TOP Ships Inc. Annual Report 2022

Plain-text annual report

2022 Annual Report in form 20F UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 20-F ☐REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ OR ☐SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report ____________ Commission file number 001-37889 TOP SHIPS INC.(Exact name of Registrant as specified in its charter) (Translation of Registrant’s name into English) Republic of the Marshall Islands(Jurisdiction of incorporation or organization) 1 Vasilisis Sofias and Megalou Alexandrou Str, 15124 Maroussi, Greece(Address of principal executive offices) Alexandros Tsirikos, (Tel) +30 210 812 8107, info@topships.org1 Vasilisis Sofias and Megalou Alexandrou Str, 15124 Maroussi, Greece(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act. Title of each class Trading Symbol(s) Name of each exchangeon which registeredCommon Stock, par value $0.01 per share TOPS Nasdaq Capital MarketPreferred Stock Purchase Rights Nasdaq Capital Market Securities registered or to be registered pursuant to Section 12(g) of the Act. NONE(Title of class) Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. NONE(Title of class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report. As of December 31, 2022, 10,294,906 shares of common stock, par value $0.01 per share, 100,000 Series D Preferred Shares, par value $0.01 per share, 13,452 Series E Preferred Shares, parvalue $0.01 per share, and 5,850,748 Series F Preferred Shares, par value $0.01 per share, were outstanding. Indicate by check mark if the registrant is well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes☐No☒ If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes☐No☒ Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations underthose Sections. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒No☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Sec.232.405 ofthis chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒No☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “largeaccelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☐Accelerated filer ☐Non-accelerated filer ☒Emerging growth company ☐ If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extendedtransition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April5, 2012. Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reportingunder Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of anerror to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’sexecutive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: ☒U.S. GAAP☐International Financial Reporting Standards as issued by the International Accounting Standards Board☐Other If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: ☐Item 17☐Item 18 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐No☒ (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS) Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to thedistribution of securities under a plan confirmed by a court. Yes☐No☐TABLE OF CONTENTSPART I 4ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS4ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE4ITEM 3.KEY INFORMATION4ITEM 4.INFORMATION ON THE COMPANY28ITEM 4A.UNRESOLVED STAFF COMMENTS44ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS44ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES54ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS56ITEM 8.FINANCIAL INFORMATION.59ITEM 9.THE OFFER AND LISTING.59ITEM 10.ADDITIONAL INFORMATION59ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK76ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES77PART II 77ITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES77ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS77ITEM 15.CONTROLS AND PROCEDURES77ITEM 16.Reserved78ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT78ITEM 16B.CODE OF ETHICS79ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES79ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES79ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS79ITEM 16F.CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT79ITEM 16G.CORPORATE GOVERNANCE79ITEM 16H.MINE SAFETY DISCLOSURE80ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS80PART III 80ITEM 17.FINANCIAL STATEMENTS80ITEM 18.FINANCIAL STATEMENTS80ITEM 19.EXHIBITS802Table of ContentsCAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTSMatters discussed in this report may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995, or the PSLRA, provides safe harborprotections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statementsconcerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are statements other than statements of historicalfacts.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 annual report 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 futureevents and financial performance. When used in this annual report, statements that are predictive in nature, that depend upon or refer to future events or conditions, or that includewords such as “anticipate,” “believe,” “expect,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “continue,” “possible,” “likely,” “may,” “should,” and similar expressionsidentify forward-looking statements.The forward-looking statements in this annual report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including withoutlimitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptionswere reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyondour 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, couldcause actual results to differ materially from those discussed in the forward-looking statements include the following:●our ability to maintain or develop new and existing customer relationships with major refined product importers and exporters, major crude oil companies and majorcommodity 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, bunkercosts 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 may acquire or order in the future and the ability of shipyards to deliver vessels on atimely 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 acceptablerates or at all;●changes to governmental rules and regulations or actions taken by regulatory authorities and the expected costs thereof;●our ability to comply with additional costs and risks related to our environmental, social and governance policies;●potential liability from litigation and our vessel operations, including discharge of pollutants;●changes in general economic and business conditions;●general domestic and international political conditions, potential disruption of shipping routes due to accidents, political events, including “trade wars,” piracy or acts byterrorists;3Table of Contents●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 any environmental damage and vessel collisions;●the length and severity of epidemics and pandemics, including the global outbreak of the novel coronavirus (“COVID-19”) and its impact on the demand for commercialseaborne transportation and the condition of the financial markets; and●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.You should not place undue reliance on forward-looking statements contained in this annual report because they are statements about events that are not certain to occur asdescribed or at all. All forward-looking statements in this annual report are qualified in their entirety by the cautionary statements contained in this annual report.Any forward-looking statements contained herein are made only as of the date of this annual report, and except to the extent required by applicable law or regulation weundertake 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 theoccurrence 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 eachsuch 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-lookingstatement. PART IITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERSNot Applicable.ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLENot Applicable.ITEM 3.KEY INFORMATIONUnless the context otherwise requires, as used in this annual report, the terms “Company,” “we,” “us,” and “our” refer to TOP Ships Inc. and all of its subsidiaries, and “TOPShips Inc.” refers only to TOP Ships Inc. and not to its subsidiaries. We use the term deadweight ton, or dwt, in describing the size of vessels. Dwt, expressed in metric tons each ofwhich is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry. References to our “Fleet Manager” or “CSI” are to Central ShippingInc, a related party of ours, which performs the day-to-day management of our fleet. Throughout this annual report, the conversion from Euros, or €, to U.S. dollars, or $, is based on theU.S. dollar/Euro exchange rate of 0.9344 as of December 30, 2022, unless otherwise specified. References in this annual report to our common shares and earnings per share amounts, aswell as warrant shares eligible for purchase under our warrants, exercise price of said warrants and conversion prices of our Series E Shares in this report, are adjusted to reflect theconsolidation of our common shares through reverse stock splits, including the 20-to-1 reverse stock split which became effective as of August 22, 2019, the 25-to-1 reverse stock splitwhich became effective as of August 10, 2020 and the 20-to-1 reverse stock split which became effective as of September 23, 2022.A.ReservedB.Capitalization and IndebtednessNot Applicable.C.Reasons for the Offer and Use of ProceedsNot Applicable.D.Risk FactorsThe following risks relate principally to the industry in which we operate and our business in general. Any of these risk factors could materially and adversely affect ourbusiness, financial condition or operating results and the trading price of our common shares.4Table of ContentsSummary of Risk Factors●The international tanker industry has historically been both cyclical and volatile and this may lead to reductions and volatility in our charter rates, our vessel values, ourrevenues, earnings and cash flow results.●Uncertain economic conditions throughout the world could have an adverse impact on our operations and financial results.●The international oil tanker industry has recently experienced volatile charter rates and vessel values and there can be no assurance that these charter rates and vessel valueswill not decrease in the near future.●Our financial results may be adversely affected by the outbreak of epidemic and pandemic diseases, such as COVID-19, and the related governmental responses thereto.●Volatility of LIBOR and potential changes of the use of LIBOR as a benchmark could affect our profitability, earnings and cash flow.●We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of doing business.●Climate change and greenhouse gas restrictions may adversely impact our operations and markets.●Increasing growth of electric vehicles and renewable fuels could lead to a decrease in trading and the movement of crude oil and petroleum products worldwide.●If our vessels call on ports located in countries or territories that are the subject of sanctions or embargoes imposed by the U.S. government or other governmental authorities,it could lead to monetary fines or adversely affect our business, reputation and the market for our common shares.●Political instability, terrorist or other attacks, war, international hostilities and public health threats can affect the tanker industry, which may adversely affect our business.●Acts of piracy on ocean-going vessels could adversely affect our business.●We rely on our information systems to conduct our business, and failure to protect these systems against security breaches could adversely affect our business and results ofoperations. Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed.●Our financing facilities contain restrictive covenants that may limit our liquidity and corporate activities, and could have an adverse effect on our financial condition and resultsof operations.●Our President, Chief Executive Officer and Director has significant influence over us, and a trust established for the benefit of his family may be deemed to beneficially own,directly or indirectly, 100% of our Series D and our Series E Preferred Shares, and an affiliate of his may be deemed to beneficially own 100% of our Series F Preferred Shares, andthereby to control the outcome of matters on which our shareholders are entitled to vote.●We have been subject to litigation in the past and we may be subject to similar or other litigation in the future.●We expect to be dependent on a limited number of customers for a large part of our revenues, and failure of such counterparties to meet their obligations could cause us tosuffer losses or negatively impact our results of operations and cash flows.●Our ability to obtain additional debt financing may be dependent on our ability to charter our vessels, the performance of our charters and the creditworthiness of ourcharterers.●The industry for the operation of tanker vessels and the transportation of oil, petroleum products and chemicals is highly competitive and we may not be able to compete forcharters with new entrants or established companies with greater resources.●We maintain cash with a limited number of financial institutions, including financial institutions that may be located in Greece, which will subject us to credit risk.●We may be unable to attract and retain key management personnel and other employees in the international tanker shipping industry, which may negatively impact theeffectiveness of our management and our results of operations.●If labor interruptions are not resolved in a timely manner, they could have a material adverse effect on our business, results of operations, cash flows, financial condition andavailable cash.●A drop in spot charter rates may provide an incentive for some charterers to default on their charters, which could affect our cash flow and financial condition.5Table of Contents●The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings.●Purchasing and operating secondhand vessels may result in increased operating costs and vessels off-hire, which could adversely affect our earnings.●We may not have adequate insurance to compensate us if we lose any vessels that we acquire.●We may be subject to increased premium payments, or calls, as we obtain some of our insurance through protection and indemnity associations.●Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our Environmental, Social and Governance (“ESG”) policiesmay impose additional costs on us or expose us to additional risks.●Maritime claimants could arrest our vessels or vessels we acquire, which could interrupt our cash flow.●Governments could requisition our vessels or vessels we acquire during a period of war or emergency, resulting in loss of earnings.●U.S. federal tax authorities could treat us as a “passive foreign investment company,” which could have adverse U.S. federal income tax consequences to U.S. shareholders.●We may be subject to U.S. federal income tax on our U.S. source income, which would reduce our earnings.●We are a “foreign private issuer,” which could make our common shares less attractive to some investors or otherwise harm our stock price.●Our share price may continue to be highly volatile, which could lead to a loss of all or part of a shareholder’s investment.●There is no guarantee of a continuing public market for you to resell our common shares.●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.●We have issued common shares in the past through various transactions and we may do so in the future without shareholder approval, which may dilute our existingshareholders, depress the trading price of our securities and impair our ability to raise capital through subsequent equity offerings.●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 rightsand protections under Marshall Islands law than under a typical jurisdiction in the United States.●It may not be possible for investors to serve process on or enforce U.S. judgments against us.●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, whichcould limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.●Anti-takeover provisions in our organizational documents could have the effect of discouraging, delaying or preventing a merger, amalgamation or acquisition, which couldreduce the market price of our common shares.●We are dependent on our Fleet Manager to perform the day-to-day management of our fleet.●Our Fleet Manager is a privately held company and there may be limited or no publicly available information about it.●Our Fleet Manager may have conflicts of interest between us and its other clients.RISKS RELATED TO OUR INDUSTRYThe international tanker industry has historically been both cyclical and volatile and this may lead to reductions and volatility in our charter rates, our vessel values, ourrevenues, earnings and cash flow results.The international tanker industry in which we operate is cyclical, with attendant volatility in charter hire rates, vessel values and industry profitability. For tanker vessels, thedegree of charter rate volatility has varied widely. Please see “—The international oil tanker industry has experienced volatile charter rates and vessel values and there can be noassurance that these charter rates and vessel values will not decrease in the near future.” Currently, all of our vessels are employed on time charters. However, changes in spot rates andtime charter rates can affect the revenues we receive from operations in the event our charterers default or seek to renegotiate the charter hire, as well as the value of our vessels, even ifour vessels are employed under long-term time charters. Our ability to re-charter our vessels on the expiration or termination of their time or bareboat charters and the charter ratespayable under any renewal or replacement charters will depend upon, among other things, economic conditions in the tanker markets and several other factors outside of our control. Ifwe enter into a charter when charter rates are low, our revenues and earnings will be adversely affected. A decline in charter hire rates will also likely cause the value of our vessels todecline.6Table of ContentsFluctuations in charter rates and vessel values result from changes in the supply and demand for vessels and changes in the supply and demand for oil, chemicals and otherliquids our vessels carry. Factors affecting the supply and demand for our vessels are outside of our control and are unpredictable. The nature, timing, direction and degree of changes inthe tanker industry conditions are also unpredictable.Factors that influence demand for tanker vessel capacity include:●supply and demand for oil, petroleum products and chemicals carried;●changes in oil production and refining capacity resulting in shifts in trade flows for oil products;●the distance oil, petroleum products and chemicals are to be moved by sea;●global and regional economic and political conditions, including “trade wars” and developments in international trade, national oil reserves policies, fluctuations inindustrial and agricultural production, armed conflicts and work stoppages;●increases in the production of oil in areas linked by pipelines to consuming areas, the extension of existing, or the development of new pipeline systems in markets we mayserve, or the conversion of existing non-oil pipelines to oil pipelines in those markets;●environmental and other legal and regulatory developments;●economic slowdowns caused by public health events such as the COVID-19 pandemic or inflationary pressures and resultant governmental responses;●currency exchange rates;●weather, natural disasters and other acts of God;●competition from alternative sources of energy, other shipping companies and other modes of transportation; and●international sanctions, embargoes, import and export restrictions, nationalizations, piracy and wars or other conflicts, including the war in Ukraine.The factors that influence the supply of tanker capacity include:●the number of newbuilding deliveries;●current and expected newbuilding orders for vessels;●the scrapping rate of older vessels;●speed of vessel operation;●vessel freight rates, which are affected by factors that may affect the rate of newbuilding, swapping and laying up of vessels;●the price of steel and vessel equipment;●technological advances in the design and capacity of vessels;●potential conversion of vessels for alternative use;●changes in environmental and other regulations that may limit the useful lives of vessels;●port or canal congestion;7Table of Contents●the number of vessels that are out of service at a given time, namely those that are laid-up, drydocked, awaiting repairs or otherwise not available for hire, including thosethat are in drydock for the purpose of installing exhaust gas cleaning systems, known as scrubbers; and●changes in global petroleum and chemical production.The factors affecting the supply and demand for tankers have been volatile and are outside of our control, and the nature, timing and degree of changes in industry conditionsare unpredictable. Market conditions have been volatile in recent years and continued volatility may reduce demand for transportation of oil, petroleum products and chemicals overlonger distances and increase the supply of tankers, which may have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to paydividends and existing contractual obligations.Uncertain economic conditions throughout the world could have an adverse impact on our operations and financial results.Various macroeconomic factors, including rising inflation, higher interest rates, global supply chain constraints, and the effects of overall economic conditions and uncertaintiessuch as those resulting from the current and future conditions in the global financial markets, could adversely affect our results of operations and financial condition. Inflation and risinginterest rates may negatively impact us by increasing our operating costs and our cost of borrowing. Interest rates, the liquidity of the credit markets and the volatility of the capitalmarkets could also affect the operation of our business and our ability to raise capital on favorable terms, or at all.The world economy continues to face a number of challenges. Global financial markets and economic conditions have been, and continue to be, volatile. Beginning in February2020, due in part to fears associated with the spread of COVID-19, global financial markets experienced volatility and a steep and abrupt downturn, followed by a recovery. This volatilitymay continue as the COVID-19 pandemic nears its endemic phase. In addition, the continuing war in Ukraine has led to increased economic uncertainty amidst fears of a more generalizedmilitary conflict or significant inflationary pressures, due to the increases in fuel and grain prices following the sanctions imposed on Russia.Credit markets and the debt and equity capital markets have been volatile and the uncertainty surrounding the future of the global credit markets has at times resulted inreduced access to credit worldwide, particularly for the shipping industry. These issues have resulted in significant write-offs in the financial services sector, the re-pricing of credit riskand uncertain economic conditions, which have at times made, and may continue to make, it difficult to obtain additional financing. The current state of global financial markets andcurrent 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 equityat all. Furthermore, further economic volatility and/or an economic downturn resulting from government restrictions imposed in connection with a resurgence of COVID-19 orgovernment responses to the war in Ukraine could also adversely affect the market price of our common shares. Due to these factors, we cannot be certain that financing will be availableif 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. If financing or refinancing is not availablewhen 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, completeadditional vessel acquisitions or otherwise take advantage of business opportunities as they arise.European countries have recently experienced relatively slow growth. Over the past several years, the credit markets in Europe have experienced significant contraction,deleveraging and reduced liquidity, and European authorities continue to implement a broad variety of governmental action and/or new regulation of the financial markets. In addition,the war in Ukraine has created great uncertainty in the European economy. If economic conditions in Europe preclude or limit financing, we may not be able to obtain financing on termsthat are acceptable to us, or at all, even if conditions outside Europe remain favorable for lending.A general deterioration in the global economy may also cause a decrease in worldwide demand for certain goods and, thus, shipping. Worldwide economic and governmentalfactors, together with concurrent declines in charter rates and vessel values, have in the past had, and could in the future have, a material adverse effect on lenders’ willingness toprovide credit to us, our ability to obtain other financing, and on our results of operations, financial condition and cash flows, causing the price of our common shares to decline.The international oil tanker industry has recently experienced volatile charter rates and vessel values and there can be no assurance that these charter rates and vesselvalues will not decrease in the near future.The Baltic Dirty Tanker Index, or the BDTI, a U.S. dollar daily average of charter rates issued by the Baltic Exchange that takes into account input from brokers around the worldregarding crude oil fixtures for various routes and oil tanker vessel sizes, has been volatile. For example, in 2022, the BDTI reached a high of 2,496 and a low of 679. The Baltic CleanTanker Index, or BCTI, a comparable index to the BDTI but for petroleum product fixtures, has similarly been volatile. In 2022, the BCTI reached a high of 2,143 and a low of 543. Althoughthe BDTI and BCTI were 1,587 and 1,202, respectively, as of March 28, 2023, there can be no assurance that the crude oil and petroleum products charter market will continue to increase,and the market could again decline. Recent heightened volatility in charter prices has resulted primarily from the war in Ukraine and sanctions on Russian exports of crude oil andpetroleum products, and there is great uncertainty about the future impact of those events. In general, volatility in charter rates depends, among other factors, on (i) supply and demandfor tankers, (ii) the demand for crude oil and petroleum products, (iii) the inventories of crude oil and petroleum products in the United States and in other industrialized nations, (iv) oilrefining volumes, (v) oil prices, and (vi) any restrictions on crude oil production imposed by the Organization of the Petroleum Exporting Countries, or OPEC, and non-OPEC oilproducing countries.8Table of ContentsIf the charter rates in the oil tanker market decline from their current levels, our future earnings may be adversely affected, we may have to record impairment adjustments to thecarrying values of our fleet and we may not be able to comply with the financial covenants in our loan agreements.Our financial results may be adversely affected by the outbreak of COVID-19, other pandemic or epidemic diseases and the related governmental responses thereto.Public health threats, such as the COVID-19 outbreak, influenza and other highly communicable diseases or viruses, outbreaks of which have from time to time occurred invarious parts of the world in which we operate, including China, could adversely impact our operations, the timing of completion of any outstanding or future newbuilding projects, aswell as the operations of our customers.Since the beginning of calendar year 2020, the outbreak of COVID-19 that originated in China in late 2019 and that has spread to most nations around the globe has resulted innumerous actions taken by governments and governmental agencies in an attempt to mitigate the spread of the virus, including travel bans, quarantines, and other emergency publichealth measures, and a number of countries implemented lockdown measures. These measures resulted in a significant reduction in global economic activity and extreme volatility in theglobal financial markets. COVID-19 has resulted in reduced industrial activity in China with temporary closures of factories and other facilities, labor shortages and restrictions on travel.We believe these disruptions along with other seasonal factors, including lower demand for some of the cargoes we carry, has at times contributed to downward pressure on rates in thetanker industry at times.Although the incidence and severity of COVID-19 and its variants have diminished over time, periodic spikes in incidence occur. Many nations worldwide have significantlyeased or eliminated restrictions that were enacted at the outset of the outbreak of COVID-19. The United States has announced that it will terminate the COVID-19 national emergencyand public health emergency that was put in place in 2020. Notably, the Chinese government removed its zero-COVID policy in December 2022, although China is now facing a suddensurge in COVID cases after easing the lockdown restrictions nationwide. WHO officials had expressed hope that COVID-19 might be entering an endemic phase by early 2023, but thecontinued uncertainties associated with the COVID-19 pandemic worldwide may cause an adverse impact on the global economy and the rate environment for tanker and other cargovessels may deteriorate and our operations and cash flows may be negatively impacted.The COVID-19 pandemic and measures to contain its spread negatively impacted regional and global economies and trade patterns in markets in which we operate, the way weoperate our business, and the businesses of our charterers and suppliers. Over time, the incidence of COVID-19 and its variants has diminished although periodic spikes in incidenceoccur. Consequently, restrictions imposed by various governmental health organizations may change over time. Several countries have lifted restrictions only to reimpose suchrestrictions as the number of cases rise and new variants arise. Negative impacts could occur, even after the pandemic itself diminishes or ends.Measures against COVID-19 in a number of countries restricted crew rotations on our vessels. As a result, we experienced, and may experience in the future, disruptions to ournormal vessel operations caused by increased deviation time associated with positioning our vessels to countries in which we can undertake a crew rotation in compliance with suchmeasures. Delays in crew rotations have led to issues with crew fatigue and may continue to do so, which may result in delays or other operational issues. We have had and may havedays in which our vessels are unable to earn revenue in order to deviate to certain ports on which we would ordinarily not call during a typical voyage. We may also incur additionalexpenses associated with testing, personal protective equipment, quarantines, and travel expenses such as airfare costs in order to perform crew rotations in the current environment aswell as related logistical complications associated with supplying our vessels with spares or other supplies. Although during 2022 the effect of measures against COVID-19 on ouroperations diminished, the above-mentioned factors led to an increase in off-hire days and a slight increase in operating and voyage expenses during 2020 and 2021 and may continue todo so.The occurrence or continued occurrence of any of the foregoing events or other epidemics or an increase in the severity or duration of the COVID-19 or other epidemics couldhave a material adverse effect on our business, results of operations, cash flows, financial condition, value of our vessels, and ability to pay dividends.The market value of our vessels, and those we may acquire in the future, may fluctuate significantly, which could cause us to incur losses if we decide to sell them followinga decline in their market values or we may be required to write down their carrying value, which will adversely affect our earnings.The fair market value of our vessels may increase and decrease depending on the following factors:●general economic and market conditions affecting the shipping industry;●prevailing level of charter rates;●competition from other shipping companies;●types, sizes and ages of vessels;9Table of Contents●the availability of other modes of transportation;●supply and demand for vessels;●shipyard capacity;●cost of newbuildings;●price of steel;●number of tankers scrapped;●governmental or other regulations; and●technological advances.Dislocations in the supply of and demand for tankers as a result of the war in Ukraine and sanctions on Russian exports have resulted in greatly increased volatility in tankerasset prices. If we sell any vessel at a time when vessel prices have fallen, the sale price may be less than the vessel’s carrying amount in our financial statements, in which case we willrealize a loss. Vessel prices can fluctuate significantly, and in the case where the market value falls below the carrying amount, we will evaluate the vessel for a potential impairmentadjustment. If the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the vessel is less than its carrying amount, we may be requiredto write down the carrying amount of the vessel to its fair value in our financial statements and incur a loss and a reduction in earnings. See “Item 5. Operating and Financial Review andProspects—A. Operating Results—Critical Accounting Policies—Impairment of Vessels.”An over-supply of tanker capacity may lead to reductions in asset prices, charter hire rates and profitability.The market supply of tankers is affected by a number of factors such as demand for energy resources, crude oil, petroleum products and chemicals, as well as strong overalleconomic growth of the world economy. If the capacity of new tankers delivered exceeds the capacity of such tankers being scrapped and lost, vessel capacity will increase, which couldlead to reductions in asset prices and charter rates. The impact of the sanctions on Russian exports of crude oil and petroleum products is uncertain and has generated increasedvolatility in the supply of tankers available for worldwide trade. As of March 28, 2023, newbuilding orders have been placed for an aggregate of approximately 3.9% of the existing globaltanker fleet with the bulk of deliveries expected during 2023.Volatility of LIBOR and potential changes of the use of LIBOR as a benchmark could affect our profitability, earnings and cash flow.The London Interbank Offered Rate (“LIBOR”) is the subject of recent national, international and other regulatory guidance and proposals for reform. These reforms and otherpressures may cause LIBOR to be eliminated or to perform differently than in the past. The consequences of these developments cannot be entirely predicted but could include anincrease in the cost of any of our future variable rate indebtedness and obligations. LIBOR has been volatile in the past, with the spread between LIBOR and the prime lending ratewidening significantly at times. Currently four of our debt facilities have interest rates that fluctuate with changes in LIBOR and hence significant changes in LIBOR could have amaterial effect on the amount of interest payable on any future indebtedness, which in turn, could have an adverse effect on our financial condition.Furthermore, the calculation of interest in most financing agreements in our industry has been based on published LIBOR rates. Due in part to uncertainty relating to the LIBORcalculation process in recent years, it is likely that the publication of LIBOR will be phased out in mid-2023. Since the majority of our credit facilities contain provisions that entitle thelenders, to replace published LIBOR as the base for the interest calculation with another equivalent rate negotiated between the parties and/or their cost-of-funds rate, the triggering ofsuch provisions could significantly increase our lending costs, which would have an adverse effect on our profitability, earnings and cash flow. The Alternative Reference RateCommittee, a committee convened by the Federal Reserve that includes major market participants, has proposed the Secured Overnight Financing Rate, or “SOFR,” an alternative rate toreplace U.S. Dollar LIBOR. The impact of such a transition from LIBOR to SOFR could be significant for us. Although we intend to agree to an alternative, market acceptable, basis withthe lenders under our credit facilities, and with the counterparties under any derivative instruments, to replace the applicable LIBOR rates with another reference rate in terms of rapidlydeveloping marking practice being established by the Loan Markets Association (LMA) prior to any cessation of LIBOR there can be no assurance that we will be able to reachagreement on favorable terms or at all.In order to manage any future exposure to interest rate fluctuations, we may from time to time use interest rate derivatives to effectively fix any floating rate debt obligations. Noassurance can however be given that the use of these derivative instruments, if any, may effectively protect us from adverse interest rate movements. The use of interest rate derivativesmay affect our results through mark to market valuation of these derivatives. Also, adverse movements in interest rate derivatives may require us to post cash as collateral, which mayimpact our free cash position. Interest rate derivatives may also be impacted by the transition from LIBOR to SOFR or other alternative rates.10Table of ContentsWe are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of doing business.Our operations are subject to numerous laws and regulations in the form of international conventions and treaties, national, state and local laws and national and internationalregulations in force in the jurisdictions in which our vessels will operate or are registered, which can significantly affect the operation of our vessels. These regulations include, but arenot limited to the International Convention for the Prevention of Pollution from Ships of 1973, as from time to time amended and generally referred to as MARPOL, including thedesignation of Emission Control Areas, or ECAs, thereunder, the International Convention on Load Lines of 1966, the International Convention on Civil Liability for Oil Pollution Damageof 1969, generally referred to as CLC, the International Convention on Civil Liability for Bunker Oil Pollution Damage, or Bunker Convention, the International Convention for the Safetyof Life at Sea of 1974, or SOLAS, the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or ISM Code, the International Convention forthe Control and Management of Ships’ Ballast Water and Sediments, or the BWM Convention, the U.S. Oil Pollution Act of 1990, or OPA, the Comprehensive Environmental Response,Compensation and Liability Act, or CERCLA, the U.S. Clean Water Act, the U.S. Clean Air Act, the U.S. Outer Continental Shelf Lands Act, the U.S. Maritime Transportation SecurityAct of 2002, or the MTSA, and European Union regulations. Compliance with such laws, regulations and standards, where applicable, may require installation of costly equipment oroperational changes and may affect the resale value or useful lives of our vessels. We may also incur additional costs in order to comply with other existing and future regulatoryobligations, including, but not limited to, costs relating to air emissions, the management of ballast waters, maintenance and inspection, development and implementation of emergencyprocedures and insurance coverage or other financial assurance of our ability to address pollution incidents. These costs could have a material adverse effect on our business, results ofoperations, cash flows and financial condition. A failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or thesuspension or termination of our operations.Environmental laws often impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard towhether we were negligent or at fault. Under OPA, for example, owners, operators and bareboat charterers are jointly and severally strictly liable for the discharge of oil within the 200-mile exclusive economic zone around the United States. Events such as the 2010 explosion of the Deepwater Horizon and the subsequent release of oil into the Gulf of Mexico, or otherevents, may result in further regulation of the shipping industry, and modifications to statutory liability schemes, which could have a material adverse effect on our business, financialcondition, results of operations and cash flows. An oil spill could result in significant liability, including fines, penalties and criminal liability and remediation costs for natural resourcedamages under other federal, state and local laws, as well as third-party damages. We are required to satisfy insurance and financial responsibility requirements for potential oil(including marine fuel) spills and other pollution incidents. Although insurance covers certain environmental risks, there can be no assurance that such insurance will be sufficient tocover all such risks or that any claims will not have a material adverse effect on our business, results of operations, cash flows and financial condition and our ability to pay dividends, ifany, in the future.Climate change and greenhouse gas restrictions may adversely impact our operations and markets. Due to concern over the risk of climate change, a number of countries and the IMO have adopted, or are considering the adoption of, regulatory frameworks to reducegreenhouse gas emissions. These regulatory measures may include, among others, adoption of cap and trade regimes, carbon taxes, increased efficiency standards and incentives ormandates for renewable energy. Since January 1, 2020, IMO regulations have required vessels to comply with a global cap on the sulfur in fuel oil used on board of 0.5%, down from theprevious cap of 3.5%. Additionally, in April 2018, nations at the MEPC 72 adopted an initial strategy to reduce greenhouse gas emissions from ships. The initial strategy identifies levelsof ambition to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through implementation of further phases of the EEDI for new ships; (2)reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008emission levels; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 compared to 2008 while pursuing efforts towards phasing them out entirely. Since January 1, 2020, ships have to either remove sulfur from emissions or buy fuel with low sulfur content, which may lead to increased costs and supplementary investmentsfor ship owners. The interpretation of “fuel oil used on board” includes use in main engine, auxiliary engines and boilers. Shipowners may comply with this regulation by (i) using 0.5%sulfur fuels on board, which are available around the world but at a higher cost; (ii) installing scrubbers for cleaning of the exhaust gas; or (iii) by retrofitting vessels to be powered byliquefied natural gas, which may not be a viable option due to the lack of supply network and high costs involved in this process. While currently all our vessels have scrubbersinstalled, costs of compliance with these regulatory changes for any non-scrubber vessels we may acquire may be significant and may have a material adverse effect on our futureperformance, results of operations, cash flows and financial position.In addition, although the emissions of greenhouse gases from international shipping currently are not subject to the Kyoto Protocol to the United Nations FrameworkConvention on Climate Change, which required adopting countries to implement national programs to reduce emissions of certain gases, or the Paris Agreement (discussed furtherbelow), a new treaty may be adopted in the future that includes restrictions on shipping emissions. Compliance with changes in laws, regulations and obligations relating to climatechange affects the propulsion options in subsequent vessel designs and could increase our costs related to acquiring new vessels, operating and maintaining our existing vessels andrequire us to install new emission controls, acquire allowances or pay taxes related to our greenhouse gas emissions or administer and manage a greenhouse gas emissions program.Revenue generation and strategic growth opportunities may also be adversely affected.11Table of ContentsAdverse effects upon the oil and gas industry relating to climate change, including growing public concern about the environmental impact of climate change, may alsoadversely affect demand for our services. For example, increased regulation of greenhouse gases or other concerns relating to climate change may reduce the demand for oil and gas inthe future or create greater incentives for use of alternative energy sources. In addition, the physical effects of climate change, including changes in weather patterns, extreme weatherevents, rising sea levels, scarcity of water resources, may negatively impact our operations. Any long-term material adverse effect on the oil and gas industry could have a significantfinancial and operational adverse impact on our business that we cannot predict with certainty at this time.Increasing growth of electric vehicles and renewable fuels could lead to a decrease in trading and the movement of crude oil and petroleum products worldwide.The IEA noted in its Global EV Outlook 2022 that total electric cars sold annually worldwide grew from about 120,000 in 2012 to 6.6 million in 2021, bringing the total number ofelectric cars to approximately 16.5 million, around triple the number from 2018. Electric car sales in the first quarter of 2022 were 2.1 million, up 75% from the same quarter of 2021. This wasdriven mainly by government subsidies and policy initiatives, such as the phasing-out of internal combustion engines and vehicle electrification targets. IEA forecasts are for electricvehicles (“EVs”) to grow from 17 million in 2021 to 70 million registered vehicles by 2025 and 190 million by 2030, which the IEA forecasts would reduce worldwide demand for oilproducts by 3.4 million barrels per day in 2030. IEA stated that EV operations in 2019 avoided the consumption of almost 0.6 million barrels per day of oil products. According to theWorld Economic Forum, there were about 1.1 billion cars registered in 2015 and there will be about 2 billion cars registered by 2040.According to the IEA, U.S. biodiesel production increased rapidly from 32,000 barrels per day in 2009 to 118,000 barrels per day in 2020, a growth of about 260% (that productionwas up from 112 thousand barrels per day in 2019). During the same period, diesel production from U.S. refineries grew from an average of 4.0 million barrels per day in 2009 to a maximumof 5.6 million barrels per day in December 2018 before declining to 4.6 million barrels per day in January 2021 during the pandemic. A growth in EVs or a slowdown in imports or exports ofcrude or petroleum products worldwide may result in decreased demand for our vessels and lower charter rates, which could have a material adverse effect on our business, results ofoperations, cash flows, financial condition, and ability to make cash distributions.Our vessels may suffer damage due to the inherent operational risks of the tanker industry and we may experience unexpected dry-docking costs, which may adverselyaffect our business and financial condition.The operation of an ocean-going vessel carries inherent risks. Our vessels and their cargoes are at risk of being damaged or lost because of events such as marine disasters,bad weather and other acts of God, business interruptions caused by mechanical failures, grounding, fire, explosions and collisions, human error, war, terrorism, piracy, diseases (such asthe outbreak of COVID-19), quarantine and other circumstances or events. These hazards may result in death or injury to persons, loss of revenues or property, the payment of ransoms,environmental damage, higher insurance rates, damage to our customer relationships or delay or re-routing, which may also subject us to litigation. In addition, the operation of tankershas unique operational risks associated with the transportation of oil or chemicals. An oil or chemical spill may cause significant environmental damage, and the costs associated with acatastrophic spill could exceed the insurance coverage available to us. Compared to other types of vessels, tankers are exposed to a higher risk of damage and loss by fire, whetherignited by a terrorist attack, collision, or other cause, due to the high flammability and high volume of the oil and chemicals transported in such tankers.If our vessels suffer damage, they may need to be repaired at a dry-docking facility. The costs of dry-dock repairs are unpredictable and may be substantial. We may have topay dry-docking costs that our insurance does not cover in full. The loss of earnings while these vessels are being repaired and repositioned, as well as the actual cost of these repairs,would decrease our earnings. In addition, space at dry-docking facilities is sometimes limited and not all dry-docking facilities are conveniently located. We may be unable to find spaceat a suitable dry-docking facility or our vessels may be forced to travel to a dry-docking facility that is not conveniently located to our vessels’ positions. The loss of earnings whilethese vessels are forced to wait for space or to travel to more distant dry-docking facilities would decrease our earnings.We are subject to international safety regulations and requirements imposed by classification societies and the failure to comply with these regulations may subject us toincreased liability, may adversely affect our insurance coverage and may result in a denial of access to, or detention in, certain ports.The operation of our vessels is affected by the requirements set forth in the United Nations’ International Maritime Organization’s International Management Code for the SafeOperation of Ships and Pollution Prevention, or ISM Code. The ISM Code requires ship owners, ship managers and bareboat charterers to develop and maintain an extensive “SafetyManagement System” that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing proceduresfor dealing with emergencies. We expect that any vessels that we acquire in the future will be ISM Code-certified when delivered to us. The failure of a shipowner or bareboat charterer tocomply with the ISM Code may subject it to increased liability, may invalidate existing insurance or decrease available insurance coverage for the affected vessels and may result in adenial of access to, or detention in, certain ports, including United States and European Union ports.12Table of ContentsIn addition, the hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification societycertifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the International Convention for Safety ofLife at Sea. If a vessel does not maintain its class and/or fails any annual survey, intermediate survey or special survey, the vessel will be unable to trade between ports and will beunemployable, which will negatively impact our revenues and results from operations.If our vessels call on ports located in countries or territories that are the subject of sanctions or embargoes imposed by the U.S. government or other governmentalauthorities, it could lead to monetary fines or adversely affect our business, reputation and the market for our common shares.While our vessels have not called on ports located in countries or territories that are the subject of country-wide or territory-wide sanctions or embargoes imposed by the U.S.government or other governmental authorities (“Sanctioned Jurisdictions”) in violation of applicable sanctions or embargo laws, in 2022, and although we intend to maintain compliancewith all applicable sanctions and embargo laws, and we endeavor to take precautions reasonably designed to ensure compliance with such laws, it is possible that, in the future, ourvessels may call on ports in Sanctioned Jurisdictions in violation of applicable sanctions or embargo laws on charterers’ instructions and without our consent. If such activities result ina violation of sanctions or embargo laws, we could be subject to monetary fines, penalties, or other sanctions, and our reputation and the market for our common shares could beadversely affected.The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and suchsanctions and embargo laws and regulations may be amended or expanded over time.In particular, the ongoing war in Ukraine could result in the imposition of further economic sanctions by the United States and the European Union against Russia. Current orfuture counterparties of ours may be affiliated with persons or entities that are or may be in the future the subject of sanctions imposed by the governments of the U.S., European Union,and/or other international bodies. If we determine that such sanctions require us to terminate existing or future contracts to which we, or our subsidiaries, are party or if we are found tobe in violation of such applicable sanctions, our results of operations may be adversely affected or we may suffer reputational harm.Although we believe that we have been in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, any suchviolation could result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business, and could result in someinvestors deciding, or being required, to divest their interest, or not to invest, in us. In addition, certain institutional investors may have investment policies or restrictions that preventthem from holding securities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism. The determination by these investors notto invest in, or to divest from, our common shares may adversely affect the price at which our common shares trade. Moreover, our charterers may violate applicable sanctions andembargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. Investor perception of thevalue of our common shares may also be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in countries or territories that weoperate in.Political instability, terrorist or other attacks, war, international hostilities and public health threats can affect the tanker industry, which may adversely affect ourbusiness.We conduct most of our operations outside of the United States, and our business, results of operations, cash flows, financial condition and available cash may be adverselyaffected by changing economic, political and government conditions in the countries and regions where our vessels are employed or registered. Moreover, we operate in a sector of theeconomy that is likely to be adversely impacted by the effects of political conflicts, including the current political instability in the Middle East, Ukraine, and the South China Sea regionand other geographic countries and areas, geopolitical events such as the withdrawal of the U.K. from the European Union, or “Brexit,” terrorist or other attacks, and war (or threatenedwar) or international hostilities, such as those between the United States and North Korea.The war between Russia and Ukraine may lead to further regional and international conflicts or armed action. This war has disrupted supply chains and caused instability in theenergy markets and the global economy, with effects on the tanker market, which has experienced volatility. The United States, United Kingdom and the European Union, among othercountries, have announced sanctions against Russia, including sanctions targeting the Russian oil sector, among those a prohibition on the import of oil from Russia to the UnitedStates and the European Union’s and G7 countries price cap regime for seaborne Russian oil and petroleum products. The ongoing war could result in the imposition of further economicsanctions by the United States, the United Kingdom and the European Union against Russia, with uncertain impacts on the tanker market. While much uncertainty remains regarding theglobal impact of the war in Ukraine, it is possible that such tensions could adversely affect our business, financial condition, results of operation and cash flows. Furthermore, it ispossible that third parties with whom we have charter contracts may be impacted by events in Russia and Ukraine, which could adversely affect our operations. Terrorist attacks such asthose in Paris on November 13, 2015, Manchester on May 22, 2017, and the frequent incidents of terrorism in the Middle East, and the continuing response of the United States andothers to these attacks, as well as the threat of future terrorist attacks around the world, continues to cause uncertainty in the world’s financial markets and may affect our business,operating results and financial condition. Continuing conflicts and recent developments in the Middle East, including increased tensions between the U.S. and Iran, as well as thepresence of U.S. or other armed forces in Iraq, Syria and various other regions, may lead to additional acts of terrorism and armed conflict around the world, which may contribute tofurther economic instability in the global financial markets. As a result of the above, insurers have increased premiums and reduced or restricted coverage for losses caused by terroristacts generally. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. Any of these occurrences could have amaterial adverse impact on our operating results, revenues and costs. Additionally, Brexit, or similar events in other jurisdictions, could impact global markets, including foreign exchangeand securities markets; any resulting changes in currency exchange rates, tariffs, treaties and other regulatory matters could in turn adversely impact our business and operations.13Table of ContentsFurther, governments may turn to trade barriers to protect their domestic industries against foreign imports, thereby depressing shipping demand. In particular, leaders in theUnited States have indicated that the United States may seek to implement more protective trade measures. There is significant uncertainty about the future relationship between theUnited States, China and other exporting countries, including with respect to trade policies, treaties, government regulations and tariffs. For example, in January 2019, the United Statesannounced expanded sanctions against Venezuela, which may have an effect on its oil output and in turn affect global oil supply. Protectionist developments, or the perception that theymay occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade. Moreover, increasing trade protectionism may cause an increasein (a) the cost of goods exported from regions globally, (b) the length of time required to transport goods and (c) the risks associated with exporting goods. Such increases maysignificantly affect the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated costs, which could have an adverse impact on the shippingindustry, and therefore our charterers and their business, operating results and financial condition and could thereby affect their ability to make timely charter hire payments to us and torenew and increase the number of their time charters with us. This could have a material adverse effect on our business, results of operations, financial condition and our ability to payany cash distributions to our stockholders.Beginning in February of 2022, President Biden and several European leaders also announced various economic sanctions against Russia in connection with theaforementioned conflicts in the Ukraine region, which have continued to expand over the past year and which may adversely impact our business. The Russian Foreign HarmfulActivities Sanctions program includes prohibitions on the import of certain Russian energy products into the United States, including crude oil, petroleum, petroleum fuels, oils, liquefiednatural gas and coal, as well as prohibitions on all new investments in Russia by U.S. persons, among other restrictions. Furthermore, the United States, the EU and other countries hasalso prohibited a variety of specified services related to the maritime transport of Russian Federation origin crude oil and petroleum products, including trading/commodities brokering,financing, shipping, insurance (including reinsurance and protection and indemnity), flagging, and customs brokering. These prohibitions took effect on December 5, 2022 with respectto the maritime transport of crude oil and took effect on February 5, 2023 with respect to the maritime transport of other petroleum products. An exception exists to permit such serviceswhen the price of the seaborne Russian oil into non-EU countries does not exceed the relevant price cap; but implementation of this price exception relies on a recordkeeping andattestation process that allows each party in the supply chain of seaborne Russian oil to demonstrate or confirm that oil has been purchased at or below the price cap. Violations of theprice cap policy or the risk that information, documentation, or attestations provided by parties in the supply chain are later determined to be false may pose additional risks adverselyaffecting our business. Our business could also be adversely impacted by trade tariffs, trade embargoes or other economic sanctions that limit trading activities by the United States orother countries against countries in the Middle East, Asia or elsewhere as a result of terrorist attacks, hostilities or diplomatic or political pressures.Potential conflict between the U.S. and its allies and Iran could result in retaliation from Iran that could potentially affect the shipping industry, through increased attacks onvessels in the Strait of Hormuz (which already experienced an increased number of attacks on and seizures of vessels lately), or by potentially closing off or limiting access to the Strait ofHormuz, where a significant portion of the world’s oil supply passes through. For example, in January 2020, in response to certain perceived terrorist activity, the United States launchedan airstrike in Baghdad that killed a high-ranking Iranian general. Although spillover effects relating to the incident were contained, similar actions and responses increase the risk orconflict in the Strait of Hormuz. Any restriction on access to the Strait of Hormuz, or increased attacks on vessels in the area, could negatively impact our earnings, cash flow and resultsof operations.In the past, political instability has also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulfregion. Acts of terrorism and piracy have also affected vessels trading in regions such as the South China Sea and the Gulf of Aden off the coast of Somalia. Any of these occurrencescould have a material adverse impact on our future performance, results of operations, cash flows and financial position.The U.K.’s withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business.On June 23, 2016, in a referendum vote commonly referred to as “Brexit” a majority of voters in the U.K. voted to exit the European Union. Since then, the U.K. and the EUnegotiated the terms of a withdrawal agreement, which was approved in October 2019, ratified in January 2020 and effected in December 31, 2020. The U.K formally exited the EuropeanUnion on January 31, 2020, although a transition period remained in place until December 2020 during which the U.K. was subject to the rules and regulations of the European Unionwhile continuing to negotiate the parties’ relationship going forward, including trade deals. It is unclear what long-term economic, financial, trade and legal implications the withdrawal ofthe U.K. from the European Union would have and how such withdrawal would affect our business. In addition, Brexit may lead other European Union member countries to considerreferendums regarding their European Union membership. Any of these events, along with any political, economic and regulatory changes that may occur could cause political andeconomic uncertainty and harm our business and financial results.Brexit contributes to considerable uncertainty concerning the current and future economic environment. Brexit could adversely affect European or worldwide political,regulatory, economic or market conditions and could contribute to instability in global political institutions, regulatory agencies and financial markets.Acts of piracy on ocean-going vessels could adversely affect our business.Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Arabian Sea, the Red Sea, the Gulf of Aden offthe coast of Somalia, South China Sea, Sulu Sea, Celebes Sea, the Indian Ocean and in particular, the Gulf of Guinea, region off Nigeria, which has experienced increased incidents ofprivacy in recent years. Sea piracy incidents continue to occur. Acts of piracy could result in harm or danger to the crews that man our vessels. If insurers or the Joint War Committeecharacterize the regions in which our vessels are deployed as “war risk” zones or “war and strikes” listed areas, respectively, premiums payable for insurance coverage could increasesignificantly and such coverage may be more difficult to obtain if available at all. In addition, crew costs, including costs that may be incurred to the extent we employ onboard securityguards, could increase in such circumstances. We may not be adequately insured to cover losses from these incidents, least of all for bearing the cost of the applicable deductible(s) orunforeseen charges/costs, which could have a material adverse effect on us. In addition, hijacking as a result of an act of piracy against our vessels, or an increase in cost orunavailability of insurance for our vessels, could have a material adverse impact on our business, results of operations, cash flows, financial condition and ability to pay dividends andmay result in loss of revenues, increased costs and decreased cash flows to our customers, which could impair their ability to make payments to us under our charters.14Table of ContentsAn economic slowdown or changes in the economic and political environment in the Asia Pacific region could have a material adverse effect on our business, financialcondition and results of operations.We anticipate a significant number of the port calls made by our vessels will continue to involve the loading or discharging of cargoes in ports in the Asia Pacific region. As aresult, any negative changes in economic conditions in any Asia Pacific country, particularly in China, may have a material adverse effect on our business, financial condition and resultsof operations, as well as our future prospects. Before the global economic financial crisis that began in 2008, China had one of the world’s fastest growing economies in terms of grossdomestic product, or GDP, which had a significant impact on shipping demand. However, the average GDP growth rate of China over the last ten years remains below pre-2008 levels. Inparticular, China’s GDP growth rate for the year ended December 31, 2022 was approximately 3.0%, one of its lowest rates in 50 years, thought to be mainly caused by the country‘s zero-COVID-19 policy and strict lockdowns. Although the Chinese government removed its zero-COVID-19 policy in December 2022 and after easing the lockdown restrictions nationwide,China is now facing a sudden surge in COVID-19 cases, which introduces further uncertainty into prospects for economic recovery. Furthermore, there is a rising threat of a Chinesefinancial crisis resulting from massive personal and corporate indebtedness and “trade wars.” The International Monetary Fund has warned that continuing geopolitical tensions,between the United States and China could derail recovery from the impacts of COVID-19. Although the United States and China signed a trade agreement in early 2020, as furtherdescribed below, there is no assurance that the Chinese economy will not experience a significant contraction in the future.Although state-owned enterprises still account for a substantial portion of the Chinese industrial output, in general, the Chinese government is reducing the level of directcontrol that it exercises over the economy through state plans and other measures. There is an increasing level of freedom and autonomy in areas such as allocation of resources,production, pricing and management and a gradual shift in emphasis to a “market economy” and enterprise reform. Limited price reforms were undertaken with the result that prices forcertain refined petroleum products are principally determined by market forces. Many of the reforms are unprecedented or experimental and may be subject to revision, change orabolition based upon the outcome of such experiments. If the Chinese government does not continue to pursue a policy of economic reform, the level of imports to and exports fromChina could be adversely affected by changes to these economic reforms by the Chinese government, as well as by changes in political, economic and social conditions or other relevantpolicies of the Chinese government, such as changes in laws, regulations or export and import restrictions. Notwithstanding economic reform, the Chinese government may adoptpolicies that favor domestic shipping and tanker companies and may hinder our ability to compete with them effectively. For example, China imposes a tax for non-resident internationaltransportation enterprises engaged in the provision of services of passengers or cargo, among other items, in and out of China using their own, chartered or leased vessels. Theregulation may subject international transportation companies to Chinese enterprise income tax on profits generated from international transportation services passing through Chineseports. This could have an adverse impact on our charterers’ business, operating results and financial condition and could thereby affect their ability to make timely charter hire paymentsto us and to renew and increase the number of their time charters with us. Moreover, an economic slowdown in the economies of the European Union and other Asian countries mayfurther adversely affect economic growth in China and elsewhere.In addition, concerns regarding the possibility of sovereign debt defaults by European Union member countries, including Greece, although generally alleviated, have in thepast disrupted financial markets throughout the world, and may lead to weaker consumer demand in the European Union, the United States, and other parts of the world. The possibilityof sovereign debt defaults by European Union member countries, including Greece, and the possibility of market reforms to float the Chinese renminbi, either of which developmentcould weaken the Euro against the Chinese renminbi, could adversely affect consumer demand in the European Union. Moreover, the revaluation of the renminbi may negatively impactthe United States’ demand for imported goods, many of which are shipped from China. Future weak economic conditions could have a material adverse effect on our business, results ofoperations and financial condition and our ability to pay dividends to our stockholders. Our business, financial condition, results of operations, as well as our future prospects, will likelybe materially and adversely affected by another economic downturn in any of the aforementioned countries and regions.Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business.International shipping is subject to various security and customs inspection and related procedures in countries of origin and destination. Inspection procedures can result inthe seizure of, delay in the loading, off-loading or delivery of, the contents of our vessels or the levying of customs duties, fines or other penalties against us. It is possible that changesto inspection procedures could impose additional financial and legal obligations on us. Furthermore, changes to inspection procedures could also impose additional costs andobligations on our customers and may, in certain cases, render the shipment of certain types of cargo uneconomical or impractical. Any such changes or developments may have amaterial adverse effect on our business, financial condition, and results of operations.15Table of ContentsWe rely on our information systems to conduct our business, and failure to protect these systems against security breaches could adversely affect our business and results ofoperations. Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed.The efficient operation of our business is dependent on computer hardware and software systems both onboard our vessels and at our onshore offices. Information systemsare vulnerable to security breaches by computer hackers and cyber terrorists. We rely on industry-accepted security measures and technology to securely maintain confidential andproprietary information kept on our information systems. However, these measures and technology may not adequately prevent cybersecurity breaches, the access, capture or alterationof information by criminals, the exposure or exploitation of potential security vulnerabilities, the installation of malware or ransomware, acts of vandalism, computer viruses, misplaceddata or data loss. In addition, the unavailability of the information systems or the failure of these systems to perform as anticipated for any reason could disrupt our business and couldresult in decreased performance and increased operating costs, causing our business and results of operations to suffer. Any significant interruption or failure of our informationsystems or any significant breach of security could adversely affect our business, results of operations and financial condition, as well as our cash flows, including cash available fordividends to our stockholders.Additionally, any changes in the nature of cyber threats might require us to adopt additional procedures for monitoring cybersecurity, which could require additional expensesand/or capital expenditures. Most recently, the war between Russia and Ukraine has been accompanied by cyber-attacks against the Ukrainian government and other countries in theregion. It is possible that these attacks could have collateral effects on additional critical infrastructure and financial institutions globally, which could adversely affect our operations. Itis difficult to assess the likelihood of such threat and any potential impact at this time.RISKS RELATED TO OUR COMPANYOur financing facilities contain restrictive covenants that may limit our liquidity and corporate activities, and could have an adverse effect on our financial condition andresults of operations.Our financing facilities either in the form of the bareboat charters in connection with the sale and leaseback agreements (“SLBs”) of our fleet or senior secured loan agreements contain,and any future financing facilities we may enter into are expected to contain, customary covenants, events of default and termination event clauses, including cross-default provisionsand restrictive covenants and performance requirements that may affect our operational and financial flexibility. Such restrictions could affect, and in many respects limit or prohibit,among other things, our ability to incur additional indebtedness, pay dividends, create liens, sell assets, or engage in mergers or acquisitions. These restrictions could also limit ourability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. There can be no assurance that such restrictions will notadversely affect our ability to finance our future operations or capital needs.Our financing facilities require us to maintain specified financial ratios, satisfy financial covenants and contain cross-default clauses and other representations, including thefollowing:●maintain a consolidated leverage ratio of not more than 75%;●maintain market adjusted total assets minus total liabilities of at least $60 million,●maintain minimum free liquidity of $0.5 million per operating vessel but not less than $4.0 million in aggregate; and●assure no change of control of the company takes place, except with the lessor’s/lender’s prior written consent.As of December 31, 2022, we are in compliance with all covenants in our financing facilities.As a result of the restrictions in our financing facilities, or similar restrictions in our future financing facilities, we may need to seek permission from the owners of our leasedvessels or banks that finance our vessels in order to engage in certain corporate actions. Their interests may be different from ours and we may not be able to obtain their permissionwhen needed. This may prevent us from taking actions that we believe are in our best interest, which may adversely impact our revenues, results of operations and financial condition.A failure by us to meet our payment and other obligations, including our financial covenant requirements, could lead to defaults under our financing facilities or any futurefinancing facilities. If we are not in compliance with our covenants and we are not able to obtain covenant waivers or modifications, the current or future owners of our leased vessels orthe banks that finance our current or future vessels, as appropriate, could retake possession of our vessels or require us to pay down our indebtedness to a level where we are incompliance with our covenants or sell vessels in our fleet. Events beyond our control, including changes in the economic and business conditions in the shipping markets in which weoperate, interest rate developments, changes in the funding costs of our banks, changes in vessel earnings and asset valuations and outbreaks of epidemic and pandemic of diseases,such as the outbreak of COVID-19, may affect our ability to comply with these covenants. We could lose our vessels if we default on our financing facilities, which would negativelyaffect our revenues, results of operations and financial condition.Servicing current and future debt (including SLBs) will limit funds available for other purposes and impair our ability to react to changes in our business.We must dedicate a portion of our cash flow from operations to pay the principal and interest on our indebtedness. These payments limit funds otherwise available for workingcapital, capital expenditures and other purposes. As of December 31, 2022, we had a total indebtedness of $240.6 million, excluding deferred finance fees and debt discounts. Our currentor future debt could have other significant consequences on our operations. For example, it could:16Table of Contents●increase our vulnerability to general economic downturns and adverse competitive and industry conditions;●require us to dedicate a substantial portion, if not all, of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flowto fund working capital, capital expenditures and other general corporate purposes;●limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;●place us at a competitive disadvantage compared to competitors that have less debt or better access to capital;●limit our ability to raise additional financing on satisfactory terms or at all; and●adversely impact our ability to comply with the financial and other restrictive covenants of our current or future financing arrangements, which could result in an event ofdefault under such agreements.Furthermore, our current or future interest expense will increase if interest rates increase. If we do not have sufficient earnings, we may be required to refinance all or part of ourcurrent or future debt, sell assets, borrow more money or sell more securities, and we cannot guarantee that the resulting proceeds therefrom, if any, will be sufficient to meet our ongoingcapital and operating needs. Because interest paid on loans is generally a margin plus a reference rate, such as SOFR or LIBOR, that is subject to change, our actual interest costs wouldincrease as the reference rate increases. During an inflationary period, such as one we are currently experiencing, the SOFR or LIBOR or similar reference rate will generally be increased,thus costing us more money to service our debt obligations and reducing our results of operations and cash flow. Any event of default under a loan agreement pursuant to which wehave granted security could permit the relevant lender to exercise its rights as a secured lender and take the relevant collateral, which may include our vessels.Our President, Chief Executive Officer and Director has significant influence over us, and trusts established for the benefit of his family may be deemed to beneficiallyown, directly or indirectly, 100% of our Series D, Series E and Series F Preferred Shares, and thereby to control the outcome of matters on which our shareholders are entitled tovote.As of the date of this annual report, Lax Trust, which is an irrevocable trust established for the benefit of certain family members of our President, Chief Executive Officer andDirector, 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 Sharecarries 1,000 votes. In addition, the Lax Trust, through Family Trading Inc., or Family Trading, may be deemed to beneficially own 13,452 Series E Preferred Shares held by Family Trading,which represent all of the Series E Preferred Shares that are currently outstanding and which are convertible into approximately 21,696,774 common shares as of March 28, 2023. EachSeries E Preferred Share carries 1,000 votes. Three Sororibus Trust of Cyprus, an irrevocable trust established for the benefit of certain family members of Mr. Pistiolis, may be deemed tobeneficially own all of the 3,834,082 outstanding shares of our Series F Preferred Shares. Each Series F Preferred Share carries 10 votes. By the Lax Trust’s beneficial ownership of 100% of our Series D Preferred Shares and Series E Preferred Shares, and Three Sororibus Trust of Cyprus beneficial ownership of100% of our Series F Preferred Shares, as of the date of this annual report, the Lax Trust together with Three Sororibus Trust of Cyprus may be deemed to beneficially own 88.2% of ourtotal voting power and to control the outcome of matters on which our shareholders are entitled to vote, including the election of our directors and other significant corporate actions.The interests of the Lax Trust, Three Sororibus Trust of Cyprus or the family of Mr. Pistiolis may be different from your interests. As a prerequisite for the Navigare Lease (defined below), Mr. Pistiolis personally guaranteed the performance of the bareboat charters connected to the lease, under certaincircumstances, and in exchange, we, among other things, amended the Certificate of Designations governing the terms of the Series D Preferred Shares, to adjust the voting rights pershare of Series D Preferred Shares such that during the term of the Navigare Lease, the combined voting power controlled by Mr. Pistiolis and the Lax Trust does not fall below a majorityof our total voting power, irrespective of any new common or preferred stock issuances, and thereby complying with a relevant covenant of the bareboat charters entered in connectionwith the Navigare Lease.We have been subject to litigation in the past and we may be subject to similar or other litigation in the future.We and certain of our current executive officers were defendants in purported class-action lawsuits in the U.S. District Court for the Eastern District of New York, brought onbehalf of our shareholders. The lawsuits alleged violations of Sections 9, 10(b), 20(a) and/or 20A of the Securities Exchange Act of 1934, as amended, or the Exchange Act and Rule 10b-5promulgated hereunder. In connection with these lawsuits, certain co-defendants requested that we indemnify and hold them harmless against all losses, including reasonable costs ofdefense, arising from the litigation, pursuant to the provisions of the Common Stock Purchase Agreement between us and Kalani.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 ofAppeals for the Second Circuit. We filed our response briefs on November 26 and November 27, 2019, and plaintiffs/appellants filed their reply brief on December 11, 2019. The Court ofAppeals 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’sdecision dismissing Plaintiffs’ claims and denying leave to amend and the case was finally concluded in our favor.17Table of ContentsWe may, from time to time, be a party to other litigation in the normal course of business. Monitoring and defending against legal actions, whether or not meritorious, is time-consuming for our management and detracts from our ability to fully focus our internal resources on our business activities. In addition, our legal fees and costs incurred in connectionwith such activities and any legal fees of co-defendants for which we are deemed responsible may be significant and we could, in the future, be subject to judgments or enter intosettlements of claims for significant monetary damages. A decision adverse to our interests could result in the payment of substantial damages and could have a material adverse effecton our cash flow, results of operations and financial position.With respect to any litigation, our insurance may not reimburse us or may not be sufficient to reimburse us for the expenses or losses we may suffer in contesting andconcluding such lawsuit. Furthermore, our insurance does not cover legal fees associated with co-defendants. Substantial litigation costs, including the substantial self-insuredretention that we are required to satisfy before any insurance applied to the claim, or an adverse result in any litigation may adversely impact our business, operating results or financialcondition.As of the date of this annual report our operating fleet consists of eight tankers. Any limitation in the availability or operation of these vessels could have a materialadverse effect on our business, results of operations and financial condition.As of the date of this annual report, our operating fleet consists of one 50,000 dwt MR product tanker, five 157,000 dwt Suezmax crude oil tankers, and two 300,000 dwt VeryLarge Crude Carriers (VLCCs). Our MR product tanker is M/T Eco Marina Del Ray. Our Suezmax fleet consists of M/T Eco Bel Air, M/T Eco Beverly Hills, M/T Oceano CA, M/T EcoMalibu and M/T Eco West Coast. Our VLCC fleet consists of M/T Julius Caesar and M/T Legio X Equestris. Furthermore, we have a 50% interest in M/T Eco Yosemite Park and M/T EcoJoshua Park, two 50,000 dwt product tankers. If these vessels are unable to generate revenue as a result of off hire time, early termination of the applicable time charter or otherwise, ourbusiness, results of operations, financial condition and ability to pay dividends on our common shares could be materially adversely affected.We expect to be dependent on a limited number of customers for a large part of our revenues, and failure of such counterparties to meet their obligations could cause us tosuffer losses or negatively impact our results of operations and cash flows.During 2022, 100% of our revenues derived from five charterers, BP Shipping Limited (“BP”), Clearlake Shipping Pte Ltd (“Clearlake”), Trafigura Maritime Logistics Pte Ltd(“Trafigura”), Central Tankers Chartering Inc (“Central Tankers Chartering”) and Cargill International SA (“Cargill”). Such agreements subject us to counterparty risks. The ability of eachof our counterparties to perform its obligations under a contract with us will depend on a number of factors that are beyond our control and may include, among other things, generaleconomic conditions, the condition of the maritime industry, the overall financial condition of the counterparty, charter rates received for specific types of vessels, work stoppages orother labor disturbances and various expenses. The combination of a reduction of cash flow resulting from declines in world trade, a reduction in borrowing bases under reserve-basedcredit facilities and the lack of availability of debt or equity financing may result in a significant reduction in the ability of charterers to make charter payments to us. In addition, indepressed market conditions, charterers and customers may no longer need a vessel that is then under charter or contract or may be able to obtain a comparable vessel at lower rates. Asa result, charterers and customers may seek to renegotiate the terms of their existing charter agreements or avoid their obligations under those contracts. Should one of ourcounterparties fail to honor its obligations under agreements with us, we could sustain significant losses that could have a material adverse effect on our business, financial condition,results of operations and cash flows.If we fail to manage our planned growth properly, we may not be able to successfully expand our market share.We intend to continue to grow our fleet in the future in line with our strategy. Our future growth will primarily depend on our ability to:●generate excess cash flow for investment without jeopardizing our ability to cover current and foreseeable working capital needs (including debt service);●raise equity and obtain required financing for our existing and new operations;●locate and acquire suitable vessels;●identify and consummate acquisitions or joint ventures;●integrate any acquired business successfully with our existing operations;●our manager’s ability to hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet;●enhance our customer base; and●manage expansion.18Table of ContentsGrowing any business by acquisition presents numerous risks such as undisclosed liabilities and obligations, difficulty in obtaining additional qualified personnel, managingrelationships with customers and suppliers and integrating newly acquired operations into existing infrastructures. We may not be successful in executing our growth plans and we mayincur significant additional expenses and losses in connection therewith.Delays or defaults by the shipyards in the construction of newbuildings could increase our expenses and diminish our net income and cash flows. As of the date of this annual report, we do not have any contracts for newbuilding vessels. We may enter into contracts for newbuilding vessels in the future. Vesselconstruction 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 ofequipment, materials or skilled labor, unscheduled delays in the delivery of ordered materials and equipment or shipyard construction, failure of equipment to meet quality and/orperformance standards, financial or operating difficulties experienced by equipment vendors or the shipyard, unanticipated actual or purported change orders, inability to obtain requiredpermits or approvals, design or engineering changes and work stoppages and other labor disputes, adverse weather conditions or any other events of force majeure. Significant delayscould 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 may continue to incur costs and expenses related to delayed vessels, such as supervision expenses. Our ability to obtain additional debt financing may be dependent on our ability to charter our vessels, the performance of our charters and the creditworthiness of ourcharterers.Our inability to re-charter our vessels and the actual or perceived credit quality of our charterers, and any defaults by them, may materially affect our ability to obtain theadditional capital resources that we will require to purchase additional vessels or may significantly increase our costs of obtaining such capital. Our inability to obtain financing, orreceiving financing at a higher than anticipated cost, may materially affect our results of operation and our ability to implement our business strategy.The industry for the operation of tanker vessels and the transportation of oil, petroleum products and chemicals is highly competitive and we may not be able to competefor charters with new entrants or established companies with greater resources.We will employ our tankers and any additional vessels we may acquire in a highly competitive market that is capital intensive and highly fragmented. The operation of tankervessels and the transportation of cargoes shipped in these vessels, as well as the shipping industry in general, is extremely competitive. Competition arises primarily from other vesselowners, including major oil companies as well as independent tanker shipping companies, some of whom have substantially greater resources than we do. Competition for thetransportation of oil, petroleum products and chemicals can be intense and depends on price, location, size, age, condition and the acceptability of the vessel and its operators to thecharterers. Due in part to the highly fragmented market, competitors with greater resources could enter and operate larger fleets through consolidations or acquisitions that may be ableto offer better prices and fleets than us.We maintain cash with a limited number of financial institutions, including financial institutions that may be located in Greece, which will subject us to credit risk. We maintain all of our cash with a limited number of financial institutions, including institutions that are located in Greece. These financial institutions located in Greece may besubsidiaries of international banks or Greek financial institutions. Although concerns relating to the sovereign debt crisis have largely been allayed and Greece has emerged from itsbailout programs, the stand-alone financial strength of the banks and the anticipated additional pressures stemming from the legacy of the country’s multi-year debt crisis and theCOVID-19 pandemic continue to create uncertain economic prospects.Additionally, only a small portion of cash balances are covered by insurance in the event of default by these financial institutions in Greece or elsewhere. Several banks,including banks in the United States and Switzerland, have recently been subject to extraordinary resolution procedures or sale because of the risk of such a default. Furthermore, in theevent any of our banks do not allow us to withdraw funds in the time and amounts that we want, we may not timely comply with contractual provisions in any of our contracts or oursalary obligations, among other things. The occurrence of such a default of any of our banks could have a material adverse effect on our business, financial condition, results ofoperations and cash flows, and we may lose part or all of our cash that we deposit with such banks.We may be unable to attract and retain key management personnel and other employees in the international tanker shipping industry, which may negatively impact theeffectiveness of our management and our results of operations.Our success depends to a significant extent upon the abilities and efforts of our management team. All of our executive officers are employees of Central Mare Inc., or CentralMare, a related party affiliated with the family of Mr. Evangelos J. Pistiolis, our President, Chief Executive Officer and Director, and we have entered into agreements with Central Mare forthe compensation of Mr. Evangelos J. Pistiolis; Alexandros Tsirikos, our Chief Financial Officer and Director; Vangelis G. Ikonomou our Chief Operating Officer and Konstantinos Patis,our Chief Technical Officer. The loss of any of these individuals could adversely affect our business prospects and financial condition. Difficulty in hiring and retaining personnel couldadversely affect our results of operations. We do not maintain “key man” life insurance on any of our officers.If labor interruptions are not resolved in a timely manner, they could have a material adverse effect on our business, results of operations, cash flows, financial conditionand available cash.Our Fleet Manager, is responsible for recruiting, mainly through a crewing agent, the senior officers and all other crew members for our vessels and all other vessels we mayacquire. If not resolved in a timely and cost-effective manner, industrial action or other labor unrest could prevent or hinder our operations from being carried out as we expect and couldhave a material adverse effect on our business, results of operations, cash flows, financial condition and available cash.19Table of ContentsIf we expand our business, we will need to improve our operations and financial systems and staff; if we cannot improve these systems or recruit suitable employees, ourperformance may be adversely affected.Our current operating and financial systems may not be adequate if we implement a plan to expand the size of our fleet, and our attempts to improve those systems may beineffective. If we are unable to operate our financial and operations systems effectively or to recruit suitable employees as we expand our fleet, our performance may be adverselyaffected.A drop in spot charter rates may provide an incentive for some charterers to default on their charters, which could affect our cash flow and financial condition.When we enter into a time charter or bareboat charter, rates under that charter are fixed throughout the term of the charter. If the spot charter rates in the tanker shippingindustry become significantly lower than the time charter equivalent rates that some of our charterers are obligated to pay us under our then existing charters, the charterers may haveincentive to default under that charter or attempt to renegotiate the charter. If our charterers fail to pay their obligations, we would have to attempt to re-charter our vessels at lowercharter rates, and as a result we could sustain significant losses which could have a material adverse effect on our cash flow and financial condition, which would affect our ability tomeet our current or future loans or current leaseback obligations. If our current or future lenders choose to accelerate our indebtedness and foreclose their liens, or if the owners of ourleased vessels choose to repossess vessels in our fleet as a result of a default under the SLBs, our ability to continue to conduct our business would be impaired.An increase in operating costs could decrease earnings and available cash.Vessel operating costs include the costs of crew, fuel (for spot-chartered vessels), provisions, deck and engine stores, insurance, and maintenance and repairs, which depend ona variety of factors, many of which are beyond our control. Some of these costs, primarily relating to insurance and enhanced security measures, have been increasing. If any vessels wehave or will acquire suffer damage, they may need to be repaired at a dry-docking facility. The costs of dry-docking repairs are unpredictable and can be substantial. Increases in any ofthese expenses could decrease our earnings and available cash.The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings.In general, the cost of maintaining a vessel in good operating condition increases with the age of the vessel. As our fleet ages, operating and other costs will increase. In thecase of bareboat charters, operating costs are borne by the bareboat charterer. Cargo insurance rates also increase with the age of a vessel, making older vessels less desirable tocharterers. Governmental regulations, including environmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations orthe addition of new equipment to our vessels and may restrict the type of activities in which our vessels may engage. As our fleet ages, market conditions might not justify thoseexpenditures or enable us to operate our vessels profitably during the remainder of their useful lives.Unless we set aside reserves or are able to borrow funds for vessel replacement, our revenue will decline at the end of a vessel’s useful life, which would adversely affect ourbusiness, results of operations and financial condition.Unless we maintain reserves or are able to borrow or raise funds for vessel replacement, we will be unable to replace the vessels in our fleet upon the expiration of theirremaining useful lives, which we estimate to be 25 years from the date of initial delivery from the shipyard. Our cash flows and income are dependent on the revenues earned by thechartering of our vessels to customers. If we are unable to replace the vessels in our fleet upon the expiration of their useful lives, our business, results of operations and financialcondition will be materially and adversely affected.Purchasing and operating secondhand vessels may result in increased operating costs and vessels off-hire, which could adversely affect our earnings.We may expand our fleet through the acquisition of secondhand vessels. While we rigorously inspect previously owned or secondhand vessels prior to purchase, this does notnormally provide us with the same knowledge about their condition and cost of any required (or anticipated) repairs that we would have had if these vessels had been built for andoperated exclusively by us. Accordingly, we may not discover defects or other problems with such vessels prior to purchase. Any such hidden defects or problems, when detected, maybe expensive to repair, and if not detected, may result in accidents or other incidents for which we may become liable to third parties. Also, when purchasing previously owned vessels,we do not receive the benefit of warranties from the builders if the vessels we buy are older than one year. In general, the costs to maintain a vessel in good operating condition increasewith the age and type of the vessel. In the case of chartered-in vessels, we run the same risks.Governmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations, or the addition of new equipment, to ourvessels and may restrict the type of activities in which the vessels may engage. As our vessels age, market conditions may not justify those expenditures or enable us to operate ourvessels profitably during the remainder of their useful lives.20Table of ContentsWe may not have adequate insurance to compensate us if we lose any vessels that we acquire.We carry insurance for all vessels we acquire against those types of risks commonly insured against by vessel owners and operators. These insurances include hull andmachinery insurance, protection and indemnity insurance (which includes environmental damage and pollution insurance coverage), freight demurrage and defense and war riskinsurance. Reasonable insurance rates can best be obtained when the size and the age/trading profile of the fleet is attractive. As a result, rates become less competitive as a fleetdownsizes.In the future, we may not be able to obtain adequate insurance coverage at reasonable rates for the vessels we acquire. The insurers may not pay particular claims. Ourinsurance policies also contain deductibles for which we will be responsible as well as limitations and exclusions that may increase our costs or lower our revenue.We may be subject to increased premium payments, or calls, as we obtain some of our insurance through protection and indemnity associations.We may be subject to increased premium payments, or calls, in amounts based on our claim records and the claim records of our Fleet Manager as well as the claim records ofother members of the protection and indemnity associations through which we receive insurance coverage for tort liability, including pollution-related liability. In addition, our protectionand indemnity associations may not have enough resources to cover claims made against them. Our payment of these calls could result in significant expense to us, which could have amaterial adverse effect on our business, results of operations and financial condition.Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our Environmental, Social and Governance (“ESG”)policies may impose additional costs on us or expose us to additional risks.Companies across all industries are facing increasing scrutiny relating to their ESG policies. Investor advocacy groups, certain institutional investors, investment funds, lendersand other market participants are increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their investments.The increased focus and activism related to ESG and similar matters may hinder access to capital, as investors and lenders may decide to reallocate capital or to not commit capital as aresult of their assessment of a company’s ESG practices. Companies which do not adapt to or comply with investor, lender or other industry shareholder expectations and standards,which are evolving, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, maysuffer from reputational damage and the business, financial condition, and/or stock price of such a company could be materially and adversely affected.We may face increasing pressures from investors, lenders and other market participants, who are increasingly focused on climate change, to prioritize sustainable energypractices, reduce our carbon footprint and promote sustainability. As a result, we may be required to implement more stringent ESG procedures or standards so that our existing andfuture investors and lenders remain invested in us and make further investments in us. If we do not meet these standards, our business and/or our ability to access capital could beharmed.Additionally, certain investors and lenders may exclude shipping companies, such as us, from their investing portfolios altogether due to environmental, social and governancefactors.  These limitations in both the debt and equity capital markets may affect our ability to develop as our plans for growth may include accessing the equity and debt capitalmarkets.  If those markets are unavailable, or if we are unable to access alternative means of financing on acceptable terms, or at all, we may be unable to implement our business strategy,which would have a material adverse effect on our financial condition and results of operations and impair our ability to service our indebtedness. Further, it is likely that we will incuradditional costs and require additional resources to monitor, report and comply with wide ranging ESG requirements. The occurrence of any of the foregoing could have a materialadverse effect on our business and financial condition.Moreover, from time to time, we may establish and publicly announce goals and commitments in respect of certain ESG items. While we may create and publish voluntarydisclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures are based on hypothetical expectations and assumptions that may or may notbe representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith. Such expectations and assumptions arenecessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuringand reporting on many ESG matters. If we fail to achieve or improperly report on our progress toward achieving our environmental goals and commitments, the resulting scrutiny frommarket participants or regulators could adversely affect our reputation and/or our access to capital. Technological innovation and quality and efficiency requirements from our customers could reduce our charter hire income and the value of our vessels.Our customers, in particular those in the oil industry, have a high and increasing focus on quality and compliance standards with their suppliers across the entire supply chain,including the shipping and transportation segment. Our continued compliance with these standards and quality requirements is vital for our operations. Charter hire rates and the valueand operational life of a vessel are determined by a number of factors including the vessel’s efficiency, operational flexibility and physical life. Efficiency includes speed, fuel economyand the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, utilize related docking facilities and pass through canals and straits. The length of avessel’s physical life is related to its original design and construction, its maintenance and the impact of the stress of operations. If new vessels are built that are more efficient or moreflexible or have longer physical lives than our vessels, competition from these more technologically advanced vessels could adversely affect the amount of charter hire payments wereceive for our vessels, and the resale value of our vessels could significantly decrease which may have a material adverse effect on our future performance, results of operations, cashflows and financial position.The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.Our vessels may call in ports where smugglers may attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To the extent ourvessels are found with contraband, whether inside or attached to the hull of our vessel and whether with or without the knowledge of any of our crew, we may face governmental orother regulatory claims that could have an adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.21Table of ContentsMaritime claimants could arrest our vessels or vessels we acquire, which could interrupt our cash flow.Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against that vessel for unsatisfied debts, claimsor damages. In many jurisdictions, a maritime lienholder may enforce its lien by “arresting” or “attaching” a vessel through foreclosure proceedings. The arrest or attachment of one ormore of our vessels or vessels we acquire could result in a significant loss of earnings for the related off-hire period. In addition, in jurisdictions where the “sister ship” theory of liabilityapplies, a claimant may arrest the vessel which is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner. Incountries with “sister ship” liability laws, claims might be asserted against us or any of our vessels for liabilities of other vessels that we own.Governments could requisition our vessels or vessels we acquire during a period of war or emergency, resulting in loss of earnings.A government could requisition vessels for title or hire. Requisition for title occurs when a government takes control of a vessel and becomes the owner. Requisition for hireoccurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency.Government requisition of any of our vessels or vessels we acquire could negatively impact our revenues should we not receive adequate compensation. U.S. federal tax authorities could treat us as a “passive foreign investment company,” which could have adverse U.S. federal income tax consequences to U.S.shareholders.A foreign corporation will be treated as a “passive foreign investment company,” or PFIC, for U.S. federal income tax purposes if either (1) at least 75% of its gross income forany taxable year consists of certain types of “passive income” or (2) at least 50% of the average value of the corporation’s assets produce or are held for the production of those typesof “passive income.” For purposes of these tests, “passive income” includes dividends, interest, gains from the sale or exchange of investment property and rents and royalties otherthan rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. Income derived from the performance of services does notconstitute “passive income” for this purpose. U.S. shareholders of a PFIC are subject to a disadvantageous U.S. federal income tax regime with respect to the income derived by thePFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.In general, income derived from the bareboat charter of a vessel should be treated as “passive income” for purposes of determining whether a foreign corporation is a PFIC, andsuch vessel should be treated as an asset which produces or is held for the production of “passive income.” On the other hand, income derived from the time charter of a vessel shouldnot be treated as “passive income” for such purpose, but rather should be treated as services income; likewise, a time chartered vessel should generally not be treated as an asset whichproduces or is held for the production of “passive income.”We believe that we were not a PFIC for our 2014 through 2022 taxable years and do not expect to be treated as a PFIC in subsequent taxable years. In this regard, we intend totreat the gross income we derive or are deemed to derive from our time chartering activities as services income, rather than rental income. Accordingly, we believe that our income fromour time chartering activities does not constitute ‘‘passive income,’’ and the assets that we own and operate in connection with the production of that income do not constitute passiveassets.There is, however, no direct legal authority under the PFIC rules addressing our proposed method of operation. Accordingly, no assurance can be given that the United StatesInternal Revenue Service, or IRS, or a court of law will accept our position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurancecan be given that we would not constitute a PFIC for any future taxable year if there were to be changes in the nature and extent of our operations.Our U.S. shareholders may face adverse U.S. federal income tax consequences and certain information reporting obligations as a result of us being treated as a PFIC. Under thePFIC rules, unless those shareholders make an election available under the Code (which election could itself have adverse consequences for such shareholders, as discussed belowunder “Taxation—U.S. Federal Income Taxation of U.S. Holders—Passive Foreign Investment Company Status and Significant Tax Consequences”), such shareholders would be liableto pay U.S. federal income tax at the then prevailing income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of their commonshares, as if the excess distribution or gain had been recognized ratably over the shareholder’s holding period of the common shares. See “Taxation—U.S. Federal Income Taxation ofU.S. Holders—Passive Foreign Investment Company Status and Significant Tax Consequences” for a more comprehensive discussion of the U.S. federal income tax consequences toU.S. shareholders as a result of our status as a PFIC. We may be subject to U.S. federal income tax on our U.S. source income, which would reduce our earnings. Under the U.S. Internal Revenue Code of 1986, as amended, or the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such as ourselves andour subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States is characterized as U.S. source shipping income andsuch income is subject to a 4% U.S. federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code.22Table of ContentsWe did not qualify for the tax exemption under Section 883 of the Code for our 2021 taxable year. Therefore, we and our subsidiaries were subject to an effective 2% U.S. federalincome tax on the gross shipping income we derived during 2021 that was attributable to the transport of cargoes to or from the United States. The amount of this tax for our 2021 taxableyear was $152,000.We intend to take the position for U.S. federal income tax reporting purposes that we are not subject to U.S. federal income taxation for the 2022 taxable year. However, there arefactual circumstances beyond our control that could cause us to lose the benefit of the exemption and thereby become subject to U.S. federal income tax on our U.S. source shippingincome. Due to the factual nature of the issues involved, we may not qualify for exemption under Section 883 of the Code for any future taxable year.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 rulesgoverning 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 notrequired 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 anddirectors 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 oursecurities. 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 thanshareholders 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 reviewby 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 commonshares less attractive to some investors or otherwise harm our stock price. RISKS RELATED TO OUR COMMON SHARESThe market price and trading volume of our common shares may continue to be highly volatile, which could lead to a loss of all or part of a shareholder’s investment. The market price of our common shares has fluctuated widely since our common shares began trading in July of 2004 on Nasdaq. The market price of our common shares is affected by a variety of factors, including: •fluctuations in interest rates;•fluctuations in the availability or the price of oil and chemicals;•fluctuations in foreign currency exchange rates;•announcements by us or our competitors;•changes in our relationships with customers or suppliers;•actual or anticipated fluctuations in our semi-annual and annual results and those of other public companies in our industry;•changes in United States or foreign tax laws;•international sanctions, embargoes, import and export restrictions, nationalizations, piracy and wars or other conflicts, including the war in Ukraine.•actual or anticipated fluctuations in our operating results from period to period;•shortfalls in our operating results from levels forecast by securities analysts;•market conditions in the shipping industry and the general state of the securities markets;•business interruptions caused by the outbreak of COVID-19 or the war in Ukraine;•mergers and strategic alliances in the shipping industry;•changes in government regulation;•a general or industry-specific decline in the demand for, and price of, shares of our common shares resulting from capital market conditions independent of ouroperating performance;•the loss of any of our key management personnel;•our failure to successfully implement our business plan;•issuance of shares; and•stock splits / reverse stock splits. In addition, over the last few years, the stock market has experienced price and volume fluctuations, including due to factors relating to the outbreak of COVID-19 and the war inUkraine, and this volatility has sometimes been unrelated to the operating performance of particular companies. As a result, there is a potential for rapid and substantial decreases in theprice of our common shares, including decreases unrelated to our operating performance or prospects. During 2022, the closing price of our common shares experienced a high of $29.80in March and a low of $1.11 in December. This market and share price volatility relating to the effects of COVID-19 or the war in Ukraine, as well as general economic, market or politicalconditions, has and could further reduce the market price of our common shares in spite of our operating performance and could also increase our cost of capital, which could prevent usfrom accessing debt and equity capital on terms acceptable to us or at all. 23Table of ContentsIn addition, the market price and trading volume of our common shares have very recently and at certain other times in the past exhibited, and may continue to exhibit, extremevolatility, including within a single trading day. Such volatility could cause purchasers of our common shares to incur substantial losses. For example, on October 5, 2022, the tradingprice of our common shares ranged from an intra-day high of $11.60 to an intra-day low of $5.28, on trading volume of approximately 40.8 million shares. On November 30, 2022, thetrading price of our common shares ranged from an intra-day high of $4.58 to an intra-day low of $2.03, on trading volume of approximately 23.6 million shares, and over the followingthree trading days, the trading price of our common shares ranged from an intra-day high of $5.94 to an intra-day low of $1.73, on daily trading volume of between approximately 29.0million shares and 44.3 million shares. By comparison, during the period from January 1, 2022 to December 31, 2022, the average daily trading volume of our common shares wasapproximately 1,278,800 shares and the trading price of our common shares fluctuated from an intra-day high of $32.80 on March 7, 2022 to an intra-day low of $1.04 on December 28,2022. With respect to certain such instances of trading volatility, including the period beginning on November 30, 2022, we are not aware of any material changes in our financialcondition or results of operations that would explain such price volatility or trading volume, which we believe reflect market and trading dynamics unrelated to our operating business orprospects and outside of our control. We are thus unable to predict when such instances of trading volatility will occur or how long such dynamics may last. Under these circumstances,we would caution you against investing in our common shares unless you are prepared to incur the risk of incurring substantial losses. A portion of our common shares may be traded by short sellers which may put pressure on the supply and demand for our common shares, creating further price volatility. Inparticular, a possible “short squeeze” due to a sudden increase in demand of our common stock that largely exceeds supply may lead to sudden extreme price volatility in our commonshares. Investors may purchase our common shares to hedge existing exposure in our common shares or to speculate on the price of our common shares. Speculation on the price of ourcommon shares may involve long and short exposures. To the extent aggregate short exposure exceeds the number of common shares available for purchase in the open market,investors with short exposure may have to pay a premium to repurchase our common shares for delivery to lenders of our common shares. Those repurchases may in turn, dramaticallyincrease the price of our common shares until investors with short exposure are able to purchase additional common shares to cover their short position. This is often referred to as a“short squeeze.” Following such a short squeeze, once investors purchase the shares necessary to cover their short position, the price of our common shares may rapidly decline. Ashort squeeze could lead to volatile price movements in our shares that are not directly correlated to the performance or prospects of our company and could cause purchasers of ourcommon shares to incur substantial losses.Further, shareholders may institute securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantialcosts and our resources and the attention of management could be diverted from our business.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 youmay 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 factorssuch as: •actual or anticipated fluctuations in our results and those of other public companies in our industry;•mergers and strategic alliances in the shipping industry;•market conditions in the shipping industry and the general state of the securities markets;•changes in government regulation;•shortfalls in our operating results from levels forecast by securities analysts; and•announcements concerning us or our competitors.Further, a lack of trading volume in our stock may affect investors’ ability to sell their shares. Our common shares have periodically had 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 closingprice.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 tradingrestrictions.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 underthe 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 thelisting 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 dayswas 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 NasdaqListing Rules, the applicable grace period to regain compliance was 180 days, or until December 26, 2017. We regained compliance on August 17, 2017. 24Table of ContentsOn 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 dayswas 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 NasdaqListing 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 dayswas 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). On August 22, 2019 weeffectuated 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. 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 businessdays was below $1.00 per share, we no longer met the minimum bid price requirement under Nasdaq rules. On April 17, 2020 we received a written notification from Nasdaq granting anextension to the grace period for regaining compliance. On August 10, 2020 we effectuated a 25-to-1 reverse stock split in order to regain compliance with Nasdaq Listing Rule 5450(a)(1).As a result, we regained compliance on August 25, 2020. On January 26, 2022, we received a written notification from Nasdaq indicating that because the closing bid price of our common shares for the last 30 consecutive businessdays was below $1.00 per share, we no longer met the minimum bid price requirement under Nasdaq rules. We regained compliance on March 22, 2022. On May 18, 2022, we received a written notification from Nasdaq indicating that because the closing bid price of our common shares for the last 30 consecutive business dayswas below $1.00 per share, we no longer met the minimum bid price requirement under Nasdaq rules. On September 23, 2022 we effectuated a 20-to-1 reverse stock split in order to regaincompliance with Nasdaq Listing Rule 5450(a)(1). As a result, we regained compliance on October 7, 2022.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. Thecommencement 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 asuspension 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 capitalthrough 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 otherinvestor demand, analyst coverage, market making activity and information available concerning trading prices and volume, and fewer broker-dealers would be willing to execute tradeswith 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 ourcredit 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, whichcould 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 operatingperformance.We have issued common shares in the past through various transactions and we may do so in the future without shareholder approval, which may dilute our existingshareholders, depress the trading price of our securities and impair our ability to raise capital through subsequent equity offerings.We have already sold large quantities of our common shares and securities convertible into common shares, pursuant to previous public and private offerings of our equity andequity-linked securities. We currently have an effective registration statement on Form F-3 (333-267170), for the registered sale of $200 million of our securities, of which we have sold$13.6 million. We also have 13,452 Series E Preferred Shares outstanding, which are convertible into approximately 21,696,774 shares as of March 28, 2023. All of the Series E PreferredShares are beneficially owned by the Lax Trust, an irrevocable trust established for the benefit of certain family members of Mr. Evangelos Pistiolis, our President, Chief Executive Officerand Director.In addition, the outstanding October 2022 Warrants (defined below) are exercisable to purchase up to 1,072,725 common shares at an exercise price of $6.75 per share, theoutstanding Class C Warrants (defined below) are exercisable to purchase up to 6,744,000 common shares at an exercise price of $1.35 per share and the outstanding February 2023Warrants (defined below) are exercisable to purchase up to 10,045,185 common shares at an exercise price of $1.35 per share.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 whichthey 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, debtprepayments, future vessel acquisitions, redemptions of our Series E or Series F Preferred Shares, or any future equity incentive plan, without shareholder approval, in a number ofcircumstances. Our existing shareholders may experience significant dilution if we issue shares in the future at prices below the price at which previous shareholders invested.25Table of ContentsOur issuance of additional shares of common shares or other equity securities of equal or senior rank would have the following effects:●our existing shareholders’ proportionate ownership interest in us will decrease;●the amount of cash available for dividends payable on the shares of our common shares may decrease;●the relative voting strength of each previously outstanding common share may be diminished; and●the market price of the shares of our common shares may decline.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 salesof common shares by our large shareholders or by holders of securities convertible into common shares, or the perception that these sales could occur. These sales or the perceptionthat 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 itmore 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 orother 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 orpreferred stock or securities convertible or exchangeable into equity securities, without shareholder approval. We may issue such additional equity or convertible securities to raiseadditional capital. The issuance of any additional shares of common or preferred stock or convertible securities could be substantially dilutive to our shareholders. Moreover, to theextent 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 orwarrants 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 thatentitle 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 ourshareholders.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 have been triggered by securities we have issued, including common shares, convertible preferred shares,and warrants, and could further be triggered by future issuances of the same or similar types of securities, depending on the offering price of equity issuances, the conversion price orformula of convertible shares or the exercise price or formula of warrants. Any issuance of common shares below the applicable fixed conversion price of the Series E Preferred Shares,would result in an adjustment downward of the Series E Preferred Shares fixed conversion price and could result in a corresponding increase in the number of common shares each SeriesE Share is converted into. 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 currentfixed conversion price of the Series E Preferred Shares would result in similar adjustments. These adjustments could increase the number of common shares issuable upon conversion ofthe Series E Preferred Shares, dilute the interests of our common shareholders and affect the trading price for our common shares. Furthermore, the Series E Preferred Shares conversionprice is equal to the lesser of the fixed conversion price subject to adjustment as described above, and a variable conversion price, namely 80% of the lowest daily Volume-WeightedAverage 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 a conversion notice.However, in no event can the conversion price be less than $0.60. If using the variable conversion price of the Series E Preferred Shares, as of March 28,2023, the Series E PreferredShares have a conversion price of $0.62 and are convertible into 21,696,774 common shares per Series E Share, as may be further adjusted.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 fewerrights 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 CorporationsAct, 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 theRepublic 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 clearlyestablished as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain United States jurisdictions. Shareholder rights may differ aswell. 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, ourpublic shareholders may have more difficulty in protecting their interests in the face of actions by management, directors or controlling shareholders than would shareholders of acorporation incorporated in a United States jurisdiction.26Table of ContentsIt may not be possible for investors to serve process on or enforce U.S. judgments against us.We and all of our subsidiaries are incorporated in jurisdictions outside the U.S. and substantially all of our assets and those of our subsidiaries are located outside the U.S. Inaddition, all of our directors and officers are non-residents of the U.S., and all or a substantial portion of the assets of these non-residents are located outside the U.S. As a result, it maybe difficult or impossible for U.S. investors to serve process within the U.S. upon us, our subsidiaries or our directors and officers or to enforce a judgment against us for civil liabilitiesin U.S. courts. In addition, you should not assume that courts in the countries in which we or our subsidiaries are incorporated or where our assets or the assets of our subsidiaries arelocated (1) would enforce judgments of U.S. courts obtained in actions against us or our subsidiaries based upon the civil liability provisions of applicable U.S. federal and statesecurities laws or (2) would enforce, in original actions, liabilities against us or our subsidiaries based on those laws.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 soleand exclusive forum for (i) any shareholders’ derivative action or proceeding brought on behalf of the Corporation, including any such action arising under the Exchange Act or theSecurities Act (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’sshareholders, (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 aclaim 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 withus 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 Bylaws include a forum selection provision as described under the section herein entitled “Item 10. Additional Information—B. Memorandum and Articles of Association”.However, the enforceability of similar forum selection provisions in other companies’ governing documents has been challenged in legal proceedings, and it is possible that inconnection with any action a court could find the forum selection provision contained in our Bylaws to be inapplicable or unenforceable in such action. In particular, Section 27 of theExchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. In addition,Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rulesand regulations thereunder. Shareholders’ derivative actions, including those arising under the Exchange Act or Securities Act, are subject to our forum selection provision. To the extentthat the exclusive forum provision would apply to restrict the courts in which our shareholders may bring claims arising under the Exchange Act or the Securities Act and the rules andregulations thereunder, there is uncertainty as to whether a court would enforce such a provision. Investors cannot waive compliance with the federal securities laws and the rules andregulations promulgated thereunder. 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 ofactions or proceedings, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition andresults of operations.Anti-takeover provisions in our organizational documents could have the effect of discouraging, delaying or preventing a merger, amalgamation or acquisition, whichcould reduce 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 could make it difficult for our shareholdersto 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: •authorizing our Board of Directors to issue “blank check” preferred stock without stockholder approval;•providing for a classified Board of Directors with staggered, three-year terms;•prohibiting cumulative voting in the election of directors;•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 stockentitled to vote for the directors;•prohibiting shareholder action by written consent unless the written consent is signed by all shareholders entitled to vote on the action;•limiting the persons who may call special meetings of shareholders;•establishing advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted on by shareholders atshareholder meetings; and•restricting business combinations with interested shareholders.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 supportof our Board of Directors. See “Item 10. Additional Information—B. Memorandum and Articles of Association—Stockholders Rights Agreement.” 27Table of ContentsThe above anti-takeover provisions and the provisions of our stockholders rights agreement could substantially impede the ability of public shareholders to benefit from achange 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. RISKS RELATED TO OUR RELATIONSHIP WITH OUR FLEET MANAGER AND ITS AFFILIATESWe are dependent on our Fleet Manager to perform the day-to-day management of our fleet.Our executive management team, provided by Central Mare, consists of Evangelos J. Pistiolis; Alexandros Tsirikos, our Chief Financial Officer and Director; Vangelis G.Ikonomou our Chief Operating Officer and Konstantinos Patis, our Chief Technical Officer. We subcontract the day-to-day vessel management of our fleet, including crewing,maintenance and repair to our Fleet Manager. Furthermore, upon delivery of any vessels we may acquire, we expect to subcontract their day-to-day management to our Fleet Manager.Our Fleet Manager is a related party affiliated with the family of Mr. Pistiolis. We are dependent on our Fleet Manager for the technical and commercial operation of our fleet as well as forall accounting and reporting functions and the loss of our Fleet Manager’s services or its failure to perform obligations to us could materially and adversely affect the results of ouroperations. If our Fleet Manager suffers material damage to its reputation or relationships it may harm our ability to:●continue to operate our vessels and service our customers;●renew existing charters upon their expiration;●obtain new charters;●obtain financing on commercially acceptable terms;●obtain insurance on commercially acceptable terms;●maintain satisfactory relationships with our customers and suppliers; and●successfully execute our growth strategy.Our Fleet Manager is a privately held company and there may be limited or no publicly available information about it.Our Fleet Manager is a privately held company. The ability of our Fleet Manager to provide services for our benefit will depend in part on its own financial strength.Circumstances beyond our control could impair our Fleet Manager’s financial strength, and there may be limited publicly available information about its financial condition. As a result,an investor in our common shares might have little advance warning of problems affecting our Fleet Manager, even though these problems could have a material adverse effect on us.Our Fleet Manager may have conflicts of interest between us and its other clients.We subcontract the day-to-day vessel management of our fleet, including crewing, maintenance and repair to our Fleet Manager. Our Fleet Manager may provide similarservices for vessels owned by other shipping companies, and it also may provide similar services to companies with which our Fleet Manager is affiliated. These responsibilities andrelationships could create conflicts of interest between our Fleet Manager’s performance of its obligations to us, on the one hand, and our Fleet Manager’s performance of itsobligations to its other clients, on the other hand. These conflicts may arise in connection with the crewing, supply provisioning and operations of the vessels in our fleet versus vesselsowned by other clients of our Fleet Manager. In particular, our Fleet Manager may give preferential treatment to vessels owned by other clients whose arrangements provide for greatereconomic benefit to our Fleet Manager. These conflicts of interest may have an adverse effect on our results of operations.ITEM 4.INFORMATION ON THE COMPANYA.History and Development of the CompanyOur 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. inMay 2004. In December 2007, Top Tankers Inc. was renamed TOP Ships Inc. Our common shares are currently listed on Nasdaq under the symbol “TOPS.” The current address of ourprincipal executive office is 1 Vasilisis Sofias and Megalou Alexandrou Str, 15124 Maroussi, Greece. The telephone number of our registered office is +30 210 812 8107. The SEC maintainsan Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of the SEC’s Internetsite is http://www.sec.gov. The address of our Internet site is https://www.topships.org.On January 3, 2020, we announced that we agreed to sell two MR1 Product Tankers, the M/T Eco Fleet and the M/T Eco Revolution (each with a capacity of 39,000 dwt) tounaffiliated third parties. On January 14, 2020, the M/T Eco Revolution was delivered to its buyer and we received gross proceeds of $23.0 million, part of which were used to prepay infull the outstanding amount of $15.1 million under tranche A of our loan facility with ABN AMRO, or the ABN Facility. On January 21, 2020, the M/T Eco Fleet was delivered to its buyerand we received $21.0 million, part of which were used to prepay in full the outstanding amount of $14.4 million under tranche B of the ABN Facility, resulting in the full prepayment ofthe ABN Facility.On February 10 and February 17, 2020, we took delivery of M/T Eco Los Angeles and M/T Eco City of Angels, respectively, from the Hyundai Mipo Dockyard Co., Ltd. in SouthKorea.28Table of ContentsBetween January 22 and February 21, 2020, all of the Class A Warrants sold pursuant to a private placement in November 2019 (4,200,000 warrants) were exercised on a cashlessbasis into 67,200 of our common shares. No Class B Warrants sold pursuant to the same private placement were exercised prior to their expiration on May 7, 2021.On February 12, 2020, we entered into an Equity Distribution Agreement with Maxim Group LLC, as sales agent, under which we could offer and sell, from time to time throughMaxim, up to $5.0 million of our common shares. We completed the offering on March 4, 2020 and sold a total of 29,274 common shares.On February 17, 2020, we announced the issuance of 16,004 Series E Preferred Shares to Family Trading, as settlement of the consideration outstanding for the purchase of theM/T Eco City of Angels and M/T Eco Los Angeles from Mr. Pistiolis, our President, Chief Executive Officer and Director, and for dividends payable to Family Trading under alreadyoutstanding Series E Preferred Shares.On February 21, 2020, we announced that our 50% owned subsidiaries which owned M/T Holmby Hills and M/T Palm Springs entered into agreements to sell both vessels tounaffiliated third parties. On March 30, 2020, we announced the delivery of M/T Holmby Hills to an unaffiliated party.On February 6, 2020, we announced that we agreed to sell two MR2 Product Tankers, the M/T Stenaweco Elegance and the M/T Palm Desert (each with a capacity of 50,000dwt) to unaffiliated third parties. On February 25, 2020, we announced the closing of the sale of the M/T Stenaweco Elegance and on March 23, 2020, we announced the conclusion ofthe sale of the M/T Palm Desert.On March 11, 2020, we entered into an Equity Distribution Agreement with Maxim Group LLC, as sales agent, under which we could offer and sell, from time to time throughMaxim, up to $5.0 million of our common shares. We completed the offering on March 27, 2020 and sold a total of 105,385 common shares.On March 30, April 15, April 27, April 28, May 14, May 19, June 7, June 10, June 14, June 23 and July 6, 2020, we closed registered direct offerings for the sale of an aggregate of1,836,188 of our common shares for gross proceeds of $119.7 million with unaffiliated investors. Maxim acted as a placement agent for all of these registered direct offerings.On April 20, 2020, we announced the closing of the sale of the MR Product Tanker, M/T Palm Springs, by our 50% owned subsidiary, Eco Nine Pte.On April 24, 2020, we announced the purchase of 50% interests in two MR Product Tankers, M/T Yosemite Park and M/T Joshua Park from entities affiliated with our ChiefExecutive Officer for $27 million. Both vessels were delivered in March 2020 from Hyundai Mipo shipyard in South Korea.On May 6, 2020 we purchased a 100% ownership interest in three Marshall Islands companies that each owned 100% interests in one scrubber-fitted 50,000 dwt eco MRProduct Tanker under construction in Hyundai Heavy Industries shipyard in South Korea, with attached time charters from entities affiliated with our Chief Executive Officer. Theconsideration amounted to $18 million and was scheduled to be paid in installments through the vessels’ delivery dates. The vessels, M/T Eco Van Nuys (Hull No 2789), M/T Eco SantaMonica (Hull No 2790) and M/T Eco Venice Beach (Hull No 2791) were scheduled to be delivered in the first quarter of 2021. In January 2021, we sold these three shipowning companies,as described below.On May 28, 2020, we acquired for $22 million from a company affiliated with our Chief Executive Officer, or the Suezmax Seller, a 50% ownership interest in two Marshall Islandscompanies that each had a newbuilding contract for the construction of one scrubber-fitted 157,000 dwt eco Suezmax tanker, the M/T Eco West Coast (Hull No 865) and the M/T EcoMalibu (Hull No 866), under construction in Hyundai Heavy Industries’ shipyard in South Korea, with attached time charters. The M/T Eco West Coast was delivered to us in March2021 and commenced its time charter upon delivery. The M/T Eco Malibu was delivered in May 2021. We had the option to acquire the other 50% ownership interest in both vessels fromthe Suezmax Seller at the same price until July 15, 2020. On June 18, 2020, we exercised both purchase options for a consideration of $22 million.On August 10, 2020, we effected a 25-to-1 reverse stock split of our common shares. There was no change in the number of our authorized common shares. All share amounts inthis report, not including amounts incorporated by reference, have been retroactively adjusted to reflect this reverse stock split.On August 17, 2020, we announced the authorization by our Board of Directors of a share repurchase program under which we could repurchase up to $5.1 million of ouroutstanding common shares, representing approximately 10% of our market capitalization as of August 14, 2020, for a period of three months (the “Repurchase Program”). No commonstock purchases took place under the Repurchase Program.On August 20, 2020, we announced that a company affiliated with our Chief Executive Officer, Mr. Pistiolis, purchased an aggregate of 5,000 of our common shares in the openmarket. In addition, we committed until August 21, 2021 that we would not (i) conduct any equity offerings, public or private; (ii) conduct any reverse stock splits; or (iii) pay anybonuses to our executive management. We also entered into a standstill agreement with Family Trading, pursuant to which Family Trading agreed not to convert any of its Series EPreferred Shares into common shares, other than in connection with a change of control of us.29Table of ContentsOn October 19, 2020, we announced the sale of M/T Stenaweco Excellence to an unaffiliated third party. The respective loan for which the vessel was collateral was fullyprepaid.On October 30, 2020, we announced the sale of M/T Stenaweco Energy to an unaffiliated third party. The respective loan for which the vessel was collateral was fully prepaid.On November 6, 2020, we announced the sale of M/T Stenaweco Evolution to an unaffiliated third party. The respective loan for which the vessel was collateral was fullyprepaid.On November 13, 2020, we announced the sale of M/T Eco California to an unaffiliated third party. The respective loan for which the vessel was collateral was fully prepaid.On December 4, 2020, we announced the entrance into a refinancing facility for M/T Eco Beverly Hills and M/T Eco Bel Air pursuant to which the vessels were sold tounaffiliated third parties and leased back through bareboat charters for a period of 5 years.On January 8, 2021, we announced the sale of the three shipowning companies that owned M/T Eco Van Nuys (Hull No 2789), M/T Eco Santa Monica (Hull No 2790) and M/TEco Venice Beach (Hull No 2791) to a related party affiliated with Mr. Evangelos J. Pistiolis in exchange for:●$10.0 million in cash.