• |
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;
|
• |
our future operating and financial results;
|
• |
our future vessel acquisitions, our business strategy and expected and unexpected capital spending or operating expenses, including any dry-docking, crewing, bunker
costs and insurance costs;
|
• |
our financial condition and liquidity, including our ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate
activities;
|
• |
oil and chemical tanker industry trends, including fluctuations in charter rates and vessel values and factors affecting vessel supply and demand;
|
• |
our ability to take delivery of, integrate into our fleet, and employ any newbuildings we have ordered or may acquire or order in the future and the ability of
shipyards to deliver vessels on a timely basis;
|
• |
the aging of our vessels and resultant increases in operation and dry-docking costs;
|
• |
the ability of our vessels to pass classification inspections and vetting inspections by oil majors and big chemical corporations;
|
• |
significant changes in vessel performance, including increased vessel breakdowns;
|
• |
the creditworthiness of our charterers and the ability of our contract counterparties to fulfill their obligations to us;
|
• |
our ability to repay outstanding indebtedness, to obtain additional financing and to obtain replacement charters for our vessels, in each case, at commercially
acceptable rates or at all;
|
• |
changes to governmental rules and regulations or actions taken by regulatory authorities and the expected costs thereof;
|
• |
our ability to maintain the listing of our common shares on NYSE or another trading market;
|
• |
our ability to comply with additional costs and risks related to our environmental, social and governance policies;
|
• |
potential liability from litigation, including purported class-action litigation;
|
• |
changes in general economic and business conditions;
|
• |
general domestic and international political conditions, potential disruption of shipping routes due to accidents, political events, including
“trade wars”, piracy, acts by terrorists or major disease outbreaks such as the recent worldwide coronavirus outbreak;
|
• |
changes in production of or demand for oil and petroleum products and chemicals, either globally or in particular regions;
|
• |
the strength of world economies and currencies, including fluctuations in charterhire rates and vessel values;
|
• |
potential liability from future litigation and potential costs due to our vessel operations, including due to discharge of pollutants, any environmental damage and
vessel collisions;
|
• |
the length and severity of public health threats, epidemics and pandemics, including the global outbreak of the novel coronavirus (“COVID-19”) (and various variants
that may emerge), and other disease outbreaks and their impact on the demand for commercial seaborne transportation and the condition of the financial markets and governmental responses thereto;
|
• |
international sanctions, embargoes, import and export restrictions, nationalizations,
piracy and wars or other conflicts, including the war in Ukraine, the war between Israel and Hamas or the Houthi crisis in and around the Red Sea; and
|
• |
other important factors described from time to time in the reports filed by us with the U.S. Securities and Exchange Commission, or the SEC.
