Company Overview - TOP Ships Inc. is an international owner and operator of modern, fuel-efficient "ECO" tanker vessels, focusing on the transportation of crude oil, petroleum products, and bulk liquid chemicals [6]. Charter Agreements - The company announced that its 50% subsidiaries, which own M/T Eco Yosemite Park and M/T Eco Joshua Park, have entered into agreements to extend their time charter employment at higher rates [5]. - Both MRs will commence 7-year time charters on August 1, 2024, at a gross daily hire rate of $19,500, representing a 12% increase from the current daily hire rate [2]. - The expected revenue generated by the two subsidiaries from these charters is approximately $100 million for the firm period [2].

Group 1 - TOP Ships Inc. announced that its 50% subsidiaries, which own M/T Eco Yosemite Park and M/T Eco Joshua Park, have entered into agreements to extend their time charter employment at higher rates [4] - The new time charters will commence on August 1, 2024, with a gross daily hire rate of $19,500, reflecting a 12% increase from the current rate [1] - The expected revenue from these charters for the firm period is approximately $100 million [1] Group 2 - TOP Ships Inc. is an international owner and operator of modern, fuel-efficient "ECO" tanker vessels, focusing on transporting crude oil, petroleum products, and bulk liquid chemicals [5]

Financial Performance - Total revenues increased from $80,656,000 in 2022 to $82,949,000 in 2023, representing a growth of 2.8%[339] - Time charter equivalent (TCE) revenues rose from $79,008,000 in 2022 to $81,340,000 in 2023, an increase of 2.9%[339] - Average daily TCE rate improved from $27,310 in 2022 to $27,856 in 2023, reflecting a 2.0% increase[337] - Total operating days for the fleet increased from 2,893 in 2022 to 2,920 in 2023, indicating a growth of 0.9%[337] - Fleet utilization reached 100.00% in 2023, up from 99.72% in 2022, demonstrating improved operational efficiency[337] - EBITDA decreased from $46,554,000 in 2022 to $43,058,000 in 2023, a decline of 7.4%[340] - Net income fell significantly from $18,948,000 in 2022 to $6,066,000 in 2023, a decrease of 68.0%[345] - Operating income decreased by $3.9 million, or 12%, from $32.6 million in 2022 to $28.7 million in 2023[361] - Net income fell by $12.9 million, or 68%, from $18.9 million in 2022 to $6.1 million in 2023[361] Expenses and Costs - Vessel operating expenses slightly decreased from $6,397 per day in 2022 to $6,345 per day in 2023[337] - General and administrative expenses increased from $555,000 in 2022 to $2,293,000 in 2023, a rise of 313.0%[337] - General and administrative expenses surged by $5.1 million, or 314%, from $1.6 million in 2022 to $6.7 million in 2023, primarily due to $5.0 million in bonuses declared in 2023[363] - Interest and finance costs rose by $8.6 million, or 60%, from $14.4 million in 2022 to $23.0 million in 2023[365] Cash Flow and Liquidity - Cash and cash equivalents increased from $24.5 million in 2022 to $40.0 million in 2023[377] - Net cash provided by operating activities decreased by $4.5 million, or 13%, from $33.4 million in 2022 to $28.9 million in 2023[378] - Net cash used in financing activities was $16.0 million in 2023, compared to $127.4 million in 2022[383] - Net cash provided by investing activities in 2023 was $2.5 million, solely from returns on investments in unconsolidated joint ventures[381] - Total adjustments to reconcile net income to net cash provided by operating activities for 2023 amounted to $28.3 million, primarily due to $14.3 million in depreciation expenses[379] - The company expects a slight decrease in operating cash flow for 2024 compared to 2023 due to increased interest costs from loans with fluctuating rates[376] Debt and Financing - As of December 31, 2023, total indebtedness amounted to $246.2 million, with cash and cash equivalents of $40.0 million[372] - The company entered into an HSBC Bridge Loan for a maximum amount of $24.0 million, with a drawdown of $20.0 million for M/T Julius Caesar and $8.0 million for M/T Legio X Equestris[389] - The 3rd AVIC Sale and Leaseback (SLB) agreement was consummated for $41.0 million, with a bareboat charter for ten years at $0.18 million per month and a balloon payment of $19.0 million[390] - The Huarong SLB was completed for $41.0 million, with similar terms to the AVIC SLB, including a ten-year bareboat charter and a balloon payment of $19.0 million[391] - The company purchased M/Ts Julius Caesar and Legio X Equestris for $48.6 million and $49.3 million respectively, followed by New CMBFL SLBs totaling $125.0 million for financing[392] - Net cash used in financing activities for the year ended December 31, 2023 was $16.0 million, which included $76.4 million in principal payments and $26.3 million for Series F Preferred Shares redemptions[383] Market Conditions - The BDTI reached a high of 1,642 and a low of 713 in 2023, indicating high volatility in charter rates[397] - The ongoing war in Ukraine has created uncertainty in the tanker market, affecting ton-mile demand due to changes in cargo sources[398] - Inflation has moderately impacted vessel operating expenses, with expectations of rising insurance costs and crew expenses[401] - The company has not experienced material impacts from supply chain disruptions related to the conflicts in Ukraine and the Middle East, and does not anticipate future material effects[400] Asset Valuation and Impairment - The basic charter-free market values of owned operating vessels are estimated to be approximately 52.8% higher than their carrying value[367] - The company has not identified any impairment indicators for its vessels, as tanker values increased in both 2022 and 2023[411] - In both 2022 and 2023, tanker values increased, resulting in the charter-free market value of each vessel being higher than its carrying amount, indicating no impairment[411] Employment and Compensation - As of December 31, 2023, the company employed 178 sea-going employees, an increase from 170 in 2022[433] - The total compensation for senior management and directors in 2023 was $0.4 million, with a $5.0 million bonus granted to the CEO[422] - The company has no retirement plan for its officers or directors and did not issue stock options as part of compensation for the fiscal year ended December 31, 2023[422] - The Chief Executive Officer is entitled to a cash payment of €10 million in the event of a change of control[424] - The Chief Operating Officer is entitled to receive a cash payment equal to three years' annual base salary in the event of a change of control[425] - The Chief Financial Officer is entitled to receive a cash payment equal to three years' annual base salary in the event of a change of control[427] - The Chief Technical Officer is also entitled to receive a cash payment equal to three years' annual base salary in the event of a change of control[428] - The company has no direct employees, with executive officers and administrative staff provided through agreements with Central Mare[433] Governance - The Board of Directors is composed of two executive directors and three independent non-executive directors, with staggered terms[429]

