We are offering an aggregate of 40,000,000 of our common shares pursuant to a Securities Purchase Agreement, dated March 30, 2020, between us and the institutional investors
identified therein (who we refer to herein as the Investors).
Our common shares are traded on the Nasdaq Capital Market, or Nasdaq, under the symbol “TOPS.” On March 27, 2020, the last reported sale price of our common shares on Nasdaq
was $0.23 per share.
Sales of common shares and associated preferred stock purchase rights, if any, sold under this prospectus supplement and the accompanying prospectus, may be made by means of
ordinary brokers’ transactions on the Nasdaq, in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made to or through a
market maker other than on an exchange, at prices related to the prevailing market prices or at negotiated prices.
Investing in our common shares involves a high degree of risk and uncertainty. See “Risk Factors” beginning on page S-7 of this prospectus supplement, and in
the accompanying prospectus and the documents we have filed with the Securities and Exchange Commission, or the Commission, that are incorporated by reference herein for more information, before you make any investment in our common shares.
We have retained Maxim Group LLC (who we refer to herein as the Placement Agent or Maxim) as our exclusive placement agent to use its reasonable best efforts to solicit offers to purchase our common
shares in this offering, and we have agreed to pay the Placement Agent a cash fee of 6.5% of the aggregate gross proceeds in this offering. The Placement Agent is not selling any of our common shares pursuant to this prospectus supplement or the
accompanying prospectus. We expect that delivery of our common shares being offered pursuant to this prospectus supplement will be made to the Investors on or about April 1, 2020.
None of the Securities and Exchange Commission, or the Commission, any state securities commission, or any other regulatory body has approved or disapproved
of these securities or passed on the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
Page
ABOUT THIS PROSPECTUS SUPPLEMENT
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S-ii
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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S-iii
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PROSPECTUS SUPPLEMENT SUMMARY
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S-1
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THE OFFERING
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S-6
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RISK FACTORS
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S-7
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USE OF PROCEEDS
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S-14
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CAPITALIZATION
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S-15
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BENEFICIAL OWNERSHIP OF OUR COMMON SHARES
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S-17
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DESCRIPTION OF CAPITAL STOCK
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S-18
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TAX CONSIDERATIONS
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S-27
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PLAN OF DISTRIBUTION
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S-28
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EXPENSES
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S-30
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LEGAL MATTERS
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EXPERTS
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
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BASE PROSPECTUS
Page
SUMMARY
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1
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RISK FACTORS
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5
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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6
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USE OF PROCEEDS
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7
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CAPITALIZATION
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8
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PLAN OF DISTRIBUTION
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9
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DESCRIPTION OF CAPITAL STOCK
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11
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DESCRIPTION OF DEBT SECURITIES
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20
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DESCRIPTION OF WARRANTS
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26
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DESCRIPTION OF PURCHASE CONTRACTS
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27
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DESCRIPTION OF RIGHTS
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28
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DESCRIPTION OF UNITS
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29
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ENFORCEABILITY OF CIVIL LIABILITIES
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30
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EXPENSES
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31
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LEGAL MATTERS
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31
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EXPERTS
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31
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
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31
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ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus are part of a registration statement that we filed with the Commission,
utilizing a “shelf” registration process.
This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering described herein and the securities offered
hereby, and also adds to and updates information contained in the accompanying base prospectus and the documents incorporated by reference into this prospectus supplement and the base prospectus.
The second part, the base prospectus, gives more general information about securities we may offer from time to time, some of which does not apply to this offering. Generally,
when we refer only to the prospectus, we are referring to both parts combined, and when we refer to the accompanying prospectus, we are referring to the base prospectus.
If the description of this offering varies between this prospectus supplement and the accompanying prospectus, you should rely on the information contained in this prospectus
supplement. This prospectus supplement, the accompanying base prospectus and the documents incorporated into each by reference include important information about us, our common shares being offered and other information you should know before
investing. You should read this prospectus supplement and the accompanying base prospectus together with the additional information described under the heading “Where You Can Find Additional Information” before investing in our common shares.
We have authorized only the information contained or incorporated by reference in this prospectus supplement, the accompanying prospectus, and any free writing prospectus
prepared by or on behalf of us or to which we have referred you. We have not, and the placement agent has not, authorized anyone to provide you with information that is different. We and the placement agent take no responsibility for, and can
provide no assurance as to the reliability of, any information that others may give you. If anyone provides you with different or inconsistent information, you should not rely on it. We are offering to sell our common shares only in jurisdictions
where offers and sales are permitted. The information contained in or incorporated by reference in the prospectus is accurate only as of the date such information was issued, regardless of the time of delivery of the prospectus or the date of any
sale of our common shares.
Unless otherwise indicated, all references to “dollars” and “$” in this prospectus supplement are to, and amounts presented in, United States dollars and financial information
presented in this prospectus supplement that is derived from financial statements incorporated by reference is prepared in accordance with accounting principles generally accepted in the United States.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Matters discussed in this prospectus supplement may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995, or the PSLRA, provides safe
harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events
or performance, and underlying assumptions and other statements, which are statements other than statements of historical facts.
TOP Ships Inc. desires to take advantage of the safe harbor provisions of the PSLRA and is including this cautionary statement in connection with this safe harbor legislation.
This prospectus supplement and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. When used in this
prospectus supplement, statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “anticipate,” “believe,” “expect,” “intend,” “estimate,” “forecast,” “project,” “plan,”
“potential,” “continue,” “possible,” “likely,” “may,” “should,” and similar expressions identify forward-looking statements.
The forward-looking statements in this prospectus supplement are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without
limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are
inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these assumptions and matters discussed elsewhere herein and in the documents incorporated by reference herein, important factors that, in our view, could cause
actual results to differ materially from those discussed in the forward-looking statements include the following:
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•
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our ability to maintain or develop new and existing customer relationships with major refined product importers and exporters, major crude oil companies and major commodity traders, including our ability to enter into long-term
charters for our vessels;
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•
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our future operating and financial results;
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•
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our future vessel acquisitions, our business strategy and expected capital spending or operating expenses, including any dry-docking and
insurance costs;
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•
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our financial condition and liquidity, including our ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate activities;
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•
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oil and chemical tanker industry trends, including charter rates and vessel values and factors affecting vessel supply and demand;
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•
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our ability to take delivery of, integrate into our fleet, and employ any new vessels we have ordered or may order in the future and the ability of shipyards to deliver vessels on a timely basis;
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•
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the aging of our vessels and resultant increases in operation and dry-docking costs;
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•
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the ability of our vessels to pass classification inspections and vetting inspections by oil majors and big chemical corporations;
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•
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significant changes in vessel performance, including increased vessel breakdowns;
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•
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the creditworthiness of our charterers and the ability of our contract counterparties to fulfill their obligations to us;
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•
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our ability to repay outstanding indebtedness, to obtain additional financing and to obtain replacement charters for our vessels, in each case, at commercially acceptable rates or at all;
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•
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changes to governmental rules and regulations or actions taken by regulatory authorities and the expected costs thereof;
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•
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potential liability from litigation and our vessel operations, including discharge of pollutants;
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changes in general economic and business conditions;
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•
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general domestic and international political conditions, potential disruption of shipping routes due to accidents, political events (including “trade wars”), piracy, acts by terrorists or major disease outbreaks such as the recent
worldwide coronavirus outbreak;
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•
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changes in production of or demand for oil and petroleum products and chemicals, either globally or in particular regions;
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•
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the strength of world economies and currencies, including fluctuations in charter hire rates and vessel values;
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•
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potential liability from future litigation and potential costs due to any environmental damage and vessel collisions; and
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•
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other important factors described from time to time in the reports filed by us with the Commission.
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You should not place undue reliance on forward-looking statements contained in this prospectus supplement because they are statements about events that are not certain to occur
as described or at all. All forward-looking statements in this prospectus supplement are qualified in their entirety by the cautionary statements contained in this prospectus supplement.
Any forward-looking statements contained herein are made only as of the date of this prospectus supplement, and except to the extent required by applicable law or regulation we
undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to
time, and it is not possible for us to predict all or any of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be
materially different from those contained in any forward-looking statement.
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights information that appears elsewhere in this prospectus supplement or in the documents incorporated by reference herein and is
qualified in its entirety by the more detailed information, including the financial statements that appear in the documents incorporated by reference. This summary may not contain all of the information that may be important to you. As an
investor or prospective investor, you should review carefully the entire prospectus supplement, including the risk factors, and the more detailed information that is included herein and in the documents incorporated by reference herein.
Unless the context otherwise requires, as used in this prospectus supplement, the terms “Company,” “we,” “us,” and “our” refer to TOP Ships Inc. and all
of its subsidiaries. We use the term deadweight ton, or dwt, in describing the size of vessels. Dwt, expressed in metric tons each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can
carry. Our reporting currency is in the U.S. dollar and all references in this prospectus supplement to “$” or “dollars” are to U.S. dollars. Further, unless otherwise indicated, the information presented in this prospectus supplement gives
effect to the following reverse stock splits of our issued and outstanding common shares: a one-for-ten reverse stock split effected on February 22, 2016, a one-for-twenty reverse stock split effected on May 11, 2017, a one-for-fifteen reverse
stock split effected on June 23, 2017, a one-for-thirty reverse stock split effected on August 3, 2017, a one-for-two reverse stock split effected on October 6, 2017, a one-for-ten reverse stock split effected on March 26, 2018 and a
one-for-twenty reverse stock split of our issued and outstanding common shares effective on August 22, 2019.
Our Company
We are an international owner and operator of modern, fuel efficient eco vessels focusing on the transportation of crude oil, petroleum products (clean and dirty) and bulk
liquid chemicals. Our fleet has a total capacity of 714,000 deadweight tonnes (“dwt”). As of the date of this report, our fleet consists of eight 50,000 dwt product/chemical tankers, the M/T Stenaweco Energy, M/T Stenaweco Evolution, M/T Nord
Valiant, M/T Stenaweco Excellence, the M/T Eco California, the M/T Eco Marina Del Ray, The M/T Eco Los Angeles and the M/T Eco City of Angels and two 157,000 dwt Suezmax tankers, the M/T Eco Bel Air and M/T Eco Beverly Hills and we also own 50%
interests in one 50,000 dwt product/chemical tanker, the M/T Palm Springs, which we have agreed to sell subject to customary closing conditions. All of our vessels are IMO certified and are capable of carrying a wide variety of oil products
including chemical cargos which we believe make our vessels attractive to a wide base of charterers. All of the vessels in our fleet are financed under sale and leaseback agreements.
Our Fleet in the Water
The following tables present our fleet list as of the date of this prospectus supplement:
MR Tanker vessels on Sale and Leaseback (“SLBs”) (treated as financings):
Name
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Deadweight
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Charterer
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End of firm period
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Charterer’s Optional Periods
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Gross Rate fixed period/ options
|
M/T Stenaweco Energy
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50,000
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Stena Weco A/S
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February 2021
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1+1 years
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$15,616 / $17,350 / $18,100
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M/T Stenaweco Evolution
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50,000
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Stena Weco A/S
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October 2021
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1+1 years
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$15,516 / $17,200 / $18,000
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M/T Stenaweco Excellence
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50,000
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Stena Weco A/S
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November 2020
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1+1 years
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$16,200 / $17,200 / $18,000
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M/T Nord Valiant
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50,000
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DS Norden A/S
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August 2021
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1+1 years
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$16,800 / $17,600 / $18,400
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M/T Eco California
|
50,000
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Shell Tankers Singapore Private Limited
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January 2021
|
1 year
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$13,750 plus 50% profit share/ $13,950 plus 50% profit share
|
M/T Eco Marina Del Ray
|
50,000
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Cargill
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March 2024
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-
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$15,100
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M/T Eco Los Angeles
|
50,000
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Trafigura
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February 2023
|
1+1 years
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$17,500 / $18,750 / $20,000
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M/T Eco City of Angels
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50,000
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Trafigura
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February 2023
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1+1 years
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$17,500 / $18,750 / $20,000
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Suezmax Vessels on SLBs (treated as financings):
Name
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Deadweight
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Charterer
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End of firm period
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Charterer’s Optional Periods
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Gross Rate fixed period/ options
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M/T Eco Bel Air
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157,000
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BP Shipping Limited
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April 2022
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1+1 years
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$24,500 / $27,500 / $29,000
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M/T Eco Beverly Hills
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157,000
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BP Shipping Limited
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May 2022
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1+1 years
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$24,500 / $27,500 / $29,000
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Joint Venture MR Tanker fleet (50% owned):
Name
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Deadweight
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Charterer
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End of firm period
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Charterer’s Optional Periods
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Gross Rate fixed period/ options
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M/T Eco Palm Springs*
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50,000
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Clearlake Shipping Pte Ltd
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May 2021
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1+1 years
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$14,750 up to May 2020 and $15,175 thereafter / $15,550 / $16,550
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* We have agreed to sell this vessel subject to customary closing conditions.
