We are offering an aggregate of 166,666,667 of our common shares pursuant to a Securities Purchase Agreement, dated
June 23, 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 June 22, 2020,
the last reported sale price of our common shares on Nasdaq was $0.15 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
June 26, 2020.
None of the Securities and Exchange Commission, or the Commission, any state securities commission, or any other
regulatory body has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
ABOUT THIS PROSPECTUS SUPPLEMENT
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S-ii
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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S-iii
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PROSPECTUS SUPPLEMENT SUMMARY
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S-1
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THE OFFERING
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S-5
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RISK FACTORS
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S-6
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USE OF PROCEEDS
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S-14
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CAPITALIZATION
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S-15
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BENEFICIAL OWNERSHIP OF OUR COMMON SHARES
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S-18
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DESCRIPTION OF CAPITAL STOCK
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S-19
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TAX CONSIDERATIONS
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S-28
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PLAN OF DISTRIBUTION
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S-29
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EXPENSES
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S-31
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LEGAL MATTERS
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EXPERTS
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
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BASE PROSPECTUS
SUMMARY
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1
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RISK FACTORS
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5
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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6
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USE OF PROCEEDS
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7
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CAPITALIZATION
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8
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PLAN OF DISTRIBUTION
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9
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DESCRIPTION OF CAPITAL STOCK
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11
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DESCRIPTION OF DEBT SECURITIES
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21
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DESCRIPTION OF WARRANTS
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27
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DESCRIPTION OF PURCHASE CONTRACTS
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28
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DESCRIPTION OF RIGHTS
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29
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DESCRIPTION OF UNITS
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30
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ENFORCEABILITY OF CIVIL LIABILITIES
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31
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EXPENSES
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32
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LEGAL MATTERS
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32
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EXPERTS
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32
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
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32
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ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus are part of a
registration statement that we filed with the Commission, utilizing a “shelf” registration process.
This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of
this offering described herein and the securities offered hereby, and also adds to and updates information contained in the accompanying base prospectus and the documents incorporated by reference into this prospectus supplement and the base
prospectus.
The second part, the base prospectus, gives more general information about securities we may offer from time to
time, some of which does not apply to this offering. Generally, when we refer only to the prospectus, we are referring to both parts combined, and when we refer to the accompanying prospectus, we are referring to the base prospectus.
If the description of this offering varies between this prospectus supplement and the accompanying prospectus, you
should rely on the information contained in this prospectus supplement. This prospectus supplement, the accompanying base prospectus and the documents incorporated into each by reference include important information about us, our common shares
being offered and other information you should know before investing. You should read this prospectus supplement and the accompanying base prospectus together with the additional information described under the heading “Where You Can Find
Additional Information” before investing in our common shares.
We have authorized only the information contained or incorporated by reference in this prospectus supplement, the
accompanying prospectus, and any free writing prospectus prepared by or on behalf of us or to which we have referred you. We have not, and the placement agent has not, authorized anyone to provide you with information that is different. We and the
placement agent take no responsibility for, and can provide no assurance as to the reliability of, any information that others may give you. If anyone provides you with different or inconsistent information, you should not rely on it. We are
offering to sell our common shares only in jurisdictions where offers and sales are permitted. The information contained in or incorporated by reference in the prospectus is accurate only as of the date such information was issued, regardless of
the time of delivery of the prospectus or the date of any sale of our common shares.
Unless otherwise indicated, all references to “dollars” and “$” in this prospectus supplement are to, and amounts
presented in, United States dollars and financial information presented in this prospectus supplement that is derived from financial statements incorporated by reference is prepared in accordance with accounting principles generally accepted in the
United States.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Matters discussed in this prospectus supplement may constitute forward-looking statements. The Private Securities
Litigation Reform Act of 1995, or the PSLRA, provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements
concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are statements other than statements of historical facts.
TOP Ships Inc. desires to take advantage of the safe harbor provisions of the PSLRA and is including this cautionary
statement in connection with this safe harbor legislation. This prospectus supplement and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to
future events and financial performance. When used in this prospectus supplement, statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “anticipate,” “believe,” “expect,”
“intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “continue,” “possible,” “likely,” “may,” “should,” and similar expressions identify forward-looking statements.
