Filed Pursuant to Rule
424(b)(5)
Registration No.
333-234281
PROSPECTUS SUPPLEMENT
(To
Prospectus dated November 4, 2019)
59,400,000
Common Shares
We are offering an aggregate of 59,400,000 of our common shares
pursuant to a Securities Purchase Agreement, dated May 14, 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 May 14, 2020, the last
reported sale price of our common shares on Nasdaq was $0.19 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-6 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 6.25% 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 May 18, 2020.
|
|
Per Share
|
|
|
Total
|
|
Public
offering price
|
|
$
|
0.135
|
|
|
$
|
8,019,000
|
|
Placement
agent fees
|
|
$
|
0.008
|
|
|
$
|
501,187
|
|
Proceeds
to the Company before expense
|
|
$
|
0.127
|
|
|
$
|
7,517,813
|
|
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.
Maxim Group LLC
The date of this prospectus supplement is May 14, 2020.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
Page
ABOUT THIS
PROSPECTUS SUPPLEMENT
|
S-ii
|
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
|
S-iii
|
PROSPECTUS
SUPPLEMENT SUMMARY
|
S-1
|
THE
OFFERING
|
S-5
|
RISK
FACTORS
|
S-6
|
USE OF
PROCEEDS
|
S-14
|
CAPITALIZATION
|
S-15
|
BENEFICIAL
OWNERSHIP OF OUR COMMON SHARES
|
S-17
|
DESCRIPTION OF CAPITAL STOCK
|
S-18
|
TAX
CONSIDERATIONS
|
S-28
|
PLAN OF
DISTRIBUTION
|
S-29
|
EXPENSES
|
S-31
|
LEGAL
MATTERS
|
S-31
|
EXPERTS
|
S-31
|
WHERE YOU
CAN FIND ADDITIONAL INFORMATION
|
S-31
|
BASE PROSPECTUS
Page
SUMMARY
|
1
|
RISK FACTORS
|
5
|
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
|
6
|
USE OF PROCEEDS
|
7
|
CAPITALIZATION
|
8
|
PLAN OF DISTRIBUTION
|
9
|
DESCRIPTION OF CAPITAL STOCK
|
11
|
DESCRIPTION OF DEBT SECURITIES
|
20
|
DESCRIPTION OF WARRANTS
|
26
|
DESCRIPTION OF PURCHASE CONTRACTS
|
27
|
DESCRIPTION OF RIGHTS
|
28
|
DESCRIPTION OF UNITS
|
29
|
ENFORCEABILITY OF CIVIL LIABILITIES
|
30
|
EXPENSES
|
31
|
LEGAL MATTERS
|
31
|
EXPERTS
|
31
|
WHERE YOU CAN FIND ADDITIONAL INFORMATION
|
31
|
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:
|
• |
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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|
• |
our future
operating and financial results;
|
|
• |
our future vessel acquisitions, our
business strategy and expected capital spending or
operating expenses, including any dry-docking
and insurance costs;
|
|
• |
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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|
• |
oil and
chemical tanker industry trends, including charter rates and vessel
values and factors affecting vessel supply and demand;
|
|
• |
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;
|
|
• |
the aging of
our vessels and resultant increases in operation and dry-docking
costs;
|
|
• |
the ability of
our vessels to pass classification inspections and vetting
inspections by oil majors and big chemical corporations;
|
|
• |
significant
changes in vessel performance, including increased vessel
breakdowns;
|
|
• |
the
creditworthiness of our charterers and the ability of our contract
counterparties to fulfill their obligations to us;
|
|
• |
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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|
• |
changes to
governmental rules and regulations or actions taken by regulatory
authorities and the expected costs thereof;
|
|
• |
potential
liability from litigation and our vessel operations, including
discharge of pollutants;
|
|
• |
changes in
general economic and business conditions;
|
|
• |
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;
|
|
• |
changes in
production of or demand for oil and petroleum products and
chemicals, either globally or in particular regions;
|
|
• |
the strength of
world economies and currencies, including fluctuations in charter
hire rates and vessel values;
|
|
• |
potential
liability from future litigation and potential costs due to any
environmental damage and vessel collisions;
|
|
• |
the length and
severity of the recent coronavirus outbreak (COVID-19) and its
impact on the demand for commercial seaborne transportation and the
condition to the financial markets; and
|
|
• |
other important factors
described from time to
time in the reports filed by us with the Commission.
|
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
operating fleet has a total capacity of 814,000 deadweight tonnes
(“dwt”). As of the date of this prospectus supplement, 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 two 50,000
dwt product/chemical tankers, M/T Eco Yosemite Park and the M/T Eco
Joshua Park. We also have three newbuilding contracts for
three 50,000 dwt product/chemical tankers. 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
operating 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
|
Deadweight
|
Charterer
|
End of firm period
|
Charterer’s Optional Periods
|
Gross Rate fixed period/ options
|
M/T
Stenaweco Energy
|
50,000
|
Stena Weco A/S
|
February 2021
|
1+1 years
|
$15,616 / $17,350 / $18,100
|
M/T
Stenaweco Evolution
|
50,000
|
Stena Weco A/S
|
October 2021
|
1+1 years
|
$15,516 / $17,200 / $18,000
|
M/T
Stenaweco Excellence
|
50,000
|
Stena Weco A/S
|
November 2020
|
1+1 years
|
$16,200 / $17,200 / $18,000
|
M/T Nord
Valiant
|
50,000
|
DS Norden A/S
|
August 2021
|
1+1 years
|
$16,800 / $17,600 / $18,400
|
M/T Eco
California
|
50,000
|
Shell Tankers Singapore Private Limited
|
January 2021
|
1 year
|
$13,750 plus 50% profit share/ $13,950 plus 50% profit share
|
M/T Eco
Marina Del Ray
|
50,000
|
Cargill
|
March 2024
|
-
|
$15,100
|
M/T Eco
Los Angeles
|
50,000
|
Trafigura
|
February 2023
|
1+1 years
|
$17,500 / $18,750 / $20,000
|
M/T Eco
City of Angels
|
50,000
|
Trafigura
|
February 2023
|
1+1 years
|
$17,500 / $18,750 / $20,000
|
Suezmax Vessels on SLBs (treated as financings):
Name
|
Deadweight
|
Charterer
|
End of firm period
|
Charterer’s Optional Periods
|
Gross Rate fixed period/ options
|
M/T Eco
Bel Air
|
157,000
|
BP Shipping Limited
|
April 2022
|
1+1 years
|
$24,500 / $27,500 / $29,000
|
M/T Eco
Beverly Hills
|
157,000
|
BP Shipping Limited
|
May 2022
|
1+1 years
|
$24,500 / $27,500 / $29,000
|
Joint Venture MR Tanker fleet (50% owned):
Name
|
Deadweight
|
Charterer
|
End of firm period
|
Charterer’s Optional Periods
|
Gross Rate fixed period/ options
|
M/T Eco
Yosemite Park
|
50,000
|
Clearlake Shipping Pte Ltd
|
March 2025
|
1+1 years
|
$17,400 / $18,650 / $19,900
|
M/T Eco
Joshua Park
|
50,000
|
Clearlake Shipping Pte Ltd
|
March 2025
|
1+1 years
|
$17,400 / $18,650 / $19,900
|
Fleet under construction (MR Tankers):
Name
|
|
Deadweight
|
|
Charterer
|
End of
firm period
|
Charterer's Optional Periods
|
|
Gross
Rate fixed period/ options
|
Delivery
date
|
Shipyard
|
M/T Eco Van
Nuys (Hull No 2789)
|
|
50,000
|
|
Central Tankers Chartering Inc
|
January 2026
|
1+1
years
|
|
$16,200 / $17,200 / $18,200
|
January 2021
|
Hyundai Mipo S. Korea
|
M/T
Eco Santa Monica (Hull No 2790)
|
|
50,000
|
|
Central Tankers Chartering Inc
|
February 2026
|
1+1
years
|
|
$16,200 / $17,200 / $18,200
|
February 2021
|
Hyundai Mipo S. Korea
|
M/T
Eco Venice Beach (Hull No 2791)
|
|
50,000
|
|
Central Tankers Chartering Inc
|
March
2026
|
1+1
years
|
|
$16,200 / $17,200 / $18,200
|
March
2021
|
Hyundai Mipo S. Korea
|
All the vessels in our fleet, including our newbuildings, are and
will be 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, all of our vessels are fitted with
ballast water treatment equipment and 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 and certain of our current executive officers were defendants in
purported class-action lawsuits pending in the U.S. District Court
for the Eastern District of New York, brought on behalf of our
shareholders. On August 3, 2019 the Eastern District Court of
New York dismissed the case with prejudice. On August 26,
2019, plaintiffs appealed the dismissal to the United States Court
of Appeals for the Second Circuit. We filed our response briefs on
November 26 and November 27, 2019, and plaintiffs 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. On April 2,
2020, the Court of Appeals issued a summary order affirming the
District Court's decision dismissing plaintiffs' claims and denying
leave to amend. Due to issues relating to COVID-19, the
Second Circuit has extended all deadlines by 21 days and
plaintiffs’ deadline to file a motion for reargument with the
Second Circuit was May 7, 2020. The plaintiffs did not file a
motion for reargument and the Second Circuit issued its mandate on
May 14, 2020 upholding the decision of the Eastern District of New
York. Furthermore, the United States Supreme Court has
extended the deadline for parties to file cert petitions asking the
Court to hear an appeal to 150 days from the date of the lower
court judgment. As a result, the deadline for plaintiffs to
file a petition with the Supreme Court is now August 30,
2020.
