d1277700_f1-a.htm

Registration No. 333–
 
Form F-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________.
Form F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________________________________________.
SEANERGY MARITIME HOLDINGS CORP.
(Exact name of registrant as specified in its charter)

Republic of the Marshall Islands
4412
Not Applicable
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
 
(I.R.S. Employer
Identification Number)
 
 
 
Seanergy Maritime Holdings Corp.
1-3 Patriarchou Grigoriou
166 74 Glyfada
Athens, Greece
Tel: +30 213 0181507
(Address and telephone number of Registrant's principal executive offices)
 
 
Seward & Kissel LLP
Attention: Gary J. Wolfe, Esq.
One Battery Park Plaza
New York, New York 10004
Tel: (212) 574-1200
(Name, Address, and telephone number of agent for service)
 
__________________________________________________________________________________________

 
Copies to:
 
Seanergy Maritime Holdings Corp.
Attn: Dale Ploughman
1-3 Patriarchou Grigoriou
166 74 Glyfada
Athens, Greece
Tel: +30 213 0181507
Fax: +30 210 9638450
 
Gary J. Wolfe, Esq.
Robert E. Lustrin, Esq.
Seward & Kissel LLP
One Battery Park Plaza
New York, New York 10004
Tel: (212) 574-1200
Fax: (212) 480-8421

Approximate date of commencement of proposed sale to the public:
From time to time after this registration statement becomes effective as determined by market conditions and other factors.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box: x
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  o


 
 

 

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered
 
 
Amount to be Registered
 
   
Proposed Maximum Aggregate Offering Price
 
   
Amount of Registration Fee
 
 
Common Shares, par value $0.0001 per share
    4,641,620     $ 16,292,086 (1)   $ 2,000  
                         

(1)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) of the Securities Act of 1933, as amended (the "Securities Act"), based upon the average of the high and low sales prices on the NASDAQ Global Market on March 26, 2012 of the Common Shares of the Registrant.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
 

 
 

 

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy or sell these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MARCH 29, 2012



Seanergy Maritime Holdings Corp.

Up to 4,641,620 Shares of Common Stock.

This prospectus relates to the proposed sale by the selling shareholders named in the section "Selling Shareholders", in one or more offerings from time to time, of up to an aggregate of 4,641,620 of our common shares.
 
We are not selling any common shares under this prospectus and will not receive any proceeds from the sale of the common shares by the selling shareholders. We will pay the expenses in connection with the registration of the resale of the common shares.
 
Our common shares are listed on the NASDAQ Global Market under the symbol "SHIP".  On March 28, 2012, the closing price of our common shares was $3.39 per share.
 
Investing in our securities involves a high degree of risk.  See "Risk Factors" beginning on page 13 of this prospectus and in our Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed on March 19, 2012, as amended.  You should read this prospectus, any accompanying prospectus supplement, and the documents incorporated by reference herein and therein carefully before you make your investment decision.
 
____________________

The securities issued under this prospectus may be offered directly or through underwriters, agents or dealers.  The names of any underwriters, agents or dealers will be included in a prospectus supplement.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus.  Any representation to the contrary is a criminal offense.
 
_________________________

The date of this prospectus is                    , 2012.

 
 
 

 

TABLE OF CONTENTS
 
 
 

ENFORCEABILITY OF CIVIL LIABILITIES
1
PROSPECTUS SUMMARY
2
THE OFFERING
8
RISK FACTORS
9
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
10
CAPITALIZATION
11
SELECTED HISTORICAL FINANCIAL AND OTHER DATA
12
DIVIDEND POLICY
14
USE OF PROCEEDS
15
PRICE RANGE OF OUR COMMON SHARES
16
DESCRIPTION OF CAPITAL STOCK
17
SELLING AND PRINCIPAL SHAREHOLDERS
21
HOW THE SHARES MAY BE DISTRIBUTED
22
REPUBLIC OF THE MARSHALL ISLANDS COMPANY CONSIDERATIONS
24
TAXATION
27
EXPENSES RELATING TO THIS OFFERING
35
LEGAL MATTERS
35
EXPERTS
35
WHERE YOU CAN FIND MORE INFORMATION
35
DOCUMENTS INCORPORATED BY REFERENCE
36
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF MARITIME CAPITAL SHIPPING LIMITED   F-1


You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted.
 
