
Year built 2010
Acquisition date May 28, 2010
Thirdone Corporation Ltd [Member]  
Property, Plant and Equipment [Line Items]  
Entity incorporation date of incorporation May 23, 2007
Vessel Northsea Beta
DWT 8,647
Year built 2010
Acquisition date May 25, 2010
Fourthone Corporation Ltd [Member]  
Property, Plant and Equipment [Line Items]  
Entity incorporation date of incorporation May 30, 2007
Vessel Pyxis Malou
DWT 50,667
Year built 2009
Acquisition date Feb. 16, 2009
Sixthone Corp [Member]  
Property, Plant and Equipment [Line Items]  
Entity incorporation date of incorporation Jan. 15, 2010
Vessel Pyxis Delta
DWT 46,616
Year built 2006
Acquisition date Mar. 04, 2010
Seventhone Corp [Member]  
Property, Plant and Equipment [Line Items]  
Entity incorporation date of incorporation May 31, 2011
Vessel Pyxis Theta
DWT 51,795
Year built 2013
Acquisition date Sep. 16, 2013
Eighthone Corp [Member]  
Property, Plant and Equipment [Line Items]  
Entity incorporation date of incorporation Feb. 08, 2013
Vessel Pyxis Epsilon
DWT 50,295
Year built 2015
Acquisition date Jan. 14, 2015
v3.20.1
Significant Accounting Policies (Details Narrative)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
Segments
$ / t
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Trade accounts receivable, net $ 1,243 $ 2,585  
Hire collected in advance $ 1,415 422  
Residual value per lightweight ton | $ / t 0.300    
Estimated useful life 25 years    
Estimated fleet utilization rate depending on the type of the vessel, minimum rate 75.00%    
Estimated fleet utilization rate depending on the type of the vessel, maximum rate 98.60%    
Estimated fleet utilization rate including scheduled off-hire days for planned dry dockings and vessel surveys minimum rate 70.00%    
Estimated fleet utilization rate including scheduled off-hire days for planned dry dockings and vessel surveys maximum rate 93.00%    
Aggregate difference between market value and carrying value of vessel $ 3,354 9,987 $ 8,299
Vessel impairment charge 2,282
Number of reportable segments | Segments 1    
Working capital deficit $ 5,301    
Revenues, net decreased value     247
Voyage related costs and commissions decreased, value     247
Restricted cash 3,735 3,659 $ 5,000
Spot Charters [Member]      
Trade accounts receivable, net 743 2,581  
Allowance for doubtful accounts 26  
Time Charters [Member]      
Trade accounts receivable, net $ 500 $ 4  
v3.20.1
Significant Accounting Policies - Schedule of Revenue Disaggregated by Revenue Source (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Revenues, net $ 27,753 $ 28,457 $ 29,579
Revenues Derived from Spot Charters, Net [Member]      
Revenues, net 8,067 16,990 16,668
Revenues Derived from Time Charters, Net [Member]      
Revenues, net $ 19,686 $ 11,467 $ 12,911
v3.20.1
Significant Accounting Policies - Summary of Revenue from Significant Charterers for 10% or More of Revenue (Details)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Concentration risk percentage 71.00% 38.00% 49.00%
Charterer A [Member]      
Concentration risk percentage 0.00% 0.00% 15.00%
Charterer B [Member]      
Concentration risk percentage 0.00% 0.00% 16.00%
Charterer C [Member]      
Concentration risk percentage 0.00% 0.00% 18.00%
Charterer D [Member]      
Concentration risk percentage 71.00% 23.00% 0.00%
Charterer E [Member]      
Concentration risk percentage 0.00% 15.00% 0.00%