UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of: August 2019

Commission File Number: 001-37611

Pyxis Tankers Inc.

59 K. Karamanli Street

Maroussi 15125 Greece

+30 210 638 0200

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):___

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):___

EXPLANATORY NOTE

Attached as Exhibit 99.1 to this Report on Form 6-K is the press release of the Company entitled “Pyxis Tankers Inc. Announces Financial Results for the Three and Six Months Ended June 30, 2019”.

Attached as Exhibit 99.2 to this Report on Form 6-K is Management’s Discussion and Analysis of Financial Condition and Results of Operations and unaudited interim consolidated financial statements and the accompanying notes thereto of Pyxis Tankers Inc. (the “Company”) as of June 30, 2019 and for the six-month periods ended June 30, 2018 and 2019.

Only Exhibit 99.2 of this Report on Form 6-K is hereby incorporated by reference into the following Registration Statements of the Company:

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 12, 2019

Exhibit 99.1

Pyxis Tankers Inc. Announces Financial Results for the Three and Six Months Ended June 30, 2019

Maroussi, Greece, August 12, 2019 – Pyxis Tankers Inc. (NASDAQ Cap Mkts: PXS), (the “Company” or “Pyxis Tankers”), an emerging growth pure play product tanker company, today announced unaudited results for the three and six months ended June 30, 2019.

Summary

For the three months ended June 30, 2019, our Revenues, net were $6.5 million. For the same period, our time charter equivalent revenues were $5.5 million, an increase of 7.6% over the comparable period in 2018, but our net loss increased $0.3 million to $1.6 million primarily due to higher interest costs. For the second quarter, 2019 the loss per share (basic and diluted) was $0.08 and our Adjusted EBITDA (see “Non-GAAP Measures and Definitions” below) was $1.3 million.

Valentios Valentis, our Chairman and CEO commented:

“As previously stated, we felt the chartering environment for product tankers would be choppy in the second and third quarters of 2019. In fact, the spot market for MR’s has been challenging primarily due to softer demand for refined petroleum products associated with slowing global economic conditions and seasonal trends, a significant number of new build deliveries, longer maintenance programs at certain refineries, and to a lesser extent, intrusion of larger vessels, including crude carriers taking clean cargoes on their maiden voyages. Our employment strategy of shorter-term, staggered time charters has proven beneficial, so far. In the second quarter of 2019, the average TCE for our MR’s was almost $13,600/day. As of August 8, 2019, we had 46% of remaining days in 2019 covered for our MR’s, exclusive of options, at an average rate of approximately $15,100. Two MR’s will be re-delivered in the fourth quarter, historically a stronger seasonal period. Moreover, at that time we expect to see the start of a sustainable improvement in vessel earnings based on the positive fundamentals of supply and demand growth, plus incremental demand for MR’s given the global impact of upcoming IMO 2020 regulations. However, we are concerned about the effects of rising trade tensions and recent geo-political events which could undermine global economic growth.

In general, we are encouraged by the relative improvement in time charter rates for MR’s over the last 12 months combined with our continued discipline within operational costs. We are optimistic about the near-term prospects for the product tanker sector, and for us, specifically, and look forward to taking advantage of various opportunities as they may arise to enhance shareholder value.”

Results for the three months ended June 30, 2018 and 2019

For the three months ended June 30, 2019, we reported a net loss of $1.6 million, or $0.08 basic and diluted loss per share, compared to a net loss of $1.3 million, or $0.06 basic and diluted loss per share, for the same period in 2018. Our Revenues, net during the three months ended June 30, 2019 were $6.5 million. An improvement in TCE revenues of $0.4 million to $5.5 million in the second quarter, 2019 was partially offset by an aggregate increase of $0.2 million in vessel operating expenses and general and administrative expenses. More significantly, a $0.5 million increase in interest and finance costs, net impacted the bottom line for the period ended June 30, 2019. Our Adjusted EBITDA was $1.3 million, representing an increase of $0.2 million from $1.1 million for the same period in 2018.

Results for the six months ended June 30, 2018 and 2019

For the six months ended June 30, 2019, we reported a net loss of $3.9 million, or $0.19 basic and diluted loss per share, compared to a net loss of $0.7 million or $0.03 basic and diluted loss per share, for the same period in 2018. The increase in our net loss was primarily the result of a non-cash impairment charge of $1.5 million that was recorded in the first quarter of 2018 related to the write down of the carrying amount of Northsea Alpha and Northsea Beta to their then fair values offset by the gain from debt extinguishment of $4.3 million as a result of the early prepayment of loans from Commerzbank when the existing debt for the small tankers and Pyxis Malou was refinanced in full with Amsterdam Trade Bank, N.V. (“ATB”) in February, 2018. Our Adjusted EBITDA was $1.8 million, an increase of $0.6 million from $1.2 million for the same period in 2018, reflected higher TCE revenues.