We obtained statistical data, market data and other industry data and forecasts used or incorporated by reference in this prospectus from publicly available information. While we believe that the statistical data, industry data, forecasts and market research are reliable, we have not independently verified the data, and we do not make any representation as to the accuracy of the information.
 
Unless otherwise indicated, all references in this prospectus to "$" or "dollars" are to U.S. dollars and financial information presented in this prospectus that is derived from the financial statements incorporated by reference is prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP.

 

 
 

 

ENFORCEABILITY OF CIVIL LIABILITIES
 
Seanergy Maritime Holdings Corp. is a Marshall Islands company and our executive offices are located outside of the United States in Athens, Greece. All of our directors, officers and the expert named herein reside outside the United States. In addition, a substantial portion of our assets and the assets of our directors, officers and the expert named herein are located outside of the United States. As a result, you may have difficulty serving legal process within the United States upon us or any of these persons. You may also have difficulty enforcing, both in and outside the United States, judgments you may obtain in U.S. courts against us or these persons in any action, including actions based upon the civil liability provisions of U.S. federal or state securities laws.  Furthermore, there is substantial doubt that the courts of the Republic of the Marshall Islands or Greece would enter judgments in original actions brought in those courts predicated on U.S. federal or state securities laws.
 

 
1

 

PROSPECTUS SUMMARY
 
This summary highlights certain information and financial statements appearing elsewhere in this prospectus or incorporated by reference herein and is qualified in its entirety by the more detailed information and financial statements included elsewhere or incorporated by reference. For a more complete understanding of this offering, you should read the entire prospectus carefully, including the risk factors and the financial statements and the related notes thereto. We use the term "deadweight tons," or dwt, in describing the capacity of our dry bulk carriers. Dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the weight that a vessel can safely carry.
 
References in this prospectus to "Seanergy," "we," "us", "our company" or the "Company" refer to Seanergy Maritime Holdings Corp. and its consolidated subsidiaries, unless the context otherwise requires.  References in this prospectus to "Seanergy Maritime" refer to our predecessor Seanergy Maritime Corp.  References in this prospectus to "BET" refer to our wholly-owned subsidiary Bulk Energy Transport (Holdings) Limited.  References in this prospectus to "MCS" refer to our wholly-owned subsidiary Maritime Capital Shipping Limited.  References in this prospectus to the "selling shareholders" refers to United Capital Investments Corp., Atrion Shipholding S.A., Plaza Shipholding Corp. and Comet Shipholding Inc., collectively.  References in this prospectus to the "Reverse Stock Split" refer to the one-for-fifteen reverse split of our common shares that took effect on June 24, 2011.  For more information about us, please refer to our Annual Report on Form 20-F for year ended December 31, 2011, filed on March 19, 2012, as amended, incorporated into this prospectus by reference.
 
The Company
 
We are an international company providing worldwide transportation of dry bulk commodities through our vessel-owning subsidiaries, which include BET and MCS. We own and operate a fleet of 19 dry bulk vessels that consists of four Capesize, three Panamax, two Supramax and ten Handysize vessels. Our fleet transports a variety of dry bulk commodities, including coal, iron ore and grains, or major bulks, as well as bauxite, phosphate, fertilizer and steel products, or minor bulks. We acquired all of our vessels from companies related to members of the Restis family, who are affiliates of our major shareholders. As of December 31, 2011, we had total outstanding indebtedness of $346.4 million. By operating a fleet of dry bulk carriers of various sizes, a majority of which have time charters attached to them, we believe that we can serve a variety of charterers with diverse requirements while maintaining a stable base of cash flows. We believe this will reduce our reliance on any one sector of dry bulk charterers and provide us with a diversified client base and greater stability of revenue.
 
 
 
2

 
 
Our Fleet
 
As of the date of this prospectus, we own and operate 19 dry bulk carriers that transport a variety of dry bulk commodities. The following table provides summary information about our fleet and its current employment:
 
Vessel/Flag
Type
 
Dwt
   
Year Built
 
Current Employment
Terms of Employment Period
 
Daily Base Gross Charter
Hire Rate
 
Profit Sharing
Above Base
Charter Hire Rate
Charterer
African Oryx
/Bahamas
Handysize
    24,112       1997  
Time Charter
Expiring June 2013
 
$7,000
base rate
 
50% above base rate (1)
MUR Shipping B.V.
Bremen Max/ Isle of Man
Panamax
    73,503       1993  
Spot
Time Charter
Expiring May 2012
    $11,500  
None
A/C Pacific Bulk Shipping Limited
Hamburg Max
/Isle of Man
Panamax
    73,498       1994  
Time Charter
Expiring October 2012
 
$21,500 base rate and a ceiling of $25,500
 
100% between base and ceiling and
50% above ceiling (2)
A/C Mansel Ltd.
 