All the vessels in our fleet are equipped with engines of modern design and with improvements in the hull, propellers and other parts of the vessel to decrease fuel
consumption and reduce emissions. Vessels with this combination of technologies, introduced from certain shipyards, are commonly referred to as eco vessels. We believe that recent advances in shipbuilding design and technology should make these
latest generation vessels more fuel-efficient than older vessels in the global fleet that compete with our vessels for charters, providing us with a competitive advantage. Furthermore, five of our vessels have scrubbers installed.
We believe we have established a reputation in the international ocean transport industry for operating and maintaining vessels with high standards of performance,
reliability and safety. We have assembled a management team comprised of executives who have extensive experience operating large and diversified fleets of tankers and who have strong ties to a number of national, regional and international oil
companies, charterers and traders.
Recent Developments
We entered into sale and leaseback agreements with Oriental Fleet International Company Limited, a non-affiliated party, for M/T Stenaweco Excellence on July 15, 2019, and
for both M/T Stenaweco Energy and M/T Stenaweco Evolution on August 30, 2019. The sale of the M/T Stenaweco Excellence was completed on July 15, 2019 and the sales of the M/T Stenaweco Energy and M/T Stenaweco Evolution were completed on
November 20, 2019. Prior to the aforementioned sale and leasebacks, on November 20, 2019, we exercised the purchase options on the operating leases of the M/T Stenaweco Energy and M/T Stenaweco Evolution for a total of $47.9 million. Following
completion of the sales, we bareboat chartered back the three vessels for periods of ten years at bareboat hire rates comprising of financing principal based on straight-line amortization with a balloon payment at the end of the bareboat
charter term plus interest based on the three months LIBOR rate plus 3.90% per day. As part of this transaction, we have continuous options, commencing after the third year, to buy back the vessels at purchase prices stipulated in the bareboat
agreements dependent upon on when the options are exercised and at the end of the ten -year period we have an obligation to purchase the vessels. The gross proceeds from the sale of the M/T Stenaweco Excellence was $25.6 million and the total
gross proceeds for the M/T Stenaweco Energy and M/T Stenaweco Evolution was $45.8 million.
The abovementioned sale and leaseback transactions contain customary covenants and event of default clauses, including cross-default provisions, restrictive covenants and
performance requirements. The sale and leaseback agreements with Oriental Fleet International Company Limited has been accounted as financing transactions, since control will remain with us and the vessels will continue to be recorded as assets
on our balance sheet.
On August 22, 2019, we effected a 1-for-20 reverse stock split of our common shares. There was no change in the number of our authorized common shares. All share amounts in
this prospectus have been retroactively adjusted to reflect this reverse stock split.
On September 9, 2019, Nasdaq notified us that we have regained compliance with the minimum bid price requirement for the Nasdaq Capital Market.
On September 13, 2019, we closed an underwritten public offering of an aggregate of 1,580,000 common shares (or pre-funded warrants to purchase common shares in lieu
thereof, the Pre-Funded Warrants), warrants, or the Traditional Warrants, to purchase up to 1,790,000 of our common shares and an overallotment option of up to 237,000 common shares, or the September 2019 Transaction. This resulted in gross
proceeds of $10,480,060 before deducting underwriting discounts, commissions and other offering expenses. The gross proceeds include the partial exercise of 85,000 common shares of the underwriter’s over-allotment option granted in connection
with the offering. From September 13 to December 31, 2019, 1,245,089 common shares were issued pursuant to the cashless exercise of 1,778,700 Traditional Warrants. The Traditional Warrants expired on December 31, 2019.
On October 14, 2019, we entered into a deed of Amendment for the AT Bank Bridge Facility Note dated March 22, 2019 in the amount of $10.5 million, or the AT Note, which
among other things, extended the maturity date of the AT Note for one year to March 31, 2021.
On November 6, 2019, we entered into a placement agent agreement with Maxim Group LLC relating to the sale of our securities, or the Placement Agent Agreement. In addition
to the Placement Agent Agreement, we entered into the Securities Purchase Agreement with certain institutional investors in connection with a registered direct offering of an aggregate of 4,200,000 of our common shares at a public offering
price of $2.00 per share, registered on our Registration Statement on Form F-3 (333-215577), or the Registered Direct Offering. Concurrently with the Registered Direct Offering and pursuant to the Securities Purchase Agreement, we also
commenced a private placement whereby we issued and sold Class A warrants to purchase up to 4,200,000 of our common shares and Class B warrants to purchase up to 4,200,000 of our common shares that were attached to the 4,200,000 common shares
sold.
On December 18, 2019, we acquired interests in two companies that each is the sole purchaser in a newbuilding contract. We purchased 100% of the issued and outstanding
shares of Santa Catalina Inc., a Marshall Islands company that had entered into a newbuilding contract for a high specification scrubber-equipped, 50,000 dwt MR product/chemical tanker named Eco Los Angeles under construction at Hyundai Mipo
Dockyard Co., Ltd. in South Korea that was delivered to us February 10, 2020. We acquired the shares from an entity affiliated with our Chief Executive Officer for an aggregate purchase price of $7.2 million. We also purchased 100% of the
issued and outstanding shares of Santa Monica Inc., a Marshall Islands company that had entered into a newbuilding contract for a high specification scrubber-equipped, 50,000 dwt MR product/chemical tanker to be named Eco City of Angels
delivered from Hyundai Mipo Dockyard Co., Ltd. in South Korea on February 17, 2020. We acquired the shares from an entity affiliated with our Chief Executive Officer for an aggregate purchase price of $7.2 million. Following their delivery,
the vessels commenced a time charter with Trafigura for a firm duration of three years, with charterer’s option to extend for two additional years.
On December 26, 2019, we received a written notification from Nasdaq indicating that because the closing bid price of our common shares for the last 30 consecutive business
days was below $1.00 per share, we no longer met the minimum bid price requirement under Nasdaq rules. Pursuant to the Nasdaq Listing Rules, the applicable grace period to regain compliance is 180 days, or until June 23, 2020. We intend to
monitor the closing bid price of our common shares between now and June 23, 2020 and are considering our options, including a reverse stock split, in order to regain compliance with the Nasdaq Capital Market minimum bid price requirement. We
can cure this deficiency if the closing bid price of our common stock is $1.00 per share or higher for at least ten consecutive business days during the grace period.
On January 3, 2020, we announced that we agreed to sell two MR1 Product Tankers, the M/T Eco Fleet and the M/T Eco Revolution (each weighing 39,000 dwt) to unaffiliated
third parties. On January 14, 2020, the M/T Eco Revolution was delivered to its buyer and we received gross proceeds of $23.0 million, part of which were used to prepay in full the outstanding amount of $15.1 million under tranche A of our
loan facility with ABN AMRO, or the ABN Facility. On January 21, 2020, the M/T Eco Fleet was delivered to its buyer and we received $21.0 million, part of which were used to prepay in full the outstanding amount of $14.4 million under tranche
B of the ABN Facility, resulting in the full prepayment of the ABN Facility. The sales of the M/T Eco Revolution and the M/T Eco Fleet resulted in impairment charges amounting to about $5.5 million and $6.8 million, respectively, that will
affect the year ended 2019 financial results and is estimated to result in losses per share of $4.20.
Between January 22 and February 21, 2020, all of the Class A Warrants (4,200,000 warrants) were exercised on a cashless basis into 1,680,000 of our common shares.
On February 12, 2020, we entered into an Equity Distribution Agreement with Maxim Group LLC, as sales agent, under which the Company may offer and sell, from time to time
through Maxim, up to US$5,000,000 of its common shares. We completed the offering on March 4, 2020 and sold a total of 14,637,118 common shares.
On February 17, 2020, we announced the issuance of 16,004 Series E Preferred Shares to Family Trading, as settlement of the purchase price of $14.35 million for the
purchase of the M/T Eco City of Angels and M/T Eco Los Angeles from Mr. Pistiolis, our President, Chief Executive Officer and Director, and for dividends payable to Family Trading Inc. under already outstanding Series E Preferred Shares. As of
March 30, 2020, there were 10,364 shares of Series E Preferred Shares outstanding.
On February 21, 2020, we announced that our 50% owned subsidiaries which own M/T Holmby Hills and M/T Palm Springs entered into agreements to sell both vessels to
unaffiliated third parties and that depending on when the closing of the sales occurred and the prevailing USD swap rates at the time of closing, we estimated that we would incur impairment charges ranging from $1.5 million to $3.5 million due
to these sales (or losses per share ranging from $0.51 to $1.20) that would affect the year ended 2019 financial results and also estimated the cash release to us to range from $19 million to $21 million. On March 30, 2020, we announced the
delivery of M/T Holmby Hills to an unaffiliated party that resulted in a cash release to the Company of $10.2 million. This sale resulted in impairment charges of $1.5 million that will affect the year ended 2019 financial results. The delivery
of the M/T Palm Springs is scheduled to occur around April 6, 2020.
On February 6, 2020, we announced that we agreed to sell two MR2 Product Tankers, the M/T Stenaweco Elegance and the M/T Palm Desert (each weighing 50,000 dwt) to unaffiliated third
parties. On February 25, 2020, we announced the delivery of the M/T Stenaweco Elegance and the respective loans for which the vessel served as collateral was fully prepaid and we realized a gain of $2.0 million.
From July 25, 2019 to March 30, 2020, we redeemed 33,798 of Series E perpetual preferred convertible shares, or the Series E Preferred Shares, for $38.9 million in cash
from Family Trading Inc., a company related to Mr. Pistiolis, our President, Chief Executive Officer and Director, or Family Trading. Please see the section entitled “Capitalization” for further information relating to the redemptions.
On August 26, 2019, Plaintiffs filed a notice of appeal to an ongoing purported securities class action complaint filed in the United States District Court for the Eastern
District of New York (No. 2:17-cv-04987(JFB)(SIL)) by Christopher Brady on behalf of himself and all others similarly situated against (among other defendants) the Company and two of its executive officers. Plaintiffs/appellants filed their
opening brief on the appeal on October 25, 2019. Defendants/appellees filed their response briefs on November 26 and November 27, 2019, and plaintiffs/appellants filed their reply brief on December 11, 2019. The Court of Appeals held oral
argument on March 10, 2020 and took the matter under advisement. A decision on the appeal is currently pending. The Company and its management believe that the allegations in the complaints are without merit and plan to vigorously defend
themselves against the allegations.
On March 11, 2020, we entered into an Equity Distribution Agreement with Maxim Group LLC, as sales agent, under which the Company may offer and sell, from time to time
through Maxim, up to US$5,000,000 of its common shares. We completed the offering on March 27, 2020 and sold a total of 52,692,690 common shares.