* Subject to rounding; please see “Non-GAAP Measures and Definitions” below

Management’s Discussion and Analysis of Financial Results for the Three Months ended June 30, 2018 and 2019 (Amounts are presented in million U.S. dollars, rounded to the nearest one hundred thousand, except as otherwise noted)

Revenues, net: Revenues, net of $6.5 million for the three months ended June 30, 2019, represented a decrease of $0.5 million, or 7.5%, from $7.0 million in the comparable period in 2018. The decrease in the second quarter of 2019 related to a decline in total operating days attributed to more idle days between voyage charter employments partially offset by greater time charter equivalents rates compared to the three-month period ended June 30, 2018.

Voyage related costs and commissions: Voyage related costs and commissions of $1.0 million for the three months ended June 30, 2019, represented a decrease of $0.9 million, or 48.2%, from $1.9 million in the comparable period in 2018. The decrease was primarily attributed to lower spot chartering activity, which incurs voyage costs. Under spot charters, all voyage expenses are typically borne by us rather than the charterer and a decrease in spot chartering results in a decrease in voyage related costs and commissions.

Vessel operating expenses: Vessel operating expenses of $3.1 million for the three months ended June 30, 2019, represented a slight increase of $0.1 million, or 3.7%, from $3.0 million in the comparable period in 2018. Some incremental operating costs were incurred in the beginning of the second quarter of 2019 with the re-delivery of the Pyxis Malou after her second special survey with Ballast Water Treatment System (“BWTS”) installation.

General and administrative expenses: General and administrative expenses of $0.6 million for the three months ended June 30, 2019, represented a slight increase of less than $0.1 million, or 7.9%, from the comparable period in 2018 due to timing of certain incurred costs.

Management fees: For the three months ended June 30, 2019, management fees paid to our ship manager, Pyxis Maritime Corp. (“Maritime”), and to International Tanker Management Ltd. (“ITM”), our fleet’s technical manager, were $0.4 million in aggregate and remained flat compared to the three-month period ended June 30, 2018.

Amortization of special survey costs: Amortization of special survey costs of less than $0.1 million for the three months ended June 30, 2019, remained relatively stable compared to the same period in 2018.

Depreciation: Depreciation of $1.4 million for the three months ended June 30, 2019, remained flat compared to the three months ended June 30, 2018.

Bad debt provisions: Bad debt provisions of less than $0.1 million for the three months ended June 30, 2019, represented a slight decrease in doubtful trade accounts receivable compared to the same period ended June 30, 2018.

Loss from financial derivative instrument: The loss from financial derivative instrument for the three months ended June 30, 2019, related to the net loss from the change in fair value of the interest rate cap for a notional amount of $10.0 million we purchased in January 2018. The same loss was the also recorded in the comparable period in 2018.

Interest and finance costs, net: Interest and finance costs, net, of $1.5 million for the three months ended June 30, 2019, represented an increase of $0.5 million, or 52.9%, from $1.0 million in the comparable period in 2018. The increase was mainly attributed to the increase of the LIBOR-based interest rates applied to our outstanding loans, as well as due to the increased total borrowings outstanding from $58.2 million at June 30, 2018 to $61.2 million at June 30, 2019. In addition, the overall weighted average interest rate increased to 8.2% in 2019 from 5.1% in the comparable period in 2018, as a result of the refinancing of the existing debt for a) Northsea Alpha, Northsea Beta and Pyxis Malou with ATB and b) Eighthone Corp. (Pyxis Epsilon) with EnTrustPermal in September, 2018.

Management’s Discussion and Analysis of Financial Results for the Six Months ended June 30, 2018 and 2019 (Amounts are presented in million U.S. dollars, rounded to the nearest one hundred thousand, except as otherwise noted)

Revenues, net: Revenues, net of $13.2 million for the six months ended June 30, 2019, represented a decrease of $0.4 million, or 2.9%, from $13.6 million in the comparable period in 2018. The decrease during the first six months of 2019 related to the small tankers’ lower TCE rates, due to greater number of idle days between their voyage charter employments and hence less operating days.

Voyage related costs and commissions: Voyage related costs and commissions of $2.9 million for the six months ended June 30, 2019, represented a decrease of $1.0 million, or 25.7%, from $3.9 million in the comparable period in 2018. The decrease was primarily attributed to lower spot chartering activity with our MR’s.

Vessel operating expenses: Vessel operating expenses of $6.4 million for the six months ended June 30, 2019, represented a slight increase of less than $0.1 million, or 1.0%, from $6.3 million in the comparable period in 2018.

General and administrative expenses: General and administrative expenses of $1.2 million for the six months ended June 30, 2019, represented a slight decrease of less than $0.1 million, or 4.8%, from the comparable period in 2018.

Management fees: For the six months ended June 30, 2019, management fees payable to Maritime and ITM of $0.8 million in the aggregate, remained flat compared to the six months ended June 30, 2018.