On April 17, 2020 our 50% subsidiary, Eco Nine Pte., concluded the
previously announced sale of its 100% owned vessel, M/T Palm
Springs. The net cash release to the Company amounted to $9.7
million.
On April 24, 2020 we acquired from a company affiliated with the
Company’s Chief Executive Officer, or the Seller, a 50% interest in
two vessel owning companies that owned two ultra-high specification
scrubber-fitted 50,000 dwt eco MR product tankers, M/T Eco Yosemite
Park and M/T Eco Joshua Park for $27.0 million, which was paid with
cash on hand. Both vessels were delivered in March 2020 to the
Seller from Hyundai Mipo shipyard of South Korea. The
acquisitions were approved by a special committee composed of
independent members of the Company's board of directors, or the
Transaction Committee. The Transaction Committee obtained a
fairness opinion relating to the consideration paid in this
transaction from an independent financial advisor. The Seller
had already entered into two joint venture agreements, for the two
vessels, each with an equal ownership interest of 50%, with Just-C
Limited, a wholly owned subsidiary of Gunvor Group Ltd (the other
50% owner). Each of the two product tankers have time charters with
Clearlake Shipping Pte Ltd, a subsidiary of Gunvor Group Ltd for a
firm term of five years plus two additional optional years.
On March 30, April 15, April 27 and April 28, 2020, we entered into
registered offerings for the sale of an aggregate of 137,833,333
common shares for gross proceeds of $25.9 million with the same
investors participating in this offering.
On May 8, 2020, we
announced that we acquired for $18.0 million from a company
affiliated with our Chief Executive Officer, a 100% ownership
interest in three Marshall Island companies that each own one
ultra-high specification scrubber-fitted 50,000 dwt eco MR
product/chemical tanker, all currently under construction in
Hyundai Mipo shipyard in South Korea. The consideration will
be paid in installments through the vessels’ delivery dates. The
three tankers are scheduled to be delivered in the first quarter of
2021. The Company also anticipates it will enter into financing
arrangements for the vessels prior to their delivery from the
shipyard. The Transaction Committee obtained a fairness
opinion relating to the consideration paid in this transaction from
an independent financial advisor.
Each of the three product
tankers have time charters with Central Tankers Chartering Inc, a
company affiliated with our Chief Executive Officer, for a firm
term of five years plus two additional optional years. The total
potential gross revenue backlog from these contracts is about
$127.5 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.
Issuer
|
TOP Ships Inc., a Marshall Islands corporation
|
|
|
Common
shares outstanding
as of May 14, 2020
|
215,538,488
|
|
|
Common
shares offered by us
|
59,400,000 common shares.
|
|
|
Common
shares outstanding immediately after the offering
|
274,938,488 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.”
|
|
|
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, as described under the section entitled
Description of Capital Stock -- Description of Series E Convertible
Preferred Shares. See “Use of
Proceeds.”
|
|
|
Risk
factors
|
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-6 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.
|
Listing
|
Our common shares are traded on the Nasdaq Capital Market under the
symbol “TOPS.”
|
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, 2019, filed with the Commission on
April 10, 2020 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. However, due
to the extraordinary market conditions caused by COVID-19, Nasdaq
announced the tolling of all compliance periods related to a bid
price deficiency and our grace period is extended to September 7,
2020. We intend to monitor the closing bid price of our
common shares between now and September 7, 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 April 10, 2020 we distributed the notice for our Annual Meeting
of Shareholders to be held on May 29, 2020. One of the agenda
items for the meeting is the authorization of one or more
amendments to the Company’s Amended and Restated Articles of
Incorporation to effect one or more reverse stock splits of the
Company’s issued common shares at a ratio of not less than
one-for-two and not more than one-for-25 and in the aggregate at a
ratio of not more than one-for-25, inclusive, with the exact ratio
to be set at a whole number within this range to be determined by
our board of directors. We may effectuate a reverse stock
split in order to regain compliance with the Nasdaq minimum bid
price requirement.
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.
The novel coronavirus (COVID-19) pandemic is dynamic and expanding
and has negatively affected the shipping and energy industries,
including oil prices. The continuation of this outbreak likely
would have, and the emergence of other epidemic or pandemic crises
could have, material adverse effects on our business, results of
operations, or financial condition.
The novel coronavirus pandemic is dynamic and expanding, and its
ultimate scope, duration and effects are uncertain. This pandemic
has had and is expected to continue to have direct and indirect
adverse effects on our industry and customers, which in turn impact
our business, results of operations and financial condition, as
could any future epidemic or pandemic health crisis. Effects of the
current COVID-19 pandemic include, or may include, among
others:
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deterioration
of worldwide, regional or national economic conditions and
activity, which is expected to result in a global recession, the
duration and severity of which is uncertain, and could further
reduce or prolong the recent significant declines in energy prices,
or adversely affect global demand for crude oil or petroleum
products, demand for our services;
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disruptions to
our operations as a result of the potential health impact on our
employees and crew, and on the workforces of our customers and
business partners;
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disruptions to
our business from, or additional costs related to, new regulations,
directives or practices implemented in response to the pandemic,
such as travel restrictions (including for any of our onshore
personnel or any of our crew members to timely embark or disembark
from our vessels), increased inspection regimes, hygiene measures
(such as quarantining and physical distancing) or increased
implementation of remote working arrangements;
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potential
shortages or a lack of access to required spare parts for our
vessels, or potential delays in any repairs to, or scheduled or
unscheduled maintenance or modifications or dry docking of, our
vessels, as a result of a lack of berths available by shipyards
from a shortage in labor or due to other business
disruptions;
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delays in
vessel inspections and related certifications by class societies
customers or government agencies;
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potential
reduced cash flows and financial condition including potential
liquidity constraints;
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reduced access
to capital, including the ability to refinance any existing
obligations, as a result of any credit tightening generally or due
to continued declines in global financial markets, including to the
prices of publicly-traded securities of us, our peers and of listed
companies generally;
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a reduced
ability to opportunistically sell any of our vessels on the
second-hand market, either as a result of a lack of buyers or a
general decline in the value of second-hand vessels;
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a decline in
the market value of our vessels, which may cause us to (a) incur
impairment charges or (b) breach certain covenants under our
financing agreements;
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disruptions,
delays or cancellations in connection with among others, vessel
special surveys, installation of ballast water systems and scrubber
installations, which could increase our off-hire time and decrease
revenues; and
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potential
deterioration in the financial condition and prospects of our
customers or partners, which could adversely impact their ability
or willingness to fulfill their obligations to us, or attempts by
customers or third parties to renegotiate existing agreement or
invoke force majeure contractual clauses as a result delays or
other disruptions, such as the renegotiation of lease terms,
including charter rates.
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Given the dynamic nature of the circumstances surrounding the
COVID-19 pandemic and the worldwide nature of our business and
operations, the duration of any business disruption and the related
financial impact to us cannot be reasonably estimated at this time,
but any prolonged slowdown in the global economy would be likely to
continue to negatively impact worldwide demand for seaborne
transportation of goods and commodities, as well as for oil and
drilling units, and could materially affect our business, results
of operations and financial condition.
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 7,544,475 and 206,843,400 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
$200,000,000 of which we have sold $36.0 million. 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 the Class B Warrants, discussed under the
section entitled Description of Capital Stock—2019 Class A Warrants
and Class B Warrants below, 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, debt prepayments, 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 59,400,000 common shares which is approximately
27.6% 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 May 14,
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.
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 May 14, 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.
Delays or defaults by the shipyards in the construction of our
newbuildings could increase our expenses and diminish our net
income and cash flows.
As of May 14, 2020, we had contracts for three newbuilding vessels.
These three product tankers are expected to be delivered during the
first quarter of 2021. Vessel construction projects are generally
subject to risks of delay that are inherent in any large
construction project, which may be caused by numerous factors,
including shortages of equipment, materials or skilled labor,
unscheduled delays in the delivery of ordered materials and
equipment or shipyard construction, failure of equipment to meet
quality and/or performance standards, financial or operating
difficulties experienced by equipment vendors or the shipyard,
unanticipated actual or purported change orders, inability to
obtain required permits or approvals, design or engineering changes
and work stoppages and other labor disputes, adverse weather
conditions or any other events of force majeure. Significant delays
could adversely affect our financial position, results of
operations and cash flows. Additionally, failure to complete a
project on time may result in the delay of revenue from that
vessel, and we will continue to incur costs and expenses related to
delayed vessels, such as supervision expense.
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.
The following table sets forth our consolidated capitalization as
of December 31, 2019:
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on an as
adjusted basis to give effect to the following transactions which
occurred between December 31, 2019 and May 14, 2020:
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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 $16.0 million of
consideration outstanding for the purchase of the M/T Eco City of
Angels and M/T Eco Los Angeles from Mr. Pistiolis and for Series E
Shares dividends payable to Family Trading Inc.
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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 redemption
of 21,364 Series E Preferred Shares for $24.6 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
$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”) (the sale and leaseback
will be accounted as a financing transaction);
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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;
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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 on
April 1, 2020 of 40,000,000 of the Company’s common shares via a
registered direct offering at a public offering price of $0.20 per
share resulting in aggregate net proceeds of $7.4 million;
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The sale on
April 17, 2020 of 33,333,333 of the Company’s common shares via a
registered direct offering at a public offering price of $0.18 per
share resulting in aggregate net proceeds of $5.5 million;
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The sale on
April 29, 2020 of 35,000,000 of the Company’s common shares via a
registered direct offering at a public offering price of $0.186 per
share resulting in aggregate net proceeds of $6.0 million;
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The sale on
April 30, 2020 of 29,500,000 of the Company’s common shares via a
registered direct offering at a public offering price of $0.186 per
share resulting in aggregate net proceeds of $5.0 million;
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$18.0 million
excess consideration over the carrying amount of acquired assets
relating to the acquisitions of M/T Eco Van Nuys (Hull No 2789),
M/T Eco Santa Monica (Hull No 2790) and M/T Eco Venice Beach (Hull
No 2791), accounted for as a transfer of assets between entities
under common control;
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$8.5 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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on an as
further adjusted basis, assuming our issuance and sale of
59,400,000 common shares at an assumed offering price of $0.135 per
share resulting in proceeds of $8.0 million, net of estimated
expenses of $0.6 million.