On February 6, 2020, we announced that we agreed to sell two MR2 Product Tankers, the M/T Stenaweco Elegance and the M/T Palm Desert (each weighing 50,000 dwt) to unaffiliated third
parties. On March 23, 2020, we announced the delivery of the M/T Palm Desert and the respective loans for which the vessel served as collateral was fully prepaid and we realized a gain of $3.2 million.
Corporate Information
Our predecessor, Ocean Holdings Inc., was formed as a corporation in January 2000 under the laws of the Republic of the Marshall Islands and renamed Top Tankers Inc. in May
2004. In December 2007, Top Tankers Inc. was renamed TOP Ships Inc.
Our common shares are currently listed on the Nasdaq Capital Market under the symbol “TOPS.” The current address of our principal executive office is 1 Vasilisis Sofias and
Megalou Alexandrou Str, 15124 Maroussi, Greece. The telephone number of our registered office is +30 210 812 8000. Our corporate website address is www.topships.org. The information contained on our website does not constitute part of this
prospectus supplement.
THE OFFERING
Issuer
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TOP Ships Inc., a Marshall Islands corporation
|
|
|
Common shares outstanding
as of March 30, 2020
|
77,705,155 common shares
|
|
|
Common shares offered by us
|
40,000,000 common shares.
|
|
|
Common shares outstanding immediately after the offering
|
117,705,155 common shares
|
|
|
Preferred share purchase rights
|
Our common shares include preferred share purchase rights, as described in the section of this prospectus supplement entitled “Description of Capital Stock—Stockholders Rights Agreement.”
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|
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Use of proceeds
|
We intend to use the net proceeds of this offering, after deducting the sale agent’s commissions and our estimated offering expenses, for general corporate purposes which may include the purchase of
vessels from an affiliate and the redemption of Series E Preferred Shares. See “Use of Proceeds.”
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|
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Risk factors
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Investing in our common shares involves a high degree of risk and uncertainty. You should carefully consider all the information in this
prospectus supplement, the accompanying prospectus and the documents incorporated into each by reference prior to investing in our common shares. In particular, we urge you to consider carefully the factors set forth in the section
entitled “Risk Factors” beginning on page S-7 of this prospectus supplement, and in the accompanying prospectus and the documents we have filed with the Commission that are incorporated by reference herein for more information, before
you make any investment in our common shares.
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Listing
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Our common shares are traded on the Nasdaq Capital Market under the symbol “TOPS.”
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RISK FACTORS
An investment in our common shares involves a high degree of risk and uncertainty. We have identified a number of
risk factors which you should consider before investing in our common shares. You should consider carefully the risks set forth below, those risk factors set forth under the heading “Risk Factors” in our Annual Report on Form 20-F for the year
ended December 31, 2018, filed with the Commission on March 28, 2019 and incorporated by reference in this prospectus supplement, and in any other documents we have incorporated by reference in this prospectus supplement, as well as those under
the heading “Risk Factors” in the accompanying prospectus before investing in our common shares. The occurrence of one or more of these risk factors could adversely affect our results of operations or financial condition.
Risks Related to Our Common Shares and this Offering
There is no guarantee of a continuing public market for you to resell our common shares.
Our common shares currently trade on the Nasdaq Capital Market. We cannot assure you that an active and liquid public market for our common shares will continue and you may not
be able to sell your common shares in the future at the price that you paid for them or at all. The price of our common shares may be volatile and may fluctuate due to factors such as:
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actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry;
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mergers and strategic alliances in the shipping industry;
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market conditions in the shipping industry and the general state of the securities markets;
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changes in government regulation;
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shortfalls in our operating results from levels forecast by securities analysts; and
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announcements concerning us or our competitors.
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Further, a lack of trading volume in our stock may affect investors’ ability to sell their shares. Our common shares have been experiencing low daily trading volumes in the
market. As a result, investors may be unable to sell all or any of their shares in the desired time period, or may only be able to sell such shares at a significant discount to the previous closing price.
Nasdaq may delist our common shares from its exchange which could limit your ability to make transactions in our
securities and subject us to additional trading restrictions.
On December 26, 2019, we received a written notification from Nasdaq indicating that because the closing bid price of our common shares for the last 30 consecutive business
days was below $1.00 per share, we no longer met the minimum bid price requirement under Nasdaq rules. Pursuant to the Nasdaq Listing Rules, the applicable grace period to regain compliance is 180 days, or until June 23, 2020. We intend to monitor
the closing bid price of our common shares between now and June 23, 2020 and are considering our options, including a reverse stock split, in order to regain compliance with the Nasdaq Capital Market minimum bid price requirement. We can cure this
deficiency if the closing bid price of our common shares is $1.00 per share or higher for at least ten consecutive business days during the grace period.
On July 27, 2016, we transferred our Nasdaq listing from the Nasdaq Global Select Market to the Nasdaq Capital Market. Our common shares continue to trade on Nasdaq under the
symbol “TOPS”. The Nasdaq Capital Market is a continuous trading market that operates in substantially the same manner as the Nasdaq Global Select Market. We then fulfilled the listing requirements of the Nasdaq Capital Market and the approval of
the transfer cured our deficiency under Nasdaq Listing Rule 5450(b)(1)(C).
On June 27, 2017, we received written notification from Nasdaq, indicating that because the closing bid price of our common shares for the last 30 consecutive business days was
below $1.00 per share, we no longer met the minimum bid price requirement for the Nasdaq Capital Market, set forth in Nasdaq Listing Rule 5450(a)(1). Pursuant to the Nasdaq Listing Rules, the applicable grace period to regain compliance was 180
days, or until December 26, 2017. We regained compliance on August 17, 2017.
On October 10, 2017, we received written notification from Nasdaq indicating that because the closing bid price of our common shares for the last 30 consecutive business days
was below $1.00 per share, we no longer meet the minimum bid price requirement for the Nasdaq Capital Market, set forth in Nasdaq Listing Rule 5450(a)(1). Pursuant to the Nasdaq Listing Rules, the applicable grace period to regain compliance is 180
days, or until April 9, 2018. After requesting a grace period from Nasdaq, we regained compliance on April 11, 2018.
On March 11, 2019, we received written notification from Nasdaq, indicating that because the closing bid price of our common shares for the last 30 consecutive business days
was below $1.00 per share, we no longer met the minimum bid price requirement for the Nasdaq Capital Market, set forth in Nasdaq Listing Rule 5450(a)(1). Pursuant to the Nasdaq Listing Rules, the applicable grace period to regain compliance is 180
days, or until September 9, 2019.
On August 22, 2019 we effectuated a 20 to 1 reverse stock split in order to regain compliance with Nasdaq Listing Rule 5450(a)(1). As a result, we regained compliance on
September 5, 2019.
A continued decline in the closing price of our common shares on Nasdaq could result in suspension or delisting procedures in respect of our common shares. The commencement of
suspension or delisting procedures by an exchange remains, at all times, at the discretion of such exchange and would be publicly announced by the exchange. If a suspension or delisting were to occur, there would be significantly less liquidity in
the suspended or delisted securities. In addition, our ability to raise additional necessary capital through equity or debt financing would be greatly impaired. Furthermore, with respect to any suspended or delisted common shares, we would expect
decreases in institutional and other investor demand, analyst coverage, market making activity and information available concerning trading prices and volume, and fewer broker-dealers would be willing to execute trades with respect to such common
shares. A suspension or delisting would likely decrease the attractiveness of our common shares to investors and constitutes a breach under certain of our credit agreements as well as constitutes an event of default under certain classes of our
preferred stock and would cause the trading volume of our common shares to decline, which could result in a further decline in the market price of our common shares.
Finally, if the volatility in the market continues or worsens, it could have a further adverse effect on the market price of our common
shares, regardless of our operating performance.
Outbreaks of epidemic and pandemic diseases and governmental responses thereto could adversely affect our business.
Public health threats, such as the COVID-19 outbreak (as described more fully below), influenza and other highly communicable diseases or viruses, outbreaks of which have from
time to time occurred in various parts of the world in which we operate, including China, could adversely impact our operations, the timing of completion of any outstanding or future newbuilding projects, as well as the operations of our customers.
The recent outbreak of coronavirus COVID-19, a virus causing potentially deadly respiratory tract infections first identified in China, has negatively affected economic
conditions regionally as well as globally and we expect it to otherwise impact our operations and the operations of our customers and suppliers. Governments in affected countries are imposing travel bans, quarantines and other emergency public
health measures. In response to the virus, a number of countries throughout the world including China, Italy, Spain and France have implemented lockdown measures, and other countries and local governments may enact similar policies. As of March 15,
2020, the United States has temporarily restricted travel by foreign nationals into the country from a number of areas, including China and Europe. In addition, on March 18, 2020, the U.S. and Canada agreed to restrict all nonessential travel
across the border. Companies are also taking precautions, such as requiring employees to work remotely, imposing travel restrictions and temporarily closing businesses. These restrictions, and future prevention and mitigation measures, have had and
are likely to continue to have an adverse impact on global economic conditions, which could materially adversely affect our future operations. Uncertainties regarding the economic impact of the COVID-19 outbreak are likely to result in sustained
market turmoil, which could also negatively impact our business, financial condition and cash flows. As a result of these measures, our vessels may not be able to call on ports, or may be restricted from disembarking from ports, located in regions
affected by the outbreak. In addition we may experience severe operational disruptions and delays, unavailability of normal port infrastructure and services including limited access to equipment, critical goods and personnel, disruptions to crew
change, quarantine of ships and/or crew, counterparty solidity, closure of ports and custom offices, as well as disruptions in the supply chain and industrial production which may lead to reduced cargo demand, amongst other potential consequences
attendant to epidemic and pandemic diseases. The extent of the COVID-19 outbreak’s effect on our operational and financial performance will depend on future developments, including the duration, spread and intensity of the outbreak, all of which
are uncertain and difficult to predict considering the rapidly evolving landscape. As a result, we cannot predict the impact it may have on our future operations, which could be material and adverse, particularly if the pandemic continues to evolve
into a severe worldwide health crisis.
Public health threats in any area, including areas where we do not operate, could disrupt international transportation. Our crews generally work on a rotation basis, with a
substantial portion relying on international air transport for rotation. Any such disruptions could impact the cost of rotating our crews, and possibly impact our ability to maintain a full crew on all vessels at any given time. Any of these public
health threats and related consequences could adversely affect our financial results.
Our management team will have broad discretion over the use of the net proceeds from this offering.
Our management will use its discretion to direct the net proceeds from this offering. We intend to use the net proceeds of this offering, after deducting the sale agent’s commissions and our estimated offering expenses, for general corporate purposes which may include the purchase of vessels from an affiliate and the redemption of Series E Preferred Shares. Our
management’s judgments may not result in positive returns on your investment and you will not have an opportunity to evaluate the economic, financial or other information upon which our management bases its decisions.
We issued 7,544,474 and 69,009,808 common shares during 2019 and 2020, respectively, through various
transactions. Shareholders may experience significant dilution as a result of our offerings.
We have already sold large quantities of our common shares pursuant to previous public and private offerings of our equity and equity-linked securities. We currently have an
effective registration statement on Form F-3 (333-234281), for the sale of up to $200,000,000, of which $10.0 million worth of shares have been sold. We also have 10,364 Series E Preferred Shares outstanding, which are convertible into
approximately 17,274,140 common shares as of the date of this prospectus supplement and Class B Warrants which are exercisable into 4,200,000 common shares. All of the Series E Preferred Shares are held by Family Trading.
Purchasers of the common shares we sell, as well as our existing shareholders, will experience significant dilution if we sell shares at prices significantly below the price at
which they invested. In addition, we may issue additional common shares or other equity securities of equal or senior rank in the future in connection with, among other things, future vessel acquisitions, redemptions of our Series E Preferred
Shares, or our equity incentive plan, without shareholder approval, in a number of circumstances. Our existing shareholders may experience significant dilution if we issue shares in the future at prices below the price at which previous
shareholders invested.
