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

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2025

Commission File Number 001-41095

 

 

IMPERIAL PETROLEUM INC.

(Translation of registrant’s name into English)

 

 

331 Kifissias Avenue, Kifissia 14561 Athens, Greece

(Address of principal executive office)

 

 

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

Form 20-F ☒     Form 40-F ☐

 

EXHIBIT INDEX

 

99.1		Proxy Statement for the 2025 Annual Meeting of Stockholders
99.2		Proxy and Notice Cards for the 2025 Annual Meeting of Stockholders
99.3		2024 Annual Report

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 29, 2025

 

IMPERIAL PETROLEUM INC.
By:		/s/ Ifigeneia Sakellari
Name:		Ifigeneia Sakellari
Title:		Chief Financial Officer

Exhibit 99.1

 

 

IMPERIAL PETROLEUM INC.

331 Kifissias Avenue

Kifissia 14561

Athens,Greece

August 29, 2025

Dear Stockholder:

You are cordially invited to attend the 2025 Annual Meeting of Stockholders of Imperial Petroleum Inc., which will be held onMonday, October 13, 2025 at 11:00 a.m. Greek local time at the Company’s offices at 331 Kifissias Avenue, Kifissia 14561 in Athens, Greece.

The following Notice of the 2025 Annual Meeting of Stockholders and 2025 Proxy Statement describe the items to be considered bythe stockholders at the meeting.

We are pleased to provide our proxy materials to our stockholders over the Internet. Onor about August 29, 2025, we will begin mailing a Notice of Internet Availability of Proxy Materials to stockholders informing them that our 2025 Proxy Statement, 2024 Annual Report and voting instructions are available online. As more fullydescribed in that Notice, stockholders may choose to access our proxy materials on the Internet or may request to receive paper copies of the proxy materials. This allows us to conserve natural resources and reduces the costs of printing anddistributing the proxy materials, while providing our stockholders with access to the proxy materials in a fast and efficient manner. If you request proxy materials by mail, the Notice of the 2025 Annual Meeting of Stockholders, 2025 Proxy Statementand proxy card or voting instruction card and 2024 Annual Report will be sent to you.

Whether or not you are able toattend the 2025 Annual Meeting in person, it is important that your shares be represented. You can vote your shares by using the Internet, by telephone, or by requesting a printed copy of the proxy materials and completing and returning by mail theproxy card or voting instruction card that you will receive in response to your request. Instructions on each of these voting methods are outlined in the enclosed Proxy Statement. Please vote as soon as possible.

We hope to see you on October 13th.

Sincerely,

Harry N. Vafias

Chairman of the Board of Directors

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL STOCKHOLDERSMEETING TO BE HELD ON OCTOBER 13, 2025

The Notice of Annual Meeting of Stockholders, Proxy Statement, proxy cardor voting instruction form and the Company’s 2024 Annual Report to Stockholders are available at www.Imperialpetro.com under the heading “Investor Relations-SEC Filings” or atwww.proxyvote.com.

YOUR VOTE IS IMPORTANT.

IN ORDER TO ENSURE YOUR REPRESENTATION AT THE 2025 ANNUAL MEETING AND THAT A QUORUM WILL BE PRESENT, WE URGE YOU TO VOTE AS PROMPTLY AS POSSIBLE BY USING THEINTERNET, BY TELEPHONE, OR BY COMPLETING, SIGNING, DATING AND RETURNING YOUR PROXY CARD OR VOTING INSTRUCTION FORM. A PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED. THE RETURN OF THIS PROXY CARD OR VOTING INSTRUCTION FORM WILLNOT AFFECT YOUR RIGHT TO VOTE IN PERSON, SHOULD YOU DECIDE TO ATTEND THE 2025 ANNUAL MEETING.

IMPERIAL PETROLEUM INC.

331 Kifissias Avenue

Kifissia 14561

Athens,Greece

NOTICE OF 2025 ANNUAL MEETING OF STOCKHOLDERS

To Be Held On Monday, October 13, 2025

NOTICE IS HEREBY GIVEN that the 2025 Annual Meeting of Stockholders of Imperial Petroleum Inc., a corporation incorporated inthe Republic of the Marshall Islands, will be held at 11:00 a.m. Greek local time, Monday, October 13, 2025, at the Company’s offices at 331 Kifissias Avenue, Kifissia 14561 in Athens, Greece for the following purposes:

 

1.

to elect one director to hold office until the annual meeting of stockholders in 2028 and such director’ssuccessor has been duly elected and qualified;

 

2.

to ratify the appointment of our independent auditors; and

 

3.

to transact such other business as may properly come before the 2025 Annual Meeting and any adjournments orpostponements thereof.

During the 2025 Annual Meeting, management also will discuss our financialresults for the year ended December 31, 2024. Copies of our audited consolidated financial statements are contained in our 2024 Annual Report to Stockholders, which is being made available to stockholders together with the accompanying proxystatement. Our 2024 Annual Report to Stockholders is also available on our website at www.Imperialpetro.com under the heading “Investor Relations-SEC Filings” or at www.proxyvote.com.

Only holders of record of shares of our common stock, par value $0.01 per share, and Series B Preferred Stock, par value $0.01per share, at the close of business on August 18, 2025 will be entitled to receive notice of, and to vote at, the 2025 Annual Meeting and at any adjournments or postponements thereof.

You are cordially invited to attend the 2025 Annual Meeting. Whether or not you expect to attend the 2025 Annual Meeting inperson, please vote your shares by using the Internet, by telephone, or by completing and returning by mail, in the envelope provided, the proxy card or voting instruction form, which is being solicited on behalf of our Board of Directors. The proxycard or voting instruction form shows the form in which your shares of stock are registered. Your signature must be in the same form. Voting your shares by using the Internet, by telephone, or by returning the proxy card or voting instruction formdoes not affect your right to vote in person, should you decide to attend the 2025 Annual Meeting. We look forward to seeing you.

ByOrder of the Board of Directors

Harry N. Vafias

President, Chief Executive Officer and Chairman

Athens, Greece

August 29,2025

IMPERIAL PETROLEUM INC.

331 Kifissias Avenue

Kifissia 14561

Athens,Greece

PROXY STATEMENT FOR THE 2025 ANNUAL MEETING OF STOCKHOLDERS

To be held on Monday, October 13, 2025

This Proxy Statement is furnished in connection with the solicitation of proxies by and on behalf of the Board of Directors of ImperialPetroleum Inc., a corporation incorporated in the Republic of the Marshall Islands, for use at the 2025 Annual Meeting of Stockholders of the Company to be held at 11:00 a.m. Greek local time, Monday, October 13, 2025, at the Company’soffices at 331 Kifissias Avenue, Kifissia 14561 in Athens, Greece and at any adjournments or postponements thereof.

On or aboutAugust 29, 2025, we will begin mailing a Notice of Internet Availability of Proxy Materials to stockholders informing them that our 2025 Proxy Statement, 2024 Annual Report and voting instructions are available online.

VOTING METHODS

Internet Voting

All stockholders of record and street name holders may vote on the Internet by accessing the following website address:http://www.proxyvote.com.

Telephone Voting

All stockholders of record may vote by calling the following toll-free telephone number: 1-800-690-6903. Please follow the voice prompts.

If youare a street name holder, and you requested to receive printed proxy materials, you may vote by telephone if your bank or broker makes that method available to you in the voting instruction form enclosed with the proxy materials that your bank orbroker sends you.

Vote by Mail

If you receive a printed copy of the proxy materials, you can vote by completing the accompanying proxy card or voting instruction form andreturning it in the return envelope provided. If you receive a Notice, you can request a printed copy of the proxy materials by following the instructions contained in the Notice. If you vote by Internet or telephone, you do not need to return yourproxy card or voting instruction form.

Stockholders of Record and Beneficial Owners

If your shares are registered directly in your name on the books of the Company maintained with the Company’s transfer agent, EquinitiTrust Company, LLC, you are considered the “stockholder of record” of those shares and, if you request to receive a paper copy of them, the proxy materials will be mailed directly to you.

 

1

If your shares are held in a stock brokerage account or by a bank or other nominee, you areconsidered the “beneficial owner” of shares held in street name (also called a “street name” holder) and, if you request to receive a paper copy of them, the proxy materials will be forwarded to you by your broker, bank ornominee. As a beneficial owner, you have the right to direct your broker, bank or other nominee how to vote and are also invited to attend the 2025 Annual Meeting. However, since you are not a stockholder of record, you may not vote these shares inperson at the 2025 Annual Meeting unless you bring with you a legal proxy from the stockholder of record. A legal proxy may be obtained from your broker, bank or other nominee.

VOTING OF PROXY, REVOCATION

A proxy thatis properly executed, whether on the Internet, by telephone or by mail and not subsequently revoked will be voted in accordance with instructions contained therein. If no instructions are given with respect to the matters to be acted upon, proxieswill be voted as follows: (i) for the election of the nominee for director described herein, (ii) for the ratification of the appointment of our independent auditors and (iii) otherwise in accordance with the best judgment of theperson or persons voting the proxy on any other matter properly brought before the 2025 Annual Meeting or any adjournments or postponements thereof.

Any stockholder who votes by using the Internet, by telephone or by completing and returning by mail the proxy card or voting instruction formmay revoke it at any time before it is exercised by (i) delivering written notice to our Secretary of its revocation, (ii) executing and delivering to our Secretary a later dated proxy by using the Internet, by telephone or by mail, or(iii) appearing in person at the 2025 Annual Meeting and expressing a desire to vote his, her or its shares in person. You may not revoke a proxy merely by attending the 2025 Annual Meeting. To revoke a proxy, you must take one of the actionsdescribed above.

EXPENSES OF SOLICITATION

The expenses of the preparation of proxy materials and the solicitation of proxies for the 2025 Annual Meeting will be borne by us. In additionto solicitation by mail, proxies may be solicited in person, by telephone, telecopy, electronically or other means, or by our directors, officers and regular employees who will not receive additional compensation for such solicitations. If youchoose to vote on the Internet, you are responsible for Internet access charges you may incur. If you choose to vote by telephone, you are responsible for telephone charges you may incur. Although there is no formal agreement to do so, we willreimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in forwarding the proxy soliciting materials to the beneficial owners of our common stock and Series B Preferred Stock.

VOTING SECURITIES

Holders of our commonstock and Series B Preferred Stock as of the close of business on August 18, 2025 will be entitled to notice of, and to vote at, the 2025 Annual Meeting or any adjournments or postponements thereof. On that date there were (1) 34,844,629shares of our common stock outstanding, the holders of which are entitled to one vote for each share registered in their names with respect to each matter to be voted on at the 2025 Annual Meeting and (2) 16,000 shares of our Series B PreferredStock outstanding, the holders of which are entitled to 25,000 votes for each share registered in their names with respect to each matter to be voted on at the 2025 Annual Meeting; provided, that no holder of Series B Preferred Stock may exercisevoting rights that would result in the aggregate voting power of any beneficial owner of such shares and its affiliates (whether pursuant to ownership of Series B Preferred Stock, Common Stock or otherwise) exceeding 49.99% of the total number ofvotes eligible to be cast on any matter submitted to a vote of shareholders of the Company. The holders of common stock and Series B Preferred Stock shall vote on the proposals as a single class. The presence in person or by proxy (regardless ofwhether the proxy has authority to vote on all matters) of stockholders of record holding a majority of the total voting rights of shares entitled to vote at the 2025 Annual Meeting will constitute a quorum at the 2025 Annual Meeting.

Assuming that a quorum is present at the 2025 Annual Meeting, the directors will be elected by a plurality of votes cast. There is noprovision for cumulative voting. Approval of other items at the 2025 Annual Meeting will require the affirmative vote of a majority of the votes cast. Abstentions and broker non-votes will not affect theelection of the directors or the outcome of the vote on other proposals.

 

2

PROPOSAL ONE — ELECTION OF DIRECTOR

Our Board currently consists of three directors. Under our Amended and Restated Articles of Incorporation, the directors are divided intothree classes, one of which is elected each year, with each director elected holding office for a three-year term and until his respective successor is duly elected and qualified. Our Board of Directors has determined that John Kostoyannis andGeorge Xiradakis are each independent, as neither of them have any relationship or have had any transaction with us which the Board believes would compromise their independence.

Mr. George Xiradakis is the Class I director whose term expires this year. Mr. Xiradakis is standing for election as a directorat the 2025 Annual Meeting and, if elected, will serve a three-year term expiring at the annual meeting of our stockholders in 2028. Mr. Xiradakis has consented to be named herein and to serve if elected. We do not know of anything that wouldpreclude the nominee from serving if elected. If the nominee becomes unable to stand for election as a director at the 2025 Annual Meeting, an event not anticipated by the Board, the proxy may be voted for a substitute designated by the Board. Theidentity and a brief biography of the nominee for director and each continuing director is set forth below.

The Board recommends thatstockholders vote FOR the following nominee for director.

NOMINEE FOR ELECTION

 

Name		Age(1)				Positions		Director Since
George Xiradakis			60			Class I Director — Term to Expire in 2028(2)			2021

DIRECTORS CONTINUING IN OFFICE

 

Name		Age(1)				Positions		Director Since
John Kostoyannis			59			Class II Director — Term to Expire in2026(2)			2021
Harry N. Vafias			47			President, Chief Executive Officer, Chairman and Class III Director — Term to Expire in 2027			2021

(1)	As of July 31, 2025.

(2)	Member of the Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee.

Nominee for Election

The Board of Directors has nominated the following individual to serve as director:

Class I Director

George Xiradakis

Director

George Xiradakis has been amember of our Board of Directors since November 2021. Mr. Xiradakis is the founder and Managing Director of XRTC Business Consultants Ltd. (“XRTC”) (January 1999). The company was established in order to represent financialinstitutions in the Greek territory and initially acted as the exclusive Shipping Representative of Credit Lyonnais Group in Greece. XRTC expanded its scope as Financial and Advisor Consultant for Greek Shipping, offering its services in nationaland International Institutions and Organizations. From February 2005 to 2008, XRTC acted as shipping finance consultant of the French banking group NATIXIS. He is also the General Secretary of the Association of Banking and Financial Executives of

 

3

Hellenic Shipping, Vice President of China Hellenic Chamber (HCCI), Vice President (International and Financial Relations) of the China-Greece Association. He served as the President of theInternational Propeller Club, Port of Piraeus from 2013 to 2019 and he acted as a VP of the International Propeller Club of the United States. He is now Emeritus President of International Propeller Club, Port of Piraeus, Emeritus Member of ThePiraeus Chamber of Commerce & Industry, Member of the Mediterranean Committee of China Classification Society, Piraeus Marine Club, Hellenic Maritime Museum and Hellas Liberty Floating Museum. He has also been a Board Member of otherU.S.-listed shipping companies, and is a member of the Board of Directors of C3is Inc. since its spinoff from the Company and Nasdaq listing in June 2023.

Directors Continuing in Office

Thefollowing directors will continue in office:

Class II Director

John Kostoyannis

Director

John Kostoyannis has been a member of our Board of Directors since November 2021. He has also been a member of the Board of Directors of StealthGas Inc. since2010, and a member of the Board of Directors of C3is Inc. since its spinoff from the Company and Nasdaq listing in June 2023. Mr. Kostoyannis is a Managing Director at Allied Shipbroking Inc., a leading shipbroking house in Greece, providingSale and Purchase and Chartering services in the shipping industry. Before joining Allied Shipbroking, from 1991 until September 2001, Mr. Kostoyannis worked in several prominent shipbroking houses in London and Piraeus. He is a member of theHellenic Shipbrokers Association. Mr. Kostoyannis graduated from the City of London Polytechnic in 1988 where he studied Shipping and Economics.

Class III Director

Harry N. Vafias

President, Chief Executive Officer and Chairman

Harry N. Vafias has been a member of the Board of Directors and Chief Executive Officer and President of Imperial Petroleum since its inceptionon May 14, 2021. He has also been the President and Chief Executive Officer and a member of the Board of Directors of StealthGas Inc., which is listed on the Nasdaq Global Select Market, since its inception in December 2004 and its ChiefFinancial Officer since January 2014. Mr. Vafias is also the Non-Executive Chairman of C3is Inc., which was spun off from the Company and listed on the Nasdaq Capital Market in June 2023. Mr. Vafiashas been actively involved in the tanker and gas shipping industry since 1999. Mr. Vafias worked at Seascope, a leading ship brokering firm specializing in sale and purchase of vessels and chartering of oil tankers. Mr. Vafias also workedat Braemar, a leading ship brokering firm, where he gained extensive experience in tanker and dry cargo chartering. Seascope and Braemar merged in 2001 to form Braemar Seascope Group plc, a public company quoted on the London Stock Exchange and oneof the world’s largest ship brokering and shipping service groups. From 2000 until 2004, he worked at Brave Maritime and Stealth Maritime, companies providing comprehensive ship management services, where Mr. Vafias headed the operationsand chartering departments of Stealth Maritime and served as manager for the sale and purchase departments of both Brave Maritime and Stealth Maritime. Mr. Vafias graduated from City University Business School in the City of London in 1999 witha B.A. in Management Science and from Metropolitan University in 2000 with a Master’s Degree in Shipping, Trade and Transport.

 

4

PROPOSAL TWO — RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

Appointment of Auditors

The AuditCommittee of the Board, subject to the approval of our stockholders, has appointed the firm of Deloitte Certified Public Accountants S.A., independent registered public accounting firm, as auditors of the Company for the year endingDecember 31, 2025. The Board recommends approval by our stockholders of the appointment of Deloitte Certified Public Accountants S.A. as our auditors for the fiscal year ending December 31, 2025.

Representatives of Deloitte Certified Public Accountants S.A. are expected to be present at the 2025 Annual Meeting. They will have theopportunity to make a statement if they so desire, and are expected to be available to respond to appropriate questions from stockholders. Deloitte Certified Public Accountants S.A. has been our independent auditors since our inception in 2021 and,by virtue of their familiarity with our affairs and their qualifications, are considered qualified to perform this important function.

PrincipalAccounting Fees and Services

Deloitte Certified Public Accountants S.A. (“Deloitte”), an independent registered publicaccounting firm, has audited our annual financial statements for fiscal years ending 2024, 2023 and 2022 and has been acting as our independent auditor since our inception in 2021. All services provided by Deloitte were pre-approved by the Audit Committee. Those services provided before the completion of our Spin-Off from StealthGas Inc. on December 3, 2021, were pre-approved by the Audit Committee of StealthGas Inc.

The table below sets forth the total amountbilled and accrued for Deloitte for services performed in 2023 and 2024 and breaks down these amounts by the category of service (in thousands):

 

		2023				2024
Audit fees		$	237			$	151
Assurance/audit related fees			—				—
Tax fees			—				—
All other fees			—				—
Total		$	237			$	151

Audit fees

Audit fees represent compensation for professional services rendered for (i) the audit of our annual financial statements, (ii) thereview of our quarterly financial information and (iii) audit services provided in connection with filing of registration statements and related consents and comfort letters and other audit services required for SEC or other regulatory filings.

Assurance / Audit Related Fees

Deloitte did not provide any services that would be classified in this category in 2023 or 2024.

Tax Fees

Deloitte did not provideany tax services in 2023 or 2024.

All Other Fees

Deloitte did not provide any other services that would be classified in this category in 2023 or 2024.

 

5

Non-audit services

The Audit Committee of our Board of Directors has the authority to pre-approve permissibleaudit-related and non-audit services not prohibited by law to be performed by our independent auditors and associated fees.

Engagements for proposed services either may be separately pre-approved by the audit committee or entered intopursuant to detailed pre-approval policies and procedures established by the audit committee, as long as the audit committee is informed on a timely basis of any engagement entered into on that basis. Approvalfor other permitted non-audit services has to be sought on an ad hoc basis. Where no Audit Committee meeting is scheduled within an appropriate time frame, the approval is sought from the Chairman of the AuditCommittee subject to confirmation at the next meeting.

The Audit Committee and the Board of Directors recommend that the stockholdersvote FOR the ratification of the appointment of Deloitte Certified Public Accountants S.A. as our independent auditors for the fiscal year ending December 31, 2025.

 

6

OTHER MATTERS

Registered and Principal Executive Offices

Our registered address in the Republic of The Marshall Islands is Trust Company Complex, Ajeltake Road, Ajeltake Island, Marshall IslandsMH96960. Our principal executive offices are located at 331 Kifissias Avenue, Kifissia 14561 Athens, Greece and our telephone number at that address is + 30 210 625 0001. Our corporate website address is http://www.Imperialpetro.com.

U.S. Securities and Exchange Commission Reports

Copies of the Company’s Annual Report on Form 20-F for the fiscal year ended December 31,2024, as filed with the SEC, are available to stockholders free of charge on the Company’s website at www.Imperialpetro.com under the heading “Investor Relations-SEC Filings” or by writing tothe attention of Harry N. Vafias, President and Chief Executive Officer, Imperial Petroleum Inc. at 331 Kifissias Avenue, Kifissia 14561 Athens, Greece.

General

The enclosed proxy is solicitedon behalf of the Company’s Board of Directors. Unless otherwise directed, proxies held by Harry N. Vafias, our President and Chief Executive Officer, or Ifigeneia (Fenia) Sakellari, our Chief Financial Officer, will be voted at the 2025 AnnualMeeting or any adjournments or postponements thereof FOR the election of the director nominee to the Board named on the proxy card or voting instruction form and FOR the ratification of the appointment of the independent auditors. If any matterother than those described in this Proxy Statement properly comes before the 2025 Annual Meeting, or with respect to any adjournments or postponements thereof, the proxies will vote the shares of common stock and Series B Preferred Stock representedby such proxies in accordance with their best judgment.

Please vote all of your shares. Beneficial stockholders sharing an address whoare receiving multiple copies of the proxy materials and Annual Report to Stockholders should contact their broker, bank or other nominee to request that in the future only a single copy of each document be mailed to all stockholders at the sharedaddress.

In addition, if you are the beneficial owner, but not the record holder, of shares of common stock, your broker, bank or othernominee may deliver only one copy of the Proxy Statement and Annual Report to Stockholders to multiple stockholders who share an address unless that nominee has received contrary instructions from one or more of the stockholders. We will deliverpromptly, upon written or oral request, a separate copy of the Proxy Statement and Annual Report to Stockholders to a stockholder at a shared address to which a single copy of the documents was delivered. Stockholders who wish to receive a separatecopy of the Proxy Statement and Annual Report to Stockholders, now or in the future, should submit their request to us by telephone at + 30 210 625 0001 or by submitting a written request to Imperial Petroleum Inc. at 331 Kifissias Avenue, Kifissia14561 Athens, Greece.

 

7

Exhibit 99.2

 

		VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above
IMPERIAL PETROLEUM INC. 331 KIFISSIASAVE. 14561 ATHENS, GREECE		Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time theday before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
		ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
		If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all futureproxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive oraccess proxy materials electronically in future years.
		VOTE BY PHONE - 1-800-690-6903
		Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date ormeeting date. Have your proxy card in hand when you call and then follow the instructions.
		VOTE BY MAIL
		Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/oBroadridge, 51 Mercedes Way, Edgewood, NY 11717.

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK ASFOLLOWS:            V79162-P37017				KEEP THIS PORTION FOR YOUR RECORDS
— — — — — — — — — — — — — — —— — — — — — — — — — —— — — — — — — — — — — — — — — — — —— — — — — — — — — — — — — — — — — — — —— — — — — — — — — —— —
		THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.		DETACH AND RETURN THIS PORTION ONLY

 

IMPERIAL PETROLEUM INC.

The Board of Directors recommends you vote FOR the following:

1.  Election of Director

Nominee:

For

Against

Abstain

1a.  George Xiradakis

☐

☐

☐

The Board of Directors recommends you vote FOR the following proposal:

For

Against

Abstain

2.  Ratification of appointment of Deloitte Certified Public Accountants S.A.as the Company’s independent auditors for the year ending December 31, 2025.

☐

☐

☐

NOTE: Such other business as may properly come before the meeting or any adjournment thereof.

		Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or otherfiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
		Signature [PLEASE SIGN WITHIN BOX]    Date		Signature (Joint Owners)           Date

 

Important Notice Regardingthe Availability of Proxy Materials for the Annual Meeting:

The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.

— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —— — — —

V79163-P37017

 

		IMPERIAL PETROLEUM INC. 2025 Annual Meetingof Stockholders October 13, 2025, 11:00 a.m. Greek Local Time THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS   The stockholder(s) herebyappoint(s) Harry N. Vafias and Ifigeneia Sakellari, or either of them, as proxies, each with the power to appoint (his/her) substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all ofthe shares of Common Stock or Series B Convertible Preferred Stock of IMPERIAL PETROLEUM INC. that the stockholder(s) is/are entitled to vote at the 2025 Annual Meeting of Stockholders to be held on Monday, October 13, 2025 at 11:00 a.m. Greeklocal time, at the Company’s principal executive offices at 331 Kifissias Avenue, Kifissia 14561 in Athens, Greece, and any adjournment or postponement thereof.   This proxy, whenproperly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.       Continued and to be signed on reverse side

You invested in IMPERIAL PETROLEUM INC. and it’s time to vote!

You have the right to vote on proposals being presented at the Annual Meeting. This is an important notice regarding the availability of proxymaterials for the stockholder meeting to be held on October 13, 2025.

Get informed before you vote

View the Notice and Proxy Statement and Annual Report OR you can receive a free paper or email copy of the material(s) byrequesting prior to September 29, 2025. If you would like to request a copy of the material(s) for this and/or future stockholder meetings, you may (1) visit www.ProxyVote.com, (2) call 1-800-579-1639 or (3) send an email to sendmaterial@proxyvote.com. If sending an email, please include your control number (indicated below) in the subject line.Unless requested, you will not otherwise receive a paper or email copy.

 

 

						IMPERIAL PETROLEUM INC. 331 Kifissias Avenue Kifissia 14561 in Athens, Greece

 

 

* Please check the meeting materials for any special requirements for meeting attendance. At the meeting, you will need to requesta ballot to vote these shares.

 Vote at www.ProxyVote.com

 

THIS IS NOT A VOTABLE BALLOT

 

This is an overview of the proposals being presented at the upcoming stockholder meeting. Please follow the instructions on the reverse side to vote these important matters.

 

Voting Items				Board Recommends
1.		Election of Director
		Nominee:
1a.		George Xiradakis
2.		Ratification of appointment of Deloitte Certified Public Accountants S.A. as the Company’s independent auditors for theyear ending December 31, 2025.
NOTE: Such otherbusiness as may properly come before the meeting or any adjournment thereof.

 

Prefer to receive an email instead? While voting on www.ProxyVote.com, be sure to click “Delivery Settings”.

 

V79165-P37017

Exhibit 99.3

 

Imperial Petroleum Inc. ANNUAL REPORT 2024

COMPANY PROFILE Imperial Petroleum Inc. is a ship-owning company providing petroleum products, crude oil and dry bulkseaborne transportation services. As of December 31, 2024 the Company’s fleet was comprised of 11 vessels consisting of six Medium Range (M.R) type product tankers, two Suezmax crude oil tankers and three Handysize drybulk carriers with acapacity of approximately 711,000 deadweight tons (dwt). In January 2025 the Company took delivery of an additional product tanker, the Clean Imperial (2009 built) with a capacity of approximately 40,000 dwt. Within the second quarter of 2025, theCompany took delivery of seven drybulk carriers with an aggregate capacity of approximately 444,000 dwt. Within August 2025 the Company agreed to the acquisition of three additional drybulk carriers with an aggregate capacity of approximately164,400 dwt. These vessels are expected to be delivered between September 2025 and August 2026. Imperial Petroleum Inc.’s shares of common stock and 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock are listed on the NasdaqCapital Market and trade under the symbols “IMPP” and “IMPPP”, respectively. KEY COMPANY HIGHLIGHTS Fleet operational utilization of 78.3% for 2024. Revenues of $147.5 million in 2024. About 69% of our fleet days dedicated tospot activity while almost 29% to time charter activity. Net income of $50.2 million in 2024 while our operating cash flow amounted to $77.7 million. Cash and time deposits of $206.7 million as of December 31, 2024 versus c.$124 million as ofDecember 31, 2023 equivalent to a 66.7% increase. SELECTED COMPANY FINANCIAL DATA (Amounts in $ millions) TCE Revenues is equivalent to Revenues less Voyage costs. 40.00 Q1 24’ Q2 24’ Q3 24’ Q4 24’ 30.00 20.00 10.00 00.0027.73 16.70 29.93 19.50 20.05 10.10 17.75 3.90 TCE Revenues Net Income

HARRY VAFIAS BOARD CHAIRMAN & CEO Dear Shareholders, Year 2024 was once more exceptional for our Company. We managed,in spite of market conditions being softer than in 2023, to sustain profits at high levels ending the year with a net income of $50.2 million. Most importantly our profitability materially fueled our cash flow generation thus we were able to end theyear with cash of $206.7 million. In terms of market conditions, year 2024 was overall positive for the tanker market even though we witnessed a decline in rates in excess of 30%, year on year from multi-year’s high. Vessel re-routing aroundthe Cape of Good Hope due to Red Sea disruptions, long haul Russian – Asia trade flows and limited fleet expansion sustained rates and trade activity at firm levels when compared to historical averages. However after the first half of 2024 wedid see spot rates for MRs and suezmax tankers decline, driven by uncertainty over demand, refinery runs and OPEC+ decisions. Being committed to our goal of growing our Company and leveraging upon our debt free balance sheet, ample liquidity andongoing profitability, in September 2024 we agreed to the purchase of seven dry bulk carriers, two kamsarmaxes and five supramaxes, to enhance our fleet and add a diversification element to our assets. These vessels were all delivered to ImperialPetroleum by June 2025. Looking ahead, our strategy is to grow further and to continue producing strong results as we have the competence to adjust and adapt to market conditions. As we have repeatedly stated, our main focus is to reflect the truevalue of Imperial Petroleum in our share price and sincerely hope that our expansion and commitment to excelling our Company’s performance will eventually be reflected in our share price. As a closing remark, I would like to thank ourshareholders for their continuous support; finally and most importantly, my sincere thanks goes out to our officers and crew for their manning and safe running of our vessels. Respectfully, Harry Vafias

The table below presents Imperial Petroleum’s fleet as of June 30, 2025. TANKER VESSELS Vessel Name Year BuiltCapacity (dwt) Vessel Type Clean Nirvana 2008 50,000 MR product tanker Magic Wand 2008 47,000 MR product tanker Clean Sanctuary 2009 46,000 MR product tanker Aquadisiac 2008 51,000 MR product tanker Clean Imperial 2009 40,000 MR product tanker CleanThrasher 2009 47,000 MR product tanker Clean Justice 2011 46,000 MR product tanker Suez Enchanted 2007 160,000 Suezmax oil tanker Suez Protopia 2008 160,000 Suezmax oil tanker DRYBULK CARRIERS Vessel Name Year Built Capacity (dwt) Vessel TypeNeptulus 2012 33,000 Handysize bulk carrier Glorieuse 2012 38,000 Handysize bulk carrier Eco Wildfire 2013 33,000 Handysize bulk carrier Eco Sikousis 2008 82,000 Kamsarmax bulk carrier Eco Czar 2009 82,000 Kamsarmax bulk carrier Supra Baron 200956,000 Supramax bulk carrier Supra Monarch 2011 56,000 Supramax bulk carrier Supra Duke 2011 56,000 Supramax bulk carrier Supra Pasha 2012 56,000 Supramax bulk carrier Supra Sovereign 2012 56,000 Supramax bulk carrier Fleet Total 1,195,000

UNITED STATES

SECURITIESAND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

 

 

FORM 20-F

 

 

 

☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

 

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2024

OR

 

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

 

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-41095

 

 

IMPERIAL PETROLEUM INC.

(Exact name of Registrant as specified in its charter)

 

 

Not applicable

(Translation of Registrant’s Name into English)

Republic of the Marshall Islands

(Jurisdiction of incorporation or organization)

331 Kifissias Avenue, Erithrea 14561 Athens, Greece

(Address of principal executive offices)

Harry N. Vafias

331Kifissias Avenue, Erithrea 14561, Athens, Greece

Telephone: (011) (30) (210) 625 0001

Facsimile: (011) (30) (210) 625 0018

(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		IMPP		The Nasdaq Stock Market LLC
8.75% Series A Cumulative Redeemable Perpetual Preferred Stock		IMPPP		The Nasdaq Stock Market LLC

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None

SECURITIES FORWHICH THERE IS A REPORTING OBLIGATION

PURSUANT TO SECTION 15(d) OF THE ACT:

None

 

 

 

The number of outstanding shares of each of the issuer’s classes of capital or commonstock as of December 31, 2024 was: 34,023,635 shares of Common Stock, par value $0.01 per share, and 795,878 shares of 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share, and 16,000 shares of Series BPreferred Stock, par value $0.01 per share.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule405 of the Securities Act. ☐ Yes ☒ No

If this report is an annual or transition report, indicate bycheck mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronicallyevery Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrantwas required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer” and“emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☐		Accelerated filer		☐		Non-accelerated filer		☒
								Emerging growth company		☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate bycheck mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectivenessof its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport: ☐ Yes ☒ No

If securities are registered pursuant to Section 12(b) of the Act, indicate bycheck mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-basedcompensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 

U.S. GAAP ☒		International Financial Reporting Standards as issued by the International Accounting Standards Board  ☐		Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark whichfinancial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18

If this is anannual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

 

TABLE OF CONTENTS

 

ABOUT THIS REPORT					1
FORWARD-LOOKING INFORMATION					2
Part I					3
Item 1.		Identity of Directors, Senior Management and Advisers			3
Item 2.		Offer Statistics and Expected Timetable			3
Item 3.		Key Information			3
Item 4.		Information on the Company			43
Item 4A.		Unresolved Staff Comments			66
Item 5.		Operating and Financial Review and Prospects			66
Item 6.		Directors, Senior Management and Employees			83
Item 7.		Major Stockholders and Related Party Transactions			88
Item 8.		Financial Information			93
Item 9.		The Offer and Listing			94
Item 10.		Additional Information			94
Item 11.		Quantitative and Qualitative Disclosures About Market Risk			119
Item 12.		Description of Securities Other than Equity Securities			119
PART II					120
Item 13.		Defaults, Dividend Arrearages and Delinquencies			120
Item 14.		Material Modifications to the Rights of Security Holders and Use of Proceeds			120
Item 15.		Controls and Procedures			120
Item 16A.		Audit Committee Financial Expert			121
Item 16B.		Code of Ethics			121
Item 16C.		Principal Accountant Fees and Services			121
Item 16D.		Exemptions from the Listing Standards for Audit Committees			122
Item 16E.		Purchases of Equity Securities by the Issuer and Affiliated Purchasers			122
Item 16F.		Change in Registrant’s Certifying Accountant			123
Item 16G.		Corporate Governance			123
Item 16H.		Mine Safety Disclosures			123
Item 16I.		Disclosure Regarding Foreign Jurisdictions that Prevent Inspections			123
Item 16J.		Insider Trading Policies			124
Item 16K		Cybersecurity			124
PART III					125
Item 17.		Financial Statements			125
Item 18.		Financial Statements			125
Item 19.		Exhibits			125

ABOUT THIS REPORT

Imperial Petroleum Inc. is a Marshall Islands company that is referred to in this Annual Report on Form 20-F, together with its subsidiaries,as “Imperial Petroleum,” the “Company,” “we,” “us,” or “our.” This Annual Report should be read in conjunction with our consolidated financial statements and the accompanying notes thereto,which are included in Item 18 to this Annual Report.

Imperial Petroleum Inc. was incorporated under the laws of the Republic of theMarshall Islands on May 14, 2021, by StealthGas Inc. (“StealthGas”) to serve as the holding company of four subsidiaries, each owning one of the tanker vessels in our initial fleet, that it subsequently contributed to us inconnection with the 2021 Spin-Off (as defined below). On December 3, 2021, StealthGas distributed all of our then outstanding shares of common stock, par value $0.01 per share (“common stock”), and 8.75% Series A CumulativeRedeemable Perpetual Preferred Stock, par value $0.01 per share, liquidation preference $25.00 per share (“Series A Preferred Stock”), to its stockholders, which completed our separation from StealthGas (the “2021 Spin-Off”).See “Item 4. Information on the Company—Business Overview—Our Fleet”.

We use the term deadweight tons, or dwt,expressed in metric tons, each of which is equivalent to 1,000 kilograms, in describing the size of our vessels. Unless otherwise indicated, all references to “U.S. dollars,” “dollars,” “U.S. $” and“$” in this annual report are to the lawful currency of the United States of America.

All share amounts reflect the 1-for-15reverse split of the Common Stock effected by the Company on April 28, 2023.

 

1

FORWARD-LOOKING INFORMATION

This Annual Report on Form 20-F includes assumptions, expectations, projections, intentions and beliefs about future events. These statementsare intended as “forward-looking statements.” We caution that assumptions, expectations, projections, intentions and beliefs about future events may and often do vary from actual results and the differences can be material.

All statements in this report that are not statements of historical fact are forward-looking statements as defined in Section 27A of theU.S. Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include, but are not limited to, suchmatters as:

 

•

future operating or financial results;

 

•

global and regional economic and political conditions including the conflict in Ukraine and related sanctions,the war in Gaza and ongoing attacks by Houthis in the Red Sea and Gulf of Aden;

 

•

geopolitical conditions, including trade protectionism and tariffs imposed by the United States and othercountries;

 

•

pending or recent acquisitions, business strategy and expected capital spending or operating expenses;

 

•

competition in the maritime transportation industry;

 

•

shipping market trends, including charter rates, factors affecting supply and demand and world tanker fleet anddrybulk fleet composition;

 

•

potential disruption of shipping routes due to accidents, diseases, pandemics, political events, piracy or actsby terrorists, along with various ongoing geopolitical pressures such as the conflict in Ukraine and the related global response, the war in Gaza and the ongoing attacks by Houthis in the Red Sea and Gulf of Aden;

 

•

ability to employ our vessels profitably;

 

•

performance by the counterparties to our charter agreements;

 

•

future refined petroleum product and oil prices and production;

 

•

future supply and demand for oil, refined petroleum products and drybulk cargoes;

 

•

our financial condition and liquidity, including our ability to obtain financing in the future to fund capitalexpenditures, acquisitions and other general corporate activities, the terms of such financing and our ability to comply with covenants set forth in our financing arrangements;

 

•

performance by the shipyards constructing any newbuilding vessels we order; and

 

•

expectations regarding vessel acquisitions and dispositions.

When used in this report, the words “anticipate,” “believe,” “intend,” “estimate,”“project,” “forecast,” “plan,” “potential,” “may,” “should” and “expect” reflect forward-looking statements. Such statements reflect our current views andassumptions and all forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect our future financial results are discussed more fullyunder “Item 3. Key Information—Risk Factors,” as well as elsewhere in this Annual Report on Form 20-F and in our other filings with the U.S. Securities and Exchange Commission (“SEC”). We caution readers of this AnnualReport not to place undue reliance on these forward-looking statements, which speak only as of their dates. We undertake no obligation to publicly update or revise any forward-looking statements.

 

2

Part I

Item 1. Identity of Directors, Senior Management and Advisers

Not Applicable.

Item 2. Offer Statistics and Expected Timetable

Not Applicable.

Item 3. Key Information

A. [RESERVED]

B. Capitalization and Indebtedness

Not applicable.

C. Reasons For theOffer and Use of Proceeds

Not Applicable.

D. Risk Factors

Summary of RiskFactors

An investment in our common stock or Series A Preferred Stock is subject to a number of risks, including risks related to ourindustry, business and corporate structure. The following summarizes some, but not all, of these risks. Please carefully consider all of the information discussed in “Item 3. Key Information— Risk Factors” in this annual report fora more thorough description of these and other risks.

Risks Related To Our Industry

 

•

The cyclical nature of the demand for seaborne transportation of oil and petroleum products may lead tosignificant changes in our chartering and vessel utilization, which may result in difficulty finding profitable charters for our tanker vessels.

 

•

Charter rates for dry bulk vessels are volatile and may remain at currently low levels or decrease in the future,which may adversely affect our results of operations and financial condition.

 

•

Economic and political factors, including increased trade protectionism and tariffs imposed by the U.S. and othercountries, sanctions such as the sanctions imposed on Russian oil trade and health crises could materially adversely affect our business, financial position and results of operations.

 

•

The tanker industry is highly dependent upon the crude oil and petroleum products industries, with the level ofavailability and demand for oil and petroleum products.

 

•

An over-supply of tankers or drybulk carriers may lead to a reduction in charter rates, vessel values andprofitability.

 

•

Our operations outside the United States expose us to global risks, such as political conflict, terrorism andpublic health concerns, including the conflict in Ukraine and related sanction, the war in Gaza and attacks by Houthi Rebels in the Red Sea and Gulf of Aden, which may interfere with the operation of our vessels.

 

3

•

We are subject to regulation and liability under environmental, health and safety laws that could requiresignificant expenditures.

 

•

The market values of tankers and drybulk carriers are volatile and over time may fluctuate significantly.

 

•

Technological innovation could reduce our charter hire income and the value of our vessels.

 

•

Changes in fuel, or bunker, prices may adversely affect profits.

 

•

Risks involved with operating maritime vessels could affect our business and reputation, which would adverselyaffect our revenues and stock price.

 

•

Governments could requisition our vessels during a period of war or emergency, and maritime claimants couldarrest our vessels.

Risks Related To Our Business

 

•

We are dependent on the ability and willingness of our charterers to honor their commitments to us for all ourrevenues.

 

•

We are exposed to the volatile spot market and charters at attractive rates may not be available when thecharters for our vessels expire which would have an adverse impact on our revenues and financial condition.

 

•

Our fleet’s average age is above the average age of the global tanker fleet and only slightly below theaverage age of the global drybulk carrier fleet, and as our vessels age we may have difficulty competing with younger, more technologically advanced tankers for charters from oil majors and other top-tier charterers.

 

•

Unless we set aside reserves for vessel replacement, at the end of a vessel’s useful life, our revenue willdecline, which would adversely affect our cash flows and income.

 

•

We depend upon a few significant customers for a large part of our revenues. The loss of one or more of thesecustomers could adversely affect our financial performance.

 

•

If in the future we again incur debt, the future loan agreements we enter into for such debt, whether to financethe expansion of our fleet or raise funds by taking loans against our existing vessels which are currently unencumbered, are likely to contain restrictive covenants that may limit our liquidity and corporate activities.

 

•

The market values of our vessels may decrease, which could cause us to breach covenants in any future creditfacilities, and could have a material adverse effect on our business, financial condition and results of operations.

 

•

The book value of some of our vessels is currently higher than their market value, and if we sell a vessel at atime when vessel prices have not increased, the sale may be for less than the vessel’s carrying value, which would result in a reduction in our profits.

 

•

We may incur debt in the future, and a significant increase in our debt levels may adversely affect us and ourcash flows.

 

•

We depend on our manager, Stealth Maritime Corporation S.A., to operate our business.

 

•

Delays in the delivery of any newbuilding or secondhand vessels we agree to acquire could harm our operatingresults.

 

•

We may become exposed to volatility in interest rates, including SOFR.

 

•

We may enter into derivative contracts to hedge exposure to fluctuations in interest rates, which could result inhigher than market interest rates and charges against our income.

 

4

Risks Related to Taxation

 

•

We may have to pay tax on U.S.-source income and/or may become a passive foreign investment company.

Risks Related to an Investment in a Marshall Islands Corporation

 

•

As a foreign private issuer we are entitled to claim an exemption from certain Nasdaq corporate governancestandards, and to the extent we elect to rely on this exemption, you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

 

•

We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body ofcorporate law or a bankruptcy act, and it may be difficult to enforce service of process and judgments against us and our officers and directors.

Risks Related To Our Common Stock

 

•

The market price of our common stock has fluctuated and may continue to fluctuate in the future, and we maycontinue not to pay dividends on our common stock.

 

•

Our stockholders may experience future dilution as a result of future equity offerings and other issuances of ourcommon stock, preferred stock or other securities. In addition, we may elect to sell one or more of our vessels or vessel-owning subsidiaries, conduct a spinoff of such vessels or subsidiaries, or contribute such vessels or vessel-owningsubsidiaries to a joint venture, master limited partnership or other entity on terms with which you do not agree.

 

•

Future issuances or sales, or the potential for future issuances or sales, of our common stock may cause thetrading price of our securities to decline and could impair our ability to raise capital through subsequent equity offerings.

 

•

The superior voting rights of our Series B preferred stock may limit the ability of our common stockholders tocontrol or influence corporate matters, and the interests of the holder of such shares could conflict with the interests of common stockholders.

 

•

Our restated articles of incorporation and amended and restated bylaws contain anti-takeover provisions that maydiscourage, delay or prevent (1) our merger or acquisition and/or (2) the removal of incumbent directors and officers and (3) the ability of public stockholders to benefit from a change in control.

 

•

Issuance of preferred stock, such as our Series B preferred stock, may adversely affect the voting power of ourcommon stockholders and have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common stock.

Risks Related To Our Series A Preferred Stock

 

•

Our Series A Preferred Stock are subordinated to any future debt obligations and investors’ interests couldbe diluted by the issuance of additional preferred shares and by other transactions.

 

•

Holders of our Series A Preferred Stock have extremely limited voting rights.

 

•

The Series A Preferred Stock represents perpetual equity interests and holders have no right to receive anygreater payment than the liquidation preference regardless of the circumstances.

 

5

Risks Related To Our Industry

The tanker industry is cyclical and volatile, which may adversely affect our earnings and available cash flow.

The tanker industry is both cyclical and volatile in terms of charter rates and profitability. Periodic adjustments to the supply of and demandfor crude oil and product tankers cause the industry to be cyclical in nature. We expect continued volatility in market rates for our vessels in the foreseeable future with a consequent effect on our short and medium-term liquidity. A worsening ofcurrent global economic conditions may cause tanker charter rates to decline and thereby adversely affect our ability to charter or re-charter our vessels and any renewal or replacement charters that we enter into, may not be sufficient to allow usto operate our vessels profitably. In addition, the conflict in Ukraine is disrupting energy production and this conflict, as well Houthi attacks on vessels, are disrupting trade patterns, including shipping in the Black Sea, the Red Sea, Gulf ofAden and elsewhere, and the impact of these events on energy prices and tanker rates, which initially have increased, is uncertain. Fluctuations in charter rates and vessel values result from changes in the supply and demand for tanker capacity andchanges in the supply and demand for oil and oil products. The factors affecting the supply and demand for tankers are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable.

The factors that influence demand for tanker capacity include:

 

•

supply and demand for energy resources and oil and petroleum products;

 

•

regional availability of refining capacity and inventories compared to geographies of oil production regions;

 

•

national policies regarding strategic oil inventories (including if strategic reserves are set at a lower levelin the future as oil decreases in the energy mix);

 

•

global and regional economic and political conditions, including armed conflicts, terrorist activities, embargoesand strikes;

 

•

currency exchange rates;

 

•

the distance over which oil and oil products are to be moved by sea;

 

•

changes in seaborne and other transportation patterns;

 

•

changes in governmental or maritime self-regulatory organizations’ rules and regulations or actions takenby regulatory authorities;

 

•

environmental and other legal and regulatory developments;

 

•

weather and natural disasters;

 

•

developments in international trade, including those relating to the imposition of tariffs by the United Statesor other countries;

 

•

competition from alternative sources of energy; and

 

•

international sanctions, embargoes, import and export restrictions, nationalizations and wars.