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(Expressed in thousands of U.S. Dollars, except number of shares
and per share data)
|
|
Actual
|
|
|
As Adjusted
|
|
|
As Further Adjusted
|
|
Debt:(1) (2)
|
|
|
|
|
|
|
|
|
|
Current portion of long term debt
|
|
$
|
16,908
|
|
|
$
|
16,698
|
|
|
$
|
16,698
|
|
Non-current portion of long term debt
|
|
|
262,122
|
|
|
|
262,601
|
|
|
|
262,601
|
|
Debt
related to vessels held for sale
|
|
|
29,977
|
|
|
|
-
|
|
|
|
-
|
|
Total debt
|
|
|
309,007
|
|
|
|
279,299
|
|
|
|
279,299
|
|
Mezzanine equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock Series E, $0.01 par value; 15,724 shares issued and
outstanding at December 31, 2019, 10,364 shares issued and
outstanding at December 31, 2019, as adjusted and as further
adjusted
|
|
|
18,083
|
|
|
|
12,437
|
|
|
|
12,437
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value, 1,000,000,000 shares authorized;
8,695,348 shares issued and outstanding at December 31, 2019,
215,538,488 shares issued and outstanding at December 31, 2019 as
adjusted and 274,938,488 shares issued and outstanding at December
31, 2019 as further adjusted
|
|
|
87
|
|
|
|
2,155
|
|
|
|
2,749
|
|
Preferred stock Series D, $0.01 par value; 100,000 shares issued
and outstanding at December 31, 2019 as adjusted and as
further adjusted
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
Additional paid-in capital
|
|
|
411,499
|
|
|
|
422,286
|
|
|
|
429,135
|
|
Accumulated other comprehensive loss
|
|
|
(1,361
|
)
|
|
|
(1,361
|
)
|
|
|
(1,361
|
)
|
Accumulated deficit
|
|
|
(322,552
|
)
|
|
|
(317,311
|
)
|
|
|
(317,311
|
)
|
Total Shareholders’ and Mezzanine equity
|
|
|
105,757
|
|
|
|
118,207
|
|
|
|
125,650
|
|
Total capitalization
|
|
$
|
414,764
|
|
|
$
|
397,506
|
|
|
$
|
404,949
|
|
(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
December 31, 2019 or any write -offs of deferred fees in respect of
loans fully repaid.
(2) Our indebtedness (both current and non-current portions), is
secured by titles on our vessels and is guaranteed by us.
BENEFICIAL OWNERSHIP OF OUR
COMMON SHARES
The following table sets forth the beneficial ownership of our
common shares, as of May 14, 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 SEC'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
|
|
|
|
7.4
|
%
|
Executive officers, directors and key employees
|
|
|
-
|
|
|
|
-
|
%
|
(1)
|
Based upon
215,538,488 common shares outstanding as of May 14, 2020.
|
(2)
|
The
above information is derived, in part, from the Schedule 13D/A
filed with the SEC on April 30, 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 232,812,628 common
shares outstanding, which is calculated for this Schedule 13D/A
purposes by taking the sum of (i) 215,538,488 common shares
outstanding, and (ii) 17,274,140 common shares issuable upon the
conversion of 10,364 Series E Preferred Shares held by Family
Trading, all figures being as of May 14, 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. 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. 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 May 14, 2020, we had one shareholder of record, which was
located in the United States and held an aggregate of 215,538,488 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 April 10, 2020 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 215,538,488 shares were issued and
outstanding as of May 14, 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 May 14,
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 19, 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 May 14, 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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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.
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.
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.”
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, 2019, filed with the Commission on April 10,
2020 and incorporated by reference herein.
Pursuant to a placement agency agreement, dated May 14, 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 May 14,
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 twenty trading
days following the closing of this offering. In addition, we
have also agreed that for a period of twenty 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
6.25% 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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0.008
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Total
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$
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501,187
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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 $15,000. 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 $75,000. 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 $7.4 million.
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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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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54,000
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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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75,000
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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.
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, 2019, 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, 2019, filed with the Commission on April
10, 2020, which contains our audited consolidated financial
statements for the most recent fiscal year for which those
statements have been filed.
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Report on
Form 6-K furnished
to the Commission on April 17, 2020, which contains the
announcement of the Company’s entrance into a Securities Purchase
Agreement with certain institutional investors and Placement Agency
Agreement with Maxim Group LLC, under which the Company sold
33,333,333 of its common shares at a public offering price of $0.18
per share.
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Report on
Form 6-K to the
Commission on April 20, 2020, which contained an announcement of
the Company’s completion of the sale of M/T Palm Springs.
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Report on
Form 6-K to the
Commission on April 24, 2020, which contained an announcement of
the joint venture with Gunvor Group.
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Report on
Form 6-K furnished
to the Commission on April 29, 2020, which contains the
announcement of the Company’s entrance into a Securities Purchase
Agreement with certain institutional investors and Placement Agency
Agreement with Maxim Group LLC, under which the Company sold
35,000,000 of its common shares at a public offering price of
$0.186 per share.
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Report on
Form 6-K furnished
to the Commission on April 30, 2020, which contains the
announcement of the Company’s entrance into a Securities Purchase
Agreement with certain institutional investors and Placement Agency
Agreement with Maxim Group LLC, under which the Company sold
29,500,000 of its common shares at a public offering price of
$0.186 per share.
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Report on
Form 6-K furnished
to the Commission on May 8, 2020, which contained an announcement
of the Company’s acquisition of three newbuilding vessels form an
entity related to our Chief Executive Officer.
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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.
RELIMINARY PROSPECTUS
$200,000,000
Common Shares (including preferred stock purchase rights),
Preferred Shares, Debt Securities, Warrants, Purchase Contracts,
Rights and Units
TOP SHIPS INC.
Through this prospectus, we may periodically offer common shares
(including related preferred stock purchase rights), preferred
shares, debt securities, warrants, purchase contracts, rights and
units. We may also offer securities of the types listed above that
are convertible or exchangeable into one or more of the securities
listed above.
The prices and terms of the securities that we will offer or sell
will be determined at the time of their offering and will be
described in a supplement to this prospectus. This prospectus
describes some of the general terms that may apply to these
securities. The securities issued under this prospectus may
be offered directly or through one or more underwriters, agents or
dealers, or through other means. The names of any
underwriters, agents or dealers will be included in a supplement to
this prospectus.
Our common shares are currently listed on the Nasdaq Capital Market
under the symbol “TOPS.”
The aggregate market value
of our outstanding common shares held by non-affiliates as of
October 21, 2019 is $39.3 million, based on 4,493,528 common shares
held by non-affiliates, and a closing price on the Nasdaq Capital
Market of $8.74 on September 9, 2019. As of the date hereof,
we have offered $7,934,756 securities pursuant to General
Instruction I.B.5 of Form F-3 during the twelve calendar month
period that ends on and includes the date hereof.
Investing in our securities involves a high degree of risk.
Before you make an investment in our securities, you should
carefully consider the section entitled “Risk Factors”
beginning on page 5 of this prospectus, and the other risk factors
contained in the applicable prospectus supplement and in the
documents incorporated by reference herein and therein.
Neither the U.S. Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is October 21, 2019.
ABOUT THIS PROSPECTUS
Unless otherwise indicated, all references to “dollars” and “$” in
this prospectus are to United States dollars and financial
information presented in this prospectus that is derived from
financial statements incorporated by reference is prepared in
accordance with accounting principles generally accepted in the
United States.
This prospectus is part of a registration statement that we filed
with the U.S. Securities and Exchange Commission, or the
Commission, using a shelf registration process. Under the shelf
registration process, we may sell the common shares (including
related preferred stock purchase rights), preferred shares, debt
securities, warrants, purchase contracts, rights and units that are
described in this prospectus from time to time in one or more
offerings. This prospectus provides you with a general description
of the securities we may offer. Each time we offer or sell
securities pursuant to this prospectus, we will provide you with a
prospectus supplement that will describe the specific types,
amounts, prices and terms of the offered securities. The prospectus
supplement may also add, update or change the information contained
in this prospectus. If there is any inconsistency between the
information in this prospectus and any prospectus supplement, you
should rely on the prospectus supplement. Before purchasing any
securities, you should read carefully both this prospectus and any
prospectus supplement, together with the additional information
described below.
This prospectus and any prospectus supplement are part of a
registration statement we filed with the Commission and do not
contain all of the information in the registration statement. Forms
of the indentures and other documents establishing the terms of the
offered securities are filed as exhibits to the registration
statement. Statements in this prospectus or any prospectus
supplement about these documents are summaries and each statement
is qualified in all respects by reference to the document to which
it refers. You should refer to the actual documents for a more
complete description of the relevant matters. For further
information about us or the securities offered hereby, you should
refer to the registration statement, which you can obtain from the
Commission as described below under “Where You Can Find Additional
Information.”
You should rely only on the information contained or incorporated
by reference in this prospectus and in any prospectus supplement.
We and any underwriters have 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 will not make any 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 and the
applicable supplement to this prospectus is accurate as of the date
on its respective cover, and that any information incorporated by
reference is accurate only as of the date of the document
incorporated by reference, unless we indicate otherwise. Our
business, financial condition, results of operations and prospects
may have changed since those dates.