Our issuance of additional shares of common shares or other equity securities of equal or senior rank would have the following effects:
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our existing shareholders’ proportionate ownership interest in us will decrease;
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the amount of cash available for dividends payable on the shares of our common shares may decrease;
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the relative voting strength of each previously outstanding common share may be diminished; and
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the market price of the shares of our common shares may decline.
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Investors may experience significant dilution as a result of this offering and future offerings.
We are selling 40,000,000 common shares which is approximately 51.5% of our issued and outstanding common shares through this offering pursuant to this prospectus supplement to the Investors.
The Investors may resell some or all of the shares of our common shares we issue to them and such sales could cause the market price of our common shares to decline. Under these circumstances, our existing shareholders would experience greater
dilution.
Purchasers of the common shares we sell, as well as our existing shareholders, will experience significant dilution if we sell shares at prices significantly below the price
at which they invested. In addition, we may offer additional common shares in the future, which may result in additional significant dilution.
Future issuances or sales, or the potential for future issuances or sales, of our common shares 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 common shares and we may do so in the future. Shares to be issued in future equity offerings could cause the market price of our
common shares to decline, and could have an adverse effect on our earnings per share if and when we become profitable. In addition, future sales of our common shares or other securities in the public markets, or the perception that these sales may
occur, could cause the market price of our common shares to decline, and could materially impair our ability to raise capital through the sale of additional securities.
The market price of our common shares could decline due to sales, or the announcements of proposed sales, of a large number of common shares in the market, including sales of
common shares by our large shareholders, 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 shares and impair our ability to raise capital
through the sale of additional equity securities or make it more difficult or impossible for us 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 shares or
other equity-related securities would have on the market price of our common shares.
Our Third Amended and Restated Articles of Incorporation, as amended, authorizes our Board of Directors to, among other things, issue additional shares of common or preferred
stock or securities convertible or exchangeable into equity securities, without shareholder 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 our shareholders. Moreover, to the extent that we issue restricted stock units, stock appreciation rights, options or warrants to purchase our common shares in the future
and those stock appreciation rights, options or warrants are exercised or as the restricted stock units vest, our shareholders may experience further dilution. Holders of shares of our common shares have no preemptive rights that entitle such
holders to purchase their 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 shareholders.
Future issuance of common shares may trigger anti-dilution provisions in our Series E Preferred Shares and affect the interests of our common shareholders.
The Series E Preferred Shares contain anti-dilution provisions that could be triggered by the issuance of common shares in a future offering, depending on their offering price.
For instance, the issuance by us of common shares for less than $20.00 per common share, which is the current fixed conversion price of the Series E Preferred Shares, could result in an adjustment downward of the Series E Preferred Shares
conversion price and an increase in the number of common shares each Series E Preferred Share is converted into. These adjustments could affect the interests of our common shareholders and the trading price for our common shares. Furthermore the
Series E Preferred Shares holders have the option to replace the fixed conversion price with a variable exercise price, namely 80% of the lowest daily Volume-Weighted Average Price (“VWAP”) of our common shares over the 20 consecutive trading days
expiring on the trading day immediately prior to the date of delivery of an exercise notice (but in no event can this variable conversion price be less than $0.60) and purchase such proportionate number of shares based on the variable conversion
price in effect on the date of conversion. If using the variable conversion price of the Series E Preferred Shares, as of March 30, 2020, the Series E Preferred Shares have a conversion price of $0.60 and are converted into 17,274,140 common
shares, as may be further adjusted. Moreover, future issuance of other equity or debt convertible into or issuable or exchangeable for common shares at a price per share less than the then current conversion price of the Series E Preferred Shares
would result in similar adjustments.
Political instability, terrorist or other attacks, war, international hostilities and public health threats can affect the tanker industry, which may
adversely affect our business.
We conduct most of our operations outside of the United States, and our business, results of operations, cash flows, financial condition and available cash 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 that is likely to be adversely impacted by the effects of
political conflicts, including the current political instability in the Middle East and the South China Sea region and other geographic countries and areas, geopolitical events such as the withdrawal of the U.K. from the European Union, or
“Brexit,” terrorist or other attacks, and war (or threatened war) or international hostilities, such as those between the United States and North Korea.
Terrorist attacks such as those in Paris on November 13, 2015, Manchester on May 22, 2017, and the frequent incidents of terrorism in the Middle East, and the continuing
response of the United States 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 may affect our business, operating results and
financial condition. Continuing conflicts and recent developments in the Middle East, including increased tensions between the U.S. and Iran, as well as the presence of U.S. or other armed forces in Iraq, Syria, Afghanistan and various other
regions, 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. As a result of the above, insurers have increased premiums and reduced or
restricted coverage for losses caused by terrorist acts generally. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. Any of these occurrences could have a material
adverse impact on our operating results, revenues and costs. Additionally, Brexit, or similar events in other jurisdictions, could impact global markets, including foreign exchange and securities markets; any resulting changes in currency exchange
rates, tariffs, treaties and other regulatory matters could in turn adversely impact our business and operations.
Further, governments may turn and have turned to trade barriers to protect their domestic industries against foreign imports, thereby depressing shipping demand. In particular,
leaders in the United States and China have implemented certain increasingly protective trade measures. The results of the 2016 presidential election and the potential results of the upcoming 2020 presidential election in the United States have
created significant uncertainty about the future relationship between the United States, China and other exporting countries, including with respect to trade policies, treaties, government regulations and tariffs. For example, in March 2018,
President Trump announced tariffs on imported steel and aluminum into the United States that could have a negative impact on international trade generally and in January 2019, the United States announced expanded sanctions against Venezuela, which
may have an effect on its oil output and in turn affect global oil supply. There have also been continuing trade tensions, including significant tariff increases, between the United States and China. Protectionist developments, or the perception
that they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade. Moreover, increasing trade protectionism may cause an increase in (a) the cost of goods exported from regions
globally, (b) the length of time required to transport goods and (c) the risks associated with exporting goods. Such increases may significantly affect the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated
costs, which could have an adverse impact on our charterers’ business, operating results and financial condition and could thereby affect their ability to make timely charter hire payments to us and to renew and increase the number of their time
charters with us. This could have a material adverse effect on our business, results of operations, financial condition and our ability to pay any cash distributions to our stockholders.
In January 2020, in response to certain perceived terrorist activity, the United States launched an airstrike in Baghdad that killed a high-ranking Iranian general, increasing
hostilities between the U.S. and Iran. This attack or further escalations between the U.S. and Iran that may follow, could result in retaliation from Iran that could potentially affect the shipping industry, through increased attacks on vessels in
the Strait of Hormuz (which already experienced an increased number of attacks on and seizures of vessels in 2019), or by potentially closing off or limiting access to the Strait of Hormuz, where a significant portion of the world’s oil supply
passes through. Any restriction on access to the Strait of Hormuz, or increased attacks on vessels in the area, could negatively impact our earnings, cash flow and results of operations.
In the past, political instability has also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian
Gulf region. Acts of terrorism and piracy have also affected vessels trading in regions such as the South China Sea and the Gulf of Aden off the coast of Somalia. Any of these occurrences could have a material adverse impact on our future
performance, results of operations, cash flows and financial position.
Anti-takeover provisions in our organizational documents as well as our stockholders rights agreement could make it difficult for our shareholders to
replace or remove our current Board of Directors or have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common shares.
Several provisions of our Third Amended and Restated Articles of Incorporation, as amended, and Amended and Restated By-laws (as amended, our “By-laws”) could make it difficult
for our shareholders to change the composition of our board of directors in any one year, preventing them from changing the composition of management. In addition, the same provisions may discourage, delay or prevent a merger or acquisition that
shareholders may consider favorable.
These provisions include:
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authorizing our Board of Directors to issue “blank check” preferred stock without stockholder approval;
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providing for a classified Board of Directors with staggered, three-year terms;
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prohibiting cumulative voting in the election of directors;
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authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of at least 80% of the outstanding shares of our capital stock entitled to vote for the directors;
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prohibiting shareholder action by written consent unless the written consent is signed by all shareholders entitled to vote on the action;
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limiting the persons who may call special meetings of shareholders;
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establishing advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted on by shareholders at shareholder meetings; and
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restricting business combinations with interested shareholders.
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In addition, we have entered into a stockholders rights agreement that makes it more difficult for a third party to acquire a significant stake in the Company without the
support of our Board of Directors.
The above anti-takeover provisions and the provisions of our stockholders rights agreement could substantially impede the ability of public shareholders to benefit from a
change in control and, as a result, may adversely affect the market price of our common shares and your ability to realize any potential change of control premium.
We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law, and as a result, shareholders may
have fewer rights and protections under Marshall Islands law than under a typical jurisdiction in the United States.
Our corporate affairs are governed by our Third Amended and Restated Articles of Incorporation, as amended, our By-laws, and by the Marshall Islands Business Corporations Act,
or the 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 Islands interpreting 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 judicial precedent in existence in certain
United States jurisdictions. Shareholder 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 substantially similar legislative
provisions, our public shareholders may have more difficulty in protecting their interests in the face of actions by management, directors or controlling shareholders than would shareholders of a corporation incorporated in a United States
jurisdiction.
Our By-laws provide that the High Court of the Republic of Marshall Islands shall be the sole and exclusive forum for certain disputes between us and our
shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Our By-laws provide that, unless the Company consents in writing to the selection of an alternative forum, the High Court of the Republic of Marshall Islands, shall be the sole
and exclusive forum for (i) any shareholders’ derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation
to the Corporation or the Corporation’s shareholders, (iii) any action asserting a claim arising pursuant to any provision of the Business Corporations Act of the Republic of the Marshall Islands, or (iv) any action asserting a claim governed by
the internal affairs doctrine. This forum selection provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage
lawsuits with respect to such claims.
We may not achieve the intended benefits of having a forum selection provision if it is found to be unenforceable.
Our By-laws include a forum selection provision as under the section herein entitled “Description of Share Capital – Shareholders’ Derivative Actions”. However, the
enforceability of similar forum selection provisions in other companies’ governing documents has been challenged in legal proceedings, and it is possible that in connection with any action a court could find the forum selection provision contained
in our By-laws to be inapplicable or unenforceable in such action. If a court were to find the forum selection provision to be inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may
incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition and results of operations.
We are a “foreign private issuer,” which could make our common shares less attractive to some investors or otherwise harm our stock price.
We are a “foreign private issuer,” as such term is defined in Rule 405 under the Securities Act of 1933, as amended, or the Securities Act. As a “foreign private issuer” the
rules governing the information that we disclose differ from those governing U.S. corporations pursuant to the Securities Exchange Act of 1934, as amended, or the Exchange Act. We are not required to file quarterly reports on Form 10-Q or provide
current reports on Form 8-K disclosing significant events within four days of their occurrence. In addition, our officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and
related rules with respect to their purchase and sales of our securities. Our exemption from the rules of Section 16 of the Exchange Act regarding sales of common shares by insiders means that you will have less data in this regard than
shareholders of U.S. companies that are subject to the Exchange Act. Moreover, we are exempt from the proxy rules, and proxy statements that we distribute will not be subject to review by the Commission. Accordingly there may be less publicly
available information concerning us than there is for other U.S. public companies. These factors could make our common shares less attractive to some investors or otherwise harm our stock price.
Our President, Chief Executive Officer and Director, who may be deemed to beneficially own, directly or indirectly, 100% of our Series D Preferred Shares,
has control over us.
As of March 30, 2020, Lax Trust, which is an irrevocable trust established for the benefit of certain family members of our President, Chief Executive Officer and Director, Mr.
Pistiolis, may be deemed to beneficially own, directly or indirectly, all of the 100,000 outstanding shares of our Series D Preferred Shares. Each Series D Preferred Share carries 1,000 votes. By its ownership of 100% of our Series D Preferred
Shares, Lax Trust has control over our actions.