The factors that influence the supply of tanker capacity include:

 

•

supply and demand for energy resources and oil and petroleum products;

 

•

demand for alternative sources of energy;

 

•

environmental regulations that may affect the technology and fuel of vessels

 

•

the number of newbuilding orders and deliveries, including slippage in deliveries;

 

•

the number of vessel casualties;

 

6

•

technological advances in tanker design and capacity;

 

•

the number of shipyards and ability of shipyards to deliver vessels;

 

•

availability of financing for new vessels and shipping activity;

 

•

the degree of scrapping or recycling rate of older vessels, depending, amongst other things, on scrapping orrecycling rates and international scrapping or recycling regulations;

 

•

price of steel and vessel equipment;

 

•

the number of conversions of tankers to other uses or conversions of other vessels to tankers;

 

•

the number of product tankers trading crude or “dirty” oil products (such as fuel oil);

 

•

the number of vessels that are out of service, namely those that are laid up, drydocked, awaiting repairs orotherwise not available for hire;

 

•

changes in government and industry environmental and other regulations that may limit the useful lives of tankersand environmental concerns and regulations;

 

•

product imbalances (affecting the level of trading activity);

 

•

developments in international trade, including refinery additions and closures;

 

•

port or canal congestion; and

 

•

speed of vessel operation

In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up includenewbuilding prices, secondhand vessel values in relation to scrap prices, costs of bunkers and other operating costs, costs associated with classification society surveys, normal maintenance costs, insurance coverage costs, the efficiency and ageprofile of the existing tanker fleet in the market, and government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the supply of and demand forshipping capacity are outside of our control, and we may not be able to correctly assess the nature, timing and degree of changes in industry conditions. The effective supply of tankers has been impacted in recent years by the impact of sanctionsand trade pattern disruptions, including vessels currently continuing to reroute away from the Red Sea, Gulf of Aden and Suez Canal due to Houthi attacks on ships. These factors resulted in fleet inefficiencies and support for tanker charter rates,which may not continue.

We anticipate that the future demand for our tankers will be dependent upon economic growth in the world’seconomies, seasonal and regional changes in demand, changes in the capacity of the global tanker fleet and the sources and supply of oil and petroleum products to be transported by sea. Given the number of new tankers currently on order withshipyards, the capacity of the global tanker fleet seems likely to increase and there can be no assurance as to the timing or extent of future economic growth. Adverse economic, political, social or other developments could have a material adverseeffect on our business and operating results.

Declines in oil and natural gas prices for an extended period of time, or marketexpectations of potential decreases in these prices, could negatively affect our future growth in the tanker sector. Sustained periods of low oil and natural gas prices typically result in reduced exploration and extraction because oil and naturalgas companies’ capital expenditure budgets are subject to cash flow from such activities and are therefore sensitive to changes in energy prices. These changes in commodity prices can have a material effect on demand for our services, andperiods of low demand can cause excess vessel supply and intensify the competition in the industry, which often results in vessels, particularly older and less technologically-advanced vessels, being idle for long periods of time. We cannot predictthe future level of demand for our services or future conditions of the oil and natural gas industry. Any decrease in exploration, development or production expenditures by oil and natural gas companies could reduce our revenues and materially harmour business, results of operations and cash available for distribution.

 

7

Charter rates for dry bulk vessels are volatile and may remain at currently low levels or decrease inthe future, which may adversely affect our results of operations and financial condition.

The dry bulk shipping industry continuesto be cyclical with high volatility in charter rates and profitability among the various types of dry bulk vessels. The Baltic Dry Index, or the “BDI”, an index published by The Baltic Exchange of shipping rates for key drybulk routes,declined in 2020, principally as a result of the global economic slowdown caused by the COVID-19 pandemic. Strong global growth and increased infrastructure spending led to a rise in demand for commodities, which combined with a historically loworderbook and port delays and congestion, resulted in an increase in BDI in 2021 and the first half of 2022, before moderating and declining significantly in the second half of 2022 as port congestion eased and Chinese demand for drybulk commoditiesweakened. The BDI increased in the fourth quarter of 2023 and the first half of 2024 due in part to disruptions that lengthened sailing distances, including trading pattern disruptions related to Russian sanctions, transit restrictions at the PanamaCanal due to low water levels and vessels re-routing away from the Red Sea and Suez Canal due to Houthi attacks on ships, before again declining to relatively low levels, which continued to prevail in in the first quarter of 2025, as demand forcommodities weakened. On April 1, 2025, the BDI stood at 1 1,587 compared to 1,821 one year earlier.

The factors affecting thesupply and demand for drybulk vessels are outside of our control and are difficult to predict. As a result, the nature, timing, direction and degree of changes in industry conditions are also unpredictable.

Factors that influence demand for drybulk vessel capacity include:

 

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demand for and production of drybulk products;

 

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supply of and demand for energy resources and commodities;

 

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global and regional economic and political conditions, including weather, natural or other disasters, armedconflicts (including the conflicts in Ukraine and Gaza and Houthi attacks in the Red Sea and Gulf of Aden), terrorist activities and strikes;

 

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environmental and other regulatory developments;

 

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the location of regional and global exploration, production and manufacturing facilities of the sourcingmaterials and the distance drybulk cargoes are to be moved by sea;

 

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changes in seaborne and other transportation patterns including shifts in the location of consuming regions forenergy resources, commodities, and transportation demand for drybulk transportation;

 

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international sanctions, embargoes, import and export restrictions, including tariffs imposed by the U.S. andother countries, nationalizations and wars, including the conflict in Ukraine and Gaza;

 

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natural disaster and weather;

 

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trade disputes or the imposition of tariffs, including those imposed by the United States or other countries, onvarious commodities that could affect the international trade; and

 

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currency exchange rates.

Factors that influence the supply of drybulk vessel capacity include:

 

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the size of the newbuilding orderbook;

 

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the average age of current drybulk fleet;

 

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the prevailing and anticipated freight rates which in turn affect the rate of newbuilding;

 

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availability of financing for new vessels;

 

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•

the number of newbuild deliveries, including slippage in deliveries, which, among other factors, relates to theability of shipyards to deliver newbuilds by contracted delivery dates and the ability of purchasers to finance such newbuilds;

 

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the scrapping rate of older vessels, depending, amongst other things, on scrapping rates and internationalscrapping regulations;

 

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health crises and related factors, including port lockdowns, higher crew cost and travel restrictions imposed bygovernments around the world;

 

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port and canal congestion;

 

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the speed of vessel operation which may be influenced by several reasons including energy cost and environmentalregulations;

 

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sanctions;

 

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the number of vessels that are in or out of service, delayed in ports for several reasons, laid-up, dry dockedawaiting repairs or otherwise not available for hire, including due to vessel casualties;

 

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changes in environmental and other regulations that may limit the useful lives of vessels or effectively causereductions in the carrying capacity of vessels or early obsolescence of tonnage; and

 

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ability of the Company to maintain ESG practices acceptable to customers, regulators and financing sources.

Factors influencing the supply of and demand for shipping capacity are outside of our control, and we may not be ableto correctly assess the nature, timing and degree of changes in industry conditions. We anticipate that the future demand for our drybulk vessels and, in turn, drybulk charter rates, will be dependent, among other things, upon economic growth in theworld’s economies, seasonal and regional changes in demand, changes in the capacity of the global drybulk vessel fleet and the sources and supply of drybulk cargo to be transported by sea. Fleet inefficiencies, including sanctions on Russianenergy and disruptions related to vessels re-routing away from the Red Sea, Gulf of Aden and Suez Canal due to Houthi attacks on ships, have resulted in significant lengthening of average sailing distances and, as a result, have increased vesselemployment rates in excess of cargo demand at times in recent years; such fleet inefficiencies and resulting support for drybulk charter rates may not continue.

A decline in demand for commodities transported in drybulk vessels or an increase in supply of drybulk vessels could cause a significantdecline in charter rates, which could materially adversely affect our business, financial condition and results of operations. There can be no assurance as to the sustainability of future economic growth, if any, due to unexpected demand shocks.

World events, including terrorist attacks, international hostilities and potential disruption of shipping routes due to events outside of ourcontrol, including the conflict in Ukraine and ongoing Houthi attacks on vessels in the Red Sea and Gulf of Aden, could negatively affect our results of operations and financial condition.

We conduct most of our operations outside of the U.S. and our business, results of operations, cash flows, financial condition and ability topay dividends, if any, in the future may be adversely affected by changing economic, political and government conditions in the countries and regions where our vessels are employed or registered. Moreover, we operate in a sector of the economy thatis likely to be adversely impacted by the effects of political conflicts, including the current political instability in the Middle East, North Africa and other countries and geographic areas, terrorist or other attacks and war or internationalhostilities. Terrorist attacks and the continuing response of the U.S. and others to these attacks, as well as the threat of future terrorist attacks around the world, continues to cause uncertainty in the world’s financial markets and mayaffect our business, operating results and financial condition. Continuing conflicts and recent developments in the Middle East,

 

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including the Israeli-Palestinian conflict, the escalation of conflict between Russia and Ukraine, and the presence of U.S. or other armed forces in Iraq, Syria, Afghanistan and various otherregions, may lead to additional acts of terrorism and armed conflict around the world, which may contribute to further economic instability in the global financial markets. These uncertainties could also adversely affect our ability to obtainadditional financing on terms acceptable to us or at all. In the past, political conflicts have also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region.These types of attacks have also affected vessels trading in regions such as the Black Sea, South China Sea and the Gulf of Aden off the coast of Somalia. The Company is still taking ships through the Suez Canal, and there is a high risk thatHouthis might attack our vessels. Although our vessels are insured, there is a risk that insurers may deny cover, or delay payment if an attack does take place, which attack could destroy our ships or partially damage them. The IMO’sextraordinary council session held on 10th and 11th March 2022, addressed the impacts on shipping and seafarers, as a result of the conflict in the Black Sea and the Sea of Azov. The IMO called for the need to preserve the integrity of maritimesupply chains and the safety and welfare of seafarers and any spillover effects of the military action on global shipping, logistics and supply chains, in particular the impacts on the delivery of commodities and food to developing nations and theimpacts on energy supplies. Any of these occurrences could have a material adverse impact on our operating results, revenues and costs.

The conflict between Russia and Ukraine, which commenced in February 2022, has disrupted supply chains and caused instability and significantvolatility in the global economy. Much uncertainty remains regarding the global impact of the conflict in Ukraine, and it is possible that such instability, uncertainty and resulting volatility could significantly increase our costs and adverselyaffect our business, including our ability to secure charters and financing on attractive terms, and as a result, adversely affect our business, financial condition, results of operation and cash flows.

As a result of the conflict between Russia and Ukraine, Switzerland, the US, the EU, the UK and others have announced unprecedented levels ofsanctions and other measures against Russia and certain Russian entities and nationals. Such sanctions against Russia may adversely affect our business, financial condition, results of operation and cash flows. For example, apart from the immediatecommercial disruptions caused in the conflict zone, escalating tensions among the two countries and fears of potential shortages in the supply of Russian crude have caused the price of oil to trade at high levels. The ongoing conflict could resultin the imposition of further economic sanctions against Russia, with uncertain impacts on the drybulk carrier and tanker markets and the world economy. While we do not have any Ukrainian or Russian crew, our vessels currently do sail in the BlackSea and we otherwise conduct limited operations in Russia and Ukraine, it is possible that the conflict in Ukraine, including any increased shipping costs, disruptions of global shipping routes, any impact on the global supply chain and any impacton current or potential customers caused by the events in Russia and Ukraine, could adversely affect our operations or financial performance.

Adecrease in the level of export of goods, in particular from Asia, or an increase in trade protectionism globally, including as a result of tariffs imposed by the United States or other countries, could have a material adverse impact on ourbusiness, financial condition, results of operations and cash flows.

Our operations expose us to the risk that increased tradeprotectionism from the United States, China or other nations adversely affect our business. Governments may turn to trade barriers to protect or revive their domestic industries in the face of foreign imports, thereby depressing the demand forshipping. Restrictions on imports, including in the form of tariffs, could have a major impact on global trade and demand for shipping. Trade protectionism in the markets that our charterers serve may cause an increase in the cost of exported goods,the length of time required to deliver goods and the risks associated with exporting goods and, as a result, a decline in the volume of exported goods and demand for shipping. Due to the interconnected nature of the global supply chain for manyproducts, these policies could impact imports and exports from countries not directly imposing or subject to tariffs.

Tensions over tradeand other matters remain high between the U.S. and China. In recent years, the United States instituted large tariffs on a wide variety of goods, including from China, which led to retaliatory tariffs

 

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from leaders of other countries including China, and the new U.S. administration, led by President Trump, has announced the intention to use tariffs extensively as a policy tool. The UnitedStates has recently imposed blanket 10% tariffs on virtually all imports to the U.S. and significantly higher tariffs applicable to imports from many countries, including tariffs aggregating 145% on imports from China, which have resulted in othercountries imposing additional tariffs on imports from the U.S., including additional tariffs of 125% on imports from the U.S. announced by China, and is likely to continue to result in more retaliatory tariffs. On April 9, 2025, the U.S.announced a temporary pause on its tariffs applicable to many countries, while increasing the tariffs applicable to imports from China. The new U.S. administration has threatened to continue to broadly impose tariffs, which could lead tocorresponding punitive actions by the countries with which the U.S. trades. In April 2025, the U.S. also announced that it would impose additional port fees on (1) Chinese-owned ships of $50 per net ton for the arriving vessel commencingOctober 14, 2025, increasing to $80 per net ton on April 17, 2026, $110 per net ton on April 17, 2027 and $140 per net ton on April 17, 2028 and (2) operators of Chinese-built vessels of $18 per net ton ($120 per container,if applicable) commencing October 14, 2025, increasing to $23 per net ton ($153 per container, if applicable) on April 17, 2026, $28 per net ton ($195 per container, if applicable) on April 17, 2027 and $33 per net ton ($250 percontainer, if applicable) on April 17, 2028. The fees will be charged up to five times per year, per vessel. Although we do not have any Chinese-built vessels in our current fleet, it is unknown the effect that these proposed new port fees,whether adopted in the form proposed or with modifications, will have on us or our industry generally. These policy pronouncements have created significant uncertainty about the future relationship between the United States and China, Canada,Mexico, the EU and other exporting countries, including with respect to trade policies, treaties, government regulations and tariffs, and has led to concerns regarding the potential for an extended trade war. Protectionist developments, or theperception they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade and, in particular, trade between the United States and other countries, including China, which could adverselyand materially affect our business, results of operations, and financial condition.

The employment of our drybulk vessels and therespective revenues depend on the international shipment of raw materials and commodities primarily to China, Japan, South Korea and Europe from North and South America, India, Indonesia, and Australia. China is estimated to account for a largepercentage of the demand in recent years for commodities transported on drybulk carriers. Any reduction in or hindrance to the demand for such materials could negatively affect demand for our vessels and, in turn, harm our business, results ofoperations and financial condition. For instance, the government of China has implemented economic policies aimed at reducing the consumption of coal which may, in turn, result in a decrease in shipping demand. Similarly, the COVID-19 pandemicresulted in reduced economic activity due to lockdowns and lower demand for movement of raw materials, and the potential for a trade war resulting from the recent announcement of tariffs by the U.S., China and other countries has led to fears of aslowdown in global economic activity.

Furthermore, the government of China has implemented economic policies aimed at increasing domesticconsumption of Chinese-made goods and containing capital outflows. These policies may have the effect of reducing the supply of goods available for exports and the level of international trading and may, in turn, result in a decrease in demand forshipping raw materials and commodities consumed in China. In addition, reforms in China for a gradual shift to a “market economy” including with respect to the prices of certain commodities, are unprecedented or experimental and may besubject to revision, change or abolition and if these reforms are reversed or amended, the level of imports to and exports from China could be adversely affected.

Any new or increased trade barriers or restrictions on trade, including as a result of tariffs imposed by the United States or othercountries, would have an adverse impact on our charterers’ business, operating results and financial condition and could thereby affect their ability to make timely charter payments to us and to renew and increase the number of their charterswith us. Such adverse developments could in turn have a material adverse effect on our business, financial condition, results of operations, cash flow, and our ability to service or refinance any debt we may incur in the future.

 

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The conflict in Ukraine could disrupt our operations and negatively impact charter rates and costs.

The conflict in Ukraine, and the economic sanctions imposed by the EU, U.S. and other countries in response to Russian action, isdisrupting energy production and trade patterns, including shipping in the Black Sea and elsewhere, and its impact on energy prices and tanker rates, which initially have increased, is uncertain. Some of these sanctions and executive orders targetthe Russian oil sector, including a prohibition on the import of oil from Russia to the United States or the United Kingdom, and the European Union’s recent ban on Russian crude oil and petroleum products which took effect in December 2022 andFebruary 2023, respectively, as well as a price cap on Russian oil of $60 per barrel. Prior to the war, Russia exported approximately 5.5 mbpd of seaborne crude oil and refined petroleum products to the EU, USA, South Korea and Japan. After February2023, Russia is exporting less than 0.4 mbpd to these countries. The price of crude oil (Brent) initially traded above $100 per barrel as a result of the war and escalating tensions in the region and fears of potential shortages in the supply ofRussian crude oil but has since come down and, as of March 31, 2025, was trading at lower than $75 per barrel while following the introduction of tariff announcements imposed by the U.S. in the beginning of April 2025 crude oil (Brent) wastrading at a price lower than $65 per barrel. Russian crude oil is restricted for export, due to the extension of economic sanctions, and has also been impacted by boycotts and general sentiment, which could result in a reduction in the supply ofcrude oil and refined petroleum products cargoes available for transportation and, while initially tanker rates have increased, this could negatively impact tanker charter rates over the longer term. In addition, higher oil prices could reducedemand for oil and refined petroleum products, including in the event of any slowdown in the global economy due to such high oil prices or the impact of economic sanctions or geopolitical tensions and uncertainty, and in turn reduce demand fortankers and tanker charter rates. A slowdown in the global economy would also negatively affect the demand for products and commodities transported by dry bulk vessels, which would then negatively affect the charter rates for such vessels. The warin Ukraine is also impacting trade flows on drybulk vessels as it impacts the trade of a range of commodities. Some of these changes in trade flows could positively affect the demand for vessels, other trade flow changes might negatively affect thevessel demand, such as reduced grain exports ex Ukraine. The conflict may also impact various costs of operating our business, such as bunker expenses, for which we are responsible when our vessels operate in the spot market, which have increasedwith higher oil prices, war risk insurance premiums and crewing services, as Russia and the Ukraine are significant sources of crews, which may be disrupted or more expensive.

In addition, our vessels carry from time to time lawful cargoes originating in Russia, in compliance with existing sanctions, oil majors andother charterers may elect not to charter our vessels simply for doing business with companies that do lawful business in Russia. In addition, it may not be possible for us to obtain war risk insurance for any vessel loading Russian origin cargoes,in which case our vessels would not be allowed to call Russian ports and thereby impacting the vessels’ future trading pattern and earnings.

The situation in Ukraine, and the global response, continues to evolve and its impact on energy supply and demand, energy prices and tankeroperations and charter rates remains subject to considerable uncertainty, which could adversely impact our business, results of operations and financial condition.

If global economic conditions weaken, particularly in Europe, the United States or the Asia Pacific region, it could have a material adverse effect onour business, financial condition and results of operations.

Global economic conditions impact worldwide demand for various goodsand commodities and, tanker and drybulk shipping. The current macroeconomic environment is characterized by significant inflation, causing the U.S. Federal Reserve and other central banks to increase interest rates, which may raise the cost ofcapital, increase operating costs and reduce economic growth, disrupting global trade and shipping. Political events such as the continued global trade war between the U.S. and China, expansion of U.S. tariffs and trade protectionism policies tonearly all other countries, and other policies that the new U.S. administration has stated, such as demands related to the operation of the Panama Canal, as well as ongoing conflicts throughout the world, such as those in Ukraine and in the MiddleEast, including Houthi attacks on ships in the Red Sea and the Gulf of Aden,

 

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may disrupt global supply chains and negatively impact globalization and global economic growth. Weakened global economic conditions could disrupt financial markets, and may lead to weakerconsumer demand in the European Union, the United States and other parts of the world which could have a material adverse effect on our business.

In particular, we anticipate a significant number of the port calls made by our vessels will continue to involve the loading or unloading inports in the Asia Pacific region. As a result, negative changes in economic conditions in any Asia Pacific country, in particular China which has been one of the world’s fastest growing economies in recent years, can have a significant impacton the demand for tanker and drybulk shipping. If China’s pace of growth continues to decline or other countries in the Asia Pacific region experience slower or negative economic growth in the future, this may also negatively affect theeconomies of the United States and the European Union, or “EU”, and tanker and drybulk shipping demand. Our business, financial condition, results of operations, as well as our future prospects, will likely be materially and adverselyaffected by an economic downturn in any of these countries.

As a result of past disruptions in the credit markets and more recentlyincreased interest rates, the cost of obtaining bank financing in the shipping industry has increased and many lenders have enacted tighter lending standards, required more restrictive terms, including higher collateral ratios for advances, shortermaturities and smaller loan amounts, refused to refinance existing debt at maturity. Furthermore, certain banks that have historically been significant lenders to the shipping industry have reduced or ceased lending activities in the shippingindustry. We cannot be certain that financing will be available on acceptable terms or at all. If financing is not available when needed, or is available only on unfavorable terms, we may be unable to meet our obligations as they come due. In theabsence of available financing, we may be unable to take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our revenues and results of operations.

In addition, public health threats, such as the coronavirus, influenza and other highly communicable diseases or viruses, outbreaks of whichhave from time to time occurred in various parts of the world in which we operate, including China, could adversely impact our operations, and the operations of our customers.

The tanker industry is highly dependent upon the crude oil and petroleum products industries.

The employment of our subsidiaries’ vessels is driven by the availability of and demand for crude oil and petroleum products, theavailability of modern tanker capacity and the scrapping, conversion, or loss of older vessels. Historically, the world oil and petroleum markets have been volatile and cyclical because of the many conditions and events that affect the supply,price, production and transport of oil, including:

 

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increases and decreases in the demand and price for crude oil and petroleum products;

 

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availability of crude oil and petroleum products;

 

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demand for crude oil and petroleum product substitutes, such as natural gas, coal, hydroelectric power and otheralternate sources of energy that may, among other things, be affected by environmental regulation;

 

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actions taken by OPEC and major oil producers and refiners;

 

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political turmoil in or around oil producing nations;

 

•

global and regional political and economic conditions;

 

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developments in international trade;

 

•

international trade sanctions and tariffs imposed by the United States and retaliatory tariffs imposed by othercountries;

 

•

environmental factors;

 

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•

natural catastrophes;

 

•

terrorist acts;

 

•

weather; and

 

•

changes in seaborne and other transportation patterns.

Despite turbulence in the world economy at times in recent years, worldwide demand for oil and oil products has continued to rise; however,the COVID-19 pandemic caused demand for oil and oil products to stagnate for an extended period of time. In the event that an economic slowdown, whether as a result of recent imposition of tariffs by the U.S. and other countries or otherwise,results in a persistent stagnation or decline in demand and the long-term trend falters, the production of and demand for crude oil and petroleum products will encounter pressure which could lead to a decrease in shipments of these products andconsequently this would have an adverse impact on the employment of our vessels and the charter rates that they command, as was case from the second half of 2020 until the second quarter of 2022. Also, if oil prices decline to uneconomic levels forproducers, whether as a result of global economic weakness resulting from the escalating trade wars resulting from U.S. tariff announcements or otherwise, it may lead to declining output. As a result of any reduction in demand or output, the charterrates that we earn from our vessels employed on charters related to market rates may decline, and possibly remain at low levels for a prolonged period, as was the case for most periods during the preceding ten years.

An over-supply of tankers may lead to a reduction in charter rates, vessel values and profitability.

The market supply of tankers is affected by a number of factors, such as supply and demand for energy resources, including oil and petroleumproducts, supply and demand for seaborne transportation of such energy resources, and the current and expected purchase orders for new-buildings. While currently the orderbook for tankers is at low levels compared to historical standards, if thecapacity of new tankers delivered exceeds the capacity of such vessel types being scrapped and converted to non-trading vessels, global fleet capacity will increase. If the supply of tanker capacity, for the vessel class sizes comprising our fleetin particular, increases, and if the demand for the capacity of such vessel types decreases, or does not increase correspondingly, charter rates could materially decline. A reduction in charter rates and the value of our tankers may have a materialadverse effect on our results of operations.

An over-supply of drybulk vessel capacity may depress the current charter rates and, in turn,adversely affect our profitability.

The market supply of drybulk vessels had increased due to the high level of new deliveries inrecent years. Drybulk newbuildings were delivered in significant numbers starting at the beginning of 2006 and continued to be delivered in significant numbers through 2017, before declining to more moderate levels of newbuilding deliveries. Inaddition, the drybulk newbuilding orderbook may increase further in proportion to the existing fleet. Even though the overall level of the orderbook has declined over the past years, an over-supply of drybulk vessel capacity could depress thecurrent charter rates. Factors that influence the supply of vessel capacity include:

 

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number of new vessel deliveries;

 

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scrapping rate of older vessels;

 

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vessel casualties;

 

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price of steel;

 

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number of vessels that are out of service;

 

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vessels’ average speed;

 

•

changes in environmental and other regulations that may limit the useful life of vessels; and

 

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port or canal congestion.

 

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If drybulk vessel capacity increases but the demand for vessel capacity does not increase orincreases at a slower rate, charter rates could materially decline, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The market values of tankers and drybulk carriers are volatile and over time may fluctuate significantly. When the market values of our vessels are low,we may incur a loss on sale of a vessel or record an impairment charge, which may adversely affect our profitability and possibly lead to defaults under any future loan agreements.

The market value of drybulk and tanker vessels is highly volatile, and the market value of our vessels may fluctuate significantly, and couldexperience significant declines. The market values of our vessels are subject to potential significant fluctuations depending on a number of factors including:

 

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general economic and market conditions affecting the shipping industry;

 

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age, sophistication and condition of our vessels;

 

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types and sizes of vessels;

 

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availability of other modes of transportation;

 

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cost and delivery of schedules for new-buildings;

 

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governmental and other regulations;

 

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supply and demand for refined petroleum products;

 

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the prevailing level of product tanker charter rates and crude oil tanker rates; and

 

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technological advances.

As of December 31, 2024, the book value of four out of eleven vessels, was higher than their market value. Although we believe that, withrespect to each of these vessels, we will recover their carrying values at the end of their useful lives, based on their undiscounted cash flows, if we sell vessels at a time when vessel prices have not increased, the sale may be for less than thevessel’s carrying value in our financial statements, resulting in a reduction in profitability. Furthermore, if vessel values or anticipated future cash flows experience further declines, we may have to record an impairment charge in ourfinancial statements, which would also result in a reduction in our profits. If we in the future again incur indebtedness and subsequently the market value of our fleet declines, we may not be in compliance with certain provisions of any suchpotential future loan agreements obtained for fleet expansion or financing of existing vessels. If we obtain future financing and the market value of our fleet declines, we may be unable to pledge additional collateral, our lenders could accelerateour debt and foreclose on our fleet. The loss of our vessels would mean we could not run our business.

Increasing scrutiny and changingexpectations from investors, lenders and other market participants with respect to our ESG policies may impose additional costs on us or expose us to additional risks.

Companies across all industries, including the shipping industry, are facing increased scrutiny relating to their ESG policies. Investoradvocacy groups, certain institutional investors, investment funds, lenders and other market participants are increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of theirinvestments. The increased focus and activism related to ESG and similar matters may hinder access to capital, as investors and lenders may decide to reallocate capital or to not commit capital as a result of their assessment of a company’sESG practices. Companies which do not adapt to or comply with investor, lender or other industry shareholder expectations and standards, which are evolving, or which are perceived to have not responded appropriately to the growing concern for ESGissues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and the business, financial condition, and/or the stock price of such a company could be materially and adversely

 

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affected. As a result, we may be required to implement more stringent ESG procedures or standards so that we continue to have access to capital and our existing and future investors and lendersremain invested in us and make further investments in us.

Specifically, we may face increasing pressures from investors, lenders andother market participants, who are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability. Additionally, certain investors and lenders may exclude shippingcompanies, such as us, from their investing portfolios altogether due to environmental, social and governance factors. If we are faced with limitations in the debt and/or equity markets as a result of these concerns, or if we are unable to accessalternative means of financing on acceptable terms, or at all, we may be unable to access funds to implement our business strategy or service any future indebtedness, which could have a material adverse effect on our financial condition and resultsof operations.

If we cannot meet our charterers’ quality and compliance requirements, including regulations or costs associated with theenvironmental impact of our vessels, we may not be able to operate our vessels profitably which could have an adverse effect on our future performance, results of operations, cash flows and financial position.

Customers have a high focus on quality, emissions and compliance standards with their suppliers across the entire value chain, includingshipping and transportation. There is also increasing focus on the environmental footprint of marine transportation. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance,continuous training of our officers and crews and compliance with United States and international regulations, and are subject vetting processes conducted by prospective charterers. In addition, RightShip, which is a voluntary compliance requirementbut a desirable chartering verifier among top charterers, is also demanding compliance with their standards regarding environmental acceptability based on a number of variables and factors important in the maritime industry. If we or our manager, orother affiliated entities, including Stealth Maritime, Brave Maritime, StealthGas or C3is Inc., are rated low or otherwise perform poorly on RightShip evaluations or other vetting processes conducted by charterers, it could lead to the loss ofapproval to conduct business with us and in turn the loss of revenue under existing charters or future chartering opportunities.

Ourcontinuous compliance with existing and new standards and quality requirements is vital for our operations. Related risks could materialize in multiple ways, including a sudden and unexpected breach in quality and/or compliance concerning one ormore vessels and/or a continuous decrease in the quality concerning one or more vessels occurring over time. For instance, in June 2021, the IMO, working with the Marine Environmental Protection Committee, passed amendments to Annex VI aimed atreducing carbon emissions produced by vessels and include two new metrics for measuring a vessel’s overall energy efficiency and actual carbon dioxide emissions: Energy Efficiency Existing Shipping Index (“EEXI”) and CarbonIntensity Indicator (“CII”). If our vessels are only able to comply with the maximum EEXI and CII thresholds by reducing their speed, our vessels may be less attractive to charterers, and we may only be able to charter our vessels forlower charter rates or to less creditworthy charters, if we are able to do so at all. Non-compliance by us, either suddenly or over a period of time, or an increase in requirements by our charterers above and beyond what we deliver, may have amaterial adverse effect on our future performance, results of operations, cash flows and financial position.

We are subject to regulations andliability under environmental laws that require significant expenditures, which can affect the ability and competitiveness of our vessels to trade, our results of operations and financial condition.

Our business and the operation of our vessels are regulated under international conventions, national, state and local laws and regulations inforce in the jurisdictions in which our vessels operate, as well as in the country or countries of their registration, in order to protect against potential environmental impacts. Regulations of vessels, particularly environmental regulations havebecome more stringent and are expected to be further

 

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revised and become stricter in the future, including air emissions (nitrogen and sulfur oxides, particulate matter, etc.), marine pollution, BWTS implementation, GHG emissions, etc. As a result,significant capital expenditures may be required on our vessels to keep them in compliance, and we may be required to pay increased prices for newbuild and secondhand vessels that meet these requirements. See “Business-Environmental and OtherRegulations” for more information.

In addition, the heightened environmental, quality and security concerns of the public,regulators, insurance underwriters, financing sources and charterers may generally lead to additional regulatory requirements, including enhanced risk assessment and security requirements, greater inspection, and safety requirements on all vesselsin the marine transportation markets and possibly restrictions on the emissions of greenhouse gases from the operation of vessels. These requirements are likely to add incremental costs to our operations and the failure to comply with theserequirements may affect the ability of our vessels to obtain and, possibly, collect on insurance or to obtain the required certificates for entry into the different ports where we operate. We could also incur material liabilities, including cleanupobligations and claims for natural resource, personal injury and property damages in the event that there is a release of petroleum or other hazardous materials from our vessels or otherwise in connection with our operations. Violations of, orliabilities under, environmental regulations can result in substantial penalties, fines and other sanctions, including, in certain instances, seizure or detention of our vessels. Any such actual or alleged environmental laws regulations and policiesviolation, under negligence, willful misconduct or fault, could result in substantial fines, civil and/or criminal penalties or curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations orfinancial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating and resolving actual or alleged violations is expensive and can consume significant time andattention of our senior management. Events of this nature would have a material adverse effect on our business, financial condition and results of operations.

Environmental regulations in relation to climate change and greenhouse gas (“GHG”) emissions may increase operational and financialrestrictions, and environmental compliance costs and our non–scrubber fitted vessels may face difficulties in competing with scrubber-fitted vessels.

GHG reduction measures adopted, or further additional measures to be adopted by the IMO, EU and other jurisdictions for achieving 2030 goalsmay impose operational and financial restrictions, carbon taxes or an emission trading system on less efficient vessels starting from 2023, gradually affecting younger vessels, even newbuilds after 2030, reducing their trade and competitiveness,increasing their environmental compliance costs, imposing additional energy efficiency investments, or even making such vessels obsolete. Maritime shipping is included within the European Union’s Emission Trading Scheme (ETS) as ofJanuary 1, 2024 with a phase-in period requiring shipping companies to surrender 40% of their 2024 emissions in 2025; 70% of their 2025 emissions in 2026; and 100% of their 2026 emissions in 2027. Compliance with the maritime EU ETS may resultin additional compliance and administration costs. These or other developments may lead to environmental taxation affecting less energy efficient vessels, reduce their trade and competitiveness and make certain vessels in our fleet obsolete, whichmay have a material adverse effect on our business, financial condition and results of operations. See “Business-Environmental and Other Regulations” for more information.

Our vessels are not retrofitted with scrubbers and need to use low sulfur fuel containing 0.5% sulfur content, which is currently moreexpensive than standard marine fuel containing 3.5% sulfur content. If the cost differential between low sulfur fuel and high sulfur fuel is significantly higher than anticipated, or if low sulfur fuel is not available at ports on certain tradingroutes, it may not be feasible or competitive to operate vessels on certain trading routes without installing scrubbers or without incurring deviation time to obtain compliant fuel. Our vessels may therefore face difficulties in competing withvessels equipped with scrubbers.

Our vessels are subject to periodic inspections by a classification society.

The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. Theclassification society certifies that a vessel is safe and seaworthy in accordance

 

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with the applicable rules and regulations of the country of registry of the vessel and the Safety of Life at Sea Convention. Our fleet is currently classed with Lloyds Register of Shipping,Bureau Veritas, Registro Italiano Navale (RINA) and American Bureau of Shipping (ABS).

A vessel must undergo annual surveys, intermediatesurveys and special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. Our vessels are on special survey cycles forhull inspection and continuous survey cycles for machinery inspection. Every vessel is also required to be dry docked every two to three years for inspection of the underwater parts of such vessel. However, for vessels not exceeding 15 years thathave means to facilitate underwater inspection in lieu of dry docking, the dry docking may be skipped and be conducted concurrently with the special survey.

If a vessel does not maintain its class and/or fails any annual survey, intermediate survey or special survey, the vessel will be unable totrade between ports and will be unemployable; we would then be in violation of covenants in our loan agreements and insurance contracts or other financing arrangements. This would adversely impact our operations and revenues.

Changes in fuel, or bunker, prices may adversely affect profits.

While we do not bear the cost of fuel or bunkers under time and bareboat charters, fuel is a significant expense in our shipping operationswhen vessels are deployed under spot charters. The cost of fuel, including the fuel efficiency or capability to use lower priced fuel, can also be an important factor considered by charterers in negotiating charter rates. Changes in the price offuel may adversely affect our profitability. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by the OPEC(“Organization of Petroleum Exporting Countries”) and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. Furthermore, fuel may become significantlymore expensive in the future, which may reduce our profitability. In addition, on January 1, 2020 the 0.5% global sulfur cap in marine fuels used by vessels that are not equipped with sulfur oxide (“SOx”) exhaust gas cleaningsystems (“scrubbers”) under the International Convention for Prevention of Pollution from Ships (“MARPOL”) Annex VI entered into force. Our vessels are not retrofitted with scrubbers and need to use this low sulfur fuelcontaining 0.5% sulfur content, which is currently more expensive than standard marine fuel containing 3.5% sulfur content. If the cost differential between low sulfur fuel and high sulfur fuel increases, or if low sulfur fuel is not available atports on certain trading routes, this may adversely affect our expenses for vessels operating in the sport market and the competitiveness of our vessels. See “—Environmental regulations in relation to climate change and greenhouse gas(“GHG”) emissions may increase operational and financial restrictions, and environmental compliance costs, and our non–scrubber fitted vessels may face difficulties in competing with scrubber-fitted vessels.” In addition,this may lead to changes in the production quantities and prices of different grades of marine fuel by refineries and introduces an additional element of uncertainty in fuel markets, which could result in additional costs and adversely affect ourcash flows, earnings and results from operations.

Maritime claimants could arrest our vessels, which could interrupt our cash flow.

Crew members, suppliers of goods and services to a vessel, shippers of cargo and others may be entitled to a maritime lien against that vesselfor unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could interrupt our cash flowand require us to pay large sums of funds to have the arrest lifted.

In addition, in some jurisdictions, such as South Africa, under the“sister ship” theory of liability, a claimant may arrest both the vessel which is subject to the claimant’s maritime lien and any “associated” vessel, which is

 

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any vessel owned or controlled by the same owner. Claimants could try to assert “sister ship” liability against one vessel in our fleet for claims relating to another of our ships or,possibly, another vessel managed by Stealth Maritime.

Governments could requisition our vessels during a period of war or emergency, resulting inloss of revenues.

A government could requisition for title or seize our vessels. Requisition for title occurs when a governmenttakes control of a vessel and becomes the owner. Also, a government could requisition our vessels for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates.Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of our vessels would adversely impact our operations and revenues, thereby resulting in loss of revenues.

Risks involved with operating ocean-going vessels could affect our business and reputation, which would adversely affect our revenues and stock price.

The operation of an ocean-going vessel carries inherent risks. These risks include the possibility of:

 

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marine accident or disaster;

 

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piracy and terrorism;

 

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explosions;

 

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environmental accidents;

 

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pollution;

 

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loss of life;

 

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cargo and property losses or damage; and

 

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business interruptions caused by mechanical failure, human error, war, political action in various countries,labor strikes or adverse weather conditions.

Any of these circumstances or events could increase our costs or lower ourrevenues. The involvement of our vessels in a serious accident could harm our reputation as a safe and reliable vessel operator and lead to a loss of business.

Our vessels may suffer damage and we may face unexpected repair costs, which could affect our cash flow and financial condition.

If our vessels suffer damages, they may need to be repaired at a shipyard facility. The costs of repairs are unpredictable and can besubstantial. We may have to pay repair costs that our insurance does not cover. The loss of earnings while these vessels are being repaired and repositioned, as well as the actual cost of these repairs, would have an adverse effect on our cash flowand financial condition. We do not intend to carry business interruption insurance.

Acts of piracy on ocean-going vessels could adversely affectour business.

Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the SouthChina Sea, the Indian Ocean and in the Gulf of Aden, off the coast of Somalia. If these piracy attacks occur in regions in which our vessels are deployed and are characterized by insurers as “war risk” zones, as the Gulf of Adencontinues to be, or Joint War Committee (JWC) “war and strikes” listed areas, premiums payable for such coverage, for which we are responsible with respect to vessels employed on spot charters, but not vessels employed on bareboat ortime charters, could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew costs, including employing onboard security guards, could increase in

 

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such circumstances. We usually employ armed guards on board the vessels on time and spot charters that transit areas where Somali pirates operate. We may not be adequately insured to cover lossesfrom these incidents, which could have a material adverse effect on us. In addition, detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability of insurance for our vessels, could have amaterial adverse impact on our business, financial condition and results of operations.

Our operations outside the United States expose us toglobal risks, such as political conflict, terrorism and public health concerns, including the current conflict in Ukraine, which may interfere with the operation of our vessels.

We are an international company and primarily conduct our operations outside the United States. Changing economic, political and governmentalconditions in the countries where we are engaged in business or where our vessels are registered affect us. In the past, political conflicts, particularly in the Arabian Gulf, resulted in attacks on vessels, mining of waterways and other efforts todisrupt shipping in the area. Continuing conflicts, instability and other recent developments in Ukraine, the Middle East and elsewhere, including attacks in recent years involving vessels and vessel seizures for example in the Strait of Hormuz andoff the coast of Gibraltar, the attack on an Iranian tanker near the Saudi Arabian port city of Jeddah and in Syria and Afghanistan, may lead to additional acts of terrorism or armed conflict around the world, and our vessels may face higher risksof being attacked or detained, or shipping routes transited by our vessels, such as the Strait of Hormuz or the Black Sea, may be otherwise disrupted. Acts of terrorism may increase with the continuing conflicts in the Middle East and North Africa,and therefore our vessels may face higher risks of being attacked. In addition, future hostilities or other political instability in regions where our vessels trade could affect our trade patterns and adversely affect our operations and performance.If certain shipping lanes were to close it could adversely affect the availability of, and the demand for crude oil and petroleum products. This would negatively affect our business and our customers’ investment decisions over an extendedperiod of time. In addition, sanctions against oil exporting countries such as Iran, Syria and Venezuela, and the events in Ukraine and related sanctions against Russia and regions of Ukraine, may also impact the availability of crude oil andpetroleum products and which would increase the availability of applicable vessels, thereby impacting negatively charter rates. Changes in laws and regulations, including tax matters and their implementation by local authorities could affect ourvessels chartered to customers in certain countries, including Chinese customers, as well as our vessels calling to ports in certain countries, including Chinese ports, and could have a material adverse effect on our business, results of operationsand financial condition.

Terrorist attacks, or the perception that oil refineries and product tankers or crude oil tankers are potentialterrorist targets, could materially and adversely affect the continued supply of refined petroleum products and crude oil to the United States and to other countries. Furthermore, future terrorist attacks could result in increased volatility of thefinancial markets in the United States and globally, and could result in an economic recession in the United States or the world. Any of these occurrences could have a material adverse impact on our operating results, revenues and costs.

In addition, public health threats, such as the coronavirus, influenza and other highly communicable diseases or viruses, outbreaks of whichhave from time to time occurred in various parts of the world in which we operate, including China, could adversely impact our operations, and the operations of our customers.

The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.

Our vessels call in ports in certain geographic areas where smugglers attempt to hide drugs and other contraband on vessels, with or withoutthe knowledge of crew members. To the extent our vessels are found with contraband, whether inside or attached to the hull of our vessel and whether with or without the knowledge of any of our crew, we may face governmental or other regulatoryclaims or penalties which could have an adverse effect on our business, results of operations, cash flows and financial condition.

 

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Our vessels may call on ports located in countries that are subject to sanctions and embargoes imposedby the U.S. or other governments, which could adversely affect our reputation and the market for our common stock.

From time totime on charterers’ instructions, our vessels have called and may again call on ports located in countries subject to sanctions and embargoes imposed by the United States government and countries identified by the United States government asstate sponsors of terrorism, such as Iran, Syria and North Korea. The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and suchsanctions and embargo laws and regulations may be amended or strengthened over time.

We believe all of our vessels port calls have beenmade in full compliance with applicable economic sanctions laws and regulations, including those of the United States, the EU and other relevant jurisdictions. Our charter agreements include provisions that restrict trades of our vessels tocountries targeted by economic sanctions unless such transportation activities involving sanctioned countries are permitted under applicable economic sanctions and embargo regimes. Our ordinary chartering policy is to seek to include similarprovisions in all of our period charters. Prior to agreeing to waive existing charter party restrictions on carrying cargoes to or from ports that may implicate sanctions risks, we ensure that the charterers have proof of compliance withinternational and U.S. sanctions requirements, or applicable licenses or other exemptions.

Although we believe that we are in compliancewith all applicable sanctions and embargo laws and regulations and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may vary or may be subject tochanging interpretations and we may be unable to prevent our charterers from violating contractual and legal restrictions on their operations of the vessels. Any such violation could result in fines or other penalties for us and could result in someinvestors deciding, or being required, to divest their interest, or not to invest, in the Company. Additionally, some investors may decide to divest their interest, or not to invest, in the Company simply because we do business with companies thatdo lawful business in sanctioned countries. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affectour reputation. Investor perception of the value of our shares may also be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.

Failure to comply with the U.S. Foreign Corrupt Practices Act and other anti-bribery legislation in other jurisdictions could result in fines, criminalpenalties, contract terminations and an adverse effect on our business.

We operate in a number of countries through the world,including countries that may be known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted policies which are consistent and in full compliance with the U.S.Foreign Corrupt Practices Act of 1977 (the “FCPA”) and other anti-bribery laws. We are subject, however, to the risk that we, our affiliated entities or their respective officers, directors, employees and agents may take actionsdetermined to be in violation of such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adverselyaffect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations isexpensive and can consume significant time and attention of our senior management.

A cyber-attack could materially disrupt our business.

Our business operations could be targeted by individuals or groups seeking to sabotage or disrupt our information technologysystems and networks, or to steal data. A successful cyber-attack could materially disrupt our operations, including the safety of our operations, or lead to unauthorized release of information or alteration of information on our systems. Any suchattack or other breach of our information technology systems could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

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Risks Related To Our Business

We are dependent on the ability and willingness of our charterers to honor their commitments to us for all our revenues.

We derive all our revenues from the payment of charter hire by charterers of our vessels. The ability and willingness of each of ourcounterparties to perform their obligations under charter agreements with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the refined petroleumproduct tanker sector, crude oil tanker sector and the drybulk sector, of the shipping industry and the overall financial condition of the counterparties. In addition, in depressed market conditions, charterers may seek to renegotiate their chartersor may default on their obligations under charters and our charterers may fail to pay charter hire or attempt to renegotiate charter rates. Should a counterparty fail to honor its obligations under agreements with us, it may be difficult to securesubstitute employment for such vessel, and any new charter arrangements we secure in the spot market or on bareboat or time charters could be at lower rates. If we lose a charter, we may be unable to re-deploy the related vessel on terms asfavorable to us. We would not receive any revenues from such a vessel while it remained unchartered, but we may be required to pay expenses necessary to maintain the vessel in proper operating condition, insure it and service any indebtednesssecured by such vessel. The failure by charterers to meet their obligations to us or an attempt by charterers to renegotiate our charter agreements could have a material adverse effect on our revenues, results of operations and financial condition.

Employment of our vessels on time or bareboat charters may prevent us from taking advantage of rising spot charter rates.

The spot market may fluctuate significantly based upon tanker, crude oil and refined petroleum product supply and demand, in the case of ourtankers, and drybulk carrier and drybulk cargo supply and demand, in the case of our drybulk carriers. The factors affecting supply and demand for tankers, crude oil and refined petroleum products and drybulk carriers are outside of our control, andthe nature, timing and degree of changes in industry conditions are unpredictable.

As of April 15, 2025, five of our vessels wereoperating in the spot market. We may employ more vessels on time and bareboat charters in the future, and to the extent we employ our vessels on time and bareboat charters, the charter rates for such vessels will be fixed for a specified timeperiod. We cannot assure you that charter rates will not increase during the period of such employment. If our vessels are employed on time or bareboat charters during a period of rising spot market charter rates, we would be unable to pursueopportunities to charter our vessels at such higher charter rates. Conversely, spot rates are volatile and cyclical and may decline substantially.

Charters at attractive rates may not be available when the charters for our vessels expire, which would have an adverse impact on our revenues andfinancial condition.

As of April 15, 2025, all of our vessels were employed in the spot market or on time charters expiringfrom May 2025 up to September 2027. We are exposed to prevailing charter rates in the product tanker, crude tanker and drybulk carrier sectors, including with respect to our vessels operating in the spot market and when our vessels’ existingtime charters expire, and to the extent the counterparties to our fixed-rate time charter contracts fail to honor their obligations to us. The successful operation of our vessels in the competitive and highly volatile spot charter market will dependon, among other things, obtaining profitable spot charters, which depends greatly on vessel supply and demand, and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. When thecurrent charters for our fleet expire or are terminated, it may not be possible to re-charter these vessels at similar rates, or at all, or to secure charters for any vessels we agree to acquire at similarly profitable rates, or at all. As a result,we may have to accept lower rates or experience off hire time for our vessels, which would adversely impact our revenues, results of operations and financial condition.