Other than in the United States, no action has been taken by us
that would permit a public offering of the securities offered by
this prospectus in any jurisdiction where action for that purpose
is required. The securities offered by this prospectus may not be
offered or sold, directly or indirectly, nor may this prospectus or
any other offering material or advertisements in connection with
the offer and sale of any such securities be distributed or
published in any jurisdiction, except under circumstances that will
result in compliance with the applicable rules and regulations of
that jurisdiction. Persons into whose possession this prospectus
comes are advised to inform themselves about and to observe any
restrictions relating to the offering and the distribution of this
prospectus. This prospectus does not constitute an offer to sell or
a solicitation of an offer to buy any securities offered by this
prospectus in any jurisdiction in which such an offer or a
solicitation is unlawful.
Table of Contents
SUMMARY
|
1
|
RISK
FACTORS
|
5
|
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
|
6
|
USE OF
PROCEEDS
|
7
|
CAPITALIZATION
|
8
|
PLAN OF
DISTRIBUTION
|
9
|
DESCRIPTION OF CAPITAL STOCK
|
11
|
DESCRIPTION OF DEBT SECURITIES
|
20
|
DESCRIPTION OF WARRANTS
|
26
|
DESCRIPTION OF PURCHASE CONTRACTS
|
27
|
DESCRIPTION OF RIGHTS
|
28
|
DESCRIPTION OF UNITS
|
29
|
ENFORCEABILITY OF CIVIL LIABILITIES
|
30
|
EXPENSES
|
31
|
LEGAL
MATTERS
|
31
|
EXPERTS
|
31
|
WHERE YOU
CAN FIND ADDITIONAL INFORMATION
|
31
|
SUMMARY
This section summarizes certain of the information that is
contained in this prospectus or the documents incorporated by
reference herein, and this summary is qualified in its entirety by
that more detailed information. This summary may not contain
all of the information that may be important to you. We urge
you to carefully read this entire prospectus and the documents
incorporated by reference herein, including our financial
statements and the related notes and the information in the section
entitled “Item 5. Operating and Financial Review and Prospects” in
our Annual Report on Form 20-F for the year ended December 31,
2018, which is incorporated by reference herein. As an investor or
prospective investor, you should review carefully the more detailed
information that appears later in this prospectus and the
information incorporated by reference in this prospectus, including
the section entitled “Risk Factors” herein.
Unless the context otherwise requires, as used in this prospectus,
the terms “Company,” “we,” “us,” and “our” refer to TOP SHIPS INC.
and all of its subsidiaries, and “TOP SHIPS INC.” refers only to
TOP SHIPS INC. and not to 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 to “$” or “dollars” are to U.S. dollars.
Our Company
We are an international owner and operator of modern, fuel
efficient eco tanker vessels focusing on the transportation of
crude oil, petroleum products (clean and dirty) and bulk liquid
chemicals. Our fleet, both sale and leasebacked and owned has a
total capacity of 892,000 deadweight tonnes (“dwt”). As of the date
of this prospectus, our fleet consists of two owned 39,000 dwt
product/chemical tankers vessels, the M/T Eco Fleet and the M/T Eco
Revolution, and two owned 50,000 dwt product/chemical tankers, the
M/T Stenaweco Elegance and the M/T Eco Palm Desert. We also have
sale and leaseback agreements for four 50,000 dwt product/chemical
tankers, M/T Nord Valiant, M/T Stenaweco Excellence, the M/T Eco
California and the M/T Eco Marina Del Ray and two 159,000 dwt
Suezmax tankers, the M/T Eco Bel Air and M/T Eco Beverly Hills and
we also own 50% interests in two 50,000 dwt product/chemical
tankers, M/T Eco Holmby Hills and the M/T Palm Springs as well as
two chartered-in 50,000 dwt product/chemical tankers vessels, the
M/T Stenaweco Energy and the M/T Stenaweco Evolution. 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.
We intend to continue to review the market in order to identify
potential acquisition targets in line with our strategy.
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.
Our Current Fleet
The
following tables present our fleet list as of the date of this
prospectus:
MR Tanker vessels:
Name
|
Deadweight
|
Vessel Type
|
Charterer
|
End of firm period
|
Charterer’s Optional Periods
|
Gross Rate fixed period/ options
|
M/T
Stenaweco Energy***
|
50,000
|
Medium
Range (“MR”) Tanker
|
Stena Weco A/S
|
February 2021
|
1+1 years
|
$15,616 / $17,350 / $18,100
|
M/T
Stenaweco Evolution***
|
50,000
|
Medium
Range (“MR”) Tanker
|
Stena Weco A/S
|
October 2021
|
1+1 years
|
$15,516 / $17,200 / $18,000
|
M/T Eco
Fleet*
|
39,000
|
Medium
Range (“MR”) Tanker
|
Clearlake Shipping Pte Ltd
|
April
2022
|
1+1
years
|
$12,600 1st
year, $13,100 2nd
year and $13,600 3rd
year / $14,350 / $15,600
|
M/T Eco
Revolution*
|
39,000
|
Medium
Range (“MR”) Tanker
|
BP
Shipping Limited
|
January 2021
|
1+1
years
|
$13,500 / $16,000 / $16,750
|
M/T Stenaweco
Excellence**
|
50,000
|
Medium
Range (“MR”) Tanker
|
Stena
Weco A/S
|
November 2020
|
1+1
years
|
$16,200 / $17,200 / $18,000
|
M/T Nord
Valiant**
|
50,000
|
Medium
Range (“MR”) Tanker
|
DS
Norden A/S
|
August
2021
|
1+1
years
|
$16,800 / $17,600 / $18,400
|
M/T Stenaweco
Elegance*
|
50,000
|
Medium
Range (“MR”) Tanker
|
Stena
Weco A/S
|
March
2021
|
1+1
years
|
$16,500 / $17,500 / $18,500
|
M/T Eco Palm
Desert*
|
50,000
|
Medium
Range (“MR”) Tanker
|
Shell
Tankers Singapore Private Limited
|
September 2021
|
1
year
|
$13,300 plus 50% profit share/ $13,950 plus 50% profit share
|
M/T Eco
California**
|
50,000
|
Medium
Range (“MR”) Tanker
|
Shell
Tankers Singapore Private Limited
|
January 2021
|
1
year
|
$13,750 plus 50% profit share/ $13,950 plus 50% profit share
|
M/T Eco Marina
Del Ray**
|
50,000
|
Medium
Range (“MR”) Tanker
|
Cargill
|
March
2024
|
-
|
$15,
100
|
Suezmax Vessels:
Name
|
Deadweight
|
Charterer
|
End of firm period
|
Charterer’s Optional Periods
|
Gross Rate fixed period/ options
|
M/T Eco
Bel Air**
|
157,000
|
BP
Shipping Limited
|
April 2020
|
1+1 years
|
$24,500 / $27,500 / $29,000
|
M/T Eco
Beverly Hills**
|
157,000
|
BP
Shipping Limited
|
May 2020
|
1+1 years
|
$24,500 / $27,500 / $29,000
|
Joint Venture MR Tanker fleet (50% owned):
Name
|
|
Deadweight
|
|
Charterer
|
End of firm period
|
Charterer’s Optional Periods
|
Gross Rate fixed period/ options
|
M/T Eco
Holmby Hills
|
|
|
50,000
|
|
Clearlake Shipping Pte Ltd
|
March 2021
|
1+1 years
|
$14,600 up to March 2020 and $15,025 thereafter / $15,400 /
$16,400
|
M/T Eco
Palm Springs
|
|
|
50,000
|
|
Clearlake Shipping Pte Ltd
|
May 2021
|
1+1 years
|
$14,750 up to May 2020 and $15,175 thereafter / $15,550 /
$16,550
|
*This vessel is
owned by the Company
**The Company
has a sale and leaseback agreement for this vessel, treated as a
financing
*** The Company
has a sale and leaseback agreement for this vessel, treated as an
operating lease
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 three of our vessels have scrubbers
installed.
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 on July 15, 2019 and we expect to
conclude sale of the last two vessels in the fourth quarter of
2019. Following the sale, we have bareboat chartered back the M/T
Stenaweco Excellence for a period of ten years at a bareboat hire
rates comprising of financing principal based on straight-line
amortization plus interest based on the three months Libor plus
3.90% per day. As part of this transaction, we have continuous
options, after the third year, to buy back the vessels at purchase
prices stipulated in the bareboat agreements depending on when the
option is 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 were $25.6 million. The sale
and leaseback agreement for the last two vessels will be on similar
terms, with the gross proceeds to be finally determined around the
sale date.
The abovementioned sale and leaseback transactions contain,
customary covenants and event of default clauses, including
cross-default provisions and restrictive covenants and performance
requirements. The sale and leaseback agreements with Oriental Fleet
International Company Limited will be accounted as financing
transactions, since control will remain with us and the vessels
will continue to be recorded as assets on our balance sheet. In
addition we have the obligation to repurchase the vessels.
From July 25 to October 21, 2019, we redeemed 9,874 of Series E
Preferred Shares for $11.4 million.
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, not
including amounts incorporated by reference, have been
retroactively adjusted to reflect this reverse stock split.
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 (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. This resulted in gross proceeds of $10.5
million before deducting underwriting discounts, commissions
and other offering expenses. Gross proceeds amount includes 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 October 17 2019, 1,243,270 common shares were
issued pursuant to the cashless exercise of the same number of
Traditional Warrants.
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 8180. Our corporate website address is
www.topships.org. The information contained on our website does not
constitute part of this prospectus.