|
TOP SHIPS INC.
|
|||
(Registrant)
|
|||
Date: August 9, 2024
|
By:
|
/s/ Evangelos J. Pistiolis
|
|
Evangelos J. Pistiolis
|
|||
Chief Executive Officer
|
A. |
Operating Results
|
Six Month Period Ended June 30,
|
Change
|
|||||||||||||||
2023
|
2024
|
June 30, 2023 vs June 30, 2024
|
||||||||||||||
($ in thousands)
|
%
|
|||||||||||||||
Revenues
|
41,145
|
42,066
|
921
|
2
|
%
|
|||||||||||
Voyage expenses
|
804
|
1,163
|
359
|
45
|
%
|
|||||||||||
Operating lease expenses
|
5,378
|
5,406
|
28
|
1
|
%
|
|||||||||||
Other vessel operating expenses
|
9,624
|
9,451
|
(173
|
)
|
-2
|
%
|
||||||||||
Vessel depreciation
|
7,175
|
6,673
|
(502
|
)
|
-7
|
%
|
||||||||||
Management fees-related parties
|
1,092
|
1,128
|
36
|
3
|
%
|
|||||||||||
General and administrative expenses
|
799
|
810
|
11
|
1
|
%
|
|||||||||||
Dry-docking costs
|
-
|
3,153
|
3,153
|
100
|
%
|
|||||||||||
Operating income
|
16,273
|
14,282
|
(1,991
|
)
|
-12
|
%
|
||||||||||
Interest and finance costs
|
(10,528
|
)
|
(12,728
|
)
|
(2,200
|
)
|
21
|
%
|
||||||||
Equity (losses)/ gains in unconsolidated joint ventures
|
(29
|
)
|
4
|
33
|
100
|
%
|
||||||||||
Interest Income
|
58
|
381
|
323
|
557
|
%
|
|||||||||||
Total other expenses, net
|
(10,499
|
)
|
(12,343
|
)
|
(1,844
|
)
|
18
|
%
|
||||||||
Net income
|
5,774
|
1,939
|
(3,835
|
)
|
-66
|
%
|
1. |
Voyage expenses
|
2. |
Vessel depreciation
|
3. |
Dry-docking costs
|
4. |
Interest and finance costs
|
Six months ended June 30,
|
||||||||
(Expressed in thousands of U.S. Dollars)
|
2023
|
2024
|
||||||
Net Income
|
5,774
|
1,939
|
||||||
Add: Vessel depreciation
|
7,175
|
6,673
|
||||||
Add: Interest and finance costs
|
10,528
|
12,728
|
||||||
Less: Interest Income
|
(58
|
)
|
(381
|
)
|
||||
EBITDA
|
23,419
|
20,959
|
• |
The consideration of the No-Shop LOI ($1.0 million) was applied against the consideration payable on signing of the SPA (please see the Unaudited Interim Condensed
Consolidated Financial Statements for the six months ended June 30, 2024 – "Note - Transactions with Related Parties" included elsewhere in this document);
|
• |
An amount of $10.1 million (the “First Installment”) was paid to the Seller on July 12, 2024;
|
• |
An amount of $1.1 million (the “Second Installment”) shall be paid to the Seller on a date that is no later than 30 days after the First Installment;
|
• |
An amount of $1.1 million (the “Third Installment”) shall be paid to the Seller on a date that is no later than 30 days after the Second Installment;
|
• |
An amount of $1.1 million (the “Fourth Installment”) shall be paid to the Seller on a date that is no later than 30 days after the Third Installment;
|
• |
An amount of $1.1 million (the “Fifth Installment”) shall be paid to the Seller on a date that is no later than 30 days after the Fourth Installment;
|
• |
An amount of $1.1 million (the “Sixth Installment”) shall be paid to the Seller on a date that is no later than 30 days after the Fifth Installment;
|
• |
An amount of $2.1 million (the “Seventh Installment”) shall be paid to the Seller on a date that is no later than 30 days after the Sixth Installment;
|
• |
An amount of $1.3 million including any adjustments for working capital of the SPV as of the Closing Date (the “Final Installment”) shall be paid to the Seller on a
date that is no later than 30 days after the Seventh Installment.