The forward-looking statements in this prospectus supplement are based upon various assumptions, many of which are
based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions
were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or
accomplish these expectations, beliefs or projections.
In addition to these assumptions and matters discussed elsewhere herein and in the documents incorporated by
reference herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the following:
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•
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our ability to maintain or develop new and existing customer relationships with major refined product importers and exporters, major crude oil companies and major commodity traders,
including our ability to enter into long-term charters for our vessels;
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our future operating and financial results;
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our future vessel acquisitions, our business strategy and expected capital spending or operating expenses,
including any dry-docking and insurance costs;
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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;
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our ability to take delivery of, integrate into our fleet, and employ any new vessels we have ordered or may order in the future and the ability of shipyards to deliver vessels on a
timely basis;
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the aging of our vessels and resultant increases in operation and dry-docking costs;
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the ability of our vessels to pass classification inspections and vetting inspections by oil majors and big chemical corporations;
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significant changes in vessel performance, including increased vessel breakdowns;
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the creditworthiness of our charterers and the ability of our contract counterparties to fulfill their obligations to us;
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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;
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potential liability from litigation and our vessel operations, including discharge of pollutants;
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changes in general economic and business conditions;
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general domestic and international political conditions, potential disruption of shipping routes due to accidents, political events (including “trade wars”), piracy, acts by terrorists
or major disease outbreaks such as the recent worldwide coronavirus outbreak;
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changes in production of or demand for oil and petroleum products and chemicals, either globally or in particular regions;
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the strength of world economies and currencies, including fluctuations in charter hire rates and vessel values;
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potential liability from future litigation and potential costs due to any environmental damage and vessel collisions;
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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
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other important factors described from time to time in the reports filed by us with the
Commission.
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You should not place undue reliance on forward-looking statements contained in this prospectus supplement because
they are statements about events that are not certain to occur as described or at all. All forward-looking statements in this prospectus supplement are qualified in their entirety by the cautionary statements contained in this prospectus
supplement.
Any forward-looking statements contained herein are made only as of the date of this prospectus supplement,
and except to the extent required by applicable law or regulation we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all or any of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any
factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights information that appears elsewhere in this prospectus supplement or in the documents
incorporated by reference herein and is qualified in its entirety by the more detailed information, including the financial statements that appear in the documents incorporated by reference. This summary may not contain all of the information that
may be important to you. As an investor or prospective investor, you should review carefully the entire prospectus supplement, including the risk factors, and the more detailed information that is included herein and in the documents incorporated
by reference herein.
Unless the context otherwise requires, as used in this prospectus supplement, the terms “Company,” “we,” “us,” and
“our” refer to TOP Ships Inc. and all of its subsidiaries. We use the term deadweight ton, or dwt, in describing the size of vessels. Dwt, expressed in metric tons each of which is equivalent to 1,000 kilograms, refers to the maximum weight of
cargo and supplies that a vessel can carry. Our reporting currency is in the U.S. dollar and all references in this prospectus supplement to “$” or “dollars” are to U.S. dollars. Further, unless otherwise indicated, the information presented in
this prospectus supplement gives effect to the following reverse stock splits of our issued and outstanding common shares: a one-for-ten reverse stock split effected on February 22, 2016, a one-for-twenty reverse stock split effected on May 11,
2017, a one-for-fifteen reverse stock split effected on June 23, 2017, a one-for-thirty reverse stock split effected on August 3, 2017, a one-for-two reverse stock split effected on October 6, 2017, a one-for-ten reverse stock split effected on
March 26, 2018 and a one-for-twenty reverse stock split of our issued and outstanding common shares effective on August 22, 2019.