USE OF PROCEEDS
We intend to use the net proceeds of this offering, after deducting the sale agent’s commissions and our estimated offering expenses, for general corporate purposes which may
include the purchase of vessels from an affiliate and the redemption of Series E Preferred Shares.
CAPITALIZATION
The following table sets forth our consolidated capitalization as of June 30, 2019:
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on an as adjusted basis to give effect to the following transactions which occurred between June 30, 2019 and March 30, 2020:
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the exercise of 112,000 of the 2014 Warrants into 42,903 of our common shares, with aggregate net proceeds of $0.3 million;
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the issuance of 16,004 Series E Preferred Shares to Family Trading Inc with a redemption premium of $2,918, as settlement of the purchase price of $14.35 million for the purchase of the M/T Eco City of Angels and M/T Eco Los Angeles
from Mr. Pistiolis and for dividends payable to Family Trading Inc. under already outstanding Series E Preferred Shares;
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the cashless exercise of 4,200,000 of Class A Warrants into 1,680,000 of our common shares;
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the issuance of 1,665,000 common shares pursuant to a registered public offering that closed on September 13, 2019, with aggregate net proceeds of $9.7 million;
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the cashless exercise of 1,778,700 of the Traditional Warrants into 1,245,089 of our common shares;
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the issuance of 4,200,000 common shares pursuant to a registered public offering that closed on November 7, 2019, with aggregate net proceeds of $7.7 million;
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the declaration of $1.6 million of dividends on the Series E Preferred Shares for the period of July 1, 2019 through December 31, 2019;
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the redemption of 33,798 Series E Preferred Shares for $38.9 million;
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the issuance of 14,637,118 common shares pursuant to the Equity Distribution Agreement we entered into with Maxim Group LLC on February 12, 2020, with aggregate net proceeds of $4.9 million;
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the issuance of 52,692,690 common shares pursuant to the Equity Distribution Agreement we entered into with Maxim Group LLC on March 11, 2020, with aggregate net proceeds of $4.9 million;
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the drawdown of $25.6 million, $21.4 million and $24.4 million from the sale and leasebacks of M/T Stenaweco Excellence, M/T Stenaweco Energy and M/T Stenaweco Evolution, respectively from Oriental Fleet International Company Limited
(“OFI”), the drawdown of $30.1 million and $30.1 million from the sale and leaseback of M/T Eco Los Angeles and M/T Eco City of Angels respectively from Avic International Leasing Co., Ltd (“AVIC”) and the prepayment of $17.0 million of
the outstanding loan under the NORD/LB Facility (the sale and leasebacks will be accounted as financing transactions);
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the prepayment of $29.5 million of the outstanding loan under the ABN Facility due to the sale of the M/T Eco Revolution and the M/T Eco Fleet. The sale of the M/T Eco Revolution and the M/T Eco Fleet resulted in estimated losses of
$5.5 million and $6.8 million respectively;
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the prepayment of $19.9 million of the outstanding loan under the Alpha Bank Facility and the Alpha Bank Top-Up Facility due to the sale of the M/T Stenaweco Elegance. The sale of the M/T Stenaweco Elegance resulted in gains of $2.0
million;
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the prepayment of $21.9 million of the AT Bank Senior Facility and the prepayment of $10.5 million of the AT Bank Bridge Note due to the sale of the M/T Palm Desert. The sale of the M/T Palm Desert resulted in gains of $3.2 million;
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The sale of our 50% owned vessel, M/T Holmby Hills, that resulted in estimated losses of $1.5 million,
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$14.9 million of scheduled debt repayments under the ABN Amro, the AT Bank, the BoComm Leasing, the Cargill, the CMBFL, the OFI, the AVIC and the Alpha Bank facilities; and
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$6.8 million excess consideration over the carrying amount of acquired assets relating to the acquisitions of M/T Eco Los Angeles and M/T Eco City of Angels that became payable on the vessels delivery date (February 10 and February
17, 2020 respectively), accounted for as a transfer of assets between entities under common control;
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3.
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on an as further adjusted basis, assuming our issuance and sale of $8.0 million of our common shares at an assumed offering price of $0.20 per share (i.e. 40,000,000 common shares).
|
The information set forth in the table gives effect to a one-for-twenty reverse split of our common shares effective as of August 22, 2019. There have been no other significant
adjustments to our capitalization since June 30, 2019.
(Expressed in thousands of U.S. Dollars, except number of shares and per share data)
|
|
Actual
|
|
|
As Adjusted
|
|
|
As Further Adjusted
|
|
Debt:(1)
|
|
|
|
|
|
|
|
|
|
Current portion of long term debt
|
|
$
|
27,169
|
|
|
$
|
16,510
|
|
|
$
|
16,510
|
|
Non-current portion of long term debt
|
|
|
239,073
|
|
|
|
267,922
|
|
|
|
267,922
|
|
Total debt
|
|
|
266,242
|
|
|
|
284,432
|
|
|
|
284,432
|
|
Mezzanine equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock Series E, $0.01 par value; 28,158 shares issued and outstanding at June 30, 2019, 10,364 shares issued and outstanding at June 30, 2019, as adjusted and as further adjusted
|
|
|
32,381
|
|
|
|
12,437
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value, 1,000,000,000 shares authorized; 1,542,355 shares issued and outstanding at June 30, 2019, 77,705,155 shares issued and outstanding at June 30, 2019 as adjusted and 117,705,155 shares issued and outstanding
at June 30, 2019 as further adjusted
|
|
|
15
|
|
|
|
777
|
|
|
|
1,177
|
|
Preferred stock Series D, $0.01 par value; 100,000 shares issued and outstanding at June 30, 2019 as adjusted and as further adjusted
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
Additional paid-in capital
|
|
|
403,494
|
|
|
|
418,875
|
|
|
|
425,855
|
|
Accumulated other comprehensive loss
|
|
|
(1,388
|
)
|
|
|
(1,388
|
)
|
|
|
(1,388
|
)
|
Accumulated deficit
|
|
|
(308,407
|
)
|
|
|
(316,959
|
)
|
|
|
|
)
|
Total Shareholders’ and Mezzanine equity
|
|
|
126,096
|
|
|
|
113,743
|
|
|
|
121,123
|
|
Total capitalization
|
|
$
|
392,338
|
|
|
$
|
398,175
|
|
|
$
|
405,555
|
|
(1) The capitalization table does not take into account any loan fees for the new loans and sale and leaseback financings or any
amortization of deferred finance fees incurred after June 30, 2019 or any write -offs of deferred fees in respect of loans fully repaid.
BENEFICIAL OWNERSHIP OF OUR COMMON SHARES
The following table sets forth the beneficial ownership of our common shares, as of March 30, 2020, held by: (i) each person or entity
that we know beneficially owns 5% or more of our common shares and (ii) all our executive officers, directors and key employees as a group. Beneficial ownership is determined in accordance with the Commission’s rules. In computing percentage
ownership of each person, common shares subject to options held by that person that are currently exercisable or convertible, or exercisable or convertible within 60 days are deemed to be beneficially owned by that person. These shares, however,
are not deemed outstanding for the purpose of computing the percentage ownership of any other person. All of the shareholders, including the shareholders listed in this table, are entitled to one vote for each common share held.
Name and Address of Beneficial Owner
|
|
Number of Shares Owned
|
|
|
Percent of Class(1)
|
|
Lax Trust (2)
|
|
|
17,274,140
|
|
|
|
18.2
|
%
|
Executive officers, directors and key employees
|
|
|
-
|
|
|
|
-
|
%
|
(1)
|
Based upon 77,705,155 common shares outstanding as of March 30, 2020.
|
(2)
|
The above information is derived, in part, from the Schedule 13D/A filed with the Commission on March 27, 2020. The Lax Trust is an irrevocable trust established for the benefit of certain family members of
Evangelos J. Pistiolis, our President, Chief Executive Officer and Director. The business address of the Lax Trust is Level 3, 18 Stanley Street, Auckland 1010, New Zealand. The above percentage ownership is based on 94,979,295common shares
outstanding, which is calculated for this Schedule 13D/A purposes by taking the sum of (i) 77,705,155 common shares outstanding as of March 30, 2020, and (ii) 17,274,140 common shares issuable upon the conversion of 10,364 Series E
Preferred Shares held by Family Trading, as of March 30, 2020. The Lax Trust may also be deemed to hold all of the 100,000 outstanding shares of our Series D Preferred Stock. Each Series D Preferred Share carries 1,000 votes. By its
ownership of 100% of our Series D Preferred Shares, Lax Trust has control over our actions.
|
As of March 30, 2020, we had one shareholder of record, which was located in the United States and held an aggregate of 77,705,155 our common shares, representing 100% of our
outstanding common shares. However, the U.S. shareholder of record is Cede & Co., which held our common shares. We believe that the shares held by Cede & Co. include common shares beneficially owned by both holders in the United States and
non-U.S. beneficial owners. We are not aware of any arrangements the operation of which may at a subsequent date result in our change of control.
DESCRIPTION OF CAPITAL STOCK
The following is a summary of the description of our capital stock and the material terms of our Third Amended and Restated Articles of Incorporation and
By-laws, as further amended. Because the following is a summary, it does not contain all of the information that you may find useful. For more complete information, you should read the description of capital stock and the material terms of our
Third Amended and Restated Articles of Incorporation and By-laws, as further amended, contained in our Annual Report on Form 20-F, filed with the Commission on March 29, 2018 and incorporated by reference herein, as updated by annual and other
reports and documents we file with the Commission after the date of this prospectus supplement and that are incorporated by reference herein, together with our Third Amended and Restated Articles of Incorporation and By-laws, including all
amendments thereto, copies of which have been filed as exhibits to our Annual Report. Please see the section of this prospectus supplement entitled “Where You Can Find Additional Information.”
Purpose
Our purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the BCA. Our Third Amended and Restated Articles of
Incorporation and By-laws, as further amended, do not impose any limitations on the ownership rights of our shareholders.
Authorized Capitalization
Our authorized capital stock consists of 1,000,000,000 common shares, par value $0.01 per share, of which 77,705,155 shares were issued and outstanding as of March 30, 2020 and
20,000,000 preferred shares with par value of $0.01 and 100,000 Series D Preferred Shares and 10,364 Series E Preferred Shares are issued and outstanding as of March 30, 2020. Our Board of Directors has the authority to establish such series of
preferred stock and with such designations, preferences and relative, participating, optional or special rights and qualifications, limitations or restrictions as shall be stated in the resolution or resolutions providing for the issue of such
preferred stock.
On September 14, 2016, we declared a dividend of one preferred share purchase right for each outstanding common share and adopted a shareholder rights plan, as set forth in a
Stockholders Rights Agreement dated as of September 22, 2016, by and between us and Computershare Trust Company, N.A., as rights agent (now taken over by our new transfer agent, American Stock Transfer & Trust Company, LLC, or AST), described
below under the section entitled “—Stockholders Rights Agreement”. In connection with the Stockholders Rights Agreement, we designated 1,000,000 shares as Series A Participating Preferred Stock, none of which are outstanding as of the date of this
prospectus supplement.
Description of Common Shares
Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of shareholders. Subject to
preferences that may be applicable to any outstanding preferred shares, holders of common shares are entitled to receive ratably all dividends, if any, declared by our Board of Directors out of funds legally available for dividends. Upon our
dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of our preferred shares having liquidation preferences, if any, the holders
of our common shares will be entitled to receive pro rata our remaining assets available for distribution. Holders of our common shares do not have conversion, redemption or preemptive rights to subscribe to any of our securities. The rights,
preferences and privileges of holders of our common shares are subject to the rights of the holders of any preferred shares that we may issue in the future.
Description of Preferred Shares
Our Third Amended and Restated Articles of Incorporation authorize our Board of Directors to establish one or more series of preferred shares and to determine, with respect to
any series of preferred shares, the terms and rights of that series, including the designation of the series, the number of shares of the series, the preferences and relative, participating, option or other special rights, if any, and any
qualifications, limitations or restrictions of such series, and the voting rights, if any, of the holders of the series.