Financial Performance - Revenues for the six months ended June 30, 2023, increased by $2.3 million, or 6%, to $41.145 million compared to $38.846 million in the same period of 2022[22]. - Operating income rose by $1.142 million, or 8%, to $16.273 million for the six months ended June 30, 2023, compared to $15.131 million in 2022[22]. - Net income decreased by $2.831 million, or 33%, to $5.774 million for the six months ended June 30, 2023, down from $8.605 million in 2022[22]. - EBITDA for the six months ended June 30, 2023, was $23.419 million, an increase of $1.773 million, or 8.2%, from $21.646 million in 2022[31]. - The company’s net (loss)/income attributable to common shareholders for the six months ended June 30, 2023, was $2.3 million, a recovery from a loss of $13.1 million in the same period of 2022[50]. - The Company reported a net income of $5,774,000 for the six months ended June 30, 2023, compared to $8,605,000 for the same period in 2022, reflecting a decrease of approximately 33.5%[96]. - Basic earnings per share for the six months ended June 30, 2023, was $0.13, a recovery from a loss of $6.15 per share in the same period of 2022[96]. Costs and Expenses - Interest and finance costs increased by $3.601 million, or 52%, to $10.528 million for the six months ended June 30, 2023, compared to $6.927 million in 2022[22]. - Vessel depreciation increased by $1.061 million, or 17%, to $7.175 million for the six months ended June 30, 2023, from $6.114 million in 2022[22]. - Interest paid, net of capitalized interest, increased to $8,814,000 in 2023 from $4,414,000 in 2022, reflecting a rise of 99.5%[52]. - The company reported a decrease in dividends of preferred shares to $3,485,000 in 2023 from $6,921,000 in 2022, a reduction of 49.7%[52]. Cash Flow and Working Capital - Net cash used in financing activities for the six months ended June 30, 2023, was $25.3 million, which included $26.3 million in redemptions of preferred shares and $7.8 million in scheduled repayments of long-term debt[44]. - The company expects a decrease in operating cash flow for the remainder of 2023 compared to the same period in 2022 due to increased interest costs from loans with fluctuating rates[39]. - As of June 30, 2023, total current liabilities increased to $57.4 million from $32.2 million as of December 31, 2022, reflecting a significant rise in financial obligations[48]. - The company reported a working capital deficit of $44.5 million, primarily due to the outstanding balance of the Cargill facility maturing in Q1 2024, which includes $21.8 million in current long-term debt[38]. - The company expects to finance its working capital deficit through cash on hand, operational cash flow, and refinancing efforts[67]. - As of June 30, 2023, the company reported a working capital deficit of $44,468 and cash and cash equivalents of $13,629[65]. Debt and Financing - As of June 30, 2023, total indebtedness amounted to $232.8 million, with cash and cash equivalents at $13.6 million, of which $4.0 million is restricted cash[36][38]. - The company has a total long-term debt of $232,811 as of June 30, 2023, down from $240,625 as of December 31, 2022[78]. - The Cargill facility, which matures in the first quarter of 2024, has an outstanding balance of $24,161[78]. - The company has received a termsheet from a major Chinese leasing company for refinancing the Cargill facility, which is expected to alleviate the working capital deficit[33][38]. - The Company is exploring a refinancing option for the Cargill facility through a sale and leaseback agreement, which will not bear any commitment fees[107]. Shareholder Equity - Total stockholders' equity increased to $125,554,000 as of June 30, 2023, up from $88,592,000 as of June 30, 2022, indicating a growth of 41.7%[51]. - The weighted average common shares outstanding increased significantly from 2,132,179 in June 2022 to 17,793,072 in June 2023, indicating a substantial increase in equity financing[50]. - The Company issued 10,045,185 units in a registered direct offering at a price of $1.35 per unit, raising net proceeds of $12,747,000 after fees[89]. - The Company had a total of 20,346,091 common shares outstanding as of June 30, 2023, an increase from 2,356,041 shares a year earlier[51]. - The Company did not pay any dividends to common stockholders in the six months ended June 30, 2022, and 2023[95]. Operational Developments - The company entered into an agreement to extend time charter parties for vessels M/T Eco West Coast and M/T Eco Malibu for a minimum of 30 months at a daily rate of $32,850[32]. - Future minimum time-charter receipts for the company's vessels are projected to total $276,697 through 2027 and beyond[75]. - The bareboat chartered-in vessels generated revenue of $8,688 for the six months ended June 30, 2023[73]. - The average remaining lease term on chartered-in contracts is 29.2 months[72]. - The company declared dividends of $1,001 and $2,484 for Series E and Series F shares respectively for the six months ended June 30, 2023[71]. - The company was in compliance with all debt covenants as of June 30, 2023[83]. Market and Economic Conditions - The company has not identified any apparent consequences from the ongoing geopolitical tensions affecting its business as of June 30, 2023[61].

Financial Performance - Total revenues for the first half of 2023 reached $41.1 million, an increase from $38.8 million in the same period of 2022, representing a growth of 5.5%[6] - Net income for the first half of 2023 was $5.8 million, compared to $8.6 million in the first half of 2022, indicating a decrease of 32.5%[6] - Earnings per share (EPS) for the first half of 2023 was $0.13, a significant recovery from a loss of $6.15 per share in the same period of 2022[6][7] - EBITDA for the first half of 2023 was $23.4 million, up from $21.6 million in the first half of 2022, reflecting an increase of 8.3%[17] Assets and Cash Flow - Total assets as of June 30, 2023, were $446.2 million, down from $469.3 million at the end of 2022, a decrease of 4.9%[9] - Cash and cash equivalents, including restricted cash, totaled $13.6 million as of June 30, 2023, compared to $20.5 million at the end of 2022[6][9] Operational Efficiency - The average age of the tanker fleet is less than three years, highlighting the modernity and efficiency of the vessels operated by the company[2] - The company has a substantial charter backlog, which is expected to contribute positively to income and cash flow generation extending into 2024[2] Financial Obligations - Interest and finance costs increased to $10.5 million in the first half of 2023, up from $6.9 million in the same period of 2022, representing a rise of 51.5%[17] - The company has no capital commitments going forward after completing its newbuilding program in 2022[2]

Financial Performance - The press release was issued on April 3, 2023, detailing the company's financial performance and strategic initiatives[3] Company Registration - The company is registered under Form 20-F, indicating it is a foreign private issuer[2] - The report is incorporated into the company's registration statements on Form F-3, which includes multiple file numbers[4] Compliance and Verification - The CEO, Evangelos J. Pistiolis, signed the report, affirming its accuracy and compliance with SEC regulations[6]

Financial Performance - Total revenues for 2022 reached $80.656 million, a significant increase from $56.367 million in 2021, representing a growth of approximately 43%[329] - EBITDA for 2022 was reported at $46.554 million, a substantial increase from $23.284 million in 2021, indicating a growth of approximately 100%[329] - Net income rose by $10.3 million, or 120%, from $8.6 million in 2021 to $18.9 million in 2022[349] - Operating income rose by 120% from $14.8 million in 2021 to $32.6 million in 2022[349] - Total charter revenues increased by $24.3 million, or 43%, from $56.4 million in 2021 to $80.7 million in 2022[349] Fleet and Operations - Fleet utilization in 2022 was 99.72%, showing a slight improvement from 96.93% in 2021[327] - The total number of vessels at the end of 2022 was 8, consistent with the previous year, while the average number of vessels remained stable at 8.0[327] - Total operating days for the fleet in 2022 were 2,893, an increase from 2,500 in 2021, representing a growth of about 16%[329] - Average daily Time Charter Equivalent (TCE) increased to $27,310 in 2022, up from $22,020 in 2021, reflecting a growth of about 24%[329] - Time charter equivalent revenues for 2022 were $79.008 million, up from $55.050 million in 2021, marking an increase of approximately 43%[329] Expenses and Costs - Vessel operating expenses for 2022 were $6,397 per day, up from $6,070 in 2021, reflecting an increase of about 5%[329] - Vessel operating expenses increased by $2.9 million, or 19%, from $15.7 million in 2021 to $18.6 million in 2022, attributed to larger vessels and increased average vessels employed[352] - Vessel depreciation increased by $5.6 million, or 73%, from $7.7 million in 2021 to $13.3 million in 2022, due to the employment of larger vessels[353] - Interest and finance costs surged by $7.4 million, or 105%, from $7.0 million in 2021 to $14.4 million in 2022, primarily due to increased loan balances and rising LIBOR rates[355] Cash Flow and Financing - Cash and cash equivalents increased from $6.4 million in 2021 to $24.5 million in 2022[365] - Net cash provided