Our Company
We are an international owner and operator of modern, fuel efficient eco vessels focusing on the transportation of
crude oil, petroleum products (clean and dirty) and bulk liquid chemicals. Our 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, the M/T Eco Van Nuys, the M/T Eco Santa Monica and the M/T Eco Venice Beach, and two newbuilding contracts for two scrubber-fitted suezmax tankers, the M/T Eco West Coast and the M/T Eco Malibu. 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
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Deadweight
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Charterer
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End of firm period
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Charterer’s Optional Periods
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Gross Rate fixed period/ options
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M/T Stenaweco Energy
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50,000
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Stena Weco A/S
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February 2021
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1+1 years
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$15,616 / $17,350 / $18,100
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M/T Stenaweco Evolution
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50,000
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Stena Weco A/S
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October 2021
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1+1 years
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$15,516 / $17,200 / $18,000
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M/T Stenaweco Excellence
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50,000
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Stena Weco A/S
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November 2020
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1+1 years
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$16,200 / $17,200 / $18,000
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M/T Nord Valiant
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50,000
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DS Norden A/S
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August 2021
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1+1 years
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$16,800 / $17,600 / $18,400
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M/T Eco California
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50,000
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Shell Tankers Singapore Private Limited
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January 2021
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1 year
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$13,750 plus 50% profit share/ $13,950 plus 50% profit share
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M/T Eco Marina Del Ray
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50,000
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Cargill
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March 2024
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-
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$15,100
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M/T Eco Los Angeles
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50,000
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Trafigura
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February 2023
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1+1 years
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$17,500 / $18,750 / $20,000
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M/T Eco City of Angels
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50,000
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Trafigura
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February 2023
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1+1 years
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$17,500 / $18,750 / $20,000
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Suezmax Vessels on SLBs (treated as financings):
Name
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Deadweight
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Charterer
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End of firm period
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Charterer’s Optional Periods
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Gross Rate fixed period/ options
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M/T Eco Bel Air
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157,000
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BP Shipping Limited
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April 2022
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1+1 years
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$24,500 / $27,500 / $29,000
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M/T Eco Beverly Hills
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157,000
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BP Shipping Limited
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May 2022
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1+1 years
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$24,500 / $27,500 / $29,000
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Joint Venture MR Tanker fleet (50% owned):
Name
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Deadweight
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Charterer
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End of firm period
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Charterer’s Optional Periods
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Gross Rate fixed period/ options
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M/T Eco Yosemite Park
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50,000
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Clearlake Shipping Pte Ltd
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March 2025
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1+1 years
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$17,400 / $18,650 / $19,900
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M/T Eco Joshua Park
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50,000
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Clearlake Shipping Pte Ltd
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March 2025
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1+1 years
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$17,400 / $18,650 / $19,900
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Newbuildings (MR and Suezmax Tankers):
Name
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Deadweight
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Charterer
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End of firm period
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Charterer’s Optional Periods
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Gross Rate fixed period/ options
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Delivery date
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Shipyard
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M/T Eco Van Nuys (Hull No 2789)
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50,000
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Central Tankers Chartering Inc
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January 2026
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1+1 years
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$16,200 / $17,200 / $18,200
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January 2021
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Hyundai Mipo S. Korea
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M/T Eco Santa Monica (Hull No 2790)
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50,000
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Central Tankers Chartering Inc
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February 2026
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1+1 years
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$16,200 / $17,200 / $18,200
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February 2021
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Hyundai Mipo S. Korea
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M/T Eco Venice Beach (Hull No 2791)
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50,000
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Central Tankers Chartering Inc
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March 2026
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1+1 years
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$16,200 / $17,200 / $18,200
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March 2021
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Hyundai Mipo S. Korea
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M/T Eco West Coast (Hull No 865)
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157,000
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Clearlake Shipping Pte Ltd
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February 2024
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1+1 years
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$33,950 / $34,750 / $36,750
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February 2021
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HHI S. Korea
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M/T Eco Malibu (Hull No 866)
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157,000
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Clearlake Shipping Pte Ltd
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May 2024
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1+1 years
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$33,950 / $34,750 / $36,750
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May 2021
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HHI S. Korea
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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 seven of our operating vessels have scrubbers installed, as well as all of our newbuildings.