Description of Series B Convertible Preferred Shares
On November 22, 2016, we completed a private placement of up to 3,160 Series B Convertible Preferred Shares for an aggregate principal amount of up to $3.0 million. The
investor purchased 1,579 Series B Convertible Preferred Shares at the initial closing of the Transaction and 527 Series B Convertible Preferred Shares on November 28, 2016 for a total of $2.0 million. The investor waived the right to purchase any
additional Series B Preferred Shares. The description of the Series B Preferred Shares is incorporated by reference from our registration statement on Form F-3 (333-215577). The description of the Series B Convertible Preferred Shares is subject to
and qualified in its entirety by reference to the Securities Purchase Agreement, Certificate of Designation of the Series B Convertible Preferred Shares and Registration Rights Agreement entered into in connection with the private placement. Copies
of the Securities Purchase Agreement, Certificate of Designation of the Series B Convertible Preferred Shares and Registration Rights Agreement have been filed as exhibits to our Report on Form 6-K filed with the Commission on November 23, 2016.
The waiver agreement was filed as an exhibit to our Report on Form 6-K filed with the Commission on January 10, 2017. We issued 901 common shares in connection with the conversions of all of our Series B Convertible Preferred Shares, and there are
currently no Series B Convertible Preferred Shares outstanding. Convertible Preferred Shares, and there are currently no Series B Convertible Preferred Shares outstanding.
Description of Series C Convertible Preferred Shares
On February 17, 2017, we closed a private placement with a non-U.S. institutional investor for the sale of 7,500 newly issued Series C Convertible Preferred Shares, which are
convertible into our common shares, for $5.0 million pursuant to a securities purchase agreement, or the Series C Transaction. The description of the Series C Preferred Shares is incorporated by reference from our registration statement on Form
F-3 (333-215577). The description of the Series C Convertible Preferred Shares is subject to and qualified in its entirety by reference to the Securities Purchase Agreement and Statement of Designations, Preferences and Rights of the Series C
Convertible Preferred Shares entered into in connection with the private placement. Copies of the Securities Purchase Agreement and Statement of Designations, Preferences and Rights of the Series C Convertible Preferred Shares have been filed as
exhibits to our Report on Form 6-K filed with the Commission on February 21, 2017. We issued 45,232 common shares in connection with the conversions of all our Series C Convertible Preferred Shares, and there are currently no Series C Convertible
Preferred Shares outstanding.
Description of Series D Preferred Shares
On May 8, 2017, we issued 100,000 shares of Series D Preferred Shares to Tankers Family Inc., a company controlled by Lax Trust, which is an irrevocable trust established for
the benefit of certain family members of Evangelos Pistiolis, for $1,000 pursuant to a stock purchase agreement. Each Series D Preferred Share has the voting power of one thousand (1,000) common shares.
On April 21, 2017, we were informed by ABN Amro Bank that we were in breach of a loan covenant that requires that any member of the family of Mr. Pistiolis, maintain an
ownership interest (either directly and/or indirectly through companies beneficially owned by any member of the Pistiolis family and/or trusts or foundations of which any member of the Pistiolis family are beneficiaries) of 30% of our outstanding
Common Shares. ABN Amro Bank requested that either the family of Mr. Pistiolis maintain an ownership interest of at least 30% of the outstanding common shares or maintain a voting rights interest of above 50% in us. In order to regain compliance
with the loan covenant, we issued the Series D Preferred Shares. Currently the Sale and Leaseback agreements with Bank of Communications Financial Leasing Company, Oriental Fleet International Company Limited and China Merchants Bank Financial
Leasing have similar provisions that are satisfied via the existence of the Series D Preferred Shares.
The Series D Preferred Shares has the following characteristics:
Conversion. The Series D Preferred Shares are not convertible into common shares.
Voting. Each Series D Preferred Share has the voting power of 1,000 common shares.
Distributions. The Series D Preferred Shares shall have no dividend or distribution rights.
Maturity. The Series D Preferred Shares shall expire and all outstanding Series D Preferred Shares shall be
redeemed by us for par value on the date that any loan with any other financial institution, which contain covenants that require that any member of the family of Mr. Pistiolis maintain a specific minimum ownership or voting interest (either
directly and/or indirectly through companies or other entities beneficially owned by any member of the Pistiolis family and/or trusts or foundations of which any member of the Pistiolis family are beneficiaries) of the Company’s issued and
outstanding common shares, respectively, are fully repaid or reach their maturity date. The Series D Preferred Shares shall not be otherwise redeemable.
Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of our Company, the Series D
Preferred Shares shall have a liquidation preference of $0.01 per share.
Description of Series E Convertible Preferred Shares
On April 1, 2019, we announced the sale of 27,129 newly issued Series E Preferred Shares at a price of $1,000 per share to Family Trading in exchange for the full and final
settlement of the loan facility between our Company and Family Trading dated December 23, 2015, as amended.
From July 25, 2019 to March 30, 2020, we redeemed 33,798 of Series E Preferred Shares for $38.9 million. We also announced the issuance of 16,004 Series E Preferred Shares to
Family Trading, as settlement of the purchase price of $14.35 million for the purchase of the M/T Eco City of Angels and M/T Eco Los Angeles from Mr. Pistiolis and for dividends payable to Family Trading Inc. under already outstanding Series E
Preferred Shares. As of March 30, 2020, there were 10,364 shares of Series E Preferred Shares outstanding.
The Series E Preferred Shares have the following characteristics:
Conversion. Each holder of Series E Share, at any time and from time to
time, has the right, subject to certain conditions, to convert all or any portion of the Series E Preferred Shares then held by such holder into our common shares at the conversion rate then in effect. Each Series E Share is convertible into the
number of our common shares equal to the quotient of $1,000 plus any accrued and unpaid dividends divided by the lesser of the following four prices: (i) $20.00, (ii) 80% of the lowest daily VWAP of our common shares over the twenty consecutive
trading days expiring on the trading day immediately prior to the date of delivery of a conversion notice, (iii) the conversion price or exercise price per share of any of our then outstanding convertible shares or warrants, (iv) the lowest
issuance price of our common shares in any transaction from the date of the issuance the Series E Preferred Shares onwards, but in no event will the conversion price be less than $0.60.
Limitations of Conversion. Holders of the shares of Series E Preferred
Shares shall be entitled to convert the Series E Preferred Shares in full, regardless of the beneficial ownership percentage of the holder after giving effect to such conversion.
Voting. The holders of Series E Preferred Shares are entitled to the voting power of one thousand (1,000) of our
common shares. The holders of Series E Preferred Shares and the holders of our common shares shall vote together as one class on all matters submitted to a vote of our shareholders. The holders of Series E Preferred Shares have no special voting
rights and their consent shall not be required for taking any corporate action.
Distributions. Upon any liquidation, dissolution or winding up of our
Company, the holders of Series E Preferred Shares shall be entitled to receive the net assets of our Company pari passu with the Common Shares.
Redemption. We at our option shall have the right to redeem a portion or
all of the outstanding Series E Preferred Shares. We shall pay an amount equal to one thousand dollars ($1,000) per each Series E Share, or the Liquidation Amount, plus a redemption premium equal to fifteen percent (15%) of the Liquidation Amount
being redeemed if that redemption takes place up to and including March 29, 2020 and twenty percent (20%) of the Liquidation Amount being redeemed if that redemption takes place after March 29, 2020, plus an amount equal to any accrued and unpaid
dividends on such Preferred Shares (collectively referred to as the “Redemption Amount”). In order to make a redemption, we shall first provide one business day advanced written notice to the holders of our intention to make a redemption, or the
Redemption Notice, setting forth the amount it desires to redeem. After receipt of the Redemption Notice, the holders shall have the right to elect to convert all or any portion of its Series E Preferred Shares. Upon the expiration of the one
business day period, we shall deliver to each holder the Redemption Amount with respect to the amount redeemed after giving effect to conversions effected during the notice period.
The Series E Preferred Shares shall not be subject to redemption in cash at the option of the holders thereof under any circumstance.
Dividends. The holders of outstanding Series E Preferred Shares shall be
entitled to receive out of funds legally available for the purpose, semi-annual dividends payable in cash on the last day of June and December in each year (each such date being referred to herein as a “Semi Annual Dividend Payment Date”),
commencing on the first Semi Annual Dividend Payment Date in an amount per share (rounded to the nearest cent) equal to fifteen percent (15%) per year of the Liquidation Amount of the then outstanding Series E Preferred Shares computed on the basis
of a 365-day year and the actual days elapsed.
Accrued but unpaid dividends shall bear interest at fifteen percent (15%). Dividends paid on the Series E Preferred Shares in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. Our Board of Directors may fix a record date for the determination of holders of Series E
Preferred Shares entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof.
Ranking. All shares of Series E Preferred Shares shall rank pari passu with all classes of our common shares.
Shareholder Meetings
Under our By-laws, annual shareholder meetings will be held at a time and place selected by our Board of Directors. The meetings may be held in or outside of the Marshall
Islands. Special meetings of the shareholders, unless otherwise prescribed by law, may be called for any purpose or purposes at any time exclusively by our Board of Directors. Notice of every annual and special meeting of shareholders shall be
given at least 15 but not more than 60 days before such meeting to each shareholder of record entitled to vote thereat.
Directors
Our directors are elected by a plurality of the votes cast at a meeting of the shareholders by the holders of shares entitled to vote in the election. Our Third Amended and
Restated Articles of Incorporation and By-laws, as further amended, prohibit cumulative voting in the election of directors.
Our Board of Directors must consist of at least one member and not more than twelve, as fixed from time to time by the vote of not less than 66 2/3% of the entire board. Each
director shall be elected to serve until the third succeeding annual meeting of shareholders and 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. Our Board of Directors has the authority to fix the amounts which shall be payable to the members of our Board of Directors, and to members of any committee, for attendance at any meeting or for services rendered to us.
Classified Board
Our Third Amended and Restated Articles of Incorporation provide for the division of our Board of Directors into three classes of directors, with each class as nearly equal in
number as possible, serving staggered, three-year terms. Approximately one-third of our Board of Directors 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 shareholders who do not agree with the policies of our Board of Directors from removing a majority of our Board of Directors for two years.
Election and Removal
Our Third Amended and Restated Articles of Incorporation and By-laws require parties other than our Board of Directors to give advance written notice of nominations for the
election of directors. Our Third Amended and Restated Articles of Incorporation 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 capital
stock entitled to vote for those directors. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.
Dissenters’ Rights of Appraisal and Payment
Under the BCA, our shareholders have the right to dissent from various corporate actions, including certain mergers or consolidations
or sales of all or substantially all of our assets not made in the usual course of our business, and receive payment of the fair value of their shares, subject to exceptions. For example, the right of a dissenting shareholder to receive
payment of the fair value of his shares is not available if for the shares of any class or series of shares, which shares at the record date fixed to determine the shareholders entitled to receive notice of and vote at the meeting of shareholders
to act upon the agreement of merger or consolidation, were either (1) listed on a securities exchange or admitted for trading on an interdealer quotation system or (2) held of record by more than 2,000 holders. In the event of any further amendment of the articles, a shareholder 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 dissenting shareholder
must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting shareholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings
in the High Court of the Republic of the Marshall Islands or in any appropriate court in any jurisdiction in which our shares are primarily traded on a local or national securities exchange. The value of the shares of the dissenting shareholder is
fixed by the court after reference, if the court so elects, to the recommendations of a court-appointed appraiser.