|
B. |
Liquidity and Capital Resources
|
Page
|
|
Unaudited Interim Condensed Consolidated Balance Sheets as of December 31, 2023 and June 30, 2024
|
F-2
|
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income for the six months ended June 30, 2023
and 2024
|
F-3
|
Unaudited Interim Condensed Consolidated Statements of Mezzanine and Stockholders’ Equity for the six months ended June 30, 2023 and 2024
|
F-4
|
Unaudited Interim Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023
and 2024
|
F-5
|
F-6
|
December 31,
|
June 30,
|
|||||||
2023 | 2024 | |||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
|
|
||||||
Trade accounts receivable
|
|
|
||||||
Prepayments and other
|
|
|
||||||
Inventories
|
|
|
||||||
Total current assets
|
|
|
||||||
FIXED ASSETS:
|
||||||||
Vessels, net (Note 4)
|
|
|
||||||
Right of use assets from operating leases
|
|
|
||||||
Other fixed assets, net
|
|
|
||||||
Total fixed assets
|
|
|
||||||
OTHER NON CURRENT ASSETS:
|
||||||||
Restricted cash
|
|
|
||||||
Investments in unconsolidated joint ventures
|
|
|
||||||
Deposit asset
|
|
|
||||||
Advances for asset acquisition to related party (Note 5)
|
||||||||
Trade accounts receivable, non-current
|
||||||||
Deferred charges
|
||||||||
Total non-current assets
|
|
|
||||||
Total assets
|
|
|
||||||
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Current portion of long-term debt (Note 7)
|
|
|
||||||
Due to
(Note 5) |
|
|
||||||
Accounts payable
|
|
|
||||||
Accrued liabilities
|
|
|
||||||
Unearned revenue
|
|
|
||||||
Current portion of Operating lease liabilities (Note 6)
|
|
|
||||||
Vessel fair value participation liability (Note 7)
|
||||||||
Total current liabilities
|
|
|
||||||
NON-CURRENT LIABILITIES:
|
||||||||
Non-current portion of long-term debt (Note 7)
|
|
|
||||||
Non-current portion of Operating lease liabilities (Note 6)
|
|
|
||||||
Other non-current liabilities
|
||||||||
Total non-current liabilities
|
|
|
||||||
COMMITMENTS AND CONTINGENCIES (Note 8)
|
|
|
||||||
Total liabilities
|
||||||||
MEZZANINE EQUITY:
|
||||||||
Preferred stock, $
|
|
|
||||||
Preferred stock, Paid-in capital in excess of par
|
|
|
||||||
Total mezzanine equity
|
|
|
||||||
STOCKHOLDERS’ EQUITY:
|
||||||||
Preferred stock, $
|
|
|
||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities, mezzanine equity and stockholders’ equity
|
|
|
Six Months Ended
|
||||||||
June 30,
|
June 30,
|
|||||||
2023
|
2024
|
|||||||
REVENUES:
|
||||||||
Time charter revenues
|
$
|
|
$
|
|
||||
Time charter revenues from related parties (Note 5)
|
|
|
||||||
Total revenues
|
|
|
||||||
EXPENSES:
|
||||||||
Voyage expenses (including $
|
|
|
||||||
Operating lease expenses
|
|
|
||||||
Other vessel operating expenses
|
|
|
||||||
Vessel depreciation
|
|
|
||||||
Management fees-related parties (Note 5)
|
|
|
||||||
Dry-docking costs (including $
|
|
|
||||||
General and administrative expenses
|
|
|
||||||
Operating income
|
|
|
||||||
OTHER INCOME (EXPENSES):
|
||||||||
Interest and finance costs
|
(
|
)
|
(
|
)
|
||||
Interest income
|
|
|
||||||
Equity (losses)/gains in unconsolidated joint ventures
|
(
|
)
|
|
|||||
Total other expenses, net
|
( |
) | ( |
) | ||||
Net income and comprehensive income
|
||||||||
Less: Dividends of preferred shares (Note 5)
|
(
|
)
|
|
|||||
Net income and comprehensive income attributable to common shareholders
|
||||||||
(Loss)/Earnings per common share, basic (Note 10) | ||||||||
(Loss)/Earnings per common share, diluted (Note 10)
|
||||||||
Weighted average common shares outstanding, basic (Note 10) | ||||||||
Weighted average common shares outstanding, diluted (Note 10)
|
|
|
Mezzanine Equity
|
Stockholder’s Equity
|
|||||||||||||||||||||||||||||||||||||||
Preferred Stock
|
Common Stock
|
Additional | Total | |||||||||||||||||||||||||||||||||||||