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 MR
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,
representing the Company’s share of interest in the fair value of the net assets acquired. Both vessels were delivered in March 2020 to the MR 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 MR Transaction Committee. The MR Transaction Committee obtained a fairness opinion relating to the consideration paid in this transaction from an independent financial
advisor. The MR 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 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 have a newbuilding contract for the construction of 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, with attached time charters. The consideration will be paid in installments through the vessels’ delivery dates. As per the shipbuilding
contracts, yard installments are payable in accordance with key milestones, that as of the date of this prospectus amount to $103. 3 million. 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 acquisitions were approved by a special committee composed of independent members of the Company’s board of directors,
or the NB Transaction Committee. The NB 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.
On May 29, 2020, we announced that we acquired for $22.0 million from a company affiliated with the Company’s Chief
Executive Officer, or the Suezmax Seller, a 50% ownership interest in two Marshall Island companies (the “SPVs”) that each have a newbuilding contract for the construction of one ultra-high specification` scrubber-fitted 157,000 dwt eco Suezmax
tanker, both currently under construction in Hyundai Heavy Industries shipyard in South Korea, with attached time charters. The purchase price of $22 million was settled from proceeds from some of the Registered Direct Offerings, as defined
below. The two tankers are scheduled to be delivered in February and May 2021 respectively. In addition, the Company had the option to acquire the other 50% ownership interest in both vessels from the Seller at the same price until July 15, 2020.
We exercised both purchase options and the consideration due under the options is $22.0 million, of which $11.0 million has been settled and the remaining $11.0 million will be settled with the proceeds of this offering. As per the shipbuilding
contracts, yard installments are payable in accordance with key milestones, that as of the date of this prospectus supplement, amount to $113.3 million. The Company anticipates that the shipowning companies will enter into financing arrangements
for the vessels prior to the delivery from the shipyard. Upon their delivery, both vessels will enter into time charters with a major oil trader, for a firm term of three years plus two additional optional years. The total potential gross revenue
backlog from these contracts is about $126.5 million. The acquisitions were approved by a special committee composed of independent members of the Company's board of directors, or the Suezmax Transaction Committee. The Suezmax Transaction
Committee obtained a fairness opinion relating to the purchase price of the SPVs from an independent financial advisor.
On May 29, 2020, we held our Annual Meeting of Shareholders, or the Annual Meeting. At the Annual Meeting, the
shareholders of the Company approved and adopted the following three proposals:
1. the
election of Evangelos J. Pistiolis and Stavros Emmanuel as Class I Directors to serve until the 2023 Annual Meeting of Shareholders;
2. the
ratification of Deloitte Certified Public Accountants S.A. as the Company’s independent auditors for the fiscal year ending December 31, 2020; and
3. the
approval 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 the Company’s board of directors (the “Board”), or any duly constituted
committee thereof, at any time after approval of each amendment in its discretion, and to authorize the Board to implement any such reverse stock split by filing any such amendment with the Registrar of Corporations of the Republic of the
Marshall Islands.
On March 30, April 15, April 27, April 28, May 14, May 19, June 7, June 10 and June 14, 2020, we entered into
registered offerings for the sale of an aggregate of 592,787,500 common shares for gross proceeds of $83.8 million with the same investors participating in this offering, or together the Registered Direct Offerings. We may conduct further
offerings with a similar structure to the current offering and the previous Registered Direct Offerings.
Corporate Information
Our predecessor, Ocean Holdings Inc., was formed as a corporation in January 2000 under the laws of the Republic of
the Marshall Islands and renamed Top Tankers Inc. in May 2004. In December 2007, Top Tankers Inc. was renamed TOP Ships Inc.
Our common shares are currently listed on the Nasdaq Capital Market under the symbol “TOPS.” The current address of
our principal executive office is 1 Vasilisis Sofias and Megalou Alexandrou Str, 15124 Maroussi, Greece. The telephone number of our registered office is +30 210 812 8000. Our corporate website address is www.topships.org. The information contained
on our website does not constitute part of this prospectus supplement.