 

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We depend upon a few significant customers for our revenues. The loss of one or more of thesecustomers could adversely affect our financial performance.

We derive a significant part of our revenue from a small number ofcharterers. For the year ended December 31, 2022, we had two customers from which we derived 33% of our revenues, for the year ended December 31, 2023 we had one customer from which we derived 21% of our revenues, and for the year endedDecember 31, 2024 we had two customers from which we derived 21% of our revenues. We anticipate a limited number of customers will continue to represent significant amounts of our revenue. If these customers cease doing business or do notfulfill their obligations under the charters of our vessels, due to financial pressure on these customers or otherwise, our results of operations and cash flows could be adversely affected. Further, if we encounter any difficulties in ourrelationships with these charterers, our results of operations, cash flows and financial condition could be adversely affected.

Technologicalinnovation could reduce our charter hire income and the value of our vessels.

The charter hire rates and the value and operationallife of a vessel are determined by a number of factors including the vessel’s efficiency, operational flexibility and physical life. Efficiency includes speed, fuel economy and the ability to load and discharge cargo quickly, including theability to use alternative combustion fuels. Flexibility includes the ability to enter harbors, utilize related docking facilities and pass through canals and straits. The length of a vessel’s physical life is related to its original designand construction, its maintenance and the impact of the stress of operations. More technologically advanced tankers and drybulk carriers have been built since our vessels, which have an average age of 15.6 years as of April 15, 2025, wereconstructed and tankers and drybulk carriers with further advancements may be built that are even more efficient or more flexible or have longer physical lives, including new vessels powered by alternative fuels or which are otherwise perceived asmore environmentally friendly by charterers.

Competition from these more technologically advanced vessels could adversely affect theamount of charter hire payments we receive for our vessels, and the resale value of our vessels could significantly decrease, which could also result in impairment costs. In these circumstances, we may also be forced to charter our vessels to lesscreditworthy charterers, either because the oil majors and other top tier charters will not charter older and less technologically advanced vessels or will only charter such vessels at lower contracted charter rates than we are able to obtain fromthese less creditworthy, second tier charterers. Consequently, our results of operations and financial condition could be adversely affected.

Theaging of our fleet may result in our vessels being less attractive to charterers and in increased operating costs in the future, which could adversely affect our earnings.

Our fleet’s average age, which was approximately 15.6 years, as of April 15, 2025, with our tankers having an average age of 16.7years and our drybulk carriers having an average age of 12.4 years, which is above the average age of the global tanker fleet and only somewhat below above the average age of the global drybulk carrier fleet, respectively. As our vessels age we mayhave difficulty competing with younger, more technologically advanced vessels for charters from oil majors and other top-tier charterers. In general, the costs to maintain a tanker or drybulk carrier in good operating condition increase with the ageof the vessel. Older vessels are typically less fuel-efficient and more costly to maintain than more recently constructed tankers or drybulk carriers, as applicable, due to improvements in engine technology. Cargo insurance rates also increase withthe age of a vessel, as do charterer’s concerns regarding the perceived reliability of the vessel’s technical performance. As a result, older vessels are generally less desirable to charterers, particularly oil majors and other top tiercharterers.

Unless we set aside reserves for vessel replacement, at the end of a vessel’s useful life, our revenue will decline, which wouldadversely affect our cash flows and income.

As of April 15, 2025, the vessels in our fleet had an average age ofapproximately 15.6 years, with our tankers having an average age of 16.7 years and our drybulk carriers having an average age of 12.4 years. Unless

 

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we maintain cash reserves for vessel replacement, we may be unable to replace the vessels in our fleet upon the expiration of their useful lives. We estimate the useful life of our vessels to be25 years from the completion of their construction. Our cash flows and income are dependent on the revenues we earn by chartering our vessels to customers. If we are unable to replace the vessels in our fleet upon the expiration of their usefullives, our business, financial condition and results of operations may be materially adversely affected. Any reserves set aside for vessel replacement would not be available for other cash needs or dividends, if any.

Any future financing arrangements may contain restrictive covenants that may limit our liquidity and corporate activities.

As of December 31, 2024 and the date of this report, we did not have any outstanding bank debt. Secured bank debt is common in theshipping industry, however, and we may incur indebtedness in connection with any further expansion of our fleet or the financing of existing vessels. We expect our future financing arrangements may impose operating and financial restrictions on us.These restrictions may limit our ability to:

 

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incur additional indebtedness;

 

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create liens on our assets;

 

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sell capital stock of our subsidiaries;

 

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make investments;

 

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engage in mergers or acquisitions;

 

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pay dividends; and

 

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make capital expenditures.

We expect that any future credit facilities will require us to maintain specified financial ratios, satisfy financial covenants and containcross-default clauses. As a result of the restrictions in our future financing arrangements we may enter into with respect to future vessels which we have yet to identify, we may need to seek permission from our lenders in order to engage in somecorporate actions. Our future lenders’ interests may be different from ours, and we may not be able to obtain their permission when needed. This may prevent us from taking actions that we believe are in our best interest which may adverselyimpact our revenues, results of operations and financial condition.

If in the future we again incur debt, a failure by us to meet ourpayment and other obligations contained in the agreements for such indebtedness, including our financial covenants and security coverage requirement, could lead to defaults under any future secured loan agreements. Our lenders could then accelerateour indebtedness outstanding at such time and foreclose on any vessels in our fleet mortgaged thereunder. The loss of our vessels would mean we could not run our business.

The market values of our vessels may decrease, which could cause us to breach covenants in any future credit facilities, and could have a materialadverse effect on our business, financial condition and results of operations.

Any future credit facilities, which likely would besecured by liens on our vessels, we enter into will likely contain various financial covenants, including requirements that relate to our financial condition, operating performance and liquidity. For example, we may be required to maintain a maximumconsolidated leverage ratio that is based, in part, upon the market value of the vessels securing the applicable loan, as well as a minimum ratio of the market value of vessels securing a loan to the principal amount outstanding under such loan. Themarket value of drybulk carriers and tankers is sensitive to, among other things, changes in the drybulk carrier and tanker charter markets, respectively, with vessel values deteriorating in times when drybulk carrier charter rates or tanker charterrates, as applicable, are falling and improving when charter rates are anticipated to rise.

 

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Lower charter rates coupled with the difficulty in obtaining financing for vessel purchases have adversely affected drybulk carrier and tanker values in the recent past. If we face similarconditions in the future, this could lead to a significant decline in the fair market values of our vessels, which may affect our ability to comply with these loan covenants. If the value of our vessels deteriorates, we may have to record animpairment charge in our financial statements which would adversely affect our financial results and could further hinder our ability to raise capital.

If in the future we again incur debt, a failure to comply with the covenants contained in such debt agreements and/or obtain covenant waiversor modifications could result in the lenders thereunder requiring us to post additional collateral, enhance our equity and liquidity, increase our interest payments or pay down indebtedness to a level where we were in compliance with such loancovenants, sell vessels in our fleet or accelerate our indebtedness, which would impair our ability to continue to conduct our business. If in the future we incur debt and such indebtedness is accelerated, we may not be able to refinance this debtor obtain additional financing and could lose our vessels if our lenders foreclosed on their liens. In addition, if we find it necessary to sell our vessels at a time when vessel prices are low, we will recognize losses and a reduction in ourearnings, which could affect our ability to raise additional capital necessary for us to comply with loan agreements for debt we may incur in the future.

Our ability to obtain debt financing may be dependent on the performance of our then existing charters and the creditworthiness of our charterers, aswell as the perceived impact of emissions by our vessels on the climate.

The actual or perceived credit quality of our charterers,and any defaults by them, may materially affect our ability to obtain the additional capital resources that we will require in order to purchase additional vessels or may significantly increase our costs of obtaining such capital. Our inability toobtain additional financing, or obtain financing at a higher than anticipated cost may materially affect our results of operation and our ability to implement our business strategy.

In 2019, a number of leading lenders to the shipping industry and other industry participants announced a global framework by which financialinstitutions can assess the climate alignment of their ship finance portfolios, called the Poseidon Principles, and additional lenders have subsequently announced their intention to adhere to such principles. If the ships in our fleet are deemed notto satisfy the emissions and other sustainability standards contemplated by the Poseidon Principles, or other Environmental Social Governance (ESG) standards required by lenders or investors, the availability and cost of bank financing for suchvessels may be adversely affected.

An incurrence of a significant amount of debt may adversely affect us and our cash flows.

As of December 31, 2024 and the date of this report, we did not have any outstanding bank debt. We may, however, incur indebtedness inconnection with any further expansion of our fleet or the financing of existing vessels. This increase in the level of indebtedness and the need to service the indebtedness may impact our profitability and cash available for growth of our fleet,working capital and dividends if any. In addition, dividend payments on our Series A Preferred Stock will reduce cash available for growth of our fleet, working capital and dividends, if any, on our common stock. Additionally, any increases ininterest rate levels, may increase the cost of servicing any potential future indebtedness.

To finance our future fleet expansion programbeyond our current fleet, we may incur secured debt. We would have to dedicate a portion of our cash flow from operations to pay the principal and interest on such future debt. These payments would limit funds otherwise available for workingcapital, capital expenditures, and other purposes, including any distributions of cash to our stockholders, and our inability to service any such debt could lead to acceleration of such debt and foreclosure on our fleet.

Moreover, carrying secured indebtedness would expose us to increased risks if the demand for oil, oil-related or drybulk marine transportationdecreases and charter rates and vessel values are adversely affected.

 

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We may become exposed to volatility in interest rates, including SOFR.

To the extent we enter into credit facilities in the future to finance our fleet, we expect that the loans advanced under such creditfacilities would be advanced at a floating rate based on SOFR. After a long period of relative stability at historically low levels, interest rates in 2022 began to increase; this trend continued up to the first half of 2023. Following this periodinterest rates have begun to gradually decrease. Any future volatility in interest rates as witnessed in the past can affect the amount of interest payable on floating rate debt, and which, in turn, could have an adverse effect on our earnings andcash flow during periods in which we have such debt.Our financial condition could be materially adversely affected at any time that we have not entered into interest rate hedging arrangements to hedge our interest rate exposure and the interestrates applicable to any credit facilities and or other financing arrangements we may enter into in the future increase. Moreover, even if we have entered into interest rate swaps or other derivative instruments for purposes of managing our interestrate or bunker cost exposure, our hedging strategies may not be effective and we may incur substantial losses.

Any derivative contracts we mayenter into to hedge our exposure to fluctuations in interest rates could result in higher than market interest rates and charges against our income, as well as reductions in our stockholders’ equity.

We may enter into interest rate swaps for purposes of managing our exposure to fluctuations in interest rates applicable to indebtedness underany future credit facilities which are advanced at floating rates. Our hedging strategies, however, may not be effective and we may incur substantial losses if interest rates or currencies move materially differently from our expectations.

To the extent any interest rate swaps we may enter into do not qualify for treatment as hedges for accounting purposes, we will recognizefluctuations in the fair value of such contracts in our statement of comprehensive income. In addition, changes in the fair value of any derivative contracts that do qualify for treatment as accounting hedges, will be recognized in“Accumulated other comprehensive income” on our statement of equity. Our financial condition could also be materially adversely affected to the extent we do not hedge our exposure to interest rate fluctuations under our financingarrangements under which loans may be advanced at a floating rate.

In addition, we may enter in the future into foreign currencyderivative contracts in order to hedge an exposure to foreign currencies related to shipbuilding contracts.

Any hedging activities weengage in may not effectively manage our interest rate and foreign exchange exposure or have the desired impact on our financial condition or results of operations.

Because we generate all of our revenues in U.S. dollars but incur a portion of our expenses in other currencies, exchange rate fluctuations couldadversely affect our results of operations.

We generate the substantial majority of our revenues in U.S. dollars and the majorityof our expenses are also in U.S. dollars. However, a relatively small portion of our overall expenses, mainly executive compensation, is incurred in Euros. This could lead to fluctuations in net income due to changes in the value of the U.S. dollarrelative to the other currencies, in particular the Euro. Expenses incurred in foreign currencies against which the U.S. dollar falls in value can thereby increase, decreasing our net income.

Inflation could adversely affect our business and financial results.

Inflation could adversely affect our business and financial results by increasing the costs of labor and materials needed to operate ourbusiness. During 2022, 2023 and 2024, we experienced moderate inflationary cost increases in vessel operating expenses mainly in spares, stores and maintenance costs, before such cost increases peaked in late 2022 and followed a slower growth in2023 and 2024. In 2022 our main cost driver was the increase in the number of our vessels as well as the effect of COVID-19 pandemic on crew costs. In 2023 our

 

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main cost driver was the average increase of our fleet by approximately three vessels, while in 2024 our fleet increased by two more vessels thus leading to increased costs of operations. In anintense inflationary environment and depending on the tanker and drybulk industries specific conditions and market cycles, we may be unable to raise our charter rates enough to offset the increasing costs of our operations, which would decrease ourprofit margins. Inflation may also raise our costs of capital and decrease our purchasing power, making it more difficult to maintain sufficient funds to operate our business. See “Item 5. Operating and Financial Review andProspects—Inflation.”

We are dependent on our relationship with Stealth Maritime.

Stealth Maritime serves as commercial and technical manager for all of the vessels in our fleet . We are accordingly dependent upon our fleetmanager, Stealth Maritime, for:

 

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the administration, chartering and operations supervision of our fleet;

 

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our recognition and acceptance as owners of product and crude oil carriers, including our ability to attractcharterers;

 

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our ability to obtain vetting approval from oil majors;

 

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relations with charterers and charter brokers;

 

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operational expertise; and

 

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management experience.

The loss of Stealth Maritime’s services or its failure to perform its obligations to us properly for financial or other reasons couldmaterially and adversely affect our business and the results of our operations, including the potential loss of oil major approvals to conduct business with us and in turn our ability to employ our vessels our charters with such oil majors. Althoughwe may have rights against Stealth Maritime if it defaults on its obligations to us, you would have no recourse against Stealth Maritime. In addition, in such a case or if our management agreement were to be terminated we might not be able to find areplacement manager on terms as favorable as those currently in place with Stealth Maritime. Further, we expect that we will need to seek approval from our future lenders to change our manager. We are not permitted to change our commercial ortechnical our manager from Stealth Maritime, or to allow Stealth Maritime to subcontract or delegate commercial or technical management, without the prior written consent of our lenders.

In addition, if Stealth Maritime suffers material damage to its reputation or relationships, including as a result of a spill or otherenvironmental incident or an accident, or any violation or alleged violation of U.S., EU, UN or other sanctions, involving ships managed by Stealth Maritime whether or not owned by us, it may harm the ability of our company or our subsidiaries tosuccessfully compete in our industry, including due to oil majors and other charterers electing not to do business with Stealth Maritime or us.

Since our manager, Stealth Maritime, is a privately held company and there is little or no publicly available information about it, an investor couldhave little advance warning of potential financial and other problems that might affect our manager that could have a material adverse effect on us.

We would be materially adversely affected if our manager becomes unable or unwilling to provide services for our benefit at the level ofquality they have provided such services to our vessels in the past. If we were required to employ a ship management company other than our manager, we cannot offer any assurances that the terms of such management agreements and results ofoperations would be equally or more beneficial to us in the long term.

Our manager’s ability to render management services willdepend in part on its own financial strength. Circumstances beyond our control could impair Stealth Maritime’s financial strength, and because it is a

 

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privately held company, information about its financial strength is not publicly available. As a result, our stockholders and we might have little advance warning of financial or other problemsaffecting our manager even though their financial or other problems could have a material adverse effect on our stockholders and us.

Our officersface conflicts in the allocation of their time to our business. In addition, the fiduciary duties of our officers and directors may conflict with those of the officers and directors of StealthGas, C3is and/or its affiliates.

Our Chief Executive Officer is involved in other business activities not associated with us, which may result in his spending less time than isappropriate or necessary to manage our business successfully. In particular, Mr. Vafias, who functions as our Chief Executive Officer and President, also provides services in similar capacities for StealthGas and is a significant stockholder ofStealthGas, and is the Non-Executive Chairman of C3is Inc. Our officers are not required to work full-time on our affairs and also perform services for StealthGas, C3is Inc. and its affiliates. As a result, there could be material competition forthe time and effort of our officers who also provide services to StealthGas, C3is and its affiliates, which could have a material adverse effect on our business, results of operations and financial condition. See “Item 6. Directors, SeniorManagement and Employees”.

Our officers and directors have fiduciary duties to manage our business in a manner beneficial to us andour stockholders. However, some of our officers and directors also serve as executive officers and/or directors of StealthGas and C3is Inc. As a result, these individuals have fiduciary duties to manage the business of StealthGas, C3is Inc. and itsaffiliates in a manner beneficial to such entities and their stockholders. Consequently, these officers and directors may encounter situations in which their fiduciary obligations to StealthGas, C3is Inc. and us are in conflict. There may also beother business opportunities for which StealthGas and C3is Inc. may compete with us such as hiring employees, acquiring other businesses, or entering into joint ventures, which could have a material adverse effect on our business.

Companies affiliated with us or our management, including StealthGas, C3is Inc. Stealth Maritime and Brave Maritime, may manage or acquire vessels thatcompete with our fleet.

Entities affiliated with other members of the Vafias family own vessels that operate in various sectors ofthe shipping industry, including a number of product and crude oil tankers and drybulk carriers, which are managed by Stealth Maritime and/or Brave Maritime. It is possible that StealthGas, C3is Inc., Stealth Maritime or other companies affiliatedwith the Vafias family or Stealth Maritime, including Brave Maritime, could, in the future, agree to acquire or manage additional vessels that compete directly with ours and may face conflicts between their own interests and their obligations to us.These conflicts may arise in connection with the chartering, purchase, sale and operations of the vessels in our fleet versus other vessels in which these persons or entities have an interest. Accordingly, our management and our manager might befaced with conflicts of interest with respect to their own interests and their obligations to us. These conflicts of interests may have an adverse effect on our business and your interests as stockholders.

We may enter into certain significant transactions with companies affiliated with members of the Vafias family which may result in conflicts ofinterests.

In addition to our management contract with Stealth Maritime, a company controlled by members of the Vafias familyother than our Chief Executive Officer, from time to time we may enter into other transactions with companies affiliated with members of the Vafias family. For instance, we acquired an aggregate of seventeen vessels from entities affiliated with thefamily of our Chief Executive Officer since 2022, and sold one vessel to C3is Inc. Stealth Maritime also contracts for the crewing of vessels in our fleet with Hellenic Manning Overseas Inc., which is 25% owned by an affiliate of Stealth Maritime.Such transactions could create conflicts of interest that could adversely affect our business or your interests as holders of our shares, as well as our financial position, results of operations and our future prospects.

 

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As our fleet grows in size, we will have to improve our operations and financial systems, staff andcrew; if we cannot maintain these systems or continue to recruit suitable employees, our business and results of operations may be adversely affected.

As we expand our fleet, we and Stealth Maritime will have to invest considerable sums in upgrading its operating and financial systems, as wellas hiring additional well-qualified personnel to manage the vessels. In addition, as we expand our fleet, we will have to rely on our technical managers to recruit suitable additional seafarers and shoreside administrative and management personnel.Stealth Maritime and those technical managers may not be able to continue to hire suitable employees to the extent we continue to expand our fleet. Our vessels require a technically skilled staff with specialized training. If the technicalmanagers’ crewing agents are unable to employ such technically skilled staff, they may not be able to adequately staff our vessels. If Stealth Maritime is unable to operate our financial and operations systems effectively or our technicalmanagers are unable to recruit suitable employees as we expand our fleet, our results of operation and our ability to expand our fleet may be adversely affected.

Delays in the delivery of any newbuilding or secondhand vessels we agree to acquire could harm our operating results.

Delays in the delivery of the six drybulk carriers we have agreements to acquire, or any new-building or second-hand vessels we may agree toacquire in the future, would delay our receipt of revenues generated by these vessels and, to the extent we have arranged charter employment for these vessels, could possibly result in the cancellation of those charters, and therefore adverselyaffect our anticipated results of operations. Although this would delay our funding requirements for the installment payments to purchase these vessels, it would also delay our receipt of revenues under any charters we arrange for such vessels. Thedelivery of newbuilding vessels could be delayed, other than at our request, because of, among other things, work stoppages or other labor disturbances; bankruptcy or other financial crisis of the shipyard building the vessel; hostilities, healthpandemics or political or economic disturbances in the countries where the vessels are being built, including any escalation of tensions involving North Korea; weather interference or catastrophic event, such as a major earthquake, tsunami or fire;our requests for changes to the original vessel specifications; requests from our customers, with whom we have arranged any charters for such vessels, to delay construction and delivery of such vessels due to weak economic conditions and shippingdemand and a dispute with the shipyard building the vessel.

In addition, the refund guarantors under any newbuilding contracts, which arebanks, financial institutions and other credit agencies, may also be affected by financial market conditions in the same manner as our lenders and, as a result, may be unable or unwilling to meet their obligations under their refund guarantees. Ifthe shipbuilders or refund guarantors are unable or unwilling to meet their obligations to the sellers of the vessels, this may impact our acquisition of vessels and may materially and adversely affect our operations and our obligations under any ofour future credit facilities. The delivery of any secondhand vessels could be delayed because of, among other things, hostilities or political disturbances, non-performance of the purchase agreement with respect to the vessels by the seller, ourinability to obtain requisite permits, approvals or financing or damage to or destruction of the vessels while being operated by the seller prior to the delivery date.

If we fail to manage our growth properly, we may not be able to successfully expand our market share.

We intend to continue to grow our fleet. The acquisition of such additional vessels could impose significant additional responsibilities on ourmanagement and staff, and may necessitate that we, and they, increase the number of personnel. In the future, we may not be able to identify suitable vessels, acquire vessels on advantageous terms or obtain financing for such acquisitions. Anyfuture growth will depend on:

 

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locating and acquiring suitable vessels;

 

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identifying and completing acquisitions or joint ventures;

 

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integrating any acquired business successfully with our existing operations;

 

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expanding our customer base; and

 

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obtaining required financing.

Growing a business by acquisition presents numerous risks such as undisclosed liabilities and obligations, difficulty in obtaining additionalqualified personnel, managing relationships with customers and our commercial and technical managers and integrating newly acquired vessels into existing infrastructures. We may not be successful in executing any growth initiatives and may incursignificant expenses and losses in connection therewith.

We may be unable to attract and retain key management personnel and other employees in theshipping industry, which may negatively affect the effectiveness of our management and our results of operation.

Our successdepends to a significant extent upon the abilities and efforts of our management team, including our Chief Executive Officer, Harry Vafias. In addition, Harry Vafias is a member of the Vafias family, which controls Stealth Maritime, our fleetmanager. Our success will depend upon our and Stealth Maritime’s ability to hire and retain qualified managers to oversee our operations. The loss of any of these individuals could adversely affect our business prospects and financialcondition. Difficulty in hiring and retaining personnel could adversely affect our results of operations. We do not have employment agreements directly with our key personnel who are technically employees of Stealth Maritime, our fleet manager,although under our management agreement with Stealth Maritime, our relationship is governed by terms substantially similar to those typically included in employment agreements. We do not maintain “key man” life insurance on any of ourofficers.

In the highly competitive international product tanker and crude oil tanker markets, we may not be able to compete for charters with newentrants or established companies with greater resources.

We deploy our tanker vessels in highly competitive markets that arecapital intensive. Competition arises primarily from other vessel owners, many of which have larger fleets and greater resources than we do. Competition for the transportation of refined petroleum products and crude oil can be intense and depends onprice, location, size, age, condition and the acceptability of the vessel and its managers to the charterers. Competitors with greater resources could enter and operate larger tanker fleets through consolidations or acquisitions, and many largerfleets that compete with us in each of these sectors may be able to offer more competitive prices and fleets.

The international drybulk shippingindustry is highly competitive, and we may not be able to compete successfully for charters with new entrants or established companies with greater resources.

We employ our drybulk vessels in highly competitive markets that are capital intensive and highly fragmented. Competition arises primarily fromother vessel owners, some of whom have substantially greater resources than we do. Competition for the transportation of drybulk cargo by sea is intense and depends on price, customer relationships, operating expertise, professional reputation andsize, age, location and condition of the vessel. Due in part to the highly fragmented market, additional competitors with greater resources could enter the drybulk shipping industry and operate larger fleets through consolidations or acquisitionsand may be able to offer lower charter rates than we are able to offer, which could have a material adverse effect on our fleet utilization and, accordingly, our results of operations.

Purchasing and operating previously owned, or secondhand, vessels may result in increased operating costs and vessels off-hire, which could adverselyaffect our revenues.

Our examination of secondhand vessels, which may not include physical inspection prior to purchase, does notprovide us with the same knowledge about their condition and cost of any required (or anticipated) repairs that we would have had if these vessels had been built for and operated exclusively by us. Generally, we do not receive the benefit ofwarranties on secondhand vessels.

 

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In general, the cost of maintaining a vessel in good operating condition increases with itsage. As of April 15, 2025, the average age of the vessels in our fleet was approximately 15.6 years. Older vessels are typically less fuel efficient and more costly to maintain and operate than more recently constructed vessels due toimprovements in engine technology. Cargo insurance rates increase with the age of a vessel, making older vessels less desirable to charterers.

Governmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations, or theaddition of new equipment, to our vessels and may restrict the type of activities in which the vessels may engage. As our vessels age, market conditions may not justify those expenditures or enable us to operate our vessels profitably during theremainder of their useful lives. If we sell vessels, the sales prices may not equal and could be less than their carrying values at that time and thereby negatively affect our profitability.

The shipping industry has inherent operational risks that may not be adequately covered by our insurance.

We procure hull and machinery insurance, protection and indemnity insurance, which include environmental damage and pollution insurancecoverage, and war risk insurance for our fleet. While we endeavor to be adequately insured against all known risks related to the operation of our ships, there remains the possibility that a liability may not be adequately covered and we may not beable to obtain adequate insurance coverage for our fleet in the future. The insurers may also not pay particular claims. Even if our insurance coverage is adequate, we may not be able to timely obtain a replacement vessel in the event of a loss. Ourinsurance policies contain deductibles for which we will be responsible and limitations and exclusions which may increase our costs or lower our revenue. In addition, if one of our ships, or other ships managed by Stealth Maritime or Brave Maritimeand owned by an affiliated entity of Stealth Maritime or Brave Maritime, were to incur significant costs from an accident, spill or other environmental liability, our insurance premiums and costs could increase significantly.

The operation of drybulk vessels has particular operational risks.

The operation of drybulk vessels has certain unique risks. With a drybulk vessel, the cargo itself and its interaction with the vessel can bean operational risk. By their nature, drybulk cargoes are often heavy, dense, easily shifted, and react badly to water exposure. In addition, drybulk vessels are often subjected to battering treatment during discharging operations with grabs,jackhammers (to pry encrusted cargoes out of the hold) and small bulldozers. This treatment may cause damage to the vessel. Vessels damaged due to treatment during discharging procedures may affect a vessel’s seaworthiness while at sea. Hullfractures in drybulk vessels may lead to the flooding of the vessels’ holds. If a drybulk vessel suffers flooding in its forward holds, the bulk cargo may become so dense and waterlogged that its pressure may buckle the vessel’sbulkheads, leading to the loss of a vessel. If we are unable to adequately maintain our vessel and other vessels we may acquire, we may be unable to prevent these events. Any of these circumstances or events could negatively impact our business,financial condition, and results of operations.

We may be subject to lawsuits for damages and penalties.

The nature of our business exposes us to the risk of lawsuits for damages or penalties relating to, among other things, personal injury,property casualty and environmental contamination. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. We expect that these claims wouldbe covered by insurance, subject to customary deductibles. However, such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources.

Regulatory and legal risks as a result of our global operations, including with respect to sanctioned countries, could have a material adverse effect onour business, results of operations and financial conditions.

Our global operations increase both the number and the level ofcomplexity of U.S. or foreign laws and regulations applicable to us, some of which can conflict with one another, as is the case, for instance, with certain

 

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sanctions issued by U.S., E.U. and U.K. These laws and regulations include international labor laws; U.S. laws such as the FCPA and other laws and regulations established by the Office of ForeignAssets Control; local laws such as the U.K. Bribery Act 2010; data privacy requirements like the European General Data Protection Regulation, enforceable as of May 25, 2018; and the E.U.-U.S. Privacy Shield Framework, adopted by the EuropeanCommission on July 12, 2016. Some sanctions may also apply to transportation of goods (including crude oil) originating in sanctioned countries (particularly Iran, Venezuela and Russia), even if the vessel does not travel to those countries, oris otherwise acting on behalf of sanctioned persons. We may inadvertently breach some provisions of those laws and regulations which could result in cease of business activities, criminal sanctions against us, our officers or our employees, finesand materially damage our reputation. In addition, detecting, investigating and resolving such cases of actual or alleged violations may be expensive and time consuming for our senior management.

For example, in 2024 our tanker vessels made 14 voyages carrying cargoes originating in the Russian ports of St. Petersburg and Ust-Luga, forwhich 1.1% of our fleet calendar days were spent in these Russian ports, and may from time to time in the future carry cargoes originating in Russia, Ukraine or sanctioned countries. It is possible that such cargoes, despite our belief that they arecompliant with applicable sanctions, are alleged to have originated from sources that are not in compliance with such sanctions, which could result in penalties against us, including blacklisting of a vessel which would preclude chartering orselling such vessel, and negatively impact our acceptability to potential charterers and harm our business. In addition, it may not be possible for us to obtain war risk or other insurances for any vessel loading cargoes originating in suchcountries, as has been the case for certain of our vessels’ voyages this year. In such a case, if the vessel was involved in an accident, spill or was otherwise damaged in connection with such a voyage, which could result inlosses up to the total loss of the vessel, we would have to bear the repair, clean-up or other costs associated with such an incident, as well as the lack of revenue from any off-hire period, in reliance on our existing cash resources, and we wouldremain obligated to service and repay any outstanding indebtedness that may be secured by such vessel. In addition, any deemed non-compliance with sanctions could constitute an event of default under any loan agreements secured by such vessel, andour lenders may seek to accelerate for immediate repayment any indebtedness outstanding thereunder. Any such occurrences could adversely affect our business, results of operations or financial condition. In addition, actual or alleged violationscould damage our reputation and ability to do business. Furthermore, if ships managed by Stealth Maritime or Brave Maritime, including those not owned by us, and ships owned by an affiliated entity of Stealth Maritime or Brave Maritime, includingStealthGas and C3is were deemed to have violated sanctions or other laws and regulations, we could face similar consequences, including an inability to charter, insure or sell our ships, if we, such affiliated entities or our ships are blacklistedby authorities.

We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy ourfinancial obligations or to make dividend payments.

We are a holding company and our subsidiaries, which are all wholly-owned byus, conduct all of our operations and own all of our operating assets. We have no significant assets other than the equity interests in our wholly-owned subsidiaries. As a result, our ability to make dividend payments to you depends on oursubsidiaries and their ability to distribute funds to us. If we are unable to obtain funds from our subsidiaries, we may be unable or our Board of Directors may exercise its discretion not to pay dividends.

Obligations associated with being a public company require significant company resources and management attention.

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the other rules andregulations of the SEC, including the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley. Section 404 of Sarbanes-Oxley requires that we evaluate and determine the effectiveness of our internal control over financial reporting.

 

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We work with our legal, accounting and financial advisors to identify any areas in whichchanges should be made to our financial and management control systems to manage our growth and our obligations as a public company. We evaluate areas such as corporate governance, corporate control, internal audit, disclosure controls andprocedures and financial reporting and accounting systems. We will make changes in any of these and other areas, including our internal control over financial reporting, which we believe are necessary. However, these and other measures we may takemay not be sufficient to allow us to satisfy our obligations as a public company on a timely and reliable basis. In addition, compliance with reporting and other requirements applicable to public companies do create additional costs for us and willrequire the time and attention of management. Our limited management resources may exacerbate the difficulties in complying with these reporting and other requirements while focusing on executing our business strategy. We may not be able to predictor estimate the amount of the additional costs we may incur, the timing of such costs or the degree of impact that our management’s attention to these matters will have on our business.

If management is unable to provide reports as to the effectiveness of our internal control over financial reporting, investors could lose confidence inthe reliability of our financial statements, which could result in a decrease in the value of our common stock.

Under Section 404 ofSarbanes-Oxley, we are required to include in each of our annual reports on Form 20-F, a report containing our management’s assessment of the effectiveness of our internal control over financial reporting. If, in such annual reports on Form20-F, our management cannot provide a report as to the effectiveness of our internal control over financial reporting as required by Section 404, investors could lose confidence in the reliability of our financial statements, which could resultin a decrease in the value of our shares.

Risks Related to Taxation

A change in tax laws in any country in which we operate or loss of a major tax dispute or a successful tax challenge to our operating structure,intercompany pricing policies or the taxable presence of our subsidiaries in certain countries could adversely affect us.

Taxlaws, treaties and regulations are highly complex and subject to interpretation. Consequently, we and our subsidiaries are subject to changing laws, treaties and regulations in and between the countries in which we operate. Our tax expense is basedon our interpretation of the tax laws in effect at the time the expense was incurred. A change in tax laws, treaties or regulations, or in the interpretation thereof, could result in a materially higher tax expense or a higher effective tax rate onour earnings. Such changes may include measures enacted in response to the ongoing initiatives in relation to fiscal legislation at an international level such as the Action Plan on Base Erosion and Profit Shifting of the Organization for EconomicCo-Operation and Development, which contemplates a global minimum tax rate of 15% calculated on a jurisdictional basis, subject to exemptions including for qualifying international shipping income.

In addition, if any tax authority successfully challenges positions we may take in tax filings, our operational structure, intercompanypricing policies, the taxable presence of our subsidiaries in certain countries or any other situation, or if the terms of certain income tax treaties are interpreted in a manner that is adverse to our structure, or if we lose a material tax disputein any country, our effective tax rate on our worldwide earnings could increase substantially and our earnings and cash flows from operations could be materially adversely affected.

In accordance with the currently applicable Greek law, foreign flagged vessels that are managed by Greek or foreign ship management companieshaving established an office in Greece are subject to duties towards the Greek state which are calculated on the basis of the relevant vessels’ tonnage. The payment of said duties exhausts the tax liability of the foreign ship owning companyand the relevant manager against any tax, duty, charge or contribution payable on income from the exploitation of the foreign flagged vessel. As our manager is located in Greece, we will have to pay these duties. Our operations in Greece may besubjected to new regulations that may require us to incur new or additional compliance or other administrative costs, which may include requirements that we pay to the Greek government new taxes or other fees.

 

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In addition, China has enacted a new tax for non-resident international transportationenterprises engaged in the provision of services of passengers or cargo, among other items, in and out of China using their own, chartered or leased vessels, including any stevedore, warehousing and other services connected with the transportation.The new regulation broadens the range of international transportation companies which may find themselves liable for Chinese enterprise income tax on profits generated from international transportation services passing through Chinese ports.

We may have to pay tax on United States-source income, which would reduce our earnings.

Under the United States Internal Revenue Code of 1986, as amended, or the Code, 50% of the gross shipping income of vessel owning or charteringcorporations, such as our subsidiaries, that is attributable to transportation that begins or ends, but does not both begin and end, in the United States is characterized as United States-source shipping income. United States-source shipping incomeis subject to either a (i) 4% United States federal income tax without allowance for deductions or (ii) taxation at the standard United States federal income tax rates (and potentially to a 30% branch profits tax), unless derived by acorporation that qualifies for exemption from tax under Section 883 of the Code and the Treasury Regulations promulgated thereunder.

Generally, we and our subsidiaries will qualify for this exemption for a taxable year if our shares are treated as “primarily andregularly traded” on an established securities market in the United States. Our shares of common stock will be so treated if (i) the aggregate number of our shares of common stock traded during such year on an established securitiesmarket in the United States exceeds the aggregate number of our shares of common stock traded during that year on established securities markets in any other single country, (ii) either (x) our shares of common stock are regularly quoted duringsuch year by dealers making a market in our shares or (y) trades in our shares of common stock are effected, other than in de minimis quantities, on an established securities market in the United States on at least 60 days during such taxableyear and the aggregate number of our shares of common stock traded on an established securities market in the United States during such year equals at least 10% of the average number of our shares of common stock outstanding during such taxable yearand (iii) our shares of common stock are not “closely held” during such taxable year. For these purposes, our shares of common stock will be treated as closely held during a taxable year if, for more than one-half the number of daysin such taxable year, one or more persons each of whom owns either directly or under applicable attribution rules, at least 5% of our shares of common stock, own, in the aggregate, 50% or more of our shares of common stock, unless we can establish,in accordance with applicable documentation requirements, that a sufficient number of the shares of common stock in the closely-held block are owned, directly or indirectly, by persons that are residents of foreign jurisdictions that provide UnitedStates shipping companies with an exemption from tax that is equivalent to that provided by Section 883 to preclude other stockholders in the closely-held block from owning 50% or more of the closely-held block of shares of common stock.

We believe that it will be the case, and may also be the case in the future, that, one or more persons each of whom owns, either directly orunder applicable attribution rules, at least 5% of our shares of common stock own, in the aggregate, 50% or more of our shares of common stock. In such circumstances, we and our subsidiaries may qualify for the exemption provided in Section 883of the Code only if a sufficient number of shares of the closely-held block of our shares of common stock were owned or treated as owned by “qualified shareholders” so it could not be the case that, for more than half of the days in thetaxable year, the shares of common stock in the closely-held block not owned or treated as owned by qualified shareholders represented 50% or more of our shares of common stock. For these purposes, a “qualified shareholder” includes anindividual that owns or is treated as owning shares of our common stock and is a resident of a jurisdiction that provides an exemption that is equivalent to that provided by Section 883 of the Code and certain other persons; provided in eachcase that such individual or other person complies with certain documentation and certification requirements set forth in the Section 883 regulations and designed to establish status as a qualified shareholder.

If we or our subsidiaries do not qualify for the exemption under Section 883 of the Code for any taxable year, then we or oursubsidiaries would be subject for those years to the 4% United States federal income tax on

 

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gross United States shipping income or, in certain circumstances, to net income taxation at the standard United States federal income tax rates (and potentially also to a 30% branch profits tax).The imposition of such tax could have a negative effect on our business and would result in decreased earnings and cash flow.

We could become a“passive foreign investment company,” which would have adverse United States federal income tax consequences to United States holders and, in turn, us.

A foreign corporation will be treated as a “passive foreign investment company,” or PFIC, for United States federal income taxpurposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of “passive income” or (2) at least 50% of the average value of the corporation’s assets produce or are held for theproduction of those types of “passive income.” For purposes of these tests, “passive income” includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rentsand royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute “passive income” andworking capital and similar assets held pending investment in vessels will generally be treated as an asset which produces passive income. United States stockholders of a PFIC (and holders of warrants in a PFIC) are subject to a disadvantageousUnited States federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.

In connection with determining our PFIC status we treat and intend to continue to treat the gross income that we derive or are deemed toderive from our time chartering and voyage chartering activities as services income, rather than rental income. We believe that our income from time chartering and voyage chartering activities does not constitute “passive income” andthat the assets that we own and operate in connection with the production of that income do not constitute assets held for the production of passive income. We treat and intend to continue to treat, for purposes of the PFIC rules, the income that wederive from bareboat charters as passive income and the assets giving rise to such income as assets held for the production of passive income. There is, however, no legal authority specifically under the PFIC rules regarding our current and proposedmethod of operation and it is possible that the U.S. Internal Revenue Service, or IRS, may not accept our positions and that a court may uphold such challenge, in which case we and certain of our subsidiaries could be treated as PFICs. In thisregard we note that a federal court decision addressing the characterization of time charters concludes that they constitute leases for federal income tax purposes and employs an analysis which, if applied to our time charters, could result in ourtreatment and the treatment of our vessel-owning subsidiaries as PFICs. In addition, in making the determination as to whether we are a PFIC, we intend to treat the deposits that we make on our newbuilding contracts and that are with respect tovessels we do not expect to bareboat charter as assets which are not held for the production of passive income for purposes of determining whether we are a PFIC. We note that there is no direct authority on this point and it is possible that the IRSmay disagree with our position.

On the basis of the foregoing assumptions, we do not believe that we will be a PFIC for 2024. This beliefis based in part upon our beliefs regarding the value of the assets that we hold for the production of or in connection with the production of passive income relative to the value of our other assets. Should these beliefs turn out to be incorrect,then we and certain of our subsidiaries could be treated as PFICs for 2024. There can be no assurance that the IRS or a court will not determine values for our assets that would cause us to be treated as a PFIC for 2024 or a subsequent year.

In addition, although we do not believe that we will be a PFIC for 2024, we may choose to operate our business in the current or in futuretaxable years in a manner that could cause us to become a PFIC for those years. Because our status as a PFIC for any taxable year will not be determinable until after the end of the taxable year, and depends upon our assets, income and operations inthat taxable year, there can be no assurance that we will not be considered a PFIC for 2024 or any future taxable year.

If the IRS wereto find that we are or have been a PFIC for any taxable year, our United States stockholders and warrant holders would face adverse United States tax consequences. Under the PFIC rules, unless those

 

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stockholders make an election available under the Code (which election could itself have adverse consequences for such stockholders, as discussed below under “TaxConsiderations—United States Federal Income Taxation of United States Holders”), such stockholders would be liable to pay United States federal income tax at the then prevailing income tax rates on ordinary income plus interest uponexcess distributions and upon any gain from the disposition of our common stock, as if the excess distribution or gain had been recognized ratably over the stockholder’s holding period of our common stock. Similar rules would apply to holdersof our Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants. See “Tax Considerations—United States Federal Income Tax Consequences—United States Federal Income Taxation of United StatesHolders” for a more comprehensive discussion of the United States federal income tax consequences to United States stockholders if we are treated as a PFIC. As a result of these adverse tax consequences to United States stockholders, such afinding by the IRS may result in sales of our common stock by United States stockholders, which could lower the price of our common stock and adversely affect our ability to raise capital.

Risk Related to an Investment in a Marshall Islands Corporation

As a foreign private issuer we are entitled to claim exemptions from certain Nasdaq corporate governance standards, and to the extent we elect to rely onthese exemptions, you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

As a foreign private issuer, we are entitled to claim an exemption from many of Nasdaq’s corporate governance practices. Currently, ourcorporate governance practices comply with the Nasdaq corporate governance standards applicable to U.S. listed companies other than that we only have two independent members on our audit committee whereas a domestic U.S. company would be required tohave three independent members on its audit committee and, in lieu of obtaining stockholder approval prior to the issuance of certain designated securities issuances, the Company will comply with provisions of the Marshall Islands BusinessCorporations Act providing that the Board of Directors approves share issuances. To the extent we rely on these or other exemptions you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaqcorporate governance requirements.

We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body ofcorporate law or a bankruptcy act.

Our corporate affairs are governed by our articles of incorporation and bylaws and by theMarshall Islands Business Corporations Act, or BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Republic of the Marshall Islandsinterpreting the BCA. The rights and fiduciary responsibilities of directors under the law of the Republic of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicialprecedent in existence in certain U.S. jurisdictions. Stockholder rights may differ as well. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantiallysimilar legislative provisions, our public stockholders may have more difficulty in protecting their interests in the face of actions by the management, directors or controlling stockholders than would stockholders of a corporation incorporated in aU.S. jurisdiction. The Marshall Islands has no established bankruptcy act, and as a result, any bankruptcy action involving our company would have to be initiated outside the Marshall Islands, and our public stockholders may find it difficult orimpossible to pursue their claims in such other jurisdictions.

It may be difficult to enforce service of process and judgments against us and ourofficers and directors.

We are a Marshall Islands company, and our executive offices are located outside of the United States. Allof our directors and officers reside outside of the United States, and most of our assets and their assets are located

 

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outside the United States. As a result, you may have difficulty serving legal process within the United States upon us or any of these persons. You may also have difficulty enforcing, both in andoutside the United States, judgments you may obtain in the U.S. courts against us or these persons in any action, including actions based upon the civil liability provisions of U.S. federal or state securities laws. There is also substantial doubtthat the courts of the Marshall Islands would enter judgments in original actions brought in those courts predicated on U.S., federal or state securities laws.

Risks Related To Our Common Stock

An activetrading market that will provide you with adequate liquidity for our common stock may not be sustained.

The lack of an activetrading market on Nasdaq and low trading volume for our common stock may make it more difficult for you to sell our common stock and could lead to our share price becoming depressed or volatile. Our shares began regular way trading on the NasdaqCapital Market on December 6, 2021, and there can be no assurance that an active trading market for our common stock on either Nasdaq or any other exchange will be sustained. If an active and liquid trading market is not sustained, relativelysmall sales of our common stock could have a significant negative impact on the price of our common stock.

If securities or industry analysts donot publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.

We became publicly traded on December 3, 2021, and there is currently only one analyst covering the Company. The trading market for ourcommon stock and Series A Preferred Stock will depend, in part, upon the research and reports that securities or industry analysts publish about us or our business. We do not have any control over analysts as to whether they will cover us, and ifthey do, whether such coverage will continue. If analysts do not commence coverage of the Company, or if one or more of these analysts cease coverage of the Company or fail to regularly publish reports on us, we could lose visibility in thefinancial markets, which could cause our share price or trading volume to decline. In addition, if one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price may likely decline.

The market price of our common stock may be subject to significant fluctuations.

The market price of our common stock may be subject to significant fluctuations as a result of many factors, some of which are beyond ourcontrol. Among the factors that could affect our stock price are:

 

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actual or anticipated fluctuations in quarterly and annual variations in our results of operations;

 

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changes in market valuations or sales or earnings estimates or publication of research reports by analysts;

 

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changes in earnings estimates or shortfalls in our operating results from levels forecasted by securitiesanalysts;

 

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speculation in the press or investment community about our business or the shipping industry, and the product andcrude oil tanker and drybulk sectors in particular;

 

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changes in market valuations of similar companies and stock market price and volume fluctuations generally;

 

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payment of dividends;

 

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strategic actions by us or our competitors such as mergers, acquisitions, joint ventures, strategic alliances orrestructurings;

 

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changes in government and other regulatory developments;

 

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additions or departures of key personnel;

 

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general market conditions and the state of the securities markets; and

 

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domestic and international economic, market and currency factors unrelated to our performance.

The international tanker and drybulk shipping industry has been highly unpredictable. In addition, the stock markets ingeneral, and the markets for tanker and drybulk shipping and shipping stocks in general, have experienced extreme volatility that has sometimes been unrelated to the operating performance of particular companies. These broad market fluctuations mayadversely affect the trading price of our common stock. Our common stock may trade at prices lower than you originally paid for such shares.

Youmay experience future dilution as a result of future equity offerings and other issuances of our common stock, preferred stock or other securities. In addition, we may elect to sell one or more of our vessels or vessel- owning subsidiaries, conducta spinoff of such vessels or subsidiaries, or contribute such vessels or vessel- owning subsidiaries to a joint venture, master limited partnership or other entity on terms with which you do not agree.

In order to raise additional capital, including to support our growth plans, or in connection with equity awards, strategic transactions orotherwise, we expect in the future to offer additional common stock, preferred stock or other securities convertible into or exchangeable for our common stock, including convertible debt. We expect that a significant component of the financing forthe planned expansion of our fleet will be through equity offerings. We cannot predict the size of future issuances or sales of our common stock, preferred stock or other securities, including those made in connection with future capital raisingactivities or acquisitions, or the effect, if any, that such issuances or sales may have on the market price of our common stock. The issuance and sale of substantial amounts of common stock, preferred stock or other equity-linked securities, orannouncement that such issuance and sales may occur, could adversely affect the market price of our common stock and our Series A Preferred Stock. In addition, we cannot assure you that we will be able to make future sales of our common stock,preferred stock or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors, and investors purchasing stocks or other securities in the future could have rights that aresuperior to existing stockholders. The issuance of additional common stock, preferred stock or other securities could adversely impact the trading price of our common stock.