# of Shares
|
Par
Value
|
Paid-in Capital
|
# of Shares
|
Par
Value
|
# of Shares
|
Par
Value
|
Paid –
in Capital
|
Accumulated Deficit
|
stockholders’
equity
|
|||||||||||||||||||||||||||||||
BALANCE, December 31, 2022
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|||||||||||||||||||||||||||||
Net Income
|
-
|
-
|
-
|
-
|
|
-
|
|
|
|
|
||||||||||||||||||||||||||||||
Issuance of common stock pursuant to equity offerings
|
- | - | - | - | - | |||||||||||||||||||||||||||||||||||
Exercise of Warrants, net of fees
|
- | - | - | - | - | |||||||||||||||||||||||||||||||||||
Redemptions of preferred shares
|
( |
) | ( |
) | ( |
) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Dividends of Preferred Shares
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(
|
)
|
-
|
(
|
)
|
||||||||||||||||||||||||||||
BALANCE, June 30, 2023
|
|
|
|
|
|
|
|
(
|
)
|
|
Mezzanine Equity | Stockholder’s Equity | |||||||||||||||||||||||||||||||||||||||
Preferred Stock
|
Common Stock
|
Additional | Total | |||||||||||||||||||||||||||||||||||||
# of Shares
|
Par
Value
|
Paid-in Capital
|
# of Shares
|
Par
Value
|
# of Shares
|
Par
Value
|
Paid –
in Capital
|
Accumulated Deficit
|
stockholders’
equity
|
|||||||||||||||||||||||||||||||
BALANCE, December 31, 2023
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|||||||||||||||||||||||||||||
Net Income
|
-
|
-
|
-
|
-
|
|
-
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Equity offering costs (Note 9)
|
- | - | - | - | - | - | - | ( |
) | - | ( |
) | ||||||||||||||||||||||||||||
Redemptions of preferred shares (Note 5)
|
(
|
)
|
(
|
)
|
(
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||
BALANCE, June 30, 2024
|
|
|
|
|
|
|
|
(
|
)
|
|
Six months ended June 30,
|
||||||||
2023
|
2024
|
|||||||
Net Cash provided by Operating Activities
|
||||||||
Cash Flows from Investing Activities:
|
||||||||
Returns of investments in unconsolidated joint ventures
|
|
|
||||||
Advances for asset acquisition from related parties (Note 5)
|
( |
) | ||||||
Net Cash provided by/(used in) Investing Activities
|
( |
) | ||||||
Cash Flows from Financing Activities:
|
||||||||
Proceeds from debt
|
|
|
||||||
Principal payments of debt
|
(
|
)
|
(
|
)
|
||||
Prepayment of debt
|
|
(
|
)
|
|||||
Proceeds from equity offerings, gross (Note 9)
|
|
|
||||||
Equity offerings costs
|
(
|
)
|
(
|
)
|
||||
Dividends of Preferred shares (Note 5)
|
(
|
)
|
|
|||||
Payment of financing costs
|
|
(
|
)
|
|||||
Redemption of preferred shares
|
( |
) | ( |
) | ||||
Proceeds from warrant exercises, net
|
||||||||
Proceeds from short-term debt
|
||||||||
Prepayments of short-term debt
|
( |
) | ||||||
Repayment of Vessel fair value participation liability
|
( |
) | ||||||
Net Cash (used in) Financing Activities
|
(
|
)
|
(
|
)
|
||||
Net decrease in cash and cash equivalents and restricted cash
|
(
|
)
|
(
|
)
|
||||
Cash and cash equivalents and restricted cash at beginning of year
|
|
|
||||||
Cash and cash equivalents and restricted cash at end of the period
|
|
|
||||||
Cash breakdown
|
||||||||
Cash and cash equivalents
|
|
|
||||||
Restricted cash, non-current
|
|
|
||||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||
Interest paid
|
|
|
||||||
Equity issuance costs included in liabilities |
||||||||
Finance fees included in Accounts payable/Accrued liabilities/Due to related parties
|
|
|
1. |
Basis of Presentation and General Information:
|
Companies
|
Date of
Incorporation
|
Country of
Incorporation
|
Activity
|
Top Tanker Management Inc.
|
|
|
|
Rubico Inc. | |||
Top Mega Yachts Inc. |
Wholly owned Shipowning Companies (“SPC”)
with vessels in operation during period ended
June 30, 2024
|
Date of
Incorporation |
Country of
Incorporation |
Vessel
|
Delivery Date
|
|
1
|
PCH Dreaming Inc.