Amortization of special survey costs: Amortization of special survey costs of $0.1 million for the six months ended June 30, 2019, represented an increase of 112.7%, compared to the same period in 2018 due to the Pyxis Malou’s 10th year special survey which was performed during the first quarter of 2019.

Depreciation: Depreciation of $2.7 million for the six months ended June 30, 2019, remained relatively flat compared to the same period in 2018.

Vessel impairment charge: No vessel impairment charge was recorded in the six months ended June 30, 2019 compared to a vessel impairment charge of $1.5 million (non-cash) for the comparable period of 2018, that was related to the write down of the carrying amounts of Northsea Alpha and Northsea Beta to their then fair values.

Bad debt provisions: Bad debt provisions of less than $0.1 million for the six months ended June 30, 2019, represented a slight decrease in doubtful trade account receivable compared to the same period ended June 30, 2018.

Gain from debt extinguishment: There was no such gain recorded in the six months ended June 30, 2019 in contrast with the comparable period in 2018 when a gain from debt extinguishment of $4.3 million was recognized related to the refinancing of existing indebtedness of Secondone Corporation Ltd, Thirdone Corporation Ltd and Fourthone Corporation Ltd in a new 5-year secured term loan with ATB. Approximately $4.3 million was written-off by the previous lender at closing, which was recorded as gain from debt extinguishment in 2018.

Gain / (Loss) from financial derivative instrument: Loss from financial derivative instrument of less than $0.1 million for the six months ended June 30, 2019 related to the net loss from the change in fair value of the interest rate cap compared to a gain of less than $0.1 million in the respective period in 2018.

Interest and finance costs, net: Interest and finance costs, net, of $2.9 million for the six months ended June 30, 2019, represented an increase of $1.1 million, or 58.2%, from $1.8 million in the comparable period in 2018. The increase was attributable to higher LIBOR rates paid on floating rate bank debt compared to the comparable period in 2018 and the refinancing of the loans on four of our vessels at higher interest rates. The total borrowings outstanding increased to $61.2 million at June 30, 2019 from $58.2 million at June 30, 2018 and the overall weighted average interest rate increased to 8.2% in 2019 from 5.1% in the comparable period in 2018.

Unaudited Interim Consolidated Statements of Comprehensive Loss

For the three months ended June 30, 2018 and 2019

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

Unaudited Interim Consolidated Statements of Comprehensive Loss

For the six months ended June 30, 2018 and 2019

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

Consolidated Balance Sheets

As of December 31, 2018 and June 30, 2019 (unaudited)

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

Unaudited Interim Consolidated Statements of Cash Flow

For the six months ended June 30, 2018 and 2019

(Expressed in thousands of U.S. dollars)

Liquidity, Debt and Capital Structure

Pursuant to our loan agreements, as of June 30, 2019, we were required to maintain minimum liquidity of $3.6 million. Total cash and cash equivalents, including restricted cash, aggregated $5.0 million as of June 30, 2019.

Total funded debt (in thousands of U.S. dollars), net of deferred financing costs:

Our weighted average interest rate on our total funded debt for the six months ended June 30, 2019 was 8.2%.

On May 14, 2019, the Company entered into a second amendment to the Amended & Restated Promissory Note to the outstanding $5 million unsecured promissory note (the “Note”) issued to Maritime Investors Corp., an affiliate controlled by Mr. Valentis, 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 EntrustPermal (the “Credit Facility”) in September 2023, b) January 15, 2024 and c) repayment of any 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 is 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. Out of the total interest charged on the Amended & Restated Promissory Note during the six-month period ended June 30, 2019, $112 will be paid in cash and the remaining $56 will be settled with common shares to be issued subsequent to June 30, 2019.

Non-GAAP Measures and Definitions

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) represents the sum of net income / (loss), interest and finance costs, depreciation and amortization and, if any, income taxes during a period. Adjusted EBITDA represents EBITDA before certain non-operating or non-recurring charges, such as vessel impairment charges, gain from debt extinguishment and stock compensation. EBITDA and Adjusted EBITDA are not recognized measurements under U.S. GAAP.

EBITDA and Adjusted EBITDA are presented in this press release as we believe that they provide investors with means of evaluating and understanding how our management evaluates operating performance. These non-GAAP measures have limitations as analytical tools, and should not be considered in isolation from, as a substitute for, or superior to financial measures prepared in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA do not reflect:

In addition, these non-GAAP measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other companies. The following table reconciles net loss, as reflected in the Unaudited Consolidated Statements of Comprehensive Loss to EBITDA and Adjusted EBITDA:

Daily time charter equivalent (“TCE”) is a shipping industry performance measure of the average daily revenue performance of a vessel on a per voyage basis. TCE is not calculated in accordance with U.S. GAAP. We utilize TCE because we believe it is a meaningful measure to compare period-to-period changes in our performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which our vessels may be employed between the periods. Our management also utilizes TCE to assist them in making decisions regarding employment of the vessels. We calculate TCE by dividing Revenues, net after deducting Voyage related costs and commissions, by operating days for the relevant period. Voyage related costs and commissions primarily consist of brokerage commissions, port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract. Vessel operating expenses (“Opex”) per day are our vessel operating expenses for a vessel, which primarily consist of crew wages and related costs, insurance, lube oils, communications, spares and consumables, tonnage taxes as well as repairs and maintenance, divided by the ownership days in the applicable period.