Any such capital raising transactions may be at the Imperial Petroleum Inc. or subsidiary level, to which interests in certain vessels in ourfleet and rights to receive related cash flows would be transferred, as well as other capital raising alternatives available to us at that particular time. In addition, we may elect to sell one or more of our vessels or vessel-owning subsidiaries,conduct a spinoff of such vessels or subsidiaries, or contribute such vessels or vessel-owning subsidiaries to a joint venture, master limited partnership or other entity on terms with which you do not agree. Any such transfer may reduce our assetbase and our rights to cash flows related to the transferred assets. If we contribute assets to a joint venture or master limited partnership, the joint venture or master limited partnership may be owned by or issue equity securities to public orprivate investors, and as part of any spin-off of assets we may be required to distribute a portion of such assets to holders of outstanding warrants pursuant to the terms of such warrants, thereby reducing our percentage interest in such assets andin the related cash flows.

Future issuances or sales, or the potential for future issuances or sales, of our common stock, including shares ofcommon stock issuable upon the exercise of our outstanding warrants, may cause the trading price of our securities to decline and could impair our ability to raise capital through subsequent equity offerings.

We have issued a significant number of our shares of common stock and we may do so in the future. Shares to be issued in future equityofferings could cause the market price of our common stock to decline, and could have an adverse effect on our earnings per share. In addition, future sales of our common stock or other securities in the public markets, or the perception that thesesales may occur, including shares of common stock issuable upon the exercise of our outstanding warrants, could cause the market price of our common stock to decline, and could materially impair our ability to raise capital through the sale ofadditional securities.

 

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The market price of our common stock could decline due to sales, or the announcements ofproposed sales, of a large number of shares of common stock, including those issuable exercise of our outstanding warrants, in the market, including sales of common stock by our large stockholders, or the perception that these sales could occur.These sales or the perception that these sales could occur could also depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities or make it more difficult or impossible forus to sell equity securities in the future at a time and price that we deem appropriate. We cannot predict the effect that future sales of common stock or other equity-related securities would have on the market price of our common stock.

Our Restated Articles of Incorporation, as amended, authorizes our Board, to, among other things, issue additional shares of common orpreferred stock or securities convertible or exchangeable into equity securities, without stockholder approval. We may issue such additional equity or convertible securities to raise additional capital.

The issuance of any additional shares of common or preferred stock or convertible securities could be substantially dilutive to ourstockholders. Moreover, to the extent that we issue restricted stock units, stock appreciation rights, options or any additional warrants to purchase our common stock in the future or the exercise of the existing warrants to purchase common stockand those stock appreciation rights, options are exercised or as the restricted stock units vest, our stockholders may experience further dilution. Holders of shares of our common stock have no preemptive rights that entitle such holders to purchasetheir pro rata share of any offering of shares of any class or series and, therefore, such sales or offerings could result in increased dilution to our stockholders.

The superior voting rights of our Series B Preferred Stock may limit the ability of our common stockholders to control or influence corporate matters,and the interests of the holder of such shares could conflict with the interests of common stockholders

While our shares of commonstock have one vote per share, each of our 16,000 shares of Series B preferred stock currently outstanding has 25,000 votes per share; however, the voting power of the Series B preferred stock is limited such that no holder of Series B preferredstock may exercise voting rights pursuant to any Series B preferred stock that would result in the total number of votes a holder is entitled to vote on any matter submitted to a vote of stockholders of the Company to exceed 49.99% of the totalnumber of votes eligible to be cast on such matter. The Series B preferred stock, however, have no dividend rights or distribution rights, other than the right upon dissolution to receive a payment equal to the par value per of $0.01 per share.

As of the date of this report, our Chairman and Chief Executive Officer can therefore control 49.99% of the voting power of our outstandingcapital stock. Our Chairman and Chief Executive Officer will have substantial influence over our management and affairs and over matters requiring stockholder approval, including the election of directors and significant corporate transactions, eventhough he owns significantly less than 50% of the Company economically.

The superior voting rights of our Series B preferred stock maylimit our common stockholders’ ability to influence corporate matters. The interests of the holder of the Series B preferred stock may conflict with the interests of our common stockholders, and as a result, the holders of our capital stockmay approve actions that our common stockholders do not view as beneficial. Any such conflicts of interest could adversely affect our business, financial condition and results of operations, and the trading price of our common stock.

Our amended and restated articles of incorporation and amended and restated bylaws contain anti-takeover provisions that may discourage, delay orprevent (1) our merger or acquisition and/or (2) the removal of incumbent directors and officers and (3) the ability of public stockholders to benefit from a change in control.

Our restated articles of incorporation and amended and restated bylaws contain certain anti-takeover provisions. These provisions include blankcheck preferred stock, including preferred stock with superior voting

 

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rights, such as the Series B preferred stock, the prohibition of cumulative voting in the election of directors, a classified Board of Directors, advance written notice for stockholdernominations for directors, removal of directors only for cause, advance written notice of stockholder proposals for the removal of directors and limitations on action by stockholders. These anti-takeover provisions, either individually or in theaggregate, may discourage, delay or prevent (1) our merger or acquisition by means of a tender offer, a proxy contest or otherwise, that a stockholder may consider in its best interest, (2) the removal of incumbent directors and officers,and (3) the ability of public stockholders to benefit from a change in control. These anti-takeover provisions could substantially impede the ability of stockholders to benefit from a change in control and, as a result, may adversely affect themarket price of our common stock and stockholders’ ability to realize any potential change of control premium.

Issuance of preferred stock,such as our Series B preferred stock, may adversely affect the voting power of our common stockholders and have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our commonstock.

Our restated articles of incorporation authorize our board of directors to issue preferred stock in one or more series andto determine the rights, preferences, privileges and restrictions, with respect to, among other things, dividends, conversion, voting, redemption, liquidation and the number of shares constituting any series without stockholders’ approval. Ourboard of directors has issued, and may in the future issue, preferred stock with voting rights superior to those of the common stock, such as the Series B preferred stock. If our board of directors determines to issue preferred stock, such issuancemay discourage, delay or prevent a merger or acquisition that stockholders may consider favorable. The issuance of preferred stock with voting and conversion rights may also adversely affect the voting power of the holders of common stock. Thiscould substantially impede the ability of public stockholders to benefit from a change in control and, as a result, may adversely affect the market price of our common stock and our stockholders’ ability to realize any potential change ofcontrol premium.

We are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growthcompanies will make our common stock less attractive to investors.

We are an emerging growth company, as defined in the JOBS Act,and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. We cannot predict if investors will find our common stock less attractivebecause we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our share price may be more volatile.

In addition, under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of ourinternal control over financial reporting pursuant to Section 404 of the Sarbanes- Oxley Act of 2002 for so long as we are an emerging growth company.

For as long as we take advantage of the reduced reporting obligations, the information that we provide our stockholders may be different frominformation provided by other public companies.

Our common stock ranks junior to the Series A Preferred Stock with respect to dividends and amountspayable in the event of our liquidation.

Our common stock ranks junior to our Series A Preferred Stock with respect to the paymentof dividends and amounts payable in the event of our liquidation, dissolution or winding-up. This means that, unless accumulated dividends have been paid or set aside for payment on all of our outstanding Series A Preferred Stock for all pastcompleted dividend periods, no dividends may be declared or paid on our common stock subject to limited exceptions. Likewise, in the event of our voluntary or involuntary liquidation, dissolution or winding-up, no distribution of our assets may bemade to holders of our common stock until we have paid to

 

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holders of our Series A Preferred Stock a liquidation preference equal to $25.00 per share plus accumulated and unpaid dividends Accordingly, the Series A Preferred Stock may adversely affect themarket price of the common stock.

Sales of our common stock by stockholders may have an adverse effect on the then prevailing market price of ourcommon stock.

Sales of a substantial number of our common stock in the public market, including upon exercise of our outstandingwarrants, could cause the market price of our common stock to decline and could impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our common stock or otherequity-related securities would have on the market price of our common stock.

Our Class A Warrants, Class B Warrants, Class C Warrants, ClassD Warrants and Class E Warrants are speculative in nature.

Our Class A Warrants, Class B Warrants, Class C Warrants, Class DWarrants and Class E Warrants do not confer any rights of common stock ownership on their holders, such as voting rights, but rather merely represent the right to acquire common stock at a fixed price. Specifically, holders of the Class AWarrants may acquire the common stock issuable upon the exercise of such warrants at an exercise price of $18.75 per share, holders of the Class B Warrants may acquire the common stock issuable upon the exercise of such warrants at an exercise priceof $24.00 per share, holders of Class C Warrants may acquire the common stock issuable upon the exercise of such warrants at an exercise price of $8.25 per share, holders of Class D Warrants may acquire the common stock issuable upon the exercise ofsuch warrants at an exercise price of $12.00 per share and holders of Class E Warrants may acquire the common stock issuable upon the exercise of such warrants at an exercise price of $2.00 per share. Moreover, the market value of the Class AWarrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants is uncertain and there can be no assurance that the market value of the Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class EWarrants will equal or exceed their exercise price.

There is no public market for the Class A Warrants, Class B Warrants, Class C Warrants,Class D Warrants, Class E Warrants and we do not expect one to develop.

There is presently no established public trading marketfor our Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants or Class E Warrants and we do not expect a market to develop. In addition, we do not intend to apply to list our Class A Warrants, Class B Warrants, Class CWarrants, Class D Warrants or Class E Warrants on any securities exchange or nationally recognized trading system, including the Nasdaq. Without an active market, the liquidity of our Class A Warrants, Class B Warrants, Class C Warrants, ClassD Warrants and Class E Warrants will be limited.

Holders of our Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants andClass E Warrants will not have any rights of common stockholders until such Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants are exercised.

Our outstanding Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants do not confer any rights ofcommon stock ownership on their holders, but rather merely represent the right to acquire common stock at a fixed price.

Risks Related to our Series APreferred Stock

The Series A Preferred Stock has limited trading volume and an active trading market that will provide you with adequateliquidity for our Series A Preferred Stock may not develop which may negatively affect their market value and your ability to transfer or sell your shares. In addition, the lack of a fixed redemption date for our Series A Preferred Stock willincrease your reliance on the secondary market for liquidity purposes.

There was no public market for our Series A Preferred Stockprior to the completion of the 2021 Spin-Off in December 2021, and immediately after the 2021 Spin-Off approximately 21.6% of our Series A Preferred Stock

 

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were held by one stockholder and an aggregate of 73.1% of our Series A Preferred Stock were held by seven separate stockholders that are not affiliated with one another, which concentration ofownership could make it less likely that an active and liquid trading market for our Series A Preferred Stock will develop on Nasdaq. In addition, since the securities have no stated maturity date, investors seeking liquidity will be limited toselling their shares in the secondary market absent redemption by us. There has been limited trading volume in the Series A Preferred Stock on Nasdaq historically, and we cannot predict the extent to which investor interest will lead to thedevelopment of an active and liquid trading market on Nasdaq for our Series A Preferred Stock or, if such market develops, whether it will be maintained. The lack of an active trading market on Nasdaq and low trading volume for our Series APreferred Stock, may make it more difficult for you to sell our Series A Preferred Stock and could lead to our share price becoming depressed or volatile. If an active and liquid trading market does not develop, relatively small sales of our SeriesA Preferred Stock could have a significant negative impact on the price of our Series A Preferred Stock.

The Series A Preferred Stock representsperpetual equity interests.

The Series A Preferred Stock represents perpetual equity interests in us and, unlike any futureindebtedness, will not give rise to a claim for payment of a principal amount at a particular date. As a result, holders of the Series A Preferred Stock may be required to bear the financial risks of an investment in the Series A Preferred Stock foran indefinite period of time. In addition, the Series A Preferred Stock ranks junior to any potential indebtedness and other liabilities, and to any other senior securities we may issue in the future with respect to assets available to satisfyclaims against us.

The shares of our Series A Preferred Stock are subordinated to any potential future debt, and your interests could be diluted bythe issuance of additional preferred shares and by other transactions.

Our Series A Preferred Stock are subordinate to any futureindebtedness. As of December 31, 2024 and the date of this report, we did not have any outstanding indebtedness, however, we may incur debt as we expand our fleet or finance existing vessels of our fleet. Any future agreements for indebtednesswill restrict our ability to pay dividends on or redeem preferred shares if an event of default has occurred or is continuing, and may impose similar or greater restrictions on our ability to pay dividends or redeem our preferred shares. Ourarticles of incorporation authorize the issuance of up to 200,000,000 preferred shares in one or more classes or series. The issuance of additional preferred shares on a parity with or senior to our Series A Preferred Stock would dilute theinterests of the holders of our Series A Preferred Stock, and any issuance of preferred shares senior to our Series A Preferred Stock or of additional indebtedness could affect our ability to pay dividends on, redeem or pay the liquidationpreference on our Series A Preferred Stock.

The amount of the liquidation preference applicable to the Series A Preferred Stock is fixed and youhave no right to receive any greater payment.

The payment due upon liquidation is fixed at the liquidation preference of $25.00per Series A Preferred Share, plus an amount equal to all accumulated and unpaid dividends thereon to the date of liquidation, whether or not declared. If, in the case of our liquidation, there are remaining assets to be distributed after payment ofthis amount, you have no right to receive or to participate in these amounts. In addition, if the market price of your Series A Preferred Stock is greater than the liquidation preference, you have no right to receive the market price from us uponour liquidation.

The terms of the Series A Preferred Stock do not restrict our ability to engage in certain transactions, including spin-offs,transfers of assets or the formation of a master limited partnership, joint venture or other entity that may involve issuance of interests to third-parties in a substantial portion of our assets.

Although the Statement of Designation with respect to the Series A Preferred Stock contains restrictions on our ability to dilute the value ofyour investment in the Series A Preferred Stock by issuing additional preferred

 

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shares ranking senior to the Series A Preferred Stock, we may engage in other transactions that will result in a transfer of value to third parties. We may elect to sell one or more of ourvessels or vessel-owning subsidiaries, conduct a spin-off of such vessels or subsidiaries, or contribute such vessels or vessel-owning subsidiaries to a joint venture, master limited partnership or other entity on terms with which you do not agreeor that are not in the best interests of the holders of Series A Preferred Stock. Any such transfer may reduce our asset base and our rights to cash flows related to the transferred assets. If we contribute assets to a joint venture or masterlimited partnership, the joint venture or master limited partnership may be owned by or issue equity securities to public or private investors, thereby reducing our percentage interest in such assets and in the related cash flows.

Item 4. Information on the Company

A. History and Development of the Company

We are a provider of international seaborne transportation services to oil producers, refineries and commodities traders and producers, as wellas industrial users of drybulk cargoes. As of April 15, 2025, we owned and operated a fleet of seven medium range (“MR”) refined petroleum product tankers that carry refined petroleum products such as gasoline, diesel, fuel oil andjet fuel, as well as edible oils and chemicals, two suezmax tankers that carry crude oil, and three handysize drybulk carriers that transport major bulks such as iron ore, coal and grains, and minor bulks such as bauxite, phosphate and fertilizers.The total cargo carrying capacity of our twelve-vessel fleet is 751,000 dwt. As of April 15, 2025, we had also contracted to acquire seven Japanese built drybulk carriers, aggregating approximately 443,000 dwt, one of which was delivered to uson April 26, 2025 and six of which are expected to be delivered to us by the end of May 2025, which will increase the capacity of our fleet to 1,194,000 dwt. We are managed by Stealth Maritime, a privately owned company controlled by the VafiasGroup, which has been active in shipping for over 50 years and is controlled by the Vafias family, of which Harry Vafias, our Chief Executive Officer, is a member.

Imperial Petroleum Inc. was incorporated under the laws of the Republic of the Marshall Islands on May 14, 2021, by StealthGas Inc. toserve as the holding company of four subsidiaries, each owning one of the tanker vessels in our initial fleet, that it subsequently contributed to us in connection with the 2021 Spin-Off. On December 3, 2021, StealthGas distributed all of ouroutstanding common stock and 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock to its stockholders, which completed our separation from StealthGas. Upon consummation of the 2021 Spin-Off, the Company and StealthGas became independentpublicly traded companies with separate boards of directors and management, although some of the directors and officers of the Company hold similar positions at StealthGas. Our common stock currently trades on the Nasdaq Capital Market under thesymbol “IMPP” and our Series A Preferred Stock currently trades on the Nasdaq Capital Market under the symbol “IMPPP.”

On February 2, 2022, we completed an underwritten public offering of 736,000 units for $18.75 per unit, each unit consisting of(i) one share of common stock of the Company and (ii) fifteen Class A Warrant (a “Class A Warrant”) to purchase one share of common stock at an exercise price of $18.75 per share. We also issued underwriter warrants to therepresentative of the underwriters to purchase up to an aggregate of 36,800 shares of common stock at an exercise price of $20.625 per share. As of April 15, 2025, Class A Warrants had been exercised for 733,133 shares of our common stock,resulting in proceeds to us of $13,746,250. Class A Warrants exercisable for a total of 2,867 shares of common stock, with an exercise price of $18.75 per share, remained outstanding as of April 15, 2025.

In March 2022, we completed an underwritten public offering, including the full exercise of the underwriter’s overallotment option, of2,874,997 units for $24.00 per unit, each unit consisting of (i) one share of common stock of the Company (or pre-funded warrants, all of which were subsequently exercised for common stock, in the case of 260,000 units) and (ii) fifteenClass B Warrant (a “Class B Warrant”) to purchase one share of common stock at an exercise price of $24.00 per share. We also issued underwriter warrants to the representative of the underwriters to purchase up to an aggregate of 115,000shares of Common stock at an

 

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exercise price of $30.00 per share. As of April 15, 2025, Class B Warrants had been exercised for an aggregate of 2,088,197 shares of our common stock, resulting in gross proceeds to us of$22,081,720. Class B Warrants exercisable for a total of 786,800 Class B Warrants, with an exercise of $24.00 per share, remained outstanding as of April 15, 2025. In May 2022, we completed an underwritten public offering, including the fullexercise of the underwriter’s overallotment option, of 5,575,757 units for $8.25 per unit, each unit consisting of (i) one share of common stock of the Company and (ii) fifteen Class C Warrant to purchase one share of common stock atan exercise price of $8.25 per share. The Company also issued warrants to the representative of the underwriters (the “May 2022 Representative Purchase Warrants”) to purchase up to an aggregate of 139,394 shares of common stock at anexercise price of $10.3125 per share. As of April 15, 2025, Class C Warrants had been exercised for an aggregate of 357,167 shares of our common stock, resulting in gross proceeds to us of $2,946,625, and we had repurchased Class C Warrantsexercisable for an aggregate of 3,871,323 shares of common stock. Class C Warrants exercisable for a total of 1,347,267 shares of common stock, with an exercise of $8.25 per share, remained outstanding as of April 15, 2025.

In June 2022, several existing holders of Class B Warrants exercised outstanding Class B Warrants to purchase an aggregate of 2,076,667 sharesof Common Stock for cash, at an exercise price reduced by the Company from $24.00 per share to $10.50 per share, resulting in gross proceeds to us of $21,805,000. The exercising holders also received Class D Warrants to purchase up to an aggregateof 2,076,667 shares of Common Stock in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. In the fourth quarter of 2023, we repurchased Class D Warrants exercisable for an aggregate of 1,903,333 shares ofcommon stock. Class D Warrants exercisable for a total of 173,334 shares of common stock, with an exercise of $12.00 per share, remained outstanding as of April 15, 2025.

Under our at-the-market (“ATM”) program with Maxim Group LLC and Virtu Americas LLC, which we entered into in December 2022, wesold 3,385,342 shares of common stock for gross proceeds of $12,522,156. We terminated the ATM program on March 13, 2023.

OnFebruary 14, 2023, we entered into agreements to acquire two handysize drybulk carriers, the Glorieuse built in Japan at Nakai Zosen in 2012 and the Eco Wildfire built in Shin Kurushima Onishi in 2013 respectively, with anaggregate capacity of approximately 71,000 dwt, from entities affiliated with our Chief Executive Officer, for aggregate cash consideration of $25.5 million and 13,875 shares of Series C Cumulative Convertible Perpetual Preferred Stock (the“Series C Convertible Preferred Stock”). The transactions closed upon delivery to us of the vessels in March 2023, including the issuance of the Series C Convertible Preferred Stock. The Series C Convertible Preferred Stock had adividend rate of 5.00% per annum per $1,000 liquidation preference per share, payable in cash or additional shares of Series C Convertible Preferred Stock at the Company’s election, and was convertible, at the holder’s option, afterthe six-month anniversary of issuance into shares of the Company’s common stock at a conversion price equal to the lower of $7.50 and the ten-day volume weighted average price of the common stock. On December 21, 2023, all 13,875 sharesof the Series Convertible Preferred Stock were converted by the holder, Flawless Management Inc., into 6,932,043 shares of our Common Stock.

On June 21, 2023, we completed the spin-off (the “Spin-off) of our previously wholly-owned subsidiary, C3is Inc., the holdingcompany for two drybulk carriers, the Eco Angelbay and the Eco Bushfire, with an aggregate capacity of 64,000 dwt. Imperial Petroleum stockholders and warrantholders received one C3is common share for every eight shares of ImperialPetroleum’s common stock owned, or in the case of holders of Imperial Petroleum’s outstanding Warrants that they have the right to purchase pursuant to Warrants owned, at the close of business on June 13, 2023. We retain an interestin C3is Inc. through our ownership of Series A Convertible Preferred Stock of C3is Inc., with an aggregate liquidation preference of $15,000,000, which is currently convertible into common stock of C3is Inc., at a conversion price of $3.0391 pershare.

In July 2023, we concluded a memorandum of agreement for the disposal of the vessel Stealth Berana to C3is Inc., anaffiliated party, for $43,000,000. Payment of 10% of the purchase price was effected at the time of delivery, with the remaining balance due no later than one year after delivery of the vessel, which took place on

 

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July 14, 2023. The remaining balance bore interest at an implicit rate of 8.1% per annum and was collected in July 2024.

On August 11, 2023, we entered into a securities purchase agreement with institutional investors, pursuant to which we agreed to issueand sell, in a registered direct offering 8,499,999 units, each unit consisting of one share of common stock, or one pre-funded warrant to purchase a Common Share at an exercise price of $0.01 per Common Share in lieu of one Common Share, and oneClass E Warrant to purchase one Common Share, at an exercise price of $2.00 per Common Share, at a purchase price of $2.00 per Unit including a Common Share and Class E Warrant and a purchase price of $1.99 per Unit including a Pre-Funded Warrantand Class E Warrant. The offering closed on August 15, 2023, and the aggregate gross proceeds to us from the offering, before placement agent fees and expenses, were $16,975,331. In the second and third quarter of 2024, Class E Warrants wereexercised to purchase an aggregate of 4,300,000 shares of our common stock for $2.00 per share.

On September 5, 2023, we enteredinto an agreement with affiliates of the Vafias family to acquire two tanker vessels, the aframax tanker Gstaad Grace II (ex Stealth Haralambos), built in 2009 and the product tanker Aquadisiac built in 2008, with an aggregatecapacity of approximately 164,000 dwt, which were each delivered to us in February 2024.

On September 7, 2023, we announced that ourBoard of Directors had authorized the repurchase of up to $10,000,000 of shares of our common stock. As of April 15, 2025, 4,251,883 shares of common stock had been repurchased for an aggregate of $8.4 million (excluding commissions), with theaverage purchase price of $1.97 per share. On October 9, 2023, we repurchased Class C Warrants exercisable for 1,480,000 shares of common stock and Class D Warrants exercisable for 1,100,000 shares of common stock for an aggregate purchaseprice of approximately $0.67 million. On December 6, 2023, we repurchased Class C Warrants exercisable for 2,391,323 shares of common stock and Class D Warrants exercisable for 803,333 shares of common stock for an aggregate purchase price ofapproximately $0.85 million.

In April 2024, we sold the aframax tanker Gstaad Grace II for an aggregate consideration of $42million to an unaffiliated third party.

In May 2024, we entered into an agreement with entities affiliated with the family of ourChief Executive Officer to acquire the handysize drybulk carrier Neptulus, built in 2012, and the product tanker Clean

Imperial,built in 2009, with an aggregate capacity of approximately 73,000 dwt. In August 2024, we took delivery of the handysize drybulk carrier Neptulus. The product tanker Clean Imperial was delivered on a charter-free basis in thefirst quarter of 2025.

In September 2024, we entered into agreements to acquire seven Japanese built bulkers (5 supramaxes and 2kamsarmaxes), from entities affiliated with Brave Maritime Corp Inc. One of these vessels was delivered to us on April 26, 2025, and the remaining six of these vessels are expected to be delivered to us within the second quarter of 2025.

Our principal executive offices are located at 331 Kifissias Avenue, Erithrea 14561 Athens, Greece. Our telephone number from the UnitedStates is 011 30 210 625 0001. Our website address is www.imperialpetro.com. The information contained on or linked to from our website is not incorporated herein by reference.

Our company operates through a number of subsidiaries which directly own the vessels in our fleet. A list of our subsidiaries, including theirrespective jurisdiction of incorporation, as of April 15, 2025, all of which are wholly-owned by us other is set forth in Exhibit 8 to this Annual Report on Form 20-F.

 

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B. Business Overview

As of April 15, 2025, our fleet consists of (1) seven MR refined petroleum product tankers that carry refined petroleum products suchas gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, (2) two suezmax tankers that carry crude oil and (3) three handysize drybulk carriers that transport major bulks such as iron ore, coal and grains, and minorbulks such as bauxite, phosphate and fertilizers. As of April 15, 2025, we also had contracts to acquire five supramax drybulk carriers and two kamsarmax drybulk carriers, one of which was delivered on April 26, 2025 and six of which areexpected to be delivered to us in the second quarter of 2025. Upon delivery of these contracted vessels, the total cargo carrying capacity of our combined 19-vessel fleet will be 1,194,000 dwt. Please see information in the section “OurFleet”, below. During 2022, 2023 and 2024, our fleet had a fleet operational utilization of 84.8%, 75.1% and 78.3%, respectively, and we generated voyage revenues of $97.0 million, $183.7 million and $147.5 million, respectively.

Our business strategy is focused on carefully selecting the timing and the structure of our investments in vessels and by reliably, safely andcompetitively operating the vessels we own, through our affiliate, Stealth Maritime.

Our Fleet

As of April 15, 2025, the profile and deployment of our fleet is the following:

 

Name

Year Built

Country Built

Vessel Size (dwt)

Vessel Type

Employment Status

Expiration of Charter(1)

Tankers

Magic Wand

2008

Korea

47,000

MR product tanker

Time Charter

October 2025

Clean Thrasher

2008

Korea

47,000

MR product tanker

Time Charter

May 2025

Clean Sanctuary (ex. Falcon Maryam)

2009

Korea

46,000

MR product tanker

Spot

Aquadisiac

2008

Korea

51,000

MR product tanker

Spot

Clean Nirvana

2008

Korea

50,000

MR product tanker

Spot

Clean Justice

2011

Japan

46,000

MR product tanker

Time Charter

September 2027

Clean Imperial

2009

Korea

40,000

MR product tanker

Time Charter

January 2026

Suez Enchanted

2007

Korea

160,000

Suezmax tanker

Spot

Suez Protopia

2008

Korea

160,000

Suezmax tanker

Spot

Drybulk Carriers(2)

Eco Wildfire

2013

Japan

33,000

Handysize drybulk

Time Charter

May 2025

Glorieuse

2012

Japan

38,000

Handysize drybulk

Time Charter

May 2025

Neptulus

2012

Japan

33,000

Time Charter

June 2025

Fleet Total

751,000 dwt

 

(1)	Earliest date charters could expire.

(2)	In September 2024, we contracted to acquire seven Japanese built drybulk carriers, aggregating approximately443,000 dwt, one of which, the 2012-built Supra Pasha, was delivered on April 26, 2025 and the remaining six of which are expected to be delivered to us within the second quarter of 2025.

We intend to take advantage of the cyclical nature of the market by buying and selling ships when we believe favorable opportunities exist. Wewill deploy our fleet on a mix of period charters, including time and bareboat charters which can last up to twelve years, and spot market charters, which generally last from one to six months, according to our assessment of market conditions.

 

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Commercial and Technical Management of Our Fleet

We have entered into a management agreement with Stealth Maritime, pursuant to which Stealth Maritime provides us with technical,administrative, commercial and certain other services. Stealth Maritime is a leading ship-management company based in Greece, established in 1999 in order to provide shipping companies with a range of services. Our manager’s safety managementsystem is ISM certified in compliance with IMO’s regulations by Lloyd’s Register. In relation to the technical services, Stealth Maritime is responsible for arranging for the crewing of the vessels, the day to day operations, inspectionsand vetting, maintenance, repairs, drydocking and insurance. Administrative functions include, but are not limited to accounting, back-office, reporting, legal and secretarial services. In addition, Stealth Maritime provides services for thechartering of our vessels and monitoring thereof, freight collection, and sale and purchase. For our drybulk vessels, Stealth Maritime subcontracts these services to its affiliate Brave Maritime.

Under our management agreement with Stealth Maritime, which we entered into in conjunction with the 2021 Spin-Off, we pay Stealth Maritime afixed management fee of $440 per vessel operating under a voyage or time charter per day on a monthly basis in advance, pro-rated for the calendar days we own the vessels. We pay a fixed fee of $125 per vessel per day for each of our vesselsoperating on bareboat charter. We are also obligated to pay Stealth Maritime a fee equal to 1.25% of the gross freight, demurrage and charter hire collected from the employment of our vessels. Stealth Maritime will also earn a fee equal to 1.0% ofthe contract price of any vessel bought or sold by them on our behalf.

The initial term of our management agreement with Stealth Maritimewill expire on December 31, 2025. Unless six months’ notice of non-renewal is given by either party prior to the end of the then current term, this agreement will automatically extend for additional 12-month periods.

For additional information about the management agreement, including the calculation of management fees and termination provisions, see“Item. 7. Major Stockholders and Related Party Transactions—B. Related Party Transactions—Management and Other Fees.”

Crewingand Employees

Stealth Maritime ensures that all seamen have the qualifications and licenses required to comply with internationalregulations and shipping conventions, and that our vessels employ experienced and competent personnel. Hellenic Manning Overseas Inc (HMO), formerly known as Navis Maritime Services Inc., based in Manila, is responsible for providing the crewing ofour fleet, under Stealth Maritime’s technical management. These responsibilities include training, compensation, transportation and additional insurance of the crew.

Chartering of the Fleet

We, throughStealth Maritime, manage the employment of our fleet. We deploy our tankers and drybulk carriers on period charters, including time and bareboat charters that can last up to several years, and spot market charters along with short-term timecharters, which generally last from one to twelve months, subject to market conditions. Time and bareboat charters are for a fixed period of time, but could also occasionally include optional periods giving charterers the right to extend thecharter. A voyage charter is generally a contract to carry a specific cargo from a loading port to a discharging port for an agreed-upon total charge. Under voyage charters we pay for voyage expenses such as port, canal and fuel costs. Under a timecharter the charterer pays for voyage expenses while under a bareboat charter the charterer pays for voyage expenses and operating expenses such as crewing, supplies, maintenance and repairs including special survey and drydocking costs.

Vessels operating in the spot market generate revenues that are less predictable but may enable us to capture increased profit margins duringperiods of improvements in tanker charter rates, although we are then exposed to the risk of declining tanker charter rates. Typically, spot market charters can last from a few days up to two months. If we commit vessels to period charters, futurespot market rates may be higher or lower than those rates at which we have period chartered our vessels.

 

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In formulating our chartering strategy, we evaluate past, present and future performance ofthe freight markets and balance the mix of our chartering arrangements in order to achieve optimal results for the fleet. .

Our vesselstrade globally. Some of the areas where we usually operate are the Middle East-Far East range, the Mediterranean, North West Europe range, Africa, USA and Latin America. As freight rates usually vary between these areas as well as voyage andoperating expenses, we evaluate such parameters when positioning our vessels for new employment.

Customers

Our assessment of a charterer’s financial condition and reliability is an important factor in negotiating employment for our vessels.Principal charterers for our tankers include national, major and other independent energy companies and energy traders, and industrial users of those products. Principal charterers for our drybulk carriers include drybulk charterers, including majornational and private industrial users, commodity producers and traders. For the years ended December 31, 2022, 2023 and 2024, we had two, one and two customers accounted for 33%, 21% and 21%, respectively, of our total revenues. In addition,any vessels under bareboat charter may be sub-chartered to third parties.

The average age of our tankers is above the average age of theglobal tanker fleet and the average age of our drybulk carriers is only lower than the average age of the global drybulk carrier fleet, and as our vessels age we may have difficulty competing with younger, more technologically advanced tankers forcharters from oil majors and other top-tier charterers and more technologically advanced drybulk carriers for charters from major industrial users, commodity producers and traders and other top-tier charterers. In these circumstances, we may also beforced to charter our vessels to less creditworthy charterers, either because the oil majors, industrial users and commodity producers and traders and other top tier charters will not charter older and less technologically advanced vessels or willonly charter such vessels at lower contracted charter rates than we are able to obtain from other charterers.

Dry-BMS (RightShip Standards)

This program is designed to allow ship managers to measure their Safety Management System (SMS) against agreed industry standards, with the aimof improving fleet performance and risk management. This will ensure that policies align with the industry’s best practice to both advance our vessels’ performance and attain high standards of health, safety, security and pollutionprevention. The draft guidelines focus on 30 areas of management practice across the four most serious risk areas faced in vessel operations: performance, people, plant and process. This grades the excellence of a company’s SMS againstmeasurable expectations and targets without involving the burdens of excessive inspections. This standard is not meant to replace any pre-existing system or rule but rather to enhance their existing application and raise the levels of excellenceachieved. The minimum benefits of this venture would (a) cover all relevant ship management issues in one document, (b) be relevant to the entire dry bulk shipping industry worldwide, (c) complement other statutory requirements andindustry guidance and (d) be frequently evaluated to drive continuous improvement across the management companies on an international level.

Environmental and other Regulations

Government regulations significantly affect the ownership and operation of our vessels. They are subject to international conventions andnational, state and local laws and regulations in force in the countries in which they may operate or are registered.

A variety ofgovernmental and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (United States Coast Guard (the “USCG”), harbor master or equivalent), classificationsocieties, flag state administration (country of registry), charterers and

 

48

particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and financial assurances for the operation of our vessels. Failure to maintainnecessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of operation of one or more of our vessels.

We believe that the heightened level of environmental and quality concerns among insurance underwriters, regulators and charterers is leadingto greater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the industry. Increasing environmental concerns have created a demand for vessels that conform to the stricter environmentalstandards. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations.We believe that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations. However, because such laws and regulations are frequently changed and may impose increasingly stricter requirements, anyfuture requirements may limit our ability to do business, increase our operating costs, force the early retirement of one or more of our vessels, and/or affect their resale value, all of which could have a material adverse effect on our financialcondition and results of operations.

Environmental Regulations—International Maritime Organization (the “IMO”)

The IMO, the United Nations agency for maritime safety and the prevention of pollution by ships, has negotiated international conventionsrelating to pollution by ships. In 1973, the IMO adopted the MARPOL, which has been periodically updated with relevant amendments. MARPOL addresses pollution from ships by oil, noxious liquid substances carried in bulk, harmful substances carried bysea in packaged form, sewage, garbage, and air emissions. For example, MARPOL Annex III regulates the transportation of marine pollutants, and imposes standards on packing, marking, labeling, documentation, stowage, quantity limitations andpollution prevention. Our vessels are subject to standards imposed by the IMO.

In September 1997, the IMO adopted MARPOL Annex VI toaddress air pollution from ships. Effective in May 2005, Annex VI set limits on SOx and nitrogen oxide (“NOx”) emissions from ship exhausts and prohibited deliberate emissions of ozone depleting substances, such as chlorofluorocarbons.Annex VI also included a global cap on the sulfur content of fuel oil and allowed for special areas to be established with more stringent controls on emissions. Options for complying with the requirements of Annex VI include use of low sulfur fuels,modifications to vessel engines, or the addition of post combustion emission controls. Annex VI has been ratified by some, but not all IMO member states. Vessels that are subject to Annex VI must obtain an International Air Pollution PreventionCertificate evidencing compliance with Annex VI. We have obtained International Air Pollution Prevention Certificates for all of our vessels and believe they are compliant in all material respects with current Annex VI requirements.

Amendments to Annex VI, effective July 2010, set progressively stricter regulations to control SOx and NOx emissions from ships, which presentboth environmental and health risks. The amendments required a progressive reduction of sulfur levels in bunker fuels to be phased in by 2020 and imposed more stringent NOx emission standards on marine diesel engines, depending on their date ofinstallation. The Annex VI amendments have also established tiers of stringent NOx emissions standards for new marine engines, depending on their dates of installation. The United States ratified the amendments, and all vessels subject to Annex VImust comply with the amended requirements when entering U.S. ports or operating in U.S. waters. Since January 1, 2020, the amended Annex VI required that fuel oil contain no more than 0.50% sulfur. It is up to individual parties to MARPOL toenforce fines and sanctions, and several major port state regimes have announced plans to do so. We may incur costs to comply with the amended Annex VI requirements.

In November 2022, amendments to MARPOL Annex VI adopted by the IMO came into effect. These amendments require ships to improve their energyefficiency with a view to reducing their greenhouse gas emissions, with a particular focus on carbon emissions, both through changes in technical specifications as well

 

49

as in modifications in vessels’ operational parameters. The USCG is working to implement the amended provisions of MARPOL Annex VI, chiefly through proposed rule 1625-AC78, which remains atthe proposed rule stage since its original publication in October of 2022. The amended MARPOL provisions and the rules proposed by the USCG to implement them, in addition to any other new or more stringent air emission regulations which may beadopted, could require significant capital expenditures to retrofit vessels and could otherwise increase our investment and operating costs. As of April 15, 2025, all of our 19 vessels, including those we have agreements to acquire, haveballast water treatment systems installed. In 2025, from our current fleet on water, we will be drydocking one suezmax tanker, the Suez Enchanted.

More stringent emission standards apply in coastal areas designated by the IMO as SOx Emission Control Areas (“ECAs”). For SOx,current ECAs in which a 0.1% cap on the sulfur content of fuel is enforced include: (i) the North American ECA, which includes the area extending 200 nautical miles from the Atlantic/Gulf and Pacific Coasts of the United States and Canada, theHawaiian Islands, and the French territories of St. Pierre and Miquelon; (ii) the US Caribbean ECA, including Puerto Rico and the US Virgin Islands; (iii) the Baltic Sea ECA; and (iv) the North Sea ECA. Similar restrictions on thesulfur content of fuel apply in Icelandic and inland Chinese waters. Similar restrictions apply in Icelandic and inland Chinese waters. Specifically, as of January 1, 2019, China expanded the scope of its Domestic ECAs to include all coastalwaters within 12 nautical miles of the mainland. Vessels operating within an ECA or an area with equivalent standards must use fuel with a sulfur content that does not exceed 0.10%. Additionally, two new NOx ECAs, the Baltic Sea and the North Sea,will be enforced for ships constructed (keel laying) on or after January 1, 2021, or existing ships which replace an engine with “non-identical” engines, or install an “additional” engine. Other ECAs may be designated,and the jurisdictions in which our vessels operate may adopt more stringent emission standards independent of IMO. Effective from January 1, 2022, all vessels entering Korean ports are prohibited from consuming marine fuel with sulfur contentexceeding 0.5% cap and are prohibited from consuming marine fuel with sulfur content exceeding 0.1% cap in the SOx ECAs. For NOx, current ECAs in which certain requirements exist regarding the engines used by vessels and the attendant NOx emissions,include (i) the North American ECA, and (ii) the US Caribbean ECA. Additionally, two new NOx ECAs, the Baltic Sea and the North Sea, are being enforced for ships constructed (keel laying) on or after January 1, 2021, or existing shipswhich replace an engine with “non-identical” engines, or install an “additional” engine. We may incur costs to install control equipment on our engines in order to comply with these requirements. In December 2021, the memberstates of the Convention for the Protection of the Mediterranean Sea Against Pollution agreed to support the designation of a new ECA in the Mediterranean. The Mediterranean Sea ECA for SOx and Particulate Matter was approved at MEPC 78 and wasformally designated during MEPC 79 in December 2022. MEPC 79 designated the Mediterranean Sea as an ECA for SOx and particulate matter, under MARPOL Annex VI. The amendment is expected to enter into force on May 1, 2024, with the new limittaking effect on May 1, 2025. Other ECAs may be designated, and the jurisdictions in which our vessels operate may adopt more stringent emission standards independent of IMO.

Many countries have ratified and follow the liability plan adopted by the IMO and set out in the International Convention on Civil Liabilityfor Oil Pollution Damage of 1969 (the “CLC”) (the United States, with its separate OPA regime described below, is not a party to the CLC). This convention generally applies to vessels that carry oil in bulk as cargo. Under thisconvention and depending on whether the country in which the damage results is a party to the 1992 Protocol to the CLC, the registered owner of a regulated vessel is strictly liable for pollution damage in the territorial waters or exclusiveeconomic zone of a contracting state caused by the discharge of any oil from the ship, subject to certain defenses. Under an amendment to the 1992 Protocol that became effective on November 1, 2003, for vessels of 5,000 to 140,000 gross tons,liability per incident is limited to 4.51 million Special Drawing Rights (“SDR”) plus 631 SDR for each additional gross ton over 5,000. For a vessel over 140,000 gross tons, liability is limited to 89.77 million SDR. SDR is anInternational Monetary Fund unit pegged to a basket of currencies. The right to limit liability under the CLC is forfeited where the spill is caused by the owner’s actual fault and, under the 1992 Protocol, where the spill is caused by theowner’s intentional or reckless conduct. Vessels trading in states that are parties to the CLC must provide evidence of insurance covering the liability of the owner. In jurisdictions where the CLC has not been adopted, various legislativeschemes or common law regimes govern, and liability is imposed either on the basis of fault or in a

 

50

manner similar to that convention. We believe that our protection and indemnity insurance will cover any liability under the CLC.

In 2001, the IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the “BunkerConvention”), which imposes strict liability on ship owners for pollution damage caused by discharges of bunker oil in jurisdictional waters of ratifying states. The Bunker Convention also requires registered owners of ships over 1,000 grosstons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime (but not exceeding the amount calculated in accordance with the Convention on Limitationof Liability for Maritime Claims of 1976, as amended). Because the Bunker Convention does not apply to pollution damage governed by the CLC, it applies only to discharges from any of our vessels that are not transporting oil. The Bunker Conventionentered into force on November 21, 2008. Liability limits under the Bunker Convention were increased as of June 2015. In jurisdictions where the Bunker Convention has not been adopted, such as the United States, liability for spills or releasesof oil from ship’s bunkers may be strictly imposed or fault-based.

Our vessels may also become subject to the InternationalConvention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea adopted in 1996 as amended by the Protocol to the HNS Convention, adopted in April 2010 (2010 HNS Protocol) (collectively,the “2010 HNS Convention”), if it enters into force. The 2010 HNS Convention creates a regime of liability and compensation for damage from hazardous and noxious substances (“HNS”). The 2010 HNS Convention sets up a two-tiersystem of compensation composed of compulsory insurance taken out by ship owners and an HNS Fund that will come into play when the insurance is insufficient to satisfy a claim or does not cover the incident. Under the 2010 HNS Convention, if damageis caused by bulk HNS, claims for compensation will first be sought from the ship owner up to a maximum of 100 million SDR. If the damage is caused by packaged HNS or by both bulk and packaged HNS, the maximum liability is 115 million SDR.Once the limit is reached, compensation will be paid from the HNS Fund up to a maximum of 250 million SDR. The 2010 HNS Convention has not been ratified by a sufficient number of countries to enter into force, and at this time we cannotestimate with any certainty the costs of compliance with its requirements should it enter into force.

The IMO adopted InternationalConvention for the Control and Management of Ships’ Ballast Water and Sediments (the “BWM Convention”) in February 2004. The BWM Convention’s implementing regulations call for a phased introduction of mandatory ballast waterexchange requirements, to be replaced in time with mandatory concentration limits. The BWM Convention took effect on September 8, 2017. Many of the implementation dates originally contained in the BWM Convention had already passed prior to itseffectiveness, so that the period for installation of mandatory ballast water exchange requirements would be very short, with several thousand ships per year needing to install the systems. Consequently, the IMO Assembly passed a resolution inDecember 2013 revising the dates for implementation of the ballast water management requirements so that they are triggered by the entry into force date. In effect, this makes all vessels constructed before September 8, 2017“existing” vessels, allowing for the installation of ballast water management systems on such vessels at the first renewal International Oil Pollution Prevention (“IOPP”) survey following entry into force of the BWMConvention. In July 2017, the implementation scheme was further changed to require vessels with IOPP certificates expiring between September 8, 2017 and September 8, 2019 to comply at their second IOPP renewal. All ships must haveinstalled a ballast water treatment system by September 8, 2024. Each vessel in our current fleet has been issued or will be issued a ballast water management plan Statement of Compliance by the classification society with respect to theapplicable IMO regulations and guidelines. The cost of compliance could increase for our vessels as a result of these requirements, although it is difficult to predict the overall impact of such a requirement on our operations.

The operation of our vessels is also affected by the requirements set forth in the ISM Code of the IMO. The ISM Code requires ship owners andbareboat charterers to develop and maintain an extensive Safety Management System (“SMS”) that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation anddescribing procedures for dealing with emergencies.

 

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Vessel operators must obtain a “Safety Management Certificate” from the government of the vessel’s flag state to verify that it is being operated in compliance with its approvedSMS. The failure of a ship owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, decrease available insurance coverage for the affected vessels and result in a denial of access to, or detention in,certain ports. Currently, each of the vessels in our fleet is ISM code-certified. However, there can be no assurance that such certification will be maintained indefinitely. Non-compliance with the ISM Code may subject such party to increasedliability, invalidate existing insurance or decrease available insurance coverage for the affected vessels and result in a denial of access to, or detention in, certain ports. For example, the USCG and E.U. authorities have indicated that vesselsnot in compliance with the ISM Code will be prohibited from trading in U.S. and E.U. ports.

The operations of our product tankers aresubject to compliance with the IMO’s International Code for the Construction and Equipment of Ships carrying Dangerous Chemicals in Bulk (the “IBC Code”) for chemical tankers built after July 1, 1986. The IBC Code includesship design, construction and equipment requirements and other standards for the bulk transport of certain liquid chemicals. Amendments to the IBC Code pertaining to revised international certificates of fitness for the carriage of dangerous goodsentered into force in June 2014, and additional requirements regarding stability, tank purging, venting and inerting requirements entered into force in January 2016. Further amendments to the IBC Code entered into force on January 1, 2021including revisions to carriage requirements for products. Moreover, on June 10, 2022, the IMO adopted additional amendments to the IBC Code to reduce flooding risks. These amendments are expected to enter into force on July 1, 2024. Wemay need to make certain expenditures to comply with these amendments.

Environmental Regulations—The United States Oil Pollution Act of 1990and the U.S. Comprehensive Environmental Response, Compensation, and Liability Act

The United States Oil Pollution Act of 1990(“OPA”), established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA applies to discharges of any oil from a vessel, including discharges of fuel oil (bunkers) andlubricants. OPA affects all owners and operators whose vessels trade in the United States, its territories and possessions or whose vessels operate in United States waters, which include the United States’ territorial sea and its two hundrednautical mile exclusive economic zone. The United States has also enacted the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), which applies to the discharge of hazardous substances other than oil, whetheron land or at sea. OPA and CERCLA both define “owner and operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel. Accordingly, both OPA and CERCLA impact our operations.