The
Securities We May Offer
We
may use this prospectus to offer up to $200,000,000 of our:
1.
|
common
shares, including related preferred stock purchase rights;
|
2.
|
preferred
shares;
|
3.
|
debt
securities;
|
4.
|
warrants;
|
5.
|
purchase
contracts;
|
6.
|
rights;
and
|
7.
|
units.
|
We may also offer securities of the types listed above that are
convertible or exchangeable into one or more of the securities
listed above. A prospectus supplement will describe the specific
types, amounts, prices, and detailed terms of any of these offered
securities and may describe certain risks in addition to those set
forth below associated with an investment in the securities. Terms
used in the prospectus supplement will have the meanings described
in this prospectus, unless otherwise specified.
RISK FACTORS
An investment in our securities involves a high degree of risk.
Before making an investment in our securities, you should carefully
consider all of the information included or incorporated by
reference into this prospectus and any prospectus supplement,
including the risks described under the heading “Item 3. Key
Information—D. 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, as updated by annual and other reports and
documents we file with the Commission after the date of this
prospectus and that are incorporated by reference herein.
Please see the section of this prospectus entitled “Where You Can
Find Additional Information.” In addition, you should also consider
carefully the risks set forth under the heading “Risk Factors” in
any prospectus supplement before investing in the securities
offered by this prospectus. The occurrence of one or more of those
risk factors could adversely impact our business, financial
condition or results of operations. When we offer and sell any securities pursuant to
a prospectus supplement, we may include additional risk factors
relevant to such securities in the prospectus
supplement.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Matters discussed in this prospectus may constitute forward-looking
statements. The Private Securities Litigation Reform Act of 1995
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 other than statements of historical facts.
We desire to take advantage of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and are including
this cautionary statement in connection with this safe harbor
legislation. This prospectus 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, the
words “anticipate,” “believe,” “expect,” “intend,” “estimate,”
“forecast,” “project,” “plan,” “potential,” “may,” “should,” and
similar expressions identify forward-looking statements.
All forward-looking statements involve risks and uncertainties. The
occurrence of the events described, and the achievement of the
expected results, depend on many events, some or all of which are
not predictable or within our control. Actual results may differ
materially from expected results.
The forward-looking statements in this prospectus are based upon
various assumptions, many of which are based, in turn, upon further
assumptions, including without limitation, management’s examination
of historical operating trends, data contained in our records and
other data available from third parties. Although we believe that
these assumptions were reasonable when made, because these
assumptions are inherently subject to significant uncertainties and
contingencies, which are difficult or impossible to predict and are
beyond our control, we cannot assure you that we will achieve or
accomplish these expectations, beliefs or projections.
In addition to these assumptions and matters discussed elsewhere
herein, important factors that, in our view, could cause actual
results to differ materially from those discussed in the
forward-looking statements include the strength of world economies
and currencies, general market conditions, including fluctuations
in charterhire rates and vessel values, changes in demand in the
shipping market, including the effect of changes in the
Organization of the Petroleum Exporting Countries’ petroleum
production levels and worldwide oil consumption and storage,
changes in regulatory requirements affecting vessel operations,
changes in Top Ships Inc.’s operating expenses, including bunker
prices, dry-docking and insurance costs, changes in governmental
rules and regulations or actions taken by regulatory authorities,
changes in the price of our capital investments, potential
liability from pending or future litigation, general domestic and
international political conditions, potential disruption of
shipping routes due to accidents, political events, piracy or acts
by terrorists, and other important factors described from time to
time in the reports filed by us with the Commission.
See the section entitled “Risk Factors,” beginning on page 5, for a
more complete discussion of these risks and uncertainties and for
other risks and uncertainties. Other unknown or unpredictable
factors also could harm our results. Consequently, there can be no
assurance that actual results or developments anticipated by us
will be realized or, even if substantially realized, that they will
have the expected consequences to, or effects on, us. Given these
uncertainties, prospective investors are cautioned not to place
undue reliance on such forward-looking statements. We undertake no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events, or
otherwise, except as required by law.
USE OF PROCEEDS
We intend to use net proceeds from the sale of the securities by us
as set forth in the applicable prospectus supplement.
CAPITALIZATION
Each prospectus supplement will include information on our
consolidated capitalization.
PLAN OF DISTRIBUTION
We may sell or distribute the securities included in this
prospectus through underwriters, through agents, to dealers, in
private transactions, at market prices prevailing at the time of
sale, at prices related to the prevailing market prices, or at
negotiated prices.
In addition, we may sell some or all of our securities included in
this prospectus, through:
|
• |
a block trade
in which a broker-dealer may resell a portion of the block, as
principal, in order to facilitate the transaction;
|
|
• |
purchases by a
broker-dealer, as principal, and resale by the broker-dealer for
its account; or
|
|
• |
ordinary
brokerage transactions and transactions in which a broker solicits
purchasers.
|
In addition, we may enter into options or other types of
transactions that require us or them to deliver our securities to a
broker-dealer, who will then resell or transfer the securities
under this prospectus. We may enter into hedging transactions with
respect to our securities. For example, we may:
|
• |
enter into transactions involving
short sales of our common shares by broker-dealers;
|
|
• |
enter into
option or other types of transactions that require us to deliver
common shares to a broker-dealer, who will then resell or transfer
the common shares under this prospectus; or
|
|
• |
loan or pledge
the common shares to a broker-dealer, who may sell the loaned
shares or, in the event of default, sell the pledged shares.
|
We may also sell securities under Rule 144 or any other exemption
from registration under the Securities Act of 1933, as amended, or
the Securities Act, if available, rather than under this
prospectus.
We may enter into derivative transactions with third parties, or
sell securities not covered by this prospectus to third parties in
privately negotiated transactions. If the applicable prospectus
supplement indicates, in connection with those derivatives, the
third parties may sell securities covered by this prospectus and
the applicable prospectus supplement. If so, the third party may
use securities pledged by us or borrowed from us to settle those
sales or to close out any related open borrowings of stock, and may
use securities received from us in settlement of those derivatives
to close out any related open borrowings of stock. The third party
in such sale transactions may be an underwriter and, if not
identified in this prospectus, will be identified in the applicable
prospectus supplement (or a post-effective amendment). In addition,
we may otherwise loan or pledge securities to a financial
institution or other third party that in turn may sell the
securities short using this prospectus. Such financial institution
or other third party may transfer its economic short position to
investors in our securities or in connection with a concurrent
offering of other securities.
Any broker-dealers or other persons acting on our behalf that
participate with us in the distribution of the securities, may be
deemed to be underwriters, and any commissions received or profit
realized by them on the resale of the securities, may be deemed to
be underwriting discounts and commissions under the Securities Act
of 1933, as amended, or the Securities Act. As a result, we have
informed, or will inform, them that Regulation M, promulgated under
the Securities Exchange Act of 1934, or the Exchange Act, may apply
to sales by any broker dealers or other persons acting on our
behalf in the market. We may agree to indemnify any broker, dealer
or agent that participates in transactions involving the sale of
our common shares against certain liabilities, including
liabilities arising under the Securities Act.
As of the date of this prospectus, we are not a party to any
agreement, arrangement or understanding between any broker or
dealer and us with respect to the offer or sale of the securities
pursuant to this prospectus.
At the time that any particular offering of securities is made, to
the extent required by the Securities Act, a prospectus supplement
will be distributed, setting forth the terms of the offering,
including the aggregate number of securities being offered, the
purchase price of the securities, the initial offering price of the
securities, the names of any underwriters, dealers or agents, any
discounts, commissions and other items constituting compensation
from us, and any discounts, commissions or concessions allowed or
re-allowed or paid to dealers. Furthermore, we, our executive
officers, our directors and major shareholders may agree, subject
to certain exemptions, that for a certain period from the date of
the prospectus supplement under which the securities are offered,
we and they will not, without the prior written consent of an
underwriter, offer, sell, contract to sell, pledge or otherwise
dispose of any of our common shares or any securities convertible
into or exchangeable for common shares. However, an underwriter, in
its sole discretion, may release any of the securities subject to
these lock-up agreements at any time without notice.
Underwriters or agents could make sales in privately negotiated
transactions and/or any other method permitted by law, including
sales deemed to be an at-the-market offering as defined in Rule 415
promulgated under the Securities Act, which includes sales made
directly on or through the Nasdaq Capital Market, the existing
trading market for our common shares, or sales made to or through a
market maker other than on an exchange.
We will bear costs relating to all of the securities offered and
sold by us under this registration statement.
If more than five percent (5%) of the net proceeds of any offering
of common shares made under this prospectus will be received by a
Financial Industry Regulatory Authority, or FINRA, member
participating in the offering or affiliates or associated persons
of such a FINRA member, the offering will be conducted in
accordance with FINRA Rule 5121.
DESCRIPTION OF CAPITAL STOCK
You should carefully review the description of our share capital
under the heading “Item 10. Additional Information” in our Annual
Report on Form 20-F for the fiscal year ended December 31, 2018,
which is incorporated by reference herein.
Share Capital
Between January 1, 2019 and the date of this prospectus we have
issued 97,350 common shares pursuant to exercises of 1,947,000 of
our 2018 Warrants for gross proceeds of $1.5 million and 337,036
common shares pursuant to exercises of 1,268,000 of our 2014
Warrants for gross proceeds of $3.2 million.
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 (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. This resulted in gross proceeds of $10.5
million before deducting underwriting discounts, commissions and
other offering expenses. Gross proceeds amount includes the partial
exercise of 85,000 common shares of the underwriter’s
over-allotment option granted in connection with the
offering. The remainder of such over-allotment option of up
to 152,000 common shares shall continue in place until October 25,
2019.
For more information about the share capital of the Company please
see Item 4. Information on the Company – A. History and Development
of the Company found in the Company’s Annual Report on Form 20-F
for the year ended December 31, 2018, which is incorporated herein
by reference.