●100% ownership in a Marshall Islands company that was a party to a shipbuilding contract for a high specification scrubber fitted Suezmax Tanker (to be named M/T EcoOceano Ca) delivered from Hyundai Samho shipyard in March 2022. The shipowning company was party to a time charter, starting from the vessel’s delivery, with CentralTankers Chartering, a company affiliated with Mr. Evangelos J. Pistiolis, for a firm duration of five years at a gross daily rate of $32,450, with a charterer’s option to extend fortwo additional years at $33,950 and $35,450.●35% ownership in one Marshall Islands company that was a party to a shipbuilding contract for a high specification scrubber fitted VLCC tanker (to be named M/T JuliusCaesar) delivered from Hyundai Heavy Industries shipyard in January 2022. The shipowning company was party to a time charter, starting from the vessel’s delivery, withTrafigura, for a firm duration of three years at a gross daily rate of $36,000, with a charterer’s option to extend for two additional years at $39,000 and $41,500.●35% ownership in one Marshall Islands company that was a party to a shipbuilding contract for a high specification scrubber fitted VLCC tanker (to be named M/T Legio XEquestris) delivered from Hyundai Heavy Industries shipyard in March 2022. The shipowning company was party to a time charter, starting from the vessel’s delivery, withTrafigura, for a firm duration of three years at a gross daily rate of $35,750, with a charterer’s option to extend for two additional years at $39,000 and $41,500.●A forgiveness of $1.2 million in payables to the buyer.The buyer would remain the guarantor on the shipbuilding contracts towards the shipyard and in addition, the buyer provided us with an option for a credit line up to 10% ofthe total shipbuilding cost at market terms, to be negotiated when the such option was to be exercised, amounting to $23.8 million.On March 18, 2021, we entered into a credit facility with ABN Amro for $36.8 million for the financing of the vessel M/T Eco West Coast. This facility was drawn down in full.The credit facility is repayable in 24 consecutive quarterly installments of $0.62 million commencing in June 2021, plus a balloon installment of $22.0 million payable together with the lastinstallment. The facility bears interest at LIBOR plus a margin of 2.50%.On March 26, 2021, we took delivery of the vessel M/T Eco West Coast from the Hyundai Heavy Industries shipyard in South Korea.On May 6, 2021, we entered into a senior debt facility with Alpha Bank of $38 million for the financing of the vessel M/T Eco Malibu. The loan is payable in 12 consecutivequarterly installments of $0.75 million followed by 12 consecutive quarterly installments of $0.63 million, commencing three months from draw down, and a balloon payment of $21.5million payable together with the last installment. The facility bears interest at LIBOR plus a margin of 3.00%.On May 11, 2021, we took delivery of the vessel M/T Eco Malibu from the Hyundai Heavy Industries shipyard in South Korea.On September 1, 2021, we sold the M/T Nord Valiant to unaffiliated third parties for gross proceeds of $26.4 million, part of which were used to fully prepay the respective loanfor which the vessel was collateral.30Table of ContentsOn September 8, 2021 we purchased from a company affiliated with Mr. Evangelos J. Pistiolis (the “Seller”) for a consideration of $29.8 million an additional 65% ownershipinterest in each of Julius Caesar Inc. and Legio X Inc. (the “VLCC Companies”), each a party to shipbuilding contracts for VLCC Julius Caesar (Hull No. 3213) and VLCC Legio XEquestris (Hull No. 3214), respectively. Following this transaction (the “VLCC Transaction”), we became 100% owner of the VLCC Companies. The Seller remained the guarantor on theshipbuilding contracts towards the shipyard and in addition the Seller provided a financing option to the Company by remaining responsible to the shipyard for up to 20% of theshipbuilding cost per vessel (increased from 10%, as previously agreed on January 6, 2021), at our option, exercisable until each vessel’s delivery date. On September 8, 2021 we issued2,188 Series E Shares to Family Trading, as partial settlement of $2.2 million of the consideration outstanding from the VLCC Transaction.On November 23, 2021 we entered into a credit facility with China Merchants Bank Financial Leasing Co. Ltd. (“CMBFL”) for $108.0 million for the financing of the newbuildingvessels Julius Caesar (Hull No. 3213) and Legio X Equestris (Hull No. 3214). We drew down $54.0 million from the facility in January 2022 for the financing of the delivery of the M/TJulius Caesar and another $54.0 in March 2022 for the financing of the delivery of the M/T Legio X Equestris. For each of the vessels the credit facility is repayable in 32 consecutivequarterly installments of $0.7 million and a balloon payment of $32.4 million payable together with the last installment. The credit facility bears interest at LIBOR plus a margin of 2.60%.On November 24, 2021 we agreed to sell the M/T Eco Los Angeles and M/T Eco City of Angels to unaffiliated third parties for net proceeds after debt repayment of $18.6million, with the closings taking place on February 28 and March 15, 2022 respectively.On January 5, 2022, we entered into an unsecured credit facility for up to $20 million with Central Mare Inc. (the “Central Mare Unsecured Bridge Loan”), an affiliate of our CEO,in order to finance part of the shipbuilding cost of the two VLCCs. A total of $9 million was drawn down and subsequently repaid from proceeds from the sale of M/T Eco Los Angelesand the facility is now terminated. The maturity date of the loan was December 31, 2022. The principal terms of the loan included an arrangement fee of 2%, interest of 12% per annum anda commitment fee of 1.00% on the undrawn part of the facility.On January 17, 2022, we entered into a stock purchase agreement with Africanus Inc, owned by Three Sororibus Trust of Cyprus, an irrevocable trust established for the benefitof certain family members of Mr. Pistiolis, for the sale of up to 7,560,759 newly-issued Series F Non-Convertible Perpetual Preferred Shares (“Series F Preferred Shares”), in exchange for(i) the assumption by Africanus Inc of an amount of $47.6 million of shipbuilding costs for its newbuilding vessels M/T Eco Oceano CA (Hull No. 871), M/T Julius Caesar (Hull No. 3213)and M/T Legio X Equestris (Hull No. 3214), and (ii) settlement of the Company’s remaining payment obligations relating to the VLCC Transaction, in an amount of up to $27.6 million. Attotal of 7,200,000 Series F Preferred Shares were issued in connection with the deliveries of M/T Julius Caesar, M/T Legio X Equestris and M/T Eco Oceano Ca. and the settlement of$24.4 million of payment obligations relating to the VLCC Transaction.On January 17, 2022, we took delivery of the vessel M/T Julius Caesar from the Hyundai Heavy Industries shipyard in South Korea.On January 26, 2022, we received a notice from the Nasdaq Stock Market indicating that because the closing bid price of our common shares for the preceding 30 consecutivebusiness days was below $1.00 per share, we no longer met the minimum bid price requirement for the Nasdaq Capital Market. We regained compliance on March 22, 2022.On February 14, 2022, we entered into time charter employment agreements with a major oil trader for M/T Eco Beverly Hills and for M/T Eco Bel Air, according to which uponcompletion of their current charters, the M/T Eco Beverly Hills and M/T Eco Bel Air will enter into a time charter for a minimum period of 20 months and a maximum period of 26 months(at charterers option) at daily rate of $24,000 per vessel. Charterers also have the option to further extend the time charter until December 1, 2025 for M/T Eco Beverly Hills and December10, 2025 for M/T Eco Bel Air. The daily rate for the entire period for both vessels is $24,000, including charterer optional periods.On February 22, 2022 we announced an amendment of a previously agreed time charter with an affiliate of Evangelos Pistiolis which commenced upon delivery of M/T EcoOceano from Hyundai Samho shipyard, on March 4, 2022. According to the amendment, the firm period of the time charter employment is increased from five years to 15 years and thedaily rate is reduced from $32,450 to $24,500.On March 2, 2022, we took delivery of the vessel M/T Legio X Equestris from the Hyundai Heavy Industries shipyard in South Korea.On March 2, 2022 we entered into a sale and leaseback with AVIC International Leasing Co., Ltd (“AVIC”), for our newbuilding vessel Eco Oceano Ca (Hull No. 871) for totalproceeds of $48.2 million. Consummation of the sale and leaseback took place on March 4, 2022. Following the sale, we have bareboat chartered back the vessel for a period of ten yearsat bareboat hire rates comprising of 40 consecutive quarterly installments of $0.68 million and a balloon payment of $21.1 million payable together with the last installment, plus interestbased on the three months LIBOR plus 3.50%. As part of this transaction, we have continuous options to buy back the vessels at purchase prices stipulated in the bareboat agreementsdepending on when the option will be exercised and at the end of the ten year period we have an obligation to buy back the vessel at a cost represented by the balloon payment.On March 4, 2022, we took delivery of the vessel M/T Eco Oceano Ca from the Hyundai Samho shipyard in South Korea.31Table of ContentsOn April 15, 2022, we entered into an Equity Distribution Agreement with Maxim Group LLC, as sales agent, under which we would offer and sell, from time to time throughMaxim Group LLC, up to $19,700,000 of our common shares, par value $0.01 per share. On October 6, 2022, we announced that we had terminated the Equity Distribution Agreement. Wesold 129,442 common shares pursuant to the Equity Distribution Agreement for aggregate net proceeds of approximately $2.0 million.On May 18, 2022, we received a written notification from Nasdaq indicating that because the closing bid price of our common shares for the last 30 consecutive business dayswas below $1.00 per share, we no longer met the minimum bid price requirement under Nasdaq rules. On September 23, 2022 we effectuated a 20-to-1 reverse stock split in order to regaincompliance with Nasdaq Listing Rule 5450(a)(1). As a result, we regained compliance on October 7, 2022. There was no change in the number of our authorized common shares. On June 3, 2022, we entered into a securities purchase agreement with a single unaffiliated institutional investor to purchase approximately $7.2 million of our common shares (orpre-funded warrants in lieu thereof) in a registered direct offering and warrants to purchase common shares in a concurrent private placement. On June 7, 2022, we issued 235,000 of ourcommon shares and 480,150 pre-funded warrants in the registered direct offering, and 14,303,000 warrants (the “June 2022 Warrants”) to purchase 715,150 common shares in theconcurrent private placement for a purchase price of $10.00 per common share and June 2022 Warrants and $9.9980 per pre-funded warrant and June 2022 Warrant. The June 2022Warrants were immediately exercisable, with an expiration date of five years from the date of issuance and had an exercise price of $10.00 per common share. Maxim Group LLC acted asthe sole placement agent in connection with the offering. In July 2022, 5,229,000 pre-funded warrants were exercised for 261,450 common shares, and in September 2022, 4,374,000 pre-funded warrants were exercised for 218,700 common shares. On July 8, 2022, we redeemed 865,558 of our Series F Preferred Shares for an aggregate amount of approximately $10.4 million, payable in cash. On September 23, 2022, we effected a 20-to-1 reverse stock split of our common shares, which was authorized at our annual meeting of shareholders held on September 5, 2022.There was no change in the number of our authorized common shares. All share amounts in this report, not including amounts incorporated by reference, have been retroactivelyadjusted to reflect this reverse stock split.On October 10, 2022, we entered into a warrant exercise inducement letter agreement (“Inducement Letter”) with an accredited investor that was an existing holder of June 2022Warrants, wherein the investor agreed to exercise all of the June 2022 Warrants at an exercise price reduced from $10.00 per share to $6.75 per share, in consideration for the issuance ofnew warrants (the “October 2022 Warrants”) to purchase up to an aggregate of 1,072,725 common shares for a purchase price of $6.75 per common share. The October 2022 Warrantswere immediately exercisable upon issuance at an exercise price of $6.75 per common share and will expire on June 7, 2027. The net proceeds of the exercise of the October 2022 Warrantsto the Company, after deducting estimated expenses and fees, were approximately $4.5 million. We granted customary registration rights covering the resale of the common sharesissuable upon exercise of the October 2022 Warrants. On December 6, 2022, we closed a public offering of 6,750,000 units, each consisting of one of our common shares and one Class C Common Stock Purchase Warrant (a “Class CWarrant”), at a price of $2.00 per unit. Each Class C Warrant was immediately exercisable for one common share at an exercise price of $2.00 per share with an expiration date of five yearsafter the issuance date. The gross proceeds of the offering to us, before discounts and commissions and estimated offering expenses, were approximately $13.5 million. On December 30, 2022, we redeemed 483,694 of our Series F Preferred Shares for an aggregate amount of approximately $5.8 million, payable in cash. Recent DevelopmentsOn January 13 and March 6, 2023, we redeemed 1,000,000 and 1,016,667 of our Series F Preferred Shares for an aggregate amount of approximately $12.0 million and $12.2 million,payable in cash respectively. Following completion of the redemption, as of the date hereof 3,834,082 of the Company’s Series F Preferred Shares remain issued and outstanding. On February 14, 2023, we entered into a securities purchase agreement with several institutional investors to purchase approximately $13.6 million of our units in a registereddirect offering at a price of $1.35 per unit. Each unit consisted of one common share and one warrant (the “February 2023 Warrants”). The February 2023 Warrants are immediatelyexercisable, will expire five years from the date of issuance and have an exercise price of $1.35 per common share. Additionally, pursuant to the terms of our Class C Warrants issued toinvestors on December 6, 2022, we agreed to reduce the exercise price per common share under the Class C Warrants to $1.35 per common share from an original exercise price of $2.00per common share. The offering closed on February 16, 2023. On March 1, 2023 we announced that for the period commencing from March 1, 2023 to December 31, 2023 we will not conduct any new equity offerings, public or private, wewill not conduct any reverse stock splits (except to the extent our Board of Directors deems advisable for the sole purpose of remaining compliant with Nasdaq continued listingrequirements), we will not pay any bonuses to our executive management and that neither the CEO nor his affiliates will sell any common shares.32Table of ContentsB.Business OverviewWe are an international owner and operator of modern, fuel efficient eco tanker vessels focusing on the transportation of crude oil, petroleum products (clean and dirty) andbulk liquid chemicals. Our operating fleet has a total capacity of 1,435,000 deadweight tons (“dwt”). As of the date of this annual report, our operating fleet consists of one 50,000 dwtproduct/chemical tanker, M/T Eco Marina Del Ray, five 157,000 dwt Suezmax tankers, the M/T Eco Bel Air, M/T Eco Beverly Hills, M/T Oceano CA, M/T Eco Malibu and M/T Eco WestCoast, two 300,000 dwt Very Large Crude Carriers (VLCCs), M/T Julius Caesar and M/T Legio X Equestris, and we also own 50% interest in two 50,000 dwt product tankers, M/T EcoYosemite Park and M/T Joshua Park. 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 ourvessels attractive to a wide base of charterers.For more information, please see “Item 4. Information on the Company—A. History and Development of the Company—Recent Developments.”We intend to continue to review the market in order to identify potential acquisition targets in line with our strategy.We believe we have established a reputation in the international ocean transport industry for operating and maintaining vessels with high standards of performance, reliabilityand 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 toa number of national, regional and international oil companies, charterers and traders.Our FleetThe following tables present our fleet list as of the date of this annual report:Operating MR Tanker Vessels on SLBs (treated as financings):NameDeadweightChartererEnd of firm periodCharterer’sOptional PeriodsGross Rate fixed period/optionsM/T Eco Marina Del Ray50,000Cargill / WECO TankersA/SMarch 2024 / March 2027- / 1 yearCargill: $15,100 /WECO Tankers A/S: $20,500 / $22,500Operating Suezmax Vessels on SLBs (treated as operating leases):NameDeadweightChartererEnd of firm periodCharterer’sOptional PeriodsGross Rate fixed period/optionsM/T Eco Bel Air157,000TrafiguraMay 202419 months$24,000 / $24,000M/T Eco Beverly Hills157,000TrafiguraJuly 202416 months$24,000 / $24,000Operating Suezmax Vessels on SLBs (treated as financings):NameDeadweightChartererEnd of firm periodCharterer’sOptional PeriodsGross Rate fixed period/optionsM/T Eco Oceano CA157,000Central Tankers CharteringMarch 2037none$24,500Operating Suezmax Vessels financed via senior loan facilities:NameDeadweightChartererEnd of firmperiodCharterer’s Optional PeriodsGross Rate fixed period/ optionsM/T Eco West Coast157,000ClearlakeMarch 20241+1 years$33,950 / $34,750 / $36,750M/T Eco Malibu157,000ClearlakeMay 20241+1 years$33,950 / $34,750 / $36,750Operating VLCC Vessels on SLBs (treated as financings):NameDeadweightChartererEnd of firmperiodCharterer’s OptionalPeriodsGross Rate fixed period/optionsM/T Julius Caesar300,000TrafiguraJanuary 20251+1 years$36,000 / $39,000 / $41,500M/T Legio X Equestris300,000TrafiguraMarch 20251+1 years$35,750 / $39,000 / $41,500Operating Joint Venture MR Tanker fleet (50% owned):NameDeadweightChartererEnd of firm periodCharterer’sOptional PeriodsGross Rate fixed period/optionsM/T Eco Yosemite Park50,000ClearlakeMarch 20255+1+1 years$17,400 / $18,650 / $19,900M/T Eco Joshua Park50,000ClearlakeMarch 20255+1+1 years$17,400 / $18,650 / $19,90033Table of ContentsAll the vessels in our fleet are equipped with engines of modern design with improved Specific Fuel Oil Consumption (SFOC) and in compliance with the latest emissionrequirements, fitted with energy saving improvements in the hull, propellers and rudder as well as equipment that further reduces fuel consumption and emissions certified with animproved Energy Efficiency Design Index (Phase 2 compliance level as minimum). Vessels with this combination of technologies, introduced from certain shipyards, are commonlyreferred to as eco vessels. We believe that recent advances in shipbuilding design and technology makes these latest generation vessels more fuel-efficient than older vessels in theglobal 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 andexhaust gas cleaning systems (scrubbers).exhaust gas cleaning systems (scrubbers).Management of our FleetOur Fleet Manager provides all operational, technical and commercial management services for our fleet. Please see “Item 18. Financial Statements—Note 5—Transactions withRelated Parties”.Officers, Crewing and EmployeesAs of the date of this annual report we do not employ any shore-based employees. Our executive officers and a number of administrative employees are provided according toan agreement with Central Mare. Please see “Item 18. Financial Statements—Note 5—Transactions with Related Parties”. In addition, our Fleet Manager is responsible for recruiting,mainly through a crewing agent, the senior officers and all other crew members for our vessels. We believe the streamlining of crewing arrangements will ensure that all our vessels willbe crewed with experienced seamen that have the qualifications and licenses required by international regulations and shipping conventions.The International Shipping IndustryThe seaborne transportation industry is a vital link in international trade, with ocean going vessels representing the most efficient and often the only method of transportinglarge volumes of basic commodities and finished products. Demand for tankers is dictated by world oil demand and trade, which is influenced by many factors, including internationaleconomic activity; geographic changes in oil production, processing, and consumption; oil price levels; inventory policies of the major oil and oil trading companies; and strategicinventory policies of countries such as the United States, China and India.Shipping demand, measured in ton-miles, is a product of (a) the amount of cargo transported in ocean going vessels, multiplied by (b) the distance over which this cargo istransported. The distance is the more variable element of the ton-mile demand equation and is determined by seaborne trading patterns, which are principally influenced by the locationsof production and consumption. Seaborne trading patterns are also periodically influenced by geo-political events that divert vessels from normal trading patterns, as well as by inter-regional trading activity created by commodity supply and demand imbalances. Tonnage of oil shipped is primarily a function of global oil consumption, which is driven by economicactivity as well as the long-term impact of oil prices on the location and related volume of oil production. Tonnage of oil shipped is also influenced by transportation alternatives (such aspipelines) and the output of refineries.Demand for tankers and tonnage of oil shipped is primarily a function of global oil consumption, which is driven by economic activity, as well as the long-term impact of oilprices on the location and related volume of oil production. Global oil demand returned to limited growth in 2010 and has since been expanding at a modest pace, as a steady rise in Asiahas outweighed decreasing demand in Europe and in the United States, with a notable exception for 2020 and 2021 in which years the COVID 19 epidemic dramatically reduced oildemand. According to the International Energy Agency, global oil demand for 2022 has increased to approximately 100.8 million barrels/day compared to approximately 96.5 millionbarrels/day during 2021.We strategically monitor developments in the tanker industry on a regular basis and, subject to market demand, will seek to enter into shorter or longer time or bareboat chartersaccording to prevailing market conditions.We will compete for charters on the basis of price, vessel location, size, age and condition of the vessel, as well as on our reputation as an operator. We will arrange our timecharters and bareboat charters through the use of brokers, who negotiate the terms of the charters based on market conditions. We will compete primarily with owners of tankers in theMR Product Tanker, Suezmax and VLCC class sizes. Ownership of tankers is highly fragmented and is divided among major oil companies and independent vessel owners.SeasonalityHistorically, oil and oil products trade and, therefore, charter rates increased in the winter months and eased in the summer months as demand for oil and oil products in theNorthern Hemisphere rose in colder weather and fell in warmer weather. The tanker industry, in general, has become less dependent on the seasonal transport of heating oil than a decadeago as new uses for oil and oil products have developed, spreading consumption more evenly over the year. This is most apparent from the higher seasonal demand during the summermonths due to energy requirements for air conditioning and motor vehicles. This seasonality may affect operating results. However, to the extent that our vessels are chartered at fixedrates on a long-term basis, seasonal factors will not have a significant direct effect on our business.34Table of ContentsRisk of Loss and Liability InsuranceGeneralThe operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss, cargo loss or damage and business interruption due topolitical circumstances in foreign countries, piracy incidents, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills andother environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon shipowners,operators and bareboat charterers of any vessel trading in the exclusive economic zone of the United States for certain oil pollution accidents in the United States, has made liabilityinsurance more expensive for shipowners and operators trading in the United States market. We carry insurance coverage as customary in the shipping industry. However, not all riskscan be insured, specific claims may be rejected, and we might not be always able to obtain adequate insurance coverage at reasonable rates.Hull and Machinery InsuranceWe procure hull and machinery insurance, protection and indemnity insurance, which includes environmental damage and pollution insurance and war risk insurance andfreight, demurrage and defense insurance for our fleet. We generally do not maintain insurance against loss of hire (except for certain charters for which we consider it appropriate),which covers business interruptions that result in the loss of use of a vessel.Protection and Indemnity InsuranceProtection and indemnity insurance is provided by mutual protection and indemnity associations, or “P&I Associations,” and covers our third-party liabilities in connectionwith our shipping activities. This includes third-party liability and other related expenses of injury or death of crew, passengers and other third parties, loss or damage to cargo, claimsarising from collisions with other vessels, damage to other third-party property, pollution arising from oil or other substances and salvage, towing and other related costs, includingwreck removal. Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations, or “clubs.”Our current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident. The 13 P&I Associations that comprise the International Groupinsure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each association’s liabilities. The International Group’s website statesthat the Pool provides a mechanism for sharing all claims in excess of US $10 million up to, currently, approximately US$8.2 billion. As a member of a P&I Association, which is a memberof the International Group, we are subject to calls payable to the associations based on our claim records as well as the claim records of all other members of the individual associationsand members of the shipping pool of P&I Associations comprising the International Group.Environmental and Other Regulations in the Shipping IndustryGovernment regulation and laws significantly affect the ownership and operation of our fleet. We are subject to international conventions and treaties, national, state and locallaws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health and environmental protection including the storage,handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources.Compliance with such laws, regulations and other requirements entails significant expense, including vessel modifications and implementation of certain operating procedures.A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicablenational authorities such as the United States Coast Guard (“USCG”), harbor master or equivalent), classification societies, flag state administrations (countries of registry) andcharterers, particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure tomaintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of the operation of one or more of our vessels.Increasing environmental concerns have created a demand for vessels that conform to stricter environmental standards. We are required to maintain operating standards for allof our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. Webelieve that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses,certificates or other authorizations necessary for the conduct of our operations. However, because such laws and regulations frequently change and may impose increasingly stricterrequirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition,a future serious marine incident that causes significant adverse environmental impact could result in additional legislation or regulation that could negatively affect our profitability.35Table of ContentsInternational Maritime OrganizationThe International Maritime Organization, the United Nations agency for maritime safety and the prevention of pollution by vessels (the “IMO”), adopted the InternationalConvention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as “MARPOL,”the International Convention for the Safety of Life at Sea of 1974 (“SOLAS Convention”), and the International Convention on Load Lines of 1966 (the “LL Convention”) andInternational Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”). MARPOL establishes environmental standards relating to oil leakage orspilling, garbage management, sewage, air emissions, handling and disposal of noxious liquids and the handling of harmful substances in packaged forms. MARPOL is applicable to drybulk, tanker and LNG carriers, among other vessels, and is divided into six Annexes, each of which regulates a different source of pollution. Annex I relates to oil leakage or spilling;Annexes II and III relate to harmful substances carried in bulk, in liquid or in packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; andAnnex VI, lastly, relates to air emissions.Since 2014, the IMO’s Marine Environmental Protection Committee, or the “MEPC,” amendments to MARPOL Annex I Condition Assessment Scheme, or “CAS” have requiredcompliance with the 2011 International Code on the Enhanced Programme of Inspections during Surveys of Bulk Carriers and Oil Tankers, or “ESP Code,” which provides for enhancedinspection programs. In January 2023, amendments to the ESP Code relating to thickness measurements at the first renewal survey of double hull oil tankers will become effective. Wemay need to make certain financial expenditures to comply with these requirements.Air EmissionsIn September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution from vessels. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxideemissions from all commercial vessel exhausts and prohibits “deliberate emissions” of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatilecompounds from cargo tanks and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas tobe established with more stringent controls on sulfur emissions, as explained below. Emissions of “volatile organic compounds” from certain vessels, and the shipboard incineration(from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls, or “PCBs”) are also prohibited. We believe that all our vessels are currentlycompliant in all material respects with these regulations.The Marine Environment Protection Committee, or “MEPC,” adopted amendments to Annex VI regarding emissions of sulfur oxide, nitrogen oxide, particulate matter and ozonedepleting substances, which entered into force on July 1, 2010. The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressivereduction of the amount of sulfur contained in any fuel oil used on board ships. Effective January 1, 2020, there has been a global limit of 0.5% m/m sulfur oxide emissions (reduced from3.50%). This limitation can be met by using low-sulfur compliant fuel oil, alternative fuels or exhaust gas cleaning systems (or EGCS). Ships are required to obtain bunker delivery notesand International Air Pollution Prevention (“IAPP”) Certificates from their flag states that specify sulfur content. Additionally, at MEPC 73, amendments to Annex VI to prohibit thecarriage of bunkers above 0.5% sulfur on ships became effective on March 1, 2020. Fuels with higher sulfur content than required by Reg. 14 of Annex VI can still be delivered to a ship,provided the ship uses equivalent measures, such as an EGCS. Additional amendments to Annex VI revising, among other terms, the definition of “Sulphur content of fuel oil” and “low-flashpoint fuel” and pertaining to the sampling and testing of onboard fuel oil, became effective in April 2022. These regulations subject ocean-going vessels to stringent emissionscontrols, and may cause us to incur substantial costs.Sulfur content standards are even stricter within certain “Emission Control Areas,” or (“ECAs”). As of January 1, 2015, ships operating within an ECA were not permitted to usefuel with sulfur content in excess of 0.1% m/m. Amended Annex VI establishes procedures for designating new ECAs. Currently, the IMO has designated four ECAs, including specifiedportions of the Baltic Sea area, North Sea area, North American area and United States Caribbean Sea area. Furthermore, in December 2022, the Committee adopted ResolutionMEPC.361(79) establishing a new Emission Control Area (ECA) for the Mediterranean Sea as a whole. These amendments will enter into force on 1 May 2024, however, ships operating inthis ECA will be exempted from compliance with the 0.10% m/m sulfur content standard for fuel oil, during the first 12 months immediately following entry into force of the amendment.Ocean-going vessels in these areas will be subject to stringent emission controls and ocean-going vessels trading in ECAs are subject to increased operational costs due to thesignificantly higher price of the fuel with very low Sulphur content (0.1%m/m) or due to the additional cost entailed by the use of an EGCS. If other ECAs are approved by the IMO, orother new or more stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the U.S. Environmental Protection Agency(“EPA”) or the states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our operations.36Table of ContentsAmended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for marine diesel engines, depending on their date of installation. Now Annex VIprovides for a three-tier reduction in NOx emissions from marine diesel engines, with the final tier (or Tier III) to apply to engines installed on vessels constructed on or after January 1,2016 and which operate in the North American ECA or the U.S. Caribbean Sea ECA as well as ECAs designated in the future by the IMO. At MEPC 70 and MEPC 71, the MEPC approvedthe North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built on or after January 1, 2021. The EPA promulgated equivalent (and in some senses stricter) emissions standards inlate 2009. Additionally, amendments to Annex II, which strengthen discharge requirements for cargo residues and tank washings in specified sea areas (including North West Europeanwaters, Baltic Sea area, Western European waters and Norwegian Sea), came into effect in January 2021.As determined at the MEPC 70, the new Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018 and requires ships above 5,000 gross tonnage to collectand report annual data on fuel oil consumption to an IMO database, with the first year of data collection commencing on January 1, 2019. The IMO intends to use such data as the firststep in its roadmap (through 2023) for developing its strategy to reduce greenhouse gas emissions from ships, as discussed further below. As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. All ships are now required to develop and implement Ship EnergyEfficiency Management Plans (“SEEMPS”), and new ships must be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy EfficiencyDesign Index (“EEDI”). Under these measures, by 2025, all new ships built will be 30% more energy efficient than those built in 2014. Additionally, MEPC 75 adopted amendments toMARPOL Annex VI which brought forward the effective date of the EEDI’s “phase 3” requirements from January 1, 2025, to April 1, 2022, for several ship types, including gas carriers,general cargo ships, and LNG carriers. Additionally, MEPC 76 adopted amendments to Annex VI which impose new regulations to reduce greenhouse gas emissions from ships. The revised Annex VI entered intoforce in November 2022, and includes requirements to assess and measure the energy efficiency of all ships and set the required attainment values, with the goal of reducing the carbonintensity of international shipping. The requirements include (1) a technical requirement to reduce carbon intensity based on a new Energy Efficiency Existing Ship Index (or EEXI), and(2) operational carbon intensity reduction requirements based on a new operational carbon intensity indicator (or CII). The attained EEXI is required to be calculated for ships of 400gross tonnage and above, in accordance with different values set for ship types and categories. With respect to the CII, taking effect from 1/1/2023, ships of 5,000 gross tonnage todocument and verify their actual annual operational CII achieved against a determined required annual operational CII. All ships that fall under the new CII regime will have to have a CIIrating of C or above in order to be compliant. Ships that have a CII rating of D for three consecutive years or E, are required to submit a corrective action plan, to show how the requiredindex (C or above) would be achieved or else they will be deemed non-compliant. The EEXI and CII certification requirements entered into effect on January 1, 2023. Additionally, MEPC 76 adopted amendments requiring ships of 5,000 gross tonnage and above to revise their SEEMP to include methodology for calculating the ship’s attainedannual operation CII and the required annual operational CII, on or before June 1, 2023. MEPC 76 also approved amendments to MARPOL Annex I to prohibit the use and carriage foruse as fuel of heavy fuel oil (or HFO) by ships in Arctic waters on and after July 1, 2024. For ships subject to Regulation 12A (oil fuel tank protection), the prohibition become effectiveon or after July 1, 2029.We may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations may be adopted that could require the installation ofexpensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.Safety Management System RequirementsThe SOLAS Convention was amended to address the safe manning of vessels and emergency training drills. The Convention of Limitation of Liability for Maritime Claims (the“LLMC”) sets limitations of liability for a loss of life or personal injury claim or a property claim against ship owners. We believe that our vessels are in substantial compliance withSOLAS and LLMC standards.Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (the “ISM Code”), ouroperations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safetymanagement system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vesselssafely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical management team have developed forcompliance with the ISM Code. The failure of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease availableinsurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.The ISM Code requires that vessel operators obtain a Safety Management Certificate (or SMC) for each vessel they operate. This certificate evidences compliance by a vessel’smanagement with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a DocumentOf Compliance (or DOC), issued by each flag state (or Recognized Organization (“RO”) on behalf of the flag administration), under the ISM Code. We have obtained applicable DOC forour offices and safety management certificates for all of our vessels. The DOCs & SMCs are renewed as required.Regulation II-1/3-10 of the SOLAS Convention governs ship construction and stipulates that ships over 150 meters in length must have adequate strength, integrity, andstability to minimize risk of loss or pollution. Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012, and from July 1, 2016 with respect to new oiltankers and bulk carriers. Regulation II-1/3-10 requires that all oil tankers and bulk carriers of 150 meters in length and above, for which the building contract is placed on or after July 1,2016, satisfy applicable structural requirements conforming to the functional requirements of the International Goal-based Ship Construction Standards for Bulk Carriers and Oil Tankers,or GBS Standards.37Table of ContentsAmendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be in compliance with the International MaritimeDangerous Goods Code (“IMDG Code”). Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions fromthe International Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods and (3) new mandatory training requirements. Amendmentswhich took effect on January 1, 2020, also reflect the latest material from the UN Recommendations on the Transport of Dangerous Goods, including (1) new provisions regarding IMOtype 9 tank, (2) new abbreviations for segregation groups; and (3) special provisions for carriage of lithium batteries and of vehicles powered by flammable liquid or gas. Amendments tothe IMDG Code relating to segregation requirements for certain substances, and classification and transport of carbon came into effect in June 2022.The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”). As of February 2017, all seafarersare required to meet the STCW standards and be in possession of a valid STCW certificate. Flag states that have ratified SOLAS and STCW generally employ the classification societies,which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.Furthermore, recent action by the IMO’s Maritime Safety Committee and United States agencies indicate that cybersecurity regulations for the maritime industry are likely to befurther developed in the near future in an attempt to combat cybersecurity threats. For example, effective January 2021, cyber-risk management systems must be incorporated by ship-owners and managers. This might cause companies to create additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures.The impact of such regulations is hard to predict at this time.Pollution Control and Liability RequirementsThe IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatories to such conventions. Forexample, the IMO adopted an International Convention for the Control and Management of Ships’ Ballast Water and Sediments (the “BWM Convention”) in 2004. The BWMConvention entered into force on September 9, 2017. The BWM Convention requires ships to manage their ballast water to remove, render harmless or avoid the uptake or discharge ofnew or invasive aquatic organisms and pathogens within ballast water and sediments. The BWM Convention’s implementing regulations call for a phased introduction of mandatoryballast water exchange requirements, to be replaced in time with mandatory concentration limits, and require all ships to carry a ballast water record book and an international ballastwater management certificate.Specifically, ships over 400 gross tons generally must comply with a “D-1 standard,” requiring the exchange of ballast water only in open seas and away from coastal waters.The “D-2 standard” specifies the maximum amount of viable organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. For most ships,compliance with the D-2 standard involves installing on-board systems to treat ballast water and eliminate unwanted organisms. Ballast water management systems, which includesystems that make use of chemical, biocides, organisms or biological mechanisms, or which alter the chemical or physical characteristics of the ballast water, must be approved inaccordance with IMO Guidelines (Regulation D-3). Pursuant to the BWM Convention amendments that entered into force in October 2019, BWMS installed on or after October 28, 2020shall be approved in accordance with BWMS Code, while BWMS installed before October 23, 2020 must be approved taking into account guidelines developed by the IMO or theBWMS Code. As of October 13, 2019, MEPC 72’s amendments to the BWM Convention took effect requiring all ships to meet the D-2 standard by September 8, 2024. Costs ofcompliance with these regulations may be substantial. The cost of compliance could increase for ocean carriers and may have a material effect on our operations. However, manycountries already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmful species via such discharges. TheU.S., for example, requires vessels entering its waters from another country to conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certainreporting requirements. Amendments to the BWM Convention concerning commissioning testing of BWMS and the form of the International Ballast Water Management Certificatebecame effective in June 2022. All the vessels of our fleet have Ballast Water Treatment Systems that ensure compliance with the new environmental regulations.The IMO adopted the International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by different Protocols in 1976, 1984, and 1992, and amended in2000, the CLC. Under the CLC and depending on whether the country in which the damage results is a party to the 1992 Protocol to the CLC, a vessel’s registered owner may be strictlyliable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain exceptions. The 1992 Protocol changed certain limits onliability expressed using the International Monetary Fund currency unit, the Special Drawing Rights. The limits on liability have since been amended so that the compensation limits onliability were raised. The right to limit liability is forfeited under the CLC where the spill is caused by the shipowner’s actual fault and under the 1992 Protocol where the spill is caused bythe shipowner’s intentional or reckless act or omission where the shipowner knew pollution damage would probably result. The CLC requires ships over 2,000 tons covered by it tomaintain insurance covering the liability of the owner in a sum equivalent to an owner’s liability for a single incident. We have protection and indemnity insurance for environmentalincidents. P&I Clubs in the International Group issue the required Bunkers Convention “Blue Cards” to enable signatory states to issue certificates. We will ensure that our vessels arein possession of a CLC State issued certificate attesting that the required insurance coverage is in force as required by law.38Table of ContentsThe IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the “Bunker Convention”) to impose strict liability on ship owners(including the registered owner, bareboat charterer, manager or operator) for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The BunkerConvention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable nationalor international limitation regime (but not exceeding the amount calculated in accordance with the LLMC). With respect to non-ratifying states, liability for spills or releases of oil carriedas fuel in ship’s bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.Ships are required to maintain a certificate attesting that they maintain adequate insurance to cover an incident. In jurisdictions, such as the United States where the BunkerConvention has not been adopted, various legislative schemes or common law govern, and liability is imposed either on the basis of fault or on a strict-liability basis.Anti‑Fouling RequirementsIn 2001, the IMO adopted the International Convention on the Control of Harmful Anti‑fouling Systems on Ships, or the “Anti‑fouling Convention,” which entered into force inSeptember 2008, and prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls of vessels. Vessels of over 400 gross tonsengaged in international voyages will also be required to undergo an initial survey before the vessel is put into service or before an International Anti‑fouling System Certificate isissued for the first time; and subsequent surveys when the anti‑fouling systems are altered or replaced. We have obtained Anti‑fouling System Certificates for all of our vessels that aresubject to the Anti‑fouling Convention. MEPC 76 adopted amendments to the Anti-fouling Convention to include controls on the biocide cybutryne; ships shall not apply or re-applyanti-fouling systems containing that substance starting January 1, 2023. The amendments require ships to remove, or apply a coating to anti-fouling systems with this substance, at thenext scheduled renewal of the anti-fouling system after January 1, 2023.Compliance EnforcementNoncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased liability, may lead to decreases in available insurancecoverage for affected vessels and may result in the denial of access to, or detention in, some ports. The USCG and European Union authorities as well as other regional and nationalauthorities in a number of countries (“ISM Code Compliant Countries”) have indicated that vessels not in compliance with the ISM Code by applicable deadlines will be prohibited fromtrading in U.S., European Union and ISM Code Compliant Countries ports, respectively. As of the date of this report, each of our vessels is ISM Code certified. However, there can be noassurance that such certificates will be maintained in the future. The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, ifany, may be passed by the IMO and what effect, if any, such regulations might have on our operations.United States RegulationsThe U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability ActThe U.S. Oil Pollution Act of 1990 (“OPA”) established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affectsall “owners and operators” whose vessels trade or operate within the U.S., its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.’s territorial seaand its 200-nautical mile exclusive economic zone around the U.S. The U.S. has also enacted the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”),which applies to the discharge of hazardous substances other than oil, except in limited circumstances, whether on land or at sea. OPA and CERCLA both define “owner and operator” inthe case of a vessel as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations.Under OPA, vessel owners and operators are “responsible parties” and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a thirdparty, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels, includingbunkers (fuel). OPA defines these other damages broadly to include:(i) injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;(ii) injury to, or economic losses resulting from, the destruction of real and personal property; (iii) net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;(iv) loss of subsistence use of natural resources that are injured, destroyed or lost;(v) lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and39Table of Contents(vi) net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or healthhazards, and loss of subsistence use of natural resources.OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs. On December 23, 2022, the USCG adjusted the limits of OPA liability for atank vessel, other than a single-hull tank vessel, over 3,000 gross tons liability to the greater of $2,500 per gross ton or $21,521,000 for a single-hull tank vessel, over 3,000 gross tons tothe greater of $4,000 per gross ton or $29,591,300; and for a non-tank vessel, over to the greater of $1,300 er gross ton or $1,076,000 (subject to periodic adjustment for inflation) (subjectto periodic adjustment for inflation). These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety, construction oroperating regulation by a responsible party (or its agent, employee or a person acting pursuant to a contractual relationship) or a responsible party’s gross negligence or willfulmisconduct. The limitation on liability similarly does not apply if the responsible party fails or refuses to (i) report the incident as required by law where the responsible party knows orhas reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an orderissued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well as damages for injury to, ordestruction or loss of, natural resources, including the reasonable costs associated with assessing the same, and health assessments or health effects studies. There is no liability if thedischarge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 pergross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (renderingthe responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or theprimary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsibleperson fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law. OPA and CERCLA both require owners and operators of vessels toestablish and maintain with the USCG evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject.Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. Wecomply and plan to comply going forward with the USCG’s financial responsibility regulations by providing applicable certificates of financial responsibility.The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives or statutes, including higher liability caps under OPA, new regulationsregarding offshore oil and gas drilling and a pilot inspection program for offshore facilities. However, several of these initiatives and regulations have been or may be revised. Forexample, the U.S. Bureau of Safety and Environmental Enforcement’s (“BSEE”) revised Production Safety Systems Rule (“PSSR”), effective December 27, 2018, modified and relaxedcertain environmental and safety protections under the 2016 PSSR. Additionally, the BSEE released a final Well Control Rule, which eliminated a number of provisions which could affectoffshore drilling operations. Compliance with any new requirements of OPA and future legislation or regulations applicable to the operation of our vessels could negatively impact thecost of our operations and adversely affect our business.OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, provided they accept, at aminimum, the levels of liability established under OPA and some states have enacted legislation providing for unlimited liability for oil spills. Many U.S. states that border a navigablewaterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardoussubstance. These laws may be more stringent than U.S. federal law. Moreover, some states have enacted legislation providing for unlimited liability for discharge of pollutants withintheir waters, although in some cases, states which have enacted this type of legislation have not yet issued implementing regulations defining vessel owners’ responsibilities underthese laws. The Company intends to comply with all applicable state regulations in the ports where our vessels call.We currently maintain pollution liability coverage insurance in the amount of $1 billion per incident for each of our vessels. If the damages from a catastrophic spill were toexceed our insurance coverage, that could have an adverse effect on our business and results of operation.Other United States Environmental InitiativesThe U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (“CAA”) requires the EPA to promulgate standards applicable to emissions of volatile organiccompounds and other air contaminants. The CAA requires states to adopt State Implementation Plans, or “SIPs,” some of which regulate emissions resulting from vessel loading andunloading operations which may affect our vessels.The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly issued permit orexemption and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation anddamages and complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of “waters of the United States” (“WOTUS”), thereby expandingfederal authority under the CWA. In April 2020, the EPA and Department of the Army published the “Navigable Waters Protection Rule,” to finalize a revised WOTUS definition, whichrule became effective in June 2020. However, in light of a court order issued by the U.S. District Court for the District of Arizona on August 30, 2021, the EPA and U.S. Army Corps ofEngineers are interpreting WOTUS consistent with the pre-2015 regulatory regime. On December 30, 2022, the EPA and U.S. Army Corps of Engineers announced the final revisedWOTUS rule, which was published on January 18, 2023, and will become effective on March 20, 2023. The revised WOTUS rule replaces the 2020 Navigable Waters protection Rule andgenerally reflects an expansion of the CWA jurisdiction. 40Table of ContentsThe EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on our vessels to treat ballastwater before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict our vessels fromentering U.S. Waters. The EPA will regulate these ballast water discharges and other discharges incidental to the normal operation of certain vessels within United States waterspursuant to the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December 4, 2018 and requires that the USCG develop implementation, compliance andenforcement regulations regarding ballast water. On October 26, 2020, the EPA published a Notice of Proposed rulemaking for Vessel Incidental Discharge National Standards ofPerformance under VIDA, and in November 2020, held virtual public meetings, but a final rule has not been promulgated. Under VIDA, all provisions of the VGP 2013 and USCG ballastwater regulations remain in force and effect as currently written until the EPA publishes standards. Currently Coast Guard ballast water management regulations adopted under the U.S.National Invasive Species Act, or NISA, require mid-ocean ballast exchange programs and installation of approved USCG technology for all vessels equipped with ballast water tanksbound for U.S. ports or entering U.S. waters. Until new USCG regulations are final and enforceable, non-military, non-recreational vessels greater than 79 feet in length must continue tocomply with the requirements of the VGP, including submission of a Notice of Intent (“NOI”) or retention of a PARI form and submission of annual reports. We have submitted NOIs forall our vessels where required. Compliance with the EPA, U.S. Coast Guard and state regulations could require the installation of ballast water treatment equipment on our vessels or theimplementation of other port facility disposal procedures at potentially substantial cost, or may otherwise restrict our vessels from entering U.S. waters. Our vessel is equipped with aballast water treatment system, which is subject to functionality monitoring and treated ballast water sampling and analysis, in compliance with the requirements stipulated in EPA VGP2013.European Union RegulationsIn October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, ifcommitted with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting thedischarge of a polluting substance may also lead to criminal penalties. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships orwhere human safety or that of the ship is in danger. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims. Regulation (EU) 2015/757of the European Parliament and of the Council of 29 April 2015 (amended by Regulation (EU) 2016/2071 with respect to methods of calculating, inter alia, emission and consumption)governs the monitoring, reporting and verification of carbon dioxide emissions from maritime transport, and, subject to some exclusions, requires companies with ships over 5,000 grosstonnage to monitor and report carbon dioxide emissions annually, which may cause us to incur additional expenses relating to increased monitoring and verification services. As ofJanuary 2019, large ships calling at EU ports have been required to collect and publish data on carbon dioxide emissions and other information. The system entered into force on 1 March2018. July 2020 saw the European Parliament’s Committee on Environment, Public Health and Food Safety vote in favor of the inclusion of vessels of 5000 gross tons and above in theEU Emissions Trading System (in addition to voting for a revision to the monitoring, reporting and verification of CO2 emissions). In September 2020, the European Parliament adoptedthe proposal from the European Commission to amend the regulation on monitoring carbon dioxide emissions from maritime transport.Similarly to the EU, the UK adopted its own UK MRV (Monitoring, Reporting and Verification) scheme applicable to all vessels over 5,000 gross tonnage on voyages betweenUK and non-European Economic Area (EEA) ports and vice versa, between UK ports, and at berth in a UK port.On July 14, 2021, the European Commission published a package of draft proposals as part of its ‘Fit for 55’ environmental legislative agenda and as part of the wider EU GreenDeal growth strategy. There are two key initiatives relevant to maritime arising from the Proposals: (a) a bespoke emissions trading scheme for maritime (Maritime ETS) which is due tocommence in 2024 and which is to apply to all ships above a gross tonnage of 5000; and (b) a FuelEU draft regulation which seeks to require all ships above a gross tonnage of 5000 tocarry on board a ‘FuelEU certificate of compliance’ from 30 June 2025 as evidence of compliance with the limits on the greenhouse gas intensity of the energy used on-board by a shipand with the requirements on the use of on-shore power supply (OPS) at berth. More specifically, Maritime ETS is to apply gradually over the period from 2024-2026. “Shippingcompanies” (defined to include the ship owner or the entity that contractually assumes responsibility for compliance with ETS) will have to surrender allowances for 40% of theiremissions in 2025 for the year 2024; 70% in 2026 for the year 2025; and 100% in 2027 for the year 2026. It is intended that the polluter pays principle is applied by way of the ETS costsclause. The EU has mandated Member States to introduce national laws which enable the ship owners to pass on the costs of ETS allowances to the actual commercial users/operatorsof the ships. Also, the cap under the ETS would be set by taking into account EU MRV system emissions data for the years 2018 and 2019, adjusted, from year 2021 and is to capture100% of the emissions from intra-EU maritime voyages; 100% of emissions from ships at berth in EU ports; and 50% of emissions from voyages which start or end at EU ports (but theother destination is outside the EU). More recent proposed amendments signal that 100% of non-EU emissions may be caught if the IMO does not introduce a global market-basedmeasure by 2028. Furthermore, the MRV system is also being revised such that the scope of ships to be monitored will now extend to those that are 400GT and more. The reason for thisis because the ETS will apply to ships that are between 400GT and 5000GT from circa 2027. the proposals envisage that all maritime allowances would be auctioned and there will be nofree allocation. Whilst the ETS final form was agreed in December 2022 and only the publication of the legal text remains outstanding, FuelEU Maritime proposal is still being negotiatedand a final draft are expected soon. The UK is also considering extending the UK ETS to maritime transport however more concrete proposals are expected in a year or so. Responsible recycling and scrapping of ships is becoming an increasingly important issue for shipowners and charterers alike as the industry strives to replace old ships withcleaner, more energy efficient models. The recognition of the need to impose recycling obligations on the shipping industry is not new. In 2009, the IMO oversaw the creation of theHong Kong Ship Recycling Convention (the “Hong Kong Convention”), which sets standards for ship recycling. Concerned at the lack of progress in satisfying the conditions neededto bring the Hong Kong Convention into force, the EU published its own Ship Recycling Regulation 1257/2013 (SRR) in 2013, with a view to facilitating early ratification of the HongKong Convention both within the EU and in other countries outside the EU. As the Hong Kong Convention has yet to come into force, the 2013 regulations are vital to responsible shiprecycling in the EU. SRR requires that, from 31 December 2020, all existing ships sailing under the flag of EU member states and non-EU flagged ships calling at an EU port or anchoragemust carry on-board an Inventory of Hazardous Materials (IHM) with a certificate or statement of compliance, as appropriate. For EU-flagged vessels, a certificate (either an InventoryCertificate or Ready for Recycling Certificate) will be necessary, while non-EU flagged vessels will need a Statement of Compliance.41Table of ContentsThe European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by type, age andflag as well as the number of times the ship has been detained. The European Union also adopted and extended a ban on substandard ships and enacted a minimum ban period and adefinitive ban for repeated offenses. The regulation also provided the European Union with greater authority and control over classification societies, by imposing more requirements onclassification societies and providing for fines or penalty payments for organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to usereduced sulfur content fuel for their main and auxiliary engines. Since January 1, 2015, vessels have been required to burn fuel with sulfur content not exceeding 0.1% while within EUmember states’ territorial seas, exclusive economic zones and pollution control zones that are included in “SOx Emission Control Areas.” EU Directive (EU) 2016/802 establishes limits onthe maximum sulfur content of gas oils and heavy fuel oil and contains fuel-specific requirements for ships calling at EU ports.EU Directive 2004/35/CE (as amended) regarding the prevention and remedying of environmental damage addresses liability for environmental damage (including damage towater, land, protected species and habitats) on the basis of the “polluter pays” principle. Operators whose activities caused the environmental damage are liable for the damage (subjectto certain exceptions). With regard to specified activities causing environmental damage, operators are strictly liable. The directive applies where damage has already occurred and wherethere is an imminent threat of damage. The directive requires preventative and remedial actions, and that operators report environmental damage or an imminent threat of such damage.In 2021, the EU adopted a European Climate Law (Regulation (EU) 2021/1119), establishing the aim of reaching net zero greenhouse gas emissions in the EU by 2050, with anintermediate target of reducing greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. In July 2021, the European Commission launched the Fit for 55 (describedabove) to support the climate policy agenda.International Labour OrganizationThe International Labor Organization (the “ILO”) is a specialized agency of the UN that has adopted the Maritime Labor Convention 2006 (“MLC 2006”). A Maritime LaborCertificate and a Declaration of Maritime Labor Compliance is required to ensure compliance with the MLC 2006 for all ships above 500 gross tonnage or over and are either engaged ininternational trade. We believe that all our vessels are in substantial compliance with and are certified to meet MLC 2006 and its amendments.Greenhouse Gas RegulationCurrently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on ClimateChange (this task hanging been delegated to the IMO), which entered into force in 2005 and pursuant to which adopting countries have been required to implement national programs toreduce greenhouse gas emissions with targets extended through 2020. International negotiations are continuing with respect to a successor to the Kyoto Protocol, and restrictions onshipping emissions may be included in any new treaty. In December 2009, more than 27 nations, including the U.S. and China, signed the Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gas emissions. The 2015 United Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force onNovember 4, 2016 and does not directly limit greenhouse gas emissions from ships. The United States rejoined the Paris Agreement in February 2021.At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO strategy on reduction of greenhouse gas emissions fromships was approved. In accordance with this roadmap, in April 2018, nations at the MEPC 72 adopted an initial strategy to reduce greenhouse gas emissions from ships. The initialstrategy identifies “levels of ambition” to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through implementation of further phases of theEEDI for new ships (while the Ship Energy-Efficiency Management Plan is mandatory for all vessels); (2) reducing carbon dioxide emissions per transport work, as an average acrossinternational shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008 emission levels; and (3) reducing the total annual greenhouse emissions by atleast 50% by 2050 compared to 2008 while pursuing efforts towards phasing them out entirely. The initial strategy notes that technological innovation, alternative fuels and/or energysources for international shipping will be integral to achieve the overall ambition. These regulations could cause us to incur additional substantial expenses.As noted above, the 70th MEPC meeting in October 2016 adopted a mandatory data collection system (DCS) which requires ships above 5,000 gross tons to reportconsumption data for fuel oil, hours under way and distance travelled. Unlike the EU MRV (see below), the IMO DCS covers any maritime activity carried out by ships, includingdredging, pipeline laying, ice-breaking, fish-catching and off-shore installations. The SEEMPs of all ships covered by the IMO DCS must include a description of the methodology fordata collection and reporting. After each calendar year, the aggregated data are reported to the flag state. If the data have been reported in accordance with the requirements, the flagstate issues a statement of compliance to the ship. Flag states subsequently transfer this data to an IMO ship fuel oil consumption database, which is part of the Global IntegratedShipping Information System (GISIS) platform. IMO will then produce annual reports, summarizing the data collected. Thus, currently, data related to the GHG emissions of ships above5,000 gross tons calling at ports in the European Economic Area (EEA) must be reported in two separate, but largely overlapping, systems: the EU MRV – which applies since 2018 – andthe IMO DCS – which applies since 2019. The proposed revision of Regulation (EU) 2015/757 adopted on 4 February 2019 aims to align and facilitate the simultaneous implementation ofthe two systems however it is still not clear when the proposal will be adopted.42Table of ContentsIMO’s MEPC 76 adopted amendments to Annex VI that will require ships to reduce their greenhouse gas emissions. The Revised MARPOL Annex VI entered into forceon November 1. 