Under OPA, vessel owners, operators and bareboat charterers are “responsible parties” and are jointly, severally and strictlyliable (unless the discharge of pollutants results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges ofpollutants from their vessels. OPA broadly defines these other damages to include:

 

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natural resources damage and the costs of assessment thereof;

 

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real and personal property damage;

 

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net loss of taxes, royalties, rents, fees and other lost revenues;

 

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lost profits or impairment of earning capacity due to property or natural resources damage; and

 

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net cost of public services necessitated by a spill response, such as protection from fire, safety or healthhazards, and loss of subsistence use of natural resources.

In December 2015, the USCG adjusted the limits of liabilityof responsible parties under the OPA and established a procedure to further adjust these limits every three years. Effective November 12, 2019, the OPA liability is limited to the greater of $1,200 per gross ton or $997,100 for non tankvessels, subject to adjustment

 

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by the USCG for inflation every three years. On December 23, 2022, the USCG again adjusted those limits to the greater of $1,300 per gross ton or $1,076,000 per non-tank vessel. EffectiveMarch 23, 2023, the current limits of OPA liability for double-hulled tank vessels larger than 3,000 gross tons are the greater of $2,500 per gross ton or $21,521,000, subject to adjustment for inflation by the USCG every three years. Theselimits of liability do not apply if an incident was directly caused by violation of applicable United States federal safety, construction or operating regulations or by a responsible party’s gross negligence or willful misconduct, or if theresponsible party fails or refuses to report the incident or to cooperate and assist in connection with oil removal activities.

OPArequires owners and operators of vessels over 300 gross tons to establish and maintain with the USCG evidence of financial responsibility sufficient to meet their potential liabilities under the OPA. Under the USCG regulations implementing OPA,vessel owners and operators may evidence their financial responsibility by showing proof of insurance, surety bond, self-insurance, or guaranty. Under the OPA regulations, an owner or operator of a fleet of vessels is required only to demonstrateevidence of financial responsibility in an amount sufficient to cover the vessels in the fleet having the greatest maximum liability under OPA.

CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as wellas damage for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing same, and health assessments or health effects studies. There is no liability if the discharge of a hazardous substanceresults solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5 million for vessels carrying a hazardous substance as cargo and the greater of$300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willfulmisconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsible person fails or refused toprovide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.

We currently maintain, for each of our vessels, pollution liability coverage insurance in the amount of $1 billion per vessel per incident. Inaddition, we carry hull and machinery and protection and indemnity insurance to cover the risks of fire and explosion. Under certain circumstances, fire and explosion could result in a catastrophic loss. While we believe that our present insurancecoverage is adequate, not all risks can be insured, and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates. If the damages from a catastrophicspill exceeded our insurance coverage, it would have a severe effect on us and could possibly result in our insolvency.

OPA and CERCLAboth require owners and operators of vessels to establish and maintain with the USCG evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject as discussedabove. Under the self-insurance provisions, the ship owner or operator must have a net worth and working capital, measured in assets located in the United States against liabilities located anywhere in the world, that exceeds the applicable amountof financial responsibility. We have complied with the USCG regulations by providing a financial guaranty evidencing sufficient self-insurance.

OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within theirboundaries, and some states have enacted legislation providing for unlimited liability for oil spills. In some cases, states, which have enacted such legislation, have not yet issued implementing regulations defining vessels owners’responsibilities under these laws. We intend to comply with all applicable state regulations in the ports where our vessels call.

EnvironmentalRegulations—Other Environmental Initiatives

The EU has adopted legislation that: (1) requires member states to refuseaccess to their ports to certain sub-standard vessels, according to vessel type, flag and number of previous detentions; (2) creates an obligation on

 

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member states to inspect at least 25% of vessels using their ports annually and provides for increased surveillance of vessels posing a high risk to maritime safety or the marine environment;(3) provides the EU with greater authority and control over classification societies, including the ability to seek to suspend or revoke the authority of negligent societies; and (4) requires member states to impose criminal sanctions forcertain pollution events, such as the unauthorized discharge of tank washings. It is impossible to predict what additional legislation or regulations, if any, may be promulgated by the EU or any other country or authority.

On May 15, 2009, the IMO adopted the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009(the “Hong Kong Convention”). The Hong Kong Convention was ratified by 16 states, representing 40% of the world fleet, in June 2023 and will enter into force on June 26, 2025. The Hong Kong Convention requires ships over 500 grosstonnes operating in international waters to maintain an Inventory of Hazardous Materials (an “IHM”). Only warships, naval auxiliary and governmental, non-commercial vessels are exempt from the requirements of the Hong Kong Convention.The IHM has three parts:

 

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Part I - hazardous materials inherent in the ship’s structure and fitted equipment;

 

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Part II - operationally generated wastes; and

 

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Part III - stores.

Once the Hong Kong Convention has entered into force, each new and existing ship will be required to maintain Part I of IHM.

The Paris Memorandum of Understanding on Port State Control, to which 27 nations are parties, adopted the “New Inspection Regime”(“NIR”), effective January 1, 2011. The NIR is a significant departure from the previous system, as it is a risk based targeting mechanism that will reward quality vessels with a smaller inspection burden and subject high risk shipsto more in depth and frequent inspections. The NIR is designed to identify potential substandard ships and increase the effectiveness of inspections. The inspection record of a vessel, its age and type, the Voluntary IMO Member State Audit Scheme,and the performance of the flag State and recognized organizations are used to develop the risk profile of a vessel.

The EuropeanParliament and the Council of the E.U. have adopted regulation 2015/757, European Monitoring, Reporting and Verification Regulation (the “EU-MRV”) on the monitoring, reporting and verification of CO2 emissions from maritime transport. Itentered into force on July 1, 2015 and monitoring began January 1, 2018. The maritime EU-MRV regulation applies to all merchant ships of 5,000 gross tons or above on voyages from, to and between ports under jurisdiction of E.U. memberstates. Companies operating the vessels will have to monitor the CO2 emissions released while in port and for any voyages to or from a port under the jurisdiction of an E.U. member state and to keep records on CO2 emissions on both per-voyage andannual bases. Furthermore, as of January 1, 2018, our vessels began monitoring and reporting CO2 emissions pursuant to the IMO DCS regulation, which is part of the IMO’s efforts to reduce GHG emissions from ships by 50% by 2050 comparedto 2008. On February 4, 2019, the European Commission tabled a proposal concerning the amendment of the EU-MRV. The main objective of the proposal was to amend the EU-MRV in order to take account of the new IMO DCS for fuel oil consumption ofships that was introduced by the IMO in March 2018. As part of the IMO’s efforts to reduce GHG emissions from ships, an initial IMO GHG strategy envisaged a reduction in carbon intensity of international shipping (a 40 % reduction ofaverage CO2 emissions per transport work by 2030 and a 70 % reduction by 2050, compared to 2008) and a 50 % reduction in total annual GHG emissions from international shipping by 2050, compared to 2008. The globally applicable IMO DCSsystem, currently runs in parallel with the EU-MRV, thus duplicating regulation for shipping companies whose ships sail both inside and outside the EU. The EU recently included international carbon emissions from the maritime sector in the EUemissions trading system. These monitoring and reporting processes adopted by the EU-MRV and the IMO DCS regulations is considered to be part of a market-based mechanism for a carbon tax to be adopted. On June 22, 2022, the European Unionrevised proposed amendments to regulation 2015/757.

 

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On September 16, 2020, the European Parliament voted in favor of amending the EU MRVRegulation to require shipping companies to reduce on a linear basis their annual average CO2 emissions relative to transport work for all their ships by at least 40% by 2030, with penalties for non-compliance. In May 2023, EU ETS regulations wereamended in order to include emissions from maritime transport activities in the EU ETS and to require the monitoring, reporting and verification of emissions of additional greenhouse gases and emissions from additional ship types. In January 2024,the EU ETS was extended to cover CO2 emissions from all large ships (of 5,000 gross tonnage and above) entering EU ports, and will apply to methane and nitrous oxide emissions beginning in 2026. Shipping companies will need to buy allowances thatcorrespond to the emissions covered by the system.

The introduction of shipping into the EU ETS means that an additional approximately 80to 100 million emission allowances will be put on the market. Of these, auction revenues from 20 million emission allowances will go to the Innovation Fund, a funding program that develops low-carbon technologies, to be used forshipping-specific projects. The remaining revenues will go to the EU Member States and must be used for climate-related purposes.

OnMarch 23, 2012, the USCG adopted ballast water discharge standards under the U.S. National Invasive Species Act. The regulations, which became effective on June 21, 2012, set maximum acceptable discharge limits for living organisms andestablished standards for ballast water management systems, and they are consistent with the requirements under the BWM Convention described above. The requirements are being phased in based on the size of the vessel and its next dry docking date.As of the date of this report, the USCG has approved forty Ballast Water Treatment Systems. A list of approved equipment can be found on the Coast Guard Maritime Information Exchange web page. Several U.S. states, such as California, have alsoadopted more stringent legislation or regulations relating to the permitting and management of ballast water discharges compared to U.S. Environmental Protection Agency (“EPA”) regulations.

The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil or hazardous substances in navigable waters and imposes strictliability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA. Under EPA regulations we are requiredto obtain a CWA permit to discharge ballast water and other wastewaters incidental to the normal operation of our vessels if we operate within the three mile territorial waters or inland waters of the United States. This permit, which the EPA hasdesignated as the Vessel General Permit for Discharges Incidental to the Normal Operation of Vessels (“VGP”), incorporates the current USCG requirements for ballast water management, as well as supplemental ballast water requirements,and includes requirements applicable to 26 specific discharge streams, such as deck runoff, bilge water and gray water. The USCG and the EPA have entered into a memorandum of understanding which provides for collaboration on the enforcement of theVGP requirements. As a result, the USCG includes the VGP as part of its normal Port State Control inspections. The EPA issued a VGP that became effective in December 2013. Among other things, it contained numeric ballast water discharge limits formost vessels and more stringent requirements for exhaust gas scrubbers and required the use of environmentally friendly lubricants. We have submitted NOIs (Notices Of Intent) for Discharges Incidental to the Normal Operation of a Vessel under the2013 VGP to the U.S. EPA for all our ships trading in U.S. waters. The 2013 VGP was set to expire on December 13, 2018; however, its provisions will remain in effect until the regulations under the 2018 Vessel Incidental Discharge Act(“VIDA”) are final and enforceable. VIDA, signed into law on December 4, 2018, establishes a new framework for the regulation of vessel incidental discharges under CWA Section 312(p). VIDA requires the EPA to developperformance standards for those discharges within two years of enactment, and requires the USCG to develop implementation, compliance, and enforcement regulations within two years of the EPA’s promulgation of its performance standards. Allprovisions of the 2013 VGP will remain in force and effect until the USCG regulations under VIDA are finalized. On October 26, 2020, the EPA published a Notice of Proposed Rulemaking – Vessel Incident Discharge National Standards ofPerformance in the Federal Register for public comment. The comment period closed on November 25, 2020. Compliance with the EPA and USCG ballast water management regulations could require the installation of equipment on our vessels to treatballast water

 

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before it is discharged or the implementation of other port facility disposal arrangements at potentially substantial cost, or may otherwise restrict our vessels from entering United Stateswaters.

Climate Control Initiatives

Although the Kyoto Protocol requires adopting countries to implement national programs to reduce emissions of greenhouse gases, emissions ofgreenhouse gases from international shipping are not currently subject to the Kyoto Protocol. The Kyoto Protocol was extended to 2020 at the 2012 United Nations Climate Change Conference, with the hope that a new climate change treaty would beadopted by 2015 and come into effect by 2020. The Paris Agreement adopted under the United Nations Framework Convention on Climate Change in December 2015 contemplates commitments from each nation party thereto to take action to reduce greenhousegas emissions and limit increases in global temperatures but did not include any restrictions or other measures specific to shipping emissions. However, restrictions on shipping emissions are likely to continue to be considered and a new treaty maybe adopted in the future that includes restrictions on shipping emissions. International or multi-national bodies or individual countries may adopt their own climate change regulatory initiatives. The IMO’s Marine Environment ProtectionCommittee adopted two sets of mandatory requirements to address greenhouse gas emissions from shipping that entered into force in January 2013. The Energy Efficiency Design Index establishes minimum energy efficiency levels per capacity mile andapplies to new vessels of 400 gross tons or greater. Currently operating vessels must develop and implement Ship Energy Efficiency Plans. By 2025, all new ships built must be 30% more energy efficient than those built in 2014, but it is likely thatthe IMO will increase these requirements such that new ships must be up to 50% more energy efficient than those built in 2014 by 2022. These new requirements could cause us to incur additional costs to comply. Draft MARPOL amendments released inNovember 2020 and adopted in June 2021 built on the EEDI and SEEMP by requiring ships to reduce carbon intensity based on a new Energy Efficiency Existing Ship Index (“EEXI”) and reduce operational carbon intensity reductions based on anew operational carbon intensity indicator, in line with the IMO strategy which aims to reduce carbon intensity of international shipping by 40% by 2030. The EEXI, which entered into force in January 2023, requires alterations to a vessel’sdesign, machinery or arrangements to meet a certain goal of CO2 grams emitted per capacity tonne mile under certain reference conditions. This measure accounts for the vessel’s engine power, fuel consumption and CO2 conversion capacity, all ofwhich make it impossible to effect EEXI compliance by merely reducing the ship’s speed or cargo load. Alongside the EEXI, a mandatory Carbon Intensity Indicator (“CII”) was introduced on January 1, 2023. CII requirements areset to become particularly stringent by 2030. The USCG plans to develop and propose regulations to implement these provisions in the United States. This measure of annual efficiency is used to rate vessels based on the grams of CO2 they emit perdwt-mile, giving all cargo vessels above 5,000 GT a rating of A to E every year. The rating thresholds will become increasingly stringent towards 2030. For ships that achieve a D rating for three consecutive years or an E rating, a corrective actionplan needs to be developed as part of the SEEMP and approved. These changes were accompanied by the introduction of the so-called “Enhanced SEEMP,” a strengthened version of SEEMP that includes new mandatory content, such as a CII targetimplementation plan, on top of being subject to approval by appropriate authorities. These new requirements for existing ships will be reviewed by the end of 2025, with particular focus on the enforcement of the carbon intensity rating requirements.The IMO is also considering the development of market-based mechanisms for limiting greenhouse gas emissions from ships, but it is impossible to predict the likelihood of adoption of such a standard or the impact on our operations. In April 2015,the EU adopted regulations requiring the monitoring and reporting of greenhouse gas emissions from marine vessels (of over 5,000 gross tons) which went into effect in January 2018. As described above, following a July 14, 2021 EuropeanCommission proposal, the European Parliament voted to include CO2, methane (NH4) and nitrous oxide (N2O) emissions from shipping within the EU’s Emissions Trading Scheme. The proposal was adopted in May 2023, and became effectiveJanuary 1, 2024. The EU ETS now applies to all voyages by vessels 5,000 gross tonnage and above that start or finish within the EU. It requires vessel operators to purchase allowances that correspond to the emissions covered by the system. Thescheme phased in for CO2 in 2024, and will phase in for methane and nitrous oxide in 2026. Additional jurisdictions may adopt similar GHG emissions monitoring and reduction schemes in the future. The EPA has issued a finding that greenhouse gasemissions endanger the public health and safety and has

 

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adopted regulations under the Clean Air Act to limit emissions of greenhouse gases from certain mobile sources and proposed regulations to limit greenhouse gas emissions from large stationarysources, although the mobile source regulations do not apply to greenhouse gas emissions from vessels. Any passage of climate control initiatives by the IMO, the EU or the individual countries in which we operate that limit greenhouse gas emissionsfrom vessels could require us to limit our operations or make significant financial expenditures that we cannot predict with certainty at this time. Passage of climate control initiatives that affect the demand for oil may also materially affect ourbusiness. Even in the absence of climate control legislation and regulations, our business may be materially affected to the extent that climate change may result in sea level changes or more intense weather events.

On June 29, 2017, the Global Industry Alliance, or (the “GIA”), was officially inaugurated. The GIA is a program, under theGlobal Environmental Facility-United Nations Development Program-IMO project, which supports shipping, and related industries, as they move towards a low carbon future. Organizations including, but not limited to, ship owners, operators,classification societies, and oil companies, signed to launch the GIA.

The China Maritime Safety Administration (the “ChinaMSA”) issued the Regulation on Data Collection of Energy Consumption for Ships in November 2018. This regulation is effective as of January 1, 2019 and requires ships calling on Chinese ports to report fuel consumption and transport workdetails directly to the China MSA. This regulation also contains additional requirements for Chinese-flagged vessels (domestic and international) and other non-Chinese-flagged international navigating vessels. In November 2022, the China MSApublished an additional Regulation of Administrative Measures of Ship Energy Consumption Data and Carbon Intensity, which came into effect on December 22, 2022. This regulation was essentially enacted to implement MARPOL Annex VI toChinese-flagged vessels, though a few of its provisions also apply to foreign ships with a gross tonnage of at least 400 entering and exiting Chinese ports. This Regulation essentially applies more stringent rules around that collection andreporting of data related to ships’ energy consumption, as is already required by the 2018 regulation.

On October 23, 2023,the China MSA modified its monitoring and inspection requirements for vessels subject to intensified monitoring and inspection. Effective December 1, 2023, the requirements expand the kinds of vessels that can be included in the list andauthorize provincial-level offices to enter vessels parallel to the China MSA’s existing authority. The modified rules no longer distinguish between Chinese and foreign vessels. Currently, we have no vessels on the list in question, and westrongly monitor compliance with applicable rules and regulations to avoid any such entry. Nevertheless, because it is unclear how the China MSA may amend the list’s entry requirements, any number of our vessels could be entered into the listregardless of our efforts. This would subsequently result in heightened monitoring, inspection and compliance costs, as well as associated delays in the vessels’ operations.

On June 29, 2017, the Global Industry Alliance, or the GIA, was officially inaugurated. The GIA is a program, under the GlobalEnvironmental Facility-United Nations Development Program-IMO project, which supports shipping, and related industries, as they move towards a low carbon future. Organizations including, but not limited to, ship owners, operators, classificationsocieties, and oil companies, signed to launch the GIA.

In addition, the United States is currently experiencing changes in itsenvironmental policy, the results of which have yet to be fully determined. For example, in 2021, the United States announced its commitment to working with the IMO to adopt a goal of achieving zero emissions from international shipping by 2050.Additional legislation or regulation applicable to the operation of our ships that may be implemented in the future could negatively affect our profitability. Additional legislation or regulation applicable to the operation of our ships that may beimplemented in the future could negatively affect our profitability. Furthermore, recent action by the IMO’s Maritime Safety Committee and U.S. agencies indicate that cybersecurity regulations for the maritime industry are likely to be furtherdeveloped in the near future in an attempt to combat cybersecurity threats, as described below. This might cause companies to cultivate additional procedures for monitoring cybersecurity, which could require additional expenses and/or capitalexpenditures. However, the impact of such regulations is difficult to predict at this time.

 

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Vessel Security Regulations

Since the terrorist attacks of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security. OnNovember 25, 2002, the Maritime Transportation Security Act of 2002 “MTSA”) came into effect in the United States. To implement certain portions of the MTSA, in July 2003, the USCG issued regulations requiring the implementation ofcertain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. Similarly, in December 2002, amendments to the International Convention for the Safety of Life at Sea (“SOLAS”), created anew chapter of the convention dealing specifically with maritime security. The chapter went into effect in July 2004, and imposes various detailed security obligations on vessels and port authorities, most of which are contained in the newly createdInternational Ship and Port Facilities Security or, ISPS, Code. Among the various requirements are:

 

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on-board installation of automatic information systems to enhance vessel-to-vessel and vessel-to-shorecommunications;

 

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on-board installation of ship security alert systems;

 

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the development of vessel security plans; and

 

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compliance with flag state security certification requirements.

The USCG regulation’s aim to align with international maritime security standards exempted non-United States vessels from MTSA vesselsecurity measures provided such vessels have on board, by July 1, 2004, a valid International Ship Security Certificate (“ISSC”) that attests to the vessel’s compliance with SOLAS security requirements and the ISPS Code. Wehave obtained ISSCs for all of our vessels and implemented the various security measures addressed by the MTSA, SOLAS and the ISPS Codes to ensure that our vessels attain compliance with all applicable security requirements within the prescribedtime periods. We do not believe these requirements will have a material financial impact on our operations.

IMO Cyber Security

The Maritime Safety Committee, at its 98th session in June 2017, adopted Resolution MSC.428(98)— Maritime Cyber Risk Management in SafetyManagement Systems. The resolution encourages administrations to ensure that cyber risks are appropriately addressed in existing safety management systems (as defined in the ISM Code) no later than the first annual verification of thecompany’s Document of Compliance after January 1, 2021. Owners risk having ships detained if they have not included cyber security in the SMS of ships.

Vessel Recycling Regulations

TheEU has adopted a regulation that seeks to facilitate the ratification of the IMO Recycling Convention and sets forth rules relating to vessel recycling and management of hazardous materials on vessels. In addition to new requirements for therecycling of vessels, the new regulation contains rules for the control and proper management of hazardous materials on vessels and prohibits or restricts the installation or use of certain hazardous materials on vessels. The new regulation appliesto vessels flying the flag of an EU member state and certain of its provisions apply to vessels flying the flag of a third country calling at a port or anchorage of a member state. For example, when calling at a port or anchorage of a member state,a vessel flying the flag of a third country will be required, among other things, to have on board an inventory of hazardous materials that complies with the requirements of the new regulation and the vessel must be able to submit to the relevantauthorities of that member state a copy of a statement of compliance issued by the relevant authorities of the country of the vessel’s flag verifying the inventory. The new regulation took effect on non-EU-flagged vessels calling on EU portsof call beginning on December 31, 2020.

Classification and Inspection

All our vessels are certified as being “in class” by a classification society member of the International Association ofClassification Societies such as Lloyds Register of Shipping and Bureau Veritas, Registro Italiano

 

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Navale (Rina) and American Bureau of Shipping (ABS). All new and secondhand vessels that we purchase must be certified prior to their delivery under our standard contracts and memoranda ofagreement. If the vessel is not certified on the date of closing, we have no obligation to take delivery of the vessel. Most insurance underwriters make it a condition for insurance coverage that a vessel be certified as “in class” by aclassification society that is a member of the International Association of Classification Societies. Every vessel’s hull and machinery is “classed” by a classification society authorized by its country of registry. Theclassification society certifies that the vessel has been built and maintained in accordance with the rules of such classification society and complies with applicable rules and regulations of the country of registry of the vessel and theinternational conventions of which that country is a member. Each vessel is inspected by a surveyor of the classification society every year— an annual survey, every two to three years—an intermediate survey, and every four to fiveyears—a special survey. Vessels also may be required, as part of the intermediate survey process, to be drydocked every 30 to 36 months for inspection of the underwater parts of the vessel and for necessary repairs related to such inspection;alternatively, such requirements may be dealt concurrently with the special survey.

In addition to the classification inspections, manyof our customers, including the major oil companies, regularly inspect our vessels as a pre-condition to chartering voyages on these vessels. We believe that our well- maintained, high quality tonnage should provide us with a competitive advantagein the current environment of increasing regulations, and customer emphasis on quality of service.

All areas subject to surveys asdefined by the classification society, are required to be surveyed at least once per class period, unless shorter intervals between surveys are prescribed elsewhere. The period between two subsequent surveys of each area must not exceed five years.

Vessels are dry docked for the special survey for inspection of the underwater parts and for repairs related to inspections. If anydefects are found, the classification surveyor will issue a “recommendation” which must be rectified by the ship owner within the prescribed time limits.

Risk of Loss and Liability Insurance

General

The operation of any cargo vessel includes amongst others the handling and management of situations such as mechanical failureand/or physical damage to the ship, collision, third party property loss, cargo loss or damage, business interruption due to political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherentpossibility of marine disaster, including environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. While we believe that our present insurance coverage is adequate, not all risks can be insured,and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates.

We procure hull and machinery insurance, protection and indemnity insurance, which include environmental damage and pollution insurancecoverage, war risk and other insurance coverage for our fleet with insurance carriers that also provide insurance coverage for ships owned by affiliated entities, including StealthGas and private Vafias family interests. Accordingly, if one of ourships, or other ships managed by Brave Maritime or Stealth Maritime and owned by an affiliated entity of Brave Maritime or Stealth Maritime, including StealthGas and C3is, were to incur significant costs from an accident, spill or otherenvironmental liability or were subject to insurance fraud or other incident, our insurance premiums and costs could increase significantly or we may not be able to obtain insurance for our ships.

Hull and Machinery Insurance

Wehave in place Fleet Marine Hull and Machinery and Fleet War Risk insurance policies, providing cover for particular damage to the vessel, salvage and towage costs following a casualty as well as for vessel Actual or Constructive Total Loss, subjectto a deductible of $150,000 or $200,000 (depending on the ship) per incident.

 

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We also maintain Increased Value insurance. Under the Increased Value insurance, in case oftotal loss of a vessel, we will be able to recover the sum insured under the Increased Value policy in addition to the sum insured under the Hull and Machinery policy. Increased Value insurance also covers excess liabilities which are notrecoverable in full by the Hull and Machinery policies by reason of under insurance.

For each ship the sum of the values insured underthe Hull & Machinery and Increased Value policies represent its fair market value.

Protection and Indemnity Insurance

Protection and indemnity insurance, is a form of mutual indemnity insurance, which is designed to cover third party liabilities likely to ariseout of our shipping activities. It is provided by non-profit-making insurance organizations commonly known as Protection and Indemnity Associations or “ P&I Clubs”. This insurance aims to respond towards third-party liabilityclaims and other related expenses arising amongst others from injury or death of crew, shore personnel working on board the ships during cargo operations and other third parties, loss of or damage to cargoes, claims arising from collisions withother vessels, damage to third-party properties, pollution arising from oil or other substances, salvage costs to the extent that they aim to control or mitigate the environmental effect following a casualty, Wreck removal and other discretionarycosts.

Our current Protection and Indemnity insurance provides cover for Oil Pollution up to $1.0 billion per vessel per incident. Thecollective liability of the Association and those other associations is limited, in the case of liability seamen, to USD 3 billion per event.

The 12 P&I Associations that comprise the International Group insure approximately 90% of the world’s commercial tonnage and haveentered into a pooling agreement to reinsure each association’s liabilities. Claims pooling between the clubs is regulated by the Pooling Agreement which defines the risks that can be pooled and how losses are to be shared between theparticipating clubs. The Pool provides a mechanism for sharing all claims in excess of US$10 million up to, approximately US$3.1 billion.

Under the current structure, clubs’ contributions to claims in the lower pool layer i.e from $10 million to $30 million are assessed ona tripartite formula which takes account of each club’s contributing tonnage, premium and claims record. For claims falling in the upper pool layer from $50 million to $100 million, 7.5% is retained by the club bringing the claim and 92.5% isshared by all on a tonnage-weighted basis.

The International Group clubs arrange a common market reinsurance contract to providereinsurance for claims which exceed the upper limit of the pool (US $100 million) up to an amount of US $3.1 billion any one claim (US $1 billion for Oil Pollution claims). It is said to be the largest single marine reinsurance contract in themarket. Claims from $30 million to $100 million are reinsured from a captive, named Hydra.

As members of Mutual P&I Associations, wemay become subject to unbudgeted supplementary calls payable to the P&I Club depending on its financial year results that they are determined by 3 main parameters, i.e., their exposure from payment of claims, the income through premium and theincome arising from investments. Our aim at every renewal is to conclude our P&I insurance with “A rated” P&I clubs as this, amongst other benefits, eliminates the risk of unbudgeted supplementary calls being imposed.

Competition

We operate in a highlycompetitive global market based primarily on supply and demand of vessels and cargoes.

Ownership of medium range product tankers and crudeoil tankers capable of transporting crude oil and refined petroleum products, such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, is

 

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highly diversified and is divided among many independent tanker owners. Many oil companies and other oil trading companies, the principal charterers of our product tankers and crude oil tankers,also operate their own vessels and transport oil for themselves and third-party charterers in direct competition with independent owners and operators. Competition for charters, including for the transportation of oil and oil products, can beintense and depends on price as well as on the location, size, age, condition, specifications and acceptability of the vessel and its operator to the charterer and is frequently tied to having an available vessel with the appropriate approvals fromoil majors. Principal factors that are important to our charterers include the quality and suitability of the vessel, its age, technical sophistication, safety record, compliance with IMO standards and the heightened industry standards that havebeen set by some energy companies, and the competitiveness of the bid in terms of overall price.

The drybulk sector is characterized byrelatively low barriers to entry, and ownership of drybulk vessels is highly fragmented. In general, we compete with other owners of drybulk vessels for charters based upon price, customer relationships, operating expertise, professional reputationand size, age, location and condition of the vessel. We negotiate the terms of our charters (whether voyage charters, period time charters, bareboat charters or pools) based on market conditions. In the drybulk sector we currently compete primarilywith other owners of drybulk vessels, many of which may have more resources than us and may operate vessels that are newer, and therefore more attractive to charterers than vessels we may operate.

Seasonality

Tanker markets are typicallystronger in the winter months as a result of increased oil consumption in the northern hemisphere, but weaker in the summer months as a result of lower oil consumption in the northern hemisphere and refinery maintenance. In addition, unpredictableweather patterns in these months tend to disrupt vessel scheduling and supplies of certain commodities. As a result, our revenues may be stronger in fiscal quarters ended December 31 and March 31 and relatively weaker during the fiscalquarters ended June 30 and September 30.

Coal, iron ore and grains, which are the major bulks of the drybulk shipping industry,are somewhat seasonal in nature. The energy markets primarily affect the demand for coal, with increases during hot summer periods when air conditioning and refrigeration require more electricity and towards the end of the calendar year inanticipation of the forthcoming winter period. The demand for iron ore tends to decline in the summer months because many of the major steel users, such as automobile makers, reduce their level of production significantly during the summer holidays.Grain trades are seasonal as they are driven by the harvest within a climate zone. Because three of the five largest grain producers (the United States of America, Canada and the European Union) are located in the northern hemisphere and the othertwo (Argentina and Australia) are located in the southern hemisphere, harvests occur throughout the year and grains transportation requires drybulk shipping accordingly.

The Tanker Industry

In broad terms,demand for oil and oil products traded by sea is primarily affected by global and regional economic conditions, as well as other factors such as changes in the location of productive capacity, and variations in regional prices. Demand for shippingcapacity is a product of the physical quantity of the cargo (measured, depending on the cargo in terms of tons or cubic metrics), together with the distance the cargo is carried. Demand cycles move broadly in line with developments in the globaleconomy, with growth rate of demand for products slowing significantly and becoming negative in some years in the period immediately after the onset of the global economic downturn in late 2008, before recovering gradually from 2011 with generalimprovement in the global macro-economic environment. Low crude prices between 2015 and 2017 induced greater consumption, which led to increased seaborne trade of crude oil as well as refined products. Growth in seaborne trade slowed in 2018 becauseof inventory drawdown in crude as well as refined products. In 2019, the decline in seaborne trade was on account of lower refinery runs and weaker economic growth. Refineries underwent maintenance in the first half of 2019 to prepare for low sulfurfuel oil and MGO demand related with

 

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IMO 2020 regulations on the control of Sulphur emission, while refinery runs were lower in the second half of 2019 due to weaker economic growth.

The outbreak of COVID-19 severely affected the demand for crude oil and refined petroleum products in 2020 and 2021 as several major economiesenforced lockdowns to contain the spread of the virus and mitigate the damage caused by the pandemic. The decline in trade was mainly led by a sharp decline in both crude oil and oil products trade following restrictions enforced by authorities inseveral major economies. In 2022, oil demand and trade improved significantly as Covid-19 restrictions were being eased out and longer haul routes started emerging as a result of the war in Ukraine. Specifically, in 2022, 3,369 million tons ofcrude oil, products and vegetable oils/chemicals were moved by sea. Of this, crude shipments constituted 1,967 million tons of cargo and products 1,032 million tons, with the balance made up of other bulk liquids, including vegetable oils,chemicals and associated products. Products trades have received a boost in the last decade as a result of developments in exploration and production activity in the U.S. Horizontal drilling and hydraulic fracturing have triggered a shale oilrevolution and rising crude oil production has also ensured the availability of cheaper feedstocks to local refineries. As a result, the U.S. has become a major net exporter of products. In 2023 global imports of crude oil reached2,161.5 million tons marking a 6.6% year on year increase, while global exports of crude oil reached 2,167.5 million tons marking a 5.7% year on year increase. Moreover, in 2023 imports of clean products reached 807.1 million tonsmarking a 3.3% year on year decline while exports of clean products reached 797.3 million tons marking a 5.4% year on year decline. In 2024, global imports of crude oil reached 44 million barrels per day, marking an 0.9% year-on-yearincrease. In 2024 global exports of clean products reached 17 million barrels per day, marking a 1.4% year-on-year decline.

Crudeoil is transported in uncoated vessels, which range upwards in size from 55,000 dwt. Products are carried predominantly in coated ships and include commodities such as gas oil, gasoline, jet fuel, kerosene and naphtha (often referred to as‘clean products’), and fuel oil and vacuum gas oil (often referred to as ‘dirty products’). In addition, some product tankers are also able to carry bulk liquid chemicals and edible oils and fats if they have the appropriateInternational Maritime Organization (IMO) certification. These vessels are classified as product/chemical tankers, and as such, they represent a swing element in supply, having the ability to move between trades depending on market conditions. Cleanpetroleum products are therefore carried by non-IMO product tankers and IMO certified product/chemical tankers. IMO tankers will also carry, depending on their tank coatings, a range of other products including organic and inorganic bulk liquidchemicals, vegetable oils and animal fats and special products such as molasses.

Two other important factors are likely to affect producttanker supply in the future. The first is the requirement to retrofit Ballast Water Management Systems (BWTS) to existing vessels. In February 2004, the IMO adopted the International Convention for the Control and Management of Ships’ BallastWater and Sediments. The IMO Ballast Water Management (BWM) Convention contains an environmentally protective numeric standard for the treatment of a ship’s ballast water before it is discharged. This standard, detailed in Regulation‘D-2’ of the BWM Convention, sets out the numbers of organisms allowed in specific volumes of treated discharge water. The IMO ‘D-2’ standard is also the standard that has been adopted by the U.S. Coast Guard’s ballastwater regulations and the U.S. EPA’s Vessel General Permit. The BWM Convention also contains an implementation schedule for the installation of IMO member state type approved treatment systems in existing ships and in new vessels, requirementsfor the development of vessel ballast water management plans, requirements for the safe removal of sediments from ballast tanks, and guidelines for the testing and type approval of ballast water treatment technologies. In July 2017, the IMO extendedthe regulatory requirement of compliance to the BWM Convention from September 8, 2017 to September 8, 2019. Vessels trading internationally will have to comply with the BWM Convention upon their next special survey after that date.Expenditure of this kind has become another factor impacting the decision to scrap older vessels after BWM Convention came into force in 2019.

The second factor that is likely to impact future vessel supply is the drive to control sulfur emission from ships. Heavy fuel oil (HFO) hasbeen the main fuel of the shipping industry for many years. It is relatively

 

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inexpensive and widely available, but it is ‘dirty’ from an environmental point of view. The sulfur content of HFO consumed by ships has been about 3.5% until the end of 2019. It isthe reason that maritime shipping accounts for 8% of global emissions of sulfur dioxide (SO2), an important source for acid rain, as well as respiratory diseases. In some port cities, such as Hong Kong, shipping is the largest single source of SO2emissions, as well as emissions of particulate matter (PM), which are directly tied to the sulfur content of the fuel. One estimate suggests that PM emissions from maritime shipping led to 87,000 premature deaths worldwide in 2012.

Vessel chartering

Product tankers andcrude oil tankers are ordinarily chartered either through a voyage charter or a time charter, under a longer term contract of affreightment (“COA”) or in pools. Under a voyage charter, the owner agrees to provide a vessel for thetransport of cargo between specific ports in return for the payment of an agreed freight rate per ton of cargo or an agreed dollar lump sum amount. Voyage costs, such as canal and port charges and bunker expenses, are the responsibility of theowner. Under a time charter, the ship owner places the vessel at the disposal of a charterer for a given period of time in return for a specified rate (either hire per day or a specified rate per dwt capacity per month) with the voyage costs beingthe responsibility of the charterer. In both voyage charters and time charters, operating costs (such as repairs and maintenance, crew wages and insurance premiums), as well as drydockings and special surveys, are the responsibility of the shipowner. The duration of time charters varies, depending on the evaluation of market trends by the ship owner and by charterers. Occasionally, tankers are chartered on a bareboat basis. Under a bareboat charter, operations of the vessels and alloperating costs are the responsibility of the charterer, while the owner only pays the financing costs of the vessel. A COA is another type of charter relationship where a charterer and a ship owner enter into a written agreement pursuant to which aspecific cargo will be carried over a specified period of time. COAs benefit charterers by providing them with fixed transport costs for a commodity over an identified period of time. COAs benefit ship owners by offering ascertainable revenue overthat same period of time and eliminating the uncertainty that would otherwise be caused by the volatility of the charter market. A shipping pool is a collection of similar vessel types under various ownerships, placed under the care of a singlecommercial manager. The manager markets the vessels as a single fleet and collects the earnings which are distributed to individual owners under a pre-arranged weighing system by which each participating vessel receives its share. Pools have thesize and scope to combine voyage charters, time charters and COA with freight forward agreements for hedging purposes, to perform more efficient vessel scheduling thereby increasing fleet utilization.

Market cyclicality and trends

Theinternational tanker shipping industry is cyclical and volatile, having reached historical highs in 2008 and historical lows in 2016. Charter rates improved in the first half of 2020; before declining sharply in the second half of 2020 and remainingat low levels in 2021 and early 2022, before significantly improving in the second half of 2022 and the first quarter of 2023 and remained at high levels for the majority of 2023. In 2024 tanker charter rates continued to increase for the first halfof the year. In the second half of 2024 we witnessed a gradual decline in rates however these maintained and continue to be at healthy levels from a long term perspective. Tanker charter hire rates and vessel values for all tankers are influenced bythe supply-demand dynamics of the tanker market. Demand for vessels depends on the international trade of oil and refined petroleum products, including the availability of crude oil. Also, in general terms, time charter rates are less volatile thanspot rates as they reflect the fact that the vessel is fixed for a longer period of time. In the spot market, rates will reflect the immediate underlying conditions in vessel supply and demand, and are thus prone to more volatility.

At the same time, the supply of tankers vessels cannot be changed drastically in the short term as it takes about nine months to build a shipand, usually, there is a lag of, at least, fifteen to eighteen months between placing an order to build a vessel and its delivery. In the near term, supply is limited by the existing number of vessels and can only be adjusted by increasing ordecreasing the operating speed of a vessel but various economic and operational factors could limit the range of such adjustments.

 

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Typically, periods of high charter rates result in an increased rate of new vessel ordering,often more than what the demand levels warrant; these vessels begin to be delivered eighteen months or more later when demand growth for vessels may have slowed down thus creating oversupply and quick correction of charter rates. The cyclicality ofcharter rates is also reflected in vessel values.

The Drybulk Shipping Industry

The global drybulk vessel fleet is divided into four principal categories based on a vessel’s carrying capacity. These categories are:

Capesize. Capesize vessels have a carrying capacity of exceeding 100,000 dwt but normally are 160,000 to 185,000 dwt. Only thelargest ports around the world possess the infrastructure to accommodate vessels of this size. Capesize vessels are primarily used to transport iron ore, bauxite or coal and, to a much lesser extent, grains, primarily on long-haul routes.

Kamsarmax. Kamsarmax vessels have a carrying capacity of around 80,000 dwt. The standard Kamsarmax vessel measures approximately229-230 meters in length. These dimensions are generally larger than those of a Panamax vessel allowing for greater cargo capacity. These vessels are primarily used for transportation of drybulk commodities such as coal, iron ore, grain and bauxite.

Panamax. Panamax vessels have a carrying capacity of around 70,000 dwt. These vessels are designed to meet the physicalrestrictions of the Panama Canal locks (hence their name “Panamax” — the largest vessels able to transit the Panama Canal prior to its 2016 expansion, making them more versatile than larger vessels). These vessels carry coal,grains, and, to a lesser extent, minerals such as bauxite/alumina and phosphate rock.

Handymax/Supramax. Handymax vessels have acarrying capacity of between 40,000 and 60,000 dwt. These vessels operate on a large number of geographically dispersed global trade routes, carrying primarily grains and minor bulks. The standard vessels are usually built with 25-30 ton cargo gear,enabling them to discharge cargo where grabs are required (particularly industrial minerals), and to conduct cargo operations in countries and ports with limited infrastructure. This type of vessel offers good trading flexibility and can, therefore,be used in a wide variety of bulk and neobulk trades, such as steel products.

Handysize. Handysize vessels have a carryingcapacity of between 28,000 and to 40,000 dwt. These vessels are almost exclusively carry minor bulk cargo. Increasingly, vessels of this type operate on regional trading routes, and may serve as trans-shipment feeders for larger vessels. Handysizevessels are well suited for small ports with length and draft restrictions. Their cargo gear enables them to service ports lacking the infrastructure for cargo loading and discharging.

The supply of drybulk vessels is dependent on the delivery of new vessels and the removal of vessels from the global fleet, either throughscrapping or loss. The level of scrapping activity is generally a function of scrapping prices in relation to current and prospective charter market conditions, as well as operating, repair and survey costs.

The demand for drybulk vessel capacity is determined by the underlying demand for commodities transported in drybulk vessels, which in turn isinfluenced by trends in the global economy. Demand for drybulk vessel capacity is also affected by the operating efficiency of the global fleet, with port congestion, which has been a feature of the market to greater or lesser degrees since 2004,absorbing tonnage and therefore leading to a tighter balance between supply and demand. In evaluating demand factors for drybulk vessel capacity, we believe that drybulk vessels can be the most versatile element of the global shipping fleets interms of employment alternatives.

Drybulk Carrier Charter Hire Rates. Charter hire rates fluctuate by varying degrees amongdrybulk vessel size categories. The volume and pattern of trade in a small number of commodities (major bulks) affect demand

 

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for larger vessels. Therefore, charter rates and vessel values of larger vessels often show greater volatility. Conversely, trade in a greater number of commodities (minor bulks) drives demandfor smaller drybulk vessels. Accordingly, charter rates and vessel values for those vessels are subject to less volatility.

Charter hirerates paid for drybulk vessels are primarily a function of the underlying balance between vessel supply and demand, although at times other factors may play a role. Furthermore, the pattern seen in charter rates is broadly mirrored across thedifferent charter types and the different drybulk vessel categories. However, because demand for larger drybulk vessels is affected by the volume and pattern of trade in a relatively small number of commodities, charter hire rates (and vesselvalues) of larger ships tend to be more volatile than those for smaller vessels.

In the time charter market, rates vary depending on thelength of the charter period and vessel specific factors such as age, speed and fuel consumption.

In the voyage charter market, rates areinfluenced by cargo size, commodity, port dues and canal transit fees, as well as commencement and termination regions. In general, a larger cargo size is quoted at a lower rate per ton than a smaller cargo size. Routes with costly ports or canalsgenerally command higher rates than routes with low port dues and no canals to transit. Voyages with a load port within a region that includes ports where vessels usually discharge cargo or a discharge port within a region with ports where vesselsload cargo also are generally quoted at lower rates, because such voyages generally increase vessel utilization by reducing the unloaded portion (or ballast leg) that is included in the calculation of the return charter to a loading area.

Within the drybulk shipping industry, the charter hire rate references most likely to be monitored are the freight rate indexes issued by theBaltic Exchange. These references are based on actual charter hire rates under charters entered into by market participants as well as daily assessments provided to the Baltic Exchange by a panel of major shipbrokers.

Legal Proceedings

To our knowledge,there are no material legal proceedings to which we are a party or to which any of our properties are subject, other than routine litigation incidental to our business. In our opinion, the disposition of these lawsuits should not have a materialimpact on our consolidated results of operations, financial position and cash flows.

See Note 16 “Commitments andContingencies” to the audited financial statements included elsewhere in this report.

Properties

Other than our vessels, we do not own any material property.

C. Organizational Structure

As of April 15, 2025,we were the sole owner of all the outstanding shares of the subsidiaries listed in Exhibit 8.

D. Properties

Other than our vessels we do not have any material property. For information on our fleet, see “Item 4. Information on theCompany—Business Overview.”

We have no freehold or material leasehold interest in any real property. We lease office spacefrom an affiliated company of Stealth Maritime. See “Item 7. Major Stockholders and Related Party Transactions—B. Related Party Transactions—Office Space.”

 

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Item 4A.

Unresolved Staff Comments

None.

 

Item 5.

Operating and Financial Review and Prospects

The following presentation of management’s discussion and analysis of financial condition and results of operations should be read inconjunction with our consolidated financial statements, accompanying notes thereto and other financial information, appearing elsewhere in this annual report. This discussion contains forward- looking statements that reflect our current views withrespect to future events and financial performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth in the section entitled “RiskFactors” and elsewhere in this report. You should also carefully read the following discussion with “Risk Factors” and “Forward-Looking Statements.” The financial statements have been prepared in accordance with U.S.GAAP.

We use the term deadweight ton, or dwt, in describing the size of vessels. Dwt, expressed in metric tons, each of which isequivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.

Overview

Imperial Petroleum Inc. was incorporated under the laws of the Republic of the Marshall Islands on May 14, 2021, by StealthGas Inc. toserve as the holding company of four subsidiaries, each owning one of the tanker vessels in our initial fleet, that it subsequently contributed to us in connection with the 2021 Spin-Off. On December 3, 2021, StealthGas distributed all of ouroutstanding common stock and 8.75% Series A Cumulative Redeemable Perpetual Preferred Shares to its stockholders, which completed our separation from StealthGas.

We are a provider of international seaborne transportation services to oil producers, refineries and commodities traders and producers, aswell as industrial users of drybulk cargoes. As of April 15, 2025, we owned and operated a fleet of seven MR refined petroleum product tankers that carry refined petroleum products such as gasoline, diesel, fuel oil and jet fuel, as well asedible oils and chemicals, two suezmax tankers that carry crude oil and three handysize drybulk carriers, that transport major bulks such as iron ore, coal and grains, and minor bulks such as bauxite, phosphate and fertilizers. As of April 15,2025, we also had contracts to acquire five supramax drybulk carriers and two kamsarmax drybulk carriers, one of which was delivered to us on April 26, 2025 and six of which are expected to be delivered to us in the second quarter of 2025. Upondelivery of these contracted vessels, the total cargo carrying capacity of our combined 19-vessel fleet will be 1,194,000 dwt.

Weactively manage the deployment of our fleet on a mix of period charters, including time and bareboat charters which can last multiple years, and spot market charters, which generally last from one to six months, according to our assessment of marketconditions. Some of our vessels may participate in shipping pools, or, in some cases in contracts of affreightment, although we have not employed any of our vessels under such arrangements to date. As of April 15, 2025, we had each of ourhandysize drybulk vessels operating under time charters of short duration. Four of our product tankers were under time charter employment concluding in May 2025, October 2025, January 2026 and September 2027 and our two suezmax tankers andour other three product tankers were operating in the spot market.

On June 21, 2023, we completed the Spin-off of our previouslywholly-owned subsidiary, C3is Inc., the holding company for two drybulk carriers, the Eco Angelbay and the Eco Bushfire, with an aggregate capacity of 64,000 dwt. Imperial Petroleum stockholders and warrantholders received one C3iscommon share for every eight shares of Imperial Petroleum’s common stock owned, or in the case of holders of Imperial Petroleum’s outstanding Warrants that they have the right to purchase pursuant to Warrants owned, at the close ofbusiness on June 13, 2023. We retain an interest in C3is Inc. through our ownership of Series A Convertible Preferred Stock of C3is Inc., with an aggregate liquidation preference of $15,000,000, which is currently convertible into common stockof C3is Inc., at a conversion price of $3.0391 per share, as of the date of this annual report.