Authorized Capitalization
Our authorized capital stock consists of 1,000,000,000 common
shares, par value $0.01 per share, of which 4,493,528 shares were
issued and outstanding as of October 21, 2019 and 20,000,000
preferred shares with par value of $0.01 of which 100,000 Series D
Preferred Shares and 18,284 Series E Preferred Shares are issued
and outstanding as of October 21, 2019. 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, 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.
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.
We completed a
one-for-ten reverse stock split of our issued and outstanding
common shares effective on February 22, 2016, a one-for-twenty
reverse stock split of our issued and outstanding common shares
effective on May 11, 2017, a one-for-fifteen reverse stock split of
our issued and outstanding common shares effective on June 23,
2017, a one-for-thirty reverse stock split of our issued and
outstanding common shares effective on August 3, 2017, a
one-for-two reverse stock split of our issued and outstanding
common shares effective on October 6, 2017, a one-for-ten reverse
stock split of our issued and outstanding common shares effective
on March 26, 2018, and a one-for-twenty reverse stock split of our
issued and outstanding common shares effective on August 22,
2019.
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.
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 Selling Security holder
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 Selling Security holder 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.
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 $7.5 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.
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, our President, Chief
Executive Officer and director, 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. Evangelos 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. Evangelos 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.
The Series D Preferred Stock 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
the currently outstanding loans with ABN Amro Bank and NORD/LB, or
loans with any other financial institution, which contain covenants
that require that any member of the family of Mr. Evangelos
Pistiolis, maintain a specific minimum ownership 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 our 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 the Company, the Series D Preferred Shares shall
have a liquidation preference of $0.01 per share.
Series E Convertible Preferred Stock
On April 1, 2019, we announced the sale of 27,129 newly issued
Series E Perpetual Convertible Preferred Stock at a price of $1,000
per share to Family Trading Inc., a company affiliated with
Evangelos Pistiolis in exchange for the full and final settlement
of the loan facility between our Company and Family Trading dated
December 23, 2015, as amended. The following description of
the Series E Perpetual Convertible Preferred Stock is subject to
and qualified in its entirety by reference to the Certificate of
Designation (the “Certificate of Designation”) of the Series E
Perpetual Convertible Preferred Stock, which is incorporated by
reference herein.
The Series E Perpetual Convertible Preferred Stock has the
following characteristics:
Conversion. Each
holder of Series E Perpetual Convertible Preferred Stock, 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 Perpetual
Convertible Preferred Stock then held by such holder into our
common shares at the conversion rate then in effect. Each Series E
Perpetual Convertible Preferred Stock 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 the Company’s 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 the Company’s then
outstanding convertible shares or warrants, (iv) the lowest
issuance price of the Company’s common shares in any transaction
from the date of the issuance the Series E Perpetual Preferred
Stock onwards, but in no event will the conversion price be less
than $0.60.
Limitations of
Conversion. Holders of the shares of Series
E Perpetual Convertible Preferred Stock shall be entitled to
convert the Series E Perpetual Convertible Preferred Stock in full,
regardless of the beneficial ownership percentage of the holder
after giving effect to such conversion.
Voting. The
holders of Series E Perpetual Convertible Preferred Stock are
entitled to the voting power of one thousand (1,000) common shares
of the Company. The holders of Series E Perpetual Convertible
Preferred Stock and the holders of our common shares shall vote
together as one class on all matters submitted to a vote of
shareholders of the Company. The holders of Series E Perpetual
Convertible Preferred Stock 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 the Company, the
holders of Series E Perpetual Convertible Preferred Stock shall be
entitled to receive the net assets of the Company pari passu with
the Common Shares.
Redemption. The
Company at its option shall have the right to redeem a portion or
all of the outstanding Series E Perpetual Convertible Preferred
Stock. The Company shall pay an amount equal to one thousand
dollars ($1,000) per each Series E Perpetual Convertible Preferred
Stock, 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, the Company 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 Perpetual Convertible Preferred Stock. Upon the
expiration of the one business day period, the Company 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 Perpetual Convertible Preferred Stock 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 Perpetual Convertible Preferred
Stock 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 Perpetual Convertible Preferred Stock 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 Perpetual Convertible
Preferred Stock 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. The Company’s Board of Directors may fix a
record date for the determination of holders of Series E Perpetual
Convertible Preferred Stock 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 Perpetual Convertible Preferred Stock shall rank pari
passu with all classes of our common shares.
Shareholder Meetings
Under our Amended and Restated 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 Amended and Restated 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 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
Amended and Restated 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 Amended and Restated
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.
Anti-takeover Provisions of our Charter Documents
Several provisions of our Third Amended and Restated Articles of
Incorporation and Amended and Restated 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:
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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;
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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;
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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
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the shareholder
became an interested shareholder prior to the consummation of the
initial public offering.
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Limited Actions by Shareholders
Our Third Amended and Restated Articles of Incorporation and our
Amended and Restated 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
Amended and Restated 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 new of our 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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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.
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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.
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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.
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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.
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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.
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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, all
2014 Warrants have expired. As of the date of this prospectus, an
aggregate 4,621,611 of the 2014 Warrants have been exercised for a
total issuance of 347,997 common shares and all the 2014 Warrants
have expired.
2018 Warrants
On October 26, 2018, the Company priced a public offering of
100,000 common shares, and warrants to purchase 175,000 common
shares (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
common share of the Company 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.
DESCRIPTION OF DEBT SECURITIES
We may offer and issue debt securities from time to time in one or
more series, under one or more indentures, each dated as of a date
on or prior to the issuance of the debt securities to which it
relates, and pursuant to an applicable prospectus supplement.
We may issue senior debt securities and subordinated debt
securities pursuant to separate indentures, a senior indenture and
a subordinated indenture, respectively, in each case between us and
the trustee named in the indenture. We have filed forms of
these documents as exhibits to the registration statement, of which
this prospectus forms a part. The senior indenture and the
subordinated indenture, as amended or supplemented from time to
time, are sometimes referred to individually as an “indenture” and
collectively as the “indentures.” Each indenture will be subject to
and governed by the Trust Indenture Act and will be construed in
accordance with and governed by the laws of the State of New York
(without giving effect to any principles thereof relating to
conflicts of law that would result in the application of the laws
of any other jurisdiction) unless otherwise stated in the
applicable prospectus supplement and indenture (or post-effective
amendment hereto). The aggregate principal amount of debt
securities that may be issued under each indenture will contain the
specific terms of any series of debt securities or provide that
those terms must be set forth in or determined pursuant to, an
authorizing resolution, as defined in the applicable prospectus
supplement, and/or a supplemental indenture, if any, relating to
such series. Our debt securities may be convertible or
exchangeable into any of our equity or other debt securities.
The following description sets forth certain general terms and
provisions of the debt securities. The particular terms and
provisions of the debt securities offered by any prospectus
supplement, and the extent to which the general terms and
provisions described below may apply to the offered debt
securities, will be described in the applicable subsequent
filings. We refer to
any applicable prospectus supplement, amendment to the registration
statement of which this prospectus forms a part, and reports we
file with the Commission under the Exchange Act as “subsequent
filings.” The statements below are not complete and
are subject to, and are qualified in their entirety by reference
to, all of the provisions of the applicable indenture. The specific
terms of any debt securities that we may offer, including any
modifications of, or additions to, the general terms described
below as well as any applicable material U.S. federal income tax
considerations concerning the ownership of such debt securities
will be described in the applicable prospectus supplement and
indenture and, as applicable, supplemental indenture. Accordingly,
for a complete description of the terms of a particular issue of
debt securities, the general description of the debt securities set
forth below should be read in conjunction with the applicable
prospectus supplement and indenture, as amended or supplemented
from time to time.
General
We expect that neither
indenture will limit the amount of debt securities that may be
issued. The debt securities may be issued in one or more
series.
You should read the applicable indenture and subsequent filings
relating to the particular series of debt securities for the
following terms of the offered debt securities:
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• |
the
designation, aggregate principal amount and authorized
denominations;
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• |
the issue
price, expressed as a percentage of the aggregate principal
amount;
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• |
the interest
rate per annum, if any;
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• |
if the debt
securities provide for interest payments, the date from which
interest will accrue, the dates on which interest will be payable,
the date on which payment of interest will commence and the regular
record dates for interest payment dates;
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• |
any optional or
mandatory sinking fund provisions or exchangeability
provisions;
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• |
the terms and
conditions upon which conversion of any convertible debt securities
may be effected, including the conversion price, the conversion
period and other conversion provisions;
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• |
whether the
debt securities will be our senior or subordinated
securities;
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• |
whether the
obligations under the debt securities will be our secured or
unsecured obligations;
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• |
the
applicability and terms of any guarantees;
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• |
the date, if
any, after which and the price or prices at which the debt
securities may be optionally redeemed or must be mandatorily
redeemed and any other terms and provisions of optional or
mandatory redemptions;
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• |
if other than
denominations of $1,000 and any integral multiple thereof, the
denominations in which the debt securities of the series will be
issuable;
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• |
if other than
the full principal amount, the portion of the principal amount of
the debt securities of the series that will be payable upon
acceleration or provable in bankruptcy;
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• |
any events of
default not set forth in this prospectus;
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• |
the currency or
currencies, including composite currencies, in which principal,
premium and interest will be payable, if other than the currency of
the United States of America;
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• |
if principal,
premium or interest is payable, at our election or at the election
of any holder, in a currency other than that in which the debt
securities of the series are stated to be payable, the period or
periods within which, and the terms and conditions upon which, the
election may be made;
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• |
whether
interest will be payable in cash or additional securities at our or
the holder’s option and the terms and conditions upon which the
election may be made;
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• |
if denominated
in a currency or currencies other than the currency of the United
States of America, the equivalent price in the currency of the
United States of America for purposes of determining the voting
rights of holders of those debt securities under the applicable
indenture;
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• |
if the amount
of payments of principal, premium or interest may be determined
with reference to an index, formula or other method based on a coin
or currency other than that in which the debt securities of the
series are stated to be payable, the manner in which the amounts
will be determined;
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• |
any restrictive
covenants or other material terms relating to the debt
securities;
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• |
whether the
debt securities will be issued in the form of global securities or
certificates in registered or bearer form;
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• |
any listing on
any securities exchange or quotation system;
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• |
additional
provisions, if any, related to defeasance and discharge of the debt
securities; and
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any other
special features of the debt securities.