Shareholders’ Derivative Actions
Under the BCA, any of our shareholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the shareholder
bringing the action is a holder of common shares both at the time the derivative action is commenced and at the time of the transaction to which the action relates. On November 20, 2014, we amended our By-laws to provide that unless we consent in
writing to the selection of alternative forum, the sole and exclusive forum for (i) any shareholders’ derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director,
officer or other of our employees or our shareholders, (iii) any action asserting a claim arising pursuant to any provision of the BCA, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be the High Court of the
Republic of the Marshall Islands, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. This provision of our By-laws does not apply to actions arising under U.S. federal securities
laws.
Anti-takeover Provisions of our Charter Documents
Several provisions of our Third Amended and Restated Articles of Incorporation and By-laws may have anti-takeover effects. These provisions are intended to avoid costly
takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our Board of Directors to maximize shareholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover
provisions, 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 shareholder may consider in its best interest and (2) the
removal of incumbent officers and directors.
Business Combinations
Our Third Amended and Restated Articles of Incorporation include provisions which prohibit us from engaging in a business combination with an interested shareholder for a
period of three years after the date of the transaction in which the person became an interested shareholder, unless:
|
•
|
prior to the date of the transaction that resulted in the shareholder becoming an interested shareholder, the Board approved either the business combination or the transaction that resulted in the shareholder becoming an interested
shareholder;
|
|
•
|
upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction
commenced;
|
|
•
|
at or subsequent to the date of the transaction that resulted in the shareholder becoming an interested shareholder, the business combination is approved by the Board and authorized at an annual or special meeting of shareholders by
the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested shareholder; and
|
|
•
|
the shareholder became an interested shareholder prior to the consummation of the initial public offering.
|
Limited Actions by Shareholders
Our Third Amended and Restated Articles of Incorporation and our By-laws provide that any action required or permitted to be taken by our shareholders must be effected at an
annual or special meeting of shareholders or by the unanimous written consent of our shareholders.
Our Third Amended and Restated Articles of Incorporation and our By-laws provide that only our Board of Directors may call special meetings of our shareholders and the business
transacted at the special meeting is limited to the purposes stated in the notice. Accordingly, a shareholder may be prevented from calling a special meeting for shareholder consideration of a proposal over the opposition of our Board of Directors
and shareholder consideration of a proposal may be delayed until the next annual meeting.
Blank Check Preferred Stock
Under the terms of our Third Amended and Restated Articles of Incorporation, our Board of Directors has authority, without any further vote or action by our shareholders, to
issue up to 20,000,000 shares of blank check preferred stock. 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 the removal of our management.
Super-majority Required for Certain Amendments to Our By-Laws
On February 28, 2007, we amended our by-laws to require that amendments to certain provisions of our by-laws may be made when approved by a vote of not less than 66 2/3% of the
entire Board of Directors. These provisions that require not less than 66 2/3% vote of our Board of Directors to be amended are provisions governing: the nature of business to be transacted at our annual meetings of shareholders, the calling of
special meetings by our Board of Directors, any amendment to change the number of directors constituting our Board of Directors, the method by which our Board of Directors is elected, the nomination procedures of our Board of Directors, removal of
our Board of Directors and the filling of vacancies on our Board of Directors.
Stockholders Rights Agreement
On September 14, 2016, our Board of Directors declared a dividend of one preferred share purchase right, or a Right, for each outstanding common share and adopted a shareholder
rights plan, as set forth in the Stockholders Rights Agreement dated as of September 22, 2016, or the Rights Agreement, by and between us and Computershare Trust Company, N.A. (now taken over by our new transfer agent, AST), as rights agent.
The Board adopted the Rights Agreement to protect shareholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty
upon any person or group that acquires 15% or more of our outstanding common shares without the approval of our Board of Directors. If a shareholder’s beneficial ownership of our common shares as of the time of the public announcement of the rights
plan and associated dividend declaration is at or above the applicable threshold, that shareholder’s then-existing ownership percentage would be grandfathered, but the rights would become exercisable if at any time after such announcement, the
shareholder increases its ownership percentage by 1% or more.
The Rights may have anti-takeover effects. The Rights will cause substantial dilution to any person or group that attempts to acquire us without the approval of our Board of
Directors. As a result, the overall effect of the Rights may be to render more difficult or discourage any attempt to acquire us. Because our Board of Directors can approve a redemption of the Rights for a permitted offer, the Rights should not
interfere with a merger or other business combination approved by our Board.
For those interested in the specific terms of the Rights Agreement, we provide the following summary description. Please note, however, that this description is only a summary,
and is not complete, and should be read together with the entire Rights Agreement, which is an exhibit to the Form 8-A filed by us on September 22, 2016 and incorporated herein by reference. The foregoing
description of the Rights Agreement is qualified in its entirety by reference to such exhibit.
The Rights. The Rights trade with, and are inseparable from, our common shares. The Rights are evidenced only by certificates that
represent our common shares. New Rights will accompany any of our new common shares issued after October 5, 2016 until the Distribution Date described below.
Exercise Price. Each Right allows its holder to purchase from us one one-thousandth of a share of Series A Participating Preferred
Stock, or a Series A Preferred Share, for $50.00, or the Exercise Price, once the Rights become exercisable. This portion of a Series A Preferred Share will give the shareholder approximately the same dividend, voting and liquidation rights as
would one common share. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.
Exercisability. The Rights are not exercisable until ten days after the public announcement that a person or group has become an
“Acquiring Person” by obtaining beneficial ownership of 15% or more of our outstanding common shares.
Certain synthetic interests in securities created by derivative positions—whether or not such interests are considered to be ownership of the underlying common shares or are
reportable for purposes of Regulation 13D of the Exchange Act—are treated as beneficial ownership of the number of our common shares equivalent to the economic exposure created by the derivative position, to the extent our actual common shares are
directly or indirectly held by counterparties to the derivatives contracts. Swaps dealers unassociated with any control intent or intent to evade the purposes of the Rights Agreement are excepted from such imputed beneficial ownership.
For persons who, prior to the time of public announcement of the Rights Agreement, beneficially own 15% or more of our outstanding common shares, the Rights Agreement
“grandfathers” their current level of ownership, so long as they do not purchase additional shares in excess of certain limitations.
The date when the Rights become exercisable is the “Distribution Date.” Until that date, our common share certificates (or, in
the case of uncertificated shares, by notations in the book-entry account system) will also evidence the Rights, and any transfer of our common shares will constitute a transfer of Rights. After that date, the Rights will separate from our common
shares and will be evidenced by book-entry credits or by Rights certificates that we will mail to all eligible holders of our common shares. Any Rights held by an Acquiring Person are null and void and may not be exercised.
Series A Preferred Share Provisions
Each one one-thousandth of a Series A Preferred Share, if issued, will, among other things:
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entitle holders to quarterly dividend payments in an amount per share equal to the aggregate per share amount of all cash dividends, and the aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in our common shares or a subdivision of the our outstanding common shares (by reclassification or otherwise), declared on our common shares since the immediately preceding quarterly dividend
payment date; and
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•
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entitle holders to one vote on all matters submitted to a vote of our shareholders.
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The value of one one-thousandth interest in a Series A Preferred Share should approximate the value of one common share.
Consequences of a Person or Group Becoming an Acquiring Person.
Flip In. If an Acquiring Person obtains beneficial ownership of 15% or more of our common shares, then each Right will entitle the
holder thereof to purchase, for the Exercise Price, a number of our common shares (or, in certain circumstances, cash, property or other of our securities) having a then-current market value of twice the Exercise Price. However, the Rights are not
exercisable following the occurrence of the foregoing event until such time as the Rights are no longer redeemable by us, as further described below.
Following the occurrence of an event set forth in preceding paragraph, all Rights that are or, under certain circumstances specified in the Rights Agreement, were beneficially
owned by an Acquiring Person or certain of its transferees will be null and void.
Flip Over. If, after an Acquiring Person obtains 15% or more of our
common shares, (i) we merge into another entity; (ii) an acquiring entity merges into us; or (iii) we sell or transfer 50% or more of its assets, cash flow or earning power, then each Right (except for Rights that have previously been voided as
set forth above) will entitle the holder thereof to purchase, for the Exercise Price, a number of our common shares of the person engaging in the transaction having a then-current market value of twice the Exercise Price.
Notional Shares. Shares held by affiliates and associates of an
Acquiring Person, including certain entities in which the Acquiring Person beneficially owns a majority of the equity securities, and Notional Common Shares (as defined in the Rights Agreement) held by counterparties to a Derivatives Contract (as
defined in the Rights Agreement) with an Acquiring Person, will be deemed to be beneficially owned by the Acquiring Person.
Redemption. Our Board of Directors may redeem the Rights for $0.01 per Right at any time
before any person or group becomes an Acquiring Person. If our Board of Directors redeems any Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of the Rights will be to receive the redemption
price of $0.01 per Right. The redemption price will be adjusted if we have a stock dividend or a stock split.
Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of our outstanding
common shares, the Board may extinguish the Rights by exchanging one common share or an equivalent security for each Right, other than Rights held by the Acquiring Person. In certain circumstances, we may
elect to exchange the Rights for cash or other of our securities having a value approximately equal to one common share.
Expiration. The Rights expire on the earliest of (i) September 22, 2026; or (ii) the
redemption or exchange of the Rights as described above.
Anti-Dilution Provisions. The Board may adjust the purchase price of the Series A Preferred Shares, the number of Series A Preferred
Shares issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split, or a reclassification of the Series A Preferred Shares or our common shares. No adjustments to the Exercise Price of less
than 1% will be made.
Amendments. The terms of the Rights and the Rights Agreement may be amended in any respect
without the consent of the holders of the Rights on or prior to the Distribution Date. Thereafter, the terms of the Rights and the Rights Agreement may be amended without the consent of the holders of Rights, with certain exceptions, in order to
(i) cure any ambiguities; (ii) correct or supplement any provision contained in the Rights Agreement that may be defective or inconsistent with any other provision therein; (iii) shorten or lengthen any time period pursuant to the Rights
Agreement; or (iv) make changes that do not adversely affect the interests of holders of the Rights (other than an Acquiring Person or an affiliate or associate of an Acquiring Person).
Taxes. The distribution of Rights should not be taxable for federal income tax purposes. However, following an event that renders the
Rights exercisable or upon redemption of the Rights, shareholders may recognize taxable income.
2014 Warrants
Our 2014 Warrants contained certain anti-dilution provisions, which were triggered as a result of the reverse stock split, Series B Transaction, the Equity Line Offering,
Series C Transaction, First Purchase Agreement, Second Purchase Agreement and Amended Family Trading Credit Facility. As of the date of this prospectus supplement, an aggregate 4,621,611 of the 2014 Warrants were exercised for a total issuance of
347,997 common shares and all the 2014 Warrants have expired.
2018 Warrants
On October 26, 2018, we priced a public offering of 100,000 common shares, and warrants to purchase 175,000 common shares, or the 2018 Warrants, at $30.00 per common share and
$0.0002 per warrant. The 2018 Warrants had an exercise price of $30.00 per share and expired four months from the date of issuance. Each warrant granted the warrant holder the option to purchase one of our common shares at any time within the
abovementioned term. By February 25, 2019, all of the 2018 Warrants were exercised for 175,000 common shares and gross proceeds of $3.8 million.
Traditional Warrants
On September 13, 2019, we closed an underwritten public offering of an aggregate of 1,580,000 common shares or Pre-Funded Warrants, Traditional Warrants to purchase up to
1,790,000 of our common shares and an overallotment option of up to 237,000 common shares. Each Traditional Warrant entitled the holder to purchase either 1 common share upon a cash exercise or 0.7 common shares upon a cashless exercise. Each
Traditional Warrant had an exercise price of $8.19. The Traditional Warrants expired on December 31, 2019.
From September 13 to December 31, 2019, 1,245,089 common shares were issued pursuant to the cashless exercise of 1,778,700 Traditional Warrants.