2022. The revised Annex VI includes carbon intensity measures (requirements for ships to calculate their Energy Efficiency Existing Ship Index (EEXI) followingtechnical means to improve their energy efficiency and to establish their annual operational carbon intensity indicator and rating. MEPC 76 also adopted guidelines to supportimplementation of the amendments.In 2021, the EU adopted a European Climate Law (Regulation (EU) 2021/1119), establishing the aim of reaching net zero greenhouse gas emissions in the EU by 2050, with anintermediate target of reducing greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. In July 2021, the European Commission launched the Fit for 55 (describedabove) to support the climate policy agenda.In the United States, the EPA issued a finding that greenhouse gases endanger the public health and safety, adopted regulations to limit greenhouse gas emissions from certainmobile sources, and proposed regulations to limit greenhouse gas emissions from large stationary sources. The EPA or individual U.S. states could enact environmental regulations thatcould negatively affect our operations. On November 2, 2021, the EPA issued a proposed rule under the CAA designed to reduce methane emissions from oil and gas sources. InNovember 2022, the EPA issued a supplemental proposal that would achieve more comprehensive emissions reductions and add proposed requirements for sources not previouslycovered. The EPA held a public hearing in January 2023 on the proposal and anticipates issuing a final rule by the end of 2023.Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S. or other countries where we operate, or any treaty adopted at theinternational level to succeed the Kyoto Protocol or Paris Agreement, that restricts emissions of greenhouse gases could require us to make significant expenditures which we cannotpredict with certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate change may result in sea levelchanges or certain weather events.Vessel Security RegulationsSince the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel security such as the U.S. MaritimeTransportation Security Act of 2002 (“MTSA”). To implement certain portions of the MTSA, the USCG issued regulations requiring the implementation of certain security requirementsaboard vessels operating in waters subject to the jurisdiction of the United States and at certain ports and facilities, some of which are regulated by the EPA.Similarly, Chapter XI-2 of the SOLAS Convention imposes detailed security obligations on vessels and port authorities and mandates compliance with the International Shipand Port Facilities Security Code (“the ISPS Code”). The ISPS Code is designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attainan International Ship Security Certificate (“ISSC”) from a recognized security organization approved by the vessel’s flag state. Ships operating without a valid certificate will be refusedentry at port until they obtain an ISSC. The various requirements, some of which are found in the SOLAS Convention, include, for example, on-board installation of automaticidentification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information ona ship’s identity, position, course, speed and navigational status; on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities onshore and our Fleet Manager; the development of vessel security plans; ship identification number to be permanently marked on a vessel’s hull; a continuous synopsis record keptonboard showing a vessel’s history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship’sidentification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and compliance with flag state security certificationrequirements.The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vesselshave on board a valid ISSC that attests to the vessel’s compliance with the SOLAS Convention security requirements and the ISPS Code. Future security measures could have asignificant negative financial impact on us. All the vessels in our fleet comply with the various security measures addressed by MTSA, the SOLAS Convention and the ISPS Code.The cost of vessel security measures has also been affected by the escalation in the frequency of acts of piracy against ships, notably off the coast of Somalia, including theGulf of Aden, Arabian Sea area and the West Africa area including the Gulf of Guinea. Substantial loss of revenue and other costs may be incurred as a result of detention of a vessel oradditional security measures, and the risk of uninsured losses could significantly and negatively affect our business. Costs may be incurred in taking additional security measures inaccordance with Best Management Practices to Deter Piracy, notably those contained in the BMP5 industry standard.Inspection by Classification SocietiesThe hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that avessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and SOLAS. Most insurance underwriters make it acondition for insurance coverage and lending that a vessel be certified “in class” by a classification society which is a member of the International Association of ClassificationSocieties, the IACS. The IACS has adopted harmonized Common Structural Rules, or “the Rules,” which apply to oil tankers and bulk carriers constructed on or after July 1, 2015. TheRules attempt to create a level of consistency between IACS Societies. All of our vessels are certified as being “in class” by all the applicable Classification Societies (e.g., DNV GL,American Bureau of Shipping, Lloyd’s Register of Shipping).43Table of ContentsA vessel must undergo annual surveys, intermediate surveys, dry-dockings and special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuoussurvey cycle, under which the machinery would be surveyed periodically over a five-year period. Every vessel is also required to be drydocked every 30 to 36 months for inspection ofthe underwater parts of the vessel. If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, drydocking or special survey, the vessel will be unable tocarry cargo between ports and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our loan agreements. Any such inability to carrycargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.C.Organizational StructureWe are a Marshall Islands corporation with principal executive offices located at 1 Vasilisis Sofias and Megalou Alexandrou Str, 15124 Maroussi, Greece. Our significant whollyowned subsidiaries as of December 31, 2022 are listed in Exhibit 8.1 to this annual report on Form 20-F.D.Property, Plants and EquipmentFor a list of the vessels of our fleet, please see “Item 4. Information on the Company—B. Business Overview—Our Fleet” above and for a description of our majorencumbrances on our fleet please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Debt Facilities”.We do not own any real estate property.ITEM 4A.UNRESOLVED STAFF COMMENTSNone.ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTSThe following presentation of management’s discussion and analysis is intended to discuss our financial condition, changes in financial condition and results of operations,and should be read in conjunction with our historical consolidated financial statements and their notes included in this annual report. For a discussion of our results for the year ended December 31, 2021 compared to the year ended December 31, 2020, please see “Item 5 – Operating and Financial Review andProspects – A. Operating Results – Results of Operations for the Fiscal Years Ended December 31, 2020 and December 31, 2021” contained in our annual report on Form 20-F for the yearended December 31, 2021, filed with the Securities and Exchange Commission on April 15, 2022. This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results may differmaterially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth in “Item 3. Key Information—Risk Factors” and elsewhere inthis report. Operating Results Factors Affecting our Results of Operations We believe that the important measures for analyzing trends in the results of our operations consist of the following: Calendar days. We define calendar days as the total number of days the vessels were in our possession for the relevant period. Calendar days are an indicator of the sizeof our fleet during the relevant period and affect both the amount of revenues and expenses that we record during that period. Available days. We define available days as the number of calendar days less the aggregate number of days that our vessels are off-hire due to scheduled repairs, orscheduled guarantee inspections in the case of newbuildings, vessel upgrades or special or intermediate surveys and the aggregate amount of time that we spendpositioning our vessels. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should becapable of generating revenues. Operating days. We define operating days as the number of available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseentechnical circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period that our vessels actually generate revenues. 44Table of ContentsFleet utilization. We calculate fleet utilization by dividing the number of operating days during a period by the number of available days during that period. The shippingindustry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or scheduled guarantee inspections in the case of newbuildings, vessel upgrades, special or intermediate surveys and vesselpositioning. TCE Revenues / TCE Rates. We define TCE revenues as revenues minus voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs that are uniqueto a particular voyage, which would otherwise be paid by a charterer under a time charter, as well as commissions. We believe that presenting revenues net of voyageexpenses neutralizes the variability created by unique costs associated with particular voyages or the deployment of vessels on the spot market and facilitatescomparisons between periods on a consistent basis. We calculate daily TCE rates by dividing TCE revenues by operating days for the relevant time period. TCE revenuesinclude demurrage revenue, which represents fees charged to charterers associated with our spot market voyages when the charterer exceeds the agreed upon timerequired to load or discharge a cargo. The company’s calculation of TCE may not be similar to other method of calculation of other companies. In the shipping industry, economic decisions are based on vessels’ deployment upon anticipated TCE rates, and industry analysts typically measure shipping freight rates interms of TCE rates. This is because under time-charter and bareboat contracts the customer usually pays the voyage expenses, while under voyage charters the ship-owner usually paysthe voyage expenses, which typically are added to the hire rate at an approximate cost. Consistent with industry practice, we use TCE rates because it provides a means of comparisonbetween different types of vessel employment and, therefore, assists our decision-making process. In evaluating our financial condition, we focus on the below measures to assess our historical operating performance and we use future estimates of the same measures toassess our future financial performance. In assessing the future performance of our fleet, the greatest uncertainty relates to future charter rates at the expiration of a vessel’s presentperiod employment, whether under a time charter or a bareboat charter. Decisions about future purchases and sales of vessels are based on the availability of excess internal funds, theavailability of financing and the financial and operational evaluation of such actions and depend on the overall state of the shipping market and the availability of relevant purchasecandidates. The following table sets forth our selected other operating data for the periods indicated. 2018 2019 2020 2021 2022 FLEET DATA Total number of vessels at end of period (including leased vessels) 8.0 12.0 6.0 7.0 8.0 Average number of vessels(1) 7.3 11.1 9.5 7.1 8.0 Total calendar days for fleet 2,670 4,055 3,483 2,583 2,912 Total available days for fleet 2,668 4,032 3,442 2,579 2,901 Total operating days for fleet 2,663 3,959 3,363 2,500 2,893 Total time charter days for fleet 2,663 3,884 3,363 2,500 2,893 Total spot (voyage) days for fleet - 75 - - - Fleet utilization 99.81% 98.17% 97.68% 96.93% 99.72% 2018 2019 2020 2021 2022 AVERAGE DAILY RESULTS Time charter equivalent(2) $15,031 $16,233 $17,314 $22,020 $27,310 Vessel operating expenses(3) $5,552 $5,619 $6,037 $6,070 $6,397 General and administrative expenses(4) $2,620 $427 $555 $752 $555 (1)Average number of vessels is the number of vessels that constituted our fleet (including chartered in vessels) for the relevant period, as measured by the sum of the number of dayseach vessel was a part of our fleet during the period divided by the number of calendar days in that period.(2)Time charter equivalent rate, or TCE rate, is a measure of the average daily revenue performance of a vessel. Our definition of TCE may not be the same as reported by othercompanies in the shipping industry or other industries. Our method of calculating TCE rate is determined by dividing TCE revenues by operating days for the relevant time period.TCE revenues are revenues minus voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwisebe paid by the charterer under a time charter contract, but are payable by us in the case of a voyage charter, as well as commissions. TCE revenues and TCE rate, which are non-U.S.GAAP measures, provide additional supplemental information in conjunction with shipping revenues, the most directly comparable U.S. GAAP measure. We use TCE rates and TCErevenues to compare period-to-period changes in our performance and it assists investors and our management in evaluating our financial performance. The following table belowreflects the reconciliation of TCE revenues to revenues as reflected in the consolidated statements of operations and our calculation of TCE rates for the periods presented.(3)Daily vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs are calculated by dividing vesseloperating expenses by fleet calendar days for the relevant time period.(4)Daily general and administrative expenses are calculated by dividing general and administrative expenses by fleet calendar days for the relevant time period.45Table of ContentsU.S. dollars in thousands, except average daily time charter equivalentand total operating days 2018 2019 2020 2021 2022 On a consolidated basis Total Revenues $41,048 $66,088 $60,222 $56,367 $80,656 Less: Voyage expenses (1,020) (3,038) (1,994) (1,317) (1,648)Time charter equivalent revenues $40,028 $63,050 $58,228 $55,050 $79,008 Total operating days 2,663 3,884 3,363 2,500 2,893 Average Daily Time Charter Equivalent (TCE) $15,031 $16,233 $17,314 $22,020 $27,310 EBITDA* U.S. dollars in thousands 2018 2019 2020 2021 2022 EBITDA $4,792 $15,563 $11,278 $23,284 $46,554 *Non-US GAAP Measures This report describes Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), which is not a measure prepared in accordance with U.S. GAAP (i.e., a “Non-US GAAP” measure). We define EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA is a non-U.S. GAAP financial measure that is used as a supplemental financial measure by management and external users of financial statements, such as investors,to assess our financial and operating performance. We believe that this non-U.S. GAAP financial measure assists our management and investors by increasing the comparability ofour performance from period to period. This is achieved by excluding the potentially disparate effects between periods or companies of interest, other financial items, depreciationand amortization and taxes, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items maysignificantly affect net income between periods. We believe that including EBITDA as a measure of operating performance benefits investors in (a) selecting between investing in usand other investment alternatives and (b) monitoring our ongoing financial and operational strength. EBITDA is not a measure of financial performance under U.S. GAAP, does not represent and should not be considered as an alternative to net income, operating income, cashflow from operating activities or any other measure of financial performance presented in accordance with U.S. GAAP. EBITDA as presented below may not be comparable to similarlytitled measures of other companies. See below for a reconciliation of EBITDA to Net (Loss)/Income, the most directly comparable U.S. GAAP measure. Reconciliation of Net (Loss) / Income to EBITDA(Expressed in thousands of U.S. Dollars) 2018 2019 2020 2021 2022 Net (loss)/income (11,129) (14,773) (22,818) 8,616 18,948 Add: Vessel depreciation 6,389 12,392 13,174 7,670 13,289 Add: Interest and finance costs 9,662 18,077 20,956 6,998 14,365 Less: Interest income (130) (133) (34) - (48)EBITDA 4,792 15,563 11,278 23,284 46,554 Time Charter RevenuesOur Time charter revenues are driven primarily by the number and size of vessels in our fleet, the number of operating days during which our vessels generate revenues and theamount of daily charterhire that our vessels earn under charters, which, in turn, are affected by a number of factors, including our decisions relating to vessel acquisitions and disposals,the amount of time that we spend positioning our vessels, the amount of time that our vessels spend in dry-dock undergoing repairs, maintenance and upgrade work, the duration of thecharter, the age, condition and specifications of our vessels, levels of supply and demand in the global transportation market for oil and oil products and other factors affecting spotmarket charter rates such as vessel supply and demand imbalances. Vessels operating on period charters, time charters or bareboat charters provide more predictable cash flows, but can yield lower profit margins than vessels operating in theshort-term, or spot, charter market during periods characterized by favorable market conditions. Vessels operating in the spot charter market, either directly or through a poolarrangement, could generate revenues that are less predictable, but could enable us to capture increased profit margins during periods of improvements in charter rates, although wecould be exposed to the risk of declining charter rates, which could have a materially adverse impact on our financial performance. If we employ vessels on period charters, future spotmarket rates may be higher or lower than the rates at which we have employed our vessels on period time charters. 46Table of ContentsUnder a time charter, the charterer typically pays us a fixed daily charter hire rate and bears all voyage expenses, including the cost of bunkers (fuel oil) and port and canalcharges. We remain responsible for paying the chartered vessel’s operating expenses, including the cost of crewing, insuring, repairing and maintaining the vessel, the costs of sparesand consumable stores, tonnage taxes and other miscellaneous expenses, and we also pay commissions to CSI, one or more unaffiliated ship brokers and to in-house brokers associatedwith the charterer for the arrangement of the relevant charter. Under a bareboat charter, the vessel is chartered for a stipulated period of time, which gives the charterer possession and control of the vessel, including the right to appoint themaster and the crew. Under bareboat charters, all voyage and operating costs are paid by the charterer. As of the date of this annual report, we have bareboat chartered-in one product/chemical tanker, one Suezmax tanker and two VLCC tankers under our SLB arrangements whichare accounted as financing and two suezmax crude oil tankers which are accounted as an operating lease. We may in the future operate vessels in the spot market until the vessels havebeen chartered under appropriate medium to long-term charters. Voyage Expenses Voyage expenses primarily consist of port charges, including canal dues, bunkers (fuel costs) and commissions. All these expenses, except commissions, are paid by thecharterer under a time charter or bareboat charter contract. The amount of voyage expenses are primarily driven by the routes that the vessels travel, the amount of ports called on, thecanals crossed and the price of bunker fuels paid. Operating Lease Expenses Operating lease expenses represent operating lease payments for vessels we have bareboat chartered-in via operating lease agreements. Vessel Operating Expenses Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumablestores, tonnage taxes and value added tax, or VAT, and other miscellaneous expenses. We analyze vessel operating expenses on a U.S. dollar per day basis. Additionally, vessel operatingexpenses can fluctuate due to factors beyond our control, such as unplanned repairs and maintenance attributable to damages or regulatory compliance and factors which may affect theshipping industry in general, such as developments relating to insurance premiums, or developments relating to the availability of crew. Dry-docking Costs Dry-docking costs relate to regularly scheduled intermediate survey or special survey dry-docking necessary to preserve the quality of our vessels as well as to comply withinternational shipping standards and environmental laws and regulations. Dry-docking costs can vary according to the age of the vessel, the location where the dry-dock takes place,shipyard availability, local availability of manpower and material, and the billing currency of the yard. Please see “Item 18. Financial Statements—Note 2—Significant AccountingPolicies.” In the case of tankers, dry-docking costs may also be affected by new rules and regulations. For further information please see “Item 4. Information on the Company—B.Business Overview—Environmental Regulations.” Management Fees—Related Parties As from January 1, 2019, we have outsourced to CSI a related party controlled by the family of Mr. Evangelos J. Pistiolis, all operational, technical and commercial functionsrelating to the chartering and operation of our vessels. We outsourced the above functions pursuant to a letter agreement between CSI and Top Ships Inc. and management agreementsbetween CSI and our vessel-owning subsidiaries on the same date, and each new vessel that entered our fleet after that date entered into a management agreement with CSI. See “Item7.Major shareholders and related party transactions — B. Related Party Transactions”. General and Administrative Expenses Our general and administrative expenses include executive compensation paid to Central Mare for the compensation of our executive officers and a number of administrativestaff, office rent, legal and auditing costs, regulatory compliance costs, other miscellaneous office expenses, non-cash stock compensation, and corporate overhead. Central Mareprovides the services of the individuals who serve in the position of Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Chief Technical Officer as well as anumber of administrative employees. For further information please see “Item 18. Financial Statements—Note 5—Transactions with Related Parties.” 47Table of ContentsA portion of our general and administrative expenses are denominated in Euros and are therefore affected by the conversion rate of the U.S. dollar versus the Euro. Inflation Although inflation has had a moderate impact on our vessel operating expenses and corporate overheads, management does not consider inflation to be a significant risk todirect costs in the current and foreseeable economic environment. Oil transportation is a specialized area and the number of vessels is increasing. There will therefore be an increaseddemand for qualified crew and this could lead to inflationary pressure on crew costs. However, in a shipping downturn, costs subject to inflation can usually be controlled becauseshipping companies typically monitor costs to preserve liquidity and encourage suppliers and service providers to lower rates and prices in the event of a downturn. Inflation, however,has indirectly led to the increase in the base lending costs of our loans, which are based on LIBOR and which has increased from 0.10% in January 2022 to 4.78% in December 2022, thathas materially affected our results from operation and cash flow particularly towards the end of the year (please see “ITEM 11. Quantitative and qualitative disclosures about market risk -Interest rate risk” for a sensitivity analysis the increase in interest rates).Interest and Finance Costs We incur interest expense on outstanding indebtedness under our loans and SLBs, which we include in interest and finance costs. We also incur finance costs in establishingthose debt facilities and SLBs which are deferred and amortized over the period of the respective facility. The amortization of the finance costs is presented in interest and finance costs. Main components of managing our business and main drivers of profitability The management of financial, general and administrative elements involved in the conduct of our business and ownership of our vessels requires the following maincomponents: •management of our financial resources, including banking relationships, i.e., administration of bank loans and bank accounts;•management of our accounting system and records and financial reporting;•administration of the legal and regulatory requirements affecting our business and assets; and•management of the relationships with our service providers and customers.The principal factors that affect our profitability, cash flows and shareholders’ return on investment include: •charter rates and periods of charter hire for our tankers;•utilization of our tankers (earnings efficiency);•levels of our tanker’s operating expenses and dry-docking costs;•depreciation and amortization expenses;•financing costs; and•fluctuations in foreign exchange rates.RESULTS OF OPERATIONS FOR THE FISCAL YEARS ENDED DECEMBER 31, 2021 AND 2022 The following table depicts changes in the results of operations for 2022 compared to 2021. (Expressed in thousands of U.S. Dollars) Year Ended December 31, change 2021 2022 YE22 v YE21 $ % Total charter revenues 56,367 80,656 24,289 43%Voyage expenses 1,317 1,648 331 25%Operating lease Expense 10,840 10,840 - 0%Vessel operating expenses 15,679 18,628 2,949 19%Dry-docking costs 361 - (361) -100%Vessel depreciation 7,670 13,289 5,619 73%Management fees-related parties 2,596 2,093 (503) -19%General and administrative expenses 1,943 1,617 (326) -17%Loss on sale of vessels - (78) (78) - Vessels Impairment charge 1,160 - (1,160) -100%Operating income 14,801 32,619 17,818 120%Interest and finance costs (6,998) (14,365) (7,367) 105%(Loss)/Gain on financial instruments 66 - (66) -100%Interest income - 48 48 - Equity gain in unconsolidated joint ventures 747 646 (101) -14%Total other expenses, net (6,185) (13,671) (7,486) 121%Net income 8,616 18,948 10,332 120% 48Table of ContentsYear on Year Comparison of Operating Results 1.Revenues During the year ended December 31, 2022, Revenues increased by $24.3 million, or 43%, compared to the same period in 2021. This increase in revenue was due to the increasein the number of vessels (since during the year ended December 31, 2022 we employed on average 8.0 vessels, whilst in the same period of 2021 we employed on average 7.1 vessels) anddue to the increase in TCE rate from $22,020 in 2021 to $27,310 in 2022 that was due to the employment of larger vessels when compared to 2021. 2.Voyage expenses During the year ended December 31, 2022, Voyage expenses increased by $0.3 million, or 25%, compared to the same period in 2021. Since the majority of voyage expensesconsist of brokerage commissions expressed as a percentage of revenue the increase in voyage expenses is mainly due to the increase of the TCE rate by 24% between the two periods. 3.Vessel operating expenses During the year ended December 31, 2022, Vessel operating expenses increased by $2.9 million, or 19%, compared to the same period in 2021 mainly due to the employment oflarger vessels and due to the increase in average vessels employed in 2022 compared to 2021 ($6,070 per day average operating expenses in 2021 for 7.1 average vessels compared to$6,397 per day in 2022 for 8.0 average vessels). 4.Vessel depreciation During the year ended December 31, 2022, Vessel depreciation increased by $5.6 million, or 73%, compared to the same period in 2021 mainly due to the employment of largervessels and due to the increase in average vessels employed in 2022 compared to 2021. Indicatively the annual depreciation of M/T Marina Del Ray which is a 50,000 dwt MR producttanker is $1.35 million, compared to $3.18 million for M/T Julius Caesar, which is a 300,000 dwt VLCC tanker. 5.Management fees—related parties During the year ended December 31, 2022, management fees to related parties decreased by $0.5 million, or 19%, compared to the same period in 2021. This decrease was mainlydue to a $0.8 million reduction in sale and purchase commissions as per our management agreement with Central Shipping Inc (“CSI”), offset by a $0.3 million increase in managementfees relating to the increase in the size of our fleet over the two comparable periods. 6.Interest and Finance Costs During the year ended December 31, 2022, interest and finance costs increased by $7.4 million, or 105%, compared to the same period in 2021 mainly due to: •an increase of $5.5 million in interest costs mainly due to the net increase in senior loan balances, since in 2022 we entered into three new credit facilities for M/T’s EcoOceano CA, Julius Caesar, Legio X Equestris (the “2022 Credit Facilities”) for an aggregate $156.2 million in the first quarter of the year and in the same quarter prepaidtwo credit facilities of $54.2 million. The increase in interest costs was also due to the fact that the variable interest rate of our credit facilities (LIBOR) increased in 2022from 0.10% in January to 4.74% in December while in the same period of 2021 LIBOR ranged from 0.08% to 0.11%.•an increase of $1.7 million in amortization of deferred financing fees mainly due to the fact that in 2022 we accelerated the amortization of $1.9 million of unamortizedbalances of deferred financing fees relating to the sale of M/T Eco Los Angeles and M/T Eco City of Angels and the prepayment of Central Mare Unsecured BridgeLoan and we incurred $0.4 million in amortization of deferred financing fees for the 2022 Credit Facilities. These were offset by the absence in 2022 of $0.5 million ofaccelerated amortization of deferred financing fees incurred in 2021 that related to the credit facility of M/T Nord Valiant that was sold in September 2021.•an increase of $0.2 million of other financial costs, mainly relating to the increase of the number of vessels in our fleet.49Table of ContentsOur Fleet—Illustrative Comparison of Possible Excess of Carrying Value Over Estimated Charter-Free Market Value of Certain Vessels In Note 2 to our consolidated financial statements included herein we discuss our policy for impairing the carrying values of our vessels. During the past few years, the marketvalues of vessels have experienced particular volatility, with substantial declines in many vessel classes. As a result, the charter-free market value, or basic market value, of certain of ourvessels may have declined below those vessels’ carrying value. However, we would not impair those vessels’ carrying value under our accounting impairment policy due to our beliefthat future undiscounted cash flows expected to be earned by such vessels over their operating lives would exceed such vessels’ carrying amounts. Furthermore, since during the yearended December 31, 2021 tanker values slightly increased and during the year ended December 31, 2022 tanker values have materially increased there was not need to follow throughwith an undiscounted cash flows analysis due to the absence of impairment indication for all the vessels of our fleet.. As of December 31, 2022, we believe that the basic charter-free market values of our owned operating vessels are higher than the vessels carrying value by approximately 35.5%. Our estimates of basic charter-free market value assume that our vessels are all in good and seaworthy condition without need for repair and if inspected would be certified inclass without notations of any kind. Our estimates are based on the estimated market values for the vessels received from third-party independent shipbrokers approved by ourfinancing providers. Vessel values are highly volatile. Accordingly, our estimates may not be indicative of the current or future basic market value of the vessels or prices that could beachieved if the vessels were to be sold. We refer you to the risk factor entitled “The international oil tanker industry has experienced volatile charter rates and vessel values and there can be no assurance that thesecharter rates and vessel values will not decrease in the near future” and the discussion herein under the heading “Risks Related to Our Industry.” Liquidity and Capital Resources Since our formation, our principal sources of funds have been equity provided by our shareholders through equity offerings or at the market sales, operating cash flow, long-term borrowing including SLBs and short-term borrowings. Our principal use of funds has been capital expenditures to establish and grow our fleet, maintain the quality of our vessels,comply with international shipping standards and environmental laws and regulations and fund working capital requirements. Our business is capital intensive and its future success will depend on our ability to maintain a high-quality fleet through the acquisition of newer vessels and the selective saleof older vessels. Our practice has been to acquire vessels using a combination of funds received from equity investors and bank debt including SLBs secured by title on our vessels. Future acquisitions are subject to management’s expectation of future market conditions, our ability to acquire vessels on favorable terms and our liquidity and capital resources. As of December 31, 2022, we had an indebtedness of $233.7 million, which after excluding unamortized financing fees and debt discounts amounts to a total indebtedness of$240.6 million. Finally, as of December 31, 2022, our cash and cash equivalent balances amounted to $24.5 million, held in U.S. Dollar accounts, $4.0 million of which are classified asrestricted cash. As of the date of this annual report our cash flow projections indicate that cash on hand and cash to be provided by operating activities will be sufficient to cover the liquidityneeds that become due in the twelve-month period ending one year after the financial statements’ issuance. Working Capital Requirements and Sources of Capital As of December 31, 2022, we had a working capital deficit (current assets less current liabilities) of $9.3 million. Our operating cash flow, provided that LIBOR expectations for 2023 remain as they are as of the date of this annual report, is expected to slightly decrease when compared tothe same period in 2022, since all our owned vessels except for M/T Marina del Rey have loans with fluctuating interest rates leading to materially increased interest costs (please see“ITEM 11. Quantitative and qualitative disclosures about market risk -Interest rate risk” for a sensitivity analysis the increase in interest rates).Cash Flow Information Cash and cash equivalents and restricted cash were $6.4 million and $24.5 million as of December 31, 2021 and 2022 respectively. Net Cash from Operating Activities. Net cash provided by operating activities increased by $17.3 million, or 108%, for 2022 to $33.4 million, compared to $16.1 million for 2021. 50Table of ContentsAdjustments to reconcile net income to net cash provided by operating activities for the year ended December 31, 2022 totaled $24.3 million. This consisted mainly of $13.3million of depreciation expenses, $8.6 million of amortization of right of use assets from operating leases and $2.5 million of amortization and write offs of deferred financing costs, offsetby $0.1 million of gains on sale of vessels. The cash inflow from operations was offset by a $8.8 million decrease in current liabilities and a $1.0 million increase in current assets. Adjustments to reconcile net income to net cash provided by operating activities for the year ended December 31, 2021 totaled $9.0 million. This consisted mainly of $7.7 millionof depreciation expenses, $1.5 million Dividends from cumulative earnings of joint ventures, $1.2 million of impairment of vessels, $0.8 million of amortization and write offs of deferredfinancing costs, offset by $1.4 million of non-cash operating lease expenses $0.7 million in gains in unconsolidated joint ventures and $0.1 million of gains from the valuation ofderivative financial instruments. The cash inflow from operations was offset by a $1.5 million decrease in current liabilities, offset by a $0.1 million increase in current assets. Net Cash from Investing Activities. Net cash used in investing activities in the period ended December 31, 2022 was $142.7 million, consisting of $216.7 million of cash paid for advances for vessels underconstruction, offset by $71.7 million net proceeds from sale of vessels and $2.3 million of return of investments in unconsolidated joint ventures. Net cash used in investing activities in the period ended December 31, 2021 was $76.7 million, consisting of $115.6 million of cash paid for advances for vessels underconstruction, offset by $35.9 million net proceeds from sale and exchange of vessels and $3.0 million of return of investments in unconsolidated joint ventures. Net Cash from Financing Activities. Net cash provided by financing activities in the period ended December 31, 2022 was $127.4 million, consisting of $165.2 million of proceeds from long term and related partydebt, $47.6 million of proceeds from issuance of Series F Shares, $21.1 million of proceeds from issuance of our common stock net of equity issuance costs and $4.6 of proceeds fromwarrant exercises, net of fees. These were offset by $77.9 million of principal payments and prepayments of long term and related party debt, $16.2 million of payments for Series F Sharesredemptions, $13.4 million payments of dividends for Series F and E Shares and $3.6 million payments of financing costs. Net cash provided by financing activities in the period ended December 31, 2021 was $43.6 million, consisting of $74.8 million of proceeds from long term debt, offset by $28.3million of principal payments and prepayments of debt, $1.8 million payments of dividends for Series E Shares and $1.1 million payments of financing costs. Please see Item 5. “Operating and Financial Review and Prospects—A. Operating Results” in our Annual Report on Form 20-F, filed on April 15, 2022 where the 2021 cash flowinformation may be found. Debt FacilitiesFor a more complete description of debt facilities entered into in the period ended December 31, 2022 as well as for a description of debt facilities entered before the periodended December 31, 2022 please see “Item 18. Financial Statements—Note 7—Debt.”.Central Mare Unsecured Bridge LoanOn January 5, 2022 we entered into an unsecured credit facility for up to $20 million with an affiliate of Mr. Evangelos J. Pistiolis in order to finance part of the shipbuilding costof our two VLCC newbuildings. A total of $9 million had been drawn down. The facility maturity was December 31, 2022. The principal terms of the loan included an arrangement fee of2%, interest of 12% per annum and a commitment fee of 1.00% on the undrawn part of the facility. The facility was fully repaid and terminated on March 4, 2022 from proceeds from thesale of the M/T Eco Los Angeles.Financings Committed under Sale and Leaseback Agreements2nd CMBFL Sale and LeasebackOn November 23, 2021 we entered into an SLB with CMBFL, for our newbuilding vessels Julius Caesar (Hull No. 3213) and Legio X Equestris (Hull No. 3214). Consummation ofthe SLB took place on January 17 and March 2, 2022, respectively. Following the sale, we have bareboat chartered back the vessels for a period of eight years at bareboat hire ratescomprising of 32 consecutive quarterly installments of $0.68 million and a balloon payment of $32.4 million payable together with the last installment, plus interest based on the threemonths LIBOR plus 2.60%. As part of this transaction, we have continuous options to buy back the vessels at purchase prices stipulated in the bareboat agreements depending onwhen the option was exercised and at the end of the eight year period we have an option to buy back the vessels at a cost represented by the balloon payment.51Table of Contents2nd AVIC Sale and LeasebackOn March 2, 2022 we entered into an SLB with AVIC, for our newbuilding vessel Eco Oceano Ca (Hull No. 871). Consummation of the SLB took place on March 4, 2022.Following the sale, we have bareboat chartered back the vessel for a period of ten years at bareboat hire rates comprising of 40 consecutive quarterly installments of $0.68 million and aballoon payment of $21.2 million payable together with the last installment, plus interest based on the three months LIBOR plus 3.50%. As part of this transaction, we have continuousoptions to buy back the vessels at purchase prices stipulated in the bareboat agreements depending on when the option will be exercised and at the end of the ten year period we havean obligation to buy back the vessel at a cost represented by the balloon payment. The obligations of our subsidiary as charterer are secured by, among other things, an assignment ofthe vessel’s insurances and earnings and any sub-charters of the vessel, and a pledge of the charterer’s earnings account.Covenant ComplianceAs of December 31, 2022, we were in compliance with all covenants with respect to our bank loans and sale and leaseback agreements. The fair value of debt outstanding onDecember 31, 2022, after excluding unamortized financing fees and debt discounts, amounted to $238.9 million when valuing the Cargill SLB on the basis of the Commercial InterestReference Rates as applicable on December 31, 2022.Operating LeasesOn December 1 and December 10, 2020, we sold and leased back M/T Eco Beverly Hills and M/T Eco Bel Air, respectively, to a unaffiliated third party (the “Navigare Lease”).Each vessel was chartered back on a bareboat basis for five years at a bareboat hire of $16,750 per day for the first two years, $14,000 per day for the next two years and $10,000 per dayfor the fifth year. We do not have any option nor obligation to buy back the vessels. The abovementioned sale and leaseback transactions contain, customary covenants and event ofdefault clauses, including cross-default provisions, change of control provisions (whereby Mr. Evangelos J. Pistiolis may not control less than 50.1% of the voting rights of theCompany) and restrictive covenants and performance requirements. Part of these covenants is a requirement to maintain a minimum liquidity of $4 million at all times which is certified bi-annually. As of December 31, 2022, we were in compliance with all covenants of the Navigare Lease.Please see “Item 18. Financial Statements—Note 6—Leases.” for more detailed information.C.Research and Development, Patents and Licenses, Etc.Not applicable.D.Trend Information Our results of operations depend primarily on the charter rates earned by our vessels. Over the course of 2022, the BDTI reached a high of 2,496 and a low of 679 while the BCTIreached a high of 2,143 and a low of 543. Historically and even more so since the start of the financial crisis in 2008 the performance of the BDTI and the BCTI have been characterized byhigh volatility. Meanwhile, the war in Ukraine has amplified the volatility in the tanker market. In the short term, the effect of the invasion of Ukraine has been positive for the tanker market, yetthe overall longer term effect on ton-mile demand is uncertain given that cargoes exported previously from Russia will need to be substituted by cargoes from different sources due tothe oil and oil products embargo enacted by the United States, the European Union and the United Kingdom. In addition, the continuing war in Ukraine led to increased economic uncertainty amidst fears of a more generalized military conflict or significant inflationary pressures, due tothe increases in fuel and grain prices following the sanctions imposed on Russia. Whether the present dislocation in the markets and resultant inflationary pressures will transition to along-term inflationary environment is uncertain, and the effects of such a development on charter rates, vessel demand and operating expenses in the sector in which we operate areuncertain. As described above, the initial effect of the invasion in Ukraine on the tanker freight market was positive, despite the short-term volatility in charter rates and increases onspecific items of operating costs. If these conditions are sustained, the longer-term net impact on the tanker market and our business would be difficult to predict. However, such eventsmay have unpredictable consequences, and contribute to instability in global economy, a decrease in supply or cause a decrease in worldwide demand for certain goods and, thus,shipping. Regarding the possible impact of supply chain disruptions that have or may emanate from the military conflict in Ukraine, our operations have not been affected materially andwe do not expect them to be in the future. Since its outbreak in late 2019, the COVID-19 pandemic has caused severe global disruptions and may continue to affect economic conditions regionally as well as globally andotherwise impact our operations and the operations of our customers and suppliers. We assess that the tanker charter rates have been volatile as a result of COVID-19. Over time, theincidence of COVID-19 and its variants has diminished although periodic spikes in incidence occur. Consequently, restrictions imposed by various governmental health organizationsmay change over time. Several countries have lifted restrictions only to reimpose such restrictions as the number of cases rise and new variants arise. Although the Chinese governmentremoved its zero-COVID-19 policy in December 2022, and after easing the lockdown restrictions nationwide. China is now facing a sudden surge in COVID-19 cases. WHO officials hadexpressed hope that COVID-19 might be entering an endemic phase by early 2023, but the continued uncertainties associated with the COVID-19 pandemic worldwide may have anadverse impact on the tanker industry. 52Table of ContentsInflation has had a moderate impact on our vessel operating expenses and corporate overheads, hence management does not consider inflation to be a significant risk to directcosts in the current and foreseeable economic environment. It is anticipated that insurance costs, which have risen over the last three years, may well continue to rise over the next fewyears. Oil transportation is a specialized area and the number of vessels is increasing. There will therefore be an increased demand for qualified crew and this could put inflationarypressure on crew costs. However, in a shipping downturn, costs subject to inflation can usually be controlled because shipping companies typically monitor costs to preserve liquidityand encourage suppliers and service providers to lower rates and prices in the event of a downturn. Inflation, however, has indirectly led to the increase in the base lending costs of ourloans, which are based on LIBOR and which has increased from 0.10% in January 2022 to 4.78% in December 2022, that has materially affected our results from operation and cash flowparticularly towards the end of the year (please see “ITEM 11. Quantitative and qualitative disclosures about market risk—Interest rate risk” for a sensitivity analysis of an increase ininterest rates).For further discussion of industry trends, refer to industry disclosure under “Item 4. Information on the Company—B. Business Overview.”E.Critical Accounting EstimatesThe discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordancewith U.S. GAAP. The preparation of those financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities, revenues andexpenses and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions orconditions. Critical accounting estimates are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions andconditions. We have described below what we believe are our most critical accounting estimates that involve a higher degree of judgment and the methods of their application. For adescription of all of our significant accounting estimates, see Note 2 to our consolidated financial statements included herein. Vessel depreciation. We record the value of our vessels at their cost (which includes the contract price, pre-delivery costs incurred during the construction of newbuildings,capitalized interest and any material expenses incurred upon acquisition such as initial repairs, improvements and delivery expenses to prepare the vessel for its initial voyage) lessaccumulated depreciation. We depreciate our vessels on a straight-line basis over their estimated useful lives, estimated to be 25 years from the date of initial delivery from the shipyard.Depreciation is based on cost of the vessel less its residual value which is estimated to be $300 per light-weight ton. A decrease in the useful life of the vessel or in the residual valuewould have the effect of increasing the annual depreciation charge. A decrease in the useful life of the vessel may occur as a result of poor vessel maintenance performed, harsh ocean-going and weather conditions that the vessel is subject to,or poor quality of the shipbuilding yard. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, the vessel’s useful life is adjusted at the date suchregulations become effective. Weak freight markets may result in owners scrapping more vessels and scrapping them earlier due to unattractive returns. An increase in the useful life ofthe vessel may result from superior vessel maintenance performed, favorable ocean-going and weather conditions the vessel is subjected to, superior quality of the shipbuilding yard, orhigh freight rates which result in owners scrapping the vessels later due to attractive cash flows. Impairment of vessels: We evaluate the existence of impairment indicators whenever events or changes in circumstances indicate that the carrying values of our long-livedassets are not recoverable. Such indicators of potential impairment include, vessel sales and purchases, business plans and overall market conditions. If there are indications forimpairment present, we determine undiscounted projected net operating cash flows for each vessel and compare it to the vessel’s carrying value. If the carrying value of the relatedvessel exceeds its undiscounted future net cash flows, the carrying value is reduced to its fair value. The carrying values of our vessels may not represent their fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changesin charter rates and the cost of newbuildings. Although we believe that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective. There can be noassurance as to how long charter rates and vessel values will remain at their current levels or whether they will improve or decrease by any significant degree. Charter rates may be atdepressed levels for some time, which could adversely affect our revenue and profitability, and future assessments of vessel impairment. In order to perform the undiscounted cash flow test, we make assumptions about future charter rates, commissions, vessel operating expenses, dry-dock costs, fleet utilization,scrap rates used to calculate estimated proceeds at the end of vessels’ useful lives and the estimated remaining useful lives of the vessels. These assumptions are based on historicaltrends as well as future expectations. The projected net operating cash flows are determined by considering the charter revenues from existing time charters for the fixed fleet days andan estimated daily time charter equivalent for the unfixed days (based on the ten year historical averages of the one-year, three-year and five-year time charter rates) over the remaininguseful life of each vessel, which we estimate to be 25 years from the date of initial delivery from the shipyard. Expected outflows for scheduled vessels’ maintenance and vessel operatingexpenses are based on historical data, and adjusted annually assuming an average annual inflation derived from the most recent twenty-year average consumer price index. Effective fleetutilization, average commissions, dry-dock costs and scrap values are also based on historical data. 53Table of ContentsIn 2021 tanker values slightly increased and in 2022 they increased materially and as a result in both years the charter-free market value of each vessel of our fleet was higherthan its carrying amount. As such we had no indicators of potential impairment and did not perform the undiscounted cash flow test for any vessel of our fleet. In December 2021 we classified two product tankers, M/T Eco Los Angeles and M/T Eco City of Angels as held for sale and since their fair value less costs to sell exceededtheir carrying amount the Company did not incur any impairment charges. The vessels were sold on February 28 and March 15, 2022 respectively to unaffiliated third parties for a totalconsideration of $73 million. Also see “Item 18. Financial Statements—Note 2— Significant Accounting Policies”.]ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEESA.Directors and Senior ManagementSet forth below are the names, ages and positions of our directors, executive officers and key employees. Members of our Board of Directors are elected annually on a staggeredbasis and each director elected holds office for a three-year term.Officers are elected from time to time by vote of our Board of Directors and hold office until a successor is elected.Name Age PositionEvangelos J. Pistiolis 50 Director, President, Chief Executive OfficerAlexandros Tsirikos 49 Director, Chief Financial OfficerKonstantinos Patis 49 Chief Technical OfficerVangelis G. Ikonomou 58 Chief Operating OfficerKonstantinos Karelas 50 Independent Non-Executive DirectorStavros Emmanuel 80 Independent Non-Executive DirectorPaolo Javarone 49 Independent Non-Executive DirectorBiographical information with respect to each of our directors and executives is set forth below.Evangelos J. Pistiolis founded our Company in 2000, is our President and Chief Executive Officer, and has served on our Board of Directors since July 2004. Mr. Pistiolisgraduated from Southampton Institute of Higher Education in 1999, where he studied shipping operations and from Technical University of Munich in 1994 with a bachelor’s degree inmechanical engineering. His career in shipping started in 1992 when he was involved with the day-to-day operations of a small fleet of drybulk vessels. From 1994 through 1995, heworked at Howe Robinson & Co. Ltd., a London shipbroker specializing in container vessels. While studying at the Southampton Institute of Higher Education, Mr. Pistiolis oversaw thedaily operations of Compass United Maritime Container Vessels, a ship management company located in Greece.Alexandros Tsirikos has served as our Chief Financial Officer since April 1, 2009. Mr. Tsirikos is a U.K. qualified Chartered Accountant (ACA) and has been employed withTOP Ships Inc. since July 2007 as our Corporate Development Officer. Prior to joining TOP Ships Inc., Mr. Tsirikos was a manager with PricewaterhouseCoopers, or PwC, where heworked as a member of the PwC Advisory team and the PwC Assurance team, thereby drawing experience both from consulting as well as auditing. As a member of PwC’s Advisoryteam, he led and participated in numerous projects in the public and the private sectors, including strategic planning and business modeling, investment analysis and appraisal,feasibility studies, costing and project management. As a member of the PwC’s Assurance team, Mr. Tsirikos was part of the International Financial Reporting Standards, or IFRS,technical team of PwC Greece and lead numerous IFRS conversion projects for listed companies. He holds a Master’s of Science in Shipping Trade and Finance from City University ofLondon and a bachelor’s degree with honors in Business Administration from Boston University in the United States. He speaks English, French and Greek.Konstantinos Patis has served as our Chief Technical Officer since January 2018. Mr. Patis holds a Master’s of Science and a Bachelor’s degree, both in Marine Engineeringfrom the University of Newcastle upon Tyne in the UK, as well as a Bachelor’s degree in Naval Architecture from the Technological Educational Institute of Athens, in Greece. He startedhis carrier in 1997 acting as a Superintendent Engineer, thereafter as Fleet Manager and from 2014 as Technical Manager in various ship management companies in Greece, like CyprusSea Lines, Technomar Shipping, Aeolian Investments, Arion Shipping operating diverse fleets of Tankers, Bulk Carriers and Containers and was involved in the technical supervision,repairs, dry docks and construction of new projects.Vangelis G. Ikonomou is our Chief Operating Officer. Prior to joining us, Mr. Ikonomou was the Commercial Director of Primal Tankers Inc. From 2000 to 2002, Mr. Ikonomouworked with George Moundreas & Company S.A. where he was responsible for the purchase and sale of second-hand vessels and initiated and developed a shipping industry researchdepartment. Mr. Ikonomou worked, from 1993 to 2000, for Eastern Mediterranean Maritime Ltd., a ship management company in Greece, in the commercial as well as the safety and qualitydepartments. Mr. Ikonomou holds a Master’s degree in Shipping Trade and Finance from the City University Business School in London, a bachelor’s degree in Business Administrationfrom the University of Athens in Greece and a Navigation Officer Degree from the Higher State Merchant Marine Academy in Greece.54Table of ContentsKonstantinos Karelas has served on our Board of Directors and has been member of the Audit Committee since April 2014. Since 2008, Mr. Karelas has served as the Presidentand CEO of Europe Cold Storages SA, one of the leading companies in the field of refrigeration logistics.Stavros Emmanuel has served on our Board of Directors since December 31, 2017 and has been member of the Audit Committee since December 2018. Captain StavrosEmmanuel has 47 years of experience in the shipping industry and expertise in operation and chartering matters. He obtained a Naval Officers degree from ASDEN Nautical Academy ofAspropyrgos, Greece and earned a Master Mariners degree in 1971. He has worked in various management capacities at Compass United Maritime and Primal Tankers Inc. From 2004 to2009 he was our Chief Operating Officer. Since leaving us, Captain Stavros Emmanuel has been an independent advisor to various shipping companies.Paolo Javarone has served on our Board of Directors since September 1, 2014. Mr. Javarone is a member of the Italian Shipbrokers Association. From 2015, Mr. Javarone hasbeen working for Shipping 360 Ltd, a boutique shipbroking company with offices in London and Monaco and before that he has been working since 2000 for Sernavimar S.R.L., one ofthe most reputable shipbroking houses in Italy, which cooperates with many of the oil major companies and trading associations of the industry. From 1994 to 2000, Mr. Javarone workedfor Genoa Sea Brokers in the tanker wing of the company specializing in clean petroleum products and edible markets. Previously, Mr. Javarone worked for S.a.n.a. Eur, a company basedin Rome Italy, where he was tasked with supplying energy and offshore supply. Before S.a.n.a., Mr. Javarone worked for Sidermar di Navigazione S.P.A. in the dry cargo field. Mr.Javarone holds a Shipbroker degree from National Agents Association Shipbroking School in Italy and a degree in Shipping Economics and Law from Nautical Maritime School in Italy.B.CompensationOn September 1, 2010, we entered into separate agreements with Central Mare, pursuant to which Central Mare furnishes our four executive officers as described below. Duringthe fiscal year ended December 31, 2022, we paid to the members of our senior management and to our directors aggregate compensation of $0.4 million. We do not have a retirement planfor our officers or directors and we did not issue any stock options or other securities to them as part of compensation for the fiscal year ended December 31, 2022.Under the terms of the agreement for the provision of our Chief Executive Officer, we are obligated to pay annual base salary. The initial term of the agreement expired onAugust 31, 2014 and is automatically extended for successive one-year terms unless Central Mare or we provide notice of non-renewal at least sixty days prior to the expiration of thethen applicable term.If our Chief Executive Officer’s employment is terminated without cause, he is entitled to certain personal and household security costs. If he is removed from our Board ofDirectors or not re-elected, then his employment terminates automatically without prejudice to Central Mare’s rights to pursue damages for such termination. In the event of a change ofcontrol, the Chief Executive Officer is entitled to receive a cash payment of ten million Euros. The agreement also contains death and disability provisions. In addition, the ChiefExecutive Officer is subject to non-competition and non-solicitation undertakings.Under the terms of the agreement for the provision of our Chief Operating Officer, we are obligated to pay annual base salary and additional incentive compensation asdetermined by our Board of Directors. The initial term of the agreement expired on August 31, 2011 and is automatically extended for successive one-year terms unless Central Mare orwe provide notice of non-renewal at least sixty days prior to the expiration of the then applicable term. In the event of a change of control, he is entitled to receive a cash payment ofthree years’ annual base salary. The agreement also contains death and disability provisions. In addition, our Chief Operating Officer is subject to non-competition and non-solicitationundertakings.Under the terms of the agreement for the provision of our Chief Financial Officer, we are obligated to pay annual base salary. The initial term of the agreement expired on August31, 2012, and is automatically extended for successive one-year terms unless Central Mare or we provide notice of non-renewal at least sixty days prior to the expiration of the thenapplicable term.If our Chief Financial Officer is removed from our Board of Directors or not re-elected, then his employment terminates automatically without prejudice to Central Mare’s rightsto pursue damages for such termination. In the event of a change of control, our Chief Financial Officer is entitled to receive a cash payment equal to three years’ annual base salary. Theagreement also contains death and disability provisions. In addition, our Chief Financial Officer is subject to non-competition and non-solicitation undertakings.Under the terms of our agreement for the provision of our Chief Technical Officer, we are obligated to pay annual base salary. The initial term of the agreement expired onAugust 31, 2011, however the agreement is being automatically extended for successive one-year terms unless Central Mare or we provide notice of non-renewal at least sixty days priorto the expiration of the then applicable term. In the event of a change of control, the Chief Technical Officer is entitled to receive a cash payment equal to three years’ annual base salary.In addition, our Chief Technical Officer is subject to non-competition and non-solicitation undertakings.55Table of ContentsC.Board PracticesOur Board of Directors is divided into three classes. Members of our Board of Directors are elected annually on a staggered basis, and each director elected holds office for athree-year term. We currently have two executive directors and three independent non-executive directors. The terms of our Class II directors, Paolo Javarone and Konstantinos Karelas,expires at the annual general meeting of shareholders in 2024. The term of our Class III director, Alexandros Tsirikos, expires at the annual general meeting of shareholders in 2025. Theterms of our Class I directors, Stavros Emmanuel and Evangelos J. Pistiolis expires at the annual general meeting of shareholders in 2023.Committees of our Board of DirectorsWe currently have an audit committee composed of three independent members, who are responsible for reviewing our accounting controls and recommending to our Board ofDirectors, the engagement of our outside auditors. Konstantinos Karelas, Paolo Javarone and Stavros Emmanuel (Chairman), whose biographical details are included in Item 6 of thisAnnual Report, are the members of the audit committee, and our Board of Directors has determined that they are independent under the Nasdaq corporate governance rules.Our compensation committee and nominating and governance committees are currently composed of the following three members: Konstantinos Karelas, Paolo Javarone andStavros Emmanuel. The compensation committee carries out our Board of Directors’ responsibilities relating to compensation of our executive and non-executive officers and providessuch other guidance with respect to compensation matters as the committee deems appropriate. The nominating and governance committee assists our Board of Directors in: (i)identifying, evaluating and making recommendations to our Board of Directors concerning individuals for selections as director nominees for the next annual meeting of stockholders orto otherwise fill vacancies on our Board of Directors; (ii) developing and recommending to our Board of Directors a set of corporate governance guidelines and principles applicable tous; and (iii) reviewing our overall corporate governance and recommending improvements to our Board of Directors from time to time.As a foreign private issuer, we are exempt from certain Nasdaq requirements that are applicable to U.S. domestic companies. For a listing and further discussion of how ourcorporate governance practices differ from those required of U.S. companies listed on Nasdaq, please see Item 16G of this Annual Report.D.EmployeesWe have no direct employees, while our four executive officers and a number of administrative employees are furnished to us pursuant to agreements with Central Mare, asdescribed above. Our Fleet Manager ensures that all seamen have the qualifications and licenses required to comply with international regulations and shipping conventions, and thatour vessels employ experienced and competent personnel. As of December 31, 2020, 2021 and 2022, we employed 136, 146, and 170 sea-going employees, indirectly through our FleetManager.E.Share OwnershipThe common shares beneficially owned by our directors and senior managers and/or companies affiliated with these individuals are disclosed in “Item 7. Major Shareholdersand Related Party Transactions—A. Major Shareholders.”ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONSA.Major ShareholdersThe following table sets forth the beneficial ownership of our voting securities, comprised of our common shares, Series D Preferred Shares, Series E Preferred Shares, andSeries F Preferred Shares, as of the date of this annual report, held by: (i) each person or entity that we know beneficially owns 5% or more of our common shares and (ii) all our executiveofficers, 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, commonshares 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 thatperson. These shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person. All shareholders of common stock are entitledto one vote for each common share held, holders of our Series D Preferred Shares are entitled to 1,000 votes per Series D Preferred share held, holders of our Series E Preferred Shares areentitled to 1,000 votes per Series E Preferred Share held, and holders of our Series F Preferred Shares are entitled to 10 votes per Series F Preferred share held.56Table of ContentsName and Address of Beneficial OwnerNumber of Shares Owned Percentage ofClass Percentage ofTotal VotingPower Lax Trust (1)100,000 Series D Preferred Shares (2) 100% 13,452 Series E Preferred Shares 100% 65.9%Three Sororibus Trust of Cyprus (1)3,834,082 Series F Preferred Shares 100% 22.3%Executive officers, directors and key employees5,000 Common Stock 0.02% 0.0%(1)The above information is derived, in part, from the Schedule 13D/A filed with the SEC on March 3, 2023. The Lax Trust is an irrevocable trust established for the benefit ofcertain family members of Mr. 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. Three Sororibus Trust of Cyprus is an irrevocable trust established for the benefit of certain family members of Mr. Evangelos J. Pistiolis. Thebusiness address of Three Sororibus Trust of Cyprus is 31 Kitiou Kyprianou, 3036, Limassol, Cyprus. The above percentage of total voting power is based on 172,138,908eligible votes, which is calculated by taking the sum of (i) 20,346,091 common shares outstanding (one vote per common share held), (ii) 100,000,000 votes carried by theoutstanding Series D Preferred Shares (1,000 votes per Series D Preferred Share held), (iii) 13,452,000 votes carried by the outstanding Series E Preferred Shares (1,000 votes perSeries E Preferred Share held) and (iv) 38,340,817 votes carried by the outstanding Series F Preferred Shares (10 votes per Series F Preferred Share held). As of March 28, 2023,the 13,452 Series E Preferred Shares held by Family Trading may be converted to 21,696,774 common shares. (2)As a prerequisite for the Navigare Lease, Mr. Evangelos J. Pistiolis personally guaranteed the performance of the bareboat charters entered in connection with the lease, undercertain circumstances, and in exchange, we amended the Certificate of Designations governing the terms of the Series D Preferred Shares, to adjust the voting rights per share ofSeries D Preferred Shares such that during the term of the Navigare Lease, the combined voting power controlled by Mr. Evangelos J. Pistiolis and the Lax Trust does not fallbelow a majority of our total voting power, irrespective of any new common or preferred stock issuances, and thereby complying with a relevant covenant of the bareboatcharters entered in connection with the Navigare Lease.As of March 27, 2023, we had five shareholders of record, which were located in the United States and held an aggregate of 20,346,091 our common shares, representing 100%of our outstanding common shares. However, one of the U.S. shareholder of record is Cede & Co., which held 20,346,091 of 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 whichmay at a subsequent date result in our change of control.B.Related Party TransactionsPlease also see “Item 18. Financial Statements—Note 5—Transactions with Related Parties.”(a) Central Mare– Executive Officers and Other Personnel AgreementsOn September 1, 2010, we entered into separate agreements with Central Mare, a related party affiliated with the family of our President, Chief Executive Officer and Director, Mr.Evangelos J. Pistiolis, pursuant to which Central Mare provides us with our executive officers (Chief Executive Officer, Chief Financial Officer, Chief Technical Officer and Chief OperatingOfficer).The fees charged by and expenses relating to Central Mare for the years ended December 31, 2020, 2021 and 2022 are $0.3 million per year.(b) Central Shipping Inc (“CSI”) – Letter Agreement and Management AgreementsOn January 1, 2019, we entered into a letter agreement with CSI (“CSI Letter Agreement”), a related party affiliated with the family of Mr. Evangelos J. Pistiolis and on the samedate we entered into management agreements, or the CSI Management Agreements, between CSI and our vessel-owning subsidiaries respectively. The CSI Letter Agreement can only beterminated subject to an eighteen-month advance notice, subject to a termination fee equal to twelve months of fees payable under the CSI Letter Agreement.Pursuant to the CSI Letter Agreement, as well as the CSI Management Agreements concluded between CSI and our vessel-owning subsidiaries, we pay a management fee of$600 per day per vessel for the provision of technical, commercial, operation, insurance, bunkering and crew management, commencing three months before the vessel is scheduled to bedelivered by the shipyard. In addition, the CSI Management Agreements provide for payment to CSI of: (i) $546 per day for superintendent visits plus actual expenses; (ii) a charteringcommission of 1.25% on all freight, hire and demurrage revenues; (iii) a commission of 1.00% on all gross vessel sale proceeds or the purchase price paid for vessels and (iv) a financingfee of 0.2% on derivative agreements and loan financing or refinancing. CSI also performs supervision services for all of our newbuilding vessels while the vessels are underconstruction, for which we pay CSI the actual cost of the supervision services plus a fee of 7% of such supervision services.CSI provides, at cost, all accounting, reporting and administrative services. Finally, the CSI Letter Agreement provides for a performance incentive fee for the provision ofmanagement services to be determined at our discretion. The CSI Management Agreements have an initial term of five years, after which they will continue to be in effect until terminatedby either party subject to an eighteen-month advance notice of termination. Pursuant to the terms of the CSI Management Agreements, all fees payable to CSI are adjusted annuallyaccording to the US Consumer Price Inflation (“CPI”) of the previous year and if CPI is less than 2% than a 2% increase is effected.57Table of ContentsThe fees charged by and expenses relating to CSI for the years ended December 31, 2020, 2021 and 2022 were $12.3 million, $5.7 million and $4.9 million respectively. For theyears ended December 31, 2020, 2021 and 2022, CSI also charged us newbuilding supervision related pass-through costs amounting to $1.0, $1.2 and $0.2 million respectively.