THE OFFERING
Issuer
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TOP Ships Inc., a Marshall Islands corporation
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Common shares outstanding as of June 23, 2020
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670,492,655 common shares
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Common shares offered by us
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166,666,667 common shares.
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Common shares outstanding immediately after the offering
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837,159,322 common shares
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Preferred share purchase rights
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Our common shares include preferred share purchase rights, as described in the section of this prospectus supplement entitled
“Description of Capital Stock—Stockholders Rights Agreement.”
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Use of proceeds
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The net proceeds of this offering, after deducting the sale agent’s commissions and our estimated offering expenses, will be used to
settle the exercise of the second purchase option for the remaining 50% interest in one ship-owning company that owns a newbuilding contract for an ultra-high specification scrubber-fitted eco Suezmax tanker with a purchase price of $11.0
million and for general corporate purposes. The terms of the purchase agreement for the ship-owning companies from the Suezmax Seller, which is an entity affiliated with our Chief Executive Officer, were previously disclosed on May 29,
2020 and approved by the Suezmax Transaction Committee, as defined above, which obtained a fairness opinion relating to the purchase price of the SPVs from an independent financial advisor. See “Use of Proceeds.”
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Risk factors
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Investing in our common shares involves a high degree of risk and uncertainty.
You should carefully consider all the information in this prospectus supplement, the accompanying prospectus and the documents incorporated into each by reference prior to investing in our common shares. In particular, we urge you to
consider carefully the factors set forth in the section entitled “Risk Factors” beginning on page S-8 of this prospectus supplement, and in the accompanying prospectus and the documents we have filed with the Commission that are
incorporated by reference herein for more information, before you make any investment in our common shares.
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Listing
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Our common shares are traded on the Nasdaq Capital Market under the symbol “TOPS.”
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RISK FACTORS
An investment in our common shares involves a high degree of risk and uncertainty. We have identified a number of risk factors which you should consider before investing in our common shares. You should consider carefully the risks set forth below, those risk factors set forth under the heading “Risk Factors” in our
Annual Report on Form 20-F for the year ended December 31, 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 May 29, 2020 our shareholders approved the authorization of one or more amendments to our Amended and Restated
Articles of Incorporation to effect one or more reverse stock splits of our 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 expect that we will likely effectuate a reverse stock split in order to regain compliance with the Nasdaq minimum bid price requirement in the
near future.
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.
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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. The net proceeds of this
offering, after deducting the sale agent’s commissions and our estimated offering expenses, will be used to settle the exercise of the second purchase option for the remaining 50% interest in a ship-owning company that owns a newbuilding contract
for an ultra-high specification scrubber-fitted eco Suezmax tanker with a purchase price of $11.0 million and for general corporate purposes. The terms of the purchase agreement for the ship-owning companies from the Suezmax Seller, which is an
entity affiliated with our Chief Executive Officer, were previously disclosed on May 29, 2020 and approved by the Suezmax Transaction Committee, as defined above, which obtained a fairness opinion relating to the purchase price of the SPVs from an
independent financial advisor. 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 661,797,308 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 $93.8 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 166,666,667 common shares which is approximately 24.9% 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 June 23, 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 significant influence over us.
As of June 23, 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 significant influence to matters put before our shareholders.
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 June 23, 2020, we had contracts for five newbuilding vessels. These tankers are expected to be delivered
during the first and second quarters 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.
The current state of the global financial markets and current economic conditions may adversely impact our results
of operation, financial condition, cash flows and ability to obtain financing or refinance our existing and future credit facilities on acceptable terms, which may negatively impact our business.
Global financial markets and economic conditions have been, and continue to be, volatile. Beginning in February
2020, due in part to fears associated with the spread of COVID-19, global financial markets and starting in late February, financial markets in the U.S. experienced even greater relative volatility and a steep and abrupt downturn, which has since
rebounded but such volatility and downturns may return if COVID-19 continues to spread. Credit markets and the debt and equity capital markets have been distressed and the uncertainty surrounding the future of the global credit markets has resulted
in reduced access to credit worldwide, particularly for the shipping industry. These issues, along with significant write-offs in the financial services sector, the re-pricing of credit risk and the current weak economic conditions, have made, and
will likely continue to make, it difficult to obtain additional financing. The current state of global financial markets and current economic conditions might adversely impact our ability to issue additional equity at prices that will not be
dilutive to our existing shareholders or preclude us from issuing equity at all. Economic conditions and the economic slow-down resulting from COVID-19 and the intentional governmental responses to the virus may also adversely affect the market
price of our common shares.