 

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Vessels operating on period charters, principally time and bareboat charters, provide morepredictable cash flows but can yield lower profit margins than vessels operating in the spot market during periods characterized by favorable market conditions. Vessels operating in the spot market generate revenues that are less predictable but mayenable us to achieve increased profit margins during periods of high rates in the charter market, although we are exposed to the risk of having to seek to employ our vessels at low prevailing rates in weak market conditions, which may have amaterially adverse impact on our overall financial performance.

As described below under “—Results of Operations”, themix of charters our vessels are deployed on, which affects our utilization, revenues, expenses and profitability, has differed in recent periods and over time we expect will continue to vary. In the year ended December 31, 2022, the percentageof our fleet’s total calendar days on which our vessels operated in the spot market was 43.7%, time charter activity was 43.1% and bareboat activity was 9.8%. Our fleet total operational utilization for the year ended December 31, 2022was 84.8%. In the year ended December 31, 2023, the percentage of our fleet’s total calendar days on which our vessels operated in the spot market was 66.4%, time charter activity was 29.0%, while we had no bareboat activity. Our fleettotal operational utilization for the year ended December 31, 2023 was 75.1%. In the year ended December 31, 2024, the percentage of our fleet’s total calendar days on which our vessels operated in the spot market was 68.6%, timecharter activity was 28.7%, while we had no bareboat activity. Our fleet total operational utilization for the year ended December 31, 2024 was 78.3%.

Operating vessels in the spot market, can result in decreased utilization, revenues and profitability in weak charter markets, as compared toperiods of stronger markets or employment on period charters entered into during more favorable market conditions. This was the case for those of our tankers operating in the spot market in the first months of 2022 until conditions in the crude oiland product tanker charter markets began to improve substantially, particularly in the second half of 2022 and remained favorable throughout the majority of 2023 and the first half of 2024. In the second half of 2024 the market slightly softened butrates remained well above historical averages. In relation to the drybulk carriers operating in the spot market in 2023, conditions in the drybulk charter market deteriorated significantly from the strong markets experienced from late 2020 to thelatter part of 2022 and therefore the spot exposure of our drybulk carriers in 2023 and 2024 was low, although the short duration time charters on which we employed our drybulk carriers also exposes us to the prevailing charter rate environment forsuch vessels. In general, with any improvement in market conditions we may seek to employ our vessels predominately in the spot market to take advantage of higher charter rates, as we have generally done with our tankers in the fourth quarter of2022 and throughout 2023 and first half of 2024, or on a higher percentage of period charters, principally time charters, if attractive rates become available. Indeed, in the second half of 2024 we increased time charter coverage for tanker vesselsas market conditions became more suitable for adding some time charter coverage

Compared to operating in the spot market both time andbareboat period charters offer (1) higher utilization rates, particularly in weaker markets, (2) lower costs, particularly for bareboat charters under which we are not responsible for voyage or operating expenses, while under time charterswe are responsible for operating expenses and in the spot market we are responsible for both voyage and operating expenses, and (3) may generate higher or lower revenues and profit margins depending on market conditions in the product tanker,crude oil tanker and drybulk carrier charter markets, as applicable, with generally higher rates than spot charters in weak markets and lower rates than spot charters in stronger markets, and at what point in the charter market cycle the bareboat ortime charters were entered into. The proportion of time our fleet operates on bareboat charters versus time charters and in the spot market affects our revenues and expenses, as vessels employed on bareboat charters generate lower revenues andexpenses, because under bareboat charters we are not responsible for either voyage expenses or, unlike time charters, operating expenses, and the charter rates for bareboat charters are correspondingly lower. Profit margins for vessels employed onbareboat charters are generally somewhat lower than time charters, reflecting the lack of exposure to operational risk and the risk of operating expense increases. See “—Basis of Presentation and General Information—Revenues”for additional information regarding the different types of charters on which we employ our vessels.

 

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We will be evaluating vessel purchase opportunities to expand our fleet accretive to ourearnings and cash flow. Additionally, we will consider selling certain of our vessels when favorable sales opportunities present themselves. If, at the time of sale, the carrying value is lower than the sales price, we will realize a gain on sale,which will increase our earnings, but if, at the time of sale, the carrying value of a vessel is more than the sales price, we will realize a loss on sale, which will negatively impact our earnings. Please see “—Critical AccountingEstimates” below, for a further discussion of the consequences of selling our vessels for amounts below their carrying values.

Factors AffectingOur Results of Operations

We believe that the important measures for analyzing trends in the results of our operations consist of thefollowing:

 

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Calendar days. We define calendar days as the total number of days in a period during which each vessel inour fleet was in our possession including off-hire days associated with major repairs, dry dockings or special or intermediate surveys. Calendar days are an indicator of the size of our fleet over a period and affect both the amount of revenue andthe amount of expense that we record during that period. We acquired two vessels in 2023 and three vessels in 2024, and in September 2024 contracted to acquire seven drybulk carriers, one of which was delivered to us on April 26, 2025 and sixof which are expected to be delivered to us in the second quarter of 2025, significantly increasing our fleet’s size and calendar days. We may also elect to sell vessels in our fleet from time to time, as did with respect to an aframax tankerin both 2024 and 2023.

 

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Voyage days. We define voyage days as the total number of days in a period during which each vessel in ourfleet was in our possession net of off-hire days associated with major repairs, dry dockings or special or intermediate surveys. The shipping industry uses voyage days (also referred to as available days) to measure the number of days in a periodduring which vessels are available to generate revenues.

 

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Fleet utilization; Fleet operational utilization. We calculate fleet utilization by dividing the number ofour voyage days during a period by the number of our calendar days during that period, and we calculate fleet operational utilization by dividing the number of our voyage days-excluding commercially idle days-during a period, by the number of ourcalendar days during that period. The shipping industry uses fleet utilization to measure a company’s efficiency in minimizing the amount of days that its vessels are off-hire for reasons such as scheduled repairs, vessel upgrades ordrydockings and other surveys, and uses fleet operational utilization to also measure a company’s efficiency in finding suitable employment for its vessels.

 

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Cyclicality. As of April 15, 2025, we had seven vessels operating under time charter contracts andfive vessels operating in the spot market. All three of our handysize drybulk carriers were under time charter employment of short term duration while four of our product tankers were also under time charter employment expiring on May2025, October 2025, January 2026 and September 2027, respectively. Tanker charter market rates have been strong since the second half of 2022, after remaining at low levels for most periods of recent years. Conversely, drybulk charterrates, which were at high levels from late 2020 until the latter part of 2022, declined throughout most part of 2023 and stabilized at moderate levels towards the end of 2023 and in 2024 marking a further deterioration towards the end of 2024. Inthe event of renewed weakness in the global economy, including as a result of the imposition of tariffs by the United Sates and other countries, inflation or otherwise, charter rates face significant downside risks, as a weaker global economy maylead to lower demand for the seaborne transport of refined petroleum products, crude oil or drybulk cargoes. In addition, the conflict in Ukraine is disrupting energy production and trade patterns, including shipping in the Black Sea and elsewhere,and its impact on energy prices and tanker rates, which initially have increased, is uncertain, particularly if it results in an economic downturn and reduced demand for oil. The easing of trade pattern disruptions due to international

 

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events, including Houthi attacks on vessels in the Red Sea and Gulf of Aden resulting in rerouting of vessels away from the Suez Canal, could also reduce resulting support for charter rates.

The impact of the tariffs recently imposed by the U.S., and by China and other countries in response, remainsuncertain; however, it could result in global economic weakness and recession, which may negatively impact demand for drybulk, crude oil and refined petroleum product cargoes and in turn our vessels and the charter hire rates they are able to earn.

 

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Seasonality. As of April 15, 2025, we had three drybulk vessels and four product tankers under timecharter employment. The remaining three product tankers and two suezmax tankers of our fleet were operating in the spot market. At the end of these charters, seeking period or spot employment may expose us to seasonal changes. For instance, thetanker markets are typically stronger in the winter months as a result of increased oil consumption in the northern hemisphere but weaker in the summer months as a result of lower oil consumption in the northern hemisphere and refinery maintenance,and drybulk markets are typically stronger in the spring months due to grain season in the Southern Hemisphere, autumn months due to coal inventories and weaker in winter months.

Our ability to control our fixed and variable expenses, including those for commission expenses, crew wages and related costs, the cost ofinsurance, expenses for repairs and maintenance, the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses also affect our financial results. Factors beyond our control, such as developments relating to market premiumsfor insurance and the value of the U.S. dollar compared to currencies in which certain of our expenses, primarily crew wages are denominated, can also cause our vessel operating expenses to increase. In addition, our net income is affected by anyfinancing arrangements, including any interest rate swap arrangements, that we may enter into from time to time.

Below please see dataregarding our fleet and average daily results for the years ended December 31, 2022, 2023 and 2024, which we use in analyzing our performance.

 

		Year Ended December 31,
Fleet Data		2022				2023				2024
Average number of vessels(1)			7.0				10.0				10.39
Total voyage days for fleet(2)			2,464				3,481				3,700
Total time charter days for fleet(3)			1,099				1,058				1,092
Total bareboat charter days for fleet(3)			249				0				0
Total spot market days for fleet(4)			1,116				2,423				2,608
Total calendar days for fleet(5)			2,552				3,650				3,801
Fleet utilization(6)			96.6	%			95.4	%			97.3	%
Fleet operational utilization(7)			84.8	%			75.1	%			78.3	%
Average Daily Results		(In U.S. dollars per day per vessel)
Adjusted average charter rate(8)			25,654				34,816				25,799
Vessel operating expenses(9)			6,424				7,025				6,938
General and administrative expenses(10)			695				1,352				1,288
Management fees (11)			410				440				440
Total daily operating expenses(12)			7,119				8,377				8,226

 

(1)	Average number of vessels is the number of owned vessels that constituted our fleet for the relevant period, asmeasured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.

(2)	Our total voyage days for our fleet reflect the total days the vessels we operated were in our possession forthe relevant periods, net of off-hire days associated with major repairs, drydockings or special or intermediate surveys.

(3)	Total time and bareboat charter days for fleet are the number of voyage days the vessels in our fleet operatedon time or bareboat charters for the relevant period.

 

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(4)	Total spot market charter days for fleet are the number of voyage days the vessels in our fleet operated onspot market charters for the relevant period.

(5)	Total calendar days are the total days the vessels we operated were in our possession for the relevant periodincluding off-hire days associated with major repairs, drydockings or special or intermediate surveys.

(6)	Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days,and is determined by dividing voyage days by fleet calendar days for the relevant period.

(7)	Fleet operational utilization is the percentage of time that our vessels generated revenue, and is determinedby dividing voyage days, excluding commercially idle days, by fleet calendar days for the relevant period.

(8)

Average time charter equivalent daily rate is a measure of the average daily revenue performance of a vessel.We determine the average time charter equivalent daily rate by dividing voyage revenues net of voyage expenses (the “Time charter equivalent revenues”) by voyage days for the relevant time period. Voyage expenses primarily consist ofport, canal and fuel costs that are unique to a particular voyage and are payable by us under a spot charter (which would otherwise be paid by the charterer under a time or bareboat charter contract), as well as commissions or any voyage costsincurred while the vessel is idle. Time charter equivalent revenues and average time charter equivalent daily rate are non-GAAP measures, the most directly comparable GAAP measures to voyage revenues, assisting the Company’s management inmaking decisions regarding the deployment and use of its vessels and in evaluating their financial performance. They are also standard shipping industry performance measures used primarily to compare period-to-period changes in a shippingcompany’s performance despite changes in the mix of charter types (i.e., spot charters or time charters, but not bareboat charters) under which the vessels may be employed between the periods. Our calculation of time charter equivalentrevenues and average time charter equivalent daily rate may not be comparable to that reported by other companies in the shipping or other industries. Under bareboat charters, we are not responsible for either voyage expenses, unlike spot charters,or vessel operating expenses, unlike spot charters and time charters; TCE assists our investors to assess our financial performance from period to period on a comparable basis and provide investors with a means of better evaluating andunderstanding our operating performance. Reconciliation of time charter equivalent revenues as reflected in the consolidated statements of comprehensive income and calculation of average time charter equivalent daily rate follow:

 

		2022				2023				2024
Voyage revenues		$	97,019,878			$	183,725,820			$	147,479,980
Voyage expenses		$	33,807,342			$	62,530,941			$	52,024,890
Charter equivalent revenues		$	63,212,536			$	121,194,879			$	95,455,090
Total voyage days for fleet			2,464				3,481				3,700
Adjusted average charter rate		$	25,654			$	34,816			$	25,799

 

(9)	Vessel operating expenses, including related party vessel operating expenses, consist of crew costs,provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.

(10)	Daily general and administrative expenses are calculated by dividing total general and administrative expensesby fleet calendar days for the relevant period.

(11)

Management fees are based on a fixed rate management fee of $440 per day for each vessel in our fleet underspot or time charter and a fixed rate fee of $125 per day for each of the vessels operating on bareboat charter. Daily management fees are calculated by dividing total management fees by fleet calendar days for the relevant period.

(12)	Total operating expenses, or “TOE”, is a measurement of our total expenses associated withoperating our vessels. TOE is the sum of vessel operating expenses and general and administrative expenses. Daily TOE is calculated by dividing TOE by fleet calendar days for the relevant time period.

 

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Basis of Presentation and General Information

Revenues

Our voyage revenues aredriven primarily by the number and type of vessels in our fleet, the number of voyage days during which our vessels generate revenues, the mix of charters our vessels are employed on and hire that our vessels earn under charters which, in turn, areaffected by a number of factors, including our decisions relating to vessel acquisitions and disposals, the amount of time that we spend positioning our vessels, the amount of time that our vessels spend in drydock undergoing repairs, maintenanceand upgrade work, the age of our vessels, condition and specifications of our vessels and the levels of supply and demand in the product tanker and crude oil tanker charter markets and the drybulk carrier charter markets.

We employ our vessels under time, bareboat and spot charters. Bareboat charters provide for the charterer to bear the cost of operating thevessel and as such typically market rates for bareboat charters are lower than those for time charters. Vessels operating on period charters, principally time and bareboat charters, provide more predictable cash flows, but can yield lower profitmargins than vessels operating in the spot charter market during periods characterized by favorable market conditions. As a result, during the time our vessels are committed on period charters we will be unable, during periods of improving chartermarkets, to take advantage of improving charter rates as we could if our vessels were employed only on spot charters. Vessels operating in the spot charter periods of high rates in the charter market, although we are exposed to the risk of having toseek to employ our vessels at low prevailing rates in weak market conditions, and may have a materially adverse impact on our overall financial performance. If we commit vessels on period charters, future spot market rates may be higher or lowerthan those rates at which we have time chartered our vessels.

Voyage Expenses

Voyage expenses include port and canal charges, bunker (fuel oil) expenses and commissions. These charges and expenses increase in periodsduring which vessels are employed on the spot market or in periods during which vessels are not employed, because during such periods, these expenses are paid by the vessel owner. Under period charters, these charges and expenses, including bunkers(fuel oil) but excluding commissions which are always paid by the vessel owner, are paid by the charterer. Commissions on hire are paid to our manager Stealth Maritime and/or third-party brokers. Stealth Maritime receives a fixed brokeragecommission of 1.25% on freight, hire and demurrage for each vessel based on our management agreement. As of April 15, 2025, we had five vessels operating in the spot market.

Vessel Operating Expenses

Vesseloperating expenses include crew wages and related costs, the cost of insurance, expenses for repairs and maintenance, the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Our ability to control these fixed andvariable expenses, also affects our financial results. In addition, the type of charter under which our vessels are employed (time, bareboat or spot charter) also affects our operating expenses because we do not pay the operating expenses of vesselsthat we deploy on bareboat charters. Factors beyond our control, some of which may affect the shipping industry in general, including, for instance, developments relating to market prices for insurance and regulations related to safety andenvironmental matters may also cause these expenses to increase.

Management Fees

During each of the years ended December 31, 2022, 2023 and 2024, we paid Stealth Maritime, our fleet manager, a fixed rate management feeof $440 per day for each vessel in our fleet under spot or time charter and a fixed rate fee of $125 per day for each of the vessels operating on bareboat charter. Our Manager also receives a fee equal to 1.0% calculated on the price stated in therelevant memorandum of agreement for any vessel bought or sold by them on our behalf.

 

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General and Administrative Expenses

We incur general and administrative expenses that consist primarily of legal fees, audit fees, office rental fees, officers and boardremuneration or reimbursement, directors’ and officers’ insurance, listing fees and other general and administrative expenses. Our general and administrative expenses also include our direct compensation expenses and the value ofnon-cash executive services provided through, and other expenses arising from, our management agreement with Stealth Maritime, our directors’ compensation and the value of the lease expense for the space we rent from Stealth Maritime.

Inflation

Inflation has had onlya moderate effect on our expenses in recent years, particularly in 2022 following the outbreak of Russian war against Ukraine, and had a milder impact on our expenses in 2023 and 2024. In general, the pressure on energy prices brought upon by theRussian invasion in Ukraine has resulted in inflationary effects mainly on financing expenses, prior to the repayment of our debt in the first half of 2023, and operating expenses, as well as bunker costs for which we are responsible when ourvessels operate in the spot market or are unemployed. Although these impacts were milder in 2023 than 2022 and subsided further in 2024, a resumption of increased inflationary pressures would increase our financing, operating voyage andadministrative expenses further.

Depreciation and Dry docking

The carrying value of our vessels includes the original cost of the vessels plus capitalized expenses since acquisition relating toimprovements and upgrading of the vessels, less accumulated depreciation and less any impairment. We depreciate our vessels on a straight-line basis, from the date they were originally built over their estimated useful lives, determined to be 25years. Depreciation is based on cost less the estimated scrap value of the vessels which equals $350 per light weight ton. We expense costs associated with drydockings and special and intermediate surveys as incurred which may affect the volatilityof our results. In 2022, we drydocked one Suezmax tanker, the Suez Enchanted and one Handysize drybulk vessel, the Eco Angelbay, at a total cost of $1.9 million. In 2023, we drydocked three MR product tankers, namely the CleanThrasher, the Magic Wand and the Clean Nirvana, one Suezmax tanker, the Suez Protopia, and two drybulk handysize vessels, the Glorieuse and the Eco Wildfire, at a total cost of $6.6 million. In 2024, wedrydocked two vessels, an aframax tanker, the Gstaad Grace II (ex. Stealth Haralambos), and a product tanker, the Clean Sanctuary. All of the aforementioned vessels that underwent drydocking, with the exception of Eco Wildfireand Eco Angelbay, were installed with ballast water treatment systems as part of their drydocking. The installation of the ballast water treatment systems is considered an improvement and the respective cost has been capitalized in the vesselcost. Our current fleet on the water has one scheduled drydocking for 2025.

Interest Expense and Finance Costs

As of December 31, 2024 and 2023, we did not have any outstanding bank debt. In the first half of 2023, we repaid $70 million ofoutstanding indebtedness under secured credit facilities. We incurred interest expense under these credit facilities in 2022 and the first half of 2023 and will incur interest expense under any new credit facilities we enter into to finance newacquisitions or existing vessels, as described in the “—Liquidity and Capital Resources” section below. We would also incur financing costs in connection with establishing those facilities, which would be deferred and amortizedover the period of the facility, which we would also include in interest expense.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, whichhave been prepared in accordance with U.S. GAAP. The preparation of

 

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those financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses and related disclosure of contingent assetsand liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting estimates are those that reflect significant judgments or uncertainties, and potentially result in materially differentresults under different assumptions and conditions. We have described below what we believe is our most critical accounting estimate that involves a high degree of judgment. For a description of our significant accounting policies, see Note 2 to ourconsolidated financial statements included elsewhere herein.

Impairment of long-lived assets:

We follow the Accounting Standards Codification (“ASC”) Subtopic 360-10, “Property, Plant and Equipment” (“ASC360-10”), which requires long-lived assets used in operations be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. On a quarterly basis, in case animpairment indicator exists for a vessel, we perform an analysis of the anticipated undiscounted future net cash flows for such vessel. If the carrying value of the related vessel exceeds the undiscounted cash flows and the fair market value of thevessel, the carrying value is reduced to its fair value and the difference is recorded as an impairment loss in the consolidated statement of comprehensive income.

We review certain indicators of potential impairment, such as vessel fair values, vessel sales and purchases, business plans and overallmarket conditions including any regulatory changes that may have a material impact on the vessel lives. The decline in the values of our vessels was considered to be an indicator of potential impairment. We determined undiscounted projected netoperating cash flows for each vessel with carrying value exceeding its fair value and compared it to the vessel’s carrying value. This assessment was made at the individual vessel level since separately identifiable cash flow information foreach vessel was available. In developing estimates of future cash flows to be generated over remaining useful lives of the vessels, we made assumptions about the future, such as: (1) vessel charter rates, (2) vessel utilization rates,(3) vessel operating expenses, (4) dry docking costs, (5) vessel scrap values at the end of vessels’ remaining useful lives and (6) the remaining useful lives of the vessels. These assumptions were based on historicaltrends as well as future expectations in line with our historical performance and our expectations for future fleet utilization under our current fleet deployment strategy, vessel sales and purchases, and overall market conditions.

Projected cash flows were determined for the vessels by considering the revenues from existing charters for those vessels that have long termemployment, and revenue estimates based on nine-year historical average rates (base rates) for periods for which there is no charter in place. With regards to operating expenses and utilization rate, these were based on historical trends. Revenueestimates are highly subjective. We believe that the nine- year average historical average rates represent an appropriate estimation of the future revenue rates since they more accurately reflect the earnings capacity of our vessels and because theycapture the volatility of the market as they include numerous market highs and lows. Furthermore, they are considered a fair estimate based on past experience.

The carrying values of our vessels may not represent their fair market value at any point in time since the market prices of second-handvessels tend to fluctuate with changes in charter rates and the cost of new-buildings.

Sensitivity Analysis.

The impairment test is highly sensitive to variances in future charter rates. When we conducted the analysis of the impairment test as ofDecember 31, 2024 we also performed a sensitivity analysis related to the future cash flow estimates. Set forth below is an analysis, as of December 31, 2024, of the percentage difference between the

 

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current average rates for our fleet compared with the base rates used in the impairment test as described above, as well as an analysis of the impact on our impairment analysis if we were toutilize the most recent five-year, three- year and one-year historical average rates, which shows the number of vessels whose carrying value would not have been recovered and the related impairment charge.

 

		Percentage difference between our actual average 2024 rates as compared with the base rates				5-year historical average rate								3-year historical average rate								1-year historical average rate
						No. of vessels				Amount ($ million)				No. of vessels				Amount ($ million)				No. of vessels				Amount ($ million)
Product Tankers			38.30	%			—				—				—				—				—				—
Handysize Drybulk Carriers			(15.88	)%			—				—				—				—				—				—

Although we believe that the assumptions used to evaluate potential impairment are reasonable and appropriate,such assumptions are highly subjective. There can be no assurance as to how long charter rates and vessel values will remain at their current levels or whether they will improve by any significant degree. Charter rates may remain at relatively lowlevels for some time, or decline, which could adversely affect our revenue and profitability, and future assessments of vessel impairment.

Based on the carrying value of each of our vessels held for use as of December 31, 2024 and what we believe the charter-free marketvalues of each of these vessels was as of these dates, four of our owned vessels in the water had current carrying values above their market values (2023: four). We believe that the aggregate carrying value of these vessels, assessed separately,exceeds their aggregate charter-free market value by approximately $7.5 million (2023 $5.1 million). However, we believe that with respect to each of these four vessels, we will recover their carrying values at the end of their useful lives, basedon their undiscounted cash flows.

Implications of Being an Emerging Growth Company

We had less than $1.235 billion in revenue during our last fiscal year, which means that we qualify as an “emerging growth company”as defined in the Jumpstart Our Business Startups Act, or JOBS Act. An emerging growth company may take advantage or specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

 

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exemption from the auditor attestation requirement in the assessment of the emerging growth company’sinternal controls over financial reporting under Section 404(b) of the Sarbanes-Oxley Act;

 

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exemption from new or revised financial accounting standards applicable to public companies until such standardsare also applicable to private companies; and

 

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exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board, orthe PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and financial statements.

We may take advantage of these provisions until December 31, 2026. We will cease to be an emerging growth company if,among other things, we have more than $1.235 billion in “total annual gross revenues” during the most recently completed fiscal year. We may choose to take advantage of some, but not all, of these reduced burdens. For as long as we takeadvantage of the reduced reporting obligations, the information that we provide stockholders may be different from information provided by other public companies. We are choosing to “opt out” of the extended transition period relating tothe exemption from new or revised financial accounting standards and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth public companies.Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

 

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Results of Operations

Year ended December 31, 2024 compared to year ended December 31, 2023

The average number of vessels in our fleet was 10.39 for the year ended December 31, 2024 and 10.00 for the year ended December 31,2023.

REVENUES—Revenues for the year ended December 31, 2024 were $147.5 million compared to $183.7 million for the year endedDecember 31, 2023, a decrease of $36.2 million, primarily due to softer market spot rates. As of the end of 2024, daily spot market rates were about $22,000 for standard product tankers versus $33,000 as of the end of the same period of 2023and $30,000 for standard suezmax tankers as opposed to $60,000 as of the end of the same period of 2023. Total calendar days for our fleet were 3,801 for the year ended December 31, 2024 compared to 3,650 for the year ended December 31,2023. Of the total calendar days in 2024, nil or 0.0% were bareboat charter days, 1,092 or 28.7% were time charter days and 2,608 or 68.6% were spot days. This compares to nil or 0.0% bareboat charter days, 1,058 or 29.0% time charter days and 2,423or 66.4% spot days in 2023. Our fleet operational utilization was 78.3% and 75.1% for the years ended December 31, 2024 and December 31, 2023 respectively.

VOYAGE EXPENSES—Voyage expenses were $52.0 million for the year ended December 31, 2024 compared to $62.5 million for the yearended December 31, 2023. The $10.5 million decrease in voyage expenses is mainly attributed to a reduction in port expenses due to decreased transits through the Suez Canal and a decrease in voyage commissions resulting from lower market ratesand consequently softer revenue generation. Voyage expenses consisted largely of bunker charges amounting to $35.1 million for 2024, accounting for 67.5% of total voyage expenses. Voyage expenses also included port expenses of $10.7 million for theyear ended December 31, 2024, corresponding to 20.6% of total voyage expenses, and commission to third parties of $2.0 million, equivalent to 3.8% of total voyage expenses for 2024. For the year ended December 31, 2023, voyage expensesincluded bunker charges of $34.5 million corresponding to 55.2% of total voyage expenses, port expenses of $15.8 million corresponding to 25.3% of total voyage expenses, and commission to third parties of $7.3 million corresponding to 11.7% of totalvoyage expenses.

VESSEL OPERATING EXPENSES—Vessel operating expenses were $26.4 million for the year ended December 31, 2024compared to $25.6 million for the year ended December 31, 2023, an increase of $0.8 million, or 3.1%. The increase in operating expenses was primarily due to the average size of our fleet increasing by 0.39 vessels.

DRY DOCKING COSTS—Dry docking costs were $1.7 million for the year ended December 31, 2024 compared to $6.6 million for the yearended December 31, 2023. Dry docking costs for the year ended December 31, 2024 related to the dry docking of two tanker vessels, while during the year ended December 31, 2023 three of our product tankers, one of our suezmax tankersand two of our drybulk carriers underwent drydocking.

MANAGEMENT FEES—Management fees were $1.7 million for the year endedDecember 31, 2024 compared to $1.6 million for the year ended December 31, 2023, an increase of $0.1 million or 6.3%. The increase was due to the increase in the average size of our fleet by approximately 0.39 vessels. The daily managementfees per vessel did not change during these periods and remained at $440 per day for vessels under time and spot charter.

GENERAL ANDADMINISTRATIVE EXPENSES—General and administrative expenses were $4.9 million for each of the years ended December 31, 2024 and 2023, respectively. The remaining unrecognized stock-based compensation cost relating to the 1,505,338restricted shares of common stock and options to purchase common stock granted under our equity compensation plan in 2024 and 2023, amounting to $1,417,451 as of December 31, 2024, is expected to be recognized over the remaining period of 0.9years, according to the contractual terms of those non-vested share awards. The aggregate cash compensation to our officers in 2024 was $0.4 million and we expect such cash compensation to be approximately $0.4 million in 2025.

 

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DEPRECIATION—Depreciation expenses for the year ended December 31, 2024 were$17.0 million while for the year ended December 31, 2023 depreciation expenses were $15.6 million. The $1.4 million increase in depreciation expenses is due to the increase in the average size of our fleet by approximately 0.39 vessels due tothe depreciation of the vessels added in the fleet during 2024.

IMPAIRMENT LOSS—Impairment loss for the year endedDecember 31, 2024 was nil. For the year ended December 31, 2023 we incurred a $9.0 million impairment charge related to the Spin-off of the two of our drybulk carriers in June 2023. The decline in the drybulk vessels’ fair values, atthe time of the Spin-off, compared to the values prevailing when these vessels were acquired resulted in the incurrence of an impairment loss.

OTHER OPERATING INCOME-Other operating income for the year ended December 31, 2024 was $1.9 million and related to the collection of aclaim in connection with repairs undertaken in prior years

NET LOSS ON SALE OF VESSEL/NET GAIN ON SALE OF VESSEL- RELATED PARTY- Net losson sale of vessel/ Net gain on sale of vessel – related party for the year ended December 31, 2024 was a loss of $1.6 million and related to the sale of the Aframax tanker Gstaad Grace II to a third party whereas net gain on saleof vessel for the year ended December 31, 2023 was $8.2 million and related to the sale of the Aframax tanker Afrapearl II (ex. Stealth Berana) to C3is Inc., a related party.

INTEREST AND FINANCE COSTS— Interest and finance costs for the years ended December 31, 2024 and 2023 were $0.4 million and $1.8million, respectively. The $0.4 million of costs for the year ended December 31, 2024 relate mainly to accrued interest expense – related party in connection with the $14.0 million, part of the acquisition price of our bulk carrier,Neptulus, which was paid in April 2025. The $1.8 million of costs for the year ended December 31, 2023 related mainly to $1.3 million of interest charges incurred up to the full repayment of all outstanding loans concluded in April 2023along with the full amortization of $0.5 million of loan related charges following the repayment of our outstanding debt.

INTERESTINCOME— Interest income for the years ended December 31, 2024 and 2023 was $8.3 million and $5.8 million, respectively. The increase is mainly attributed to the interest earned from the time deposits held by the Company as well as theinterest income – related party for the twelve months ended December 31, 2024 in connection with the $38.7 million of the sale price of the Aframax tanker Afrapearl II (ex. Stealth Berana) which was received in July 2024.

NET INCOME—As a result of the above factors, we recorded a net income of $50.2 million for the year ended December 31, 2024compared to a net income of $71.1 million for the year ended December 31, 2023.

Year ended December 31, 2023 compared to year endedDecember 31, 2022

The average number of vessels in our fleet was 10.00 for the year ended December 31, 2023 and 6.99 for theyear ended December 31, 2022, respectively.

REVENUES—Voyage revenues for the year ended December 31, 2023 were $183.7million compared to $97.0 million for the year ended December 31, 2022, an increase of $86.7 million, primarily due to the increase in our average number of vessels by approximately three vessels and the full year of operation of our twosuezmax tankers that were delivered in early June 2022, along with stronger market conditions prevailing during the majority of the year 2023. Total calendar days for our fleet were 3,650 for the year ended December 31, 2023 compared to 2,522for the year ended December 31, 2022. Of the total calendar days in 2023, nil or 0.0% were bareboat charter days, 1,058 or 29.0% were time charter days and 2,423 or 66.4% were spot days. This compares to 249 or 9.8% bareboat charter days, 1,099or 43.1% time charter days and 1,116 or 43.7% spot days in 2022. Our fleet operational utilization was 75.1% and 84.8% for the years ended December 31, 2023 and December 31, 2022 respectively.

 

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VOYAGE EXPENSES—Voyage expenses were $62.5 million for the year endedDecember 31, 2023 compared to $33.8 million for the year ended December 31, 2022. This increase of voyage expenses by $28.7 million is attributable to the increase in the spot days of our fleet by 1,307 days or 117.1%. Voyage expensesconsisted largely of bunker charges amounting to $34.5 million for 2023, accounting for 55.2% of total voyage expenses. Voyage expenses also included port expenses of $15.8 million for the year ended December 31, 2023, corresponding to 25.3% oftotal voyage expenses, and commission to third parties which were $7.3 million, equivalent to 11.7% of total voyage expenses for year 2023. For the year ended December 31, 2022, voyage expenses included bunker charges of $24.2 millioncorresponding to 71.6% of total voyage expenses, port expenses of $5.2 million corresponding to 15.4% of total voyage expenses, and commission to third parties of $3.1 million corresponding to 9.2% of total voyage expenses.

VESSEL OPERATING EXPENSES—Vessel operating expenses were $25.6 million for the year ended December 31, 2023 compared to $16.4million for the year ended December 31, 2022, an increase of $9.2 million, or 56.1%. The increase in operating expenses was primarily due to the average size of our fleet increasing by approximately 3 vessels in conjunction with an increase indaily supply costs by approximately 66% and daily maintenance costs by approximately 57% due to increased maintenance needs relating to some of our vessels.

DRY DOCKING COSTS—Dry docking costs were $6.6 million for the year ended December 31, 2023 compared to $1.9 million for the yearended December 31, 2022. Dry docking costs for the year ended December 31, 2023 related to the dry docking of three of our product tankers, one of our suezmax tankers and two of our drybulk carriers, while during the year endedDecember 31, 2022 one of our suezmax vessels and one of our drybulk carriers underwent drydocking.

MANAGEMENT FEES—Managementfees were $1.6 million for the year ended December 31, 2023 compared to $1.0 million for the year ended December 31, 2022, an increase of $0.6 million or 60%. The increase was due to the increase in the average size of our fleet byapproximately three vessels. The daily management fees per vessel did not change during these periods and remained at $440 per day for vessels under time and spot charter and $125 per day for vessels under bareboat charter.

GENERAL AND ADMINISTRATIVE EXPENSES—General and administrative expenses for the year ended December 31, 2023 were $4.9 millioncompared to $1.8 million for the year ended December 31, 2022, an increase of $3.1 million or 172.2%. This increase is mainly attributed to a $2.3 million increase in stock-based compensation costs along with an increase in reporting costsmainly related to our spin off project. The aggregate cash compensation to our officers in 2023 and 2022 was $0.4 million and $0.3 million, respectively, and we expect such cash compensation to be approximately $0.4 million in 2024.

DEPRECIATION—Depreciation expenses for the year ended December 31, 2023 were $15.6 million while for the year endedDecember 31, 2022 depreciation expenses were $12.3 million. The $3.3 million increase in depreciation expenses is due to the increase in the average size of our fleet by approximately three vessels.

IMPAIRMENT LOSS—Impairment loss for the year ended December 31, 2023 was $9.0 million and related to the Spin-off of two of ourdrybulk carriers to C3is Inc. in June 2023. The decline in the drybulk vessels’ fair values compared to the values prevailing when these vessels were acquired resulted in the incurrence of an impairment loss. We did not incur any impairmentcharges for the year ended December 31, 2022.

GAIN ON SALE OF VESSEL—Gain on sale of vessel for the year endedDecember 31, 2023 was $8.2 million and related to the sale of our aframax tanker Afrapearl II (ex. Stealth Berana) to C3is Inc.

NET INCOME—As a result of the above factors, we recorded a net income of $71.1 million for the year ended December 31, 2023compared to a net income of $29.5 million for the year ended December 31, 2022.

 

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Recent Accounting Pronouncements

Please refer to Note 2 of the financial statements included elsewhere in this report.

Liquidity and Capital Resources

As ofDecember 31, 2024, we had cash and cash equivalents including time deposits of $206.7 million. During the year ended December 31, 2023, we raised $29.1 million in gross proceeds, or $27.6 million in net proceeds, from public offerings ofequity securities and from the partial exercises of warrants issued in such offerings, and in 2024 we raised $8.6 million in gross proceeds from the partial exercise of warrants issued in such offerings.

Our principal sources of funds for our liquidity needs have been equity offerings and cash flows from operations, which we expect to continueto be components of the financing for further fleet growth. Potential additional sources of funds may include bank borrowings. Our principal use of funds has been to acquire our vessels, maintain the quality of our vessels, and fund working capitalrequirements. In July 2023, we sold an Aframax tanker to C3is Inc. for a consideration of $43 million, of which $4.3 million was received by us upon delivery of the vessel on July 14, 2023 and the balance was received in July 2024, and we solda second Aframax tanker to a third party in 2024 for $42.0 million.

Our liquidity needs, as of December 31, 2024, primarily relateto funding expenses for operating our vessels, and payment of an aggregate of $37.3 million for a product tanker and a drybulk vessel delivered but not yet paid as per the relevant vessel purchase agreement, which payment took place in April 2025.In addition, in September 2024, we entered into agreements to acquire seven drybulk carriers for an aggregate purchase price of $129 million, the purchase price of which we expect to pay with cash on hand within the third quarter of 2025.

As of December 31, 2024, we had no outstanding bank debt, as within the first and second quarter of 2023 we repaid all of our thenoutstanding bank loans amounting to $70 million.

We believe that our working capital along with our cash flows generated from operationsare sufficient for our present short-term liquidity requirements. We believe that, unless there is a major and sustained downturn in market conditions applicable to our specific shipping industry sectors, our internally generated cash flows will besufficient to fund our operations, including working capital requirements, for at least 12 months.

In September 2023, our Board ofDirectors approved a share repurchase program and authorized the officers of the Company to repurchase, from time to time, up to $10,000,000 of the Company’s common stock. As of April 15, 2025, we had repurchased 4,251,883 shares ofcommon stock for an aggregate amount of $8.4 million under this program. We also repurchased outstanding warrants for an additional $1.5 million in the fourth quarter of 2023.

Our contractual obligations as of December 31, 2024 were:

 

		Payments due by period (in thousands of U.S. dollars)
		Total				Less than 1 year (2025)				1-3 years (2026-2027)				3-5 years (2028-2029)
Management fees (1)		$	14,129			$	1,923			$	6,103			$	6,103
Vessel acquisition agreements			166,300				166,300				—				—
Office lease			77				77				—				—
Executive fees			1,980				396				792				792
Total		$	182,486			$	168,696			$	6,895			$	6,895

(1)	This amount represents the aggregate daily management fees payable to Stealth Maritime. Based on our managementagreement with Stealth Maritime, we pay $125 per vessel per day for vessels on bareboat

 

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charter and $440 per vessel per day for vessels not on bareboat charter for our existing fleet. The amount presented does not include brokerage commission of 1.25% of the gross freight, demurrageand charter hire collected from employment of our ships and 1% of the contract price of any vessels bought or sold on our behalf payable to Stealth Maritime. The term of our management agreement with Stealth Maritime will expire in December 2025,but is extended on a year-to-year basis thereafter, unless six months’ written notice is provided prior to the expiration of the term or if a vessel is sold.

We have 795,878 shares of Series A Preferred Stock outstanding, which have a dividend rate of 8.75% per annum per $25.00 of liquidationpreference per share, with respect to which we paid aggregate dividends of $1.7 million in each of the years ended December 31, 2024, 2023 and 2022.

From time to time and depending upon market conditions, we may consider various capital raising alternatives to finance the strategic growthand diversification of our fleet. Any such capital raising transactions may be at the Imperial Petroleum Inc. or subsidiary level, to which interests in certain vessels in our fleet and rights to receive related cash flows would be transferred, aswell as other capital raising alternatives available to us at that particular time. In addition, we may elect to sell one or more of our vessels or vessel-owning subsidiaries, conduct a spinoff of such vessels or subsidiaries, or contribute suchvessels or vessel-owning subsidiaries to a joint venture, master limited partnership or other entity. Any such transfer may reduce our asset base and our rights to cash flows related to the transferred assets. If we contribute assets to a jointventure or master limited partnership, the joint venture or master limited partnership may be owned by or issue equity securities to public or private investors, and as part of any spin-off of assets we may be required to distribute a portion ofsuch assets to holders of outstanding warrants pursuant to the terms of such warrants, thereby reducing our percentage interest in such assets and in the related cash flows.

Cash Flows

For the year endedDecember 31, 2024, we had a working capital surplus of $199.6 million.

Net cash provided by operating activities. Net cashprovided by operating activities was $77.7 million for the year ended December 31, 2024, $79.5 million for the year ended December 31, 2023 and $40.9 million for the year ended December 31, 2022. This mainly represents the net amountof cash, after expenses, generated by chartering our vessels. Net cash provided by operating activities decreased in the year ended December 31, 2024 compared to the year ended December 31, 2023 by $1.8 million, mainly due to lowerprofitability offset by improved cash flow from working capital items such as trade receivables and related party liabilities. Net cash provided by operating activities increased in the year ended December 31, 2023 compared to the year endedDecember 31, 2022 by $38.6 million mainly due to the sharp increase in our profitability due to an increase in the average size of our fleet along with improved market conditions.

Net cash (used in)/provided by investing activities. Net cash used in investing activities was $106.7 million for the year endedDecember 31, 2024, net cash provided by investing activities was $12.3 million for the year ended December 31 2023, and for the year ended December 31, 2022 net cash used in investing activities was $186.7 million. During the yearended December 31, 2024, we generated $41.2 million of proceeds from the sale of an aframax vessel, deployed $74.7 million for vessel acquisitions, placed $259.6 million under time deposits and had $150.8 million of funds under time depositsmaturing during the course for the year. We also had $35.7 million of proceeds received from repayment of seller financing in connection with the Aframax tanker we sold to C3is Inc. in 2023. During the year ended December 31, 2023 we utilized$28.1 million for the acquisition of two vessels, placed $167.5 million of available funds on time deposits and had $203.8 million of funds under time deposits maturing during the course of the year. We also received net proceeds of $3.9 millionfrom the sale of one of our vessels. Net cash used in investing activities in the year ended December 31, 2022 comprised an amount of $118.7 million utilized for the acquisition of six vessels while $68 million of available funds were placedinto time deposits.

 

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Net cash provided by/(used in) financing activities.

For the year ended December 31, 2024, cash inflows from financing activities were $4.8 million, for the year ended December 31, 2023cash outflows for financing activities amounted to $57.4 million, while for the year ended December 31, 2022 cash inflows from financing activities were $196.9 million.

During the year ended December 31, 2024, we raised $8.6 million from warrant exercises and $0.5 million from exercise of stock options,used $2.5 million on share repurchases and paid dividends on our Series A Preferred Stock amounting to $1.7 million.

During the yearended December 31, 2023, we raised $27.6 million in net proceeds from equity financings, expended $70.4 million in order to repay all of our outstanding indebtedness and expended $7.4 million on common share and outstanding warrant repurchases.During the year ended December 31, 2023, we also paid dividends on our Series A and Series C Preferred Stock amounting to $2.1 million and provided $5.0 million to C3is Inc. in connection with its Spin-off.

During the year ended December 31, 2022, we raised $204.6 million from equity financings and bank borrowings, which were partly offset byloan repayments amounting to $5.4 million and dividends paid on our Series A Preferred Stock amounting to $1.7 million.

As and when weidentify assets that we believe will provide attractive returns, we may enter into specific term loan facilities and borrow amounts under these facilities as the vessels are delivered to us. Aside from the proceeds of equity offerings, this is theprimary driver of the timing and amount of cash provided to us by our financing activities.

We operate in a capital intensive industrywhich requires significant amounts of investment, and we may, at times elect, to fund a significant portion of this investment through long term debt. We will maintain debt levels we consider prudent based on our market expectations, cash flow,interest coverage and percentage of debt to capital. StealthGas, and the subsidiaries that owned the four tankers that comprised our initial fleet upon the completion of the 2021 Spin- Off, entered into credit facilities in connection with financingthe acquisition of these vessels. We entered into a senior secured credit facility with DNB to refinance the outstanding balances under these credit facilities that were entered into by StealthGas for which the four tankers served as security priorto the 2021 Spin-Off, which facility was repaid in full using cash on hand on March 10, 2023. In September and November 2022, we entered into senior secured credit facilities to refinance part of the purchase price for the other four tankers inour fleet, which we acquired earlier in 2022. In the first and second quarter of 2023 we repaid all of our then outstanding loans amounting to $70 million.

Capital Expenditures

We may make capitalexpenditures from time to time in connection with our vessel acquisitions and improvements. Please refer to section above “Liquidity and Capital Resources –Cash Flows” for a discussion of how we plan to cover our working capitalrequirements and possible capital commitments.

C. Research and Development, Patents and Licenses

None.

D. Trend Information

Tankers

The tankerindustry is both cyclical and volatile in terms of charter rates and profitability while geopolitical events affect the demand for seaborne transportation. Indicatively, during the ten-year period from the first quarter of 2013- through the fourthquarter of 2022, average earnings for an Aframax tanker fluctuated between

 

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$3,479 to $90,991 per day on a quarterly basis. Similarly, average MR tanker earnings fluctuated between $5,809 to -$41,411 per day over the same period. Asset values are also subject to pricefluctuations and market cyclicality. For example, the price of a 5-year-old Aframax tanker fluctuated between $27.0 million and $60.0 million during the ten-year period from the first quarter of 2013 through the fourth quarter of 2022 while theprice of a 5-year-old MR tanker ranged between $22.0 million and $40.0 million over the same period.

In late 2019 and during the firsthalf of 2020, tanker shipping charter rates reached near record highs driven mainly by extraordinary floating storage demand and dropped to less than operating cost levels by the end of the year. Specifically, average Aframax tanker earnings spikedover $50,000 per day in the fourth quarter of 2019 as compared to approximately $5,700 per day in the fourth quarter of 2020, $7,648 per day in the second quarter of 2021 and $11,093 in the fourth quarter of 2021. Similarly, average MR tankerearnings stood at approximately $20,000 per day in the fourth quarter of 2019 before dropping to approximately $6,400 per day in the fourth quarter of 2020, $6,880 in the second quarter of 2021 and $7,847 in the fourth quarter of 2021. Thegeopolitical crisis between Russia and Ukraine has caused tanker charter rates to rise significantly. Indicatively, average Aframax tanker earnings were $32,266 per day in the first quarter of 2022, and spiked to $82,810 per day in mid-March 2023Similarly, average MR tanker earnings stood at $9,749 per day in the first quarter of 2022, and spiked to $31,489 per day in mid-March 2023. Ongoing geopolitical tensions such as the events in the Middle East which commenced in the fourth quarter of2023 in conjunction with the Houthi attacks in the Red Sea created an upward pressure on rates which remained at high levels during the first half of 2024 and then gradual begun to decline in the second half of 2024 mostly due to the closing ofWest- East arbitrage and reduced refinery runs. Indicatively, by the end of year 2023 rates for aframax, suezmax and MR tankers had climbed to $55,000 per day, $60,400 per day and $33,000 per day. As of April 1, 2024, rates for aframax, suezmaxand MR tankers were in the region of $46,000, $40,000 and $30,000, respectively. As of April 1, 2025, rates for aframax, suezmax and MR tankers were in the region of $36,000, $46,000 and $25,000, respectively.