(c) Issuance of Series E Preferred Shares to Family Trading Inc (“Family Trading”)On September 8, 2021, pursuant to a Sale and Purchase Agreement between the Issuer and Zizzy Charter Co. dated September 8, 2021, we issued 2,188 Series E Preferred Sharesto Family Trading as partial settlement of the consideration outstanding for the purchase of an additional 65% ownership interest in each of Julius Caesar Inc. and Legio X Inc., each aparty to shipbuilding contracts for VLCC Julius Caesar and VLCC Legio X Equestris, respectively, from a party affiliated with Mr. Pistiolis.(d) Vessel Acquisitions from affiliated entitiesFrom January 8, 2021 to September 8, 2021 we entered into a series of transactions with a number of entities affiliated with Mr. Evangelos J. Pistiolis. As of December 31, 2022,we don’t owe anything to the previous owners of the newbuilding vessels. For more information on these vessel acquisitions please see “Item 18. Financial Statements—Note 1— Basisof Presentation and General Information.” and “Item 4. Information On The Company - A. History and Development of the Company.”(e) Charter Parties with Central Tankers CharteringOn May 4, 2020 we acquired from entities affiliated with Mr. Evangelos J. Pistiolis three Marshall Island companies that owned for the newbuilding vessels M/T Eco Van Nuys,M/T Eco Santa Monica and M/T Eco Venice Beach, due for delivery in the first quarter of 2021. These companies were each a party to a time charter party with Central TankersChartering, a related party affiliated with the family of Mr. Evangelos J. Pistiolis, The time charters were for a firm period of five years at a daily rate of $16,200 with two optional years atdaily rates of $17,200 and $18,200 respectively, at Central Tankers Chartering’s option and would have commenced upon each vessel’s delivery from the shipyard in the first quarter of2021. On January 6, 2021 the abovementioned companies were sold as part of the VLCC Transaction. On January 6, 2021 we acquired a shipowning company from an entity affiliated with Mr. Evangelos J. Pistiolis that owned M/T Eco Oceano CA which was party to a timecharter, with Central Tankers Chartering Inc, for a firm duration of five years at a gross daily rate of $32,450, with two optional years at $33,950 and $35,450 at Central Tankers Chartering’soption. The time charter commenced on the date of delivery. As of December 31, 2022, there were no amounts due to Central Tankers Chartering. On February 22, 2022 we amended thepreviously agreed time charter with Central Tankers Chartering and increased its firm period from five years to 15 years and reduced the daily rate from $32,450 to $24,500. Thistransaction was approved by a special committee of our Board of Directors (the “Special Committee”), of which all of the directors were independent, after obtaining a fairness opinionfrom an independent financial advisor. (f) Personal Guarantees by Mr. Evangelos J. Pistiolis and Related Amendments to the Series D Preferred Shares.As a prerequisite for the Navigare Lease, Mr. Evangelos J. Pistiolis personally guaranteed the performance of the bareboat charters connected to the lease and in exchange, weagreed to indemnify him for any losses suffered as a result of the guarantee provided, and we amended the Certificate of Designations governing the terms of the Series D PreferredShares, to adjust the voting rights per share of Series D Preferred Shares such that during the term of the Navigare Lease, the combined voting power controlled by Mr. Evangelos J.Pistiolis and the Lax Trust does not fall below a majority of our total voting power, irrespective of any new common or preferred stock issuances, and thereby complying with a relevantcovenant of the bareboat charters entered in connection with the Navigare Lease. This personal guarantee comes into effect in the case 120 days have passed and we are still unable topay down all amounts due under the Navigare Lease, with the exception of amounts due to Navigare due to a total loss, where in this case the personal guarantee will cover an amountequal to all unpaid charter hire and a further amount equivalent to all future charter hire that would have accrued from the date of the total loss up to the end of the charter period and iscallable 200 days after the date of the total loss. Due to the related party nature of the transactions involving Mr. Evangelos J. Pistiolis, such transactions were unanimously approved bythe Company’s Board of Directors, including all three independent directors.(g) Issuance of Series F Preferred SharesOn January 17, 2022, we entered into a stock purchase agreement with Africanus Inc., an affiliate of our CEO for the sale of up to 7,560,759 Series F Non-Convertible PerpetualPreferred Shares, par value $0.01, in exchange for (i) the assumption by Africanus Inc. of an amount of $48.0 million of shipbuilding costs for vessels M/T Eco Oceano CA (Hull No. 871),M/T Julius Caesar (Hull No. 3213) and M/T Legio X Equestris (Hull No. 3214), and (ii) settlement of our remaining payment obligations relating to the acquisition in September 8, 2021 ofan additional 65% ownership interest in the newbuilding contracts for its two VLCCs, in an amount of up to $27.6 million. A total of 7,200,000 Series F Preferred Shares were issued. OnJuly 8, 2022, we redeemed 865,558 of our Series F Preferred Shares for an aggregate amount of approximately $10.4 million, payable in cash. On December 30, 2022, we redeemed 483,694 ofour Series F Preferred Shares for an aggregate amount of approximately $5.8 million, payable in cash. On January 13, 2023, we redeemed 1,000,000 of our Series F Preferred Shares for anaggregate amount of approximately $12.0 million, payable in cash. On March 6,2023, we redeemed 1,016,667 of our Series F Preferred Shares for an aggregate amount of approximately$12.2 million, payable in cash. Following completion of the redemptions, as of the date hereof, 3,834,082 of the Company’s Series F Preferred Shares remain issued and outstanding. InDecember 2022, 100% of Africanus Inc shares were transferred to Three Sororibus Trust of Cyprus, which is an irrevocable trust established for the benefit of certain family members ofMr. Pistiolis.58Table of Contents(h) Central Mare Bridge LoanOn January 5, 2022 we entered into an unsecured credit facility for up to $20 million with an affiliate of Mr. Evangelos J. Pistiolis in order to finance part of the shipbuilding costof our two VLCC newbuildings. A total of $9 million was drawn down. The facility maturity was December 31, 2022. The principal terms of the loan included an arrangement fee of 2%,interest of 12% per annum and a commitment fee of 1.00% on the undrawn part of the facility. The facility was fully repaid and terminated on March 4, 2022 from proceeds from the sale ofthe M/T Eco Los Angeles.C.Interests of Experts and CounselNot applicable.ITEM 8.FINANCIAL INFORMATION.A.Consolidated Statements and Other Financial InformationSee “Item 18—Financial Statements.”Legal ProceedingsFrom time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. We expect thatthese claims would be covered by insurance, subject to customary deductibles. Those claims, even if lacking merit, could result in the expenditure of significant financial and managerialresources.Dividend Distribution PolicyThe declaration and payment of any future special dividends shall remain subject to the discretion of our Board of Directors and shall be based on general market and otherconditions including our earnings, financial strength and cash requirements and availability.B.Significant ChangesAll significant changes have been included in the relevant sections.ITEM 9.THE OFFER AND LISTING.Not applicable except for Item 9.A.4. and Item 9.C.Share History and MarketsSince July 23, 2004, the primary trading market for our common shares has been Nasdaq on which our shares are now listed under the symbol “TOPS.”ITEM 10.ADDITIONAL INFORMATIONA.Share CapitalNot applicable.B.Memorandum and Articles of AssociationPurposeOur purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Marshall Islands Business Corporations Act, or BCA.Our Third Amended and Restated Articles of Incorporation and Amended and Restated By-Laws, as further amended, do not impose any limitations on the ownership rights of ourshareholders.59Table of ContentsAuthorized CapitalizationOur authorized capital stock consists of 1,000,000,000 common shares, par value $0.01 per share, of which 20,346,091 shares were issued and outstanding as of the date of thisannual report and 20,000,000 preferred shares with par value of $0.01, of which 100,000 Series D Preferred Shares, 13,452 Series E Preferred Shares, and 3,834,082 Series F Preferred Shareswere issued and outstanding as of the date of this annual report. 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 ofsuch 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 aStockholders Rights Agreement dated as of September 22, 2016, by and between us and Computershare Trust Company, N.A., as rights agent (now taken over by our new transfer agent,AST), described below under the section entitled “—Stockholders Rights Agreement”. In connection with the Stockholders Rights Agreement, we designated 1,000,000 shares as SeriesA Participating Preferred Stock, none of which are outstanding as of the date of this annual report.Description of Common SharesEach 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 anyoutstanding 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 fordividends. 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 ofour 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 ofour 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 commonshares are subject to the rights of the holders of any preferred shares that we may issue in the future.Description of Preferred SharesOur 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 toany 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 D Preferred SharesOn 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 forthe benefit of certain family members of Mr. Evangelos J. Pistiolis, for $1,000 pursuant to a stock purchase agreement. Each Series D Preferred Share has the voting power of onethousand (1,000) common shares.On April 21, 2017, we were informed by ABN Amro Bank that we were in breach of a loan covenant that requires that any member of the family of Mr. Evangelos J. 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 anymember of the Pistiolis family are beneficiaries) of 30% of our outstanding Common Shares. ABN Amro Bank requested that either the family of Mr. Evangelos J. Pistiolis maintain anownership interest of at least 30% of the outstanding common shares or maintain voting rights interests of above 50% in us. In order to regain compliance with the loan covenant, weissued the Series D Preferred Shares.The Series D Preferred Stock has the following characteristics:Conversion. The Series D Preferred Shares are not convertible into common shares.Voting. Each Series D Preferred Share has the voting power of 1,000 common shares. As a prerequisite for the Navigare Lease, Mr. Evangelos J. Pistiolis personally guaranteedthe performance of the bareboat charters entered in connection with the lease, under certain circumstances, and in exchange, we amended the Certificate of Designations governing theterms of the Series D Preferred Shares, to adjust the voting rights per share of Series D Preferred Shares such that during the term of the Navigare Lease, the combined voting powercontrolled by Mr. Evangelos J. Pistiolis and the Lax Trust does not fall below a majority of our total voting power, irrespective of any new common or preferred stock issuances, andthereby complying with a relevant covenant of the bareboat charters entered in connection with the Navigare Lease.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 shares shall be redeemed by us for par value on the date that any financing facility with anyfinancial institution, which requires that any member of the family of Mr. Evangelos J. Pistiolis maintains a specific minimum ownership or voting interest (either directly and/or indirectlythrough 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) ofour issued and outstanding common shares, respectively, are fully repaid or reach their maturity date. The Series D Preferred Shares shall not be otherwise redeemable. Currently the SLBwith AVIC, CMBFL and Navigare, as well as the senior secured loan with ABN Amro and Alpha Bank have similar provisions that are satisfied via the existence of the Series D Shares.60Table of ContentsLiquidation, 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.The description of the Series D Convertible Preferred Shares is subject to and qualified in its entirety by reference to the Securities Purchase Agreement, Certificate ofDesignation of the Series D Preferred Shares, and Certificate of Amendment to the Certificate of Designation. Copies of the Securities Purchase Agreement and Certificate of Designationof the Series D Preferred Shares have been filed as exhibits to our Report on Form 6-K filed with the SEC on May 8, 2017. The Certificate of Amendment to the Certificate of Designationwas filed as an exhibit to our Report on Form 6-K filed with the SEC on December 4, 2020.Description of Series E Convertible Preferred StockOn 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 finalsettlement of the loan facility between our Company and Family Trading dated December 23, 2015, as amended.On June 30, 2019, we issued 1,029 Series E Shares for the payment of dividends accumulated since the original issuance of the Series E Preferred Shares through June 30, 2019.From July 25, 2019 to March 19, 2020, we redeemed 33,798 of Series E Preferred Shares for an aggregate purchase price of $38.9 million. On February 17, 2020 we issued 16,004Series E Preferred Shares to Family Trading Inc., as settlement of the consideration outstanding for the purchase of the M/T Eco City of Angels and M/T Eco Los Angeles from partiesaffiliated with Mr. Pistiolis, and for dividends payable to Family Trading Inc. under already outstanding Series E Preferred Shares. On June 30, 2020, we issued 900 Series E PreferredShares to Family Trading, as settlement for dividends payable to Family Trading Inc. under already outstanding Series E Preferred Shares.On August 20, 2020, we entered into a Standstill Agreement with Family Trading, pursuant to which Family Trading agreed not to convert any of its Series E Preferred Sharesinto Common Shares until August 20, 2021.On September 8, 2021, pursuant to a Sale and Purchase Agreement between the Issuer and Zizzy Charter Co. dated September 8, 2021, we issued 2,188 Series E Preferred Sharesto Family Trading as partial settlement of the consideration outstanding for the purchase of an additional 65% ownership interest in each of Julius Caesar Inc. and Legio X Inc., each aparty to shipbuilding contracts for VLCC Julius Caesar and VLCC Legio X Equestris, respectively, from a party affiliated with Mr. Pistiolis.As of the date of this annual report, there were 13,452 shares of Series E Preferred Shares outstanding.The Series E Preferred Shares have the following characteristics:Conversion. Each holder of Series E Preferred 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 EPreferred Shares then held by such holder into the Issuer’s Common Shares at the conversion rate then in effect. Each Series E Preferred Share is convertible into the number of theIssuer’s Common Shares equal to the quotient of $1,000 plus any accrued and unpaid dividends divided by the lesser of the following four prices (the “Series E Conversion Price”): (i)$10,000, (ii) 80% of the lowest daily VWAP of the Issuer’s Common Shares over the twenty consecutive trading days expiring on the trading day immediately prior to the date of deliveryof a conversion notice, (iii) the conversion price or exercise price per share of any of the Issuer’s then outstanding convertible shares or warrants, (iv) the lowest issuance price of theIssuer’s Common Shares in any transaction from the date of the issuance the Series E Perpetual Preferred Stock onwards, but in no event will the Series E Conversion Price be less than$0.60 (the “Floor Price”). The Floor Price is adjusted (decreased) in case of splits or subdivisions of our outstanding shares and is not adjusted in case of reverse stock splits orcombinations of our outstanding shares. Finally, the Series E Conversion Price is subject to appropriate adjustment in the event of certain dividends and distributions, stockcombinations, reclassifications or similar events affecting the Common Shares.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 beneficialownership 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 andthe 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 votingrights and their consent shall not be required for taking any corporate action.Distributions. The holders of Series E Preferred Shares are entitled to receive certain dividends and distributions paid to holders of Common Shares on an as-converted basis.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 theCommon Shares.61Table of ContentsRedemption. 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 thousanddollars ($1,000) per each Series E Preferred Shares, or the Liquidation Amount, plus a redemption premium equal to fifteen percent (15%) of the Liquidation Amount being redeemed ifthat 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 firstprovide one business day advance written notice to the holders of our intention to make a redemption, or the Redemption Notice, setting forth the amount it desires to redeem. Afterreceipt 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 dayperiod, 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 incash 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 AnnualDividend 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 PreferredShares 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 suchdividends 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 Directorsmay 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 nomore 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.The description of the Series E Preferred Shares is subject to and qualified in its entirety by reference to the Securities Purchase Agreement and Certificate of Designation of theSeries E Preferred Shares. Copies of the Securities Purchase Agreement and Statement of Designation of the Series E Preferred Shares have been filed as exhibits to our Report on Form6-K filed with the SEC on April 1, 2019.Description of Series F Preferred SharesOn January 17, 2022, we entered into a stock purchase agreement with Africanus Inc., owned by Three Sororibus Trust of Cyprus, an irrevocable trust established for the benefitof certain family members of Mr. Pistiolis, for the sale of up to 7,560,759 Series F Non-Convertible Perpetual Preferred Shares, par value $0.01, in exchange for (i) the assumption byAfricanus Inc. of an amount of $48.0 million of shipbuilding costs for vessels M/T Eco Oceano CA (Hull No. 871), M/T Julius Caesar and M/T Legio X Equestris (Hull No. 3214), and (ii)settlement of our remaining payment obligations relating to the acquisition in September 8, 2021 of an additional 65% ownership interest in the newbuilding contracts for its two VLCCs,in an amount of up to $27.6 million.A total of 7,200,000 Series F Preferred Shares were issued. On July 8, 2022, we redeemed 865,558 of our Series F Preferred Shares for an aggregate amount of approximately $10.4million, payable in cash. On December 30, 2022, we redeemed 483,694 of our Series F Preferred Shares for an aggregate amount of approximately $5.8 million, payable in cash. On January13, 2023, we redeemed 1,000,000 of our Series F Preferred Shares for an aggregate amount of approximately $12.0 million, payable in cash. On March 6, 2023, we redeemed 1,016,667 of ourSeries F Preferred Shares for an aggregate amount of approximately $12.2 million, payable in cash. Following completion of the redemptions, as of the date hereof, 3,834,082 of theCompany’s Series F Preferred Shares remain issued and outstanding.The Series F Preferred Shares have the following characteristics:Voting. The holders of Series F Preferred Shares are entitled to the voting power of ten (10) of our common shares per Series F Preferred Share. The holders of Series FPreferred Shares and the holders of common shares shall vote together as one class on all matters submitted to a vote of shareholders. Except as required by law, the holders of Series FPreferred 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 F Preferred Shares shall be entitled to receive the net assets of theCompany pari passu with the Common Shares.Redemption. The Company at its option shall have the right to redeem a portion or all of the outstanding Series F Preferred Shares. Upon an optional redemption, the Companyshall pay an amount equal to $10 per Series F Preferred Share redeemed (the “Liquidation Amount”), plus a redemption premium of 20% of the Liquidation Amount. The Series FPreferred Shares include a mandatory redemption provision tied to minimum voting requirements for the Company’s major shareholders, including affiliates of the CEO, pursuant towhich if such minimum voting rights fall below 50% the Company is obliged to redeem the full amount of the then outstanding Series F Preferred Shares at a redemption premium of 40%,as detailed in the Certificate of Designation for the Series F Preferred Shares.62Table of ContentsDividends. The holders of outstanding Series F Preferred Shares shall be entitled to receive semi-annual dividends payable in cash at a rate of 13.5% per year of the LiquidationAmount of the then outstanding Series F Preferred Shares. In addition, a one-time cash dividend equal to 4.0% of the Liquidation Amount is payable to the Buyer 30 days following theissuance of Series F Preferred Shares.Ranking. All shares of Series F Preferred Shares shall rank pari passu with the Company’s common shares.Description of June 2022 Warrants and October 2022 WarrantsOn June 3, 2022, we entered into a securities purchase agreement with a single unaffiliated institutional investor to purchase approximately $7.2 million of our common shares (orpre-funded warrants in lieu thereof) in a registered direct offering and warrants to purchase common shares in a concurrent private placement (the “June 2022 Warrants”). On June 7,2022, we issued 235,000 of our common shares and 480,150 pre-funded warrants in the registered direct offering, and 14,303,000 June 2022 Warrants to purchase 715,150 common sharesin the concurrent private placement for a purchase price of $10.00 per common share and June 2022 Warrant and $9.9980 per pre-funded warrant and June 2022 Warrant. On October 10, 2022, we entered into a warrant exercise inducement letter agreement (“Inducement Letter”) with an accredited investor that was an existing holder of the June2022 Warrants, wherein the investor agreed to exercise all of the June 2022 Warrants at an exercise price reduced from $10.00 per share to $6.75 per share, in consideration for theissuance of new warrants (the “October 2022 Warrants”) to purchase up to an aggregate of 1,072,725 common shares for a purchase price of $6.75 per common share. The net proceedsof the exercise of the June 2022 Warrants to the Company, after deducting estimated expenses and fees, were approximately $4.5 million. The following description of the characteristics of the October 2022 Warrants is a summary and does not purport to be complete and is qualified by reference to the Form ofCommon Stock Purchase Warrant attached as an exhibit to the our Report on Form 6-K filed with the SEC on October 11, 2022.Exercisability. The October 2022 Warrants are exercisable at any time after their original issuance and June 7, 2027. The October 2022 Warrants are exercisable, at the option ofeach holder, in whole or in part by delivering to us a duly executed exercise notice and, at any time a registration statement registering the issuance of the common shares underlying theOctober 2022 Warrants under the Securities Act is effective and available for the issuance of such shares, or an exemption from registration under the Securities Act is available for theissuance of such shares, by payment in full in immediately available funds for the number of common shares purchased upon such exercise. If a registration statement registering theissuance of the common shares underlying the October 2022 Warrants under the Securities Act is not effective or available and an exemption from registration under the Securities Act isnot available for the issuance of such shares, the holder may, in its sole discretion, elect to exercise the warrant through a cashless exercise, in which case the holder would receive uponsuch exercise the net number of common shares determined according to the formula set forth in the warrant. No fractional common shares will be issued in connection with the exerciseof a warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price.Exercise Limitation. A holder will not have the right to exercise any portion of the warrant if the holder (together with its affiliates) would beneficially own in excess of 9.99% ofthe number of shares of our common shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of theOctober 2022 Warrants.Exercise Price. The exercise price per whole common share purchasable upon exercise of the October 2022 Warrants is $6.75 per share. The exercise price is subject toappropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common shares andalso upon any distributions of assets, including cash, stock or other property to our shareholders.Transferability. Subject to compliance with any applicable securities laws and the additional conditions set forth in the October 2022 Warrants certificate, the October 2022Warrants and all rights hereunder are transferable, in whole or in part, upon surrender of the October 2022 Warrants at our principal office or our designated agent, together with a writtenassignment of the October 2022 Warrants substantially in the form attached thereto duly executed by the holder or its agent or attorney and funds sufficient to pay any transfer taxespayable upon the making of such transfer.Fundamental Transactions. In the event of a fundamental transaction, as described in the October 2022 Warrants and generally including, with certain exceptions, anyreorganization, recapitalization or reclassification of our common shares, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation ormerger with or into another person, the acquisition of more than 50% of our outstanding common shares, or any person or group becoming the beneficial owner of 50% of the votingpower represented by our outstanding common shares, the holders of the October 2022 Warrants will be entitled to receive upon exercise of the October 2022 Warrants the kind andamount of securities, cash or other property that the holders would have received had they exercised the October 2022 Warrants immediately prior to such fundamental transaction.Rights as a Shareholder. Except as otherwise provided in the October 2022 Warrants or by virtue of such holder’s ownership of our common shares, the holder of a October2022 Warrants does not have the rights or privileges of a holder of our common shares, including any voting rights, until the holder exercises the warrant.63Table of ContentsGoverning Law. The October 2022 Warrants and the October 2022 Warrants Agreement are governed by New York law.Description of Class C WarrantsOn December 6, 2022, we closed a public offering of 6,750,000 units, each consisting of one of our common shares and one Class C Warrant, at a price of $2.00 per unit. Thegross proceeds of the offering to us, before discounts and commissions and estimated offering expenses, were approximately $13.5 million. The following description of the characteristics of the Class C Warrants is a summary and does not purport to be complete and is qualified by reference to the Form of Class CCommon Stock Purchase Warrant and the Warrant Agency Agreement attached as exhibits to the our Report on Form 6-K filed with the SEC on December 14, 2022.Exercisability. The Class C Warrants are exercisable at any time after their original issuance and at any time up to the date that is five years after their original issuance. TheClass C Warrants are exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and, at any time a registration statement registeringthe issuance of the common shares underlying the Class C Warrants under the Securities Act is effective and available for the issuance of such shares, or an exemption from registrationunder the Securities Act is available for the issuance of such shares, by payment in full in immediately available funds for the number of common shares purchased upon such exercise. Ifa registration statement registering the issuance of the common shares underlying the Class C Warrants under the Securities Act is not effective or available and an exemption fromregistration under the Securities Act is not available for the issuance of such shares, the holder may, in its sole discretion, elect to exercise the warrant through a cashless exercise, inwhich case the holder would receive upon such exercise the net number of common shares determined according to the formula set forth in the warrant. No fractional common shares willbe issued in connection with the exercise of a warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price.Exercise Limitation. A holder will not have the right to exercise any portion of the warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% ofthe number of shares of our common shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of theClass C Warrants.Exercise Price. The exercise price per whole common share purchasable upon exercise of the Class C Warrants was $2.00 per share. The exercise price is subject to appropriateadjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common shares and also upon anydistributions of assets, including cash, stock or other property to our shareholders. On February 14, 2023 we entered into a securities purchase agreement with several institutionalinvestors as part of a registered direct equity offering, under which we reduced the exercise price per common share under the outstanding Class C Warrants to $1.35 per common sharewith all other terms remaining unchanged.Transferability. The Class C Warrants and all rights hereunder are transferable, in whole or in part, upon surrender of the Class C Warrants at our principal office or ourdesignated agent, together with a written assignment of the Class C Warrants substantially in the form attached thereto duly executed by the holder or its agent or attorney and fundssufficient to pay any transfer taxes payable upon the making of such transfer.Warrant Agent. The Class C Warrants are issued in registered form under the warrant agency agreement between American Stock Transfer & Trust Company, as warrant agent,and us.Fundamental Transactions. In the event of a fundamental transaction, as described in the Class C Warrants and generally including, with certain exceptions, anyreorganization, recapitalization or reclassification of our common shares, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation ormerger with or into another person, the acquisition of more than 50% of our outstanding common shares, or any person or group becoming the beneficial owner of 50% of the votingpower represented by our outstanding common shares, the holders of the Class C Warrants will be entitled to receive upon exercise of the Class C Warrants the kind and amount ofsecurities, cash or other property that the holders would have received had they exercised the Class C Warrants immediately prior to such fundamental transaction.Rights as a Shareholder. Except as otherwise provided in the Class C Warrants or by virtue of such holder’s ownership of our common shares, the holder of a Class C Warrantdoes not have the rights or privileges of a holder of our common shares, including any voting rights, until the holder exercises the warrant.Governing Law. The Class C Warrants and the Class C Warrant Agreement are governed by New York law.Description of February 2023 WarrantsOn February 14, 2023, we entered into a securities purchase agreement with certain unaffiliated institutional investors to purchase up to 10,045,185 units (the “Units”) each Unitconsisting of (i) one common share, par value $0.01 per share (each, a “Common Share”) of the Company and (ii) one warrant to purchase one Common Share in a registered directoffering. On February 16, 2023, we issued 10,045,185 Common Shares and 10,045,185 warrants (the “February 2023 Warrants”) to purchase 10,045,185 common shares with an exerciseprice of $1.35 per common share. 64Table of ContentsThe following description of the characteristics of the February 2023 Warrants is a summary and does not purport to be complete and is qualified by reference to the Form ofCommon Stock Purchase Warrant attached as an exhibit to the our Report on Form 6-K filed with the SEC on February 16, 2023.Exercisability. The February 2023 Warrants are exercisable at any time after their original issuance and through February 16, 2028. The February 2023 Warrants are exercisable,at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and, at any time a registration statement registering the issuance of the common sharesunderlying the February 2023 Warrants under the Securities Act is effective and available for the issuance of such shares, or an exemption from registration under the Securities Act isavailable for the issuance of such shares, by payment in full in immediately available funds for the number of common shares purchased upon such exercise. If a registration statementregistering the issuance of the common shares underlying the February 2023 Warrants under the Securities Act is not effective or available and an exemption from registration under theSecurities Act is not available for the issuance of such shares, the holder may, in its sole discretion, elect to exercise the warrant through a cashless exercise, in which case the holderwould receive upon such exercise the net number of common shares determined according to the formula set forth in the warrant. No fractional common shares will be issued inconnection with the exercise of a warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price.Exercise Limitation. A holder will not have the right to exercise any portion of the warrant if the holder (together with its affiliates) would beneficially own in excess of 9.99% ofthe number of shares of our common shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of theFebruary 2023 Warrants.Exercise Price. The exercise price per whole common share purchasable upon exercise of the February 2023 Warrants is $1.35 per share. The exercise price is subject toappropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common shares andalso upon any distributions of assets, including cash, stock or other property to our shareholders.Transferability. Subject to compliance with any applicable securities laws and the additional conditions set forth in the February 2023 Warrants certificate, the February 2023Warrants and all rights hereunder are transferable, in whole or in part, upon surrender of the February 2023 Warrants at our principal office or our designated agent, together with awritten assignment of the February 2023 Warrants substantially in the form attached thereto duly executed by the holder or its agent or attorney and funds sufficient to pay any transfertaxes payable upon the making of such transfer.Fundamental Transactions. In the event of a fundamental transaction, as described in the February 2023 Warrants and generally including, with certain exceptions, anyreorganization, recapitalization or reclassification of our common shares, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation ormerger with or into another person, the acquisition of more than 50% of our outstanding common shares, or any person or group becoming the beneficial owner of 50% of the votingpower represented by our outstanding common shares, the holders of the February 2023 Warrants will be entitled to receive upon exercise of the February 2023 Warrants the kind andamount of securities, cash or other property that the holders would have received had they exercised the February 2023 Warrants immediately prior to such fundamental transaction.Rights as a Shareholder. Except as otherwise provided in the February 2023 Warrants or by virtue of such holder’s ownership of our common shares, the holder of a February2023 Warrants does not have the rights or privileges of a holder of our common shares, including any voting rights, until the holder exercises the warrant.Governing Law. The February 2023 Warrants and the February 2023 Warrants Agreement are governed by New York law.Shareholder MeetingsUnder our Amended and Restated By-Laws, annual shareholder meetings will be held at a time and place selected by our Board of Directors. The meetings may be held in oroutside 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 ourBoard 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 recordentitled to vote thereat.DirectorsOur 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 andRestated Articles of Incorporation and Amended and Restated By-laws, as further amended, prohibit cumulative voting in the election of directors.Our Board of Directors must consist of at least one member and not more than twelve, as fixed from time to time by the vote of not less than 66 2/3% of the entire board. Eachdirector 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 hisdeath, 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 Boardof Directors, and to members of any committee, for attendance at any meeting or for services rendered to us.65Table of ContentsClassified BoardOur 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 numberas 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 thirdparty 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 ofDirectors from removing a majority of our Board of Directors for two years.Election and RemovalOur Third Amended and Restated Articles of Incorporation and Amended and Restated By-Laws require parties other than our Board of Directors to give advance writtennotice 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 uponthe 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 preventthe removal of incumbent officers and directors.Dissenters’ Rights of Appraisal and PaymentUnder 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 ourassets 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 toreceive 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 entitledto 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 tradingon 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 andreceive 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 toreceive 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 ofproceedings 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 nationalsecurities 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-appointedappraiser.Shareholders’ Derivative ActionsUnder 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 shareholderbringing 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. Our Bylaws providethat 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,including any such action arising under the Exchange Act or the Securities Act (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other of ouremployees 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 affairsdoctrine 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 asdefendants. However, the enforceability of similar forum selection provisions in other companies’ governing documents has been challenged in legal proceedings, and it is possible thatin connection with any action a court could find the forum selection provision contained in our Bylaws to be inapplicable or unenforceable in such action. In particular, Section 27 of theExchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. In addition,Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rulesand regulations thereunder. Shareholders’ derivative actions, including those arising under the Exchange Act or Securities Act, are subject to our forum selection provision. To the extentthat the exclusive forum provision would apply to restrict the courts in which our shareholders may bring claims arising under the Exchange Act or the Securities Act and the rules andregulations thereunder, there is uncertainty as to whether a court would enforce such a provision. Investors cannot waive compliance with the federal securities laws and the rules andregulations promulgated thereunder. For more information regarding the risks connected to the forum selection provision in our Bylaws, see “Risk Factors—Risks Related to ourCommon Shares— We may not achieve the intended benefits of having a forum selection provision if it is found to be unenforceable.”Anti-takeover Provisions of our Charter DocumentsSeveral provisions of our Third Amended and Restated Articles of Incorporation and Amended and Restated By-Laws may have anti-takeover effects. These provisions areintended 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 inconnection 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 oracquisition 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 anddirectors.66Table of ContentsBusiness CombinationsOur Third Amended and Restated Articles of Incorporation include provisions which prohibit us from engaging in a business combination with an interested shareholder for aperiod 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 thetransaction 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 votingstock 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 andauthorized 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 interestedshareholder; and●the shareholder became an interested shareholder prior to the consummation of the initial public offering.Limited Actions by ShareholdersOur Third Amended and Restated Articles of Incorporation and our Amended and Restated By-Laws provide that any action required or permitted to be taken by ourshareholders must be effected at an annual or special meeting of shareholders or by the unanimous written consent of our shareholders.Our Third Amended and Restated Articles of Incorporation and our Amended and Restated By-Laws provide that only our Board of Directors may call special meetings of ourshareholders 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 specialmeeting 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 annualmeeting.Blank Check Preferred StockUnder 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, toissue 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 ofcontrol of our company or the removal of our management.Super-majority Required for Certain Amendments to Our By-LawsOn 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 betransacted 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 ofDirectors, 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 onour Board of Directors.Stockholders Rights AgreementOn 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 ashareholder 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 TrustCompany, 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 penaltyupon 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 ourcommon 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-existingownership percentage would be grandfathered, but the rights would become exercisable if at any time after such announcement, the shareholder increases its ownership percentage by1% 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 ofDirectors. 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 redemptionof the Rights for a permitted offer, the Rights should not interfere with a merger or other business combination approved by our Board.67Table of ContentsFor 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 byreference. 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 Rightswill accompany any new of our common shares issued after October 5, 2016 until the Distribution Date described below.Exercise Price. Each Right allows its holder to purchase from us one one-thousandth of a share of Series A Participating Preferred Stock, or a Series A Preferred Share, for$50.00, or the Exercise Price, once the Rights become exercisable. This portion of a Series A Preferred Share will give the shareholder approximately the same dividend, voting andliquidation 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 beneficialownership 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 arereportable 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 createdby 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 anycontrol 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 inthe 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 ourcommon 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 AcquiringPerson are null and void and may not be exercised.Series A Preferred Share ProvisionsEach one one-thousandth of a Series A Preferred Share, if issued, will, among other things:●not be redeemable;●entitle holders to quarterly dividend payments in an amount per share equal to the aggregate per share amount of all cash dividends, and the aggregate per share amount(payable in kind) of all non-cash dividends or other distributions other than a dividend payable in our common shares or a subdivision of the our outstanding commonshares (by reclassification or otherwise), declared on our common shares since the immediately preceding quarterly dividend payment date; and●entitle holders to one vote on all matters submitted to a vote of our shareholders.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●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 theExercise 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 theExercise 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, asfurther 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 beneficiallyowned by an Acquiring Person or certain of its transferees will be null and void.68Table of Contents●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 ortransfer 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 holderthereof 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 theExercise 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 ofthe equity securities, and Notional Common Shares (as defined in the Rights Agreement) held by counterparties to a Derivatives Contract (as defined in the RightsAgreement) 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 Directorsredeems 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 mayextinguish 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 electto 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 ofoutstanding 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 tothe 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 DistributionDate. 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 anyambiguities; (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 lengthenany 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 affiliateor 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 ofthe Rights, shareholders may recognize taxable income.C.Material ContractsWe refer you to “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Debt Facilities,” “Item 5. Operating and Financial Review andProspects—B. Liquidity and Capital Resources— Financing Commitments under Sale and Leaseback Arrangements,” “Item 7. Major Shareholders and Related Party Transactions—B.Related Party Transactions”, “Item 18. Financial Statements—Note 5—Transactions with related parties”, “Item 18. Financial Statements—Note 6—Leases” and “Item 18. FinancialStatements—Note 7—Debt” for a discussion of our material agreements that we have entered into outside the ordinary course of our business.Certain of these material agreements that are to be performed in whole or in part at or after the date of this annual report are attached as exhibits to this annual report. Other thanthese contracts, we have no other material contracts, other than contracts entered into in the ordinary course of business, to which we are a party.D.Exchange controlsThe Marshall Islands impose no exchange controls on non-resident corporations.E.TaxationThe following is a discussion of the material Marshall Islands and U.S. federal income tax considerations relevant to a U.S. Holder and a Non-U.S. Holder, each as defined below,with respect to the ownership and disposition of our common shares. The discussion of U.S. federal income tax matters is based on the U.S. Internal Revenue Code of 1986, as amended,or the Code, judicial decisions, administrative pronouncements, and existing and proposed regulations issued by the U.S. Department of the Treasury, or the Treasury Regulations, all ofwhich are subject to change, possibly with retroactive effect. This discussion does not purport to deal with the tax consequences of owning common shares to all categories ofinvestors, some of which, such as financial institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations, insurance companies, persons holdingour common shares as part of a hedging, integrated, conversion or constructive sale transaction or a straddle, traders in securities that have elected the mark-to-market method ofaccounting for their securities, persons liable for the alternative minimum tax or the “base erosion and anti-avoidance” tax, dealers in securities or currencies, U.S. Holders, as definedbelow, whose functional currency is not the U.S. dollar, persons required to recognize income for U.S. federal income tax purposes no later than when such income is included on an“applicable financial statement” and investors that own, actually or under applicable constructive ownership rules, 10% or more of the vote or value of our outstanding shares, may besubject to special rules. This discussion deals only with holders who own hold the common shares as a capital asset. You are encouraged to consult your own tax advisors concerningthe overall tax consequences arising in your own particular situation under U.S. federal, state, local or non-U.S. law of the ownership of common shares.69Table of ContentsMarshall Islands Tax ConsequencesWe are incorporated in the Republic of the Marshall Islands. Under current Marshall Islands law, we are not subject to tax on income or capital gains, and no Marshall Islandswithholding tax will be imposed upon payments of dividends by us to our shareholders.U.S. Federal Income Taxation of Our CompanyTaxation of Operating Income: In GeneralUnless exempt from U.S. federal income taxation under the rules discussed below, a foreign corporation is subject to U.S. federal income taxation in respect of any income that isderived from the use of vessels, from the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis, from the participation in a pool, partnership, strategic alliance,joint operating agreement or other joint venture it directly or indirectly owns or participates in that generates such income, or from the performance of services directly related to thoseuses, which we refer to as “shipping income,” to the extent that the shipping income is derived from sources within the United States. For these purposes, 50% of shipping income that isattributable to transportation that begins or ends, but that does not both begin and end, in the United States constitutes income from sources within the United States, which we refer toas “U.S.-source shipping income.”Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from sources within the United States. We are notpermitted by law to engage in transportation that produces income which is considered to be 100% from sources within the United States.Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources outside the United States. Shippingincome derived from sources outside the United States will not be subject to any U.S. federal income tax.In the absence of exemption from tax under Section 883 of the Code, our gross U.S.-source shipping income would be subject to a 4% tax imposed without allowance fordeductions as described below.Exemption of Operating Income from U.S. Federal Income TaxationUnder Section 883 of the Code and the regulations thereunder, we will be exempt from U.S. federal income tax on our U.S.-source shipping income if:(1)we are organized in a foreign country, or our country of organization, that grants an “equivalent exemption” to corporations organized in the United States; and(2)eitherA.more than 50% of the value of our stock is owned, directly or indirectly, by individuals who are “residents” of our country of organization or of anotherforeign country that grants an “equivalent exemption” to corporations organized in the United States (each such individual a “qualified shareholder” andsuch individuals collectively, “qualified shareholders”), which we refer to as the “50% Ownership Test,” orB.our stock is “primarily and regularly traded on an established securities market” in our country of organization, in another country that grants an “equivalentexemption” to U.S. corporations, or in the United States, which we refer to as the “Publicly Traded Test.”The Marshall Islands, the jurisdiction where we and our ship-owning subsidiaries are incorporated, grants an “equivalent exemption” to U.S. corporations. Therefore, we will beexempt from U.S. federal income tax with respect to our U.S.-source shipping income if either the 50% Ownership Test or the Publicly-Traded Test is met.70Table of ContentsIn order to satisfy the 50% Ownership Test, a non-U.S. corporation must be able to substantiate that more than 50% of the value of its shares is owned, for at least half of thenumber of days in the non-U.S. corporation’s taxable year, directly or indirectly, by “qualified shareholders.” For this purpose, qualified shareholders are: (1) individuals who areresidents (as defined in the Treasury Regulations) of countries, other than the United States, that grant an equivalent exemption, (2) non-U.S. corporations that meet the Publicly-TradedTest and are organized in countries that grant an equivalent exemption, or (3) certain foreign governments, non-profit organizations, and certain beneficiaries of foreign pension funds. Inorder for a shareholder to be a qualified shareholder, there generally cannot be any bearer shares in the chain of ownership between the shareholder and the taxpayer claiming theexemption (unless such bearer shares are maintained in a dematerialized or immobilized book-entry system as permitted under the Treasury Regulations). A corporation claiming theSection 883 exemption based on the 50% Ownership Test must obtain all the facts necessary to satisfy the IRS that the 50% Ownership Test has been satisfied (as detailed in theTreasury Regulations). We believe that we satisfied the 50% Ownership Test for the taxable year 2022 and intend to take this position on our U.S. federal income tax return for the 2022year. This is a factual determination made on an annual basis, and no assurance can be given that we will satisfy the 50% Ownership Test in future taxable years.In order to satisfy the Publicly-Traded Test, Treasury Regulations provide, in pertinent part, that stock of a foreign corporation will be considered to be “primarily traded” on anestablished securities market if the number of shares of each class of stock that are traded during any taxable year on all established securities markets in that country exceeds thenumber of shares in each such class that are traded during that year on established securities markets in any other single country. Our common shares, which are our sole class of issuedand outstanding stock that is traded, is and we anticipate will continue to be “primarily traded” on the Nasdaq Capital Market. The Treasury Regulations also require that our stock be“regularly traded” on an established securities market. Under the Treasury Regulations, our stock will be considered to be “regularly traded” if one or more classes of our stockrepresenting more than 50% of our outstanding shares, by total combined voting power of all classes of stock entitled to vote and by total combined value of all classes of stock, arelisted on one or more established securities markets, which we refer to as the “listing threshold.” Our common stock, which is listed on the Nasdaq Capital Market and is our only classof publicly-traded stock, did not constitute more than 50% of our outstanding shares by vote for the 2022 taxable year, and accordingly, we did not satisfy the listing threshold for the2022 taxable year.Taxation in the Absence of Exemption under Section 883 of the CodeTo the extent the benefits of Section 883 of the Code are unavailable, our U.S.-source shipping income, to the extent not considered to be “effectively connected” with theconduct of a U.S. trade or business, as described below, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, which werefer to as the “4% gross basis tax regime.” Since under the sourcing rules described above, no more than 50% of our shipping income would be treated as being derived from U.S.sources, the maximum effective rate of U.S. federal income tax on our shipping income would never exceed 2% under the 4% gross basis tax regime.To the extent the benefits of the exemption under Section 883 of the Code are unavailable and our U.S.-source shipping income is considered to be “effectively connected” withthe conduct of a U.S. trade or business, as described below, any such “effectively connected” U.S.-source shipping income, net of applicable deductions, would be subject to the U.S.federal corporate income tax imposed at a current rate of 21%. In addition, we may be subject to the 30% “branch profits” tax on earnings effectively connected with the conduct of suchU.S. trade or business, as determined after allowance for certain adjustments.Our U.S.-source shipping income would be considered “effectively connected” with the conduct of a U.S. trade or business only if:●We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and●substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a publishedschedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States, or is leasing income that is attributable tosuch fixed place of business in the United States.We do not currently have, nor intend to have or permit circumstances that would result in having, any vessel operating to the United States on a regularly scheduled basis.Based on the foregoing and on the expected mode of our shipping operations and other activities, we believe that none of our U.S.-source shipping income will be “effectivelyconnected” with the conduct of a U.S. trade or business.U.S. Taxation of Gain on Sale of VesselsRegardless of whether we qualify for exemption under Section 883 of the Code, we will not be subject to U.S. federal income taxation with respect to gain realized on a sale of avessel, provided the sale is considered to occur outside of the United States under U.S. federal income tax principles. In general, a sale of a vessel will be considered to occur outside ofthe United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vesselby us will be considered to occur outside of the United States or will otherwise not be subject to U.S. federal income taxation.U.S. Federal Income Taxation of U.S. HoldersAs used herein, the term “U.S. Holder” means a beneficial owner of our common shares that71Table of Contents●is a U.S. citizen or resident, U.S. corporation or other U.S. entity taxable as a corporation, an estate the income of which is subject to U.S. federal income taxation regardlessof its source, or a trust (i) if a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons havethe authority to control all substantial decisions of the trust or (ii) the trust has in effect a valid election to be treated as a United States person for U.S. federal income taxpurposes;●owns the common shares as a capital asset, generally, for investment purposes; and●owns less than 10% of our common shares for U.S. federal income tax purposes.If a partnership holds our common shares, the tax treatment of a partner of such partnership will generally depend upon the status of the partner and upon the activities of thepartnership. If you are a partner in a partnership holding our common shares, you are encouraged to consult your tax advisor.DistributionsSubject to the discussion of passive foreign investment companies, or PFIC, below, any distributions made by us with respect to our common shares to a U.S. Holder willgenerally constitute dividends to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of suchearnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder’s tax basis in his common shares on a dollar-for-dollar basis and thereafter ascapital gain. Because we are not a U.S. corporation, U.S. Holders that are corporations will not be entitled to claim a dividends-received deduction with respect to any distributions theyreceive from us. Dividends paid with respect to our common shares will generally be treated as “passive category income” for purposes of computing allowable foreign tax credits forU.S. foreign tax credit purposes.Dividends paid on our common shares to a U.S. Holder who is an individual, trust or estate (a “U.S. Non-Corporate Holder”) will generally be treated as “qualified dividendincome” that is taxable to such U.S. Non-Corporate Holder at preferential tax rates provided that (1) the common shares are readily tradable on an established securities market in theUnited States (such as the Nasdaq Capital Market on which our common shares are traded); (2) we are not a PFIC for the taxable year during which the dividend is paid or theimmediately preceding taxable year (as discussed in more detail below); (3) the U.S. Non-Corporate Holder has owned the common shares for more than 60 days in the 121-day periodbeginning 60 days before the date on which the common shares become ex-dividend; and (4) the U.S. Non-Corporate Holder is not under an obligation to make related payments withrespect to positions in substantially similar or related property.We believe that we were not a PFIC for our 2014 through 2022 taxable years, and we do not expect to be a PFIC for subsequent taxable years. If we were treated as a PFIC for our2022 or 2023 taxable year, any dividends paid by us during 2023 will not be treated as “qualified dividend income” in the hands of a U.S. Non-Corporate Holder. Any dividends we paywhich are not eligible for the preferential rates applicable to “qualified dividend income” will be taxed as ordinary income to a U.S. Non-Corporate Holder.Special rules may apply to any “extraordinary dividend,” generally, a dividend paid by us in an amount which is equal to or in excess of 10% of a shareholder’s adjusted taxbasis in (or, in certain circumstances, fair market value of) a common share or dividends received within a one-year period that, in the aggregate, equal or exceed 20% of a shareholder’sadjusted tax basis (or fair market value upon the shareholder’s election) in a common share. If we pay an “extraordinary dividend” on our common shares that is treated as “qualifieddividend income,” then any loss derived by a U.S. Non-Corporate Holder from the sale or exchange of such common shares will be treated as long-term capital loss to the extent of suchdividend.Sale, Exchange or other Disposition of Common sharesSubject to the discussion of our status as a PFIC below, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our commonshares in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder’s tax basis in such stock.Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder’s holding period is greater than one year at the time of the sale, exchange or other disposition. Suchcapital gain or loss will generally be treated as U.S.-source income or loss, as applicable, for U.S. foreign tax credit purposes. A U.S. Holder’s ability to deduct capital losses is subject tocertain limitations.3.8% Tax on Net Investment IncomeA U.S. Holder that is an individual, estate, or, in certain cases, a trust, will generally be subject to a 3.8% tax on the lesser of (1) the U.S. Holder’s net investment income for thetaxable year and (2) the excess of the U.S. Holder’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals is between $125,000 and$250,000). A U.S. Holder’s net investment income will generally include distributions made by us which constitute a dividend for U.S. federal income tax purposes and gain realized fromthe sale, exchange or other disposition of our common shares. This tax is in addition to any income taxes due on such investment income.If you are a U.S. Holder that is an individual, estate or trust, you are encouraged to consult your tax advisors regarding the applicability of the 3.8% tax on net investmentincome to the ownership and disposition of our common shares.72Table of ContentsPassive Foreign Investment Company Status and Significant Tax ConsequencesSpecial U.S. federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a PFIC for U.S. federal income tax purposes. In general, we willbe treated as a PFIC with respect to a U.S. Holder if, for any taxable year in which such holder held our common shares, either●at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conductof a rental business); or●at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income.For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share of the income and assets, respectively, of any of oursubsidiary corporations in which we own at least 25% of the value of the subsidiary’s stock. Income earned, or deemed earned, by us in connection with the performance of serviceswould not constitute “passive income” for these purposes. By contrast, rental income would generally constitute “passive income” unless we were treated under specific rules asderiving our rental income in the active conduct of a trade or business.In general, income derived from the bareboat charter of a vessel will be treated as “passive income” for purposes of determining whether we are a PFIC and such vessel will betreated as an asset which produces or is held for the production of “passive income.” On the other hand, income derived from the time charter of a vessel should not be treated as“passive income” for such purpose, but rather should be treated as services income; likewise, a time chartered vessel should generally not be treated as an asset which produces or isheld for the production of “passive income.”We believe that we were not a PFIC for our 2014 through 2022 taxable years because we had no bareboat chartered-out vessels and consequently no gross income from vesselson bareboat charter. Furthermore, based on our current assets and activities, we do not believe that we will be a PFIC for the subsequent taxable years. Although there is no legalauthority directly on point, and we are not relying upon an opinion of counsel on this issue, our belief is based principally on the position that, for purposes of determining whether weare a passive foreign investment company, the gross income we derive or are deemed to derive from the time chartering and voyage chartering activities of our wholly-ownedsubsidiaries should constitute services income, rather than rental income. Correspondingly, such income should not constitute passive income, and the assets that we or our wholly-owned subsidiaries own and operate in connection with the production of such income, in particular, the vessels, should not constitute passive assets for purposes of determiningwhether we were a passive foreign investment company. We believe there is substantial legal authority supporting our position consisting of case law and IRS pronouncementsconcerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, in the absence of any legal authorityspecifically relating to the statutory provisions governing passive foreign investment companies, the IRS or a court could disagree with our position. In addition, although we intend toconduct our affairs in a manner to avoid being classified as a passive foreign investment company with respect to any taxable year, we cannot assure you that the nature of ouroperations will not change in the future.If we are a PFIC for any taxable year, a U.S. Holder will be treated as owning his proportionate share of the stock of any of our subsidiaries which is a PFIC. The PFIC rulesdiscussed below will apply on a company-by-company basis with respect to us and each of our subsidiaries which is treated as a PFIC.As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a U.S. Holder would be subject to different U.S. federal income taxation rules dependingon whether the U.S. Holder makes an election to treat us as a “Qualified Electing Fund,” which election is referred to as a “QEF Election.” As discussed below, as an alternative to makinga QEF Election, a U.S. Holder should be able to make a “mark-to-market” election with respect to our common shares, which election is referred to as a “Mark-to-Market Election”. A U.S.Holder holding PFIC shares that does not make either a “QEF Election” or “Mark-to-Market Election” will be subject to the Default PFIC Regime, as defined and discussed below in“Taxation—U.S. Federal Income Taxation of U.S. Holders—Taxation of U.S. Holders Not Making a Timely QEF or “Mark-to-Market” Election.”If we were to be treated as a PFIC, a U.S. Holder would be required to file IRS Form 8621 to report certain information regarding us.A U.S. Holder who held our common shares during any period in which we were treated as a PFIC and who neither made a QEF Election nor a Mark-to-Market Electionmay continue to be subject to the Default PFIC Regime, notwithstanding that we are no longer a PFIC. If you are a U.S. Holder who held our common shares during any period inwhich we were a PFIC but failed to make either of the foregoing elections, you are strongly encouraged to consult your tax advisor regarding the U.S. federal income taxconsequences to you of holding our common shares in periods in which we are no longer a PFIC.73Table of ContentsThe QEF ElectionIf a U.S. Holder makes a timely QEF Election, which U.S. Holder we refer to as an “Electing Holder,” the Electing Holder must report each year for United States federal incometax purposes his pro rata share of our ordinary earnings and our net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless ofwhether or not distributions were made by us to the Electing Holder. The Electing Holder’s adjusted tax basis in the common shares will be increased to reflect taxed but undistributedearnings and profits. Distributions of earnings and profits that had been previously taxed will result in a corresponding reduction in the adjusted tax basis in the common shares and willnot be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of our common shares. A U.S. Holderwould make a QEF Election with respect to any year that our company is a PFIC by filing one copy of IRS Form 8621 with his United States federal income tax return and a second copyin accordance with the instructions to such form. It should be noted that if any of our subsidiaries is treated as a corporation for U.S. federal income tax purposes, a U.S. Holder mustmake a separate QEF Election with respect to each such subsidiary.Taxation of U.S. Holders Making a “Mark-to-Market” ElectionMaking the Election. Alternatively, if, as is anticipated, our common shares are treated as “marketable stock,” a U.S. Holder would be allowed to make a Mark-to-MarketElection with respect to the common shares, provided the U.S. Holder completes and files IRS Form 8621 in accordance with the relevant instructions and related Treasury Regulations. The common shares will be treated as “marketable stock” for this purpose if they are “regularly traded” on a “qualified exchange or other market.” The common shares will be “regularlytraded” on a qualified exchange or other market for any calendar year during which they are traded (other than in de minimis quantities) on at least 15 days during each calendar quarter. The Nasdaq Capital Market should be treated as a “qualified exchange or other market” for this purpose. However, it should be noted that a separate Mark-to-Market Election wouldneed to be made with respect to each of our subsidiaries which is treated as a PFIC. The stock of these subsidiaries is not expected to be “marketable stock.” Therefore, a “mark-to-market” election is not expected to be available with respect to these subsidiaries.Current Taxation and Dividends. If the Mark-to-Market Election is made, the U.S. Holder generally would include as ordinary income in each taxable year the excess, if any, ofthe fair market value of the common shares at the end of the taxable year over such U.S. Holder’s adjusted tax basis in the common shares. The U.S. Holder would also be permitted anordinary loss in respect of the excess, if any, of the U.S. Holder’s adjusted tax basis in its common shares over their fair market value at the end of the taxable year, but only to the extentof the net amount previously included in income as a result of the Mark-to-Market Election. Any income inclusion or loss under the preceding rules should be treated as gain or lossfrom the sale of common shares for purposes of determining the source of the income or loss. Accordingly, any such gain or loss generally should be treated as U.S.