by operating activities increased by $17.3 million, or 108%, from $16.1 million in 2021 to $33.4 million in 2022[366] - Net cash used in investing activities for the year ended December 31, 2022 was $142.7 million, which included $216.7 million for advances for vessels under construction, offset by $71.7 million from the sale of vessels[369] - Net cash provided by financing activities for the year ended December 31, 2022 was $127.4 million, consisting of $165.2 million from long-term debt proceeds and $47.6 million from the issuance of Series F Shares[371] Market Conditions and Risks - The BDTI reached a high of 2,496 and a low of 679 in 2022, while the BCTI reached a high of 2,143 and a low of 543, indicating high volatility in charter rates[382] - The invasion of Ukraine has led to increased volatility in the tanker market, with short-term positive effects but uncertain long-term impacts on ton-mile demand[383] - Inflation has indirectly increased the base lending costs of loans, with LIBOR rising from 0.10% in January 2022 to 4.78% in December 2022, significantly affecting cash flow[386] Corporate Governance - The company has five shareholders of record as of March 27, 2023, holding an aggregate of 20,346,091 common shares, representing 100% of outstanding common shares[422] - The Chief Executive Officer is entitled to a cash payment of €10 million in the event of a change of control[409] - The Chief Operating Officer is entitled to receive a cash payment equal to three years' annual base salary in the event of a change of control[410] - The Chief Financial Officer is entitled to a cash payment equal to three years' annual base salary in the event of a change of control[412] - The Chief Technical Officer is also entitled to a cash payment equal to three years' annual base salary in the event of a change of control[413] Employment and Compensation - As of December 31, 2022, the company employed 170 sea-going employees, an increase from 146 in 2021 and 136 in 2020[418] - The total compensation paid to senior management and directors for the fiscal year ended December 31, 2022, was $0.4 million[407]

[Executive Summary & Company Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Highlights) TOP Ships Inc. achieved record net income in 2022, demonstrating significant financial growth and implementing shareholder-friendly measures - TOP Ships Inc. announced record net income for the year ended December 31, 2022, marking the highest reported net income since 2008 and a **120% increase** from 2021[1](index=1&type=chunk)[2](index=2&type=chunk) Key Financial Highlights (Year Ended December 31, 2022) | Metric | Amount (Millions USD) | Change from 2021 | | :-------------------------- | :-------------------- | :--------------- | | Total Revenues | $80.7 | +43% | | Net Income | $18.9 | +120% | | EBITDA | $46.6 | +100% | | Total Assets | $469.3 | +42% | | Total Cash and cash equivalents (including Restricted Cash) | $24.5 | +285% | - The Company adopted shareholder-friendly measures for the period from the release date to December 31, 2023, including[2](index=2&type=chunk)[6](index=6&type=chunk) * No new equity offerings (public or private) * No reverse stock splits, except if deemed advisable by the Board for Nasdaq listing compliance * No bonuses to executive management * Neither the CEO nor his affiliates will sell any common shares - Mr. Evangelos J. Pistiolis, President, CEO, and Director, stated that the current trading price of common shares does not reflect the Company's intrinsic value and that the announced actions will benefit all shareholders[2](index=2&type=chunk) [About the Company](index=1&type=section&id=About%20TOP%20Ships%20Inc.) TOP Ships Inc. operates internationally as an owner and operator of modern, fuel-efficient "ECO" tanker vessels - TOP Ships Inc. is an international owner and operator of modern, fuel-efficient "ECO" tanker vessels[1](index=1&type=chunk)[3](index=3&type=chunk) [Forward-Looking Statements](index=1&type=section&id=Forward-Looking%20Statements) The press release includes forward-looking statements that are inherently subject to significant uncertainties and contingencies - The press release contains forward-looking statements, protected by the Private Securities Litigation Reform Act of 1995, which include plans, objectives, goals, strategies, future events, or performance[4](index=4&type=chunk)[5](index=5&type=chunk) - These statements are based on various assumptions, which are inherently subject to significant uncertainties and contingencies beyond the Company's control, meaning that actual results may differ from expectations, beliefs, or projections[5](index=5&type=chunk)[7](index=7&type=chunk) [Financial Statements](index=2&type=section&id=Financial%20Statements) The company's financial statements reveal significant growth in net income and total assets, despite a net loss attributable to common shareholders due to preferred dividends [Consolidated Statements of Comprehensive (Loss)/Income](index=2&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20(LOSS)%2FINCOME) TOP Ships Inc. reported a significant increase in net income to $18.9 million in 2022 from $8.6 million in 2021, driven by higher revenues and improved operating income. However, substantial preferred share dividends and deemed dividend equivalents resulted in a net loss attributable to common shareholders Consolidated Statements of Comprehensive (Loss)/Income (in thousands of U.S. Dollars) | Metric | 2020 | 2021 | 2022 | YoY Change (2021-2022) | | :------------------------------------------------ | :------- | :------- | :------- | :--------------------- | | Revenues | 60,222 | 56,367 | 80,656 | +43.1% | | Operating (loss)/income | (1,795) | 14,801 | 32,619 | +120.4% | | Net (loss)/income and comprehensive (loss)/income | (22,818) | 8,616 | 18,948 | +120.0% | | Net (loss) / income attributable to common shareholders | (28,780) | 5,396 | (9,187) | -270.3% | | (Loss) / Earnings per common share, basic and diluted | (24.48) | 2.71 | (3.03) | -211.8% | - The increase in net income was primarily driven by a **43.1% increase in revenues** and a **120.4% increase in operating income** year-over-year[8](index=8&type=chunk) - Despite the strong net income, significant preferred shares dividend (**$12.39 million**) and deemed dividend equivalents (**$14.40 million**) led to a net loss attributable to common shareholders of **$9,187 thousand** in 2022[8](index=8&type=chunk)[9](index=9&type=chunk) [Consolidated Condensed Balance Sheets](index=3&type=section&id=UNAUDITED%20CONSOLIDATED%20CONDENSED%20BALANCE%20SHEETS) The Company's total assets increased significantly by 41.9% to $469.3 million in 2022, primarily due to a substantial increase in vessels, net. This asset growth was supported by increases in debt and stockholders' equity Consolidated Condensed Balance Sheets (in thousands of U.S. Dollars) | Metric | December 31, 2021 | December 31, 2022 | Change | | :------------------------------------------ | :------------------ | :------------------ | :------- | | Cash and cash equivalents | 2,370 | 20,544 | +766.8% | | Vessels, net | 156,585 | 389,059 | +148.5% | | Total Assets | 330,788 | 469,337 | +41.9% | | Debt | 150,570 | 233,714 | +55.2% | | Total Liabilities | 221,424 | 272,314 | +23.0% | | Stockholders' Equity | 93,222 | 110,672 | +18.7% | - The substantial increase in 'Vessels, net' by **148.5%** from **$156,585 thousand** to **$389,059 thousand** was the primary driver for the overall asset growth[10](index=10&type=chunk) - Cash and cash equivalents saw a significant increase of **766.8%** from **$2,370 thousand** in 2021 to **$20,544 thousand** in 2022[10](index=10&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-US%20GAAP%20Measures) The company utilizes non-GAAP financial measures like EBITDA to provide additional insights into operational performance, complementing U.S. GAAP metrics [Definition and Purpose of EBITDA](index=3&type=section&id=Definition%20and%20Purpose%20of%20EBITDA) EBITDA is a non-U.S. GAAP financial measure defined as earnings before interest, taxes, depreciation, and amortization. It is used by management and investors to assess financial and operating performance by enhancing comparability across periods and companies, but it is not a substitute for U.S. GAAP measures - EBITDA is defined