The ongoing war in Ukraine and the embargo imposed by the European Union to Russian crude oil and refined petroleum products along with thecrisis in the Middle East are creating shifts in trade patterns, benefiting longer- haul routes and thus supporting tanker tonne-mile demand and tanker vessel charter rates. Specifically, crude tanker dwt demand is estimated to have increased by6.6% in 2022, 6.7% in 2023, and product tanker demand is estimated to have increased by approximately 3.1% in 2022 supported by increasing demand for oil products and is currently expected to have increased by around 10% in 2023 as demand for oiltransportation recovers further, refinery capacity in key exporting regions further expands and Russia looks for alternative markets to outsource its refined petroleum products. Year 2024 started off on a very strong note with firm tanker demandhowever increased Iranian exports and slightly softer Chinese oil demand contributed to the closing of West- East arbitrage for crude oil into the summer and the second half of the year. Overall in 2024 demand for oil transportation was overall 0.8%higher year on year due to the increase in tonne mile distances. On the supply side, the crude tanker trading fleet is estimated to have increased by 2.0% in 2023 while the product tanker fleet is estimated to have increased by approximately 0.5%.For 2024 fleet growth for crude tankers was in the region of 0.3% while for product tankers fleet growth was somewhat higher in the region of 2%. Tanker deliveries are set to pick up in 2025 and it is expected that the crude fleet will increase by1.7% while the product tanker fleet by 6.1%.

The escalating trade wars resulting from U.S. tariff announcements could result in globaleconomic weaknesses and recession, which may result in stagnation or decline in demand for crude oil and refined petroleum products, the price of which initially declined significantly due to fears of a global economic slowdown, and in turn couldlead to a decrease in shipments of these products and consequently this would have an adverse impact on the employment of our tanker vessels and the charter rates that they command.

Drybulk Carriers

Over the course of 2022, the BDI registered a low of 965 on August 31, 2022 and a high of 3,369 on May 23, 2022. Since the start ofthe financial crisis in 2008 the performance of the BDI has been characterized

 

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by high volatility, as the growth in the size of the drybulk fleet outpaced growth in vessel demand for an extended period of time.

Specifically, in the period from 2010 to 2020, the size of the fleet in terms of deadweight tons grew by an annual average of about 6.0% whilethe corresponding growth in tonne-mile demand for drybulk carriers grew by 4.2%, resulting in a drop of about 61% in the value of the BDI over the period. In 2022, the total size of the drybulk fleet in deadweight tons rose by about 2.8%, comparedto a decline in tonne-mile demand of 1.8%, which resulted in a year over year drop of about 34% in the value of the BDI. According to preliminary industry estimates, the total size of the drybulk fleet is expected to have risen by about 1.9% in2023, compared to tonne- mile demand growth of 2.2%. Meanwhile, the war in Ukraine has amplified the volatility in the drybulk market with the BDI ranging between 965 and 3,369 in 2022. Specifically, the BDI ranged from a low of 965 onAugust 31, 2022 and a high of 3,369 on May 23, 2022 while it stood at 1,424 on March 10, 2023. Similarly, average handysize drybulk carrier spot rates ranged from a low of $10,833 per day on December 30, 2022 and a high of$33,333 per day on March 25, 2022. As at the end of 2023 spot rates for handysize drybulk carriers stood close to $11,800 per day while as at the end of March 1, 2024 rates had declined to approximately $11,200 per day. In the short term,the effect of the invasion of Ukraine has been mildly positive for the drybulk market, yet the overall longer-term effect on ton-mile demand is uncertain given that cargoes such as grains, coal and iron ore exported previously from Ukraine andRussia will need to be substituted by cargoes from different sources. Overall, the BDI declined significantly in the second half of 2022, which was attributed in part to the easing of port congestion which positively affected the drybulk carrierdemand in 2021 as well as to the weakening Chinese demand for drybulk commodities, a trend which was expected to continue in 2023 but the Gaza war and the resulting upscaling of hostilities in Suez Canal at Gulf of Aden proved otherwise, pushing BDIto higher numbers, especially during the fourth quarter of 2023. The resultant condition of the two major Canals, Panama due to drafts and subsequent congestion and Suez because of Houthis hostilities pushed BDI to its high of 2023 during December2023, climbing at 3,346 before stabilizing to 2,000, a figure still better than the rest of 2023. The BDI experienced notable fluctuations throughout 2024 and into early 2025. The highest point was on November 19, 2024, when the BDI reached1,627 points, and the lowest point was on December 10, 2024, when the BDI fell to 1,156 points, marking a 15-month low at that time. As of April 15, 2025, the BDI stood at 1,263, having declined from 1,821 at April 1, 2024. Disruptionsarising both from the Ukraine conflict and from recent vessel attacks in Red Sea compounded with tighter Panama Canal transit restrictions due to climate related issues, have provided support in ton-mile demand as many vessels have to divert towardslonger-haul routes. These factors resulting in fleet inefficiencies and support for drybulk charter rates may not continue.

In addition,the continuing war in Ukraine led to increased economic uncertainty amidst fears of a more generalized military conflict or significant inflationary pressures, due to the increases in fuel and grain prices following the sanctions imposed on Russia.Whether the present dislocation in the markets and resultant inflationary pressures will transition to a long-term inflationary environment is uncertain, and the effects of such a development on charter rates, vessel demand and operating expenses inthe sector in which we operate are uncertain. As described above, the initial effect of the invasion in Ukraine on the drybulk freight market ranged from neutral to positive, despite the short-term volatility in charter rates and increases onspecific items of operating costs, mainly in the context of increased crew costs. If these conditions are sustained, the longer-term net impact on the drybulk freight market and our business would be difficult to predict. Historically, a positiverelationship is registered between global inflation and drybulk vessel freight rates, and therefore the inflationary trends have not, and we do not expect them to have, a material impact on our results of operations. However, such events may haveunpredictable consequences, and contribute to instability in global economy, a decrease in supply or cause a decrease in worldwide demand for certain goods and, thus, shipping. Regarding the possible impact of supply chain disruptions that have ormay emanate from the military conflict in Ukraine, our operations have not been affected materially and we do not expect them to be in the future.

The escalating trade wars resulting from the tariffs recently imposed by the U.S., and by China and other countries in response, could resultin global economic weaknesses and recessions, which may negatively impact demand for dryblk cargoes and in turn our drybulk carriers and the charter hire rates they are able to earn.

 

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See “Business—The Tanker Industry” and “Business—The DrybulkCarrier Industry.”

E. Critical Accounting Estimates

Please see “—Critical Accounting Estimates” above.

Item 6. Directors, Senior Management and Employees

A. Directors, Senior Management and Employees

The following table sets forth, as of April 15, 2025, information for each of our directors and executive officers.

 

Name		Age		Positions		Year Became Director				Year Director’s Current Term Expires
Harry N. Vafias		47		Chief Executive Officer, President and Class III Director			2021				2027
John Kostoyannis		59		Class II Director			2021				2026
George Xiradakis		60		Class I Director			2021				2025
Ifigeneia (Fenia) Sakellari		44		Interim Chief Financial Officer

Certain biographical information about each of these individuals is set forth below.

Harry N. Vafias has been a member of the Board of Directors and Chief Executive Officer and President of Imperial Petroleum since itsinception on May 14, 2021. He has also been the President and Chief Executive Officer and a member of the Board of Directors of StealthGas, which is listed on the Nasdaq Global Select Market, since its inception in December 2004 and its ChiefFinancial Officer since January 2014. Mr. Vafias is also the Non-Executive Chairman of C3is Inc., which has been listed on the Nasdaq Capital Market since its Spin-off from the Company in June 2023. Mr. Vafias has been actively involved inthe tanker and gas shipping industry since 1999. Mr. Vafias worked at Seascope, a leading ship brokering firm specializing in sale and purchase of vessels and chartering of oil tankers. Mr. Vafias also worked at Braemar, a leading shipbrokering firm, where he gained extensive experience in tanker and dry cargo chartering. Seascope and Braemar merged in 2001 to form Braemar Seascope Group plc, a public company quoted on the London Stock Exchange and one of the world’slargest ship brokering and shipping service groups. From 2000 until 2004, he worked at Brave Maritime and Stealth Maritime, companies providing comprehensive ship management services, where Mr. Vafias headed the operations and charteringdepartments of Stealth Maritime and served as manager for the sale and purchase departments of both Brave Maritime and Stealth Maritime. Mr. Vafias graduated from City University Business School in the City of London in 1999 with a B.A. inManagement Science and from Metropolitan University in 2000 with a Masters degree in Shipping, Trade and Transport.

JohnKostoyannis has been a member of our Board of Directors since November 2021. He has also been a member of the Board of Directors of StealthGas since 2010. Mr. Kostoyannis is a Managing Director at Allied Shipbroking Inc., a leadingshipbroking house in Greece, providing Sale and Purchase and Chartering services in the shipping industry. Before joining Allied Shipbroking, from 1991 until September 2001, Mr. Kostoyannis worked in several prominent shipbroking houses inLondon and Piraeus. He is a member of the Hellenic Shipbrokers Association. Mr. Kostoyannis graduated from the City of London Polytechnic in 1988 where he studied Shipping and Economics. He is a director of C3is Inc., which is listed on theNasdaq Capital Market.

George Xiradakis has been a member of our Board of Directors since November 2021. Mr. Xiradakis is thefounder and Managing Director of XRTC Business Consultants Ltd. (“XRTC”) (January 1999). The company was established in order to represent financial institutions in the Greek territory and initially acted as the

 

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exclusive Shipping Representative of Credit Lyonnais Group in Greece. XRTC expanded its scope as Financial and Advisor Consultant for Greek Shipping, offering its services in national andInternational Institutions and Organizations. From February 2005 to 2008, XRTC acted as shipping finance consultant of the French banking group NATIXIS. He is also the General Secretary of the Association of Banking and Financial Executives ofHellenic Shipping, Vice President of China Hellenic Chamber (HCCI), Vice President (International and Financial Relations) of the China-Greece Association. He served as the President of the International Propeller Club, Port of Piraeus from 2013 to2019 and he acted as a VP of the International Propeller Club of the United States. He is now Emeritus President of International Propeller Club, Port of Piraeus, Emeritus Member of The Piraeus Chamber of Commerce & Industry, Member of theMediterranean Committee of China Classification Society, Piraeus Marine Club, Hellenic Maritime Museum and Hellas Liberty Floating Museum. He is currently a director of C3is Inc., which is listed on the Nasdaq Capital Market, and has also been aBoard Member of other US listed shipping companies.

Ifigeneia (Fenia) Sakellari is our Interim Chief Financial Officer.Ms. Sakellari has 19 years of experience in finance and has been a finance officer of StealthGas since 2015. Prior to this, Ms. Sakellari was employed for seven years with Piraeus Bank where she held positions in both its creditdepartments (corporate and project finance) and in its private equity investment arm. Ms. Sakellari holds a Bachelor Degree in Management Sciences from the London School of Economics and a Masters Degree in finance from SDA Bocconi.

Our President and Chief Executive Officer Harry Vafias, and the other individuals providing services to us or our subsidiaries may face aconflict regarding the allocation of their time between our business and the other business interests of StealthGas or its affiliates. The amount of time our officers and such other individuals providing services to us will allocate between ourbusiness and the business of StealthGas and its affiliates will vary from time to time depending on various circumstances and needs of the businesses, such as the level of strategic activity of each business. While there will be no formalrequirements or guidelines for the allocation of time spent between our business and the other businesses they are involved in, the performance of their duties will be subject to the ongoing oversight of our board of directors.

B. Compensation of Directors and Senior Management

Our Chief Executive Officer who also serves as a Board Director will not receive additional compensation for his service as a director. Eachindependent director receives annualized fees of $25,000 plus reimbursement of their out-of-pocket expenses incurred in attending meetings of our Board of Directors or any committee of our Board of Directors.

We have no direct employees. The services of our Chief Executive Officer and Interim Chief Financial Officer are provided under the managementagreement with Stealth Maritime. Stealth Maritime compensates each of these individuals for their services, in amounts approved by our Compensation Committee and Board of Directors, and we, in turn, reimburse Stealth Maritime for their compensation.The aggregate cash compensation to our officers in 2022, 2023 and 2024 was $0.3 million, $0.4 million and $0.4 million, respectively, and we expect such cash compensation to be approximately $0.4 million in 2025.

Our executive officers and directors are also eligible to receive awards under our equity compensation plan described below under“—Equity Compensation Plan.” We recognized non-cash stock-based compensation expense of $0.12 million in 2022, $2.4 million in 2023 and $3.4 million in 2024, and had unrecognized non-cash stock-based compensation expense of $1.4million as of December 31, 2024, which we expect to recognize over a weighted average period of 0.9 years. Of these amounts of recognized non-cash stock-based compensation expense, $0.1 million in 2022, $1.8 million in 2023, $2.9million in 2024 related to restricted share or option awards to our executive officers and nil million in 2022, $0.01 million in 2023, $0.1 million in 2024 related to restricted share or option awards to our directors.

We have no service contracts with any of our directors that provide for benefits upon termination of employment.

 

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C. Board Practices

We have three members on our board of directors. The board of directors may change the number of directors to not less than three, nor morethan 15, by a vote of a majority of the entire board. Each director shall be elected to serve until the third succeeding annual meeting of stockholders and until his or her successor shall have been duly elected and qualified, except in the event ofdeath, resignation or removal. A vacancy on the board created by death, resignation, removal (which may only be for cause), or failure of the stockholders to elect the entire class of directors to be elected at any election of directors or for anyother reason, may be filled only by an affirmative vote of a majority of the remaining directors then in office, even if less than a quorum, at any special meeting called for that purpose or at any regular meeting of the board of directors. Thecurrent term of our Class I director expires in 2027, the term of our Class II director expires in 2026 and the term of our Class III director expires in 2025.

Corporate Governance

Our Board of Directors and our Company’s management reviews our corporate governance practices in order to oversee our compliance withthe applicable corporate governance rules of the Nasdaq Stock Market and the SEC.

We have adopted a number of key documents that are the foundation ofour corporate governance, including:

 

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a Code of Business Conduct and Ethics;

 

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a Nominating and Corporate Governance Committee Charter;

 

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a Compensation Committee Charter; and

 

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an Audit Committee Charter.

We will provide a paper copy of any of these documents upon the written request of a stockholder. Stockholders may direct their requests tothe attention of Investor Relations, c/o Harry Vafias, Imperial Petroleum Inc., 331 Kifissias Avenue, Erithrea 14561 Athens, Greece. These documents are also available on our website at www.imperialpetro.com under the heading “CorporateGovernance.”

To promote open discussion among the independent directors, our independent directors will meet in regularly scheduledexecutive sessions without participation of our Company’s management. Stockholders who wish to send communications on any topic to the Board of Directors or to the independent directors may do so by writing to Imperial Petroleum Inc., 331Kifissias Avenue, Erithrea 14561 Athens, Greece.

We are a “foreign private issuer” under the securities laws of the UnitedStates and the rules of the Nasdaq Capital Market. Under the securities laws of the United States, “foreign private issuers” are subject to different disclosure requirements than U.S. domiciled registrants, as well as different financialreporting requirements. Under the Nasdaq Capital Market rules, a “foreign private issuer” is subject to less stringent corporate governance requirements. Subject to certain exceptions, the rules of the Nasdaq Capital Market permit a“foreign private issuer” to follow its home country practice in lieu of the listing requirements of the Nasdaq Capital Market. As permitted by these exemptions, as well as by our bylaws and the laws of the Marshall Islands, we currentlyintend to have an audit committee composed solely of two independent committee members, whereas a domestic U.S. public company would be required to have three such independent members. In addition, in lieu of obtaining stockholder approval prior tocertain issuances of designated securities, the Company will comply with provisions of the Marshall Islands Business Corporations Act, providing that the Board of Directors approves share issuances.

Committees of the Board of Directors

TheBoard of Directors has established an Audit Committee, a Nominating and Corporate Governance Committee and a Compensation Committee. The members of the Audit Committee are George Xiradakis

 

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(Chairman), and John Kostoyannis. The members of the Nominating and Corporate Governance Committee are John Kostoyannis (Chairman) and George Xiradakis. The members of the Compensation Committeeare George Xiradakis (Chairman) and John Kostoyannis. Each of the directors on the Audit Committee has been determined by our Board of Directors to be independent.

Audit Committee

The Audit Committee is governed by a written charter, which is approved and annually adopted by the Board. The Board has determined that themembers of the Audit Committee meet the applicable independence requirements of the SEC and the Nasdaq Stock Market, that all members of the Audit Committee fulfill the requirement of being financially literate and that George Xiradakis is an AuditCommittee financial expert as defined under current SEC regulations.

The Audit Committee is appointed by the Board and is responsible for, among othermatters overseeing the:

 

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integrity of the Company’s financial statements, including its system of internal controls;

 

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Company’s compliance with legal and regulatory requirements;

 

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independent auditor’s qualifications and independence;

 

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retention, setting of compensation for, termination and evaluation of the activities of the Company’sindependent auditors, subject to any required stockholder approval; and

 

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performance of the Company’s independent audit function and independent auditors,

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is appointed by the Board and is responsible for, among other matters:

 

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reviewing the Board structure, size and composition and making recommendations to the Board with regard to anyadjustments that are deemed necessary;

 

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identifying candidates for the approval of the Board to fill Board vacancies as and when they arise as well asdeveloping plans for succession, in particular, of the chairman and executive officers;

 

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overseeing the Board’s annual evaluation of its own performance and the performance of other Boardcommittees;

 

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retaining, setting compensation and retentions terms for and terminating any search firm to be used to identifycandidates; and

 

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developing and recommending to the Board for adoption a set of Corporate Governance Guidelines applicable to theCompany and to periodically review the same.

Compensation Committee

The Compensation Committee is appointed by the Board and is responsible for, among other matters:

 

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establishing and periodically reviewing the Company’s compensation programs;

 

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reviewing the performance of directors, officers and employees of the Company who are eligible for awards andbenefits under any plan or program and adjust compensation arrangements as appropriate based on performance;

 

•

reviewing and monitoring management development and succession plans and activities;

 

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•

reporting on compensation arrangements and incentive grants to the Board;

 

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retaining, setting compensation and retention terms for, and terminating any consultants, legal counsel or otheradvisors that the Compensation Committee determines to employ to assist it in the performance of its duties; and

 

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preparing any Compensation Committee report included in our annual proxy statement.

Code of Ethics

Wehave adopted a code of ethics that complies with the applicable guidelines issued by the SEC, copies of which are available on our website: www.imperialpetro.com under “Investor Relations” and upon written request by our stockholders atno cost.

D. Employees

We have nosalaried employees. Our manager employs and provides us with the services of our Chief Executive Officer, Interim Chief Financial Officer and any other management executives the Company may require. In each case their services are provided under themanagement agreement with Stealth Maritime. Stealth Maritime compensates each of these individuals for their services and we, in turn, reimburse Stealth Maritime for their compensation. For our compensation expenses, pursuant to our managementagreement, we reimburse Stealth Maritime for its payment of the compensation of our Chief Executive Officer and Interim Chief Financial Officer as described above.

As of December 31, 2024, 115 officers and 176 crew members served on board the vessels in our fleet. However, these officers and crew arenot directly employed by the Company.

E. Share Ownership

The shares of common stock beneficially owned by our directors and senior managers and/or companies affiliated with these individuals aredisclosed in “Item 7. Major Stockholders and Related Party Transactions” below.

Equity Compensation Plan

We have an equity compensation plan, the 2024 Equity Compensation Plan, which was adopted in April 2024 and is administered by our Board ofDirectors which can make awards totaling in aggregate up to 10% of the number of shares of common stock outstanding at the time any award is granted. Officers, directors and employees (including any prospective officer or employee) of the Companyand its subsidiaries and affiliates and consultants and service providers to (including persons who are employed by or provide services to any entity that is itself a consultant or service provider to) the Company and its subsidiaries and affiliateswill be eligible to receive awards under the equity incentive plan. Awards may be made under the expected equity compensation plan in the form of incentive stock options, non-qualified stock options, stock appreciation rights, dividend equivalentrights, restricted stock, unrestricted stock, restricted stock units and performance shares.

The 2024 Equity Plan replaced the 2021Equity Plan, under which we will not grant any additional awards. In 2022, 2023 and 2024, we granted an aggregate of 2,944,290 awards under the 2021 Equity Plan. This include grants of restricted shares to our Chief Executive Officer, in anaggregate amount of 1,568,026 shares, Interim Chief Financial Officer, our independent directors and employees of our manager providing services to us, including 247,286 restricted shares to Nikolas Vafias, the senior executive of our manager andfather of our Chief Executive Officer. This also includes options to purchase 593,750, 25,000 and 12,500 shares of common stock granted to our Chief Executive Officer, Directors of our Board and Interim Chief Financial Officer, respectively,

 

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on October 30, 2023, each at an exercise price of $1.60 per share, the closing price of the Common Stock on October 30, 2023, and 50% of which vested on October 30, 2024 and 50% ofwhich vest on October 30, 2025 and options to purchase 100,000, 10,000 and 1,000, shares of common stock granted to our Chief Executive Officer, Directors of our Board and Interim Chief Financial Officer, respectively, on April 12, 2024,each at an exercise price of $3.60 per share, which was the closing price of the Common Stock on April 12, 2024, and 50% of which vest on April 12, 2025 and 50% of which vest on April 12, 2026. Under the 2024 Equity Plan, onJanuary 8, 2025 we have granted an aggregate of 391,600 restricted shares and options to acquire 312,500 shares of common stock, including grants to our Chief Executive Officer of 281,250 restricted shares, 50% of which vest on January 8,2026 and 50% of which vest on January 8, 2027, subject to satisfaction of the time-based vesting terms, and options exercisable for 234,375 shares of common stock at an exercise price per share of $3.20, 50% of which options vest onJanuary 8, 2026 and 50% of which options vest on January 8, 2027, subject to satisfaction of the time-based vesting terms.

Item 7. Major Stockholders and Related PartyTransactions

A. Major Stockholders

The following table sets forth certain information regarding the beneficial ownership of our outstanding shares of common stock as ofApril 15, 2025 by:

 

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each person or entity that we know beneficially owns 5% or more of our shares of common stock;

 

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our Chief Executive Officer and our other executive officers;

 

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each of our directors; and

 

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all of our current directors and executive officers as a group.

The table also includes information regarding the beneficial ownership of our outstanding Series A Preferred Stock by each of directors andexecutive officers individually and as a group. Beneficial ownership is determined in accordance with the rules of the SEC.

In general, aperson who has or shares voting power and/or dispositive power with respect to securities is treated as a beneficial owner of those securities. It does not necessarily imply that the named person has the economic or other benefits of ownership. Forpurposes of this table, shares subject to options, warrants or rights currently exercisable or exercisable within 60 days of April 15, 2025 are considered as beneficially owned by the person holding such options, warrants or rights. Theapplicable percentage of ownership for each stockholder is based on 38,667,118 issued and 34,415,235 outstanding shares of Common Stock and 795,878 8.75% Series A Cumulative Redeemable Perpetual Preferred Shares issued and outstanding as ofApril 15, 2025. As of April 15, 2025, we also had outstanding Class A Warrants to purchase up to 2,867 shares of common stock at an exercise price of $18.75 per share, Class B Warrants to purchase up to 786,800 shares of common stockat an exercise price of $24.00 per share, Class C Warrants to purchase up to 1,347,267 shares of common stock at an exercise price of $8.25 per share, Class D Warrants to purchase up to 173,334 shares of common stock at an exercise price of $12.00per share, Class E Warrants to purchase up to 4,199,999 shares of common stock at an exercise price of $2.00 per share, and underwriters warrants to purchase up to 36,800 shares of common stock at an exercise price of $20.625 per share, 115,000shares of common stock at an exercise price of $30.00 per share and 139,394 shares of common stock at an exercise price of $10.3125 per share.

 

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Information for certain holders is based on their latest filings with the Securities andExchange Commission or information delivered to us. All of our stockholders, including the stockholders listed in this table, are entitled to one vote for each share of common stock held. Series A Preferred Stock generally have no voting rights,other than in very limited circumstances. See “Item 10. Additional Information—Authorized Capital—Description of Series A Preferred Stock.”

 

		Common Stock Beneficially Owned								Series A Preferred Stock Beneficially Owned
Name of Beneficial Owner		Number				Percentage				Number				Percentage
Principal Stockholders
Flawless Management Inc.(1)			6,991,255				20.3	%			148,030				18.6	%
Arethusa Properties Ltd.(1)			2,926,395				8.5	%
Executive Officers and Directors
Harry N. Vafias(1)(2)			12,254,704				34.9	%			172,063				21.6	%
John Kostoyannis			16,469				*				235				*
George Xiradakis			19,375				*				—				*
Ifigeneia (Fenia) Sakellari			24,166				*				66				*
All executive officers and directors as a group (four persons)			12,314,714				35.7	%			172,364				21.7	%

*	Less than 1%.

(1)

According to Amendment No. 8 to Schedule 13D jointly filed with the SEC on April 8, 2025 by FlawlessManagement Inc., Arethusa Properties LTD and Harry N. Vafias, Harry N. Vafias has sole voting power and sole dispositive power with respect to the shares owned by Flawless Management Inc., Arethusa Properties LTD and Harry N. Vafias.

(2)

Includes 1,754,038 shares of restricted common stock, of which 273,775 vest on May 15, 2025, 275,000 veston October 30, 2025, 140,000 vest on April 12, 2025, 140,625 vest on January 8, 2026, 140,000 vest on April 12, 2026 and 140,625 vest on January 8, 2027, subject to satisfaction of the vesting criteria, and 50,000 sharesacquirable pursuant to options with an exercise price per share of $3.60, which vested on April 12, 2025, subject to satisfaction of the time-based vesting terms. Excludes options exercisable to acquire (i) 296,875 shares of Common Stockat an exercise price per share of $1.60, which options vest on October 30, 2025, subject to satisfaction of the time-based vesting terms, (ii) 50,000 shares of Common Stock at an exercise price per share of $3.60, which vest onApril 12, 20264, subject to satisfaction of the time-based vesting terms and (iii) 234,375 shares of Common Stock at an exercise price per share of $3.20, 50% of which options vest on January 8, 2026 and 50% of which options vest onJanuary 8, 2027, subject to satisfaction of the time-based vesting terms. Harry N. Vafias also holds 16,000 shares of Series B Preferred Stock, each of which entitles the holder hereof to 25,000 votes per share on all matters submitted to avote of the shareholders of the Company, provided however, that no holder of Series B preferred shares may exercise voting rights pursuant to Series B preferred shares that would result in the aggregate voting power of any beneficial owner ofsuch shares and its affiliates (whether pursuant to ownership of Series B preferred shares, common shares or otherwise) to exceed 49.99% of the total number of votes eligible to be cast on any matter submitted to a vote of shareholders of theCompany.

Our common stock and Series A Preferred Stock began regular-way trading on the Nasdaq Capital Market onDecember 6, 2021. As of April 15, 2025, we had approximately 42 common stockholders of record. Six of the common stockholders of record were located in the United States and held in the aggregate 24,610,598 shares of common stockrepresenting approximately 71.5% of our outstanding shares of common stock. However, the seven United States stockholders of record include CEDEFAST, which, as nominee for The Depository Trust Company, is the record holder of 24,605,679 shares ofcommon stock. Accordingly, we believe that the shares held by CEDEFAST include shares of common stock beneficially owned by both holders in the United States and non-United States beneficial owners. As a result, these numbers may not accuratelyrepresent the number of

 

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beneficial owners in the United States. We are not aware of any arrangements the operation of which may at a subsequent date result in a change of control of the Company.

B. Related Party Transactions

Pursuantto our Audit Committee Charter, our Audit Committee is responsible for establishing procedures for the approval of all related party transactions involving executive officers and directors. Our Code of Business Conduct and Ethics requires our AuditCommittee to review and approve any “related party” transaction as defined in Item 7.B of Form 20-F before it is consummated.

Management Affiliations

HarryVafias, our president, chief executive officer and one of our directors, is an officer, director and the sole stockholder of Flawless Management Inc., our largest stockholder. He is also the son of the principal and founder of Brave Maritime, anaffiliate of Stealth Maritime, which is our management company. Stealth Maritime may subcontract the technical management of some of our vessels to Brave Maritime in the future.

Management and Other Fees

Inconnection with the 2021 Spin-Off, we entered into a management agreement with Stealth Maritime, pursuant to which Stealth Maritime provides us with technical, administrative, commercial and certain other services, on substantially the same terms,including the same fee levels, as Stealth Maritime provided these services to the vessel-owning subsidiaries of StealthGas contributed to us in connection with the 2021 Spin-Off. In relation to the technical services, Stealth Maritime is responsiblefor arranging for the crewing of the vessels, the day to day operations, inspections and vetting, supplies, maintenance, repairs, bunkering drydocking and insurance. Administrative functions include but are not limited to accounting, back-office,reporting, legal and secretarial services. In addition, Stealth Maritime provides services for the chartering of our vessels and monitoring thereof, freight collection, and sale and purchase. In providing most of these services, Stealth Maritimepays third parties and receives reimbursement from us. Under the management agreement Stealth Maritime subcontracts certain of its obligations. For our drybulk vessels, Stealth Maritime subcontracts these services to its affiliate Brave Maritime.

Stealth Maritime also provides crew management services to certain of our vessels. The majority of these services have been subcontractedby Stealth Maritime to an affiliated ship-management company, Hellenic Manning Overseas Inc. (formerly known as Navis Maritime Services Inc.), which is 25% owned by an affiliate of Stealth Maritime. The Company pays to Stealth Maritime a fixedmonthly fee of $2,500 per vessel for these crew management services, all of which fees are passed on to Hellenic Manning Overseas Inc. For the years ended December 31, 2022, 2023 and 2024, these crew management fees were, $0.14 million, $0.3million and $0.3 million, respectively. As of April 15, 2025, all of our vessels were being manned by Hellenic Manning Overseas Inc., while for our Aframax tanker sold in July 2023 and for one of our product tankers, crewing services wereprovided by Bernard Shulte Management up until April 2023 and February 2023 respectively with a lumpsum monthly fee of $0.1 million. We are not responsible for crewing any vessels deployed on bareboat charters.

In the years ended December 31, 2022, 2023 and 2024, Stealth Maritime received a fixed management fee of $440 per vessel per dayoperating under a voyage or time charter, and a fixed fee of $125 per vessel per day for each of our vessels operating on bareboat charter, with respect to the vessels in our fleet. In addition, our manager arranges for supervision onboard thevessels, when required, by superintendent engineers and when such visits exceed a period of five days in a twelve-month period we are charged $500 for each additional day. We pay our manager, Stealth Maritime, a fee equal to 1.25% of the grossfreight, demurrage and charter hire collected from the employment of our vessels. Stealth Maritime also receives a fee equal to 1.0% calculated on the price as stated in the relevant memorandum of agreement for any vessel bought or sold by them onour behalf.

 

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The above management fees for the years ended December 31, 2022, 2023 and 2024 were$1.0 million, $1.6 million and $1.7 million, respectively. We also paid $0.03 million, $0.06 million and $0.02 million, respectively, in the years ended December 31, 2022, 2023 and 2024 related to onboard supervision which were included in ouroperating expenses – related party. For the years ended December 31, 2022, 2023 and 2024, total brokerage commissions of 1.25% amounted to $1.2 million, $2.3 million and $1.9 million, respectively, and in each period were included invoyage expenses – related party. For the years ended December 31, 2022, 2023 and 2024, commissions on vessels purchased/sold were $1.2 million, $0.8 million and $1.3 million.

We also reimburse Stealth Maritime for its payment for services related to our executive officers.

Additional vessels that we may acquire in the future may be managed by Stealth Maritime or other unaffiliated management companies.

Under the management agreement we have agreed to keep Stealth Maritime and its employees, agents and sub-contractors indemnified and to holdthem harmless against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of the managementagreement and against and in respect of all costs, loss, damages, and expenses, which they may suffer or incur, during the course of the performance of the management agreement.

The initial term of our management agreement with Stealth Maritime will expire on December 31, 2025 and will be extended on ayear-to-year basis thereafter unless six-month written notice of termination is provided by either party prior to the expiration of the term.

Stealth Maritime may terminate the management agreement prior to the end of its term if any money payable by us is not paid within 30 daysfollowing demand by Stealth Maritime. The management agreement will also terminate (1) upon an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of us or Stealth Maritime (otherwise than for thepurpose of reconstruction or amalgamation) or if a receiver is appointed, or if we or Stealth Maritime suspends payment, ceases to carry on business, or makes any special arrangement or composition with creditors or (2) in the case of the saleof all of our vessels or if all of our vessels become a total loss or are declared as a constructive or compromised or arranged total loss or are requisitioned.

Office Space

Stealth Maritimeprovided our office space to us without charge for the first year after the completion of the 2021 Spin-Off, and thereafter the lease rate was €5,000 per month until January 1, 2024, when the lease term ended. The lease rate for 2024was €72,000 per year as per renewed contract effective from January 1, 2024 through January 1, 2026, which lease may be terminated by tenant upon eight weeks’ notice to landlord.

Vessel Acquisitions

OnMarch 4, 2022, we entered into agreements to acquire two MR product tankers, built 2008 and 2011, from Brave Maritime, an entity affiliated with the father of our Chief Executive Officer, for an aggregate purchase price of $31.0 million, whichwere delivered to us in March and May 2022, respectively. The transaction was approved by the Company’s audit committee comprised of independent directors.

On July 7, 2022, we entered into agreements to acquire two handysize drybulk carriers from entities affiliated with the family of ourChief Executive Officer for an aggregate purchase price of $39.0 million, which were delivered to us in the second half of 2022. The transaction was approved by the Company’s audit committee comprised of independent directors.

 

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On February 14, 2023, we entered into agreements to acquire two handysize drybulkcarriers from entities affiliated with our Chief Executive Officer for aggregate cash consideration of $25.5 million and 13,875 shares of Series C Cumulative Convertible Perpetual Preferred Stock. Delivery of the vessels on a charter-free basis, andclosing of the transactions, occurred in March 2023. The Series C Convertible Preferred Stock had a dividend rate of 5.00% per annum per $1,000 liquidation preference per share, which is payable in cash or additional shares of Series CConvertible Preferred Stock at our election, and was convertible, at the holder’s option, after the six-month anniversary of issuance into shares of our common stock at a conversion price equal to the lower of $7.50 and the ten-day volumeweighted average price of the common stock. The transaction was approved by a committee comprised of independent directors, which received a fairness opinion from an independent financial advisor in connection with the issuance of the Series CConvertible Preferred Stock in the transaction. On December 21, 2023, all 13,875 shares of our Series Convertible Preferred Stock were converted by the holder, Flawless Management Inc., into 6,932,043 shares of our Common Stock.

On September 5, 2023, we entered into an agreement with entities affiliated with the Vafias family to acquire two tanker vessels, theaframax tanker Gstaad Grace II (ex. Stealth Haralambos), built in 2009 and the product tanker Aquadisiac built in 2008, with an aggregate capacity of approximately 164,000 dwt. The aggregate purchase price for these acquisitionsis $71 million. Both vessels were delivered to us on a charter-free basis in February 2024. The transaction was approved by the Company’s audit committee comprised of independent directors.

On May 17, 2024, we entered into an agreement with entities affiliated with the family of our Chief Executive Officer to acquire thehandysize drybulk carrier Neptulus, built in 2012, and the product tanker Clean Imperial, built in 2009, with an aggregate capacity of approximately 73,000 dwt, for an aggregate purchase price of $38.9 million. In August 2024, we tookdelivery of the handysize drybulk carrier Neptulus. The product tanker Clean Imperial was delivered on a charter-free basis in the first quarter of 2025. The transaction was approved by the Company’s audit committee comprised ofindependent directors. Pursuant to the terms of the purchase agreements the Company has the right to pay for the purchase price for the vessels up to one year after the date of the purchase agreement. These vessels were paid in full onApril 22, 2025.

On September 20, 2024, we entered into agreements to acquire seven Japanese built drybulk carriers (5supramaxes and 2 kamsarmaxes) for an aggregate purchase price of $129 million, from entities affiliated with Brave Maritime Corp Inc. One of the vessels as delivered to us on April 26, 2025 and the remaining six vessels are expected to bedelivered to us within the second quarter of 2025. Brave Maritime is affiliated with members of the Vafias family. The transaction was approved by the Company’s audit committee comprised of independent directors. Pursuant to the terms of thepurchase agreements the Company has the right to pay the purchase price for the vessels up to one year after the date of the purchase agreement.

Vessel Sale to C3is Inc.

OnJuly 7, 2023, we entered into a memorandum of agreement for the disposal of the vessel Stealth Berana to C3is Inc., in which we hold an interest through Series A Convertible Preferred Stock, for $43,000,000. The vessel was delivered toher new owners in July 2023. Payment of 10% of the purchase price was effected at the time of delivery, with the remaining balance due no later than one year after delivery of the vessel, which took place on July 14, 2023. The remaining balancebore interest at an implicit rate of 8.1% per annum and was paid in July 2024.

Series B Preferred Stock

On October 21, 2022, we entered into a stock purchase agreement and issued 16,000 shares of our newly- designated Series B PreferredStock, par value $0.01 per share, to our Chairman and Chief Executive Officer, Harry Vafias, in return for cash consideration of $200,000. The issuance of the Series B Preferred Stock was approved by an independent committee of the Board ofDirectors of the Company, which received a fairness

 

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opinion from an independent financial advisor that the transaction was fair from a financial point of view to the Company. See “Item 10. Additional Information A. Share Capital –Description of Series B Preferred Stock” for a description of the Series B Preferred Stock.

Spin-off of C3is Inc.

On June 21, 2023, we completed the Spin-off of our previously wholly-owned subsidiary, C3is Inc., the holding company for two drybulkcarriers, the Eco Angelbay and the Eco Bushfire, with an aggregate capacity of 64,000 dwt. Imperial Petroleum stockholders and warrantholders received one C3is common share for every eight shares of Imperial Petroleum’s commonstock owned, or in the case of holders of Imperial Petroleum’s outstanding Warrants that they have the right to purchase pursuant to Warrants owned, at the close of business on June 13, 2023. We retain an interest in C3is Inc. through ourownership of Series A Convertible Preferred Stock of C3is Inc., with an aggregate liquidation preference of $15,000,000, which is currently convertible into common stock of C3is Inc., at a conversion price of $3.0391 per share.

C. Interest of Experts and Counsel

Notapplicable.

Item 8. Financial Information

See “Item 18. Financial Statements” below.

Significant Changes. Other than as described in Note 17 “Subsequent Events” to our consolidated financial statementsincluded in this Annual Report, no significant change has occurred since the date of such consolidated financial statements.

LegalProceedings. To our knowledge we are not currently a party to any material lawsuit that, if adversely determined, would have a material effect on our financial position, results of operations or liquidity. From time to time in the future we maybe subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. Those claims, even if lacking merit, could result in the expenditure of significant financial and managerialresources. We have not been involved in any legal proceedings which may have, or have had a material effect on our financial position, results of operations or liquidity, nor are we aware of any proceedings that are pending or threatened which mayhave a significant effect on our financial position, results of operations or liquidity. See Note 16 “Commitments and Contingencies” to our consolidated financial statements included elsewhere in this Annual Report.

Dividend Policy. We currently intend to retain our future earnings, if any, to fund the development and growth of our business. Ourboard of directors will, however, evaluate our dividend policy consistent with our cash flows and liquidity requirements and we may consider paying dividends on our common stock depending on future performance of our business and financialcondition. Declaration and payment of any future dividend is subject to the discretion of our Board of Directors. The timing and amount of dividend payments will be dependent upon our earnings, financial condition, cash requirements andavailability, restrictions in our loan agreements, or other financing arrangements, the provisions of Marshall Islands law affecting the payment of distributions to stockholders and other factors, and will be subject to the priority of our Series APreferred Stock, which, as described elsewhere in this report, earn dividends at a dividend rate of 8.75% per annum per $25.00 of liquidation preference per share. Because we are a holding company with no material assets other than the stock ofour subsidiaries, our ability to pay dividends will depend on the earnings and cash flow of our subsidiaries and their ability to pay dividends to us. Marshall Islands law generally prohibits the payment of dividends other than from surplus or whilea company is insolvent or would be rendered insolvent upon the payment thereof.

 

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Item 9.

The Offer and Listing

Trading on the Nasdaq Stock Market

Following the 2021 Spin-Off, regular way trading in our common stock and Series A Preferred Stock began on the Nasdaq Capital Market onDecember 6, 2021, under the symbols “IMPP” and “IMPPP”, respectively.

 

Item 10.

Additional Information

A. Share Capital

Authorized Capitalization

Under our amended and restated articles of incorporation, our authorized capital stock consists of 2,000,000,000 shares of common stock, parvalue $0.01 per share, and 200,000,000 shares of preferred stock, par value $0.01 per share. All of our shares of stock are in registered form. As of April 15, 2025, the Company had 38,667,118 shares of common stock issued and 34,415,235 sharesof common stock outstanding, 795,878 shares of 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock and 16,000 shares of Series B Preferred Stock issued and outstanding, as well as Class A Warrants to purchase up to 2,867 shares ofcommon stock at an exercise price of $18.75 per share, Class B Warrants to purchase up to 786,800 shares of common stock at an exercise price of $24.00 per share, Class C Warrants to purchase up to 1,347,267 shares of common stock at an exerciseprice of $8.25 per share, Class D Warrants to purchase up to 173,334 shares of common stock at an exercise price of $12.00 per share, Class E Warrants to purchase up to 4,199,999 shares of common stock at an exercise price of $2.00 per share, andunderwriters warrants to purchase up to 36,800 shares of common stock at an exercise price of $20.625 per share, 115,000 shares of common stock at an exercise price of $30.00 per share and 139,394 shares of common stock at an exercise price of$10.3125 per share.

Common Stock

Under our amended and restated articles of incorporation, we are authorized to issue up to 2,000,000,000 shares of common stock, par value$0.01 per share, of which there were 38,275,518 shares issued and 34,023,635 shares outstanding as of December 31, 2024 and 34,415,235 shares outstanding as of April 15, 2025. As of April 15, 2025, we also had outstanding Class AWarrants to purchase up to 2,867 shares of common stock at an exercise price of $18.75 per share, Class B Warrants to purchase up to 786,800 shares of common stock at an exercise price of $24.00 per share, Class C Warrants to purchase up to1,347,267 shares of common stock at an exercise price of $8.25 per share, Class D Warrants to purchase up to 173,334 shares of common stock at an exercise price of $12.00 per share, Class E Warrants to purchase up to 4,199,999 shares of common stockat an exercise price of $2.00 per share, and underwriters warrants to purchase up to 36,800 shares of common stock at an exercise price of $20.625 per share, 115,000 shares of common stock at an exercise price of $30.00 per share and 139,394 sharesof common stock at an exercise price of $10.3125 per share.

Each outstanding share of common stock is entitled to one vote, either inperson or by proxy, on all matters that may be voted upon by their holders at meetings of the stockholders. Holders of our common stock (i) have equal ratable rights to dividends from funds legally available therefore, if declared by the Boardof Directors; (ii) are entitled to share ratably in all of our assets available for distribution upon liquidation, dissolution or winding up; and (iii) do not have preemptive, subscription or conversion rights or redemption or sinking fundprovisions. All issued common stock when issued will be fully paid for and non-assessable.

Dividends. We currently intend toretain our future earnings, if any, to fund the development and growth of our business. Our board of directors will, however, evaluate our dividend policy consistent with our cash flows and liquidity requirements and we may consider paying dividendson our common stock depending on future performance of our business and financial condition. Declaration and payment of any future dividend is subject to the discretion of our Board of Directors. The timing and amount of dividend payments will bedependent upon our earnings, financial condition, cash requirements and availability, restrictions in our loan agreements, or other

 

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financing arrangements, the provisions of Marshall Islands law affecting the payment of distributions to stockholders and other factors, and will be subject to the priority of our Series APreferred Stock, which, as described elsewhere in this report, earn dividends at a dividend rate of 8.75% per annum per $25.00 of liquidation preference per share. Because we are a holding company with no material assets other than the stock ofour subsidiaries, our ability to pay dividends will depend on the earnings and cash flow of our subsidiaries and their ability to pay dividends to us. Marshall Islands law generally prohibits the payment of dividends other than from surplus or whilea company is insolvent or would be rendered insolvent upon the payment thereof.

Warrants

General. As of April 15, 2025, we had outstanding Class A Warrants to purchase up to 2,867 shares of common stock at anexercise price of $18.75 per share, Class B Warrants to purchase up to 786,800 shares of common stock at an exercise price of $24.00 per share, Class C Warrants to purchase up to 1,347,267 shares of common stock at an exercise price of $8.25 pershare, Class D Warrants to purchase up to 173,334 shares of common stock at an exercise price of $12.00 per share, Class E Warrants to purchase up to 4,199,999 shares of common stock at an exercise price of $2.00 per share and underwriters warrantsto purchase up to 36,800 shares of common stock at an exercise price of $20.625 per share, 115,000 shares of common stock at an exercise price of $30.00 per share and 139,394 shares of common stock at an exercise price of $10.3125 per share.

The following summary of certain terms and provisions of the Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants andClass E Warrants is not complete and is subject to, and qualified in its entirety by the provisions of the forms of Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants, respectively, which are each filedas an exhibit to this Annual Report.

Exercisability. The Class A Warrants are exercisable at any time after their originalissuance, of February 2, 2022, up to the date that is five years after their original issuance (February 2, 2027). The Class B Warrants are exercisable at any time after their original issuance, of March 23, 2022, up to the date that isfive years after their original issuance (March 23, 2027). The Class C Warrants are exercisable at any time after their original issuance, of May 19, 2022, up to the date that is five years after their original issuance (May 19, 2027). TheClass D Warrants are exercisable at any time after their original issuance, of June 15, 2022, up to the date that is five years after their original issuance (June 15, 2027). The Class E Warrants are exercisable at any time after their originalissuance, of August 15, 2023, up to the date that is five years after their original issuance (August 15, 2028). The Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants are exercisable, at the optionof each holder, in whole or in part by delivering to us a duly executed exercise notice and, at any time a registration statement registering the issuance of the common stock underlying the Class A Warrants, Class B Warrants, Class C Warrants,Class D Warrants or Class E Warrants under the Securities Act is effective and available for the issuance of such shares, or an exemption from registration under the Securities Act is available for the issuance of such shares, by payment in full inimmediately available funds for the number of shares of common stock purchased upon such exercise. If a registration statement registering the issuance of the common stock underlying the Class A Warrants, Class B Warrants, Class C Warrants,Class E Warrants, or the resale of the common stock underlying the Class D Warrants, under the Securities Act is not effective or available and, in the case of the Class A Warrants, Class B Warrants, Class C Warrants and Class E Warrants, anexemption from registration under the Securities Act is not available for the issuance of such shares, the holder may, in its sole discretion, elect to exercise the Class A Warrant, Class B Warrants, Class C Warrants, Class D Warrants or ClassE Warrants through a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the Class A Warrant, Class B Warrants, Class C Warrants,Class D Warrants or Class E Warrants. No fractional shares of common stock will be issued in connection with the exercise of a Class A Warrant, Class B Warrant, Class C Warrant, Class D Warrant or Class E Warrants. In lieu of fractional shares,we will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price.

 

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Exercise Limitation. A holder will not have the right to exercise any portion of theClass A Warrants, Class B Warrants, Class C Warrants, Class D Warrants or Class E Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or, upon election by a holder prior to the issuance of anyClass A warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants, 9.99%) of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership isdetermined in accordance with the terms of the warrants. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, upon at least 61 days’ prior notice from the holder to us with respect to anyincrease in such percentage.

Exercise Price. The exercise price per whole share of common stock purchasable upon exercise of theClass A Warrants is $18.75 per share, upon exercise of the Class B Warrants is $24.00 per share, upon exercise of the Class C Warrants is $8.25 per share, upon exercise of the Class D Warrants is $12.00 per share and upon exercise of the ClassE Warrants is $2.00 per share. The exercise price and number of shares of common stock issuable upon exercise will adjust in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similarevents affecting our common stock.

Transferability. Subject to applicable laws, the Class A Warrants, Class B Warrants, ClassC Warrants, Class D Warrants and Class E Warrants may be offered for sale, sold, transferred or assigned without our consent.

ExchangeListing. We do not intend to apply for the listing of the Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants or Class E Warrants on any stock exchange. Without an active trading market, the liquidity of the Class AWarrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants will be limited.