We calculate fleet utilization by dividing the number of operating days during a period by the number of available days during the same period. We use fleet utilization to measure our efficiency in finding suitable employment for our vessels and minimizing the amount of days that our vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys and intermediate dry-dockings or vessel positioning. Ownership days are the total number of days in a period during which we owned each of the vessels in our fleet. Available days are the number of ownership days in a period, less the aggregate number of days that our vessels were off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and intermediate dry-dockings and the aggregate number of days that we spent positioning our vessels during the respective period for such repairs, upgrades and surveys. Operating days are the number of available days in a period, less the aggregate number of days that our vessels were off-hire or out of service due to any reason, including technical breakdowns and unforeseen circumstances.

Subsequent Events

On July 2, 2019, following the second amendment to the Amended & Restated Promissory Note dated May 14, 2019, the Company issued 54,462 of common shares at the volume weighted average closing share price for the 10 day period immediately prior to the quarter end.

Conference Call and Webcast

We will host a conference call to discuss our results at 9 a.m., Eastern Time, on Monday, August 12, 2019.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (877) 553-9962 (US Toll Free Dial In), 0(808) 238-0669 (UK Toll Free Dial In) or +44 (0) 2071 928592 (Standard International Dial In). Please quote “Pyxis Tankers”.

A telephonic replay of the conference call will be available until Monday, August 19, 2019, by dialing 1(866) 331-1332 (US Toll Free Dial In), 0(808) 238-0667 (UK Toll Free Dial In) or +44 (0) 3333 009785 (Standard International Dial In). The access code required for the replay is: 5478965#.

A live webcast of the conference call will be available through our website (http://www.pyxistankers.com) under our Events & Presentations page.

Webcast participants of the live conference call should register on the website approximately 10 minutes prior to the start of the webcast and can also access it through the following link:

https://event.on24.com/wcc/r/2020792/4E73C1FC9AC2F16483F934EFB2C11D39

An archived version of the webcast will be available on the website within approximately two hours of the completion of the call.

The information discussed on the conference call, or that can be accessed through, Pyxis Tankers Inc.’s website is not incorporated into, and does not constitute part of this report.

About Pyxis Tankers Inc.

We own a modern fleet of six tankers engaged in seaborne transportation of refined petroleum products and other bulk liquids. We are focused on growing our fleet of medium range product tankers, which provide operational flexibility and enhanced earnings potential due to their “eco” features and modifications. Pyxis Tankers is positioned to opportunistically expand and maximize the value of its fleet due to competitive cost structure, strong customer relationships and an experienced management team, whose interests are aligned with those of its shareholders. For more information, visit: http://www.pyxistankers.com. The information discussed contained in, or that can be accessed through, Pyxis Tankers Inc.’s website, is not incorporated into, and does not constitute part of this report.

Pyxis Tankers Fleet (as of August 08, 2019)

The Pyxis Delta is scheduled for an intermediate survey during 4Q ’19 with expected off-hire of up to 3 days and estimated cost of $50 thousand. The Pyxis Epsilon is scheduled to have her first dry-docking in 1Q ’20 with expected off-hire of 25 days and estimated cost of $0.9 million, including BWTS.

Forward Looking Statements

This press release includes “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995 in order to encourage companies to provide prospective information about their business. These statements include statements about our plans, strategies, goals financial performance, prospects or future events or performance and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expects,” “seeks,” “predict,” “schedule,” “projects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “potential,” “likely” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company’s control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. A more complete description of these risks and uncertainties can be found in our filings with the U.S. Securities and Exchange Commission, including under the caption “Risk Factors” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2018. We caution you not to place undue reliance on any forward-looking statements, which are made as of the date of this press release. We undertake no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws.

Company

Pyxis Tankers Inc.

59 K. Karamanli Street

Maroussi 15125 Greece

info@pyxistankers.com

Visit our website at www.pyxistankers.com

Company Contact

Henry Williams

Chief Financial Officer

Tel: +30 (210) 638 0200 / +1 (516) 455-0106

Email: hwilliams@pyxistankers.com

Source: Pyxis Tankers Inc.

Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of our financial condition and results of operations for the six-month periods ended June 30, 2019 and 2018. Unless otherwise specified herein, references to the “Company,” “we” or “our” shall include PYXIS TANKERS INC. and its subsidiaries. You should read the following discussion and analysis together with our unaudited interim consolidated financial statements as of June 30, 2019 and for the six-month periods ended June 30, 2019 and 2018, and the accompanying notes thereto, included elsewhere in this report. For additional information relating to our management’s discussion and analysis of financial condition and results of operations, please see our Annual Report on Form 20-F for the year ended December 31, 2018, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 29, 2019 (the “2018 Annual Report”).

Forward-Looking Statements

Our disclosure and analysis herein pertaining to our operations, cash flows and financial position, including, in particular, the likelihood of our success in developing and expanding our business and making acquisitions, includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “projects,” “forecasts,” “may,” “should” and similar expressions are forward-looking statements. All statements herein that are not statements of either historical or current facts are forward-looking statements. Forward-looking statements include, but are not limited to, such matters as our future operating or financial results, global and regional economic and political conditions (including piracy), pending vessel acquisitions, our business strategy and expected capital spending or operating expenses, including dry-docking and insurance costs, competition in the product tanker industry, statements about shipping market trends (including charter rates and factors affecting supply and demand), our financial condition and liquidity, including our ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate activities, our ability to enter into fixed-rate charters after our current charters expire and our ability to earn income in the spot market and our expectations of the availability of vessels to purchase, the time it may take to construct new vessels, and vessels’ useful lives. Many of these statements are based on our assumptions about factors that are beyond our ability to control or predict and are subject to risks and uncertainties that are described more fully under “Item 3. Key Information – D. Risk Factors” of the 2018 Annual Report. Any of these factors or a combination of these factors could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements.

Factors that might cause future results to differ include, but are not limited to, the following:

You should not place undue reliance on forward-looking statements contained herein because they are statements about events that are not certain to occur as described or at all. All forward-looking statements herein are qualified in their entirety by the cautionary statements contained herein. These forward-looking statements are not guarantees of our future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements. Except to the extent required by applicable law or regulation, we undertake no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Overview

We are PYXIS TANKERS INC., a corporation incorporated in the Republic of the Marshall Islands on March 23, 2015. We currently own, directly or indirectly, 100% ownership interest in the following six vessel-owning companies:

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

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 more information, please refer to Notes 1 and 7 to our unaudited interim consolidated financial statements for the six-month periods ended June 30, 2019 and 2018, included elsewhere herein.

Vessel Management

PYXIS MARITIME CORP. (“Maritime”), a corporation established under the laws of the Republic of the Marshall Islands, which is beneficially owned by Mr. Valentios (“Eddie”) Valentis, our Chairman, Chief Executive Officer and Class I Director, provides certain ship management services to the Vessel-owning companies, including but not limited to chartering, financing and accounting, sale and purchase, insurance, operations, dry-docking and construction supervision, for a fixed daily fee per vessel.

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

Results of Operations

Our revenues consist of earnings under the charters on which we employ our vessels. We believe that the important measures for analyzing trends in the results of our operations consist of the following:

Revenues

We generate revenues by chartering our vessels for the transportation of petroleum products and other liquid bulk items, such as organic chemicals and vegetable oils. Revenues are generated primarily by the number of vessels in our fleet, the number of voyage days employed and the amount of daily charter hire earned under vessels’ charters. These factors, in turn, can be affected by a number of decisions by us, including the amount of time spent positioning a vessel for charter, dry-dockings, repairs, maintenance and upgrading, as well as the age, condition and specifications of our ships and supply and demand factors in the product tanker market. At June 30, 2019, four of the vessels in our fleet were employed in time charters, one in the spot market and one was awaiting orders. Revenues from time charter agreements providing for varying daily rates are accounted for as operating leases and thus are recognized on a straight line basis over the term of the time charter as service is performed. Revenue under spot charters is recognized from loading of the current spot charter to discharge of the current spot charter as discussed below. Vessels operating on time charters provide more predictable cash flows, but can yield lower profit margins than vessels operating in the spot market during periods characterized by favorable market conditions. The vessel owner generally pays commissions on both types of charters on the gross charter rate. Address commissions represent a discount provided directly to the charterers based on a fixed percentage of the agreed upon charter and is presented as a reduction in revenues.

Time Charters

A time charter is a contract for the use of a vessel for a specific period of time during which the charterer pays substantially all of the voyage expenses, including port and canal charges and the cost of bunker (fuel oil), but the vessel owner pays vessel operating expenses, including the cost of crewing, insuring, repairing and maintaining the vessel, the costs of spares and consumable stores and tonnage taxes. Time charter rates are usually set at fixed rates during the term of the charter. Prevailing time charter rates fluctuate on a seasonal and on a year-to-year basis and, as a result, when employment is being sought for a vessel with an expiring or terminated time charter, the prevailing time charter rates achievable in the time charter market may be substantially higher or lower than the expiring or terminated time charter rate. Fluctuations in time charter rates are influenced by changes in spot charter rates, which are in turn influenced by a number of factors, including vessel supply and demand. The main factors that could increase total vessel operating expenses are crew salaries, insurance premiums, spare parts orders, repairs that are not covered under insurance policies and lubricant prices.