as earnings before interest, taxes, depreciation, and amortization, and is considered a Non-US GAAP measure[11](index=11&type=chunk) - Management and external users utilize EBITDA to assess financial and operating performance, as it increases comparability by excluding disparate effects of financing methods, capital structure, and historical cost basis[12](index=12&type=chunk)[13](index=13&type=chunk) - EBITDA is not a measure of financial performance under U.S. GAAP and should not be considered an alternative to net income, operating income, or cash flow from operating activities[14](index=14&type=chunk) [Reconciliation of Net (Loss)/Income to EBITDA](index=4&type=section&id=Reconciliation%20of%20Net%20(Loss)%20%2F%20Income%20to%20EBITDA) The reconciliation shows that EBITDA for 2022 was $46.6 million, a 100% increase from 2021, primarily driven by the higher net income and the add-back of vessel depreciation and interest and finance costs Reconciliation of Net (Loss)/Income to EBITDA (in thousands of U.S. Dollars) | Metric | 2020 | 2021 | 2022 | YoY Change (2021-2022) | | :-------------------------- | :------- | :------- | :------- | :--------------------- | | Net (loss)/income | (22,818) | 8,616 | 18,948 | +120.0% | | Add: Vessel depreciation | 13,174 | 7,670 | 13,289 | +73.3% | | Add: Interest and finance costs | 20,956 | 6,998 | 14,365 | +105.3% | | Less: Interest income | (34) | - | (48) | N/A | | **EBITDA** | **11,278** | **23,284** | **46,554** | **+100.0%** | - EBITDA doubled year-over-year from **$23,284 thousand** in 2021 to **$46,554 thousand** in 2022, reflecting strong operational performance before non-operating and non-cash items[15](index=15&type=chunk)

[FORM 6-K Filing Information](index=1&type=section&id=FORM%206-K) This section details the Form 6-K filing by TOP SHIPS INC. for September 2022, identifying it as a foreign private issuer [Filing Details](index=1&type=section&id=Filing%20Details) This document is a Form 6-K report filed by TOP SHIPS INC. for September 2022, indicating it is a foreign private issuer filing under Form 20-F * TOP SHIPS INC. filed a **Form 6-K** report for **September 2022**[1](index=1&type=chunk) * The registrant is a foreign private issuer, filing annual reports under **Form 20-F**[1](index=1&type=chunk) [Information Contained in Report](index=2&type=section&id=INFORMATION%20CONTAINED%20IN%20THIS%20FORM%206-K%20REPORT) This section outlines the report's content, including financial statements and management's discussion, which are incorporated by reference into the Company's Form F-3 registration statement [Report Content and Incorporation by Reference](index=2&type=section&id=Report%20Content%20and%20Incorporation%20by%20Reference) This Form 6-K report includes Management's Discussion and Analysis of Financial Condition and Results of Operations, along with unaudited interim condensed consolidated financial statements for the six months ended June 30, 2022. This information is incorporated by reference into the Company's Form F-3 registration statement * The report includes **Management's Discussion and Analysis of Financial Condition and Results of Operations** and unaudited interim condensed consolidated financial statements for the **six months ended June 30, 2022**[6](index=6&type=chunk) * The information is incorporated by reference into the Company's registration statement on **Form F-3** (File No. **333-267170**), effective **September 13, 2022**[7](index=7&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=2&type=section&id=CAUTIONARY%20STATEMENT%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section provides a cautionary statement on forward-looking information, highlighting various risk factors that could cause actual results to differ materially [Forward-Looking Statements and Risk Factors](index=2&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section provides a cautionary statement regarding forward-looking statements, emphasizing that actual results may differ materially due to various factors. Key risks include maintaining customer relationships, future operating results, vessel acquisitions, financial condition, industry trends, vessel aging, creditworthiness of charterers, regulatory changes, and geopolitical events * The report contains **forward-looking statements** protected by the **Private Securities Litigation Reform Act of 1995 (PSLRA)**[9](index=9&type=chunk)[10](index=10&type=chunk) * Important factors that could cause actual results to differ materially include: ability to maintain customer relationships, future operating and financial results, vessel acquisitions, financial condition and liquidity, oil and chemical tanker industry trends, vessel aging and costs, creditworthiness of charterers, governmental regulations, general economic and political conditions, and global events like the **war in Ukraine**[12](index=12&type=chunk)[14](index=14&type=chunk) * The Company undertakes no obligation to update **forward-looking statements** beyond the report date, except as required by law[13](index=13&type=chunk) [Signatures](index=4&type=section&id=SIGNATURES) This section confirms the official signing of the report by TOP SHIPS INC.'s Chief Executive Officer on September 27, 2022 [Report Authorization](index=4&type=section&id=Report%20Authorization) The report was duly signed on behalf of TOP SHIPS INC. by Evangelos J. Pistiolis, Chief Executive Officer, on September 27, 2022 * The report was signed by **Evangelos J. Pistiolis**, **Chief Executive Officer** of **TOP SHIPS INC.**, on **September 27, 2022**[15](index=15&type=chunk) [Management's Discussion and Analysis](index=5&type=section&id=MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS%20FOR%20THE%20SIX%20MONTHS%20ENDED%20JUNE%2030,%202021%20AND%202022) This section provides an in-depth analysis of the Company's financial condition and operating results for the six months ended June 30, 2021 and 2022 [Overview](index=5&type=section&id=Overview) TOP SHIPS INC. operates a fleet of modern eco tanker vessels for crude oil, petroleum products, and chemicals, with a strategic focus on accretive fleet expansion * **TOP SHIPS INC.** is an international owner and operator of modern, fuel-efficient eco tanker vessels for crude oil, petroleum products, and bulk liquid chemicals[18](index=18&type=chunk) * As of **June 30, 2022**, the fleet included **one 50,000 dwt product/chemical tanker**, **five 159,000 dwt Suezmax tankers**, **two 300,000 dwt VLCC tankers**, and **50% interests** in **two 50,000 dwt product/chemical tankers**[18](index=18&type=chunk) * The company intends to continue reviewing the market for potential accretive acquisition targets[19](index=19&type=chunk) [Non-US GAAP Measures](index=5&type=section&id=Non-US%20GAAP%20Measures) This section defines Adjusted EBITDA as a non-U.S. GAAP measure used to assess financial performance by excluding specific non-core items, emphasizing it is not a substitute for U.S. GAAP * **Adjusted EBITDA** is a **non-U.S. GAAP** measure defined as earnings before interest, taxes, depreciation and amortization, other operating loss, operating lease expenses, vessel impairments, gains on sale of vessels, and gains/losses on derivative financial instruments[21](index=21&type=chunk) * **Adjusted EBITDA** is used by management and investors to increase comparability of performance by excluding disparate effects of financing methods, capital structure, and historical cost basis[22](index=22&type=chunk) * This measure should not be considered in isolation from, as a substitute for, or superior to financial measures prepared in accordance with **U.S. GAAP**[23](index=23&type=chunk) Reconciliation of Net (Loss) / Income to Adjusted EBITDA (Six months ended June 30) | (Expressed in thousands of U.S. Dollars) | 2021 | 2022 | | :--------------------------------------- | :--- | :--- | | Net (Loss) / Income | 1,682 | 8,605 | | Add: Operating lease expenses | 5,378 | 5,378 | | Add: Vessel depreciation | 3,339 | 6,114 | | Add: Impairment on vessels | 1,160 | - | | Add: Interest and finance costs | 2,837 | 6,927 | | Add: Loss / (Gain) on financial instruments | (66) | - | | Less: Gain on sale of vessels | - | (78) | | **Adjusted EBITDA** | **14,330** | **26,946** | [Operating Results](index=6&type=section&id=A.