Rights as a Stockholder.Except as otherwise provided in the Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants or Class E Warrants or by virtue of such holder’s ownership of our common stock, the holder of a Class A Warrant, Class BWarrant, Class C Warrants, Class D Warrants or Class E Warrants does not have the rights or privileges of a holder of our common stock, including any voting rights, until the holder exercises the warrant.

Fundamental Transactions. In the event of a fundamental transaction, as described in the Class A Warrants, Class B Warrants, ClassC Warrants, Class D Warrants and Class E Warrants and generally including, with certain exceptions, any reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all ofour properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by ouroutstanding common stock, the holders of the Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants will be entitled to receive upon exercise of the warrants the kind and amount of securities, cash or otherproperty that the holders would have received had they exercised the warrants immediately prior to such fundamental transaction. Additionally, as more fully described in the Class A Warrant, Class B Warrant, Class C Warrants, Class D Warrantsand Class E Warrants, as applicable, in the event of certain fundamental transactions, the holders of the Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants will be entitled to receive consideration inan amount equal to the Black Scholes value of the Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants or Class E Warrants, respectively, on the date of consummation of such transaction.

Governing Law. The Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants and Class E Warrants and related warrantagency agreement, as applicable, are governed by New York law.

Underwriter’s Warrants. The February 2022Representative’s Purchase Warrants, issued to the representative of the underwriters of our February 2022 underwritten public offering, have substantially similar

 

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terms as the Class A Warrants other than that they will be exercisable for up to an aggregate of 36,800 shares of common stock at any time, and from time to time, in whole or in part, duringthe period commencing July 31, 2022 and expiring January 31, 2027 at an exercise price of $20.625 per share. These warrants are governed by New York law.

The March 2022 Representative’s Purchase Warrants, issued to the representative of the underwriters of our March 2022 underwrittenpublic offering, have substantially similar terms as the Class B Warrants other than that they will be exercisable for up to an aggregate of 115,000 shares of common stock, at any time, and from time to time, in whole or in part, during the periodcommencing September 18, 2022 and expiring March 18, 2027 at an exercise price of $30.00 per share. These warrants are governed by New York law.

The May 2022 Representative’s Purchase Warrants, issued to the representative of the underwriters of our May 2022 underwritten publicoffering, have substantially similar terms as the Class C Warrants other than that they will be exercisable for up to an aggregate of 139,394 shares of common stock, at any time, and from time to time, in whole or in part, during the periodcommencing November 12, 2022 and expiring May 16, 2027 at an exercise price of $10.3125 per share. These warrants are governed by New York law.

Preferred Stock

Under our amendedand restated articles of incorporation, we are authorized to issue up to 200,000,000 shares of preferred stock, par value $0.01 per share, of which 800,000 shares have been designated as Series A Preferred Stock, of which 795,878 shares of Series APreferred Stock are outstanding as of December 31, 2024 and April 15, 2025; 16,000 shares have been designated as Series B Preferred Stock, all of which were outstanding as of December 31, 2024 and April 15, 2025. Theundesignated authorized preferred stock may be issued in one or more series and our Board of Directors, without further approval from our stockholders, is authorized to fix the dividend rights and terms, conversion rights, voting rights, redemptionrights, liquidation preferences and other rights and restrictions relating to any series. Issuances of preferred stock, while providing flexibility in connection with possible financings, acquisitions and other corporate purposes, could, among otherthings, adversely affect the relative voting power of the holders of our common stock. See “Description of Series A Preferred Stock” and “Description of Series B Preferred Stock” below.

Transfer Agent and Registrar

Equiniti Trust Company, LLC is the transfer agent and registrar for Imperial Petroleum common stock and Series A Preferred Stock, and thewarrant agent for the Class A, B and C Warrants.

Listing

Our common stock is listed on the Nasdaq Capital Market under the symbol “IMPP.” Our Series A Preferred Stock is listed on theNasdaq Capital Market under the symbol “IMPPP.”

Description of Series A Preferred Stock

The following description of the Series A Preferred Stock does not purport to be complete and is subject to, and qualified in its entiretyby reference to the Statement of Designations designating the Series A Preferred Stock (the “Statement of Designations”) and setting forth the rights, preferences and limitations of the Series A Preferred Stock. A copy of the Statementof Designations is filed as an exhibit to this Annual Report. References to “Imperial Petroleum Inc.,” “we,” “our” and “us” refer specifically to Imperial Petroleum Inc.

General

As of December 31,2024 and April 15, 2025, there were 800,000 Series A Preferred Stock authorized, and 795,878 Series A Preferred Stock issued and outstanding. We may, without notice to or consent of the holders of

 

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the then-outstanding Series A Preferred Stock, authorize and issue additional Series A Preferred Stock as well as Parity Securities and Junior Securities and, subject to the further limitationsdescribed under “—Voting Rights”, Senior Securities.

The holders of our common stock are entitled to receive dividendsout of assets legally available for that purpose at times and in amounts as our board of directors may from time to time determine. Upon the occurrence of a liquidation, dissolution or winding up the holders of common stock would be entitled toshare ratably in the distribution of all of our assets remaining available for distribution after satisfaction of all our liabilities and payment to the holders of shares of any class or series of capital stock (including the Series A PreferredStock) having preferential rights to receive distributions of our assets.

The Series A Preferred Stock entitle the holders thereof toreceive cumulative cash dividends when, as and if declared by our board of directors out of legally available funds for such purpose. Each share of Series A Preferred Stock have a fixed liquidation preference of $25.00 per share plus an amount equalto accumulated and unpaid dividends thereon to the date fixed for payment, whether or not declared. Please read “—Liquidation Rights.”

The Series A Preferred Stock represents perpetual equity interests in us and, unlike any potential indebtedness we may incur in the future,will not give rise to a claim for payment of a principal amount at a particular date. As such, the Series A Preferred Stock ranks junior to any future indebtedness and other liabilities with respect to assets available to satisfy claims against us.

All the Series A Preferred Stock are represented by a single certificate issued to the Securities Depository (as defined below) andregistered in the name of its nominee and, so long as a Securities Depository has been appointed and is serving, no person acquiring Series A Preferred Stock will be entitled to receive a certificate representing such shares unless applicable lawotherwise requires or the Securities Depository resigns or is no longer eligible to act as such and a successor is not appointed. Please read “—Book-Entry System.”

The Series A Preferred Stock are not convertible into common stock or other of our securities and will not have exchange rights or be entitledor subject to any preemptive or similar rights. The Series A Preferred Stock will not be subject to mandatory redemption or to any sinking fund requirements. The Series A Preferred Stock will be subject to redemption, in whole or from time to timein part, at our option commencing on September 30, 2022. Please read “—Redemption.”

Ranking

The Series A Preferred Stock, with respect to dividend distributions and distributions upon the liquidation, winding-up and dissolution of ouraffairs, rank:

 

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senior to all classes of our common stock, and to each other class or series of stock established after theinitial issue date of the Series A Preferred Stock by our board of directors, the terms of which class or series do not expressly provide that it is made senior to or on parity with the Series A Preferred Stock as to dividend distributions anddistributions upon the liquidation, dissolution or winding-up of our affairs, whether voluntary or involuntary (collectively, the “Junior Securities”);

 

•

on a parity with any class or series of stock established after the initial issue date of the Series A PreferredStock by our board of directors, the terms of which class or series are not expressly subordinated or senior to the Series A Preferred Stock as to dividend distributions and distributions upon the liquidation, dissolution or winding-up of ouraffairs, whether voluntary or involuntary (collectively, the “Parity Securities”); and

 

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junior to (i) any future indebtedness and other liabilities with respect to assets available to satisfyclaims against us, and (ii) each class or series of capital stock expressly made senior to the Series

 

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A Preferred Stock as to the payment of dividends and amounts payable upon liquidation, dissolution or winding up, whether voluntary or involuntary (such shares described in this clause (ii), the“Senior Securities”).

Under the Statement of Designations, we may issue Junior Securities and, so long ascumulative dividends on the Series A Preferred Stock are not in arrears, Parity Securities from time to time in one or more series without the consent of the holders of the Series A Preferred Stock. Our board of directors has the authority todetermine the preferences, powers, qualifications, limitations, restrictions and special or relative rights or privileges, if any, of any such series before the issuance of any shares of that series. Our board of directors will also determine thenumber of shares constituting each series of securities. Our ability to issue additional Senior Securities is limited as described under “—Voting Rights.”

Liquidation Preference

Theholders of issued and outstanding Series A Preferred Stock will be entitled, in the event of any liquidation, dissolution or winding up of our affairs, whether voluntary or involuntary, to receive the liquidation preference of $25.00 per share incash plus an amount equal to accumulated and unpaid dividends thereon to (but not including) the date fixed for payment of such amount (whether or not declared), and no more, before any distribution will be made to the holders of our common stock orany other Junior Securities. A consolidation or merger of us with or into any other entity, individually or in a series of transactions, will not be deemed a liquidation, dissolution or winding up of our affairs for this purpose. In the event thatour assets available for distribution to holders of the issued and outstanding Series A Preferred Stock and any Parity Securities are insufficient to permit payment of all required amounts, our assets then remaining will be distributed among theSeries A Preferred Stock and any Parity Securities, as applicable, ratably on the basis of their relative aggregate liquidation preferences. After payment of all required amounts to the holders of the outstanding shares of Series A Preferred Stockand Parity Securities, our remaining assets and funds will be distributed among the holders of the common stock and any other Junior Securities then issued and outstanding according to their respective rights.

Voting Rights

The Series APreferred Stock have no voting rights except as provided by Marshall Islands law and as follows. In the event that six quarterly dividends, whether consecutive or not, payable on Series A Preferred Stock are in arrears, the holders of SeriesA Preferred Stock will have the right, voting separately as a class together with holders of any other Parity Securities upon which like voting rights have been conferred and are exercisable, at the next meeting of stockholders called for theelection of directors, to elect one member of our board of directors, and the size of our board of directors will be increased as needed to accommodate such change (unless the size of our board of directors already has been increased by reason ofthe election of a director by holders of Parity Securities upon which like voting rights have been conferred and with which the Series A Preferred Stock voted as a class for the election of such director). The right of such holders of SeriesA Preferred Stock to elect one member of our board of directors will continue until such time as all dividends accumulated and in arrears on the Series A Preferred Stock have been paid in full, at which time such right will terminate, subject torevesting in the event of each and every subsequent failure to pay six quarterly dividends as described above. Upon any termination of the right of the holders of the Series A Preferred Stock and any other Parity Securities to vote as a classfor a director, the term of office of all directors then in office elected by such holders voting as a class will terminate immediately. Any director elected by the holders of the Series A Preferred Stock and any other Parity Securities shalleach be entitled to one vote per director on any matter before our board of directors.

Unless we have received the affirmative vote orconsent of the holders of at least two-thirds of the outstanding Series A Preferred Stock, voting as a single class, we may not (i) adopt any amendment to our articles of incorporation or Statement of Designations, that adversely alters thepreferences, powers or rights of the Series A Preferred Stock, (ii) issue any Parity Securities if the cumulative dividends payable on outstanding Series A Preferred Stock are in arrears, or (iii) create or issue any Senior Securities.

 

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On any matter described above on which the holders of the Series A Preferred Stock areentitled to vote as a class, such holders will be entitled to one vote per share. The Series A Preferred Stock held by us or any of our subsidiaries or affiliates will not be entitled to vote.

Dividends

General

Holders of Series A Preferred Stock will be entitled to receive, when, as and if declared by our board of directors out of legally availablefunds for such purpose, cumulative cash dividends from December 3, 2021.

Dividend Rate

Dividends on Series A Preferred Stock will be cumulative, commencing December 3, 2021 and payable on each Dividend Payment Date,commencing December 30, 2021, when, as and if declared by our board of directors or any authorized committee thereof out of legally available funds for such purpose. Dividends on the Series A Preferred Stock will accrue at a rate of8.75% per annum per $25.00 stated liquidation preference per Series A Preferred Stock. The dividend rate is not subject to adjustment.

DividendPayment Date

The “Dividend Payment Dates” for the Series A Preferred Stock will be each March 30, June 30, September 30and December 30, commencing December 30, 2021. Dividends will accumulate in each dividend period from and including the preceding Dividend Payment Date or the initial issue date, as the case may be, to but excluding, the applicable Dividend PaymentDate for such dividend period. If any Dividend Payment Date otherwise would fall on a day that is not a Business Day, declared dividends will be paid on the immediately succeeding Business Day without the accumulation of additional dividends.Dividends on the Series A Preferred Stock will be payable based on a 360-day year consisting of twelve 30-day months.

“BusinessDay” means a day on which the Nasdaq Stock Market is open for trading and which is not a Saturday, a Sunday or other day on which banks in New York City are authorized or required by law to close.

Payment of Dividends

Not later than theclose of business, New York City time, on each Dividend Payment Date, we will pay those dividends, if any, on the Series A Preferred Stock that have been declared by our board of directors to the holders of such shares as such holders’ namesappear on our share transfer books maintained by the Registrar and Transfer Agent on the applicable Record Date. The applicable record date (the “Record Date”), will be three Business Days immediately preceding the applicable DividendPayment Date, except that in the case of payments of dividends in arrears, the Record Date with respect to a Dividend Payment Date will be such date as may be designated by our board of directors in accordance with our Bylaws then in effect and theStatement of Designations.

So long as the Series A Preferred Stock are held of record by the Securities Depository or its nominee,declared dividends will be paid to the Securities Depository in same-day funds on each Dividend Payment Date. The Securities Depository will credit accounts of its participants in accordance with the Securities Depository’s normal procedures.The participants will be responsible for holding or disbursing such payments to beneficial owners of the Series A Preferred Stock in accordance with the instructions of such beneficial owners.

No dividend may be declared or paid or set apart for payment on any Junior Securities (other than dividend payable solely in shares of JuniorSecurities) unless full cumulative dividends have been or contemporaneously are being paid or provided for on all issued and outstanding Series A Preferred Stock and any Parity Securities

 

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through the most recent respective dividend payment dates. Accumulated dividends in arrears for any past dividend period may be declared by our board of directors and paid on any datefixed by our board of directors, whether or not a Dividend Payment Date, to holders of the Series A Preferred Stock on the record date for such payment, which may not be more than 60 days, nor less than 15 days, before such payment date.Subject to the next succeeding sentence, if all accumulated dividends in arrears on all outstanding Series A Preferred Stock and any Parity Securities have not been declared and paid, or sufficient funds for the payment thereof have not been setapart, payment of accumulated dividends in arrears will be made in order of their respective dividend payment dates, commencing with the earliest. If less than all dividends payable with respect to all Series A Preferred Stock and any ParitySecurities are paid, any partial payment will be made pro rata with respect to the Series A Preferred Stock and any Parity Securities entitled to a dividend payment at such time in proportion to the aggregate amounts remaining due in respect of suchshares at such time. Holders of the Series A Preferred Stock will not be entitled to any dividend, whether payable in cash, property or stock, in excess of full cumulative dividends. No interest or sum of money in lieu of interest will bepayable in respect of any dividend payment which may be in arrears on the Series A Preferred Stock.

Redemption

The Series A Preferred Stock represent perpetual equity interests in us. We will have no obligation to redeem or repurchase any Series APreferred Stock at any time.

Optional Redemption

We may redeem, at our option, in whole or from time to time in part, the Series A Preferred Stock (i) on or after June 30, 2024 andprior to June 30, 2025, at a price equal to $25.50 per Series A Preferred Stock, (ii) on or after June 30, 2025 and prior to June 30, 2026, at a price equal to $25.25 per Series A Preferred Stock and (iii) on or afterJune 30, 2026, at a price equal to $25.00 per Series A Preferred Stock, plus, in each case, an amount equal to all accumulated and unpaid dividends thereon to (but not including) the date of redemption, whether or not declared. Any suchoptional redemption may be effected only out of funds legally available for such purpose.

Redemption Upon a Change of Control

In connection with a Change of Control (as defined below), we may, at our option, redeem the Series A Preferred Stock, in whole but not inpart, no later than 90 days after the first date on which such Change of Control occurs, at a redemption price of (1) if the “Change of Control” occurs prior to December 31, 2023, $26.50 per share and (2) if the“Change of Control” occurs on or after December 31, 2023 at the same redemption prices as apply to an optional redemption as set forth above under “Optional Redemption”, plus, in the case of either (1) or (2), anamount equal to all accumulated and unpaid dividends thereon to (but not including) the date of redemption, whether or not declared. Any such redemption may be effected only out of funds legally available for such purpose.

A “Change of Control” means the following events have occurred and are continuing:

 

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the acquisition by any “person” or “group” (within the meaning of Section 13(d)(3)of the Exchange Act) of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of our shares entitling that person or group toexercise more than 50% of the total voting power of all of our shares entitled to vote generally in elections of directors (except that such person or group will be deemed to have beneficial ownership of all securities that such person or group hasthe right to acquire, whether such right is currently exercisable or is exercisable only upon the passage of time or occurrence of a subsequent condition); and

 

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following the closing of any transaction referred to in the above bullet point, neither we nor the acquiring orsurviving entity has a class of common securities (or American Depositary Receipts

 

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representing such securities) listed on the New York Stock Exchange (“NYSE”), the NYSE American or the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq CapitalMarket (collectively, “Nasdaq”) or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American or the Nasdaq.

Redemption Procedure

We will give notice of anyredemption by mail, postage prepaid, not less than 30 days and not more than 60 days before the scheduled date of redemption, to the holders of any shares to be redeemed as such holders’ names appear on our share transfer books maintained bythe Registrar and Transfer Agent at the address of such holders shown therein. Such notice shall state: (1) the redemption date, (2) the number of shares of Series A Preferred Stock to be redeemed and, if less than all issued andoutstanding Series A Preferred Stock are to be redeemed, the number (and the identification) of shares to be redeemed from such holder, (3) the redemption price, (4) the place where the Series A Preferred Stock are to be redeemed and shallbe presented and surrendered for payment of the redemption price therefor, and (5) that dividends on the shares to be redeemed will cease to accumulate from and after such redemption date.

If fewer than all of the issued and outstanding Series A Preferred Stock are to be redeemed, the number of shares to be redeemed will bedetermined by us, and such shares will be redeemed pro rata or by lot as the Securities Depository shall determine, with adjustments to avoid redemption of fractional shares. So long as all Series A Preferred Stock are held of record by theSecurities Depository or its nominee, we will give notice, or cause notice to be given, to the Securities Depository of the number of shares of Series A Preferred Stock to be redeemed and the Securities Depository will determine the number of sharesof Series A Preferred Stock to be redeemed from the account of each of its participants holding such shares in its participant account.

So long as the Series A Preferred Stock are held of record by the Securities Depository or its nominee, the redemption price will be paid bythe Paying Agent to the Securities Depository on the redemption date. The Securities Depository’s normal procedures provide for it to distribute the amount of the redemption price in same-day funds to its participants who, in turn, areexpected to distribute such funds to the persons for whom they are acting as agent.

If we give or cause to be given a notice ofredemption, then we will deposit with the Paying Agent funds sufficient to redeem the Series A Preferred Stock as to which notice has been given by the close of business, New York City time, no later than the Business Day immediately preceding thedate fixed for redemption, and will give the Paying Agent irrevocable instructions and authority to pay the redemption price to the holder or holders thereof upon surrender or deemed surrender (which will occur automatically if the certificaterepresenting such shares is issued in the name of the Securities Depository or its nominee) of the certificates therefor. If notice of redemption shall have been given, then from and after the date fixed for redemption, unless we default inproviding funds sufficient for such redemption at the time and place specified for payment pursuant to the notice, all dividends on such shares will cease to accumulate and all rights of holders of such shares as our stockholders will cease, exceptthe right to receive the redemption price, including an amount equal to accumulated and unpaid dividends to (but not including) the date fixed for redemption, whether or not declared. We will be entitled to receive from the Paying Agent theinterest income, if any, earned on such funds deposited with the Paying Agent (to the extent that such interest income is not required to pay the redemption price of the shares to be redeemed), and the holders of any shares so redeemed will have noclaim to any such interest income. Any funds deposited with the Paying Agent hereunder by us for any reason, including, but not limited to, redemption of Series A Preferred Stock, that remain unclaimed or unpaid after two years after theapplicable redemption date or other payment date, shall be, to the extent permitted by law, repaid to us upon our written request after which repayment the holders of the Series A Preferred Stock entitled to such redemption or other payment shallhave recourse only to us.

If only a portion of the Series A Preferred Stock represented by a certificate has been called for redemption,upon surrender of the certificate to the Paying Agent (which will occur automatically if the certificate

 

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representing such shares is registered in the name of the Securities Depository or its nominee), the Paying Agent will issue to the holder of such shares a new certificate (or adjust theapplicable book-entry account) representing the number of shares of Series A Preferred Stock represented by the surrendered certificate that have not been called for redemption.

Notwithstanding any notice of redemption, there will be no redemption of any Series A Preferred Stock called for redemption until fundssufficient to pay the full redemption price of such shares, including all accumulated and unpaid dividends to the date of redemption, whether or not declared, have been deposited by us with the Paying Agent.

We and our affiliates may from time to time purchase the Series A Preferred Stock, subject to compliance with all applicable securities andother laws. Neither we nor any of our affiliates has any obligation or any present plan or intention, to purchase any Series A Preferred Stock. Any shares repurchased and cancelled by us will revert to the status of authorized butunissued preferred stock, undesignated as to series.

Notwithstanding the foregoing, in the event that full cumulative dividends on theSeries A Preferred Stock and any Parity Securities have not been paid or declared and set apart for payment, we may not repurchase, redeem or otherwise acquire, in whole or in part, any Series A Preferred Stock or Parity Securities except pursuantto a purchase or exchange offer made on the same terms to all holders of Series A Preferred Stock and any Parity Securities. Common stock and any other Junior Securities may not be redeemed, repurchased or otherwise acquired unless fullcumulative dividends on the Series A Preferred Stock and any Parity Securities for all prior and the then-ending dividend periods have been paid or declared and set apart for payment.

No Sinking Fund

The Series APreferred Stock do not have the benefit of any sinking fund.

Description of Series B Preferred Stock

The following description of the Series B Preferred Stock is a summary and does not purport to be complete and is qualified by reference to the Statement ofDesignation filed as an exhibit to this Annual Report.

On October 21, 2022, we issued 16,000 shares of our newly-designatedSeries B Preferred Stock, par value $0.01 per share. As of December 31, 2024 and April 15, 2025, there were 16,000 shares of Series B Preferred Stock authorized, and 16,000 shares of Series B Preferred Stock issued and outstanding.

Voting

To the fullest extentpermitted by law, each share of Series B preferred stock entitles the holder hereof to 25,000 votes per share on all matters submitted to a vote of the shareholders of the Company, provided however, that no holder of Series B preferred stockmay exercise voting rights pursuant to Series B preferred stock that would result in the aggregate voting power of any beneficial owner of such shares and its affiliates (whether pursuant to ownership of Series B preferred stock, common stock orotherwise) to exceed 49.99% of the total number of votes eligible to be cast on any matter submitted to a vote of shareholders of the Company. To the fullest extent permitted by law, the holder of Series B preferred stock shall have no specialvoting or consent rights and shall vote together as one class with the holders of the common stock on all matters put before the shareholders.

Conversion

The Series B preferredstock is not convertible into shares of common stock or any other security.

 

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Redemption

The Series B preferred stock is not redeemable.

Dividends

The Series B preferredstock has no dividend rights.

Transferability

All issued and outstanding Series B preferred stock must be held of record by one holder, and the Series B preferred stock shall not betransferred or sold without the prior approval of our board of directors.

Liquidation Preference

Upon any liquidation, dissolution or winding up of the Company, the Series B preferred stock will rank pari- passu with the common stockholdersand shall be entitled to receive a payment equal to the par value of $0.01 per share. The Series B preferred stockholder has no other rights to distributions upon any liquidation, dissolution or winding up of the Company.

B. Articles of Incorporation and Bylaws

Our articles of incorporation and our bylaws are filed as Exhibit 1.1 and Exhibit 1.2, respectively, hereto.

Purpose.

Our purpose is to engage in anylawful act or activity relating to the business of chartering, rechartering or operating tankers, drybulk carriers or other vessels or any other lawful act or activity customarily conducted in conjunction with shipping, and any other lawful act oractivity approved by the Board of Directors of the Corporation. Our articles of incorporation and bylaws do not impose any limitations on the ownership rights of our stockholders.

Under our bylaws, annual stockholder meetings will be held at a time and place selected by our Board of Directors. The meetings may be held inor outside of the Marshall Islands. Special meetings may be called by the Board of Directors. Our Board of Directors may set a record date between 15 and 60 days before the date of any meeting to determine the stockholders that will be eligible toreceive notice and vote at the meeting.

Directors.

Our directors are elected by a plurality of the votes cast at a meeting of the stockholders by the holders of shares entitled to vote in theelection. There is no provision for cumulative voting.

The Board of Directors may change the number of directors by a vote of a majorityof the entire board. Each director shall be elected to serve until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal, or the earlier termination of his term of office. The Board ofDirectors has the authority to fix the amounts which shall be payable to the members of our Board of Directors for attendance at any meeting or for services rendered to us.

Dissenters’ Rights of Appraisal and Payment.

Under the BCA, our stockholders have the right to dissent from various corporate actions, including any merger or sale of all or substantiallyall of our assets not made in the usual course of our business, and receive payment of the fair value of their shares. However, the right of a dissenting stockholder under the BCA to receive payment of the fair value of his shares is not availablefor the shares of any class or series of stock, which shares

 

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or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of the stockholders to act upon theagreement of merger or consolidation, were either (i) listed on a securities exchange or admitted for trading on an interdealer quotation system or (ii) held of record by more than 2,000 holders. The right of a dissenting stockholder to receivepayment of the fair value of his or her shares shall not be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation.In the event of any further amendment of our articles of incorporation, a stockholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissentingstockholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting stockholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution ofproceedings in the circuit court in the judicial circuit in the Marshall Islands in which our Marshall Islands office is situated. The value of the shares of the dissenting stockholder is fixed by the court after reference, if the court so elects,to the recommendations of a court-appointed appraiser.

Stockholders’ Derivative Actions.

Under the BCA, any of our stockholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action,provided that the stockholder bringing the action is a holder of common stock both at the time the derivative action is commenced and at the time of the transaction to which the action relates.

Anti-takeover Provisions of our Charter Documents.

Several provisions of our articles of incorporation and bylaws may have anti-takeover effects. These provisions are intended to avoid costlytakeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our Board of Directors to maximize stockholder value in connection with any unsolicited offer to acquire us. However, these anti-takeoverprovisions, which are summarized below, could also discourage, delay or prevent (1) the merger or acquisition of our company by means of a tender offer, a proxy contest or otherwise, that a stockholder may consider in its best interest and(2) the removal of incumbent officers and directors.

Blank Check Preferred Stock.

Under the terms of our articles of incorporation, our Board of Directors has authority, without any further vote or action by our stockholders,to issue up to 200,000,000 shares of blank check preferred stock, of which 800,000 have been designated Series A Preferred Stock and of which 795,878 are issued and outstanding as of April 15, 2025 and 16,000 have been designated Series BPreferred Stock and of which 16,000 are issued and outstanding as of April 15, 2025. Our Board of Directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or theremoval of our management.

Classified Board of Directors.

Our articles of incorporation provide for a Board of Directors serving staggered, three-year terms. Approximately one-third of our Board ofDirectors will be elected each year. This classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of our company. It could also delay stockholders who do not agree with thepolicies of the Board of Directors from removing a majority of the Board of Directors for two years.

Election and Removal of Directors.

Our articles of incorporation and bylaws prohibit cumulative voting in the election of directors. Our bylaws require parties other than theBoard of Directors to give advance written notice of nominations for the election of

 

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directors. Our bylaws also provide that our directors may be removed only for cause and only upon the affirmative vote of the holders of at least 80% of the outstanding shares of our capitalstock entitled to vote for those directors. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.

Callingof Special Meetings of Stockholders.

Our bylaws provide that special meetings of our stockholders may be called only by resolution ofour Board of Directors.

Advance Notice Requirements for Stockholder Proposals and Director Nominations.

Our bylaws provide that stockholders seeking to nominate candidates for election as directors or to bring business before an annual meeting ofstockholders must provide timely notice of their proposal in writing to the corporate secretary.

Generally, to be timely, astockholder’s notice must be received at our principal executive offices not less than 90 days or more than 120 days prior to the first anniversary date of the previous year’s annual meeting. If, however, the date of our annual meetingis more than 30 days before or 60 days after the first anniversary date of the previous year’s annual meeting, a stockholder’s notice must be received at our principal executive offices by the later of (i) the close of business onthe 90th day prior to the annual meeting date or (ii) the close of business on the tenth day following the date on which such annual meeting date is first publicly announced or disclosed by us. Our bylaws also specify requirements as to theform and content of a stockholder’s notice. These provisions may impede stockholders’ ability to bring matters before an annual meeting of stockholders or make nominations for directors at an annual meeting of stockholders.

Business Combinations.

Our articles ofincorporation prohibit us from engaging in a “business combination” with certain persons for three years following the date the person becomes an interested stockholder. Interested stockholders generally include:

 

•

persons who are the beneficial owners of 15% or more of the outstanding voting stock of the corporation; and

 

•

persons who are affiliates or associates of the corporation and who hold 15% or more of the corporation’soutstanding voting stock at any time within three years before the date on which the person’s status as an interested stockholder is determined.

Subject to certain exceptions, a business combination includes, among other things:

 

•

certain mergers or consolidations of the corporation or any direct or indirect majority-owned subsidiary of thecompany;

 

•

the sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets having an aggregate marketvalue equal to 10% or more of either the aggregate market value of all assets of the corporation, determined on a consolidated basis, or the aggregate value of all the outstanding stock of the corporation;

 

•

certain transactions that result in the issuance or transfer by the corporation of any stock of the corporationto the interested stockholder;

 

•

any transaction involving the corporation that has the effect of increasing the proportionate share of the stockof any class or series, or securities convertible into the stock of any class or series, of the corporation that is owned directly or indirectly by the interested stockholder; and

 

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•

any receipt by the interested stockholder of the benefit (except as a stockholder) of any loans, advances,guarantees, pledges or other financial benefits provided by or through the corporation.

These provisions of our articles ofincorporation do not apply to a business combination if:

 

•

before a person becomes an interested stockholder, the board of directors of the corporation approves thebusiness combination or transaction in which the stockholder became an interested stockholder;

 

•

upon consummation of the transaction that resulted in the interested stockholder becoming an interestedstockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, other than certain excluded shares;

 

•

following a transaction in which the person became an interested stockholder, the business combination is(a) approved by the board of directors of the corporation and (b) authorized at a regular or special meeting of stockholders, and not by written consent, by the vote of the holders of at least two-thirds of the voting stock of thecorporation not owned by the stockholder; or

 

•

the transaction is with a stockholder that was or became an interested stockholder prior to or at the time the2021 Spin-Off was consummated.

C. Material Contracts

We refer to “Item 7. Major Stockholders and Related Party Transactions—B. Related Party Transactions” for a discussion of ourmaterial agreements outside the ordinary course of our business to which we are a party. We have entered into a management agreement with Stealth Maritime as described as described in “—Related Party Transactions – ManagementArrangements” and memoranda of agreement for the acquisition of drybulk carriers from entities affiliated with Brave Maritime “—Related Party Transactions—Vessel Acquisitions.”

Other than the agreements discussed in the aforementioned section of this annual report, we have no material contracts, other than contractsentered into in the ordinary course of business, to which we or any member of the group is a party.

D. Exchange Controls and Other LimitationsAffecting Stockholders

Under Marshall Islands law, there are currently no restrictions on the export or import of capital, includingforeign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of our common stock.

We are not aware of any limitations on the rights to own our common stock, including rights of non-resident or foreign stockholders to hold orexercise voting rights on our common stock, imposed by foreign law or by our articles of incorporation or bylaws.

E. Tax Considerations

Marshall Islands Tax Consequences

Thefollowing discussion is based on the current laws of the Republic of the Marshall Islands applicable to persons who do not reside in, maintain offices in or engage in business in the Republic of the Marshall Islands.

Imperial Petroleum is incorporated in the Marshall Islands. Under current Marshall Islands law, Imperial Petroleum is not subject to tax onincome or capital gains, and no Marshall Islands withholding tax will be imposed upon payments of dividends by Imperial Petroleum to holders of its common stock or Series A

 

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Preferred Stock that are not residents or domiciled or carrying any commercial activity in the Marshall Islands. The holders of Imperial Petroleum common stock and Series A Preferred Stock willnot be subject to Marshall Islands tax on the sale or other disposition of such common stock or Series A Preferred Stock.

United States Federal IncomeTax Consequences

The following discussion of United States federal income tax matters is based on the Code, judicial decisions,administrative pronouncements, and existing and proposed regulations issued by the United States Department of the Treasury, or the Treasury Regulations, all as of the date of this report, and all of which are subject to change, possibly withretroactive effect. This discussion is also based in part upon Treasury Regulations promulgated under Section 883 of the Code. The discussion below is based, in part, on the description of Imperial Petroleum’s business as described in“Business” above and assumes that Imperial Petroleum will conduct its business as described in that section.

United States Federal IncomeTaxation of Our Company

Taxation of Operating Income: In General

Unless exempt from United States federal income taxation under the rules discussed below, a foreign corporation is subject to United Statesfederal income taxation in respect of any income that is derived from the use of vessels, from the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis, from the participation in a pool, partnership, strategic alliance,joint operating agreement, code sharing arrangement or other joint venture it directly or indirectly owns or participates in that generates such income, or from the performance of services directly related to those uses, which we refer to as“shipping income,” to the extent that the shipping income is derived from sources within the United States. For these purposes, 50% of shipping income that is attributable to transportation that begins or ends, but that does not bothbegin and end, in the United States exclusive of certain U.S. territories and possessions constitutes income from sources within the United States, which we refer to as “U.S.-source shipping income.”

Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from sources within theUnited States. We are not permitted by law to engage in transportation that produces income which is considered to be 100% from sources within the United States. Shipping income attributable to transportation exclusively between non-United Statesports will be considered to be 100% derived from sources outside the United States. Shipping income derived from sources outside the United States will not be subject to any United States federal income tax.

In the absence of exemption from tax under Section 883 of the Code, our gross U.S.-source shipping income would be subject to a 4% taximposed without allowance for deductions as described below.

Exemption of Operating Income from United States Federal Income Taxation

Under Section 883 of the Code and the Treasury Regulations thereunder, Imperial Petroleum will be exempt from United States federal incometaxation on its U.S.-source shipping income if:

 

•

Imperial Petroleum is organized in a foreign country, or its country of organization, that grants an“equivalent exemption” to corporations organized in the United States; and

either

 

•

more than 50% of the value of Imperial Petroleum’s stock is owned, directly or indirectly, by“qualified shareholders,” individuals who are “residents” of a foreign country that grants an “equivalent exemption” to corporations organized in the United States, which we refer to as the “50% OwnershipTest,” or

 

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•

Imperial Petroleum’s stock is “primarily and regularly traded on an established securitiesmarket” in a country that grants an “equivalent exemption” to United States corporations, or in the United States, which we refer to as the “Publicly-Traded Test.”

The Marshall Islands jurisdiction where Imperial Petroleum and certain of its shipowning subsidiaries, are incorporated, and Liberia where itsother shipowning subsidiaries are incorporated, grant an “equivalent exemption” to United States corporations. Therefore, Imperial Petroleum will be exempt from United States federal income taxation in any taxable year with respect toour U.S.-source shipping income if Imperial Petroleum satisfies either the 50% Ownership Test or the Publicly-Traded Test for such taxable year.

Imperial Petroleum does not expect that it will be able to satisfy the 50% Ownership Test for any taxable year due to the anticipated,widely-held nature of its stock.

Imperial Petroleum’s ability to satisfy the Publicly-Traded Test is discussed below.

The Treasury Regulations provide, in pertinent part, that the stock of a foreign corporation will be considered to be “primarilytraded” on an established securities market in a country if the number of shares of each class of stock that is traded during the taxable year on all established securities markets in that country exceeds the number of shares in each suchclass that is traded during that year on established securities markets in any other single country. Imperial Petroleum common stock and Series A Preferred Stock will be “primarily traded” on the Nasdaq Capital Market, which is anestablished securities market for these purposes.

Under the regulations, Imperial Petroleum stock will be considered to be“regularly traded” on an established securities market if one or more classes of its stock representing more than 50% of our outstanding shares, by total combined voting power of all classes of stock entitled to vote and total value, islisted on the market (the “listing threshold”). Since Imperial Petroleum common stock and Series A Preferred Stock, which represent more than 50% of our outstanding shares, by total combined voting power of all classes of stock entitledto vote and total value, will be listed on the Nasdaq Capital Market, Imperial Petroleum will satisfy the listing threshold.

It isfurther required that with respect to each class of stock relied upon to meet the listing threshold (i) such class of the stock is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year (or 1/6 ofthe days in the case of a short taxable year); and (ii) the aggregate number of shares of such class of stock traded on such market is at least 10% of the average number of shares of such class of stock outstanding during such year (or asappropriately adjusted in the case of a short taxable year). Imperial Petroleum expects to satisfy the trading frequency and trading volume tests described in this paragraph. Even if this were not the case, the relevant Treasury regulations providethat the trading frequency and trading volume tests will be deemed satisfied by a class of stock if, as Imperial Petroleum expects to be the case with its common stock and Series A Preferred Stock, such class of stock is traded on an establishedmarket in the United States, such as the Nasdaq Capital Market and such class of stock is regularly quoted by dealers making a market in such stock.

Notwithstanding the foregoing, the Treasury regulations provide that, in pertinent part, a class of a non-U.S. corporation’s stock willnot be considered to be “regularly traded” on an established securities market for any taxable year if 50% or more of the outstanding shares of such class of the corporation’s stock is owned, actually or constructively underspecified attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of such class of the corporation’s stock (the “5% Override Rule”).

For purposes of being able to determine the persons who own 5% or more of a class of a corporation’s stock (“5%Stockholders”) the Treasury regulations permit a corporation to rely on Schedule 13G and Schedule 13D filings with the SEC to identify persons who have a 5% or more beneficial interest in such corporation’s common stock, which currentlyare our sole class of voting shares, or, if our Series A Preferred Stock are then entitled to

 

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vote, our Series A Preferred Stock. The Treasury regulations further provide that an investment company that is registered under the Investment Company Act of 1940, as amended, will not betreated as a 5% Stockholder for such purposes.

It is possible that 5% Stockholders may own more than 50% of the Imperial Petroleum commonstock. In the event the 5% Override Rule is triggered, the Treasury regulations provide that the 5% Override Rule will nevertheless not apply if Imperial Petroleum can establish that within the group of 5% Stockholders, there are sufficient 5%Stockholders that are considered to be “qualified shareholders” for purposes of Section 883 of the Code to preclude non-qualified 5% Stockholders in the closely-held group from owning 50% or more of the corporation’s commonstock for more than half the number of days during the taxable year. To establish this exception to the 5% Override Rule, 5% Stockholders owning a sufficient number of our common stock would have to provide the Corporation with certain informationin order to substantiate their status as qualified shareholders. If, after the 2021 Spin-Off, 5% Stockholders were to own more than 50% of the Imperial Petroleum common stock, there is no assurance that Imperial Petroleum would be able to satisfythe foregoing requirements.

Taxation in Absence of Exemption

If the benefits of Section 883 of the Code are unavailable for any taxable year, Imperial Petroleum’s U.S. source shipping income,to the extent not considered to be “effectively connected” with the conduct of a United States trade or business, as described below, will be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without thebenefit of deductions (“4% gross basis tax regime”). Since under the sourcing rules described above, no more than 50% of our shipping income is treated as being derived from United States sources, the maximum effective rate of UnitedStates federal income tax on our shipping income will not exceed 2% under the 4% gross basis tax regime.

To the extent the benefits ofthe Section 883 of the Code are unavailable and Imperial Petroleum’s U.S. source shipping income is considered to be “effectively connected” with the conduct of a United States trade or business, as described below, any such“effectively connected” U.S. source shipping income, net of applicable deductions, would be subject to the United States federal corporate income tax currently imposed at rates of up to 21%. In addition, Imperial Petroleum may be subjectto the 30% United States federal “branch profits” taxes on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paidattributable to the conduct of such United States trade or business.

Imperial Petroleum’s U.S. source shipping income would beconsidered “effectively connected” with the conduct of a United States trade or business only if:

 

•

Imperial Petroleum has, or is considered to have, a fixed place of business in the United States involved in theearning of shipping income; and

 

•

Substantially all of Imperial Petroleum’s U.S. source shipping income is attributable to regularlyscheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.

Imperial Petroleum does not intend to have, or permit circumstances that would result in having, any vessel operating to the United States ona regularly scheduled basis. Based on the foregoing and on the expected mode of Imperial Petroleum’s shipping operations and other activities, Imperial Petroleum believes that none of its U.S. source shipping income will be “effectivelyconnected” with the conduct of a United States trade or business.

 

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United States Taxation of Gain on Sale of Vessels

Regardless of whether Imperial Petroleum qualifies for exemption under Section 883 of the Code, Imperial Petroleum will not be subject toUnited States federal income taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under United States federal income tax principles. In general, a sale of a vessel willbe considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel by Imperial Petroleumwill be considered to occur outside of the United States.

United States Federal Income Taxation of U.S. Holders

The following discussion regarding the material U.S. federal income tax consequences, subject to the limitations described below, to U.S.Holders (as defined below) of acquiring, and of owning and disposing, our common stock, Series A Preferred Stock, Class A Warrants, Class B Warrants, Class C Warrants and Class D Warrants, does not purport to be a comprehensive description ofall tax considerations that may be relevant to a particular person.

As used herein, the term “U.S. Holder” means a beneficialowner of Imperial Petroleum common stock, Series A Preferred Stock, Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants or Class E Warrants, and that is a United States citizen or resident, United States corporation or otherUnited States entity taxable as a corporation, an estate the income of which is subject to United States federal income taxation regardless of its source, or a trust if a court within the United States is able to exercise primary jurisdiction overthe administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or the trust has in effect a valid election to be treated as a United States person.

This discussion does not purport to deal with the tax consequences of owning Imperial Petroleum common stock, Series A Preferred StockClass A Warrants, Class B Warrants, Class C Warrants, Class D Warrants or Class E Warrants to all categories of investors, some of which, such as dealers in securities, investors whose functional currency is not the United States dollar andinvestors that own, actually or under applicable constructive ownership rules, 10% or more of our common stock, may be subject to special rules. This discussion deals only with holders who hold Imperial Petroleum common stock, Series A PreferredStock, Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants or Class E Warrants as a capital asset. You are encouraged to consult your own tax advisors concerning the overall tax consequences arising in your own particularsituation under United States federal, state, local or foreign law of the ownership of Imperial Petroleum common stock, Series A Preferred Stock, Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants or Class E Warrants.

If a partnership holds Imperial Petroleum common stock, Series A Preferred Stock, Class A Warrants, Class B Warrants, Class C Warrants,Class D Warrants or Class E Warrants, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding our common stock, Series A PreferredStock, Class A Warrants, Class B Warrants, Class C Warrants, Class D Warrants or Class E Warrants, you are encouraged to consult your tax advisor.

The foregoing treatment of the common stock, Series A Preferred Stock, Class A Warrants, Class B Warrants, Class C Warrants, Class DWarrants and Class E Warrants are not binding on the IRS or the courts.

Distributions

Subject to the discussion of passive foreign investment companies below, any distributions made by Imperial Petroleum with respect to itscommon stock or Series A Preferred Stock to a U.S. Holder will generally constitute dividends, which may be taxable as ordinary income or “qualified dividend income” to the extent of Imperial Petroleum’s current or accumulatedearnings and profits, as determined under United States federal income tax principles. Distributions in excess of Imperial Petroleum’s current or accumulated earnings and

 

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profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder’s tax basis their common stock or Series A Preferred Stock on a dollar-for-dollar basis andthereafter as capital gain. Because Imperial Petroleum is not a United States corporation, U.S. Holders that are corporations will generally not be entitled to claim a dividends received deduction with respect to any distributions such corporateU.S. Holders receive. Dividends paid with respect to the Imperial Petroleum common stock or Series A Preferred Stock will generally be treated as “passive category income” or, in the case of certain types of U.S. Holders, “generalcategory income” for purposes of computing allowable foreign tax credits for United States foreign tax credit purposes.

Dividendspaid on the Imperial Petroleum common stock or Series A Preferred Stock to a U.S. Holder who is an individual, trust or estate (a “U.S. Individual Holder”) are expected generally to be treated as “qualified dividend income”provided certain requirements are met. Qualified dividend income is taxable to such U.S. Individual Holders at preferential tax rates provided that (1) Imperial Petroleum is not a passive foreign investment company for the taxable year duringwhich the dividend is paid or the immediately preceding taxable year (which as discussed below, Imperial Petroleum does not believe it is, has been or will be), (2) the Imperial Petroleum common stock or Series A Preferred Stock, as applicable,are readily tradable on an established securities market in the United States (such as the Nasdaq Capital Market, on which the Imperial Petroleum common stock and Series A Preferred Stock will be listed), (3) the U.S. Individual Holder hasowned the common stock or Series A Preferred Stock, as applicable, for more than 60 days in the 121-day period beginning 60 days before the date on which the common stock or Series A Preferred Stock, respectively, become ex-dividend, and(4) the U.S. Individual Holder is not under an obligation (whether pursuant to a short sale or otherwise) to make payments with respect to positions in similar or related property. There is no assurance that any dividends paid on the ImperialPetroleum common stock or Series A Preferred Stock will be eligible for these preferential rates in the hands of a U.S. Individual Holder. Any dividends paid by Imperial Petroleum that are not eligible for these preferential rates will be taxed asordinary income to a U.S. Individual Holder.

Special rules may apply to any “extraordinary dividend”, which is generally adividend paid by Imperial Petroleum in an amount which is equal to or in excess of ten percent (in the case of common stock) or five percent (in the case of Series A Preferred Stock) of a stockholder’s adjusted tax basis (or fair market valuein certain circumstances) in Imperial Petroleum common stock or Series A Preferred Stock. If Imperial Petroleum pays an “extraordinary dividend” on its common stock or Series A Preferred Stock that is treated as “qualified dividendincome,” then any loss derived by a U.S. Individual Holder from the sale or exchange of such common stock or Series A Preferred Stock will be treated as long-term capital loss to the extent of such dividend.

For foreign tax credit purposes, if at least 50 percent of our stock by voting power or by value is owned, directly, indirectly or byattribution, by United States persons, then, subject to the limitation described below, a portion of the dividends that we pay in each taxable year will be treated as U.S.-source income, depending in general upon the ratio for that taxable year ofour U.S.-source earnings and profits to our total earnings and profits. The remaining portion of our dividends (or all of our dividends, if we do not meet the 50 percent test described above) will be treated as foreign-source income and generallywill be treated as passive category income or, in the case of certain types of United States holders, general category income for purposes of computing allowable foreign tax credits for United States federal income tax purposes. However, if, in anytaxable year, we have earnings and profits and less than ten percent of those earnings and profits are from United States sources, then, in general, dividends that we pay from our earnings and profits for that taxable year will be treated entirelyas foreign-source income. Where a United States holder that is an individual receives a dividend on our shares that is a qualifying dividend (as described in the second preceding paragraph), special rules will apply that will limit the portion ofsuch dividend that will be included in such individual’s foreign source taxable income and overall taxable income for purposes of calculating such individual’s foreign tax credit limitation.

Sale, Exchange or other Disposition of Common Stock or Series A Preferred Stock

Assuming Imperial Petroleum does not constitute a passive foreign investment company for any taxable year, a U.S. Holder generally willrecognize taxable gain or loss for U.S. federal income tax purposes upon a

 

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