Also, as a result of concerns about the stability of financial markets generally, and the solvency of counterparties
specifically, the availability and cost of obtaining money from the public and private equity and debt markets has become more difficult. Many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existing
debt at all or on terms similar to current debt, and reduced, and in some cases ceased, to provide funding to borrowers and other market participants, including equity and debt investors, and some have been unwilling to invest on attractive terms
or even at all. Due to these factors, we cannot be certain that financing will be available if needed and to the extent required, or that we will be able to refinance our existing and future credit facilities, on acceptable terms or at all. As of
the date of this prospectus supplement we have capital commitments for the newbuildings of $216.6 million. If financing or refinancing is not available when needed, or is available only on unfavorable terms, we may be unable to meet our
obligations as they come due or we may be unable to enhance our existing business, complete additional vessel acquisitions or otherwise take advantage of business opportunities as they arise. The recent COVID-19 outbreak has negatively impacted,
and may continue to negatively impact, global economic activity, demand for energy, and funds flows and sentiment in the global financial markets. Continued economic disruption caused by the continued failure to control the spread of the virus
could significantly impact our ability to obtain additional debt financing.
USE OF PROCEEDS
The net proceeds of this offering, after deducting the sale agent’s commissions and our estimated
offering expenses, will be used to settle the exercise of the second purchase option for the remaining 50% interest in one ship-owning company that owns a newbuilding contract for an ultra-high specification scrubber-fitted eco Suezmax tanker with
a purchase price of $11.0 million and for general corporate purposes. The terms of the purchase agreement for the ship-owning companies from the Suezmax Seller, which is an entity affiliated with our Chief Executive Officer, were previously
disclosed on May 29, 2020 and approved by the Suezmax Transaction Committee, as defined above, which obtained a fairness opinion relating to the purchase price of the SPVs from an independent financial advisor.
CAPITALIZATION
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 June 23, 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;
|
|
•
|
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;
|
|
•
|
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;
|
|
•
|
The sale on May 18, 2020 of 59,400,000 of the Company’s common shares via a registered direct offering at a public offering price of $0.135 per share resulting in
aggregate net proceeds of $7.4 million;
|
|
•
|
The sale on May 21, 2020 of 51,700,000 of the Company’s common shares via a registered direct offering at a public offering price of $0.135 per share resulting in
aggregate net proceeds of $6.5 million;
|
|
•
|
The sale on June 10, 2020 of 166,666,667 of the Company’s common shares via a registered direct offering at a public offering price of $0.12 per share resulting in
aggregate net proceeds of $18.7 million;
|
|
•
|
The sale on June 12, 2020 of 117,187,500 of the Company’s common shares via a registered direct offering at a public offering price of $0.128 per share resulting in
aggregate net proceeds of $14.0 million;
|
|
•
|
The sale on June 17, 2020 of 60,000,000 of the Company’s common shares via a registered direct offering at a public offering price of $0.13 per share resulting in
aggregate net proceeds of $7.2 million;
|
|
•
|
$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;
|
|
•
|
$44.0 million excess consideration over the carrying amount of acquired assets relating to the acquisitions of 100% of the M/T Eco West Coast (Hull No 865) and of 100% of
M/T Eco Malibu (Hull No 866), accounted for as a transfer of assets between entities under common control; and
|
|
•
|
$9.5 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.
|
|
3.