-source income orloss for U.S. foreign tax credit limitation purposes. A U.S. Holder’s tax basis in his common shares would be adjusted to reflect any such income or loss amount. Distributions by us to aU.S. Holder who has made a Mark-to-Market Election generally will be treated as discussed above under “Taxation—U.S. Federal Income Taxation of U.S. Holders—Distributions.”Sale, Exchange or Other Disposition. Gain realized on the sale, exchange, redemption or other disposition of the common shares would be treated as ordinary income, and anyloss realized on the sale, exchange, redemption or other disposition of the common shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included in income by the U.S. Holder. Any loss in excess of such previous inclusions would be treated as a capital loss by the U.S. Holder. A U.S. Holder’sability to deduct capital losses is subject to certain limitations. Any such gain or loss generally should be treated as U.S.-source income or loss for U.S. foreign tax credit limitationpurposes.Taxation of U.S. Holders Not Making a Timely QEF or “Mark-to-Market” ElectionFinally, a U.S. Holder who does not make either a QEF Election or a Mark-to-Market Election with respect to any taxable year in which we are treated as a PFIC, or a U.S. Holderwhose QEF Election is invalidated or terminated, or a Non-Electing Holder, would be subject to special rules, or the Default PFIC Regime, with respect to (1) any excess distribution (i.e.,the portion of any distributions received by the Non-Electing Holder on the common shares in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder’s holding period for the common shares), and (2) any gain realized on the sale, exchange,redemption or other disposition of the common shares.Under the Default PFIC Regime:●the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common shares;●the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income; and●the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and aninterest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.Any distributions other than “excess distributions” by us to a Non-Electing Holder will be treated as discussed above under “Taxation—U.S. Federal Income Taxation of U.S.Holders—Distributions.”74Table of ContentsThese penalties would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilize leverage in connection withits acquisition of the common shares. If a Non-Electing Holder who is an individual dies while owning the common shares, such Non-Electing Holder’s successor generally would notreceive a step-up in tax basis with respect to the common shares.U.S. Federal Income Taxation of “Non-U.S. Holders”A beneficial owner of our common shares (other than a partnership) that is not a U.S. Holder is referred to herein as a “Non-U.S. Holder.”Dividends on Common sharesNon-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on dividends received from us with respect to our common shares, unless thatincome is effectively connected with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S. income taxtreaty with respect to those dividends, that income is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States.Sale, Exchange or Other Disposition of Common sharesNon-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of our commonshares, unless:●the gain is effectively connected with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S.income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States;or●the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.If the Non-U.S. Holder is engaged in a U.S. trade or business for U.S. federal income tax purposes, the income from the common shares, including dividends and the gain fromthe sale, exchange or other disposition of the stock that is effectively connected with the conduct of that trade or business will generally be subject to U.S. federal income tax in the samemanner as discussed in the previous section relating to the taxation of U.S. Holders. In addition, in the case of a corporate Non-U.S. Holder, the earnings and profits of such Non-U.S.Holder that are attributable to effectively connected income, subject to certain adjustments, may be subject to an additional branch profits tax at a rate of 30%, or at a lower rate as maybe specified by an applicable U.S. income tax treaty.Backup Withholding and Information ReportingIn general, dividend payments, or other taxable distributions, made within the United States to you will be subject to information reporting requirements. In addition, suchpayments will be subject to backup withholding tax if you are a non-corporate U.S. Holder and you:●fail to provide an accurate taxpayer identification number;●are notified by the IRS that you have failed to report all interest or dividends required to be shown on your U.S. federal income tax returns; or●in certain circumstances, fail to comply with applicable certification requirements.Non-U.S. Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on an applicable IRS Form W-8.If you sell your common shares to or through a U.S. office of a broker, the payment of the proceeds is subject to both U.S. backup withholding and information reporting unlessyou certify that you are a non-U.S. person, under penalties of perjury, or you otherwise establish an exemption. If you sell your common shares through a non-U.S. office of a non-U.S.broker and the sales proceeds are paid to you outside the United States, then information reporting and backup withholding generally will not apply to that payment. However, U.S.information reporting requirements, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made to you outside the United States, if you sell yourcommon shares through a non-U.S. office of a broker that is a U.S. person or has some other contacts with the United States. Backup withholding tax is not an additional tax. Rather, yougenerally may obtain a refund of any amounts withheld under backup withholding rules that exceed your U.S. federal income tax liability by filing a refund claim with the IRS.75Table of ContentsIndividuals who are U.S. Holders (and to the extent specified in applicable Treasury Regulations, certain individuals who are Non-U.S. Holders and certain U.S. entities) whohold “specified foreign financial assets” (as defined in Section 6038D of the Code) are required to file IRS Form 8938 with information relating to the asset for each taxable year in whichthe aggregate value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollar amount as prescribed byapplicable Treasury Regulations). Specified foreign financial assets would include, among other assets, our common shares, unless the shares are held through an account maintainedwith a U.S. financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willfulneglect. Additionally, in the event an individual U.S. Holder (and to the extent specified in applicable Treasury regulations, an individual Non-U.S. Holder or a U.S. entity) that is requiredto file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of U.S. federal income taxes of such holder for the related tax year may not closeuntil three years after the date that the required information is filed. U.S. Holders (including U.S. entities) and Non-U.S. Holders are encouraged to consult their own tax advisorsregarding their reporting obligations under this legislation.F.Dividends and Paying AgentsNot applicable.G.Statement by ExpertsNot applicable.H.Documents on DisplayWe file annual reports and other information with the SEC. Our SEC filings are available to the public at the web site maintained by the SEC at http://www.sec.gov, and the aswell as on our website at http://www.topships.org.I.Subsidiary InformationNot applicable.ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKOur Risk Management PolicyMarket risks relating to adverse movements in freight rates in the product tanker and crude oil tanker markets are minimized due to the fact that all the vessels in our fleet areunder period employment earning fixed time charter rates. Our policy is to continuously monitor our exposure to other business risks, including the impact of changes in interest rates,currency rates, and bunker prices on earnings and cash flows. We assess these risks and, when appropriate, enter into derivative contracts with credit-worthy counterparties to minimizeour exposure to the risks. With regard to bunker prices, as our employment policy for our vessels has been and is expected to continue to be with a high percentage of our fleet on periodemployment, we are not directly exposed with respect to those vessels to increases in bunker fuel prices, as these are the responsibility of the charterer under period charterarrangements.Interest Rate Risk As of the date of this report we are exposed to interest rate risk in relation to our floating rate indebtedness (See “Item 18. Financial Statements—Note 7—Debt”). Furthermorewe may be subject to additional market risks relating to changes in interest rates when we take on additional indebtedness. As of December 31, 2022, our total indebtedness excludingunamortized financing fees and debt discounts was $240.6 million, of which $25.2 million refer to the Cargill SLB facility, the interest rate of which does not fluctuate. Based on the amount of our outstanding fluctuating interest rate indebtedness, as of December 31, 2022, a hypothetical one percentage point increase in the U.S. dollar LIBORwould increase our interest rate expense for 2023, on an annualized basis, by approximately $2.2 million. Based on the amount of our outstanding fluctuating interest rate indebtedness, as of December 31, 2021, a hypothetical one percentage point increase in the U.S. dollar LIBORwould increase our interest rate expense for 2022, on an annualized basis, by approximately $0.7 million. Foreign Exchange Rate FluctuationWe generate all of our revenues in U.S. dollars but incur certain expenses in currencies other than U.S. dollars, mainly the Euro. During 2022, approximately 97.5% of ourexpenses were in U.S. Dollars, 2.1% were in Euro and approximately 0.4% were in other currencies than the U.S. dollar or Euro. For accounting purposes, expenses incurred in othercurrencies are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction. We have not hedged currency exchange risks associated with our expenses andour operating results could be adversely affected as a result. We constantly monitor the U.S. dollar exchange rate and we try to achieve the most favorable exchange rates from thefinancial institutions we work with.76Table of ContentsBased on our total expenses for the year ended December 31, 2022 and using as an average exchange rate of $1.0522 to €1, a 5% decrease in the exchange rate to $0.9996 to €1would result in an expense saving of approximately $0.07 million. Since we have no revenues in Euros an inverse 5% change in the exchange rate would lead to an equivalent additionalexpense of the same amount.Based on our total expenses for the year ended December 31, 2021 and using as an average exchange rate of $1.183 to €1, a 5% decrease in the exchange rate to $1.1239 to €1would result in an expense saving of approximately $0.07 million. Since we have no revenues in Euros an inverse 5% change in the exchange rate would lead to an equivalent additionalexpense of the same amount.ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIESNot Applicable. PART IIITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIESNeither we nor any of our subsidiaries have been subject to a material default in the payment of principal, interest, a sinking fund or purchase fund installment or any othermaterial default that was not cured within 30 days.As of December 31, 2022, we had no accrued or unpaid dividends under our Series E Preferred Shares or Series F Preferred Shares.ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDSOn September 14, 2016, we have adopted a Stockholders Rights Agreement, pursuant to which each of our common shares includes one preferred stock purchase right thatentitles the holder to purchase from us a unit consisting of one-thousandth of a share of our Series A Participating Preferred Stock if any third-party seeks to acquire control of asubstantial block of our common shares without the approval of our Board of Directors. See “Item 10. Additional Information—B. Memorandum and Articles of Association—Stockholders Rights Agreement” included in this annual report for a description of our Stockholders Rights Agreement.Please also see “Item 10. Additional Information—B. Memorandum and Articles of Association” for a description of the rights of holders of our October 2022 Warrants, Class CWarrants, February 2023 Warrants, Series D Preferred Shares, Series E Preferred Shares and Series F Preferred Shares relative to the rights of holders of our common shares.ITEM 15.CONTROLS AND PROCEDURESa)Disclosure Controls and ProceduresManagement, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the design andoperation of our disclosure controls and procedures pursuant to Rules 13a-15(e) or 15d-15(e) promulgated under the Exchange Act, as of December 31, 2022.The term disclosure controls and procedures are defined under SEC rules as controls and other procedures of an issuer that are designed to ensure that information required tobe disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’srules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in thereports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or personsperforming similar functions, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosurecontrols and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.Our management, including the chief executive and chief financial officer, recognize that any controls and procedures, no matter how well designed and operated, can provideonly reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, in the design and evaluation of our disclosure controls andprocedures our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherentlimitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Accordingly, even effective disclosure controls and procedures canonly provide reasonable assurance of achieving their control objectives.Based on this evaluation, the chief executive officer and chief financial officer concluded that, as of December 31, 2022, our disclosure controls and procedures, which include,without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulatedand communicated to management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure, were effective inproviding reasonable assurance that information that was required to be disclosed by us in reports we file or submit under the Exchange Act was recorded, processed, summarized andreported within the time periods specified in the rules and forms of the Securities and Exchange Commission.77Table of Contentsb)Management’s Annual Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) promulgated underthe Exchange Act.Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, ourprincipal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies andprocedures that:●Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;●Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accountingprinciples, and that our receipts and expenditures are being made only in accordance with authorizations of Company’s management and directors; and●Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on thefinancial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. A control system, no matter how well designed andoperated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Our disclosure controls and procedures are designed to providereasonable assurance of achieving their objectives. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must beconsidered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due toerror or fraud will not occur or that all control issues and instances of fraud, if any, within us have been detected. These inherent limitations include the realities that judgments indecision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusionof two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events,and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Also, projections of any evaluation of effectiveness tofuture periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures maydeteriorate.Our management with the participation of our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as ofDecember 31, 2022, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the TreadwayCommission. As a result of its assessment, the Chief Executive Officer and Chief Financial Officer concluded that our internal controls over financial reporting are effective as ofDecember 31, 2022.c)Attestation Report of the Registered Public Accounting FirmThis annual report does not contain an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report wasnot subject to attestation by our registered public accounting firm since under the SEC adopting release implementing the Dodd-Frank Wall Street Reform and Consumer Protection Actof 2010, companies that are non-accelerated filers are exempt from including auditor attestation reports in their Form 20-Fs.d)Changes in Internal Control over Financial ReportingThere were no changes in our internal control over financial reporting that occurred during the period covered by this annual report that have materially affected or arereasonably likely to materially affect, our internal control over financial reporting.ITEM 16.ReservedITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERTWe have established an audit committee composed of three independent members that are responsible for reviewing our accounting controls and recommending to our Board ofDirectors the engagement of our outside auditors.78Table of ContentsWe do not believe it is necessary to have a financial expert, as defined in Item 407 of Regulation S-K, because our Board of Directors has determined that the members of theaudit committee have the financial experience and other relevant experience necessary to effectively perform the duties and responsibilities of the audit committee.ITEM 16B.CODE OF ETHICSOur Board of Directors has adopted a Corporate Code of Business Ethics and Conduct that applies to all employees, directors and officers, which complies with applicableguidelines issued by the SEC. The finalized Code of Ethics has been approved by our Board of Directors and was distributed to all employees, directors and officers. This document isavailable under the “Corporate Governance” tab in the “Investors Relations” section of our website at www.topships.org. We will also provide any person a hard copy of our code ofethics free of charge upon written request. Shareholders may direct their requests to the attention of Mr. Alexandros Tsirikos at our registered address and phone number.ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICESAggregate fees billed to us for the years ended December 2021 and 2022 represent fees billed by our principal accounting firm, Deloitte Certified Public Accountants S.A.(PCAOB No.: 1163), an independent registered public accounting firm and member of Deloitte Touche Tohmatsu, Limited. Audit fees represent compensation for professional servicesrendered for the audit of the consolidated financial statements, fees for the review of interim financial information as well as in connection with the review of registration statements andrelated consents and comfort letters and any other audit services required for SEC or other regulatory filings. For 2021 and 2022, no other non-audit, tax or other fees were charged.U.S. dollars in thousands, Year Ended 2021 2022 Audit Fees 396.5 379.5 Our audit committee pre-approves all audit, audit-related and non-audit services not prohibited by law to be performed by our independent auditors and associated fees prior tothe engagement of the independent auditor with respect to such services.ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEESNot applicable.ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERSNot applicable.ITEM 16F.CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANTNot applicable.ITEM 16G.CORPORATE GOVERNANCEWe have certified to Nasdaq that our corporate governance practices are in compliance with, and are not prohibited by, the laws of the Republic of the Marshall Islands.Therefore, we are exempt from many of Nasdaq’s corporate governance practices other than the submission of a listing agreement, notification to Nasdaq of non-compliance withNasdaq corporate governance practices, prohibition on disparate reduction or restriction of shareholder voting rights, and the establishment of an audit committee satisfying NasdaqListing Rule 5605(c)(3) and ensuring that such audit committee’s members meet the independence requirement of Listing Rule 5605(c)(2)(A)(ii). The practices we follow in lieu ofNasdaq’s corporate governance rules applicable to U.S. domestic issuers are as follows:●Audit Committee. Nasdaq requires, among other things, that a listed company has an audit committee with a minimum of three independent members, at least one of whommeets certain standards of financial sophistication. As permitted under Marshall Islands law, our audit committee consists of three independent directors but we do notdesignate any one audit commit member as meeting the standards of financial sophistication.●As a foreign private issuer, we are not required to hold regularly scheduled board meetings at which only independent directors are present.●In lieu of obtaining shareholder approval prior to the issuance of designated securities, we will comply with provisions of the BCA, which allows our Board of Directors toapprove share issuances.As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islands law.Consistent with Marshall Islands law and as provided in our bylaws, we will notify our shareholders of meetings between 15 and 60 days before the meeting. This notification willcontain, among other things, information regarding business to be transacted at the meeting. In addition, our bylaws provide that shareholders must give us between 120- and 180-days’advance notice to properly introduce any business at a meeting of shareholders.79Table of ContentsOther than as noted above, we are in compliance with all other Nasdaq corporate governance standards applicable to U.S. domestic issuers.ITEM 16H.MINE SAFETY DISCLOSURENot Applicable.ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot Applicable. PART IIIITEM 17.FINANCIAL STATEMENTSSee Item 18.ITEM 18.FINANCIAL STATEMENTSThe financial statements beginning on page F-1 are filed as a part of this annual report.ITEM 19.EXHIBITSNumberDescription of Exhibits1.1Third Amended and Restated Articles of Incorporation of TOP Ships Inc. (1) 1.2Articles of Amendment to the Third Amended and Restated Articles of Incorporation, dated April 17, 2014 (2) 1.3Articles of Amendment to the Third Amended and Restated Articles of Incorporation, dated February 15, 2016 (3) 1.4Certificate of Correction to the Third Amended and Restated Articles of Incorporation, dated February 14, 2017 (4) 1.5Articles of Amendment to the Third Amended and Restated Articles of Incorporation, dated May 10, 2017 (5) 1.6Articles of Amendment to the Third Amended and Restated Articles of Incorporation, dated June 22, 2017 (6) 1.7Articles of Amendment to the Third Amended and Restated Articles of Incorporation, dated August 2, 2017 (7) 1.8Articles of Amendment to the Third Amended and Restated Articles of Incorporation, dated October 5, 2017 (8) 1.9Articles of Amendment to the Third Amended and Restated Articles of Incorporation, dated March 23, 2018 (9) 1.10Articles of Amendment to the Third Amended and Restated Articles of Incorporation, dated August 21, 2019 (10) 1.11Articles of Amendment to the Third Amended and Restated Articles of Incorporation, dated August 7, 2020 (11) 1.12Articles of Amendment to the Third Amended and Restated Articles of Incorporation, dated September 22, 2022* 1.13Amended and Restated By-Laws of the Company (12) 1.14Amendment No. 1 to the Amended and Restated By-Laws (13) 2.1Form of Share Certificate (14) 2.2Form of Common Stock Purchase Warrant (15) 2.3Form of Class C Common Stock Purchase Warrant (16) 2.4Certificate of Designations of Rights, Preferences and Privileges of Series A Participating Preferred Stock of TOP Ships Inc. (17)80Table of Contents2.5Statement of Designations, Preferences and Rights of the Series D Preferred Stock of TOP Ships Inc. (18) 2.6Certificate of Amendment to Certificate of Designation of Rights, Preferences and Privileges of Series D Preferred Stock of TOP Ships Inc. (19) 2.7Statement of Designations of Rights, Preferences and Privileges of Series E Perpetual Convertible Preferred Stock of TOP Ships Inc. (20) 2.8Statement of Designations of Rights, Preferences and Privileges of Series F Perpetual Preferred Stock of TOP Ships Inc. (21) 2.9Description of Securities* 4.1TOP Ships Inc. 2015 Stock Incentive Plan (22) 4.2Stockholders Rights Agreement with Computershare Trust Company, N.A., as Rights Agent as of September 22, 2016 (23) 4.3Employment Agreement between TOP Ships Inc. and Central Mare Inc. dated September 1, 2010, regarding employment of Chief Technical Officer (24) 4.4Employment Agreement between TOP Ships Inc. and Central Mare Inc. dated September 1, 2010, regarding employment of Executive Vice-President and Chairman (25) 4.5Employment Agreement between TOP Ships Inc. and Central Mare Inc. dated September 1, 2010, regarding employment of President and Chief Executive Officer (26) 4.6Employment Agreement between TOP Ships Inc. and Central Mare Inc. dated September 1, 2010, regarding employment of Chief Financial Officer (27) 4.7Management Agreement dated as of January 1, 2019 with Central Shipping Inc., in respect of Hull 8242 (renamed Eco Marina Del Rey) (28) 4.8Management Agreement dated as of January 1, 2019 with Central Shipping Inc., in respect of Hull S874 (TBN Eco Bel Air) (29) 4.9Management Agreement dated as of January 1, 2019 with Central Shipping Inc., in respect of Hull S875 (TBN Eco Beverly Hills) (30) 4.10Fifth Amendment to the Agreement for Provision of Personnel, dated January 1, 2019, between Top Ships Inc. and Central Mare Inc. (31) 4.11Letter Agreement from Central Shipping Inc. to Top Ships Inc. dated as of January 1, 2019, in respect of provision of management services (32) 4.12Loan Agreement for a Secured Floating Interest Rate Loan Facility of up to $37,660,000, dated March 12, 2020, by and among Alpha Bank A.E., California 19 Inc. andCalifornia 20 Inc., in relation to the M/T Eco Yosemite Park and M/T Eco Joshua Park (33) 4.13First Supplemental Agreement in relation to the Loan Agreement dated March 12, 2020, by and among Alpha Bank S.A, California 19 Inc., California 20 Inc., CentralMare Inc. and Top Ships Inc., in relation to the M/T Eco Yosemite Park and M/T Eco Joshua Park (34) 4.14Corporate Guarantee, dated December 8, 2020, by and between Top Ships Inc. and Alpha Bank S.A., in respect of the obligations under the Loan Agreement datedMarch 12, 2020 (35) 4.15Second Supplemental Agreement dated February 2, 2022, by and between Top Ships Inc. and Alpha Bank S.A., in respect of the obligations under the Loan Agreementdated March 12, 2020 (36) 4.16Joint Venture Agreement, dated March 11, 2020, by and between Augustus Enterprises Inc., Just-C Limited and California 19 Inc. relating to the M/T Eco YosemitePark (37) 4.17Joint Venture Agreement, dated March 11, 2020, by and between Augustus Enterprises Inc., Just-C Limited and California 20 Inc. relating to the M/T Eco JoshuaPark (38)81Table of Contents4.18Loan Agreement for a Secured Floating Interest Rate Loan Facility of up to $38,000,000, dated May 6, 2021, by and among Alpha Bank S.A. and Athenean Empire Inc.in relation to the M/T Eco Malibu (39) 4.19Guarantee dated as of November 23, 2021 between TOP Ships Inc., as guarantor, and Sea 268 Leasing Co. Limited, as owner, in respect of M/T Julius Caesar (40) 4.20Bareboat Charter in respect of M/T Julius Caesar dated as of November 23, 2021 (41) 4.21Guarantee dated as of November 23, 2021 between TOP Ships Inc., as guarantor, and Sea 269 Leasing Co. Limited, as owner, in respect of M/T Legio X Equestris (42) 4.22Bareboat Charter in respect of M/T Legio X Equestris dated as of November 23, 2021 (43) 4.23Stock Purchase Agreement dated January 17, 2022, by and between TOP Ships Inc. and Africanus Inc., in relation to M/T Eco Oceano CA, M/T Julius Caesar, and M/TLegio X Equestris (44) 4.24Time Charter Party dated as of February 14, 2022 in respect of M/T Eco Bel Air (45) 4.25Time Charter Party dated as of February 14, 2022 in respect of M/T Eco Beverly Hills (46) 4.26Bareboat Charter in respect of M/T Eco Oceano CA, dated as of March 2, 2022 (47) 4.27Form of Securities Purchase Agreement dated June 3, 2022 between Top Ships Inc. and certain purchasers thereto (48) 4.28Form of Inducement Letter dated October 6, 2022 between Top Ships Inc. and the warrantholder thereto. (49) 4.29Form of Securities Purchase Agreement dated December 4, 2022 between Top Ships Inc. and certain purchasers thereto (50) 4.30Warrant Agency Agreement dated December 6, 2022 between Top Ships Inc. and American Stock Transfer & Trust Company, LLC (51) 8.1List of subsidiaries of the Company * 12.1Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Executive Officer * 12.2Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Financial Officer * 13.1Certification of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 * 13.2Certification of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 * 15.1Consent of Independent Registered Accounting Firm * 101The following materials from the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2022, formatted in Inline eXtensible BusinessReporting Language (iXBRL): (i) Consolidated Balance Sheets as of December 31, 2021 and 2022; (ii) Consolidated Statements of Comprehensive Income/(Loss) for theyears ended December 31, 2020, 2021 and 2022; (iii) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2020, 2021 and 2022; (iv)Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2021 and 2022; and (v) Notes to Consolidated Financial Statements 104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101*Filed herewith(1)Incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 6-K, filed on June 24, 2011.(2)Incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 6-K, filed on April 18, 2014.(3)Incorporated by reference to Exhibit 1.3 of the Company’s Annual Report on Form 20-F, filed on April 26, 2016.(4)Incorporated by reference to Exhibit 1.4 of the Company’s Annual Report on Form 20-F, filed on March 29, 2018.(5)Incorporated by reference to Exhibit 1.5 of the Company’s Annual Report on Form 20-F, filed on March 29, 2018.(6)Incorporated by reference to Exhibit 1.6 of the Company’s Annual Report on Form 20-F, filed on March 29, 2018.(7)Incorporated by reference to Exhibit 1.7 of the Company’s Annual Report on Form 20-F, filed on March 29, 2018.(8)Incorporated by reference to Exhibit 1.8 of the Company’s Annual Report on Form 20-F, filed on March 29, 2018.82Table of Contents(9)Incorporated by reference to Exhibit 1.9 of the Company’s Annual Report on Form 20-F, filed on March 29, 2018.(10)Incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 6-K, filed on August 22, 2019.(11)Incorporated by reference to Exhibit 1.11 of the Company’s Annual Report on Form 20-F, filed on April 23, 2021.(12)Incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 6-K filed on March 9, 2007.(13)Incorporated by reference to Exhibit 1 of the Company’s Current Report on Form 6-K filed on November 28, 2014.(14)Incorporated by reference to Exhibit 2.1 of the Company’s Annual Report on Form 20-F, filed on June 29, 2009.(15)Incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 6-K, filed on October 11, 2022.(16)Incorporated by reference to Exhibit 4.4 of the Company’s Current Report on Form 6-K, filed on December 14, 2022.(17)Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 6-K, filed on September 22, 2016.(18)Incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 6-K, filed on May 8, 2017.(19)Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 6-K, filed on February 21, 2017.(20)Incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 6-K, filed on April 1, 2019.(21)Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 6-K, filed on December 4, 2020.(22)Incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 20-F, filed on April 26, 2016.(23)Incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 6-K, filed on September 22, 2016.(24)Incorporated by reference to Exhibit 4.5 of the Company’s Annual Report on Form 20-F, filed on March 29, 2018.(25)Incorporated by reference to Exhibit 4.6 of the Company’s Annual Report on Form 20-F, filed on March 29, 2018.(26)Incorporated by reference to Exhibit 4.7 of the Company’s Annual Report on Form 20-F, filed on March 29, 2018.(27)Incorporated by reference to Exhibit 4.8 of the Company’s Annual Report on Form 20-F, filed on March 29, 2018.(28)Incorporated by reference to Exhibit 4.105 of the Company’s Annual Report on Form 20-F, filed on March 28, 2019.(29)Incorporated by reference to Exhibit 4.108 of the Company’s Annual Report on Form 20-F, filed on March 28, 2019.(30)Incorporated by reference to Exhibit 4.113 of the Company’s Annual Report on Form 20-F, filed on March 28, 2019.(31)Incorporated by reference to Exhibit 4.115 of the Company’s Annual Report on Form 20-F, filed on March 28, 2019.(32)Incorporated by reference to Exhibit 4.116 of the Company’s Annual Report on Form 20-F, filed on March 28, 2019.(33)Incorporated by reference to Exhibit 4.25 of the Company’s Annual Report on Form 20-F, filed on April 23, 2021.(34)Incorporated by reference to Exhibit 4.26 of the Company’s Annual Report on Form 20-F, filed on April 23, 2021.(35)Incorporated by reference to Exhibit 4.27 of the Company’s Annual Report on Form 20-F, filed on April 23, 2021.(36)Incorporated by reference to Exhibit 4.20 of the Company’s Annual Report on Form 20-F, filed on April 15, 2022.(37)Incorporated by reference to Exhibit 4.30 of the Company’s Annual Report on Form 20-F, filed on April 23, 2021.(38)Incorporated by reference to Exhibit 4.31 of the Company’s Annual Report on Form 20-F, filed on April 23, 2021.(39)Incorporated by reference to Exhibit 4.23 of the Company’s Annual Report on Form 20-F, filed on April 15, 2022.(40)Incorporated by reference to Exhibit 4.26 of the Company’s Annual Report on Form 20-F, filed on April 15, 2022.(41)Incorporated by reference to Exhibit 4.27 of the Company’s Annual Report on Form 20-F, filed on April 15, 2022.(42)Incorporated by reference to Exhibit 4.28 of the Company’s Annual Report on Form 20-F, filed on April 15, 2022.(43)Incorporated by reference to Exhibit 4.29 of the Company’s Annual Report on Form 20-F, filed on April 15, 2022.(44)Incorporated by reference to Exhibit 99.3 of the Company’s Current Report on Form 6-K, filed on January 21, 2022.(45)Incorporated by reference to Exhibit 4.34 of the Company’s Annual Report on Form 20-F, filed on April 15, 2022.(46)Incorporated by reference to Exhibit 4.35 of the Company’s Annual Report on Form 20-F, filed on April 15, 2022.(47)Incorporated by reference to Exhibit 4.36 of the Company’s Annual Report on Form 20-F, filed on April 15, 2022.(48)Incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 6-K, filed on June 10, 2022.(49)Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 6-K, filed on October 11, 2022.(50)Incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 6-K, filed on December 14, 2022.(51)Incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 6-K, filed on December 14, 2022.SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual reporton its behalf. TOP SHIPS INC. (Registrant) Date: March 31, 2023By:/s/ Evangelos J. Pistiolis Evangelos J. Pistiolis President, Chief Executive Officer, and Director83Table of ContentsTOP SHIPS INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS PageReport of Independent Registered Public Accounting Firm (PCAOB ID 1163)F-2 Consolidated Balance sheets as of December 31, 2021 and 2022F-3 Consolidated Statements of Comprehensive (loss)/income for the years ended December 31, 2020, 2021 and 2022F-4 Consolidated Statements of Stockholders’ equity for the years ended December 31, 2020, 2021 and 2022F-5 Consolidated Statements of Cash flows for the years ended December 31, 2020, 2021 and 2022F-6 Notes to consolidated financial statementsF-7 F-1Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders ofTop Ships Inc.,Majuro, Republic of the Marshall Islands Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Top Ships Inc. and subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related consolidatedstatements of comprehensive (loss)/income, mezzanine and stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2022, and the related notes(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principlesgenerally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits.We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to theCompany in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal controlover financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion onthe effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respondto those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating theaccounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide areasonable basis for our opinion./s/ Deloitte Certified Public Accountants S.A.Athens, GreeceMarch 31, 2023We have served as the Company’s auditor since 2006.F-2Table of ContentsTOP SHIPS INC.CONSOLIDATED BALANCE SHEETSDECEMBER 31, 2021 AND 2022(Expressed in thousands of U.S. Dollars - except share and per share data) December 31, December 31, 2021 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents 2,370 20,544 Trade accounts receivable 76 8 Prepayments and other 581 1,314 Inventories 671 1,026 Vessels held for sale (Note 4c) 71,636 - Total current assets 75,334 22,892 FIXED ASSETS: Advances for vessels under construction (Note 4a) 30,579 - Vessels, net (Note 4b) 156,585 389,059 Right of use assets from operating leases (Note 6) 37,279 28,708 Other fixed assets, net 534 505 Total fixed assets 224,977 418,272 OTHER NON CURRENT ASSETS: Restricted cash (Note 6 and 7) 4,000 4,000 Investments in unconsolidated joint ventures (Note 17) 24,477 22,173 Deposit asset (Note 19) 2,000 2,000 Total non-current assets 30,477 28,173 Total assets 330,788 469,337 LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Current portion of long-term debt (Note 7) 7,205 12,344 Debt related to vessels held for sale (Note 7) 53,202 - Due to related parties (Note 5) 29,755 237 Accounts payable 2,308 1,953 Accrued liabilities 1,145 2,061 Unearned revenue 3,658 7,030 Current portion of Operating lease liabilities (Note 6) 9,815 8,610 Total current liabilities 107,088 32,235 NON-CURRENT LIABILITIES: Non-current portion of long term debt (Note 7) 90,163 221,370 Non-current portion of Operating lease liabilities (Note 6) 23,948 15,338 Other non-current liabilities 225 100 Vessel fair value participation liability (Note 7) - 3,271 Total non-current liabilities 114,336 240,079 COMMITMENTS AND CONTINGENCIES (Note 8) - - Total liabilities 221,424 272,314 MEZZANINE EQUITY: Preferred stock, $0.01 par value; 20,000,000 shares authorized; 13,452 Series E Shares issued and outstanding at December 31, 2021 and13,452 Series E Shares and 5,850,748 Series F Shares issued and outstanding at December 31, 2022 (Note 12) - 59 Preferred stock, Paid-in capital in excess of par 16,142 86,292 Total mezzanine equity 16,142 86,351 STOCKHOLDERS’ EQUITY: Preferred stock, $0.01 par value; 20,000,000 shares authorized; of which 100,000 Series D Shares were outstanding at December 31, 2021and 2022 (Note 9) 1 1 Common stock, $0.01 par value; 1,000,000,000 shares authorized; 1,991,598 and 10,294,906 shares issued and outstanding at December 31,2021 and 2022 (Note 9) 20 103 Additional paid-in capital 429,955 428,374 Accumulated deficit (336,754) (317,806)Total stockholders’ equity 93,222 110,672 Total liabilities, mezzanine equity and stockholders’ equity 330,788 469,337 F-3Table of ContentsTOP SHIPS INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOMEFOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of U.S. Dollars - except share and per share data) 2020 2021 2022 Revenues (including $0, $0 and $7,294 respectively, from related party) (Note 18 & 5) 60,222 56,367 80,656 EXPENSES: Voyage expenses (including $761, $705 and $1,008 respectively, to related party) (Note 11) 1,994 1,317 1,648 Operating lease expense (Note 6) 755 10,840 10,840 Vessel operating expenses (including $60, $17 and $37 respectively, to related party) (Note 11) 21,024 15,679 18,628 Dry-docking costs 356 361 - Vessel depreciation (Note 4b) 13,174 7,670 13,289 Management fees-related parties (Note 5) 5,627 2,596 2,093 General and administrative expenses (including $360, $360 and $360 respectively, to related party)(Note 5) 1,932 1,943 1,617 Other operating loss (Note 15) 4,800 - - Loss/(Gain) on sale of vessels (Note 6 and 19) 12,355 - (78)Impairment on vessels (Note 19) - 1,160 - Operating (loss)/ income (1,795) 14,801 32,619 OTHER EXPENSES: Interest and finance costs (including $0, $0 and $207 respectively, to related party) (Note 12) (20,956) (6,998) (14,365)(Loss)/Gain on derivative financial instruments (Note 14) (814) 66 - Interest income 34 - 48 Equity gain in unconsolidated joint ventures 713 747 646 Total other expenses, net (21,023) (6,185) (13,671) Net (loss)/income and comprehensive (loss)/income (22,818) 8,616 18,948 Less: Deemed dividend for beneficial conversion feature of Series E Shares (Note 16) (1,067) (900) - Less: Deemed dividend equivalents on preferred shares related to redemption value (Note 16) (3,099) (437) (14,400)Less: Preferred shares dividend (Note 16) (1,796) (1,883) (12,390)Less: Deemed dividend on warrant inducement (Note 9) - - (1,345)Net (loss) / income attributable to common shareholders (28,780) 5,396 (9,187) (Loss) / Earnings per common share, basic and diluted (Note 10) (24.48) 2.71 (3.03) The accompanying notes are an integral part of these consolidated financial statements.F-4Table of ContentsTOP SHIPS INC.CONSOLIDATED STATEMENTS OF MEZZANINE AND STOCKHOLDERS’ EQUITYFOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of U.S. Dollars – except number of shares and per share data) Mezzanine Equity Preferred Stock Common Stock Additional AccumulatedDeficit attributable Other # ofShares Par Value MezzanineEquity # ofShares ParValue # ofShares* ParValue* Paid-InCapital* to commonstockholders comprehensiveloss Total BALANCE,December 31,2019 15,724 - 18,083 100,000 1 17,391 - 411,586 (322,552) (1,361) 87,674 Net loss (22,818) (22,818)Stock-basedcompensation (34) (34)Issuance of commonstock pursuant toequity offerings(Note 9) 1,970,848 20 121,158 121,178 Cashless exercisesof Class AWarrants (Note 9) 3,360 - - - Issuance of Series EShares (Note 16) 14,350 14,350 - Deemed dividendequivalents onSeries E Sharesissued during theperiod related toredemption value 3,099 (3,099) (3,099)Redemptions ofSeries E Shares(Note 16) (21,364) (24,569) - Reversal of costsrelated to equityofferings 235 235 Excess ofconsiderationover carryingvalue of acquiredassets (Note 1) (62,000) (62,000)Dividends of SeriesE shares (Note 16) 2,554 2,554 (1,796) (1,796)Beneficialconversionfeature related tothe issuance ofSeries E Shares (1,067) 1,067 1,067 Deemed dividendrelated tobeneficialconversionfeature of Series EShares 1,067 (1,067) (1,067)Reversal of Othercomprehensiveloss (Note 14) 1,361 1,361 BALANCE,December 31,2020 11,264 - 13,517 100,000 1 1,991,599 20 466,050 (345,370) - 120,701 Net Income 8,616 8,616 Stock-basedcompensation (34) (34)Issuance of Series EShares (Note 16) 2,188 - 2,188 - Deemed dividendequivalents onSeries E Sharesissued during theperiod related toredemption value 437 (437) (437)Dividends of SeriesE shares (Note 16) (1,883) (1,883)Beneficialconversionfeature related tothe issuance ofSeries E Shares (900) 900 900 Deemed dividendrelated tobeneficialconversionfeature of Series EShares 900 (900) (900)Excess ofconsiderationover carryingvalue of acquiredassets (Note 1) (33,741) (33,741)BALANCE,December 31,2021 13,452 - 16,142 100,000 1 1,991,599 20 429,955 (336,754) - 93,222 Net Income 18,948 18,948 Stock-basedcompensation (16) (16)Redemption offractional sharesdue to reversestock split (6,435) (15) (15)Issuance ofpreferred shares(Note 16) 7,200,000 72 71,928 - Deemed dividend ofSeries F sharesrelated toredemption value 14,400 (14,400) (14,400)Dividends ofpreferred shares(Note 16) (12,390) (12,390)Exercise of warrants,net of fees 715,150 7 4,529 4,536 Redemptions ofpreferred shares(Note 16) (1,349,252) (13) (16,178) - Issuance of commonstock pursuant toequity offerings,net 7,594,592 76 20,711 20,787 Deemed dividend onwarrantinducement (Note9) (1,345) (1,345)Incremental fairvalue of theOctober 2022Warrants (Note 9) 1,345 1,345 BALANCE,December 31, 2022 5,864,200 59 86,292 100,000 1 10,294,906 103 428,374 (317,806) - 110,672 The accompanying notes are an integral part of these consolidated financial statements.*Adjusted to reflect the reverse stock split effected in September 2022 (see Note 1) F-5Table of ContentsTOP SHIPS INC.CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of U.S. Dollars) 2020 2021 2022 Cash Flows from Operating Activities: Net (loss) / income (22,818) 8,616 18,948 Adjustments to reconcile net (loss)/income to net cash provided by operating activities: Vessel depreciation 13,174 7,670 13,289 Other fixed assets depreciation 36 14 4 Equity (gains) in unconsolidated joint ventures (713) (747) (646)Dividends from cumulative earnings of joint venture - 1,524 646 Amortization and write off of deferred financing costs 6,311 840 2,522 Stock-based compensation expense (34) (34) (16)Change in fair value of derivative financial instruments 790 (66) - Amortization of Right of use assets from operating leases 543 7,943 8,571 Impairment on vessels - 1,160 - Loss/(Gain) on sale of other fixed assets 36 - (15)Loss/(Gain) on sale of vessels 12,355 - (78)(Increase)/Decrease in: Trade accounts receivable 642 (76) 68 Inventories 334 (157) (355)Prepayments and other (198) 323 (733)Increase/(Decrease) in: Due to related parties 2,097 (2,797) (3,204)Accounts payable (2,083) (123) (82)Other non-current liabilities 300 (75) (125)Accrued liabilities (2,803) (207) 1,068 Unearned revenue (1,263) 1,584 3,372 Operating lease liabilities (666) (9,331) (9,815)Net Cash provided by Operating Activities 6,040 16,061 33,419 Cash Flows used in Investing Activities: Advances for vessels under construction and capitalized expenses (120,858) (115,513) (216,714)Investments in unconsolidated joint ventures (2017 Joint Venture – see Note 17) 19,555 - - Investments in unconsolidated joint ventures (2020 Joint Venture – see Note 17) (27,454) - - Returns of investments in unconsolidated joint ventures (2020 Joint Venture – see Note 17) - 2,976 2,304 Net proceeds from vessel sales 310,016 35,886 71,714 Net proceeds from sales of other fixed assets, net 35 - 40 Net Cash provided by/(used in) Investing Activities 181,294 (76,651) (142,656) Cash Flows from Financing Activities: Proceeds from debt 60,200 74,800 156,201 Proceeds from related party debt - - 9,000 Principal payments and prepayments of related party debt - - (9,000)Principal payments and prepayments of debt (269,621) (28,313) (68,893)Redemption of preferred shares (24,568) - (16,191)Consideration paid in excess of purchase price over book value of vessels (60,850) - - Proceeds from issuance of common stock 129,660 - 22,718 Proceeds from warrant exercises, net of fees - - 4,556 Equity offering issuance costs (8,868) - (1,671)Payment of financing costs (1,851) (1,076) (3,566)Derivative financial instrument termination payments (1,379) - - Dividends of preferred shares - (1,779) (13,358)Proceeds from issuance of preferred shares (Note 16) - - 47,630 Redemption of fractional shares due to reverse stock split - - (15)Net Cash (used in)/ provided by Financing Activities (177,277) 43,632 127,411 Net increase/(decrease) in cash and cash equivalents and restricted cash 10,057 (16,958) 18,174 Cash and cash equivalents and restricted cash at beginning of year 13,271 23,328 6,370 Cash and cash equivalents and restricted cash at end of the year 23,328 6,370 24,544 Cash breakdown Cash and cash equivalents 19,328 2,370 20,544 Restricted cash, current - - - Restricted cash, non-current 4,000 4,000 4,000 SUPPLEMENTAL CASH FLOW INFORMATION Capital expenditures included in Accounts payable/Accrued liabilities/Due to related parties 388 1,530 - Interest paid, net of capitalized interest 18,309 7,412 11,161 Finance fees included in Accounts payable/Accrued liabilities/Due to related parties 23 151 - Equity issuance costs and warrant related costs included in liabilities - - 280 Unpaid Excess of consideration over carrying value of acquired assets included in Due to Related Parties (Note 1) 1,150 27,562 - Beneficial conversion feature of Series E perpetual convertible preferred stock (Note 16) 1,067 900 - Settlement of related party debt, interest, finance fees, Excess consideration over acquired assets, capitalexpenditures and dividends with issuance of preferred shares (Note 16) 16,904 2,188 24,370 Dividends payable included in Due to related parties (Note 16) 864 968 - Carrying value of net assets of companies acquired (Note 1) - 8,933 - Reversal of equity offering costs not payable 235 - - Prepaid rent of Navigare Lease included in initial measurement 2,006 - - Deemed dividend equivalents on preferred shares related to redemption value (Note 16) 2,253 437 14,400 Deemed dividend on warrant inducement (Note 9) - - 1,345 The accompanying notes are an integral part of these consolidated financial statements.F-6Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated) 1.Basis of Presentation and General Information:The consolidated financial statements include the accounts of Top Ships Inc. (formerly Top Tankers Inc. and Ocean Holdings Inc.) and its wholly owned subsidiaries (collectively the“Company”). Ocean Holdings Inc. was formed on January 10, 2000, under the laws of Marshall Islands and was renamed to Top Tankers Inc. and Top Ships Inc. in May 2004 andDecember 2007, respectively. The Company is an international provider of worldwide oil, petroleum products and chemicals transportation services. As of December 31, 2022, the Company was the sole owner of all outstanding shares of the following subsidiary companies. The following list is not exhaustive as the Company hasother subsidiaries relating to vessels that have been sold and that remain dormant for the periods presented in these consolidated financial statements as well as intermediary companiesthat own shipowning companies that are 100% subsidiaries of the Company. CompaniesDate ofIncorporationCountry ofIncorporationActivity Top Tanker Management Inc.May 2004Marshall IslandsManagement company Wholly owned Shipowning Companies (“SPC”)with vessels in operation during years endedDecember 31, 2020, 2021 and 2022Date ofIncorporationCountry ofIncorporationVesselDelivery Date1 Monte Carlo Lax Shipping Company LimitedMay 2013Marshall IslandsM/T Nord ValiantAugust 2016 (sold in 2021)2 PCH Dreaming Inc.January 2018Marshall IslandsM/T Eco Marina Del RayMarch 20193Santa Catalina Inc.December 2018Marshall IslandsM/T Eco Los AngelesFebruary 2020 (sold in 2022)4Santa Monica Marine Inc.December 2018Marshall IslandsM/T Eco City of AngelsFebruary 2020 (sold in 2022)5Roman Empire Inc.February 2020Marshall IslandsEco West CoastMarch 20216Athenean Empire Inc.February, 2020Marshall IslandsEco MalibuMay 20217 Julius Caesar Inc.May, 2020Marshall IslandsJulius Caesar (Hull No. 3213)January 20228Legio X Inc.December, 2020Marshall IslandsLegio X Equestris (Hull No. 3214)March 20229Eco Oceano Ca Inc.December, 2020Marshall IslandsEco Oceano Ca (Hull No. 871)March 2022 As of December 31, 2020, 2021 and 2022, the Company was the owner of 50% of outstanding shares of the following companies. SPCDate ofIncorporationCountry ofIncorporationVesselBuilt Date1California 19 Inc.May 2019Marshall IslandsM/T Eco Yosemite ParkMarch 20202California 20 Inc.May 2019Marshall IslandsM/T Eco Joshua ParkMarch 2020 On May 6, 2020, the Company acquired for $18,000 from a company affiliated with Mr. Evangelos J. Pistiolis a 100% ownership interest in three Marshall Island companies (the “MRTransaction”) that each had a newbuilding contract for the construction of one scrubber-fitted 50,000 dwt eco MR product/chemical tanker, under construction at that time in HyundaiMipo shipyard in South Korea, with attached time charters. The vessels, M/T Eco Van Nuys (Hull No 2789), M/T Eco Santa Monica (Hull No 2790) and M/T Eco Venice Beach (Hull No2791) were scheduled to be delivered in the first quarter of 2021. Each of the three product tankers had time charters with Central Tankers Chartering Inc, a company affiliated with Mr.Evangelos J. Pistiolis, for a firm term of five years at a gross daily rate of $16,200, with a charterer’s option to extend for two additional years at $17,200 and $18,200, scheduled tocommence upon delivery of each vessel. Of the consideration payable, $16,850 was paid in the year ended December 31, 2020 and the remaining $1,150 was due on the vessels’ deliverydate and was included in Due to related parties in the consolidated balance sheets as of December 31, 2020. F-7Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)On May 28, 2020, the Company acquired for $22,000 from a company affiliated with Mr. Evangelos J. Pistiolis, or the Suezmax Seller, a 50% ownership interest in two Marshall Islandcompanies (the “SPVs”) that each had a newbuilding contract for the construction of one scrubber-fitted 157,000 dwt eco Suezmax tanker, M/T Eco West Coast (Hull No 865) and M/TEco Malibu (Hull No 866) under construction at that time in Hyundai Heavy Industries shipyard in South Korea, with attached time charters with Clearlake Shipping Pte Ltd. The M/T’sEco West Coast and Eco Malibu, scheduled to commence upon delivery of each vessel, were delivered on March 26 and May 11, 2021 respectively. The Company had the option toacquire the other 50% ownership interest in both vessels from the Seller at the same price until July 15, 2020. On June 18, 2020, the Company exercised both purchase options for aconsideration of $22,000. Upon their delivery, both vessels entered into time charters with Clearlake Shipping Pte Ltd., for a firm term of three years at a gross daily rate of $33,950, with acharterer’s option to extend for two additional years at $34,750 and $36,750, respectively. The full amount of the consideration was paid in the year ended December 31, 2020. On January 6, 2021 the Company sold to a related party affiliated with Mr. Evangelos J. Pistiolis (the “Buyer”) the three shipowning companies that owned M/T Eco Van Nuys (Hull No2789), M/T Eco Santa Monica (Hull No 2790) and M/T Eco Venice Beach (Hull No 2791) in exchange for: ●$10,000 in cash●100% ownership in a Marshall Islands company that was party to a shipbuilding contract for a high specification scrubber fitted Suezmax Tanker at the time under constructionat Hyundai Samho shipyard that was delivered in March 2022 (M/T Eco Oceano Ca - Hull No 871). The shipowning company is party to a time charter, starting from the vessel’sdelivery, with Central Tankers Chartering, a related party affiliated with the family of Mr. Evangelos J. Pistiolis, for a firm duration of five years at a gross daily rate of $32,450,with a charterer’s option to extend for two additional years at $33,950 and $35,450 (also see Note 5).●35% ownership in one Marshall Islands company that was a party to a shipbuilding contract for a high specification scrubber fitted VLCC tanker under construction at HyundaiHeavy Industries shipyard that was delivered in January 2022 (Julius Caesar - Hull No. 3213). The shipowning company is party to a time charter, starting from the vessel’sdelivery, with a major oil trader, for a firm duration of three years at a gross daily rate of $36,000, with a charterer’s option to extend for two additional years at $39,000 and$41,500.●35% ownership in one Marshall Islands company that is party to a shipbuilding contract for a high specification scrubber fitted VLCC tanker at the time under construction atHyundai Heavy Industries shipyard that was delivered in March 2022 (Legio X Equestris - Hull No. 3214). The shipowning company is party to a time charter, starting from thevessel’s delivery, with a major oil trader, for a firm duration of three years at a gross daily rate of $35,750, with a charterer’s option to extend for two additional years at $39,000and $41,500.●A settlement of $1,150 in related party payables to the Buyer.The Buyer remained the guarantor on the shipbuilding contracts towards the shipyard and in addition, the Buyer provided the Company with an option for a credit line up to 10% of thetotal shipbuilding cost at market terms, to be negotiated when the option is exercised, amounting to $23,815. On September 8, 2021 the Company purchased from the Buyer for a consideration of $29,750 an additional 65% ownership interest in Julius Caesar Inc. - Hull No. 3213 and Legio X Inc. -Hull No. 3214 (the “VLCC Companies”). Following this transaction, the Company is the 100% owner of the VLCC Companies. The Buyer remained the guarantor on the shipbuildingcontracts towards the shipyard and in addition the Buyer provided a financing option to the Company by remaining responsible to the shipyard for up to 20% of the shipbuilding costper vessel (increased from 10%, as previously agreed on January 6, 2021,), at the option of the Company, to be exercised until each vessel’s delivery date. Due to the abovementioned purchase of the remaining 65% of the VLCC Companies, which were initially accounted for as Investments in affiliates, the Company consolidates the VLCCCompanies.F-8Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)Each of the abovementioned transactions were approved by a special committee of the Company’s board of directors (the “Special Committee”), of which all of the directors wereindependent and for each transaction the Special Committee obtained a fairness opinion relating to the consideration of each transaction from an independent financial advisor. TheCompany accounted for the abovementioned acquisitions as a transfer of assets between entities under common control and has recognized the vessels at their historical carryingamounts at the date of transfer. The amount of the consideration given in excess of the historical carrying value of the net assets acquired is recognized as a reduction to the Company’s additional paid in capital andpresented as Excess of consideration over the carrying value of acquired assets in the Company’s consolidated statement of stockholders’ equity for the twelve months ended December31, 2020, 2021 and 2022 respectively. An analysis of the consideration paid is presented in the table below: As of December 31, 2020 2021 2022 Consideration 62,000 29,750 - Carrying value of net assets of companies sold - 24,074 - Less: Carrying value of net assets of companies acquired - (8,933) - Less: Consideration received in cash - (10,000) - Less: Settlement of related party payables - (1,150) - Excess of consideration over acquired assets 62,000 33,741 - Following Russia’s invasion of Ukraine in February 2022, the U.S., several European Union nations, the UK and other countries have announced sanctions against Russia. Thesanctions announced by the U.S. and other countries against Russia include, among others, restrictions on selling or importing goods, services or technology in or from affectedregions, travel bans and asset freezes impacting connected individuals and political, military, business and financial organizations in Russia, severing large Russian banks from U.S.and/or other financial systems, and barring some Russian enterprises from raising money in the U.S. market. The U.S., EU nations and other countries could impose wider sanctions andtake other actions as a result of the war. With uncertainty remaining at high levels with regards to the global impact of the sanctions already announced to date and the possibility ofadditional sanctions as well as retaliation measures from Russia’s side that may follow in the period to come, it is difficult to accurately assess the exact impact on the Company. To date,no apparent consequences have been identified on the Company’s business, nor any specific implications on any of its existing counterparties, including clients, suppliers and lenders.Notwithstanding the foregoing, it is possible that these tensions might eventually have an adverse effect the Company’s business, financial condition, results of operations and cashflows.On March 11, 2020, the World Health Organization declared the coronavirus (“COVID-19”) outbreak a pandemic. In response to the pandemic, many countries, ports and organizations,including those where the Company conducts a large part of its operations, have implemented measures to combat the pandemic, such as quarantines and travel restrictions. Suchmeasures have caused and will likely continue to cause severe trade disruptions. During the years ended December 31, 2020 and 2021 the Company encountered certain prolongeddelays embarking and disembarking crew onto the Company’s ships as a result of restrictions at ports placed by various countries due to COVID-19 resulting to an increase in off-hiredays or approximately $487 and $519 respectively of reduction in revenue as well as a slight increase in operating expenses relating to crew as well as an increase in fuel expenses duringoff-hires in both periods. During the year ended December 31, 2022 such instances of increased off-hires and delays were greatly subsided. The extent to which COVID-19 will impact the Company’s future results of operations and financial condition, including possible vessel impairments, will depend on futuredevelopments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the emergence of new virus variants and the additionalactions to contain or treat its impact. On September 23, 2022 the Company effected a 1-for-20 reverse stock split of its common stock. There was no change in the number of authorized common shares of the Company, or thefloor price of the Company’s Series E Shares, or the number of votes of the Company’s Series D, E and F Shares. All numbers of common share and earnings per share amounts, as wellas warrant shares eligible for purchase under the Company’s warrants, exercise price of said warrants and conversion prices of the Company’s Series E Shares, in these consolidatedfinancial statements have been retroactively adjusted to reflect this 1-for-20 reverse stock split. F-9Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)2.Significant Accounting Policies:(a)Principles of Consolidation: The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ofAmerica (“U.S. GAAP”) and include the accounts and operating results of Top Ships Inc. and its subsidiaries referred to in Note 1. Intercompany balances and transactions havebeen eliminated on consolidation. Non-controlling interests are stated at the non-controlling interest’s proportion of the net assets of the subsidiaries where the Company has lessthan 100% interest. Subsequent to initial recognition the carrying amount of non-controlling interest is increased or decreased by the non-controlling interest’s share of subsequentchanges in the equity of such subsidiaries. Total comprehensive income is attributed to a non-controlling interest even if this results in a deficit balance. Changes in the Company’sownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions and the carrying amounts of theCompany’s interests and the non-controlling interests are adjusted to reflect these changes in their relative interests in the subsidiaries. Any difference between the amount bywhich the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Company.(b)Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts ofrevenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates mainly include impairment of vessels, vessel useful livesand residual values and fair values of derivative instruments. Actual results may differ from these estimates.(c)Foreign Currency Translation: The Company’s functional currency is the U.S. Dollar because all vessels operate in international shipping markets, and therefore primarily transactbusiness in U.S. Dollars. The Company’s books of account are maintained in U.S. Dollars. Transactions involving other currencies during the year are converted into U.S. Dollarsusing the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies are translatedto U.S. Dollars based on the year-end exchange rates and any gains and losses are included in the statement of comprehensive (loss)/income.(d)Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less tobe cash equivalents.(e)Restricted Cash: The Company considers amounts that are pledged, blocked, held as cash collateral, required to be maintained with a specific bank or be maintained by theCompany as minimum cash under the terms of a loan agreement, as restricted and these amounts are presented separately on the balance sheets. In the event original maturities areshorter than twelve months, such deposits are presented as current assets while if original maturities are longer than twelve months, such deposits are presented as non-currentassets.(f)Trade Accounts Receivable, net: The amount shown as trade accounts receivable, net at each balance sheet date, includes estimated recoveries from charterers for hire billings, netof a provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually, combined with the application of a historicalrecoverability ratio, for purposes of determining the appropriate provision for doubtful accounts. The Company assessed that it had no potentially uncollectible accounts and henceformed no provision for doubtful accounts at December 31, 2021 and 2022 respectively.(g)Inventories: Inventories consist of lubricants and paints on board the vessels. Inventories are stated at the lower of cost and net realizable value. Cost, which consists of thepurchase price, is determined by the first in, first out method.(h)Vessel Cost: Vessels are stated at cost, which consists of the contract price, pre-delivery costs and capitalized interest incurred during the construction of new building vessels, andany material expenses incurred upon acquisition (improvements and delivery costs). Subsequent expenditures for conversions and major improvements are also capitalized whenthey appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Repairs and maintenance are charged to expense as incurred and areincluded in Vessel operating expenses in the consolidated statements of comprehensive (loss)/income.F-10Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)(i)Impairment of Long-Lived Assets: The Company evaluates the existence of impairment indicators whenever events or changes in circumstances indicate that the carrying values ofthe Company’s long lived assets are not recoverable. Such indicators of potential impairment include, vessel sales and purchases, business plans, declines in the fair market value ofvessels and overall market conditions. If there are indications for impairment present, the Company determines undiscounted projected net operating cash flows for each vessel andcompares it to the vessel’s carrying value. If the carrying value of the related vessel exceeds its undiscounted future net cash flows, the carrying value is reduced to its fair value,and the difference is recognized as an impairment loss. The impairment tests the Company conducted as of December 31, 2021 and 2022 showed that there are no impairmentindications for any of the vessels held for use in the Company’s fleet.(j)Vessel Depreciation: Depreciation is calculated using the straight-line method over the estimated useful life of the vessels, after deducting the estimated salvage value. Eachvessel’s salvage value is equal to the product of its lightweight tonnage and estimated scrap rate, of $300 per lightweight ton. Management estimates the useful life of theCompany’s vessels to be 25 years from the date of initial delivery from the shipyard. Second hand vessels are depreciated from the date of their acquisition through their remainingestimated useful life. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its useful life is adjusted at the date such regulations are adopted.(k)Long Lived Assets Held for Sale: The Company classifies vessels as being held for sale when the following criteria are met: (a) management, having the authority to approve theaction, commits to a plan to sell the asset, (b) the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of suchassets, (c) an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated, (d) the sale of the asset is probable and transferof the asset is expected to qualify for recognition as a completed sale, within one year, (e) the asset is being actively marketed for sale at a price that is reasonable in relation to itscurrent fair value, (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.Long-lived assets classified as held for sale are measured at the lower of their carrying amount or fair value less costs to sell. These vessels are not depreciated once they meet thecriteria to be classified as held for sale. Long-lived assets previously classified as held for sale that are classified as held and used are revalued at the lower of (a) the carrying amount of the asset before it was classified asheld for sale, adjusted for any depreciation expense that would have been recognized had the asset been continuously classified as held and used and (b) the fair value of the assetat the date that the Company decided not to sell the asset.(l)Other Fixed Assets, Net: Other fixed assets, net, consist of furniture, office equipment, and cars, stated at cost, which consists of the purchase/contract price less accumulateddepreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the assets as presented below: Description Useful Life (years) Cars 6 Office equipment 5 Furniture and fittings 5 Computer equipment 3 (m)Accounting for Dry-Docking Costs: All dry-docking and special survey costs are expensed in the period incurred.