Spot Charters

Generally, a spot charter refers to a contract to carry a specific cargo for a single voyage, which commonly lasts from several days up to three months. Spot charters typically involve the carriage of a specific amount and type of cargo on a load-port to discharge-port basis, subject to various cargo handling terms, and the vessel owner is paid on a per-ton basis. Under a spot charter, the vessel owner is responsible for the payment of all expenses including its capital costs, voyage expenses (such as port, canal and bunker costs) and vessel operating expenses. Fluctuations in spot charter rates are caused by imbalances in the availability of cargoes for shipment and the number of vessels available at any given time to transport these cargoes at a given port. Demurrage income represents payments by a charterer to a vessel owner when loading or discharging time exceeds the stipulated time in the spot charter. We have determined that demurrage represents variable consideration and we estimate 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.

Voyage Related Costs and Commissions

We incur voyage related costs for our vessels operating under spot charters, which mainly include port and canal charges and bunker expenses. Port and canal charges and bunker expenses primarily increase in periods during which vessels are employed on spot charters because these expenses are for the account of the vessel owner. Contract fulfillment costs are capitalized and amortized as the performance obligation is satisfied and certain other criteria are met. Voyage costs during the ballast voyage represented costs to fulfil a contract which give rise to an asset and are 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 are expensed as incurred. Brokerage commissions payable for both spot and time charter contracts, if any, depend on a number of factors, including, among other things, the number of shipbrokers involved in arranging the charter and the amount of commissions charged by brokers related to the charterer. Such commissions are deferred and amortized over the related period in a charter to the extent revenue has been deferred since commissions are earned as revenues are earned.

Vessel Operating Expenses

We incur vessel operating expenses for our vessels operating under time and spot charters. Vessel operating expenses primarily consist of crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses necessary for the operation of the vessel. All vessel operating expenses are expensed as incurred.

General and Administrative Expenses

The primary components of general and administrative expenses consist of the annual fee payable to Maritime for the administrative services under our Head Management Agreement, which includes the services of our senior executive officers, and the expenses associated with being a public company. Such public company expenses include the costs of preparing public reporting documents, legal and accounting costs, including costs of legal and accounting professionals and staff, and costs related to compliance with the rules, regulations and requirements of the SEC, the rules of NASDAQ, board of directors’ compensation and investor relations.

Management Fees

We pay management fees to Maritime and ITM for commercial and technical management services, respectively, for our vessels. These services include: obtaining employment for our vessels and managing our relationships with charterers; strategic management services; technical management services, which include managing day-to-day vessel operations, ensuring regulatory and classification society compliance, arranging our hire of qualified officers and crew, arranging and supervising dry-docking and repairs and arranging insurance for vessels; and providing shoreside personnel who carry out the management functions described above. As part of their ship management services, Maritime provides us with supervision services for new construction of vessels; these costs are capitalized as part of the total delivered cost of the vessel.

Depreciation

We depreciate the cost of our vessels after deducting the estimated residual value, on a straight-line basis over the expected useful life of each vessel, which is estimated to be 25 years from the date of initial delivery from the shipyard. We estimate the residual values of our vessels to be $300 per lightweight ton.

Interest and Finance Costs

We have historically incurred interest expense and financing costs in connection with the debt incurred to partially finance the acquisition of our existing fleet. We have also incurred interest expense in relation to the $5.0 million promissory note we issued in favor of Maritime Investors Corp., which is more fully described under the section entitled “Liquidity, Debt and Capital Structure”. Except for the interest payments under our promissory note and the new loan for the Eighthone that are based on fixed rates, the interest rate under our debt agreements is linked to the three month LIBOR rate. In order to hedge our variable interest rate exposure, on January 19, 2018, we, via one of our vessel-owning subsidiaries, purchased an interest rate cap with one of our lenders for a notional amount of $10.0 million and a cap rate of 3.5%. The interest rate cap will terminate on July 18, 2022. In the future, we may consider the use of additional financial hedging products to further limit our interest rate exposure.

In evaluating our financial condition, we focus on the above financial and operating measures as well as fleet and vessel type for utilization, time charter equivalent rates and operating expenses to assess our operating performance. We also monitor our cash position and outstanding debt to assess short-term liquidity and our ability to finance further fleet expansion. Discussions about possible acquisitions or sales of existing vessels are based on our financial and operational criteria which depend on the state of the charter market, availability of vessel investments, employment opportunities, anticipated dry-docking costs and general economic prospects.