|
on an as further adjusted basis, assuming our issuance and sale of 166,666,667 common shares at an assumed offering price of $0.12 per share resulting in proceeds of
$18.7 million, net of estimated expenses of $1.3 million:
|
(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
|
|
|
$
|
16,731
|
|
|
$
|
16,731
|
|
Non-current portion of long term debt
|
|
|
262,122
|
|
|
|
261,602
|
|
|
|
261,602
|
|
Debt related to vessels held for sale
|
|
|
29,977
|
|
|
|
-
|
|
|
|
-
|
|
Total debt
|
|
|
309,007
|
|
|
|
278,333
|
|
|
|
278,333
|
|
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,
670,492,655 shares issued and outstanding at December 31, 2019 as adjusted and 837,159,322 shares issued and outstanding at December 31, 2019 as further adjusted
|
|
|
87
|
|
|
|
6,705
|
|
|
|
8,372
|
|
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
|
|
|
|
427,548
|
|
|
|
444,556
|
|
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
|
|
|
|
128,019
|
|
|
|
146,694
|
|
Total capitalization
|
|
$
|
414,764
|
|
|
$
|
406,352
|
|
|
$
|
425,027
|
|
(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 June 23, 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
|
|
|
|
|
|
|
Lax Trust (2)
|
|
|
17,274,140
|
|
|
|
2.5
|
%
|
Executive officers, directors and key employees
|
|
|
-
|
|
|
|
-
|
%
|
(1)
|
Based upon 670,492,655 common shares outstanding as of June 23, 2020.
|
(2)
|
The above information is derived, in part, from the Schedule 13D/A filed with the SEC on June 15, 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
687,766,795 common shares outstanding, which is calculated for this Schedule 13D/A purposes by taking the sum of (i) 670,492,655 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 June 23, 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 significant influence to matters put before our shareholders.
|
As of June 23, 2020, we had one shareholder of record, which was located in the United States and held an aggregate
of 670,492,655 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
670,492,655 shares were issued and outstanding as of June 23, 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 June 23, 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 June 23, 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 Shares, 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 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.”
TAX CONSIDERATIONS
You should carefully read the discussion of the material Marshall Islands
and U.S. federal income tax considerations associated with our operations and the acquisition, ownership and disposition of our common shares set forth in the section entitled “Taxation” of our
annual report on Form 20-F for the year ended December 31, 2019, filed with the Commission on April 10, 2020 and incorporated by reference herein.
PLAN OF DISTRIBUTION
Pursuant to a placement agency agreement, dated June 23, 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 June 23, 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 eighteen trading days following the closing of this offering. In addition, we have also agreed that for a period of eighteen 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.
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 $18.66 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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EXPENSES
The following are the estimated expenses of the issuance and distribution of the securities offered by this
prospectus supplement, all of which will be paid by us.
Legal Fees and Expenses
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$
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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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LEGAL MATTERS
The validity of the common shares offered hereby and other matters relating to Marshall Islands and United States
law will be passed upon for us by Seward & Kissel LLP, One Battery Park Plaza, New York, New York 10004. Ellenoff Grossman & Schole LLP, New York, New York, is representing the placement agent in this offering.
EXPERTS
The consolidated financial statements incorporated in this prospectus supplement by reference from TOP Ships Inc.’s
annual report on Form 20-F for the year ended December 31, 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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Report on Form 6-K furnished to the
Commission on May 18, 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 59,400,000 of its common shares at a public offering price of $0.135 per share.
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Report on Form 6-K furnished to the
Commission on May 27, 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 51,700,000 of its common shares at a public offering price of $0.135 per share.
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Report on Form 6-K furnished to the
Commission on May 29, 2020, which contains an announcement about the results of the Company’s Annual General Meeting of Shareholders and the Company’s acquisitions of 50% interests in two shipowning companies that each owned a
newbuilding contract for one ultra-high specification` scrubber-fitted eco Suezmax tanker form an entity related to our Chief Executive Officer.
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Report on Form 6-K furnished to the
Commission on June 10, 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 166,666,667 of its common shares at a public offering price of $0.12 per share.
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Report on Form 6-K furnished to the Commission on
June 11, 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
117,187,500 of its common shares at a public offering price of $0.128 per share.
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Report on Form 6-K furnished to the Commission on June 16, 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 60,000,000 of its common shares at a public offering price of $0.13 per share.
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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.