(n)Financing Costs: Fees incurred and paid to the lenders for obtaining new loans or refinancing existing ones are recorded as a contra to debt and such fees are amortized to interestand finance costs over the life of the related debt using the effective interest method. Unamortized fees relating to loans repaid or refinanced are expensed when a repayment orrefinancing is made and charged to interest and finance costs.F-11Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)(o)Accounting for Revenue and Expenses: Revenues are generated from time charter arrangements. A time charter is a contract for the use of a vessel for a specific period of time anda specified daily charter hire rate, which is generally payable monthly in advance. Time charter revenue is only recognized when an agreement exists, the price is fixed, service isprovided and the collection of the related revenue is reasonably assured. Revenue is shown net of address commissions, if applicable, payable directly to charterers under therelevant charter agreements. Address commissions represent a common market practice discount (sales incentive) on services rendered by the Company and no identifiable benefitis received in exchange for the consideration provided to the charterer. Commissions on time charter revenues are recognized on a pro rata basis over the duration of the period. The Company based on ASC 842 determined that all time charter-out contracts are considered operating leases and therefore fall under the scope of ASC 842 because: (i) the vesselis an identifiable asset; (ii) the Company as lessor, does not have substantive substitution rights; and (iii) the charterer, as lessee, has the right to control the use of the vesselduring the term of the contract and derives the economic benefits from such use. Time charter revenue is recognized as earned on a straight-line basis over the term of the relevant time charter starting from the vessel’s delivery to the charterer, except for any off-hire period. Revenue generated from variable lease payments is recognized in the period when changes in the facts and circumstances on which the variable lease payments arebased occur. The Company elected to not separate the lease and non-lease components included in the time charter revenue because (i) the pattern of revenue recognition for thelease and non-lease components (included in the daily hire rate) is the same and (ii) the lease component would be classified as an operating lease. The daily hire rate represents thehire rate for a bare boat charter as well as the compensation for expenses incurred running the vessel such as crewing expense, repairs, insurance, maintenance and lubes. Both thelease and non-lease components are earned by passage of time. Under a time charter agreement, vessel operating expenses such as management fees, crew wages, provisions andstores, technical maintenance and insurance expenses and broker’s commissions are paid by the vessel owner, whereas voyage expenses such as bunkers, port expenses, agents’fees, and extra war risk insurance are paid by the charterer. Vessel operating expenses are expensed as incurred. Unearned revenue represents cash received prior to year-end relatedto revenue applicable to periods after December 31 of each year. When vessels are acquired with time charters attached and the rates on such charters are below or above market on the acquisition date, the Company allocates the total costbetween the vessel and the fair value of the attached time charter based on the relative fair values of the vessel and time charter acquired. The fair value of the attached time charteris computed as the present value of the difference between the contractual amount to be received over the term of the time charter and management’s estimates of the market timecharter rate at the time of acquisition. The fair value of below or above market time charter is recognized as a liability or an intangible asset respectively and is amortized over theremaining period of the time charter as an increase or decrease to revenues. Where the time charter contains a profit or loss sharing arrangement, the profit or loss is recognized based on amounts earned or incurred as of the reporting date. The Company pays commissions to ship brokers and to the Company’s fleet manager (Note 5), a related party affiliated with the family of Mr. Evangelos J. Pistiolis, associated witharranging the Company’s charters. These brokers’ commissions are recognized over the related charter period and are included in voyage expenses. (p)Earnings / (Loss) per Share: Basic earnings/(loss) per share are computed by dividing net income or loss available to common stockholders by the weighted average number ofcommon shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock wereexercised. For purposes of calculating diluted earnings per share the denominator of the diluted earnings per share calculation includes the incremental shares assumed issued underthe treasury stock method weighted for the period the non-vested shares were outstanding. The computation of diluted earnings per share also reflects the potential dilution thatcould occur if warrants to issue common stock were exercised, to the extent that they are dilutive, using the treasury stock method, the potential dilution that could occur ifconvertible preferred stock were converted, using the if-converted method as well as the potential dilution that could occur if the Company completed all sales pursuant to commonstock purchase agreements, using the if-converted method. Finally net income or loss available to common stockholders, when computing basic earnings/(loss) per share, is reducedto reflect any deemed dividends on convertible preferred stock, weighted for the period the convertible preferred shares were outstanding. F-12Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)(q)Derivatives and Hedging, Hedge Accounting: The Company records every derivative instrument (including certain derivative instruments embedded in other contracts) on thebalance sheet as either an asset or liability measured at its fair value, with changes in the derivatives’ fair value recognized in earnings unless specific hedge accounting criteria aremet. At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and therisk management objective and strategy undertaken for the hedge. The documentation includes identification of the hedging instrument, hedged item or transaction, the nature ofthe risk being hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting exposure to changes in the hedged item’s cash flows attributable to thehedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in cash flows and are assessed on an ongoing basis to determine whether they actuallyhave been highly effective throughout the financial reporting periods for which they were designated. Contracts which meet the criteria for hedge accounting are accounted for ascash flow hedges. A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognized asset or liability, or ahighly probable forecasted transaction that could affect profit or loss. The effective portion of the gain or loss on the hedging instrument is recognized directly as a component of“Accumulated other comprehensive income” in equity, while the ineffective portion, if any, is recognized immediately in current period earnings. The Company discontinues cashflow hedge accounting if the hedging instrument expires and it no longer meets the criteria for hedge accounting or designation is revoked by the Company. At that time, anycumulative gain or loss on the hedging instrument recognized in equity is kept in equity until the forecasted transaction occurs. When the forecasted transaction occurs, anycumulative gain or loss on the hedging instrument is recognized in the statement of income. If a hedged transaction is no longer expected to occur, the net cumulative gain or lossrecognized in equity is transferred to net profit or loss for the year as a component of “Gain/(Loss) on derivatives”.(r)Financial liabilities: Financial liabilities are classified as either financial liabilities at ‘fair value through the profit and loss’ (“FVTPL”) or ‘other financial liabilities’. Financialinstruments classified as FVTPL are recognized at fair value in the balance sheet when the Company has an obligation to perform under the contractual provisions of thoseinstruments. Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Changes in the fair value of financialinstruments are recognized in earnings, except in the cases where these financial instruments fall under the guidance in ASC 815-40, where they are initially classified in equity andare initially measured at fair value in permanent equity and subsequent changes in fair value are not subsequently measured. Other financial liabilities (including borrowings andtrade and other payables) are subsequently measured at amortized cost using the effective interest rate method. (s)Segment Reporting: The Chief Operating Decision Maker (“CODM”), Mr. Evangelos J. Pistiolis, receives financial information and evaluates the Company’s operations by charterrevenues and not by the length, type of vessel or type of ship employment for its customers or by geographical region as the charterer is free to trade the vessel worldwide and as aresult, the disclosure of geographic information is impracticable. The CODM does not use discrete financial information to evaluate the operating results for each such type ofcharter or vessel. Although revenue can be identified for these types of charters or vessels, management cannot and does not identify expenses, profitability or other financialinformation for these various types of charters or vessels. As a result, management, including the CODM, reviews operating results solely by revenue per day and operating resultsof the fleet, and thus the Company has determined that it operates as one reportable segment. F-13Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)(t)Leases:●Sale-leaseback transactions: In accordance with ASC 842, the Company, as seller-lessee, determines whether the transfer of an asset should be accounted for as a sale inaccordance with ASC 606 (existence of a contract and satisfaction of performance obligation by transferring of the control of the asset). The existence of an option for theseller-lessee to repurchase the asset precludes the accounting for the transfer of the asset as a sale unless both of the following criteria are met: (1) the exercise price of theoption is the fair value of the asset at the time the option is exercised; and (2) there are alternative assets, substantially the same as the transferred asset, readily available in themarketplace. If the transfer of the asset meets the criteria of sale, the Company, as seller-lessee recognizes the transaction price for the sale when the buyer-lessor obtainscontrol of the asset, derecognizes the carrying amount of the underlying asset and accounts for the lease in accordance with ASC 842. If the transfer does not meet the criteriaof sale, the Company does not derecognize the transferred asset, accounts for any amounts received as a financing arrangement and recognizes the difference between theamount of consideration received and the amount of consideration to be paid as interest.●Finance lease: The Company classifies a lease as a finance lease when the lease meets any of the following criteria at lease commencement:i.The lease transfers ownership of the underlying asset to the lessee by the end of the lease term.ii.The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise.iii.The lease term is for the major part of the remaining economic life of the underlying asset. However, if the commencement date falls at or near the end of the economic life ofthe underlying asset, this criterion shall not be used for purposes of classifying the lease.iv.The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceedssubstantially all of the fair value of the underlying asset.v.The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.When none of these criteria are met the Company classifies the lease as an operating lease. ●Operating lease- The Company as a lessee: The Company recognizes right-of-use assets (“ROU”) and corresponding lease liabilities for its operating leases. ROU assets andliabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term. The operating lease ROU asset alsoincludes any lease payments made to the lessor prior to lease commencement, less any lease incentives, and initial direct costs incurred. Lease expense for operating leasepayments is recognized on a straight-line basis over the lease term. (u)Beneficial conversion feature: A beneficial conversion feature is defined as a non-detachable conversion feature that is in the money at the commitment date. The beneficialconversion feature guidance requires recognition of the intrinsic value of the option, which is the in-the- money portion of the conversion option, in equity, with an offsettingreduction to the carrying amount of the instrument. The resulting discount is amortized as a deemed dividend over either the life of the instrument, if a stated maturity date exists, orto the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the dividend must be recognized at inception. Whenthere is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversionfeature on occurrence.(v)Investments in unconsolidated joint ventures: The Company’s investments in unconsolidated joint ventures are accounted for using the equity method of accounting. Under theequity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company’s proportionate share of earnings orlosses and distributions. The Company evaluates its investments in unconsolidated joint ventures for impairment when events or circumstances indicate that the carrying value ofsuch investments may have experienced other than temporary decline in value below their carrying value. If the estimated fair value is less than the carrying value and is consideredother than a temporary decline, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the Consolidated Statements ofcomprehensive (loss)/income.F-14Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)(w)Other Comprehensive Income: The Company follows the provisions of guidance regarding reporting comprehensive income which requires separate presentation of certaintransactions, such as unrealized gains and losses from effective portion of cash flow hedges, which are recorded directly as components of stockholders’ equity(x)Impairment of Right of use assets from operating leases: The Company evaluates its Right of use assets from operating leases for potential impairment when it determines atriggering event has occurred. When a triggering event has occurred, the Company performs a test of recoverability by comparing the expected undiscounted future cash flows(including expected residual values) over the remaining lease terms to the carrying value of the Right of use asset. If the test of recoverability identifies a possible impairment, theRight of use asset’s fair value is measured in accordance with the fair value measurement framework. An impairment charge is recognized for the amount by which the carrying valueof the Right of use asset exceeds its estimated fair value and would be recorded in the Consolidated Statements of comprehensive (loss)/income. For the years ended December 31,2020, 2021, and 2022 there was no impairment in the Company’s Right of use assets from operating leases.(y)Recent Accounting Pronouncements: In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50),Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU reduces diversity in an issuer’saccounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange.This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. It specificallyaddresses: (1) how an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classifiedafter modification or exchange; (2) how an entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equityclassified after modification or exchange; and (3) how an entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call optionthat remains equity classified after modification or exchange. This ASU will be effective for all entities for fiscal years beginning after December 15, 2021. An entity should apply theamendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. Early adoption is permitted, including adoption in an interimperiod. The Company adopted ASU 2021-04 as of January 1, 2022, and adoption did not have a material impact on the Company’s financial statements or disclosures. On January 1, 2022 the Company adopted ASU 2020-06 and used the modified retrospective approach for all convertible debt instruments at the beginning of the period of adoption.The adoption of ASU 2020-06 at January 1, 2022 had no effect in the Company’s consolidated financial statements for the year ended December 31, 2022. 3.Going Concern: At December 31, 2022, the Company had a working capital deficit of $9,343 and for the year ended December 31, 2022 realized a net income of $18,948 and generated cash flow fromoperations of $33,419.In the Company’s opinion, the Company will be able to finance its working capital deficit in the next 12 months with cash on hand and operational cash flow and hence the Companybelieves it has the ability to continue as a going concern and finance its obligations as they come due via cash from operations over the next twelve months following the date of theissuance of these financial statements. Consequently, the consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assetsand satisfaction of liabilities in the normal course of business. F-15Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)4(a)Advances for vessels acquisitions / under construction:An analysis of Advances for vessels acquisitions / under construction is as follows: Advances for vesselsacquisitions /under construction Balance, December 31, 2020 31,654 — Advances paid 119,656 — Capitalized expenses 5,915 — Transferred to Vessels, net (126,646)Balance, December 31, 2021 30,579 — Advances paid 213,429 — Capitalized expenses 1,755 — Transferred to Vessels, net (245,763)Balance, December 31, 2022 - 4(b)Vessels, net: The amounts in the consolidated balance sheets are analyzed as follows: Vessel Cost AccumulatedDepreciation Net Book Value Balance, December 31, 2020 146,345 (10,053) 136,292 — Transferred from advances for vessels under construction 126,646 - 126,646 — Transferred to Assets held for sale (76,959) 5,323 (71,636)— Disposals (see Note 19) (32,531) 5,484 (27,047)— Depreciation - (7,670) (7,670)Balance, December 31, 2021 163,501 (6,916) 156,585 — Transferred from advances for vessels under construction 245,763 - 245,763 — Depreciation - (13,289) (13,289)Balance, December 31, 2022 409,264 (20,205) 389,059 In 2021 and 2022 the Company took delivery of the following vessels and hence advances paid and capitalized expenses relating to these vessels were transferred from Advances forvessels under construction to Vessels, net: Vessel NameDelivery Date YardInstallments CapitalizedExpenses Final Cost M/T Eco West CoastMarch 26, 2021 61,723 1,618 63,341 M/T Eco MalibuMay 11, 2021 61,722 1,583 63,305 Total 2021 123,445 3,201 126,646 M/T Julius CaesarJanuary 17, 2022 90,008 2,056 92,064 M/T Legio X EquestrisMarch 2, 2022 89,995 2,138 92,133 M/T Eco Oceano Ca.March 4, 2022 60,250 1,316 61,566 Total 2022 240,253 5,510 245,763 F-16Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)As of December 31, 2022 title of ownership is held by the relevant lenders in respect of vessels with a carrying value of $270,029 to secure the relevant sale and lease back financingtransactions and in the case of vessels financed via bank loans vessels with a carrying value of $119,030 have been mortgaged as security under their respective loan facilities (see Note7). 4(c)Vessels held for sale: As of December 31, 2021, the M/T’s Eco Los Angeles and Eco City of Angels met the criteria to be classified as assets held for sale according to guidance in ASC 360. Consequently, theCompany has treated the vessels as vessels held for sale. Since their fair value less costs to sell were higher than their carrying amount the Company did not incur any impairmentcharges. As of December 31, 2021, each of the M/T’s Eco Los Angeles and Eco City of Angels carrying amount is $35,818. The vessels were sold on February 28 and March 15, 2022 tounaffiliated third parties. 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 partyaffiliated with the family of Mr. Evangelos J. Pistiolis, pursuant to which Central Mare provides the Company with its executive officers (Chief Executive Officer, Chief Financial Officer,Chief Technical Officer and Chief Operating Officer).As of December 31, 2021 and 2022 the amounts due to Central Mare were $32 and $0 respectively and are presented in Due to related parties, on the consolidated balance sheets.The fees charged by and expenses relating to Central Mare for the years ended December 31, 2020, 2021 and 2022 are as follows: Year Ended December 31, 2020 2021 2022 Presented in:Executive officers and other personnel expenses 360 360 360 General and administrative expenses – Statement ofcomprehensive (loss)/incomeAmortization of awarded shares* (34) (34) (16)Management fees – related parties – Statement ofcomprehensive (loss)/incomeTotal 326 326 344 *As per the Company’s equity incentive plan, or the 2015 plan (null and void since due to the reverse stock splits of the Company’s stock the shares left to be vested are zero), theCompany incurred an amortization gain of $34, $34 and $16 relating to the amortization of the original fair value of the equity incentive plan recognized at inception, for each of theyears ended December 31, 2020, 2021 and 2022 respectively. The Company’s equity incentive plan ended on June 30, 2022.(b) Central Shipping Inc (“CSI”) – Letter Agreement and Management Agreements: On January 1, 2019, the Company entered into a letter agreement with CSI (“CSI LetterAgreement”), a related party affiliated with the family of Evangelos J. Pistiolis and between January 1, 2019 and September 8, 2021 the Company entered into management agreements, orManagement Agreements, between CSI and the Company’s vessel-owning subsidiaries. The CSI Letter Agreement can only be terminated subject to an eighteen-month advance notice,subject to a termination fee equal to twelve months of fees payable under the CSI Letter Agreement.Pursuant to the CSI Letter Agreement, as well as the Management Agreements concluded between CSI and the Company’s vessel-owning subsidiaries, the Company pays amanagement fee of $600 per day per vessel for the provision of technical, commercial, operation, insurance, bunkering and crew management, commencing three months before thevessel is scheduled to be delivered by the shipyard. In addition, the Management Agreements provide for payment to CSI of: (i) $546 per day for superintendent visits plus actualexpenses; (ii) a chartering commission of 1.25% on all freight, hire and demurrage revenues; (iii) a commission of 1.00% on all gross vessel sale proceeds or the purchase price paid forvessels and (iv) a financing fee of 0.2% on derivative agreements and loan financing or refinancing. CSI also performs supervision services for all of the Company’s newbuilding vesselswhile the vessels are under construction, for which the Company pays CSI the actual cost of the supervision services plus a fee of 7% of such supervision services.F-17Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)CSI provides, at cost, all accounting, reporting and administrative services. Finally, the CSI Letter Agreement provides for a performance incentive fee for the provision of managementservices to be determined at the discretion of the Company’s Board of Directors. The management agreements have an initial term of five years, after which they will continue to be ineffect until terminated by either party subject to an eighteen-month advance notice of termination. Pursuant to the terms of the management agreements, all fees payable to CSI areadjusted annually according to the US Consumer Price Inflation (“CPI”) of the previous year and if CPI is less than 2% then a 2% increase is effected. On September 15, 2021 theCompany entered into an amendment to the CSI Letter Agreement, whereby the payment for the already agreed commission for sale and purchase of vessels in the case of the purchaseof a vessel under construction is denoted as “Newbuilding vessels monitoring fee” and is payable as follows: 25% of the commission on the purchase of the newbuilding constructioncontract, 25% of the commission on the steel cutting of the newbuilding vessel, 25% of the commission on launching of the newbuilding vessel and 25% of the commission on thedelivery of the newbuilding vessel to the Company (“steel cutting” and “launching” are newbuilding vessel construction milestones, evidenced by notices received by the shipyard).As of December 31, 2021 and 2022, the amounts due to CSI were $1,193 and $237 respectively and are presented in Due to related parties, on the consolidated balance sheets.The fees charged by and expenses relating to CSI for the years ended December 31, 2020, 2021 and 2022 are as follows: Year EndedDecember 31, 2020 2021 2022 Presented in:Management fees 69 199 61 Capitalized in Vessels, net / Advances for vessels acquisitions / underconstruction –Balance sheet 1,953 1,477 1,749 Management fees – related parties –Statement of comprehensive (loss)/ incomeSupervision services fees 63 79 14 Capitalized in Vessels, net / Advances for vessels acquisitions / underconstruction –Balance sheetSuperintendent fees 60 17 37 Vessel operating expenses –Statement of comprehensive (loss)/income 198 255 129 Capitalized in Vessels, net / Advances for vessels acquisitions / underconstruction –Balance sheetAccounting and reporting cost 330 360 360 Management fees – related parties –Statement of comprehensive (loss)/ incomeCommission for sale and purchase ofvessels 3,377 793 Management fees – related parties –Statement of comprehensive (loss)/ income 3,971 - 730 Loss/(Gain) from vessel sales –Statement of comprehensive (loss)/income 454 - Capitalized in Investments in unconsolidated joint ventures –Balance sheet 1,017 - Capitalized in Right of use assets from operating leases – Balance Sheet - 264 Impairment on vessels – Statement of comprehensive (loss)/incomeNewbuilding vessels monitoring fee - 1,365 455 Capitalized in Vessels, net / Advances for vessels acquisitions / underconstruction –Balance sheetFinancing fees - 150 312 Net in Current and Non-current portions of long-term debt – Balance sheetCommission on charter hireagreements 761 705 1,008 Voyage expenses - Statement of comprehensive (loss)/incomeTotal 12,253 5,664 4,855 For the years ended December 31, 2020, 2021 and 2022 CSI charged the Company newbuilding supervision related pass-through costs amounting to $967, $1,207 and $236 respectively,which are not included in the table above and are presented within Vessels, net / Advances for vessels acquisitions / under construction in the Company’s consolidated balance sheet. F-18Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)(c) Issuance of Series E Shares: On March 29, 2019 the Company entered into a stock purchase agreement with Family Trading Inc (“Family Trading”), a related party owned by the LaxTrust, an irrevocable trust established for the benefit of certain family members of Mr. Evangelos J. Pistiolis, pursuant to which the Company exchanged the outstanding principal, feesand interest of the Further Amended Family Trading Credit Facility with 27,129 Series E Shares (defined below, also see Note 16). For the year ended December 31, 2021 and 2022 theCompany declared dividends of $1,883 and $2,046 respectively and accrued interest on unpaid dividends amounted to $0 and $30 for the same periods. As of December 31, 2021 and2022, dividends due to Family Trading were $968 and $0 and are presented in Due to related parties, on the consolidated balance sheets.(d) Vessel Acquisitions from affiliated entities: From February 20, 2020 to September 8, 2021 the Company entered into a series of transactions with a number of entities affiliated withMr. Evangelos J. Pistiolis (see Notes 1 and 5). As of December 31, 2021 and 2022, the Company owes $27,562 and $0 respectively to the previous owners of the newbuilding vesselspresented in Due to related parties in the consolidated balance sheets. (e) Charter Party with Central Tankers Chartering Inc (“Central Tankers Chartering”): As part of the MR Transaction (see Note 1) Central Tankers Chartering was the charterer ofthe vessels M/T Eco Van Nuys, M/T Eco Santa Monica and M/T Eco Venice Beach. The time charters were for a firm period of five years at a daily rate of $16,200 with two optional yearsat daily rates of $17,200 and $18,200 at Central Tankers Chartering’s option and would have commenced upon each vessel’s delivery from the shipyard in the first quarter of 2021. Thevessels M/T Eco Van Nuys, M/T Eco Santa Monica and M/T Eco Venice Beach were exchanged as part of the VLCC Transaction on January 6, 2021 (see Note 1). On January 6, 2021 theCompany acquired a shipowning company from an entity affiliated with Mr. Evangelos J. Pistiolis that owned M/T Eco Oceano Ca which was party to a time charter, with CTC, for a firmduration of five years at a gross daily rate of $32,450, with two optional years at $33,950 and $35,450 at CTC’s option. On February 22, 2022 the Company amended the previously agreedtime charter with CTC and increased its firm period from 5 years to 15 years and reduced the daily rate from $32,450 to $24,500. This amendment was approved by a committee of theCompany’s board of directors, of which all of the directors were independent, after obtaining a fairness opinion from an independent financial advisor. The time charter commenced onthe date of delivery. For the year ended December 31, 2022 the CTC charter generated $7,294 of revenue presented in Time charter revenues in the accompanying consolidated statementsof comprehensive (loss)/income. As of December 31, 2021 and 2022, there are no amounts due to Central Tankers Chartering. (f) Personal Guarantees by Mr. Evangelos J. Pistiolis and Related Amendments to the Series D Preferred Shares: As a prerequisite for the Navigare Lease (defined below, see Note 6),Mr. Evangelos J. Pistiolis personally guaranteed the performance of the bareboat charters connected to the lease and in exchange, the Company agreed to indemnify him for any lossessuffered as a result of the guarantee provided, and the Company amended the Certificate of Designations governing the terms of the Series D Preferred Shares (see Note 7), to adjust thevoting rights per share of Series D Preferred Shares such that during the term of the Navigare Lease, the combined voting power controlled by Mr. Evangelos J. Pistiolis and the LaxTrust does not fall below a majority of the Company’s total voting power, irrespective of any new common or preferred stock issuances, and thereby complying with a relevant covenantof the bareboat charters entered in connection with the Navigare Lease. This personal guarantee comes into effect in the case 120 days have passed and the Company is still unable topay down all amounts due under the Navigare lease, with the exception of amounts due to Navigare due to a total loss, where in this case the personal guarantee will cover an amountequal to all unpaid charter hire and a further amount equivalent to all future charter hire that would have accrued from the date of the total loss up to the end of the charter period and iscallable 200 days after the date of the total loss. Due to the related party nature of the transactions involving Mr. Evangelos J. Pistiolis, such transactions were unanimously approved byour Board of Directors, including all three independent directors.(g) Issuance of Series F Shares: On January 17, 2022, the Company entered into a stock purchase agreement with Africanus Inc., an affiliate of Evangelos J. Pistiolis for the sale of up to7,560,759 newly-issued Series F Non-Convertible Perpetual Preferred Shares (“Series F Shares”, see Note 16). The issuance of the Series F Shares was approved by a committee of theCompany’s board of directors, of which all of the directors were independent. In December 2022, 100% of Africanus Inc shares were transferred to Three Sororibus Trust of Cyprus,which is an irrevocable trust established for the benefit of certain family members of Mr. Pistiolis. For the year ended December 31, 2022 the Company declared dividends of $10,344 andaccrued interest on unpaid dividends amounted to $8 for the same period. As of December 31, 2022 there are no dividends due to Africanus Inc.F-19Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)(h) Short term loan from Central Mare (“Central Mare Bridge Loan”): On January 5, 2022 the Company entered into an unsecured credit facility for up to $20,000 with Central Mare inorder to finance part of the cost of its newbuilding program (see Note 7). Related party interest expense, commitment fees and arrangement fees for the year ended December 31, 2022incurred in connection with this credit facility, amounted to $169, $18 and $400 respectively and are included in interest and finance costs in the accompanying consolidated statementsof comprehensive (loss)/income. The Central Mare Bridge Loan was terminated on March 4, 2022 and as of December 31, 2022, there are no interest, arrangement fees nor commitmentfees due to Central Mare. 6.LeasesA. Lease arrangements, under which the Company acts as the lessee Bareboat Chartered-in Vessels: On December 1 and December 10, 2020, the Company sold and leased back M/T Eco Beverly Hills and M/T Eco Bel Air respectively to a third non-affiliated party (the “Navigare Lease”).Each vessel was chartered back on a bareboat basis for five years at a bareboat hire of $16,750 per day for the first two years, $14,000 per day for the next two years and $10,000 per dayfor the fifth year. The Company does not have any option nor obligation to buy back the vessels. The abovementioned sale and leaseback transactions contain, customary covenantsand event of default clauses, including cross-default provisions, change of control provisions (whereby Mr. Evangelos J. Pistiolis may not control less than 50.1% of the voting rights ofthe Company) and restrictive covenants and performance requirements. The Company must maintain a minimum liquidity of $4,000 at all times which is certified bi-annually. As ofDecember 31, 2022, the Company complied with all covenants of the Navigare Lease. The Company has treated the Navigare lease as an operating lease. An operating lease ROU asset amounting to $45,765 was recognized at the inception of the lease together with a leaseliability of $43,759 based on the present value of lease payments over the lease term. The operating lease ROU asset also includes initial direct costs of $1,666 and deferred losses fromthe sale of the vessels of $340. The discount rate used to calculate the present value of lease payments was calculated by taking into account the original lease term and lease paymentsand was estimated to be 6.72% (same as the weighted average), which was the Company’s estimated incremental borrowing rate, that reflects the interest the Company would have topay to borrow funds on a collateralized basis over a similar term and similar economic environment. Losses from the sale of these two vessels and initial direct costs which were includedin the respective ROU assets are amortized on a straight-line basis over the duration of the lease and are included in operating lease expense in the statement of consolidated(loss)/income. The cash paid for operating leases with original terms greater than 12 months was $12,228 and $12,083 for the years ended December 31, 2021 and 2022 respectively. Therevenue generated from vessels under operating leases with original terms greater than 12 months was $17,887 and $ 17,625 for the years ended December 31, 2021 and 2022 respectively. The Company’s future minimum operating lease payments required to be made after December 31, 2022, relating to the bareboat chartered-in vessels M/T Eco Beverly Hills and M/T EcoBel Air are as follows: Year ending December 31, Bareboat charterlease payments 2023 10,220 2024 10,038 2025 6,777 Total 27,035 Less imputed interest (3,087)Total Lease Liability 23,948 Presented as follows: Short-term lease liability 8,610 Long-term lease liability 15,338 The average remaining lease term on our chartered-in contracts greater than 12 months is 35.2 months. F-20Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)At the lease’s inception, the carrying amounts of the M/T Eco Beverly Hills and M/T Eco Bel Air were less than the vessels fair value, as this was determined by a third party brokervaluation. Hence in accordance with ASC 842-40-30-1 that stipulates that sale-and-leaseback transactions are accounted for at fair value, the Company recognized a loss on the sale andleaseback transactions of $10,688 included in Loss/(Gain) on sale of vessels in the Company’s consolidated statements of comprehensive (loss) / income. B. Lease arrangements, under which the Company acts as the lessor Charter agreements: During the year ended December 31, 2022, the Company operated one vessel (M/T Marina Del Ray) under a time charter with Cargill International SA, another vessel (M/T Eco OceanoCa) with Central Tankers Chartering Inc, two vessels (M/T Eco West Coast and M/T Eco Malibu) with Clearlake Shipping Pte Ltd and four vessels (M/T Eco Bel Air, M/T Eco BeverlyHills, M/T Julius Caesar and M/T Legio X Equestris) under time charters with Trafigura Maritime Logistics Pte Ltd (“Trafigura”). Future minimum time-charter receipts of the Company’s vessels in operation as of December 31, 2022, based on commitments relating to non-cancellable time charter contracts as ofDecember 31, 2022, are as follows :Year ending December 31, Time Charterreceipts 2023 81,772 2024 50,429 2025 19,362 2026 16,425 2027and thereafter 91,180 Total 259,168 In arriving at the minimum future charter revenues, an estimated 20 days off-hire time to perform scheduled dry-docking in the year the dry-docking is expected on each vessel has beendeducted, and it has been assumed that no additional off-hire time is incurred, although there is no assurance that such estimate will be reflective of the actual off-hire in the future. 7.Debt:The amounts in the consolidated balance sheets are analyzed as follows (facility names defined below): Bank / Vessel(s) December 31, 2021 2022 Total long term debt: 2nd ABN Facility (M/T Eco West Coast) 34,955 32,495 2nd Alpha Bank Facility (M/T Eco Malibu) 36,500 33,500 Cargill Facility (M/T Eco Marina Del Ray) 27,195 25,189 2nd CMBFL Facility (M/T Julius Caesar and M/T Legio X Equestris) - 103,952 2nd AVIC Facility (M/T Eco Oceano Ca) - 45,489 Total long term debt 98,650 240,625 Less: Deferred finance fees (1,282) (3,640)Less: Debt discount relating to Vessel fair value participation liability - (3,271)Total long term debt net of deferred finance fees 97,368 233,714 Presented: Current portion of long term debt 7,205 12,344 Long term debt 90,163 221,370 Debt related to Vessels held for sale: AVIC Facility (M/T Eco Los Angeles and M/T Eco City of Angels) 54,665 - Less: Deferred finance fees (1,463) - Debt related to Vessels held for sale net of deferred finance fees 53,202 - Total Debt net of deferred finance fees 150,570 233,714 F-21Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)2nd ABN Facility On March 18, 2021, the Company entered into a credit facility with ABN Amro for $36,800 for the financing of the vessel M/T Eco West Coast (Hull No 865). This facility was drawndown in full. The credit facility is repayable in 24 consecutive quarterly installments of $615 commencing in June 2021, plus a balloon installment of $22,040 payable together with the lastinstallment. The facility contains various covenants, including (i) an asset cover ratio of 125%, (ii) a ratio of total net debt to the aggregate market value of the Company’s fleet, current or future, ofno more than 75% (iii) minimum free liquidity of $500 per delivered vessel owned/operated by the Company and (iv) market adjusted total assets of the Company minus total liabilities tobe at least $60,000. Additionally, the facility contains restrictions on the shipowning company incurring further indebtedness or guarantees and change of control provisions (wherebyMr. Evangelos J. Pistiolis may not control less than 50.1% of the voting rights of the Company). It also restricts the shipowning company from paying dividends if such a payment willresult in an event of default or in a breach of covenants under the loan agreement. The facility is secured as follows: ●First priority mortgage over M/T Eco West Coast;●Assignment of insurance and earnings of the mortgaged vessel;●Specific assignment of any time charters with duration of more than 12 months;●Corporate guarantee of the Company;●Pledge of the shares of the shipowning subsidiary;●Pledge over the earnings account of the vessel. The facility bears interest at LIBOR plus a margin of 2.50%. The applicable LIBOR as of December 31, 2022 was approximately 4.73%. 2nd Alpha Bank Facility On May 6, 2021, the Company entered into a credit facility with Alpha Bank for $38,000 for the financing of the vessel M/T Eco Malibu (Hull No 866). This facility was drawn down in full.The credit facility is repayable in 12 consecutive quarterly installments of $750 and 12 consecutive quarterly installments of $625, commencing three months from draw down, and aballoon payment of $21,500 payable together with the last installment. The facility contains various covenants, including (i) an asset cover ratio of 125%, (ii) a ratio of total net debt to the aggregate market value of the Company’s fleet, current or future, ofno more than 75% and minimum free liquidity of $500 per delivered vessel owned/operated by the Company. Additionally, the facility contains restrictions on the shipowning companyincurring further indebtedness or guarantees and change of control provisions (whereby Mr. Evangelos J. Pistiolis may not control less than 50.1% of the voting rights of the Company).It also restricts the shipowning company from paying dividends if such a payment will result in an event of default or in a breach of covenants under the loan agreement. The facility is secured as follows: ●First priority mortgage over M/T Eco Malibu;●Assignment of insurance and earnings of the mortgaged vessel;●Specific assignment of any time charters with duration of more than 12 months;●Corporate guarantee of the Company;●Pledge of the shares of the shipowning subsidiary;●Pledge over the earnings account of the vessel. The facility bears interest at LIBOR plus a margin of 3.00%. The applicable LIBOR as of December 31, 2022 was approximately 4.22%. F-22Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)FINANCINGS COMMITTED UNDER SALE AND LEASEBACK AGREEMENTS The majority of the below sale and leaseback agreements (“SLB”s) contain, customary covenants and event of default clauses, including cross-default provisions and restrictivecovenants and performance requirements including (i) a ratio of total net debt to the aggregate market value of the Company’s fleet, current or future, of no more than 75% and (ii)minimum free liquidity of $500 per vessel at the guarantors level. Additionally, all the SLBs contain restrictions on the relative shipowning company incurring further indebtedness or guarantees and paying dividends, if such dividend payment wouldresult in an event of default or termination event under the SLB agreements. All the below SLBs are secured mainly by the following: ●Ownership of the vessel financed;●Assignment of insurances and earnings of the vessel financed;●Specific assignment of any time charters of the vessel financed with duration of more than 12 months;●Corporate guarantee of Top Ships Inc.;●Pledge of the shares of the relative shipowning subsidiary;●Pledge over the earnings account of the vessel financed.Cargill Facility On June 29, 2018 the Company entered into a sale and leaseback agreement (“SLB”) and a five-year time charter with Cargill, a non-affiliated party, for its newbuilding vessel M/T EcoMarina Del Ray (Hull No 8242) delivered in March 2019. Consummation of the SLB took place on the vessel’s delivery date. Following the sale, the Company has bareboat chartered backthe vessel at a bareboat hire rate of $8,600 per day and simultaneously the vessel commenced its five-year time charter with Cargill. As part of this transaction, the Company has theobligation to buy back the vessel at the end of the five-year period for $22,680. The gross proceeds from the sale were $32,387. The Company had also entered into a fair value appreciation sharing agreement with Cargill whereby it would share with the latter 25% of the excess of the fair market value of the vesselover a predetermined amount amortized on a daily basis to the facility’s maturity when the vessel was sold or when the loan matured. As a result of Cargill’s entitlement to participate inthe appreciation of the market value of the vessel and the significant increase in tankers’ fair values as of December 31, 2022 compared to December 31, 2021, the Company recognized aparticipation liability of $0 and $3,271 as of December 31, 2021 and 2022 respectively, presented in “Vessel fair value participation liability” in the consolidated balance sheets, with acorresponding debit to a debt discount account, presented contra to the loan balance, broken down to current and non-current long-term debt accordingly.The SLB with Cargill is accounted for as a financing transaction, as control remains with the Company and the M/T Eco Marina Del Ray will continue to be recorded as an asset on theCompany’s balance sheet. In addition, the Company has an obligation to repurchase the vessel. Avic International Leasing Co., Ltd (“AVIC”) Facility On September 30, 2019 the owning companies of the M/T Eco Los Angeles and M/T Eco City of Angels entered into an SLB with AVIC, a non-affiliated party, for their newbuildingvessels M/T Eco Los Angeles and M/T Eco City of Angels. Consummation of the SLB and drawdown of funds took place on the vessel’s delivery dates from the shipyard, namely onFebruary 10 and February 17, 2020 respectively. Following the sale, the Company bareboat chartered back the vessels for a period of ten years at a bareboat hire rate of $9,435 for the first5 years and $9,090 for the next 5 years per day per vessel, with a balloon installment of $11,288 for each vessel on the final charter hire date. As part of this transaction, the Company hadcontinuous options, after the second year, to buy back the vessels at purchase prices stipulated in the bareboat agreement depending on when the option was exercised and at the endof the ten year period it had an obligation to buy back the vessels at a cost represented by the balloon payment. The gross proceeds from the sale amounted to $60,200 for both vessels. F-23Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)The SLB with AVIC contained a covenant requiring that there is no change of control of the Company, save with the prior written consent of AVIC. The SLB with AVIC was accounted for as a financing transaction, as control would remain with the Company and the vessels would continue to be recorded as assets on the Company’sbalance sheet. In addition, the Company had the obligation to repurchase the vessels. On December 31, 2021 the Company classified the M/T Eco Los Angeles and M/T Eco City of Angels as Vessels held for sale (see Note 4c). Hence, the AVIC facility was also classifiedas short term in a separate balance sheet line from the other non-current portion of debt in the consolidated balance sheets. On February 28 and March 15, 2022, the company exercised its purchase option on the M/T Eco Los Angeles and M/T Eco City of Angels respectively and purchased the vessels for$27,197 and $27,163 respectively. The vessels were sold on the same dates to unaffiliated third parties. 2nd CMBFL Facility On November 23, 2021 the Company entered into an SLB with CMBFL, for its newbuilding vessels M/T Julius Caesar (Hull No. 3213) and M/T Legio X Equestris (Hull No. 3214).Consummation of the SLB took place on January 17 and March 2 2022, respectively. Following the sale, the Company has bareboat chartered back the vessels for a period of eight yearsat bareboat hire rates comprising of 32 consecutive quarterly installments of $675 and a balloon payment of $32,403 payable together with the last installment, plus interest based on thethree months LIBOR plus 2.60%. As part of this transaction, the Company has continuous options to buy back the vessels at purchase prices stipulated in the bareboat agreements depending on when the option wasexercised and at the end of the eight year period it has an option to buy back the vessels at a cost represented by the balloon payment. The gross proceeds from the sale of the twovessels were $54,005 and $53,997 for M/T Julius Caesar (Hull No. 3213) and M/T Legio X Equestris (Hull No. 3214) respectively. The 2nd CMBFL facility was accounted for as a financing transaction, as control will remain with the Company and the two vessels will continue to be recorded as assets on theCompany’s balance sheet. In addition, the Company has continuous options to repurchase the vessels below fair value.The facility contains customary covenants and event of default clauses, including cross-default provisions and restrictive covenants and performance requirements including, (i) anasset cover ratio of 125%, (ii) a ratio of total net debt to the aggregate market value of the Company’s fleet, current or future, of no more than 75% and (iii) minimum free liquidity of $500per delivered vessel owned/operated by the Company. Additionally, the facility contains restrictions on the shipowning company incurring further indebtedness or guarantees andchange of control provisions whereby there may not be a change of control of the Company, save with the prior written consent of CMBFL. It also restricts the shipowning companyfrom paying dividends if such a payment will result in an event of default or in a breach of covenants under the loan agreement.The facility is secured as follows:•Ownership of M/T’s Julius Caesar and Legio X Equestris;•Assignment of insurance and earnings of M/T’s Julius Caesar and Legio X Equestris;•Specific assignment of any time charters with duration of more than 12 months;•Corporate guarantee of the Company;•Pledge of the shares of the relative shipowning subsidiaries;•Pledge over the earnings account of the vessels.The applicable LIBOR as of December 31, 2022 was approximately 4.08% for the M/T Julius Caesar facility and 4.78% for the M/T Legio X Equestris facility.F-24Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)2nd AVIC Sale and Leaseback FacilityOn March 2, 2022 the Company entered into a sale and leaseback facility (“SLB”) with AVIC (the “2nd AVIC Facility”), for $48,200 for the financing of the M/T Eco Oceano Ca.Consummation of the SLB took place on March 4, 2022. The Company has bareboat chartered back the vessel for a period of ten years at bareboat hire rates comprising of 40consecutive quarterly installments of $678 and a balloon payment of $21,087 payable together with the last installment, plus interest based on LIBOR plus 3.50%.As part of this transaction, the Company has continuous options to buy back the vessel at purchase prices stipulated in the bareboat agreement depending on when the option wasexercised and at the end of the ten year period the Company has an obligation to buy back the vessel at a cost represented by the balloon payment.The 2nd AVIC Facility is accounted for as a financing transaction, as control remains with the Company and M/T Eco Oceano Ca. will continue to be recorded as an asset on theCompany’s balance sheet.The facility contains customary covenants and event of default clauses, including cross-default provisions and restrictive covenants and performance requirements including, (i) anasset cover ratio of 120%, (ii) a ratio of total net debt to the aggregate market value of the Company’s fleet, current or future, of no more than 75% and (iii) minimum free liquidity of $500per delivered vessel owned/operated by the Company. Additionally, the facility contains restrictions on the shipowning company incurring further indebtedness or guarantees andchange of control provisions whereby there may not be a change of control of the Company, save with the prior written consent of AVIC. It also restricts the shipowning company frompaying dividends if such a payment will result in an event of default or in a breach of covenants under the loan agreement.The facility is secured as follows:•Ownership of M/T Eco Oceano Ca.;•Assignment of insurance and earnings of M/T Eco Oceano Ca.;•Specific assignment of any time charters with duration of more than 12 months;•Corporate guarantee of the Company;•Pledge of the shares of the relative shipowning subsidiary;•Pledge over the earnings account of the vessel.The applicable LIBOR as of December 31, 2022 was approximately 4.72%.Central Mare Bridge LoanOn January 5, 2022 the Company entered into an unsecured credit facility for up to $20,000 with Central Mare in order to finance part of the cost of its newbuilding program. The CentralMare Bridge Loan facility was repayable in cash via one single installment at maturity on December 31, 2022. On January 6, 2022 the Company drew down $9,000. The principal terms ofthe loan included an arrangement fee of 2%, fixed interest of 12% per annum and a commitment fee of 1% on the undrawn part of the facility. The facility was prepaid and subsequentlyterminated on March 4, 2022.Scheduled Principal Repayments: The Company’s annual principal payments required to be made after December 31, 2022 on its loan obligations, are as follows (including thefinancings under sale and leaseback agreements): Years December 31, 2023 15,666 December 31, 2024 36,416 December 31, 2025 13,072 December 31, 2026 13,072 December 31, 2027 and thereafter 162,399 Total 240,625 F-25Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)As of December 31, 2022, the Company was in compliance with all debt covenants with respect to its loans and credit facilities. The fair value of debt outstanding on December 31, 2022,after excluding unamortized financing fees and debt discounts, amounted to $238,893 when valuing the Cargill Sale and Leaseback on the basis of the Commercial Interest ReferenceRates (“CIRR”s) as applicable on December 31, 2022, which is considered to be a Level 2 item in accordance with the fair value hierarchy. Financing Costs: The net additions in deferred financing costs amounted to $1,204 and $3,417 during the years ended December 31, 2021 and 2022 respectively.8.Commitments and Contingencies:Legal proceedings:Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. As part of the normalcourse of operations, the Company’s customers may disagree on amounts due to the Company under the provision of the contracts which are normally settled through negotiations withthe customer. Disputed amounts are normally reflected in revenues at such time as the Company reaches agreement with the customer on the amounts due. Other than the cases mentioned above, the Company is not a party to any material litigation where claims or counterclaims have been filed against the Company other than routine legalproceedings incidental to its business. Guarantee on performance of loans of the New 2020 Joint Venture On December 10, 2020, the Company entered into a corporate guarantee agreement with Alpha Bank of Greece (which was amended on February 2, 2022) in respect of the obligations ofits 50% subsidiary California 19 Inc. and California 20 Inc. under the Loan Agreement dated March 12, 2020 for a secured loan facility of $37,660 ($18,830 for each vessel) for the financingof M/T Eco Yosemite Park and M/T Eco Joshua Park (the “Alpha Corporate Guarantee”). The Company assigns zero probability of default to said loan agreements and hence has notestablished any provisions for losses relating to this matter. Environmental Liabilities: The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure.Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the consolidated financialstatements. 9.Common and Preferred Stock, Additional Paid-In Capital and Dividends:Reverse stock split: On September 23, 2022 the Company effected a 1-for-20 reverse stock split of its common stock. There was no change in the number of authorized common shares ofthe Company, or the floor price of the Company’s Series E Shares, or the number of votes of the Company’s Series D, E and F Shares. All numbers of common share and earnings pershare amounts, as well as warrant shares eligible for purchase under the Company’s warrants, exercise price of said warrants and conversion prices of the Company’s Series E Shares, inthese consolidated financial statements have been retroactively adjusted to reflect this 1-for-20 reverse stock split. F-26Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)Series D preferred shares: On May 8, 2017, the Company issued 100,000 shares of Series D preferred shares (the “Series D shares”) to Tankers Family Inc., a company controlled by LaxTrust for one thousand dollars ($1,000) pursuant to a stock purchase agreement. The Series D shares are not convertible into common shares and each Series D share has the votingpower of 1,000 common shares. The Series D shares have no dividend or distribution rights and shall expire and all outstanding Series D shares shall be redeemed by the Company forpar value on the date that any financing facility with any financial institution, which contain covenants that require that any member of the family of Mr. Evangelos J. Pistiolis maintain aspecific 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 trustsor 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 theirmaturity date. The Series D shares shall not be otherwise redeemable and upon any liquidation, dissolution or winding up of the Company, the Series D shares shall have a liquidationpreference of $0.01 per share. Currently the SLBs with CMBFL, AVIC Leasing, the Alpha Corporate Guarantee, the Navigare Lease and the ABN Amro and Alpha Bank facilities havesimilar provisions that are satisfied via the existence of the Series D Shares. As a prerequisite for the Navigare Lease, Mr. Evangelos J. Pistiolis guaranteed the performance of thebareboat charters, under certain circumstances, and in exchange, the Company agreed to indemnify him for any losses suffered as a result of the guarantee provided and in addition, theCompany has amended the Certificate of Designation governing the terms of the Series D Shares, to adjust the voting rights per share of Series D Shares such that during the term of theNavigare Lease, the combined voting power controlled by Mr. Evangelos J. Pistiolis and the Lax Trust does not fall below a majority of the total voting power of the Company,irrespective of any new common or preferred stock issuances, and thereby complying with a relevant covenant of the bareboat charters entered in connection with the Navigare Lease.Due to the related party nature of the transactions involving Mr. Evangelos J. Pistiolis, such transactions were unanimously approved by the Company’s Board of Directors, including allthree independent directors.Equity distribution agreement: On April 15, 2022, the Company, entered into an equity distribution agreement, or as they are commonly known, at-the-market offering (“ATM”), withMaxim Group LLC (“Maxim”). Under the ATM the Company could sell up to $19,700 of its common stock with Maxim acting as a sales agent. Since Maxim was acting solely as a salesagent, it had no right to require any common stock sales. No warrants, derivatives, or other share classes were associated with this ATM. The Company terminated the ATM on October6, 2022. The Company has received proceeds from the ATM (net of 2% fees), amounting to $2,025, issued 129,442 common shares and incurred $81 of expenses related to this equitydistribution agreement.Issuance of common stock and warrants as part of the June 2022 Registered Direct Offering: On June 3, 2022, the Company entered into a placement agency agreement with MaximGroup LLC relating to the sale of the Company’s securities, or the Placement Agent Agreement. Pursuant to the Placement Agent Agreement, the Company entered into a SecuritiesPurchase Agreement, with an institutional investor (the “Investor”) in connection with a registered direct offering of an aggregate of 235,000 of the Company’s common shares at apublic offering price of $10.00 per share, registered on the Company’s Registration Statement on Form F-3 (333-234281), or the Registered Offering. Concurrently with the RegisteredOffering and pursuant to the Purchase Agreement, the Company also commenced a private placement whereby the Company issued and sold 9,603,000 pre-funded warrants (“Pre-Funded Warrants”) to purchase up to 480,150 of the Company’s common shares at $10.00 per pre-funded warrant share and 14,303,000 warrants (or the “June 2022 Warrants”) topurchase up to 715,150 of the Company’s common shares. The Pre-Funded Warrants had an exercise price of $0.0020. All of the prefunded warrants were exercised from July toSeptember 2022. The June 2022 Warrants had an exercise price per warrant share of $10.00 and expired five years after issuance. The June 2022 Registered Direct Offering resulted ingross proceeds of $7,151 before deducting placement agent fees, commissions and other offering expenses that amounted to $544. Accounting Treatment of the June 2022 WarrantsThe Company accounted for the June 2022 Warrants as equity in accordance with the accounting guidance for derivatives. The Company concluded these warrants should be equity-classified since they contained no provisions which would require the Company to account for the warrants as a derivative liability.F-27Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)Accounting Treatment of the Pre-Funded WarrantsThe Pre-Funded Warrants were classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date. The Pre-FundedWarrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) areimmediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock uponexercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, such pre-funded warrants do not provide any guarantee of value orreturn.Repricing of the June 2022 Warrants: On October 7, 2022 the Company entered into an agreement with the Investor holding 100% of the June 2022 Warrants to induce him to exerciseall of his June 2022 Warrants at an exercise price reduced from $10.00 per warrant share to $6.75 per warrant share. In consideration for the immediate exercise of the June 2022 Warrantsfor cash that resulted in gross proceeds of $4,827 before related fees and commissions, the Investor received new warrants to purchase up to an aggregate of 1,072,725 common shares(the “October 2022 Warrants”) with identical terms as the June 2022 Warrants with the exception of the exercise price now set at $6.75.The Company treated this warrant inducement agreement as a warrant modification and has recognized the incremental fair value of $1,345 of the October 2022 Warrants as a deemeddividend. As the Company is in an accumulated deficit position, the offsetting amount is recorded against additional paid-in-capital.During the year ended December 31, 2022, no October 2022 Warrants were exercised.Accounting Treatment of the October 2022 WarrantsThe Company accounted for the October 2022 Warrants as equity in accordance with the accounting guidance for derivatives. The Company concluded these warrants should beequity-classified since they contained no provisions which would require the Company to account for the warrants as a derivative liability.Issuance of common stock and warrants as part of the December 2022 Public Equity Offering: On December 6, 2022, the Company closed a public offering of 6,750,000 units (the“December 2022 Public Equity Offering”), each consisting of one common share and one Class C warrant (a “Class C Warrant”), at a price of $2.00 per unit with Maxim Group LLC actingas a placement agent. Each Class C Warrant is immediately exercisable for one common share at an exercise price of $2.00 per share and expires five years after the issuance date. TheDecember 2022 Public Equity Offering resulted in gross proceeds of $13,500 before deducting placement agent fees, commissions and other offering expenses that amounted to $1,104.During the year ended December 31, 2022, no Class C Warrants were exercised.Accounting Treatment of the Class C WarrantsThe Company accounted for the June 2022 Class C Warrants as equity in accordance with the accounting guidance for derivatives. The Company concluded these warrants should beequity-classified since they contained no provisions which would require the Company to account for the warrants as a derivative liability.F-28Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)Dividends to common stock holders: No dividends were paid to common stock holders in the years ended December 31, 2020, 2021 and 2022.10.(Loss)/Earnings Per Common Share: All shares issued are included in the Company’s common stock and have equal rights to vote and participate in dividends and in undistributed earnings. The components of the calculation of basic and diluted (loss) / earnings per share for the years ended December 2020, 2021 and 2022 are as follows: Year Ended December 31, 2020 2021 2022 (Loss) / Net Income (22,818) 8,616 18,948 Less: Deemed dividend for beneficial conversion feature of Series E Shares (1,067) (900) - Less: Deemed dividend equivalents on preferred shares related to redemption value (3,099) (437) (14,400)Less: Dividends of preferred shares (1,796) (1,883) (12,390)Less: Deemed dividend on warrant inducement - - (1,345)(Loss) / gain attributable to common shareholders (28,780) 5,396 (9,187) (Loss) /Earnings per share: Weighted average common shares outstanding, basic and dilutive 1,175,874 1,991,599 3,033,785 (Loss) / earnings per share, basic and diluted (24.48) 2.71 (3.03) For the years ended December 31, 2020, 2021 and 2022, 38,514, 635,818 and 974,783 dilutive shares on an as-if converted basis relating to Series E Shares were not included in thecomputation of diluted earnings per share because to do so would have been antidilutive for the period presented.11.Voyage and Vessel Operating Expenses: The amounts in the consolidated statements of comprehensive (loss)/income are as follows: Voyage Expenses Year Ended December 31, 2020 2021 2022 Port charges / other voyage expenses 1 - - Bunkers 659 165 80 Commissions (including $761, $705 and $1,008 respectively, to related party) 1,334 1,152 1,568 Total 1,994 1,317 1,648 F-29Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)Vessel Operating Expenses Year Ended December 31, 2020 2021 2022 Crew wages and related costs 14,532 11,066 11,881 Insurance 1,194 1,026 1,577 Repairs and maintenance (including $60, $17 and $37 respectively, to related party) 1,259 747 1,592 Spares and consumable stores 3,861 2,530 3,339 Registration and taxes (Note 13) 178 310 239 Total 21,024 15,679 18,628 12.Interest and Finance Costs: The amounts in the consolidated statements of comprehensive (loss)/income are analyzed as follows: Interest and Finance Costs Year Ended December 31, 2020 2021 2022 Interest on debt (including $-, $- and $207 respectively, to related party) 16,033 7,342 11,895 Bank charges and loan commitment fees 233 20 132 Amortization and write-off of financing fees 6,311 840 2,522 Total 22,577 8,202 14,549 Less interest capitalized (1,621) (1,204) (184)Total 20,956 6,998 14,365 13.Income Taxes: Marshall Islands and Greece does not impose a tax on international shipping income. Under the laws of Marshall Islands and Greece the countries of the companies’ incorporation andvessels’ registration, the companies are subject to registration and tonnage taxes, which have been included in Vessel operating expenses in the consolidated statements ofcomprehensive (loss)/income. Under the United States Internal Revenue Code of 1986, as amended (the “Code”), the U.S. source gross transportation income of a ship-owning or chartering corporation, such as theCompany, is subject to a 4% U.S. Federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code and theTreasury Regulations promulgated thereunder. U.S. source gross transportation income consists of 50% of the gross shipping income that is attributable to transportation that begins orends, but that does not both begin and end, in the United States. Under Section 883 of the Code and the regulations thereunder, the Company will be exempt from U.S. federal income tax on our U.S.-source shipping income if: (1) the Company is organized in a foreign country, or its country of organization, grants an “equivalent exemption” to corporations organized in the United States; and (2) either A. more than 50% of the value of the Company’s stock is owned, directly or indirectly, by individuals who are “residents” of the Company’s country of organization or of another foreigncountry that grants an “equivalent exemption” to corporations organized in the United States (each such individual a “qualified shareholder” and such individuals collectively, “qualifiedshareholders”), which the Company refers to as the “50% Ownership Test,” or B. the Company’s stock is “primarily and regularly traded on an established securities market” in the Company’s country of organization, in another country that grants an “equivalentexemption” to U.S. corporations, or in the United States, which the Company refers to as the “Publicly-Traded Test.” F-30Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)The Marshall Islands, the jurisdiction where the Company and the Company’s ship-owning subsidiaries are incorporated, grants an “equivalent exemption” to U.S. corporations.Therefore, the Company will be exempt from U.S. federal income tax with respect to the Company’s U.S.