%20Operating%20Results) The Company experienced significant growth in operating results for the six months ended June 30, 2022, driven by fleet expansion and increased revenues, despite higher finance costs Results of Operations (Six Month Period Ended June 30) | ($ in thousands) | 2021 | 2022 | Change ($) | Change (%) | | :------------------------------- | :--- | :--- | :--------- | :--------- | | Revenues | 25,310 | 38,846 | 13,536 | 53% | | Voyage expenses | 608 | 875 | 267 | 44% | | Operating lease expenses | 5,378 | 5,378 | - | 0% | | Other vessel operating expenses | 7,919 | 9,705 | 1,786 | 23% | | Vessel depreciation | 3,339 | 6,114 | 2,775 | 83% | | Management fees-related parties | 1,661 | 1,030 | (631) | -38% | | Dry-docking costs | 26 | - | (26) | -100% | | General and administrative expenses | 963 | 691 | (272) | -28% | | (Gain) on sale of vessels | - | (78) | (78) | 100% | | Impairment on vessels | 1,160 | - | (1,160) | 100% | | **Operating income** | **4,256** | **15,131** | **10,875** | **256%** | | Interest and finance costs | (2,837) | (6,927) | (4,090) | 144% | | Gain on financial instruments | 66 | - | (66) | -100% | | Equity gains in unconsolidated joint ventures | 197 | 401 | 204 | 104% | | Total other expenses, net | (2,574) | (6,526) | (3,952) | 154% | | **Net income** | **1,682** | **8,605** | **6,923** | **412%** | * Revenues, voyage expenses, depreciation, and other vessel operating expenses increased due to a **16%** increase in the average number of vessels employed (from **6.8** to **7.9**) and a **100%** increase in deadweight tonnage, driven by the delivery of **three large crude carriers**[29](index=29&type=chunk) * Management fees to related parties decreased by **$0.6 million** (**38%**) primarily due to a decrease in sale & purchase commissions, partially offset by an increase in management fees related to fleet expansion[30](index=30&type=chunk) * Interest and finance costs increased by **$4.1 million** (**144%**) mainly due to accelerated amortization of deferred financing fees, a decrease in capitalized interest (**newbuilding program completion**), and an increase in weighted average debt outstanding[31](index=31&type=chunk)[34](index=34&type=chunk) * General and administrative expenses decreased by **$0.3 million** (**28%**) due to lower legal and consulting fees, directors and officers insurance, and auditor fees[31](index=31&type=chunk) [Recent Developments](index=7&type=section&id=Recent%20Developments) Post-period events include the redemption of Series F Shares, exercise of pre-funded warrants, and a 1-for-20 reverse stock split, retroactively adjusted * On **July 5, 2022**, the Company redeemed **865,558 Series F Shares**, paying **$10.4 million** to **Africanus Inc.**[32](index=32&type=chunk) * In **July and September 2022**, a total of **9,603,000 pre-funded warrants** were exercised for **480,150 common shares**[32](index=32&type=chunk) * On **September 23, 2022**, a **1-for-20 reverse stock split** of common stock was effected, with all related share and EPS amounts retroactively adjusted[33](index=33&type=chunk) [Liquidity and Capital Resources](index=8&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The Company's liquidity is primarily supported by equity offerings, operating cash flow, and borrowings, with management expecting to finance operations for the next 12 months despite a working capital deficit * Principal funding sources include equity offerings, operating cash flow, and long/short-term borrowings, primarily used for fleet growth and maintenance[35](index=35&type=chunk) * As of **June 30, 2022**, total indebtedness was **$244.5 million**, and **cash and cash equivalents** were **$18.3 million** (including **$4.0 million** restricted cash)[37](index=37&type=chunk) * The Company had a **working capital deficit** of **$18.4 million** as of **June 30, 2022**[38](index=38&type=chunk) * Management expects to finance the **working capital deficit** and obligations for the next **12 months** with cash on hand and operational cash flow[40](index=40&type=chunk) Cash Flow Information (Six months ended June 30) | Cash Flow Category | 2021 ($ thousands) | 2022 ($ thousands) | | :--------------------------------- | :----------------- | :----------------- | | Net Cash provided by Operating Activities | 9,347 | 13,947 | | Net Cash used in Investing Activities | (90,830) | (143,050) | | Net Cash provided by Financing Activities | 70,548 | 141,000 | | Net (decrease)/increase in cash and cash equivalents and restricted cash | (10,935) | 11,897 | | Cash and cash equivalents and restricted cash at end of the period | 12,393 | 18,267 | [Index to Condensed Consolidated Financial Statements](index=9&type=section&id=INDEX%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides an index to the unaudited interim condensed consolidated financial statements, including balance sheets, income statements, equity statements, cash flows, and notes [Financial Statement Listing](index=9&type=section&id=Financial%20Statement%20Listing) This section provides an index to the unaudited interim condensed consolidated financial statements, including the Balance Sheets, Statements of Comprehensive Income/(Loss), Statements of Mezzanine and Stockholders' Equity, Statements of Cash Flows, and accompanying Notes * The index lists the **Unaudited Interim Condensed Consolidated Balance Sheets**, **Statements of Comprehensive Income/(Loss)**, **Statements of Mezzanine and Stockholders' Equity**, **Statements of Cash Flows**, and **Notes to Unaudited Interim Condensed Consolidated Financial Statements**[48](index=48&type=chunk) [Unaudited Interim Condensed Consolidated Financial Statements](index=10&type=section&id=UNAUDITED%20INTERIM%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents the Company's unaudited interim condensed consolidated financial statements, offering a snapshot of its financial position, performance, and cash flows [Unaudited Interim Condensed Consolidated Balance Sheets](index=10&type=section&id=UNAUDITED%20INTERIM%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheet shows a significant increase in total assets from $330.8 million at December 31, 2021, to $475.4 million at June 30, 2022, primarily driven by an increase in vessels, net. Total liabilities also increased from $221.4 million to $284.3 million, while total stockholders' equity decreased from $93.2 million to $88.6 million Key Balance Sheet Data (as of December 31, 2021 and June 30, 2022) | Category | December 31, 2021 ($ thousands) | June 30, 2022 ($ thousands) | | :------------------------ | :------------------------------ | :-------------------------- | | Total current assets | 75,334 | 16,557 | | Total fixed assets | 224,977 | 429,822 | | Total non-current assets | 30,477 | 29,027 | | **Total assets** | **330,788** | **475,406** | | Total current liabilities | 107,088 | 34,946 | | Total non-current liabilities | 114,336 | 249,326 | | **Total liabilities** | **221,424** | **284,272** | | Total mezzanine equity | 16,142 | 102,542 | | **Total stockholders' equity** | **93,222** | **88,592** | * **Vessels, net** increased significantly from **$156.6 million** to **$396.2 million**, reflecting new vessel deliveries[49](index=49&type=chunk) * **Cash and cash equivalents** increased from **$2.4 million** to **$14.3 million**[49](index=49&type=chunk) [Unaudited Interim Condensed Consolidated Statements of Comprehensive Income/(Loss)](index=11&type=section&id=UNAUDITED%20INTERIM%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME/(LOSS)) The Company reported a substantial increase in total revenues to $38.8 million for the six months ended June 30, 2022, up from $25.3 million in the prior year. Net income also significantly improved to $8.6 million from $1.7 million. However, due to deemed dividend equivalents on Series F Shares and preferred share dividends, net income attributable to common shareholders resulted in a loss of $13.1 million, leading to a basic and diluted loss per common share of $6.15 Key Comprehensive Income Data (Six Months Ended June 30) | Category | 2021 ($ thousands) | 2022 ($ thousands) | | :---------------------------------------------- | :----------------- | :----------------- | | Total revenues | 25,310 | 38,846 | | Operating income | 4,256 | 15,131 | | Net income and comprehensive income | 1,682 | 8,605 | | Less: Deemed