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Subsequent filings may include additional terms not listed above.
Unless otherwise indicated in subsequent filings with the
Commission relating to the indenture, principal, premium and
interest will be payable and the debt securities will be
transferable at the corporate trust office of the applicable
trustee. Unless other arrangements are made or set forth in
subsequent filings or a supplemental indenture, principal, premium
and interest will be paid by checks mailed to the registered
holders at their registered addresses.
Unless otherwise indicated in subsequent filings with the
Commission, the debt securities will be issued only in fully
registered form without coupons, in denominations of $1,000 or any
integral multiple thereof. No service charge will be made for any
transfer or exchange of the debt securities, but we may require
payment of a sum sufficient to cover any tax or other governmental
charge payable in connection with these debt securities.
Some or all of the debt securities may be issued as discounted debt
securities, bearing no interest or interest at a rate which at the
time of issuance is below market rates, to be sold at a substantial
discount below the stated principal amount. United States federal
income tax consequences and other special considerations applicable
to any discounted securities will be described in subsequent
filings with the Commission relating to those securities.
We may issue senior debt securities, which may be secured or
unsecured, under the senior debt indenture. The senior debt
securities will rank on an equal basis with all our other senior
debt except subordinated debt. The senior debt securities
will be effectively subordinated, however, to all of our secured
debt to the extent of the value of the collateral securing such
debt. We will disclose the amount of our debt in the prospectus
supplement.
We may issue subordinated debt securities under a subordinated debt
indenture. Subordinated debt would rank subordinate and
junior in right of payment, to the extent set forth in the
subordinated debt indenture, to all our senior debt.
Any series of debt securities may have covenants in addition to or
differing from those included in the applicable indenture which
will be described in subsequent filings prepared in connection with
the offering of such securities, limiting or restricting, among
other things:
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our
ability to incur either secured or unsecured debt, or both;
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• |
our
ability to make certain payments, dividends, redemptions or
repurchases;
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• |
our
ability to create dividend and other payment restrictions affecting
our subsidiaries;
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• |
our
ability to make investments;
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• |
mergers
and consolidations by us or our subsidiaries;
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• |
our
ability to enter into transactions with affiliates;
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• |
our
ability to incur liens; and
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• |
sale and
leaseback transactions.
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Modification of the Indentures
We expect that each indenture and the rights of the respective
holders may be modified by us only with the consent of holders of
not less than a majority in aggregate principal amount of the
outstanding debt securities of all series under the respective
indenture affected by the modification, taken together as a class.
But we expect that no modification that:
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1. |
changes the
amount of securities whose holders must consent to an amendment,
supplement or waiver;
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2. |
reduces the
rate of or changes the interest payment time on any security or
alters its redemption provisions (other than any alteration to any
such section which would not materially adversely affect the legal
rights of any holder under the indenture) or the price at which we
are required to offer to purchase the securities;
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3. |
reduces the
principal or changes the maturity of any security or reduces the
amount of, or postpones the date fixed for, the payment of any
sinking fund or analogous obligation;
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4. |
waives a
default or event of default in the payment of the principal of or
interest, if any, on any security (except a rescission of
acceleration of the securities of any series by the holders of at
least a majority in principal amount of the outstanding securities
of that series and a waiver of the payment default that resulted
from such acceleration);
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5. |
makes the
principal of or interest, if any, on any security payable in any
currency other than that stated in the security;
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6. |
makes any
change with respect to holders’ rights to receive principal and
interest, the terms pursuant to which defaults can be waived,
certain modifications affecting shareholders or certain
currency-related issues; or
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7. |
waives a
redemption payment with respect to any security or changes any of
the provisions with respect to the redemption of any
securities
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will be effective against any holder without his consent. In
addition, other terms as specified in subsequent filings may be
modified without the consent of the holders.
Events of Default
We expect that each indenture will define an event of default for
the debt securities of any series as being any one of the following
events:
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• |
default in any
payment of interest when due which continues for 30 days;
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• |
default in any
payment of principal or premium at maturity;
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• |
default in the
deposit of any sinking fund payment when due;
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• |
default in the
performance of any covenant in the debt securities or the
applicable indenture which continues for 60 days after we receive
notice of the default;
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• |
default under a
bond, debenture, note or other evidence of indebtedness for
borrowed money by us or our subsidiaries (to the extent we are
directly responsible or liable therefor) having a principal amount
in excess of a minimum amount set forth in the applicable
subsequent filings, whether such indebtedness now exists or is
hereafter created, which default shall have resulted in such
indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise have become due and payable,
without such acceleration having been rescinded or annulled or
cured within 30 days after we receive notice of the default;
and
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• |
events of
bankruptcy, insolvency or reorganization.
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An event of default of one series of debt securities will not
necessarily constitute an event of default with respect to any
other series of debt securities.
There may be such other or different events of default as described
in an applicable subsequent filings with respect to any class or
series of debt securities.
We expect that under each indenture, in case an event of default
occurs and continues for the debt securities of any series, the
applicable trustee or the holders of not less than 25% in aggregate
principal amount of the debt securities then outstanding of that
series may declare the principal and accrued but unpaid interest of
the debt securities of that series to be due and payable. Further,
any event of default for the debt securities of any series which
has been cured is expected to be permitted to be waived by the
holders of a majority in aggregate principal amount of the debt
securities of that series then outstanding.
We expect that each indenture will require us to file annually
after debt securities are issued under that indenture with the
applicable trustee a written statement signed by two of our
officers as to the absence of material defaults under the terms of
that indenture. We also expect that each indenture will provide
that the applicable trustee may withhold notice to the holders of
any default if it considers it in the interest of the holders to do
so, except notice of a default in payment of principal, premium or
interest.
Subject to the duties of the trustee in case an event of default
occurs and continues, we expect that each indenture will provide
that the trustee is under no obligation to exercise any of its
rights or powers under that indenture at the request, order or
direction of holders unless the holders have offered to the trustee
reasonable indemnity. Subject to these provisions for
indemnification and the rights of the trustee, each indenture is
expected to provide that the holders of a majority in principal
amount of the debt securities of any series then outstanding have
the right to direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising
any trust or power conferred on the trustee as long as the exercise
of that right does not conflict with any law or the
indenture.
Defeasance and Discharge
The terms of each indenture are expected to provide us with the
option to be discharged from any and all obligations in respect of
the debt securities issued thereunder upon the deposit with the
trustee, in trust, of money or United States government
obligations, or both, which through the payment of interest and
principal in accordance with their terms will provide money in an
amount sufficient to pay any installment of principal, premium and
interest on, and any mandatory sinking fund payments in respect of,
the debt securities on the stated maturity of the payments in
accordance with the terms of the debt securities and the indenture
governing the debt securities. We expect that this right may only
be exercised if, among other things, we have received from, or
there has been published by, the United States Internal Revenue
Service a ruling to the effect that such a discharge will not be
deemed, or result in, a taxable event with respect to holders. This
discharge would not apply to our obligations to register the
transfer or exchange of debt securities, to replace stolen, lost or
mutilated debt securities, to maintain paying agencies and hold
moneys for payment in trust.
Defeasance of Certain Covenants
We expect that the terms of the debt securities provide us with the
right not to comply with specified covenants and that specified
events of default described in a subsequent filing will not apply
provided we deposit with the trustee money or U.S. government
obligations, or both, which through the payment of interest and
principal will provide money in an amount sufficient to pay any
installment of principal, premium, and interest on, and any
mandatory sinking fund payments in respect of, the debt securities
on the stated maturity of such payments in accordance with the
terms of the debt securities and the indenture governing such debt
securities. We expect that to exercise this right, we will also be
required to deliver to the trustee an opinion of counsel to the
effect that the deposit and related covenant defeasance should not
cause the holders of such series to recognize income, gain or loss
for United States federal income tax purposes.
Global Securities
The debt securities of a series may be issued in whole or in part
in the form of one or more global securities that will be deposited
with, or on behalf of, a depository identified in an applicable
subsequent filing and registered in the name of the depository or a
nominee for the depository. In such a case, one or more global
securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal
amount of outstanding debt securities of the series to be
represented by the global security or securities. Unless and until
it is exchanged in whole or in part for debt securities in
definitive certificated form, a global security may not be
transferred except as a whole by the depository for the global
security to a nominee of the depository or by a nominee of the
depository to the depository or another nominee of the depository
or by the depository or any nominee to a successor depository for
that series or a nominee of the successor depository and except in
the circumstances described in an applicable subsequent
filing.
We refer you to applicable subsequent filings with respect to any
deletions or additions or modifications from the description
contained in this prospectus.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase our debt or equity
securities. Warrants may
be issued independently or together with any other securities and
may be attached to, or separate from, such securities.