|
|
|
|
|
2
|
South California Inc.
|
|
|
|
(sold and leased back in 2020) |
3
|
Malibu Warrior Inc.
|
|
|
|
(sold and leased back in 2020) |
4
|
Roman Empire Inc.
|
|
|
|
|
5
|
Athenean Empire Inc.
|
|
|
|
|
6
|
Eco Oceano Ca Inc.
|
|
|
|
|
7
|
Julius Caesar Inc.
|
|
|
|
|
8
|
Legio X Inc.
|
|
|
|
|
SPC
|
Date of
Incorporation
|
Country of
Incorporation
|
Vessel
|
Delivery Date
|
|
1
|
California 19 Inc.
|
|
|
|
|
2
|
California 20 Inc.
|
|
|
|
|
2. |
Significant Accounting Policies:
|
•
|
Expenditures and capitalized costs, excluding recoveries, incurred related to severe weather events and natural events are required, if
such expenditures exceed defined disclosure thresholds. In addition, a description of material estimates and assumptions used to produce the financial statement disclosures are required.
|
•
|
If the use of carbon offsets or renewable energy credits (RECs) are a material component of the registrant’s plans to achieve
climate-related targets or goals, disclosure of carbon offsets and RECs beginning and ending balances, amounts expensed, capitalized costs and losses are presented in the financial statements.
|
3.
|
Going Concern:
|
4.
|
Vessels, net:
|
Vessel
Cost
|
Accumulated
Depreciation
|
Net Book Value
|
||||||||||
Balance, December 31, 2023
|
|
(
|
)
|
|
||||||||
— Depreciation
|
-
|
(
|
)
|
(
|
)
|
|||||||
Balance, June 30, 2024
|
|
(
|
)
|
|
5. |
Transactions with Related Parties:
|
(a)
|
Central Mare – Executive Officers and Other Personnel Agreements: On September 1, 2010, the Company entered into separate agreements with Central
Mare, a related party affiliated with the family of Mr. Evangelos J. Pistiolis, the Company’s President and Chief Executive Officer, pursuant to which Central Mare provides the Company with its executive officers and other administrative
employees (Chief Executive Officer, Chief Financial Officer, Chief Technical Officer and Chief Operating Officer), for which Central Mare charged the Company $
|
(b) |
Central Shipping Inc (“CSI”) – Letter Agreement and Management Agreements: On January 1, 2019, the Company entered into a letter agreement with CSI, a related party affiliated
with the family of Mr. Evangelos J. Pistiolis, which detailed the services and fees for the management of the Company’s fleet.
|
Six Months Ended June 30,
|
|||||||||
2023
|
2024
|
Presented in:
|
|||||||
Management fees
|
|
|
Management fees - related parties -Statement of comprehensive income
|
||||||
Superintendent fees
|
|
|
Vessel operating expenses -Statement of comprehensive income
|
||||||
Dry-docking costs -Statement of comprehensive income
|
|||||||||
Accounting and reporting cost
|
|
|
Management fees - related parties -Statement of comprehensive income
|
||||||
Commission on charter hire agreements
|
|
|
Voyage expenses - Statement of comprehensive income
|
||||||
Financing fees
|
|
|
Net in Current and Non-current portions of long-term debt – Balance Sheet
|
||||||
Total
|
|
|
(c) |
Series F Shares to Africanus Inc (“Africanus”): On June 30, 2023 the Company declared a dividend of $
|
(d) |
Charter party with Central Tankers Chartering Inc (“CTC”): For the six months ended June 30, 2023 and 2024 the CTC time charter generated $
|
(e) |
Advances for Asset Acquisition to Related Party: On June 14, 2024 the Company entered into a
non-binding letter of intent (“No-Shop LOI”) with Mr. Evangelos J. Pistiolis whereby the latter was precluded from marketing or selling the M/Y Para Bellvm (
|
(f) |
Personal Guarantee
for HSBC loan: On January 15, 2024 the Company entered into a bridge loan with HSBC Private Bank (Suisse) SA (“HSBC”) (Note 7).