dividend equivalents on Series F Shares related to redemption value | - | (14,400) | | Less: Dividends of preferred shares | (915) | (7,322) | | Net income/(loss) and comprehensive income/(loss) attributable to common shareholders | 767 | (13,117) | | Earnings/(Loss) per common share, basic and diluted | 0.39 | (6.15) | | Weighted average common shares outstanding, basic and diluted | 1,991,598 | 2,132,179 | * **Total revenues** increased by **53.5%** year-over-year, from **$25.3 million** in **2021** to **$38.8 million** in **2022**[50](index=50&type=chunk) * **Operating income** increased by **255.5%** year-over-year, from **$4.3 million** in **2021** to **$15.1 million** in **2022**[50](index=50&type=chunk) * **Net income attributable to common shareholders** turned into a **loss of $13.1 million** in **2022**, primarily due to **$14.4 million** in **deemed dividend equivalents on Series F Shares** and **$7.3 million** in preferred share dividends[50](index=50&type=chunk) [Unaudited Interim Condensed Consolidated Statements of Mezzanine and Stockholders' Equity](index=12&type=section&id=UNAUDITED%20INTERIM%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20MEZZANINE%20AND%20STOCKHOLDERS'%20EQUITY) The statement shows changes in mezzanine and stockholders' equity, with total mezzanine equity increasing significantly from $16.1 million at December 31, 2021, to $102.5 million at June 30, 2022, mainly due to the issuance of Series F Shares. Total stockholders' equity decreased from $93.2 million to $88.6 million, impacted by net income, equity offerings, and preferred share dividends * **Total mezzanine equity** increased from **$16.1 million** at **December 31, 2021**, to **$102.5 million** at **June 30, 2022**, driven by the issuance of **7,200,000 Series F Shares**[51](index=51&type=chunk) * **Total stockholders' equity** decreased from **$93.2 million** to **$88.6 million**, reflecting **net income**, issuance of common stock and **pre-funded warrants**, and dividends to preferred shares[51](index=51&type=chunk) * **Deemed dividend equivalents on Series F Shares** related to redemption value amounted to **$14.4 million** for the **six months ended June 30, 2022**[51](index=51&type=chunk) [Unaudited Interim Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=UNAUDITED%20INTERIM%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash provided by operating activities increased to $13.9 million for the six months ended June 30, 2022, from $9.3 million in the prior year. Investing activities used $143.1 million, primarily for vessel construction advances, partially offset by vessel sales proceeds. Financing activities provided $141.0 million, mainly from long-term debt proceeds and Series F preferred stock issuance, leading to a net increase in cash and cash equivalents and restricted cash of $11.9 million Key Cash Flow Data (Six months ended June 30) | Cash Flow Category | 2021 ($ thousands) | 2022 ($ thousands) | | :----------------------------------------------- | :----------------- | :----------------- | | Net Cash provided by Operating Activities | 9,347 | 13,947 | | Net Cash used in Investing Activities | (90,830) | (143,050) | | Net Cash provided by Financing Activities | 70,548 | 141,000 | | Net (decrease)/increase in cash and cash equivalents and restricted cash | (10,935) | 11,897 | | Cash and cash equivalents and restricted cash at end of the period | 12,393 | 18,267 | * Cash used in investing activities increased from **$90.8 million** in **2021** to **$143.1 million** in **2022**, primarily due to **$216.6 million** in advances for vessels under construction, partially offset by **$72.1 million** from vessel sales[43](index=43&type=chunk)[52](index=52&type=chunk) * Cash provided by financing activities increased from **$70.5 million** in **2021** to **$141.0 million** in **2022**, driven by **$156.2 million** from **long-term debt** and **$47.6 million** from **Series F preferred stock issuance**[44](index=44&type=chunk)[52](index=52&type=chunk) [Notes to Unaudited Interim Condensed Consolidated Financial Statements](index=14&type=section&id=NOTES%20TO%20UNAUDITED%20INTERIM%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed notes explaining the basis of presentation, significant accounting policies, going concern assessment, and specifics of financial statement line items [1. Basis of Presentation and General Information](index=14&type=section&id=1.%20Basis%20of%20Presentation%20and%20General%20Information) This note outlines the Company's business, confirms U.S. GAAP compliance for interim statements, details a retroactive stock split, and addresses the Russia-Ukraine war's potential impact * **TOP SHIPS INC.** is an international provider of worldwide oil, petroleum products, and bulk liquid chemicals transportation services[54](index=54&type=chunk) * The financial statements are prepared in accordance with **U.S. GAAP** for interim financial information and should be read in conjunction with the Company's **Annual Report on Form 20-F** for **2021**[58](index=58&type=chunk) * A **1-for-20 reverse stock split** of common stock was effected on **September 23, 2022**, with all common share and EPS amounts retroactively adjusted[62](index=62&type=chunk) * The Company has not identified any apparent consequences on its business from the **Russia-Ukraine war** and related sanctions to date, but acknowledges potential adverse effects in the future[61](index=61&type=chunk) [2. Significant Accounting Policies](index=15&type=section&id=2.%20Significant%20Accounting%20Policies) This note confirms no changes to significant accounting policies for the period and the adoption of ASU 2020-06 with no material effect on interim financial statements * No changes to significant accounting policies occurred in the **six months ended June 30, 2022**[63](index=63&type=chunk) * The Company adopted **ASU 2020-06** on **January 1, 2022**, using the modified retrospective approach, with no effect on the interim financial statements[64](index=64&type=chunk) [3. Going Concern](index=15&type=section&id=3.%20Going%20Concern) Despite a working capital deficit, management believes the Company can finance its obligations for the next 12 months through cash on hand and operational cash flow, supporting a going concern basis * At **June 30, 2022**, the Company had a **working capital deficit** of **$18.4 million**[65](index=65&type=chunk) * For the **six months ended June 30, 2022**, the Company realized a **net income** of **$8.6 million** and generated **cash flow from operations** of **$13.9 million**[65](index=65&type=chunk) * Management believes it has the ability to continue as a **going concern** and finance its obligations over the next **twelve months** using cash on hand and operational cash flow[66](index=66&type=chunk) [4(a). Vessels, net](index=16&type=section&id=4(a).%20Vessels,%20net) The net book value of vessels significantly increased due to new vessel deliveries, with two vessels previously held for sale being sold for a gain Vessels, net (Balances) | | Vessel Cost ($ thousands) | Accumulated Depreciation ($ thousands) | Net Book Value ($ thousands) | | :--------------------------------------- | :------------------------ | :----------------------------- | :--------------------------- | | Balance, December 31, 2021 | 163,501 | (6,916) | 156,585 | | — Transferred from advances for vessels under construction | 245,763 | - | 245,763 | | — Depreciation | - | (6,114) | (6,114) | | **Balance, June 30, 2022** | **409,264** | **(13,030)** | **396,234** | * **Two vessels** (M/T's Eco Los Angeles and Eco City of Angels) held for sale were sold in **February and March 2022**, resulting in a **gain** of **$78 thousand**[68](index=68&type=chunk) * Vessel titles are transferred to financing banks or mortgaged as security under loan facilities[69](index=69&type=chunk) [4(b). Advances for vessels acquisitions / under construction](index=16&type=section&id=4(b).