Each series of warrants will be issued under a separate warrant
agreement to be entered into between us and a warrant agent. The
terms of any warrants to be issued and a description of the
material provisions of the applicable warrant agreement will be set
forth in the applicable prospectus supplement. We expect that
such terms
will include, among others:
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• |
the title of
such warrants;
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• |
the aggregate
number of such warrants;
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• |
the price or
prices at which such warrants will be issued;
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• |
the number and
type of our securities purchasable upon exercise of such
warrants;
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• |
the price at
which our securities purchasable upon exercise of such warrants may
be purchased;
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• |
the date on
which the right to exercise such warrants shall commence and the
date on which such right shall expire;
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• |
if applicable,
the minimum or maximum amount of such warrants which may be
exercised at any one time;
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• |
if applicable,
the designation and terms of the securities with which such
warrants are issued and the number of such warrants issued with
each such security;
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• |
if applicable,
the date on and after which such warrants and the related
securities will be separately transferable;
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• |
information
with respect to book-entry procedures, if any;
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• |
if applicable,
a discussion of any material United States federal income tax
considerations; and
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• |
any other terms
of such warrants, including terms, procedures and limitations
relating to the exchange and exercise of such warrants.
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DESCRIPTION OF PURCHASE CONTRACTS
We may issue purchase contracts for the purchase or sale of any of
our debt or equity securities issued by us.
Each purchase contract will entitle the holder thereof to purchase
or sell, and obligate us to sell or purchase, on specified dates,
such securities, at a specified purchase price, which may be based
on a formula, all as set forth in the applicable prospectus
supplement. We may, however, satisfy our obligations, if any, with
respect to any purchase contract by delivering the cash value of
such purchase contract or the cash value of the securities
otherwise deliverable, as set forth in the applicable prospectus
supplement. The applicable prospectus supplement will also specify
the methods by which the holders may purchase or sell such
securities, and any acceleration, cancellation or termination
provisions, provisions relating to U.S. federal income tax
considerations, if any, or other provisions relating to the
settlement of a purchase contract.
The purchase contracts may require us to make periodic payments to
the holders thereof or vice versa, which payments may be deferred
to the extent set forth in the applicable prospectus supplement,
and those payments may be unsecured or pre-funded on some basis.
The purchase contracts may require the holders thereof to secure
their obligations in a specified manner to be described in the
applicable prospectus supplement. Alternatively, purchase contracts
may require holders to satisfy their obligations thereunder when
the purchase contracts are issued. Our obligation to settle such
pre-paid purchase contracts on the relevant settlement date may
constitute indebtedness. Accordingly, pre-paid purchase contracts
will be issued under either the senior indenture or the
subordinated indenture.
DESCRIPTION OF RIGHTS
We may issue rights to purchase our equity securities. These rights
may be issued independently or together with any other security
offered by this prospectus and may or may not be transferable by
the shareholder receiving the rights in the rights offering. In
connection with any rights offering, we may enter into a standby
underwriting agreement with one or more underwriters pursuant to
which the underwriter will purchase any securities that remain
unsubscribed for upon completion of the rights offering.
The applicable prospectus supplement relating to any rights will
describe the terms of the offered rights, including, where
applicable, the following:
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• |
the exercise
price for the rights;
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• |
the number of
rights issued to each shareholder;
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• |
the extent to
which the rights are transferable;
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• |
any other terms
of the rights, including terms, procedures and limitations relating
to the exchange and exercise of the rights;
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• |
the date on
which the right to exercise the rights will commence and the date
on which the right will expire;
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• |
the amount of
rights outstanding;
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• |
the extent to
which the rights include an over-subscription privilege with
respect to unsubscribed securities; and
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• |
the material
terms of any standby underwriting arrangement entered into by us in
connection with the rights offering.
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The description in the applicable prospectus supplement of any
rights we offer will not necessarily be complete and will be
qualified in its entirety by reference to the applicable rights
certificate or rights agreement, which will be filed with the
Commission if we offer rights. For more information on how you can
obtain copies of any rights certificate or rights agreement if we
offer rights, see “Where You Can Find Additional Information” of
this prospectus. We urge you to read the applicable rights
certificate, the applicable rights agreement and any applicable
prospectus supplement in their entirety.
DESCRIPTION OF UNITS
As specified in the applicable prospectus supplement, we may issue
units consisting of one or more of our purchase contracts,
warrants, debt securities, preferred shares, common shares, rights
or any combination of such securities. The applicable prospectus
supplement will describe the terms of the offered units. We
expect that such terms will
include, among others:
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• |
the terms of
the units and of the purchase contracts, warrants, debt securities,
preferred shares, common shares, and rights comprising the units,
including whether and under what circumstances the securities
comprising the units may be traded separately;
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• |
a description
of the terms of any unit agreement governing the units;
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• |
if applicable,
a discussion of any material U.S. federal income tax
considerations; and
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• |
a description
of the provisions for the payment, settlement, transfer or exchange
of the units.
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ENFORCEABILITY OF CIVIL LIABILITIES
We are a Marshall Islands company, and our principal executive
office is located outside of the United States in Greece. Some of
our directors, officers and the experts named in this registration
statement reside outside the United States. In addition, a
substantial portion of our assets and the assets of certain of our
directors, officers and experts are located outside of the United
States. As a result, it may be difficult or impossible for U.S.
investors to serve process within the United States upon us or any
of these persons. You may also have difficulty enforcing, both in
and outside the United States, judgments you may obtain in United
States courts against us or these persons in any action, including
actions based upon the civil liability provisions of United States
federal or state securities laws.
Furthermore, there is substantial doubt that courts in the
countries in which we or our subsidiaries are incorporated or where
our assets or the assets of our subsidiaries, directors or officers
and such experts are located (i) would enforce judgments of U.S.
courts obtained in actions against us or our subsidiaries,
directors or officers and such experts based upon the civil
liability provisions of applicable U.S. federal and state
securities laws or (ii) would enforce, in original actions,
liabilities against us or our subsidiaries, directors or officers
and such experts based on those laws.
EXPENSES
The following are the estimated expenses of the issuance and
distribution of the securities being registered under the
registration statement of which this prospectus forms a part, all
of which will be paid by us.
Commission registration fee
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|
$
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25,960
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|
FINRA filing fee
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|
$
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30,500
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|
Nasdaq listing fees
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|
$
|
*
|
|
Legal fees and expenses
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|
$
|
*
|
|
Accounting fees and expenses
|
|
$
|
*
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|
Printing and engraving expenses
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|
$
|
*
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|
Transfer agent and registrar fees
|
|
$
|
*
|
|
Indenture trustee fees and expenses
|
|
$
|
*
|
|
Blue sky fees and expenses
|
|
$
|
*
|
|
Miscellaneous
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|
$
|
*
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|
Total
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|
$
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*
|
|
|
|
|
|
|
*
|
To be
provided by a prospectus supplement or as an exhibit to Report on
Form 6-K that is incorporated by reference into this registration
statement.
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LEGAL MATTERS
The validity of the securities offered by this prospectus will be
passed upon for us by Seward & Kissel LLP, New York, New York
with respect to matters of United States and Marshall Islands
law.
EXPERTS
The consolidated financial statements incorporated in this
Prospectus 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
with the Commission. This prospectus is a part of that registration
statement, which includes additional information.
GOVERNMENT FILINGS
We file annual and special reports with the Commission. You may
read and copy any document that we file and obtain copies at
prescribed rates from the Commission’s Public Reference Room at 100
F Street, N.E., Washington, D.C. 20549. You may obtain information
on the operation of the Public Reference Room by calling 1 (800)
SEC-0330. The Commission maintains a website (http://www.sec.gov)
that contains reports, proxy and information statements and other
information regarding issuers 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.
This prospectus and any prospectus supplement are part of a
registration statement that we filed with the Commission and do not
contain all of the information in the registration statement. The
full registration statement may be obtained from the Commission or
us, as indicated below. Forms of the indenture and other documents
establishing the terms of the offered securities are filed as
exhibits to the registration statement. Statements in this
prospectus or any prospectus supplement about these documents are
summaries and each statement is qualified in all respects by
reference to the document to which it refers. You should refer to
the actual documents for a more complete description of the
relevant matters. You may inspect a copy of the registration
statement at the Commission’s Public Reference Room in Washington,
D.C., as well as through the Commission’s website.
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, 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 and will automatically
update and supersede previously filed information, including
information contained in this document.
We incorporate by
reference in this prospectus the documents listed below which have
been filed with the Commission:
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• |
Report on Form
6-K furnished with the Commission on September 3, 2019, which
contains Management's Discussion and Analysis of Financial
Condition and Results of Operations and the unaudited interim
condensed consolidated financial statements and related notes
thereto for the Company, as of and for the six months ended June
30, 2019.
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• |
Report on Form
6-K, furnished with the Commission on April 1, 2019, which contains
the description of the purchase of the Series E Convertible
Preferred Stock, the Certificate of Designation of the Series E
Convertible Preferred Stock and the stock purchase agreement.
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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.
|
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 the initial filing of the registration statement of which
this prospectus forms a part (if they state that they are
incorporated by reference into this prospectus) until we file a
post-effective amendment indicating that the offering of the
securities made by this prospectus has been terminated. In all
cases, you should rely on the later information over different
information included in this prospectus or the prospectus
supplement.
You should rely only on the information contained or incorporated
by reference in this prospectus and any accompanying prospectus
supplement. We have 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
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 and any accompanying
prospectus supplement 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 free copy of the above mentioned filing or any
subsequent filing we incorporate by reference to this prospectus by
writing 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)
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.
Disclosure of Commission Position on Indemnification for Securities
Act Liabilities
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons
controlling the registrant pursuant to the foregoing provisions,
the registrant has been informed that in the opinion of the
Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore
unenforceable.
59,400,000
Common Shares
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Prospectus Supplement
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