2019 Class A Warrants and Class B Warrants
On November 6, 2019, concurrently with the November 2019 Registered Direct Offering described above, we commenced a private placement whereby we issued and sold warrants to
purchase up to 8,400,000 of our common shares. One-half of the warrants would have expired on the eight-month anniversary of the date of issuance of the common shares sold under the November 2019 Registered Direct Offering (the Class A Warrants)
and one-half of the warrants will expire on the eighteen-month anniversary of the date of issuance of the common shares sold under the November 2019 Registered Direct Offering (the Class B Warrants). Each Class A Warrant was immediately exercisable
as of the date of issuance of the common shares sold under the November 2019 Registered Direct Offering (the “Exercise Date”) at an exercise price of $2.00 per share, subject to adjustment. In addition, the Class A Warrants could be exercised on a
cashless basis beginning on the earlier of (i) 30 days from the closing date and (ii) the trading day on which the aggregate trading volume of our common shares November 6, 2019 is equal to more than three times the number of common shares offered
pursuant to the Purchase Agreement (the “Cashless Date”) if the VWAP of the common shares on any Trading Day on or after the Cashless Date fails to exceed $3.20 on such date (as may be subject to adjustment). The number of common shares issuable in
such cashless exercise were 0.4 of a common share that would be issuable upon exercise of the Class A Warrant in accordance with its terms if such exercise were by means of a cash exercise. No fractional common shares would have been issued in
connection with the exercise of a Class A Warrant. In lieu of fractional shares, we would have paid the holder an amount in cash equal to the fractional amount multiplied by the exercise price. Each Class B Warrant will be immediately exercisable
as of the Exercise Date at an exercise price of $2.00 per share, subject to adjustment. The foregoing adjustment to the exercise price of the Class B Warrant is subject to a floor price of $1.00. Between January 22 and February 22, 2020, all of the
4,200,000 Class A Warrants were exercised on a cashless basis into 1,680,000 of our common shares. As of the date of this prospectus supplement, we have 4,200,000 Class B Warrants outstanding.
Transfer Agent
The registrar and transfer agent for our common shares is AST.
Listing
Our common shares are traded on the Nasdaq Capital Market under the symbol “TOPS.”
TAX CONSIDERATIONS
You should carefully read the discussion of the material Marshall Islands and U.S. federal income tax considerations associated with
our operations and the acquisition, ownership and disposition of our common shares set forth in the section entitled “Taxation” of our annual report on Form 20-F for the year ended December 31,
2018, filed with the Commission on March 28, 2019 and incorporated by reference herein.
PLAN OF DISTRIBUTION
Pursuant to a placement agency agreement, dated March 30, 2020, between us and the Placement Agent, we have engaged the Placement Agent to act as the exclusive placement agent
in connection with this offering. The Placement Agent is not purchasing or selling any of the common shares we are offering by this prospectus supplement, and are not required to arrange the purchase or sale of any specific number of shares or
dollar amount, but the placement agent has agreed to use "reasonable best efforts" to arrange for the sale of the shares offered hereby.
Our agreement with the Placement Agent provides that the obligations of the Placement Agent are subject to certain conditions precedent, including, among other things, the
absence of any material adverse change in our business and the receipt of customary opinions and closing certificates.
The Placement Agent shall arrange for the sale of the shares we are offering pursuant to this prospectus supplement to one or more Investors through a Securities Purchase
Agreement, dated March 30, 2020, directly between the Investors (acting severally and not jointly) and us. All of the shares offered hereby will be sold at the same price and, we expect, at a single closing. We established the price following
negotiations with prospective Investors and with reference to the prevailing market price of our common shares, recent trends in such price and other factors. It is possible that not all of the shares we are offering pursuant to this prospectus
supplement will be sold at the closing, in which case our net proceeds would be reduced. We expect that the sale of the shares will be completed on or around the date indicated on the cover page of this prospectus supplement.
Under the Securities Purchase Agreement, we have agreed not to contract to issue or announce the issuance or proposed issuance of any common shares or common share equivalents
for ten trading days following the closing of this offering. In addition, we have also agreed that for a period of ten trading days following the closing of this offering, we will not effect or contract to effect a "Variable Rate Transaction" as
defined in the Securities Purchase Agreement.
Commissions and Expenses
We will pay the Placement Agent a placement agent fee equal to 6.5% of the gross proceeds of this offering. The following table shows the per share and total placement agent
fee we will pay to the Placement Agent in connection with the sale of the common shares offered hereby, assuming the purchase of all of the shares we are offering.
Per Share
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$
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0.013
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Total
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$
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540,000
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In addition, we have agreed to reimburse the placement agent at the closing for its out-of-pocket expenses, including fees of counsel to the placement agent, up to a maximum of
$50,000. We estimate the total expenses of this offering, which will be payable by us, excluding the placement agent fee and placement agent counsel fee, will be approximately $50,000. After deducting the placement agent fee due to the placement
agent and our estimated offering expenses, we expect the net proceeds from this offering to be approximately $7,360,000.
We have agreed to indemnify the placement agent against certain liabilities, including liabilities under the Securities Act of 1933. We have also agreed to contribute to payments the placement
agent may be required to make in respect to such liabilities.
Listing
Our common shares are listed on the Nasdaq Capital Market under the symbol "TOPS."
Electronic Distribution
This prospectus supplement and the accompanying prospectus may be made available in electronic format on websites or through other online services maintained by the Placement
Agent, or by its respective affiliates. Other than this prospectus supplement and the accompanying prospectus in electronic format, the information on the Placement Agent's websites and any information contained in any other websites maintained by
the Placement Agent is not part of this prospectus supplement or the accompanying prospectus or the registration statement of which this prospectus supplement and the accompanying prospectus forms a part, has not been approved and/or endorsed by us
or the Placement Agent, and should not be relied upon by investors.
Regulation M Restrictions
The Placement Agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it and any profit realized
on the resale of the securities sold by it while acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. As an underwriter, the Placement Agent would be required to comply with the requirements of
the Securities Act and the Exchange Act, including, without limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of
securities by the Placement Agent acting as a principal. Under these rules and regulations, the Placement Agent:
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must not engage in any stabilization activity in connection with our securities; and
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must not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed their participation in the distribution.
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EXPENSES
The following are the estimated expenses of the issuance and distribution of the securities offered by this prospectus supplement, all of which will be paid by us.
Legal Fees and Expenses
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$
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79,000
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Accountants’ Fees and Expenses
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$
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20,000
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Miscellaneous Costs
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$
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1,000
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Total
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$
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100,000
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LEGAL MATTERS
The validity of the common shares offered hereby and other matters relating to Marshall Islands and United States law will be passed upon for us by Seward & Kissel LLP, One
Battery Park Plaza, New York, New York 10004. Ellenoff Grossman & Schole LLP, New York, New York, is representing the placement agent in this offering.
EXPERTS
The consolidated financial statements incorporated in this prospectus supplement by reference from TOP Ships Inc.’s annual report on Form 20-F for the year ended December 31,
2018, have been audited by Deloitte Certified Public Accountants S.A., an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such consolidated financial statements have been so
incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The offices of Deloitte Certified Public Accountants S.A. are located at Fragoklissias 3a & Granikou Str., 15125 Maroussi,
Athens, Greece.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
As required by the Securities Act, we filed a registration statement relating to the securities offered by this prospectus supplement with the Commission. This prospectus
supplement is a part of that registration statement, which includes additional information.
Government Filings
We file annual and special reports within the Commission. The Commission maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the Commission. Our filings are also available on our website at http://www.tops.org. The information on our website, however, is not, and should not be deemed to be, a part of
this prospectus supplement. Further, other than as described below, the information contained in or accessible from the Commission’s website is not part of this prospectus supplement.
Information Incorporated by Reference
The Commission allows us to “incorporate by reference” information that we file with it. This means that we can disclose important information to you by referring you to those
filed documents. The information incorporated by reference is considered to be a part of this prospectus supplement, and information that we file later with the Commission prior to the termination of this offering will also be considered to be part
of this prospectus supplement and will automatically update and supersede previously filed information, including information contained in this document.
This prospectus supplement incorporates by reference the following documents:
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Report on Form 20-F for the year ended December 31, 2018, filed with the Commission on March 28, 2019, which contains our
audited consolidated financial statements for the most recent fiscal year for which those statements have been filed. As a result of a one-for-twenty reverse stock split of our issued and outstanding common shares effective on August
22, 2019, we are required to retrospectively restate share information and earnings /loss per share, hence there was a reclassification from common stock to additional paid in capital. There was no impact on net income/(loss) and
comprehensive income/(loss) as previously reported or any prior amounts reported on the consolidated statements of comprehensive income/(loss), the consolidated statements of cash flows or on assets, liabilities and total equity in
the balance sheet. The earnings/ loss per share, weighted average number of common stock and the amount of common stock presented in the Selected Financial Data for the years ended December 31, 2014 – 2018 has been updated to reflect
the one-for-twenty reverse stock split of our issued and outstanding common shares effective on August 22, 2019 as set in the table below:
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(Amounts in U.S. Dollars in thousands, except per share data)
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Year Ended December 31,
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STATEMENT OF COMPREHENSIVE INCOME/(LOSS)
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2014
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2015
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2016
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2017
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2018
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Earnings/(Loss) per share, basic
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$
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8,274,280
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$
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(15,467,280
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)
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$
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(319,100
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)
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$
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(251
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)
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$
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(12.20
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)
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Earnings/(Loss) per share, diluted
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7,240,000
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(15,467,280
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)
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(319,100
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)
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(251
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)
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(12.20
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)
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Weighted average common shares outstanding, basic
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-
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-
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1
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53,169
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909,072
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Weighted average common shares outstanding, diluted
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-
|
|
|
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-
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|
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1
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|
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53,169
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|
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909,072
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|
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|
|
|
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|
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U.S. dollars in thousands, unless otherwise stated
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As of December 31,
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BALANCE SHEET DATA
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2014
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2015
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2016
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2017(1)
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2018(1)
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Common stock
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$
|
-
|
|
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$
|
-
|
|
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$
|
-
|
|
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$
|
4
|
|
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$
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11
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(1) Common stock was reduced by $219 thousand and $85 thousand as of December 31, 2018 and 2017, respectively with a corresponding increase to Additional paid in capital.
We are also incorporating by reference all subsequent annual reports on Form 20-F that we file with the Commission and certain reports on Form 6-K that we furnish to the
Commission after the date of this prospectus supplement (if they state that they are incorporated by reference into the registration statement of which this prospectus supplement is a part) until we file a post-effective amendment indicating that
the offering of the securities made by this prospectus supplement has been terminated. In all cases, you should rely on the later information over different information included in this prospectus supplement or the accompanying prospectus.
You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not, and the placement
agent has not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the placement agent is not, making an offer to sell
these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus supplement and the accompanying prospectus as well as the information we previously filed with the
Commission and incorporated by reference, is accurate as of the dates on the front cover of those documents only. Our business, financial condition and results of operations and prospects may have changed since those dates.
You may request a paper copy of our Commission filings, at no cost, by writing to or telephoning us at the following address:
TOP Ships Inc.
1 Vas. Sofias and Meg. Alexandrou Str,
15124 Maroussi, Greece
(011) 30 210 812-8180 (telephone number)
These reports may also be obtained on our website at www.topships.org. None of the information on our website is a part of this prospectus supplement or the accompanying
prospectus.
Information Provided by the Company
We will furnish holders of our common shares with annual reports containing audited financial statements and a report by our independent registered public accounting firm. The
audited financial statements will be prepared in accordance with U.S. generally accepted accounting principles. As a “foreign private issuer,” we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy
statements to shareholders. While we furnish proxy statements to shareholders in accordance with the rules of the Nasdaq Capital Market, those proxy statements do not conform to Schedule 14A of the proxy rules promulgated under the Exchange Act. In
addition, as a “foreign private issuer,” our officers and directors are exempt from the rules under the Exchange Act relating to short swing profit reporting and liability.