%20Advances%20for%20vessels%20acquisitions%20/%20under%20construction) Advances for vessels acquisitions/under construction decreased from $30.6 million at December 31, 2021, to zero at June 30, 2022. This change reflects $213.4 million in new advances paid and $1.8 million in capitalized expenses, offset by $245.8 million transferred to 'Vessels, net' upon the delivery of M/T Julius Caesar, M/T Legio X Equestris, and M/T Eco Oceano Ca in Q1 2022 Advances for vessels acquisitions / under construction (Balances) | | Advances for vessels acquisitions/under construction ($ thousands) | | :--------------------------------------- | :------------------------------------------------- | | Balance, December 31, 2021 | 30,579 | | — Advances paid | 213,429 | | — Capitalized expenses | 1,755 | | — Transferred to Vessels, net | (245,763) | | **Balance, June 30, 2022** | **-** | * The Company took delivery of **M/T Julius Caesar**, **M/T Legio X Equestris**, and **M/T Eco Oceano Ca** in **January and March 2022**, leading to the transfer of related advances to '**Vessels, net**'[70](index=70&type=chunk) [5. Transactions with Related Parties](index=16&type=section&id=5.%20Transactions%20with%20Related%20Parties) The Company engages in various transactions with related parties, including Central Mare for executive officers and administrative employees, Central Shipping Inc. (CSI) for fleet management services, Family Trading Inc. for Series E Share dividends, Africanus Inc. for Series F Share issuance and dividends, and Central Tankers Chartering Inc. (CTC) for time charters. These transactions involve management fees, commissions, dividends, and a short-term bridge loan, with some agreements amended to reflect current market conditions and fleet changes * **Central Mare** provides executive officers and administrative employees, with expenses of **$163 thousand** in **2021** and **$164 thousand** in **2022**[71](index=71&type=chunk) * **CSI** provides fleet management services, with total fees and expenses of **$3.2 million** in **2021** and **$3.2 million** in **2022**, including management fees, supervision services, accounting costs, and commissions[72](index=72&type=chunk) * Dividends declared to **Family Trading Inc.** for **Series E Shares** were **$1,015 thousand** for the **six months ended June 30, 2022**[73](index=73&type=chunk) * Dividends declared to **Africanus Inc.** for **Series F Shares** were **$6,307 thousand** for the period **January 17, 2022**, through **June 30, 2022**[73](index=73&type=chunk) * A time charter agreement with **CTC** for **M/T Eco Oceano Ca** was amended in **February 2022**, extending the firm period to **15 years** and reducing the daily rate from **$32,450** to **$24,500**, generating **$2.8 million** in revenue for the **six months ended June 30, 2022**[73](index=73&type=chunk) * The **Central Mare Bridge Loan**, an unsecured credit facility for up to **$20 million**, was entered into on **January 5, 2022**, drawn down by **$9 million**, and subsequently prepaid and terminated on **March 4, 2022**[73](index=73&type=chunk) [6. Leases](index=18&type=section&id=6.%20Leases) This note details future minimum operating lease payments for chartered-in vessels and future minimum time-charter receipts as a lessor, outlining the Company's lease obligations and revenues Future Minimum Operating Lease Payments (after June 30, 2022) | Year ending December 31, | Bareboat charter lease payments ($ thousands) | | :----------------------- | :-------------------------------------------- | | 2022 (remainder) | 6,021 | | 2023 | 10,220 | | 2024 | 10,038 | | 2025 | 6,777 | | **Total** | **33,056** | | Less imputed interest | (4,201) | | **Total Lease Liability**| **28,855** | | Presented as: Short-term lease liability | 9,213 | | Presented as: Long-term lease liability | 19,642 | * The average remaining lease term for chartered-in contracts greater than **12 months** is **41.2 months**[75](index=75&type=chunk) * Bareboat chartered-in vessels generated **$8.8 million** in revenue for the **six months ended June 30, 2022**[75](index=75&type=chunk) Future Minimum Time-Charter Receipts (as of June 30, 2022) | Year ending December 31, | Time Charter receipts ($ thousands) | | :----------------------- | :---------------------------------- | | 2022 (remaining) | 41,814 | | 2023 | 81,772 | | 2024 | 44,525 | | 2025 | 11,879 | | 2026 to 2037 | 98,545 | | **Total** | **278,535** | [7. Debt](index=19&type=section&id=7.%20Debt) Total long-term debt significantly increased due to new facilities for vessel acquisitions, with the Company remaining in compliance with all debt covenants Total Long Term Debt Net of Deferred Finance Fees | Category | December 31, 2021 ($ thousands) | June 30, 2022 ($ thousands) | | :-------------------------------------- | :------------------------------ | :-------------------------- | | Total long term debt | 98,650 | 248,432 | | Less: Deferred finance fees | (1,282) | (3,974) | | **Total long term debt net of deferred finance fees** | **97,368** | **244,458** | | Debt related to Vessels held for sale net of deferred finance fees | 53,202 | - | | **Total Debt net of deferred finance fees** | **150,570** | **244,458** | * The Company was in **compliance with all debt covenants** as of **June 30, 2022**[81](index=81&type=chunk) * A **$48.2 million 2nd AVIC Sale and Leaseback Facility** was entered into on **March 2, 2022**, for **M/T Eco Oceano Ca**, accounted for as a financing transaction[82](index=82&type=chunk)[85](index=85&type=chunk) * The **2nd AVIC Facility** includes customary covenants, cross-default provisions, and performance requirements such as an asset cover ratio of **120%** and minimum free liquidity of **$500 per vessel**[86](index=86&type=chunk) * The **Central Mare Bridge Loan**, an unsecured credit facility of up to **$20 million**, was prepaid and terminated on **March 4, 2022**[87](index=87&type=chunk) [8. Commitments and Contingencies](index=20&type=section&id=8.%20Commitments%20and%20Contingencies) The Company is subject to routine claims and suits in its shipping business but is not involved in any material litigation or aware of significant environmental liabilities * The Company is subject to various claims, suits, and complaints, including those involving government regulations and product liability, arising in the ordinary course of business[88](index=88&type=chunk) * The Company is not a party to any material litigation where claims or counterclaims have been filed against it, other than routine legal proceedings[89](index=89&type=chunk) * Management is not aware of any environmental liabilities that should be disclosed or for which a provision should be established[90](index=90&type=chunk) [9. Common Stock, Additional Paid-In Capital and Dividends](index=21&type=section&id=9.%20Common%20Stock,%20Additional%20Paid-In%20Capital%20and%20Dividends) This note details the issuance of Series F Preferred Shares, ATM offerings, and a Registered Direct Offering, impacting common stock and paid-in capital, with no common stock dividends paid * **7,200,000 Series F Preferred Shares** were issued to **Africanus Inc.** for **$47.6 million** in shipbuilding costs and **$24.4 million** in settlement of Due to related parties[93](index=93&type=chunk) * **Series F Preferred Shares** holders are entitled to **ten common share votes per share**, semi-annual cash dividends at **13.5% per year**, and a one-time **4.0% cash dividend** upon issuance[93](index=93&type=chunk) * The Company entered into an **At-The-Market (ATM) offering** agreement with **Maxim Group LLC**, selling common stock and receiving **$2.0 million** in net proceeds as of **June 30, 2022**[94](index=94&type=chunk) * A **June 2022 Registered Direct Offering** resulted in the sale of **235,000 common shares** and the issuance of **9,603,000 pre-funded warrants** and **14,303,000 private placement warrants**[95](index=95&type=chunk) * **Pre-Funded Warrants** are equity-classified, immediately exercisable for a negligible cash consideration, and were included in the weighted average common shares outstanding for EPS calculation[100](index=100&type=chunk)[103](index=103&type=chunk) * **June 2022 Private Placement Warrants** were equity-classified and initially measured at fair value using the **Black-Scholes methodology** (**Level 3 fair value hierarchy**)[97](index=97&type=chunk)[98](index=98&type=chunk) * No dividends were paid to common stock holders in the **six months ended June 30, 2021 and 2022**[101](index=101&type=chunk) [10. Earnings / (Loss) Per Common Share](index=22&type=section&id=10.