As a prerequisite for granting the loan to the Company, HSBC requested a personal guarantee from Mr. Evangelos J. Pistiolis, which he provided in exchange for an arrangement fee of
|
6. |
Leases
|
Year ending December 31,
|
Bareboat charter lease payments
|
|||
2024 (remainder)
|
|
|||
2025
|
|
|||
Total
|
|
|||
Less imputed interest
|
|
|||
Total Lease Liability
|
|
|||
Presented as follows:
|
||||
Current portion of Operating lease liabilities
|
|
|||
Non-current portion of Operating lease liabilities
|
|
Year ending December 31,
|
Time Charter receipts
|
|||
2024 (remaining)
|
|
|||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
2028 and thereafter
|
|
|||
Total
|
|
7. |
Debt:
|
Bank / Vessel(s)
|
||||||||
December 31,
2023
|
June 30,
2024
|
|||||||
Total long term debt:
|
||||||||
2nd AVIC Facility ( |
||||||||
Huarong Facility (
|
|
|
||||||
Cargill Facility (
|
|
|
||||||
2nd CMBFL Facility (
|
||||||||
1st CMBFL Facility (
|
|
|
||||||
1st AVIC Facility (
|
|
|
||||||
Total long term debt
|
|
|
||||||
Less: Deferred finance fees
|
(
|
)
|
(
|
)
|
||||
Less: Debt discount relating to Vessel fair value participation liability
|
( |
) | ||||||
Total long term debt net of deferred finance fees and debt discounts
|
|
|
||||||
Presented:
|
||||||||
Current portion of long-term debt
|
|
|
||||||
Long term debt
|
||||||||
Total Debt net of deferred finance fees
|
|
|
• |
Ownership of M/T Eco Marina Del Ray;
|
• |
Assignment of insurances and earnings of M/T Eco Marina Del Ray;
|
• |
Specific assignment of any time charters of M/T Eco Marina Del Ray with duration of more than
|
• |
Corporate guarantee of the Company;
|
• |
Pledge of the shares of M/T Eco Marina Del Ray’s shipowning subsidiary;
|
• |
Pledge over the earnings account of M/T Eco Marina Del Ray.
|
8. |
Commitments and Contingencies:
|
9. |
Common Stock, Additional Paid-In Capital and Dividends:
|
10. |
Earnings Per Common Share:
|
Six months ended June 30,
|
||||||||
2023
|
2024
|
|||||||
Net Income
|
||||||||
Less: Dividends of Preferred shares
|
(
|
)
|
|
|||||
Earnings attributable to common shareholders, basic
|
|
|
||||||
Weighted average common shares outstanding, basic
|
||||||||
Earnings per share, basic
|
||||||||
Earnings attributable to common shareholders, basic
|
||||||||
Add: Dividends of Convertible preferred shares
|
||||||||
Earnings attributable to common shareholders, diluted
|
||||||||
Effect of dilutive securities:
|
||||||||
Series E Shares
|
||||||||
Weighted average common shares outstanding, diluted
|
||||||||
Earnings per share, diluted
|
11. | Fair Value of Financial Instruments and Derivative Instruments: |
a) |
Interest rate risk: The Company as of June 30, 2024 is subject to market risks relating to changes in interest rates, since all of its debt except the 1st CMBFL facility is subject to floating interest rates.
|
b) |
Credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash. The Company places its temporary cash
investments, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions with which it places its temporary cash
investments.
|
c) |
Fair value:
|
12.
|
Subsequent Events:
|
•
|
The consideration of the No-Shop LOI ($
|
• |
An amount of $
|
• |
An amount of $
|
• |
An amount of $
|
• |
An amount of $
|
• |
An amount of $
|
• |
An amount of $
|
• |
An amount of $
|
• |
An amount of $
|