Selected Information

Our selected consolidated financial and other data for the six months ended June 30, 2018 and 2019 and as of June 30, 2019, presented in the tables below, have been derived from our unaudited interim consolidated financial statements and notes thereto included elsewhere herein. Our selected consolidated financial data as of December 31, 2018, presented in the tables below have been derived from our audited financial statements and notes thereto, included in our 2018 Annual Report.

The following table reflects the calculation of our daily TCE rates for the six-month periods ended June 30, 2018 and 2019:

⁽¹⁾ Subject to rounding

The following table reflects the daily TCE rate, daily operating expenses (“Opex”) and utilization rate on a per vessel type basis for the six-month periods ended June 30, 2018 and 2019:

Results of Operations

Six months ended June 30, 2019 and 2018

The average number of vessels in our fleet was 6.0 for the six months ended June 30, 2019 and 2018.

Cash Flows

Our principal sources of funds for the six months ended June 30, 2019, have been our cash inflows from the operation of our fleet as well as cash inflows from the increase in balances due to Maritime. Our principal uses of funds have been working capital requirements and principal and interest payments on our debt agreements. Cash and cash equivalents as of June 30, 2019, amounted to $1.4 million, compared to $0.5 million as of December 31, 2018. We define working capital as current assets minus current liabilities. We had a working capital deficit of $13.6 million as of June 30, 2019, compared to the working capital deficit of $9.2 million as of December 31, 2018. The increase in our working capital deficit was mainly driven by the increase in current liabilities of $3.0 million as a result of a $1.6 million increase in balances due to related parties, a $1.0 million increase in hires collected in advance and $0.4 million increase in accrued and other liabilities. Our working capital deficit further deteriorated in the aggregate by $1.4 million mainly driven by the decrease in trade accounts receivables, net of $2.2 million, partially offset by a $0.8 million increase in cash and cash equivalents.

Operating Activities

Investing Activities

Financing Activities

Debt Agreements

For information relating to our debt agreements, please see Note 7 to our financial statements included in our 2018 Annual Report for the year ended December 31, 2018 and Note 7 to our unaudited interim consolidated financial statements for the six-month periods ended June 30, 2019 and 2018 included elsewhere herein.

Liquidity and Capital Resources

Our principal sources of liquidity are cash flows from operations, borrowings from bank debt, proceeds from issuances of equity and, we expect in the future, from the selective sale of vessels and the proceeds from further issuances of equity and re-financings of debt. We expect that our future liquidity requirements will relate primarily to:

On March 30, 2018, we filed with the SEC a prospectus supplement to sell up to $2.3 million of common shares through an At-the-Market (“ATM”) offering or similar direct placement. We did not issue any securities under this program, but on November 19, 2018 we amended the prospectus supplement to increase the offering to $3.675 million. In November 2018 we sold 182,297 common shares and our outstanding common shares increased from 20,877,893 to 21,060,190. Following the issuance and sale of a further 28,349 shares of common stock under the ATM Program during April 2019, the Company’s outstanding common shares increased from 21,060,190 to 21,088,539 as at June 30, 2019.

We expect to rely upon operating cash flows from the employment of our vessels on spot and time charters and amounts due to related parties, long-term borrowings and the proceeds from future equity and debt offerings to fund our liquidity and capital needs and implement our growth plan. We perform on a regular basis cash flow projections to evaluate whether we will be in a position to cover our liquidity needs for the next 12-month period and be in compliance with the financial and security collateral cover ratio covenants under the existing debt agreements. In developing estimates of future cash flows, we make assumptions about the vessels’ future performance, with significant assumptions relating to time charter equivalent rates by vessel type, vessels’ operating expenses, vessels’ capital expenditures, fleet utilization, our management fees, general and administrative expenses, and debt servicing requirements. The assumptions used to develop estimates of future cash flows are based on historical trends as well as future expectations. As of June 30, 2019 we had a working capital deficit of $13.6 million, defined as current assets minus current liabilities. As of the filing date of the unaudited interim consolidated financial statements, we expect that we will be in a position to cover our liquidity needs for the next 12-month period through cash generated from operations and by managing our working capital requirements. In addition, we may consider the raising of capital including by incurring additional debt, issuing equity or debt securities, through joint ventures and / or sale of assets.

Our business is capital intensive and our future success will depend on our ability to maintain a high-quality fleet through the acquisition of modern tanker vessels and the selective sale of older tanker vessels. We are pursuing a sale or other long-term strategy for the small tankers including without limitation a bareboat charter agreement with purchase option or commitment. The acquisitions and disposals or other long-term strategy will be principally subject to management’s expectation of future market conditions, our ability to acquire and dispose of tanker vessels on favorable terms as well as access to cost-effective capital on reasonable terms.

We do not intend to pay dividends to the holders of our shares in the near future and expect to retain our cash flows primarily for the payment of vessel operating costs, dry-docking costs, debt servicing and other obligations, general corporate and administrative expenses, and reinvestment in our business (such as to fund vessel or fleet acquisitions), in each case, as determined by our board of directors and consistent with restrictions in our debt obligations.