-source shipping income if either the 50% Ownership Test or the Publicly-TradedTest is met. Treasury Regulations provide, in pertinent part, that stock of a foreign corporation will be considered to be “primarily traded” on an established securities market if the number of sharesof each class of stock that are traded during any taxable year on all established securities markets in that country exceeds the number of shares in each such class that are traded duringthat year on established securities markets in any other single country. The Company’s common shares, which is the Company’s sole class of issued and outstanding stock that istraded, is and the Company anticipates will continue to be “primarily traded” on the Nasdaq Capital Market. The Treasury Regulations also require that the Company’s stock be “regularly traded” on an established securities market. Under the Treasury Regulations, the Company’s stock will beconsidered to be “regularly traded” if one or more classes of the Company’s stock representing more than 50% of the Company’s outstanding shares, by total combined voting power ofall classes of stock entitled to vote and by total combined value of all classes of stock, are listed on one or more established securities markets, which the Company refers to as the“listing threshold.” The Company’s common stock, which is listed on the Nasdaq Capital Market and is the Company’s only class of publicly-traded stock, did not constitute more than50% of the Company’s outstanding shares by value for the 2021 taxable year, and accordingly, the Company didn’t satisfy the 50% Ownership Test for the 2021 taxable year andconsequently the Company didn’t qualify for exemption from tax under Section 883 for the 2021 taxable year. The Company for the 2021 taxable year was subject to an effective 2% United States federal tax on the U.S. source shipping income that is attributable to the transport of cargoes to orfrom the United States which is not considered an income tax. The amount of this tax for the year ended December 31, 2021 was $152 and it was recorded within “Vessel operatingexpenses” in the consolidated statements of comprehensive (loss)/income. For 2020 and for 2022 the Company qualified for the exemption from tax under Section 883.14.Financial Instruments: The principal financial assets of the Company consist of cash on hand and at banks, restricted cash, prepaid expenses and other receivables and long term deposits. The principalfinancial liabilities of the Company consist of long-term loans, accounts payable due to suppliers, amounts due to related parties and accrued liabilities. a)Interest rate risk: The Company as of December 31, 2022 is subject to market risks relating to changes in interest rates, since all of its debt except the Cargill Facility is subjectto 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 itstemporary cash investments, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluations of the relative creditstanding of those financial institutions with which it places its temporary cash investments.c)Fair value: The following methods and assumptions were used to estimate the fair value of each class of financial instrument: Cash and cash equivalents and restricted cash are considered Level 1 items as they represent liquid assets with short term maturities. The Company considers its creditworthiness whendetermining the fair value of its liquid assets. The fair value of interest rate swaps was determined using a discounted cash flow method taking into account current and future interest rates and the creditworthiness of both thefinancial instrument counterparty the Company and hence are considered Level 2 items in accordance with the fair value hierarchy. The Company paid a fixed rate and received a floatingrate for these interest rate swaps. The fair values of these derivatives were derived principally from, or corroborated by, observable market data inputs included quoted prices for similarassets, liabilities (risk adjusted) and market-corroborated inputs, such as market comparables, interest rates, yield curves and other items that allowed values to be determined. The fair value of warrants was determined using the Black Scholes methodology and hence are considered Level 3 items in accordance with the fair value hierarchy. F-31Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)The Company follows the accounting guidance for Fair Value Measurements. This guidance enables the reader of the financial statements to assess the inputs used to develop thosemeasurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The guidance requires assets and liabilities carried at fairvalue to be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities;Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data;Level 3: Unobservable inputs that are not corroborated by market data.Interest rate swap agreements The Company had entered into interest rate swap transactions to manage interest costs and the risk associated with changing interest rates with respect to its variable interest rate creditfacilities. These interest rate swaps were pay-fixed, receive-variable interest rate swaps based on the USD LIBOR swap rate. On January 16 and January 21, 2020, as part of the prepayment of the ABN Facility, the Company unwound its two remaining interest rate swaps with ABN Amro bank and realized a lossof $405. On February 21, 2020, as part of the prepayment of the Alpha Bank Facility, the Company unwound its interest rate swap with Alpha bank and realized a loss of $927, being thelast interest rate swap of the Company. In both cases the resulting losses included losses resulting from the discontinuation of hedge accounting applied that were transferred fromOther comprehensive income to (Loss)/Gain on Derivative financial instruments in the consolidated statements of comprehensive (loss)/income.The following table sets forth a summary of changes in fair value of the Company’s level 3 fair value measurements classified as liability for the year ended December 31, 2021. Therewere no instruments classified as liability subject to level 3 fair value measurements in the year ended December 31, 2022. Closing balance – December 31, 2020 66 Change in fair value of Class B Warrants, included in (Loss)/Gain on derivative financial instruments in the consolidated statements of comprehensive(loss)/income (66)Closing balance – December 31, 2021 - Location and amounts of derivative financial instruments fair values: Information on the location and amounts of derivative financial instruments fair values in the balance sheet and derivative financial instrument losses in the statement of comprehensive(loss)/income are presented below: Amount of (loss)/gain recognized in Statement ofcomprehensive loss / (income) located in (Loss)/Gain onderivative financial instruments 2020 2021 2022 Interest rate swaps- change in fair value (1,332) - - Interest rate swaps– realized gain/(loss) (25) - - Class B Warrants- change in fair value 543 66 - Total (814) 66 - 15.Other operating loss On January 15, January 21, March 9 and October 20, 2020 the Company terminated the time charters of M/T Eco Fleet, M/T Stenaweco Elegance, M/T Eco Palm Desert and M/T EcoCalifornia and incurred time charter termination fees amounting to $500, $1,850, $1,700 and $750 respectively. F-32Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)16.Mezzanine EquitySERIES E PREFERRED SHARESOn March 29, 2019, the Company entered into a Stock Purchase Agreement with Family Trading for the sale of 27,129 newly issued perpetual convertible preferred shares (the “Series EShares”) at a price of one thousand dollars ($1,000) per share. The proceeds of the sale were used for the full and final settlement of all amounts due under the Further Amended FamilyTrading Credit Facility. The issuance of the Series E Shares was approved by a committee of the Company’s board of directors, of which all of the directors were independent. Each holder of Series E Shares, at any time, has the right, subject to certain conditions, to convert all or any portion of the Series E Shares then held by such holder into the Company’scommon shares at the conversion rate then in effect. Each Series E Share is convertible into the number of the Company’s common shares equal to the quotient of one thousand dollars($1,000) plus any accrued and unpaid dividends divided by the lesser of the following four prices (the “Series E Conversion Price”): (i) $10,000, (ii) 80% of the lowest daily VWAP of theCompany’s common shares over the twenty consecutive trading days expiring on the trading day immediately prior to the date of delivery of a conversion notice, (iii) the conversionprice or exercise price per share of any of the Company’s then outstanding convertible shares or warrants, (iv) the lowest issuance price of the Company’s common shares in anytransaction from the date of the issuance the Series E Shares onwards, but in no event will the Series E Conversion Price be less than the floor price (currently at $0.60). The floor price isadjusted (decreased) in case of splits or subdivisions of the Company’s outstanding shares and is not adjusted in case of reverse stock splits or combinations of the Company’soutstanding shares. The holders of each Series E Share are entitled to the voting power of one thousand (1,000) common shares of the Company. Upon any liquidation, dissolution orwinding up of the Company, the holders of Series E Shares shall be entitled to receive the net assets of the Company pari-passu with the common shareholders. Furthermore theCompany at its option shall have the right to redeem a portion or all of the outstanding Series E Shares. The Company shall pay an amount equal to one thousand dollars ($1,000) pereach Series E Share (the “Liquidation Amount”), plus a redemption premium equal to fifteen percent (15%) of the Liquidation Amount being redeemed if that redemption takes place upto 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 anyaccrued and unpaid dividends on such Series E Shares (collectively referred to as the “Redemption Amount”). The Series E Shares shall not be subject to redemption in cash at the option of the holders thereof under any circumstance. Finally, the holders of outstanding Series E Shares shall beentitled to receive, 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 DividendPayment Date”), commencing on the first Semi Annual Dividend Payment Date, being June 30, 2019 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 Shares computed on the basis of a 365-day year and the actual days elapsed. Accrued but unpaid dividends shallbear interest at fifteen percent (15%). Dividends will not be payable in cash, if such payment violates any provision of any senior secured facility that the Company has entered or (as thecase may be) will enter into, or any senior secured facility for which the Company has provided or (as the case may be) will provide a guarantee, for as long as such provisions, if any,remain in effect. The Company determined that the Series E shares were more akin to equity than debt and that the above identified conversion feature, subject to adjustments, was clearly and closelyrelated to the host instrument, and accordingly bifurcation and classification of the conversion feature as a derivative liability was not required. Given that the Series D and Series Epreferred stock’s holder (Lax Trust) controls a majority of the Company votes, the preferred equity is in essence redeemable at the option of the holder and hence has been classified inMezzanine equity as per ASC 480-10-S99 “Distinguishing liabilities from Equity – SEC Materials”. On February 17, 2020, the Company issued 16,004 Series E Shares to Family Trading, as settlement of $14,350 of consideration then outstanding for the purchase of the M/T Eco City ofAngels and M/T Eco Los Angeles from Mr. Evangelos J. Pistiolis, $1,621 of Series E Share dividends of the second half of 2019 and $32 of accrued interest on unpaid dividends from2019. On September 8, 2021 the Company issued 2,188 Series E Shares to Family Trading, as partial settlement for $2,188 of the consideration payable for the VLCC Transaction (see Note1). F-33Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)At each issuance of Series E Shares, the Company recognizes the beneficial conversion feature by allocating the intrinsic value of the conversion option, which is the number of sharesof common stock available upon conversion multiplied by the difference between the effective conversion price per share and the fair value of the Company’s common stock per shareon the commitment date, to additional paid-in capital. As the Company is in an accumulated deficit position, the offsetting amount is amortized as a deemed dividend recorded againstadditional paid-in-capital. During the years ended December 31, 2020 and 2021, pursuant to issuances of Series E Shares, the Company recognized the beneficial conversion feature toadditional paid-in capital, resulting in a discount of $1,067 and $900 respectively on the Series E Shares which has been recognized as a deemed dividend. During the year ended December 31, 2020, but before March 29, 2020, the Company redeemed 21,364 Series E Shares and paid a total of $24,569 to Family Trading, $3,204 of which refersto the 15% redemption premium. During the years ended December 31, 2021 and 2022 the Company didn’t redeem any Series E Shares. As of December 31, 2022, upon conversion at the Series E Shares Conversion Price ($0.88) of 13,452 Series E Shares outstanding, Family Trading would receive 15,286,364 commonshares. After March 29, 2020 as per the original Series E Shares Statement of Designations all redemptions of Series E Shares will incur a redemption premium equal to twenty percent (20%) ofthe Liquidation Amount being redeemed instead of fifteen percent (15%). As of December 31, 2020 and 2021, the Company adjusted the carrying value of the Series E Shares to themaximum redemption amount, resulting in an increase of $2,253 and $437 respectively, which have been accounted as deemed dividend. No such adjustment took place in the year endedDecember 31, 2022 as no Series E Shares were issued during 2022. During the years ended December 31, 2020, 2021 and 2022 the Company declared $1,796, $1,883 and $2,046 of dividends to the Series E Shares holder.SERIES F PREFERRED SHARESOn January 17, 2022, the Company entered into a stock purchase agreement with Africanus Inc., an affiliate of Evangelos J. Pistiolis for the sale of up to 7,560,759 newly-issued Series FNon-Convertible Perpetual Preferred Shares (“Series F Shares”), in exchange for (i) the assumption by Africanus Inc. of an amount of $47,630 of shipbuilding costs for its newbuildingvessels M/T Eco Oceano Ca (Hull No. 871), M/T Julius Caesar (Hull No. 3213) and M/T Legio X Equestris (Hull No. 3214), and (ii) settlement of the Company’s remaining paymentobligations relating to the VLCC Transaction, in an amount of up to $27,978. From January 17 to March 16, 2022 we issued a total of 7,200,000 Series F Shares have been issued, to cover$47,630 of shipbuilding costs in connection with the deliveries of M/T Julius Caesar, M/T Legio X Equestris and M/T Eco Oceano Ca and as a consideration for the settlement of $24,370of Due to related parties. From July 5 to December 31, 2022 the Company redeemed a total of 1,349,252 Series F Shares for $16,191.The holders of Series F Shares are entitled to the voting power of ten of the Company’s common shares per Series F Preferred Shares. Upon any liquidation, dissolution or winding up ofthe Company, the holders of Series F Preferred Shares shall be entitled to receive the net assets of the Company pari passu with the Company’s common shares. The Series F Shares shallnot be subject to redemption in cash at the option of the holders and only the Company at its option shall have the right to redeem a portion or all of the outstanding Series F Shares atan amount equal to $10 (ten) per Series F Share redeemed (the “Liquidation Amount”), plus a redemption premium of 20% of the Liquidation Amount. The Series F Shares include amandatory redemption provision tied to minimum voting requirements for the Company’s major shareholders, including affiliates of the CEO, pursuant to which if such minimum votingrights fall below 50% the Company is obliged to redeem the full amount of the then outstanding Series F Shares at a redemption premium of 40%. The holders of outstanding Series FShares are entitled to receive semi-annual dividends payable in cash at a rate of 13.5% per year of the Liquidation Amount of the then outstanding Series F Shares. Accrued but unpaiddividends shall bear interest at 13.5%. In addition, a one-time cash dividend equal to 4.0% of the Liquidation Amount is payable following each issuance of Series F Preferred PerpetualShares. Finally, the Series F Preferred Perpetual Shares are not convertible into the Company’s common shares under any circumstances.F-34Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)The Company determined that the Series F shares were more akin to equity than debt and hence they have been classified in Mezzanine equity. As of March 16, 2022 (the date of the lastseries F Shares issuance), the Company adjusted the carrying value of the Series F Shares to the maximum redemption amount ($86,400), resulting in an increase of $14,400, which hasbeen accounted as deemed dividend.During the year ended December 31, 2022 the Company declared $10,344 of dividends to the Series F Shares holder.17.Investments in unconsolidated joint ventures 2017 Joint Venture During the year ended December 31, 2019 the Company recorded its proportionate share of City of Athens and Eco Nine’s other comprehensive losses of $391 as a decrease to theCompany’s Investments in unconsolidated joint ventures, with a corresponding increase in other comprehensive loss, in accordance with ASC 323-10-35-18. In December 2019, theCompany wrote down its Investments in the 2017 Joint Venture to their fair value less costs to sell, resulting in an impairment charge of $3,144, pursuant to the Joint Ventures’ plan to sellthe vessels. Their fair value was based on a market approach, which was determined using the purchase consideration in the sale agreements with buyers for the vessels of the jointventure companies. The Joint Venture’s vessels, the M/T Holmby Hills and the M/T Palm Springs were sold on March 26 and April 17, 2020 respectively. During the year ended December 31, 2020, theCompany recognized a loss on the sale of its Investments in unconsolidated joint ventures amounting to $64, which is included in Equity gains in unconsolidated joint ventures(attributed to the 2017 Joint Venture) in the Company’s consolidated statements of comprehensive (loss)/income. Net proceeds from the sale of the 2017 Joint Venture amounted to$19,555. The two companies that owned the vessels (City of Athens Pte. Ltd. and Eco Nine Pte. Ltd.) were dissolved in 2022. New 2020 Joint Venture On April 24, 2020 the Company acquired from a company affiliated with Mr. Evangelos J. Pistiolis, or the MR Seller, a 50% interest in two vessel owning companies (California 19 Inc. andCalifornia 20 Inc.) that owned two scrubber-fitted 50,000 dwt eco MR product tankers, M/T Eco Yosemite Park and M/T Eco Joshua Park respectively for $27,000, representing theCompany’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. TheMR 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 ofGunvor Group Ltd (the other 50% owner). The abovementioned acquisition was approved by a special committee of the Company’s board of directors (the “JV Special Committee”), ofwhich all of the directors were independent and for which the JV Special Committee obtained a fairness opinion relating to the consideration of the transaction from an independentfinancial advisor. Sale and purchase commissions due to CSI related to these investments amounting to $454 were accounted for as part of the investment. Out of the purchase price of $27,000, $1,646 and $1,654 were recognized as excess of the purchase price over the underlying net book value (“Basis Differences”) for California 19 Inc.and California 20 Inc. respectively, attributed to the value assigned to the attached time charter. These Basis Differences are amortized over the duration of the firm period of the charter(5 years) and their amortization is included as a reduction in Gains in unconsolidated joint ventures. Furthermore $1,963 and $1,963 were also recognized as Basis Differences forCalifornia 19 Inc. and California 20 Inc. respectively, attributed to the fair market value over the carrying value of the vessels. These Basis Differences are amortized over the useful life ofthe vessels (25 years) and their amortization is also included as a reduction in Gains in unconsolidated joint ventures. F-35Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)On March 12, 2020, California 19 Inc. together with California 20 Inc. entered into a loan agreement with Alpha Bank for a senior debt facility of $37,660 ($18,830 for each vessel). The loanhas a term of five years and is payable on maturity via a balloon payment of $18,830 per vessel. The credit facility bears interest at LIBOR plus a margin of 3.00%. The facility carriescustomary covenants and restrictions, including the covenant that during the life of the facility, the market value of the vessels should be at least 200% of the facility outstanding andany shortfall should be covered by partial prepayments. Vessels are to be valued three times per year, every March, July and December. Provided that there is no breach of the above-mentioned covenant and no event of default has occurred and is continuing or would occur if such dividend distribution would take place, California 19 Inc. and California 20 Inc. maydistribute dividends, without any consent from Alpha Bank. The loans are guaranteed by the Company in their entirety and this guarantee is not limited to the Company’s share of thenet assets of California 19 Inc. and California 20 Inc (see Note 8). On April 22, 2021 California 19 Inc. and California 20 Inc. prepaid $330 each to reduce each of the outstanding loans to$18,500. Each of the two product tankers are on time charters that commenced in March 2020 with Clearlake Shipping Pte Ltd, a subsidiary of Gunvor Group Ltd for a firm term of five years plustwo additional optional years. The Company’s exposure is limited to its share of the net assets of California 19 Inc. and California 20 Inc., proportionate to its 50% equity interest in these companies. Generally, theCompany will share the profits and losses, cash flows and other matters relating to its investments in California 19 Inc. and California 20 Inc. in accordance with its ownershippercentage. The vessels are managed by CSI, pursuant to management agreements. The Company accounts for investments in joint ventures using the equity method since it has jointcontrol over the investment. California 19 Inc. and California 20 Inc. made the following disbursements to the Company in 2020, 2021 and 2022: December 31, 2020 December 31, 2021 December 31, 2022 California 19Inc. California20 Inc. California 19Inc. California20 Inc. California 19Inc. California20 Inc. Total disbursements - - 2,359 2,141 1,475 1,475 Recognition of Gains in unconsolidated joint ventures for the 2020 Joint Venture for the years ended December 31, 2020, 2021 and 2022 are summarized below: December 31, 2020 December 31, 2021 December 31, 2022 California 19Inc. California 20Inc. California 19Inc. California 20Inc. California 19Inc. California 20Inc. Net profit attributable to the Company 652 670 880 684 725 738 Amortization of Basis Differences (272) (273) (408) (409) (408) (409)Equity gains in unconsolidated joint ventures(attributed to the 2020 Joint Venture) 380 397 472 275 317 329 18.Revenues Revenues are comprised of the following: 2020 2021 2022 Time charter revenues 60,222 56,367 73,362 Time charter revenues from related parties (Note 5) - - 7,294 Total 60,222 56,367 80,656 F-36Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)The Company typically enters into time charters for periods ranging between three to fifteen years and includes a charterer’s option to renew for a further two one-year periods atpredetermined daily rates. Due to the volatility of the charter rates, the Company only accounts for the options when the charterer gives notice that the option will be exercised. In a timecharter contract, the vessel is hired by the charterer for a specified period of time in exchange for consideration which is based on a daily hire rate. The charterer has the full discretionover the ports visited, shipping routes and vessel speed. The contract/charter party generally provides typical warranties regarding the speed and performance of the vessel. The charterparty generally has some owner protective restrictions such that the vessel is sent only to safe ports by the charterer, subject always to compliance with applicable sanction laws, andcarry only lawful or non-hazardous cargo. In a time charter contract, the Company is responsible for all the costs incurred for running the vessel such as crew costs, vessel insurance,repairs and maintenance and lubes. The charterer bears the voyage related costs such as bunker expenses, port charges and canal tolls during the hire period. The charterer generallypays the charter hire in advance of the upcoming contract period. As of December 31, 2022, all of the Company’s vessels are employed under time charters. 19.Loss on sale of vessels: During 2020 the Company sold the following vessels to unaffiliated third parties and collected the following gross proceeds: Vessel Date Sold Selling Price (Gross) M/T Stenaweco Energy 29-Oct-20 $25,150 M/T Stenaweco Evolution 03-Nov-20 $26,150 M/T Ecofleet 21-Jan-20 $21,000 M/T Eco Revolution 14-Jan-20 $23,000 M/T SW Excellence 14-Oct-20 $27,008 M/T Stenaweco Elegance 21-Feb-20 $33,500 M/T Eco Palm Desert 19-Mar-20 $34,800 M/T Eco California 09-Nov-20 $30,600 M/T Eco Bel Air 10-Dec-20 $50,830 M/T Eco Beverly Hills 01-Dec-20 $50,830 Total $322,868 The net proceeds from the abovementioned sales amounted to $310,016, after deducting $10,852 of expenses and $2,000 of maintenance deposits (please see below). As a result of theabovementioned sales the Company recognized a loss from the disposal of vessels amounting to $12,355, which is separately presented in the Company’s consolidated statements ofcomprehensive (loss)/income. For each of the vessels M/T Eco Bel Air and M/T Eco Beverly Hills that were sold and leased back (see Note 6) the buyer withheld $1,000 as amaintenance deposit, accounted for as a deposit asset, to be released at the end of the lease term, in accordance with ASC 840-10-25-39B. The Company evaluated these maintenancedeposits and has not assigned any probability of them not being returned. On September 1, 2021 the Company sold M/T Nord Valliant, its last non-scrubber fitted tanker, to an unaffiliated third party for net proceeds of $25,887. During the six months ended June30, 2021, in accordance with the provisions of relevant guidance, the Company recognized the vessel, the carrying amount of which as of June 30, 2021 amounted to $27,047, as held forsale and wrote it down to its fair value of $25,887, resulting in an impairment charge of $1,160, which is included in the consolidated statements of comprehensive (loss) / income for theyear ended December 31, 2021. Since the value of the held for sale vessel (after it was written down to its fair value less costs to sell) was the same with the net proceeds from the sale,the Company didn’t recognize any losses from the sale of the M/T Nord Valiant. F-37Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 AND 2022AND FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022(Expressed in thousands of United States Dollars – except share, per share earnings and rate per day, unless otherwise stated)On February 28 and March 15, 2022, the Company sold the M/T Eco Los Angeles and M/T Eco City of Angels respectively to unaffiliated third parties for net proceeds after debtrepayment of $18,640. The net proceeds after senior debt repayment relating to the vessels were used to fund the Company’s newbuilding program and to repay the outstanding CentralMare Bridge Loan facility, which was subsequently terminated. As of December 31, 2021, the two vessels were classified as assets held for sale in accordance with the provisions ofrelevant guidance with each of the vessel’s having a carrying amount of $35,818. Since their fair value less costs to sell were higher than their carrying amount the Company did not incurany impairment charges in the year ended December 31, 2021 while in the year ended December 31, 2022 the company recognized $78 of gains resulting from the two vessel’s sale.20.Subsequent Events On January 13 and March 6, 2023 the Company redeemed 1,000,000 and 1,016,667 Series F Shares for $12,000 and $12,200 respectively.On February 14, 2023, the Company entered into a securities purchase agreement with several institutional investors to purchase $13,561 of the Company’s units in a registered directoffering at a price of $1.35 per unit. Each unit consisted of one common share and one warrant (the “February 2023 Warrants”). The February 2023 Warrants are immediately exercisable,will expire five years from the date of issuance and have an exercise price of $1.35 per common share. Additionally, pursuant to the terms of the Class C Warrants issued to investors onDecember 6, 2022, we agreed to reduce the exercise price per common share under the Class C Warrants to $1.35 per common share from an original exercise price of $2.00 per commonshare. The offering closed on February 16, 2023.F-38Exhibit 1.12ARTICLES OF AMENDMENTTO THETHIRD AMENDED AND RESTATED ARTICLES OF INCORPORATIONOFTOP SHIPS INC.PURSUANT TO SECTION 90 OFTHE MARSHALL ISLANDS BUSINESS CORPORATIONS ACTI, Evangelos J. Pistiolis, as the Chief Executive Officer of TOP Ships Inc., a corporation incorporated under the laws of the Republic of the Marshall Islands as OCEANHOLDINGS INC. on January 10, 2000 (the “Corporation”), for the purpose of amending the Third Amended and Restated Articles of Incorporation of said Corporation pursuant toSection 90 of the Business Corporations Act, as amended, hereby certify: 1.The name of the Corporation is: TOP Ships Inc. 2.The Articles of Incorporation were filed with the Registrar of Corporations on the 10th day of January, 2000 under the name "OCEAN HOLDINGS INC." 3.Articles of Amendment were filed with the Registrar of Corporations on the 30th day of April, 2004, changing the name of the Corporation to "TRANS OCEANPETROLEUM TANKERS INC." 4.Articles of Amendment were filed with the Registrar of Corporations on the 10th day of May, 2004, changing the name of the Corporation to "TOP TANKERS INC." 5.Articles of Amendment were filed with the Registrar of Corporations on the 27th day of May, 2004. 6.Restated and Amended Articles of Incorporation were filed with the Registrar of Corporations on the 21st day of July, 2004. 7.Articles of Amendment were filed with the Registrar of Corporations on the 22nd day of July, 2005. 8.Articles of Amendment were filed with the Registrar of Corporations on the 17th day of December, 2007 changing the name of the Corporation to "TOP SHIPS INC." 9.Articles of Amendment were filed with the Registrar of Corporations on the 20th day of March, 2008. 10.The Second Amended and Restated Articles of Incorporation were filed with the Registrar of Corporations on the 17th day of September, 2009. 11.The Third Amended and Restated Articles of Incorporation were filed with the Registrar of Corporations on the 23rd day of June, 2011. 12.Articles of Amendment were filed with the Registrar of Corporations on the 17th day of April, 2014. 13.Articles of Amendment were filed with the Registrar of Corporations on the 16th day of February, 2016. 14.A Certificate of Correction was filed with the Registrar of Corporations on the 14th day of February, 2017. 15.Articles of Amendment were filed with the Registrar of Corporations on the 10th day of May, 2017. 16.Articles of Amendment were filed with the Registrar of Corporations on the 22nd day of June, 2017. 17.Articles of Amendment were filed with the Registrar of Corporations on the 2nd day of August, 2017. 18.Articles of Amendment were filed with the Registrar of Corporations on the 5th day of October, 2017. 19.Articles of Amendment were filed with the Registrar of Corporations on the 23rd day of March, 2018. 20.Articles of Amendment were filed with the Registrar of Corporations on the 21st day of August, 2019. 21.Articles of Amendment were filed with the Registrar of Corporations on the 7th day of August, 2020. 22.Section D of the Third Amended and Restated Articles of Incorporation is hereby amended by adding the following paragraph: “(e) Reverse Stock Split. Effective with the commencement of business on September 23, 2022, the Corporation shall effect a one-for-20 reverse stock split as to its issuedand outstanding shares of common stock, par value $0.01 per share. No fractional shares shall be issued and, in lieu thereof, holders of the Corporation's common stock,par value $0.01 per share, shall receive a cash payment. As a result of the reverse stock split, the number of issued and outstanding shares of the Corporation's commonstock, par value $0.01 per share, shall decrease from 56,723,820 to 2,836,191, as adjusted for the cancellation of fractional shares and which may be further adjusted for thecancellation of fractional shares. The reverse stock split shall not change the number of registered shares of common stock, par value $0.01 per share, the Corporation isauthorized to issue or the par value of the common stock. The stated capital of the Corporation is hereby reduced from $567,238.20 to approximately $28,361.91, which maybe further adjusted for the cancellation of fractional shares and the amount of the reduction in stated capital shall be allocated to surplus.” 23.All other provisions of the Third Amended and Restated Articles of Incorporation shall remain unchanged. 24.This amendment to the Third Amended and Restated Articles of Incorporation was authorized by vote of the holders of a majority of all outstanding shares of theCorporation with a right to vote thereon at the meeting of shareholders of the Corporation held on September 5, 2022, and by the Corporation’s Board of Directors onSeptember 19, 2022. [signature page follows] IN WITNESS WHEREOF, I have executed this Amendment to the Restated Articles of Incorporation on this 22nd day of September, 2022. /s/ Evangelos J. Pistiolis Name:Evangelos J. Pistiolis Title:Chief Executive OfficerExhibit 2.9DESCRIPTION OF THE REGISTRANT'S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934As of the date of the annual report on Form 20-F of which this exhibit is a part, TOP Ships Inc. (the "Company") had common stock, par value $0.01 per share, and preferredstock purchase rights for each outstanding common share registered under Section 12 of the Securities Exchange Act of 1934, as amended.The following description sets forth certain material terms and provisions of the Company's common stock. The following summary does not purport to be complete and issubject to, and is qualified in its entirety by reference to, the applicable provisions of the Company's Third Amended and Restated Articles of Incorporation (the "Articles ofIncorporation"), as amended, and the Amended and Restated By-laws (the "By-laws"), as amended, each of which is incorporated by reference as an exhibit to the annual report onForm 20-F of which this exhibit is a part. We encourage you to refer to our Articles of Incorporation and By-laws for additional information. Authorized Capitalization Our authorized capital stock consists of 1,000,000,000 common shares, par value $0.01 per share, of which 20,346,091 common shares were issued and outstanding as of thedate of the annual report on Form 20-F of which this exhibit is a part, and 20,000,000 preferred shares with par value of $0.01, of which 100,000 Series D Preferred Shares, 13,452 Series EPreferred Shares, and 3,834,082 Series F Preferred Shares were issued and outstanding as of the date of the annual report on Form 20-F of which this exhibit is a part. Our Board ofDirectors 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.Description of Common SharesUnder our Articles of Incorporation, our authorized capital stock consists of 1,000,000,000 common shares, par value $0.01 per share. The respective number of ordinaryshares issued and outstanding as of the last day of the fiscal year for the annual report on Form 20-F to which this description is attached or incorporated by reference as an exhibit isprovided on the cover page of such annual report on Form 20-F. Holders of our common shares do not have conversion, redemption or preemptive rights to subscribe to any of oursecurities. 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.Voting RightsEach outstanding common share entitles the holder to one vote on all matters submitted to a vote of shareholders. Our directors are elected by a plurality of the votes cast ata meeting of the shareholders by the holders of shares entitled to vote in the election. Our Articles of Incorporation and By-laws, as further amended, prohibit cumulative voting in theelection 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. Eachdirector 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 hisdeath, 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 ourBoard of Directors, and to members of any committee, for attendance at any meeting or for services rendered to us.Our 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, servingstaggered, 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 atender 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 removinga majority of our Board of Directors for two years.Dividend RightsSubject 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 byour Board of Directors out of funds legally available for dividends.Liquidation RightsUpon 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 ofour 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.Limitations on OwnershipOur Articles of Incorporation and By-Laws, as further amended, do not impose any limitations on the ownership rights of our shareholders.Description of Preferred Stock Purchase RightsOn 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 ashareholder 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 TrustCompany, 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 significantpenalty 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 ownershipof 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 ownershippercentage 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 ofDirectors. 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 redemptionof 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 asummary, 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 incorporatedherein 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 Rightswill accompany any new of our common shares issued after October 5, 2016 until the Distribution Date described below.Exercise Price. Each Right allows its holder to purchase from us one one-thousandth of a share of Series A Participating Preferred Stock, or a Series A Preferred Share, for$50.00, or the Exercise Price, once the Rights become exercisable. This portion of a Series A Preferred Share will give the shareholder approximately the same dividend, voting andliquidation 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 beneficialownership 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 orare reportable for purposes of Regulation 13D of theExchange 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 ouractual 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 purposesof 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 inthe 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 fromour 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 anAcquiring Person are null and void and may not be exercised.Series A Preferred Share ProvisionsEach one one-thousandth of a Series A Preferred Share, if issued, will, among other things:•not be redeemable;•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 pershare amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in our common shares or a subdivision of the ouroutstanding common shares (by reclassification or otherwise), declared on our common shares since the immediately preceding quarterly dividend paymentdate; and•entitle holders to one vote on all matters submitted to a vote of our shareholders.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 valueof 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 longerredeemable 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 beneficiallyowned 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 forthabove) 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 athen-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 amajority of the equity securities, andNotional Common Shares (as defined in the Rights Agreement) held by counterparties to a Derivatives Contract (as defined in the Rights Agreement) with anAcquiring 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 Directorsredeems 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 mayextinguish 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 mayelect 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 ofoutstanding 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 adjustmentsto 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 theDistribution 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 orlengthen 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 oran 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 redemptionof the Rights, shareholders may recognize taxable income.Description of Series D Preferred SharesOn 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 forthe benefit of certain family members of Mr. Evangelos J. Pistiolis, for $1,000 pursuant to a stock purchase agreement. Each Series D Preferred Share has the voting power of onethousand (1,000) common shares.On April 21, 2017, we were informed by ABN Amro Bank that we were in breach of a loan covenant that requires that any member of the family of Mr. Evangelos J. 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 anymember of the Pistiolis family are beneficiaries) of 30% of our outstanding Common Shares. ABN Amro Bank requested that either the family of Mr. Evangelos J. Pistiolis maintain anownership interest of at least 30% of the outstanding common shares or maintain voting rights interests of above 50% in us. In order to regain compliance with the loan covenant, weissued the Series D Preferred Shares.The Series D Preferred Stock has the following characteristics:Conversion. The Series D Preferred Shares are not convertible into common shares.Voting. Each Series D Preferred Share has the voting power of 1,000 common shares. As a prerequisite for the Navigare Lease, Mr. Evangelos J. Pistiolis personally guaranteedthe performance of the bareboat charters entered in connection with the lease, under certain circumstances, and in exchange, we amended the Certificate of Designations governing theterms of the Series D Preferred Shares, to adjust the voting rights per share of Series D Preferred Shares such that during the term of the Navigare Lease, the combined voting powercontrolled by Mr. Evangelos J. Pistiolis and the Lax Trust does not fall below a majority of our total voting power, irrespective of any new common or preferred stock issuances, andthereby complying with a relevant covenant of the bareboat charters entered in connection with the Navigare Lease.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 shares shall be redeemed by us for par value on the date that any financing facility with anyfinancial institution, which requires that any member of the family of Mr. Evangelos J. Pistiolis maintains a specific minimum ownership or voting interest (either directly and/or indirectlythrough 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) ofour issued and outstanding common shares, respectively, are fully repaid or reach their maturity date. The Series D Preferred Shares shall not be otherwise redeemable. Currently the SLBwith AVIC, CMBFL and Navigare, as well as the senior secured loan with ABN Amro and Alpha Bank have similar provisions that are satisfied via the existence of the Series D Shares.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.The description of the Series D Convertible Preferred Shares is subject to and qualified in its entirety by reference to the Securities Purchase Agreement, Certificate ofDesignation of the Series D Preferred Shares, and Certificate of Amendment to the Certificate of Designation. Copies of the Securities Purchase Agreement and Certificate of Designationof the Series D Preferred Shares have been filed as exhibits to our Report on Form 6-K filed with the SEC on May 8, 2017. The Certificate of Amendment to the Certificate of Designationwas filed as an exhibit to our Report on Form 6-K filed with the SEC on December 4, 2020.Description of Series E Convertible Preferred StockOn 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 finalsettlement of the loan facility between our Company and Family Trading dated December 23, 2015, as amended.On June 30, 2019, we issued 1,029 Series E Shares for the payment of dividends accumulated since the original issuance of the Series E Preferred Shares through June 30, 2019.From July 25, 2019 to March 19, 2020, we redeemed 33,798 of Series E Preferred Shares for an aggregate purchase price of $38.9 million. On February 17, 2020 we issued 16,004Series E Preferred Shares to Family Trading Inc., as settlement of the consideration outstanding for the purchase of the M/T Eco City of Angels and M/T Eco Los Angeles from partiesaffiliated with Mr. Pistiolis, and for dividends payable to Family Trading Inc. under already outstanding Series E Preferred Shares. On June 30, 2020, we issued 900 Series E PreferredShares to Family Trading, as settlement for dividends payable to Family Trading Inc. under already outstanding Series E Preferred Shares.On August 20, 2020, we entered into a Standstill Agreement with Family Trading, pursuant to which Family Trading agreed not to convert any of its Series E Preferred Sharesinto Common Shares until August 20, 2021.On September 8, 2021, pursuant to a Sale and Purchase Agreement between the Issuer and Zizzy Charter Co. dated September 8, 2021, we issued 2,188 Series E Preferred Sharesto Family Trading as partial settlement of the consideration outstanding for the purchase of an additional 65% ownership interest in each of Julius Caesar Inc. and Legio X Inc., each aparty to shipbuilding contracts for VLCC Julius Caesar and VLCC Legio X Equestris, respectively, from a party affiliated with Mr. Pistiolis.As of the date of the annual report on Form 20-F of which this exhibit is a part, there were 13,452 shares of Series E Preferred Shares outstanding.The Series E Preferred Shares have the following characteristics:Conversion. Each holder of Series E Preferred 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 EPreferred Shares then held by such holder into the Issuer’s Common Shares at the conversion rate then in effect. Each Series E Preferred Share is convertible into the number of theIssuer’s Common Shares equal to the quotient of $1,000 plus any accrued and unpaid dividends divided by the lesser of the following four prices (the “Series E Conversion Price”): (i)$10,000, (ii) 80% of the lowest daily VWAP of the Issuer's Common Shares over the twenty consecutive trading days expiring on the trading day immediately prior to the date of deliveryof a conversion notice, (iii) the conversion price or exercise price per share of any of the Issuer’s then outstanding convertible shares or warrants, (iv) the lowest issuance price of theIssuer’s Common Shares in any transaction from the date of the issuance the Series E Perpetual Preferred Stock onwards, but in no event will the Series E Conversion Price be less than$0.60 (the “Floor Price”). The Floor Price is adjusted (decreased) in case of splits or subdivisions of our outstanding shares and is not adjusted in case of reverse stock splits orcombinations of our outstanding shares. Finally, the Series E Conversion Price is subject to appropriate adjustment in the event of certain dividends and distributions, stockcombinations, reclassifications or similar events affecting the Common Shares.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 beneficialownership 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 andthe 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 votingrights and their consent shall not be required for taking any corporate action.Distributions. The holders of Series E Preferred Shares are entitled to receive certain dividends and distributions paid to holders of Common Shares on an as-converted basis.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 theCommon 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 thousanddollars ($1,000) per each Series E Preferred Shares, or the Liquidation Amount, plus a redemption premium equal to fifteen percent (15%) of the Liquidation Amount being redeemed ifthat 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 firstprovide one business day advance written notice to the holders of our intention to make a redemption, or the Redemption Notice, setting forth the amount it desires to redeem. Afterreceipt 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 dayperiod, 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 incash 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 AnnualDividend 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 PreferredShares 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 suchdividends 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 Directorsmay 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 nomore 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.The description of the Series E Preferred Shares is subject to and qualified in its entirety by reference to the Securities Purchase Agreement and Certificate of Designation of theSeries E Preferred Shares. Copies of the Securities Purchase Agreement and Statement of Designation of the Series E Preferred Shares have been filed as exhibits to our Report on Form6-K filed with the SEC on April 1, 2019.Description of Series F Preferred SharesOn January 17, 2022, we entered into a stock purchase agreement with Africanus Inc., an affiliate of our CEO for the sale of up to 7,560,759 Series F Non-Convertible PerpetualPreferred Shares, par value $0.01, in exchange for (i) the assumption by Africanus Inc. of an amount of $48.0 million of shipbuilding costs for vessels M/T Eco Oceano CA (Hull No. 871),M/T Julius Caesar and M/T Legio X Equestris (Hull No. 3214), and (ii) settlement of our remaining payment obligations relating to the acquisition in September 8, 2021 of an additional65% ownership interest in the newbuilding contracts for its 2 VLCCs, in an amount of up to $27.6 million.A total of 7,200,000 Series F Preferred Shares were issued. On July 8, 2022, we redeemed 865,558 of our Series F Preferred Shares for an aggregate amount of approximately $10.4million, payable in cash. On December 30, 2022, we redeemed 483,694 of our Series F Preferred Shares for an aggregate amount of approximately $5.8 million, payable in cash. On January13, 2023, we redeemed 1,000,000 of our Series F Preferred Shares for an aggregate amount of approximately $12.0 million, payable in cash. On March 6, 2023, we redeemed 1,016,667 of ourSeries F Preferred Shares for an aggregate amount of approximately $12.2 million, payable in cash. Following completion of the redemptions, as of the date hereof, 3,834,082 of theCompany's Series F Preferred Shares remain issued and outstanding.The Series F Preferred Shares have the following characteristics:Voting. The holders of Series F Preferred Shares are entitled to the voting power of ten (10) of our common shares per Series F Preferred Share. The holders of Series FPreferred Shares and the holders of common shares shall vote together as one class on all matters submitted to a vote of shareholders. Except as required by law, the holders of Series FPreferred 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 F Preferred Shares shall be entitled to receive the net assets of theCompany pari passu with the Common Shares.Redemption. The Company at its option shall have the right to redeem a portion or all of the outstanding Series F Preferred Shares. Upon an optional redemption, the Companyshall pay an amount equal to $10 per Series F Preferred Share redeemed (the “Liquidation Amount”), plus a redemption premium of 20% of the Liquidation Amount. The Series FPreferred Shares include a mandatory redemption provision tied to minimum voting requirements for the Company’s major shareholders, including affiliates of the CEO, pursuant towhich if such minimum voting rights fall below 50% the Company is obliged to redeem the full amount of the then outstanding Series F Preferred Shares at a redemption premium of 40%,as detailed in the Certificate of Designation for the Series F Preferred Shares.Dividends. The holders of outstanding Series F Preferred Shares shall be entitled to receive semi-annual dividends payable in cash at a rate of 13.5% per year of the LiquidationAmount of the then outstanding Series F Preferred Shares. In addition, a one-time cash dividend equal to 4.0% of the Liquidation Amount is payable to the Buyer 30 days following theissuance of Series F Preferred Shares.Ranking. All shares of Series F Preferred Shares shall rank pari passu with the Company’s common shares.Shareholder MeetingsUnder our Amended and Restated By-Laws, annual shareholder meetings will be held at a time and place selected by our Board of Directors. The meetings may be held in oroutside 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 ourBoard 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 recordentitled to vote thereat.DirectorsOur 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 andRestated Articles of Incorporation and Amended and Restated By-laws, as further amended, prohibit cumulative voting in the election of directors.Our Board of Directors must consist of at least one member and not more than twelve, as fixed from time to time by the vote of not less than 66 2/3% of the entire board. Eachdirector 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 hisdeath, 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 Boardof Directors, and to members of any committee, for attendance at any meeting or for services rendered to us.Classified BoardOur 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 numberas 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 thirdparty 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 ofDirectors from removing a majority of our Board of Directors for two years.Election and RemovalOur Third Amended and Restated Articles of Incorporation and Amended and Restated By-Laws require parties other than our Board of Directors to give advance writtennotice 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 uponthe 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 preventthe removal of incumbent officers and directors.Dissenters’ Rights of Appraisal and PaymentUnder 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 ourassets 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 toreceive 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 entitledto 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 tradingon 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 andreceive 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 toreceive 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 ofproceedings 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 nationalsecurities 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-appointedappraiser.Shareholders’ Derivative ActionsUnder 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 shareholderbringing the action is a holder of common shares both at the time the derivative action is commenced and at the time of the transaction to which the action relates. On November 20, 2014,we amended our Amended and Restated By-Laws to provide that unless we consent in writing to the selection of alternative forum, the sole and exclusive forum for (i) any shareholders’derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other of our employees or ourshareholders, (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 HighCourt 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 ourBy-Laws does not apply to actions arising under U.S. federal securities laws.Anti-takeover Provisions of our Charter DocumentsSeveral provisions of our Third Amended and Restated Articles of Incorporation and Amended and Restated By-Laws may have anti-takeover effects. These provisions areintended 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 inconnection 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 oracquisition 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 anddirectors.Business CombinationsOur Third Amended and Restated Articles of Incorporation include provisions which prohibit us from engaging in a business combination with an interested shareholder for aperiod 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 thetransaction 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 votingstock 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 andauthorized 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 interestedshareholder; and●the shareholder became an interested shareholder prior to the consummation of the initial public offering.Limited Actions by ShareholdersOur Third Amended and Restated Articles of Incorporation and our Amended and Restated By-Laws provide that any action required or permitted to be taken by ourshareholders must be effected at an annual or special meeting of shareholders or by the unanimous written consent of our shareholders.Our Third Amended and Restated Articles of Incorporation and our Amended and Restated By-Laws provide that only our Board of Directors may call special meetings of ourshareholders 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 specialmeeting 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 annualmeeting.Blank Check Preferred StockUnder 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, toissue 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 ofcontrol of our company or the removal of our management.Super-majority Required for Certain Amendments to Our By-LawsOn 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 betransacted 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 ofDirectors, 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 onour Board of Directors.Marshall Islands Company ConsiderationsOur corporate affairs are governed by our Articles of Incorporation and By-laws and by the BCA. The provisions of the BCA resemble provisions of the corporation laws of anumber of states in the United States. While the BCA also provides that it is to be interpreted according to the laws of the State of Delaware and other states with substantially similarlegislative provisions, there have been few, if any, court cases interpreting the BCA in the Marshall Islands and we cannot predict whether Marshall Islands courts would reach thesame conclusions as courts in the United States. As a result, you may have more difficulty protecting your interests in the face of actions by our management, directors or controllingshareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction which has developed a substantial body of case law. The following table provides acomparison between the statutory provisions of the BCA and the General Corporation Law of the State of Delaware relating to shareholders' rights.Marshall Islands Delaware Shareholder Meetings Held at a time and place as designated in the bylaws. May be held at such time or place as designated in the certificate of incorporation or thebylaws, or if not so designated, as determined by the board of directors. Special meetings of the shareholders may be called by the board of directors or by suchperson or persons as may be authorized by the articles of incorporation or by thebylaws. Special meetings of the shareholders may be called by the board of directors or by suchperson or persons as may be authorized by the certificate of incorporation or by thebylaws. May be held within or without the Marshall Islands. May be held within or without Delaware. Marshall Islands Delaware Notice: Notice: Whenever shareholders are required to take any action at a meeting, written notice of themeeting shall be given which shall state the place, date and hour of the meeting and,unless it is an annual meeting, indicate that it is being issued by or at the direction of theperson calling the meeting. Notice of a special meeting shall also state the purpose forwhich the meeting is called. Whenever shareholders are required to take any action at a meeting, a written notice ofthe meeting shall be given which shall state the place, if any, date and hour of themeeting, and the means of remote communication, if any. A copy of the notice of any meeting shall be given personally, sent by mail or byelectronic mail not less than 15 nor more than 60 days before the meeting. Written notice shall be given not less than 10 nor more than 60 days before the meeting. Shareholders' Voting Rights Unless otherwise provided in the articles of incorporation, any action required to betaken at a meeting of shareholders may be taken without a meeting, without prior noticeand without a vote, if a consent in writing, setting forth the action so taken, is signed byall the shareholders entitled to vote with respect to the subject matter thereof, or if thearticles of incorporation so provide, by the holders of outstanding shares having notless than the minimum number of votes that would be necessary to authorize or takesuch action at a meeting at which all shares entitled to vote thereon were present andvoted. Any action required to be taken at a meeting of shareholders may be taken without ameeting if a consent for such action is in writing and is signed by shareholders havingnot fewer than the minimum number of votes that would be necessary to authorize ortake such action at a meeting at which all shares entitled to vote thereon were presentand voted.Any person authorized to vote may authorize another person or persons to act for himby proxy. Any person authorized to vote may authorize another person or persons to act for himby proxy. Unless otherwise provided in the articles of incorporation or bylaws, a majority of sharesentitled to vote constitutes a quorum. In no event shall a quorum consist of fewer thanone-third of the shares entitled to vote at a meeting. For stock corporations, the certificate of incorporation or bylaws may specify thenumber of shares required to constitute a quorum but in no event shall a quorum consistof less than one-third of shares entitled to vote at a meeting. In the absence of suchspecifications, a majority of shares entitled to vote shall constitute a quorum. When a quorum is once present to organize a meeting, it is not broken by thesubsequent withdrawal of any shareholders. When a quorum is once present to organize a meeting, it is not broken by thesubsequent withdrawal of any shareholders. The articles of incorporation may provide for cumulative voting in the election ofdirectors. The certificate of incorporation may provide for cumulative voting in the election ofdirectors. Marshall Islands Delaware Merger or Consolidation Any two or more domestic corporations may merge into a single corporation if approvedby the board and if authorized by a majority vote of the holders of outstanding shares ata shareholder meeting. Any two or more corporations existing under the laws of the state may merge into asingle corporation pursuant to a board resolution and upon the majority vote byshareholders of each constituent corporation at an annual or special meeting. Any sale, lease, exchange or other disposition of all or substantially all the assets of acorporation, if not made in the corporation's usual or regular course of business, onceapproved by the board, shall be authorized by the affirmative vote of two-thirds of theshares of those entitled to vote at a shareholder meeting. Every corporation may at any meeting of the board sell, lease or exchange all orsubstantially all of its property and assets as its board deems expedient and for the bestinterests of the corporation when so authorized by a resolution adopted by the holdersof a majority of the outstanding stock of the corporation entitled to vote. Any domestic corporation owning at least 90% of the outstanding shares of each classof another domestic corporation may merge such other corporation into itself without theauthorization of the shareholders of any corporation. Any corporation owning at least 90% of the outstanding shares of each class of anothercorporation may merge the other corporation into itself and assume all of its obligationswithout the vote or consent of shareholders; however, in case the parent corporation isnot the surviving corporation, the proposed merger shall be approved by a majority ofthe outstanding stock of the parent corporation entitled to vote at a duly calledshareholder meeting. Any mortgage, pledge of or creation of a security interest in all or any part of thecorporate property may be authorized without the vote or consent of the shareholders,unless otherwise provided for in the articles of incorporation. Any mortgage or pledge of a corporation's property and assets may be authorizedwithout the vote or consent of shareholders, except to the extent that the certificate ofincorporation otherwise provides.Directors The board of directors must consist of at least one member. The board of directors must consist of at least one member. The number of board members may be changed by an amendment to the bylaws, by theshareholders, or by action of the board under the specific provisions of a bylaw. The number of board members shall be fixed by, or in a manner provided by, the bylaws,unless the certificate of incorporation fixes the number of directors, in which case achange in the number shall be made only by an amendment to the certificate ofincorporation. If the board is authorized to change the number of directors, it can only do so by amajority of the entire board and so long as no decrease in the number shall shorten theterm of any incumbent director. If the number of directors is fixed by the certificate of incorporation, a change in thenumber shall be made only by an amendment of the certificate. Removal: Removal: Any or all of the directors may be removed for cause by vote of the shareholders. Any or all of the directors may be removed, with or without cause, by the holders of amajority of the shares entitled to vote unless the certificate of incorporation otherwiseprovides. If the articles of incorporation or the bylaws so provide, any or all of the directors may beremoved without cause by vote of the shareholders. In the case of a classified board, shareholders may effect removal of any or all directorsonly for cause. Marshall Islands Delaware Dissenters' Rights of Appraisal Shareholders have a right to dissent from any plan of merger, consolidation or sale of allor substantially all assets not made in the usual course of business, and receive paymentof the fair value of their shares. However, the right of a dissenting shareholder under theBCA to receive payment of the appraised fair value of his shares shall not be availablefor the shares of any class or series of stock, which shares or depository receipts inrespect thereof, at the record date fixed to determine the shareholders entitled to receivenotice of and to vote at the meeting of the shareholders to act upon the agreement ofmerger or consolidation, were either (i) listed on a securities exchange or admitted fortrading on an interdealer quotation system or (ii) held of record by more than 2,000holders. The right of a dissenting shareholder to receive payment of the fair value of hisor her shares shall not be available for any shares of stock of the constituent corporationsurviving a merger if the merger did not require for its approval the vote of theshareholders of the surviving corporation. Appraisal rights shall be available for the shares of any class or series of stock of acorporation in a merger or consolidation, subject to limited exceptions, such as a mergeror consolidation of corporations listed on a national securities exchange in which listedstock is offered for consideration is (i) listed on a national securities exchange or (ii) heldof record by more than 2,000 holders. A holder of any adversely affected shares who does not vote on or consent in writing toan amendment to the articles of incorporation has the right to dissent and to receivepayment for such shares if the amendment: •Alters or abolishes any preferential right of any outstanding shareshaving preference; or •Creates, alters, or abolishes any provision or right in respect to theredemption of any outstanding shares; or •Alters or abolishes any preemptive right of such holder to acquireshares or other securities; or •Excludes or limits the right of such holder to vote on any matter,except as such right may be limited by the voting rights given tonew shares then being authorized of any existing or new class. Shareholder's Derivative Actions An action may be brought in the right of a corporation to procure a judgment in its favor,by a holder of shares or of voting trust certificates or of a beneficial interest in suchshares or certificates. It shall be made to appear that the plaintiff is such a holder at thetime of bringing the action and that he was such a holder at the time of the transaction ofwhich he complains, or that his shares or his interest therein devolved upon him byoperation of law. In any derivative suit instituted by a shareholder of a corporation, it shall be averred inthe complaint that the plaintiff was a shareholder of the corporation at the time of thetransaction of which he complains or that such shareholder's stock thereafter devolvedupon such shareholder by operation of law. A complaint shall set forth with particularity the efforts of the plaintiff to secure theinitiation of such action by the board or the reasons for not making such effort. Other requirements regarding derivative suits have been created by judicial decision,including that a shareholder may not bring a derivative suit unless he or she firstdemands that the corporation sue on its own behalf and that demand is refused (unless itis shown that such demand would have been futile). Such action shall not be discontinued, compromised or settled, without the approval ofthe High Court of the Republic of the Marshall Islands. Reasonable expenses including attorney's fees may be awarded if the action issuccessful. Marshall Islands Delaware A corporation may require a plaintiff bringing a derivative suit to give security forreasonable expenses if the plaintiff owns less than 5% of any class of outstandingshares or holds voting trust certificates or a beneficial interest in shares representingless than 5% of any class of such shares and the shares, voting trust certificates orbeneficial interest of such plaintiff has a fair value of $50,000 or less. Exhibit 8.1List of Subsidiaries as at December 31, 2022Name of SubsidiaryPlace of Incorporation Top Tanker Management Inc.Marshall Islands Monte Carlo LAX Shipping Company LimitedMarshall Islands PCH Dreaming Inc.Marshall Islands Santa Catalina Inc.Marshall Islands Santa Monica Marine Inc.Marshall Islands Roman Empire Inc.Marshall Islands Athenian Empire Inc.Marshall Islands Julius Caesar Inc.Marshall Islands Legio X Inc.Marshall Islands Eco Oceano Ca Inc.Marshall Islands California 19 Inc.Marshall Islands California 20 Inc.Marshall IslandsExhibit 12.1CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICERI, Evangelos J. Pistiolis, certify that:1. I have reviewed this annual report on Form 20-F of TOP Ships Inc. (the “Company”);2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results ofoperations and cash flows of the Company as of, and for, the periods presented in this report;4. The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that materialinformation relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to providereasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples;(c) Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that hasmaterially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and5. The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors andthe audit committee of the Company's board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affectthe Company's ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.Date: March 31, 2023/s/ Evangelos J. PistiolisEvangelos J. PistiolisPresident, Chief Executive Officer, and Director (Principal Executive Officer)Exhibit 12.2CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICERI, Alexandros Tsirikos, certify that:1. I have reviewed this annual report on Form 20-F of TOP Ships Inc. (the “Company”);2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results ofoperations and cash flows of the Company as of, and for, the periods presented in this report;4. The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that materialinformation relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to providereasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples;(c) Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that hasmaterially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and5. The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors andthe audit committee of the Company's board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affectthe Company's ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.Date: March 31, 2023/s/ Alexandros TsirikosAlexandros TsirikosChief Financial Officer (Principal Financial Officer)Exhibit 13.1PRINCIPAL EXECUTIVE OFFICER CERTIFICATIONPURSUANT TO 18 U.S.C. SECTION 1350In connection with this Annual Report of TOP Ships Inc. (the "Company") on Form 20-F for the year ended December 31, 2022 as filed with the Securities and Exchange Commission (the"SEC") on or about the date hereof (the "Report"), I, Evangelos J. Pistiolis, President, Chief Executive Officer, and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.Date: March 31, 2023/s/ Evangelos J. PistiolisEvangelos J. PistiolisPresident, Chief Executive Officer, and Director (Principal Executive Officer)Exhibit 13.2PRINCIPAL FINANCIAL OFFICER CERTIFICATIONPURSUANT TO 18 U.S.C. SECTION 1350 In connection with this Annual Report of TOP Ships Inc. (the "Company") on Form 20-F for the year ended December 31, 2022 as filed with the Securities and Exchange Commission (the"SEC") on or about the date hereof (the "Report"), I, Alexandros Tsirikos, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.Date: March 31, 2023/s/ Alexandros TsirikosAlexandros TsirikosChief Financial Officer (Principal Financial Officer)Exhibit 15.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in Registration Statement Nos. 333-267170 and 333-268475 on Form F-3 and the post-effective Amendment to Form F-1 in the RegistrationStatement on Form F-3 (File No. 333-267545) of our report dated March 31, 2023, relating to the consolidated financial statements of Top Ships Inc. appearing in this Annual Report onForm 20-F for the year ended December 31, 2022./s/ Deloitte Certified Public Accountants S.A.Athens, GreeceMarch 31, 2023

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