%20Earnings%20/%20(Loss)%20Per%20Common%20Share) For the six months ended June 30, 2022, the Company reported a basic and diluted loss per common share of $6.15, compared to earnings of $0.39 in the prior year. This shift was primarily due to $14.4 million in deemed dividend equivalents on Series F Shares and $7.3 million in preferred share dividends, which resulted in a net loss attributable to common shareholders of $13.1 million. Certain securities, including June 2022 Private Placement Warrants and Series E Shares, were excluded from diluted EPS calculation as their inclusion would have been antidilutive Earnings / (Loss) Per Common Share (Six months ended June 30) | Category | 2021 ($ thousands) | 2022 ($ thousands) | | :---------------------------------------------- | :----------------- | :----------------- | | Net Income | 1,682 | 8,605 | | Less: Dividends of Preferred shares | (915) | (7,322) | | Less: Deemed dividend equivalents on Series F Shares related to redemption value | - | (14,400) | | **Gain / (loss) attributable to common shareholders** | **767** | **(13,117)** | | Weighted average common shares outstanding, basic | 1,991,598 | 2,132,179 | | **Earnings / (loss) per share, basic and diluted** | **0.39** | **(6.15)** | * The weighted average number of common shares outstanding for basic and diluted EPS in **2022** includes **Pre-Funded Warrants** due to their immediate exercisability for negligible cash[103](index=103&type=chunk) Potentially Dilutive Securities Excluded from EPS Calculation (Six months ended June 30) | Security | 2021 | 2022 | | :-------------------------------------- | :--- | :--- | | June 2022 Private Placement Warrants | - | 282,740 | | Series E Shares | 599,148 | 974,782 | | **Potentially dilutive securities** | **599,148** | **1,257,522** | [11. Fair value of Financial Instruments and derivative instruments](index=23&type=section&id=11.%20Fair%20value%20of%20Financial%20Instruments%20and%20derivative%20instruments) This note describes the fair value classification of financial instruments, interest rate risk on floating-rate debt, and credit risk management practices * Principal financial assets include cash, restricted cash, deposit assets, and receivables; principal financial liabilities include long-term loans, accounts payable, and amounts due to related parties[107](index=107&type=chunk) * **Cash and cash equivalents** and restricted cash are considered **Level 1** items in the fair value hierarchy[108](index=108&type=chunk) * The fair value of variable interest **long-term debt** approximates recorded values, while fixed interest debt is estimated using prevailing market rates, classifying it as **Level 2**[109](index=109&type=chunk) * The Company is subject to interest rate risk on its floating-rate debt (**LIBOR** plus margin) but has not entered into rate swap agreements as of **June 30, 2022**[113](index=113&type=chunk) * Credit risk is managed by placing temporary cash investments with high-credit-qualified financial institutions[113](index=113&type=chunk) [12. Mezzanine Equity](index=23&type=section&id=12.%20Mezzanine%20Equity) This note details the Company's mezzanine equity, comprising Series E and Series F Shares. No Series E Shares were issued or redeemed during the period, with 13,452 shares outstanding. 7,200,000 Series F Preferred Shares were issued to Africanus Inc., classified as mezzanine equity due to their equity-like nature. The carrying value of Series F Shares was adjusted to their maximum redemption amount, resulting in a $14.4 million deemed dividend * As of **June 30, 2022**, **13,452 Series E Shares** were outstanding, convertible into **1,121,000 common shares** at a conversion price of **$12.00**[111](index=111&type=chunk) * The Company declared **$1,015 thousand** in dividends to **Series E Shares** holders for the **six months ended June 30, 2022**[111](index=111&type=chunk) * **7,200,000 Series F Preferred Shares** were issued to **Africanus Inc.**, classified as **mezzanine equity**, not subject to holder redemption or conversion[112](index=112&type=chunk) * The carrying value of **Series F Shares** was adjusted to the maximum redemption amount (**$86.4 million**), resulting in a **$14.4 million deemed dividend**[112](index=112&type=chunk) [13. Subsequent Events](index=24&type=section&id=13.%20Subsequent%20Events) Subsequent to June 30, 2022, the Company redeemed 865,558 Series F Shares for $10.4 million, including a $1.7 million redemption premium classified as a deemed dividend. Additionally, 9,603,000 pre-funded warrants were exercised in July and September 2022, resulting in the issuance of 480,150 common shares * On **July 5, 2022**, the Company redeemed **865,558 Series F Shares**, paying **$10.4 million** to **Africanus Inc.**, which included a **$1.7 million redemption premium** classified as a **deemed dividend**[114](index=114&type=chunk) * In **July and September 2022**, **9,603,000 pre-funded warrants** were exercised for a total of **480,150 common shares**[115](index=115&type=chunk)

Financial Performance - Total revenues for 2021 were $56,367,000, a decrease of 6% compared to $60,222,000 in 2020[309] - Time charter equivalent revenues for 2021 were $55,050, down from $58,228 in 2020[309] - Total charter revenues decreased by $3.9 million, or 6%, from $60.2 million in 2020 to $56.4 million in 2021[324] - Net income improved by $31.4 million, from a net loss of $22.8 million in 2020 to a net income of $8.6 million in 2021[324] Fleet and Operations - Average daily time charter equivalent (TCE) increased to $22,020 in 2021, up 27% from $17,314 in 2020[307] - Fleet utilization for 2021 was 96.93%, down from 97.68% in 2020[307] - Total operating days for the fleet in 2021 were 2,500, a decrease from 3,363 in 2020[309] - The average number of vessels employed decreased from 9.5 in 2020 to 7.1 in 2021, impacting revenues and expenses[325] - Total number of vessels at the end of 2021 was 7, consistent with 2020[307] Expenses - Vessel operating expenses for 2021 were $6,070 per day, slightly up from $6,037 in 2020[307] - General and administrative expenses increased to $752,000 in 2021 from $555,000 in 2020[307] - Operating lease expenses increased significantly by $10.1 million, or 1,336%, due to new operating leases starting in late 2020[326] - Vessel operating expenses decreased by $5.3 million, or 25%, from $21.0 million in 2020 to $15.7 million in 2021[324] Debt and Financing - As of December 31, 2021, total indebtedness was $153.3 million, with cash commitments for fleet acquisition totaling $213.4 million[341] - Net cash provided by financing activities for the period ended December 31, 2021 was $43.6 million, consisting of $74.8 million from long-term debt proceeds, offset by $28.3 million in principal payments and $1.8 million in dividends[351] - Total indebtedness as of December 31, 2021 was $153.3 million, with $81.9 million related to Cargill and AVIC sale and leaseback facilities[547] - The company entered into a new credit facility with ABN Amro for $36.8 million on March 18, 2021, with a repayment structure of 24 quarterly installments[355] Cash Flow - Cash and cash equivalents decreased from $23.3 million in 2020 to $6.4 million in 2021[345] - Net cash provided by operating activities increased by $10.1 million, or 168%, to $16.1 million in 2021[346] Impairments and Charges - Vessels impairment charges increased by $1.2 million, or 100%, due to a write-down of a vessel held for sale[331] - The company recognized an impairment charge of $1.2 million for the M/T Nord Valiant, which was sold for $26.4 million[373] Compliance and Risk - The company was in compliance with all covenants related to bank loans and sale and leaseback agreements as of December 31, 2021[360] - A hypothetical one percentage point increase in the three-month U.S. dollar LIBOR would increase interest rate expense for 2022 by approximately $0.7 million[548] - Approximately 96.5% of the company's expenses were in U.S. dollars, with 3.1% in Euros and 0.4% in other currencies during 2021[549] - A 5% decrease in the exchange rate from $1.1419 to $1.0848 would result in an expense saving of approximately $0.09 million[551] - An inverse 5% change in the exchange rate would lead to an equivalent additional expense of $0.09 million[551] Future Outlook - Future performance is uncertain and depends on charter rates at the expiration of current vessel employments[305]