On May 14, 2019, we 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 EntrustPermal (the “Credit Facility”) in September 2023, b) January 15, 2024 and c) repayment of any 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 calculated on the volume weighted average closing share price for the 10 day period immediately prior to each quarter end. The new interest rate is effective from April 1, 2019. After the repayment restrictions have been lifted per the Credit Facility, at our option, we 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.

On June 6, 2017, the lender of Sixthone and Seventhone agreed to extend the maturity of its respective loans from September 2018 to September 2022 under the same applicable margin, but with an extended amortization schedule. The aggregate outstanding balance of these loans as of June 30, 2019, of $18.8 million is scheduled to be repaid in 13 quarterly installments of $0.65 million each and a balloon payment of $10.4 million. As of June 30, 2019, these subsidiaries were restricted from paying dividends to the Company under the HSH loan agreement because the ratio of the Company’s total liabilities to market value adjusted total assets was 69.5%, or 4.5% higher than the threshold under which dividends can be paid. This requirement is only applicable in order to assess whether the the Sixthone and Seventhone are entitled to distribute dividends to Pyxis and does not constitute an event of default under this or our other loan agreements.

On February 2, 2018, we filed with the SEC a registration statement on Form F-3 (the “Shelf Registration Statement”), under which we 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 $100.0 million. 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 our 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, we filed a prospectus supplement to the Shelf Registration Statement related to an ATM Program under which we may, from time to time, issue and sell shares of our common stock up to an aggregate offering of $2.3 million 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 million. As of December 31, 2018, following the issuance and sale of 182,297 shares of common stock under the ATM Program during 2018, our outstanding common shares increased from 20,877,893 to 21,060,190. Following the issuance and sale of a further 28,349 shares of common stock under the ATM Program during April 2019, our outstanding common shares increased from 21,060,190 to 21,088,539 as at June 30, 2019.

On February 28, 2018, we refinanced existing indebtedness of $26.9 million under the Secondone, Thirdone and Fourthone loan agreements with a new 5-year secured loan of $20.5 million and cash of $2.1 million. The remaining balance of approximately $4.3 million was written-off by the previous lender at closing, which was recorded as gain from debt extinguishment in the first quarter of 2018. The new loan bears interest at LIBOR plus a margin of 4.65% per annum, and matures in February 2023. The loan is repayable in quarterly installments and a balloon payment. Standard loan covenants include, among others, a minimum loan to value ratio and liquidity. As a condition subsequent to the execution of this loan agreement, the borrowers, Secondone, Thirdone and Fourthone, were required to complete all required procedures for their re-domiciliation to the jurisdiction of the Republic of Malta by May 1, 2018. The relevant re-domiciliations were completed in March and April 2018.

On September 27, 2018, Eighthone, our vessel owning subsidiary that owns the Pyxis Epsilon, entered into a new $24.0 million loan agreement for the purpose of refinancing the outstanding indebtedness under the previous loan facility. 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 11.0% per annum and incurs fees due upfront and upon early prepayment or final repayment of outstanding principal. The principal obligation amortizes in 18 quarterly installments starting on March 29, 2019, equal to the lower of $0.4 million and excess cash computed through a cash sweep mechanism, plus a balloon payment due at 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. After repayment of existing loans, the new 5-year secured loan provided us approximately $7.3 million of additional liquidity for general corporate purposes.

The Company was in compliance with all of the loan covenants in its loan agreements. In addition, as of June 30, 2019, there was no amount available to be drawn down by the Company under its existing loan agreements.

We have historically incurred interest expense and financing costs in connection with the debt incurred to partially finance the acquisition of our existing fleet. The interest rate is generally linked to the three-month LIBOR rate. In order to hedge our variable interest rate exposure, on January 19, 2018, we, via one of our vessel-owning subsidiaries, purchased an interest rate cap with one of our lenders for a notional amount of $10.0 million and a cap rate of 3.5%. The interest rate cap will terminate on July 18, 2022. In the future, we may consider the use of additional financial hedging products to limit our interest rate exposure.

Recent Developments

For information relating to our recent developments, please refer to section “Liquidity and Capital Resources” above and to Note 14 to our unaudited interim consolidated financial statements as of June 30, 2019 and for the six-month periods ended June 30, 2019 and 2018 included elsewhere herein.

Fleet Information (as of August 08, 2019)

The Pyxis Delta is scheduled for an intermediate survey during 4Q ’19 with expected off-hire of up to 3 days and estimated cost of $50 thousand. The Pyxis Epsilon is scheduled to have her first dry-docking in 1Q ’20 with expected off-hire of 25 days and estimated cost of $0.9 million, including BWTS.

PYXIS TANKERS INC.

INDEX TO unaudited interim cONSOLIDATED FINANCIAL STATEMENTS

PYXIS TANKERS INC.