Davakis G./Bahamas (3)
Supramax
    54,051       2008  
Time Charter
Expiring January 2013
    $14,500  
None
A/C Bunge
Delos Ranger
/Bahamas (3)
Supramax
    54,057       2008  
Spot
Time Charter
Expiring April 2012
    $13,500  
None
Noble Chartering Corp.
BET Commander
/Isle of Man
Capesize
    149,507       1991  
Spot Voyage Charter
Expiring April 2012
    N/A  
None
Fair Wind Chartering Pte. Ltd.
BET Fighter
/Isle of Man
Capesize
    173,149       1992  
Time Charter
Expiring August 2012
 
BCI Linked (6)
 
None
SwissMarine Services S.A.
BET Prince
/Isle of Man
Capesize
    163,554       1995  
Time Charter
Expiring December 2012
 
BCI Linked (6)
 
None
SwissMarine Services S.A.
BET Scouter
/Isle of Man
Capesize
    172,173       1995  
Time Charter
Expiring July 2012
 
BCI Linked (6)
 
None
SwissMarine Services S.A.
BET Intruder
/Isle of Man
Panamax
    69,235       1993  
Time Charter
Expiring October 2012
    $12,250  
None
SwissMarine Services S.A.
Fiesta
/Liberia (4)
Handysize
    29,519       1997  
Bareboat Charter
Expiring November 2013
    (7 )
None
Oldendorff Carriers GmbH & Co. KG
Pacific Fantasy
/Liberia (4)
Handysize
    29,538       1996  
Bareboat Charter
Expiring January 2014
    (7 )
None
Oldendorff Carriers GmbH & Co. KG
Pacific Fighter
/Liberia (4)
Handysize
    29,538       1998  
Bareboat Charter
Expiring November 2013
    (7 )
None
Oldendorff Carriers GmbH & Co. KG
Clipper Freeway
/Liberia (4)
Handysize
    29,538       1998  
Bareboat Charter
Expiring January 2014
    (7 )
None
Oldendorff Carriers GmbH & Co. KG
African Joy
/Hong Kong
Handysize
    26,482       1996  
Time Charter
Expiring February 2013
 
BHSI Linked (8)
 
None
MUR Shipping B.V.
African Glory
/Hong Kong
Handysize
    24,252       1998  
Time Charter
Expiring November 2012 (5)
 
$7,000 base rate and a ceiling of $12,000
 
75% between base and ceiling and 50% above ceiling (1)
MUR Shipping B.V.
Asian Grace
/Hong Kong
Handysize
    20,138       1999  
Time Charter
Expiring September 2012 (5)
 
$7,000 base rate and a ceiling of $11,000
 
75% between base and ceiling and 50% above ceiling (1)
MUR Shipping B.V.
Clipper Glory
/Hong Kong
Handysize
    30,570       2007  
Time Charter
Expiring August 2012
    $25,000  
None
CF Bulk Carriers Ltd.
(Clipper Bulk Shipping Limited)
Clipper Grace
/Hong Kong
Handysize
    30,548       2007  
Time Charter
Expiring August 2012
    $25,000  
None
CF Bulk Carriers Ltd.
(Clipper Bulk Shipping Limited)
Total
      1,256,962                          
 
3

 
 

(1)           Calculated using the adjusted Time Charter average of the Baltic Supramax Index.
(2)
Calculated using the Time Charter average of the Baltic Panamax Index.
(3)
Sister ships.
(4)
Sister ships.
(5)
Open ended contract that continues after the date specified until mutual notice is given six months in advance.
(6)
Calculated using the adjusted Time Charter average of the Baltic Capesize Index.
(7)
Time Charter average of Baltic Handysize Index increased by 100.63% minus operating expenses.
(8)
Calculated using the adjusted Time Charter average of the Baltic Handysize Index.
 
Management of Our Fleet
 
Safbulk Pty Ltd., or Safbulk Pty, performs the commercial management of our initial fleet of six vessels. Safbulk Maritime S.A., or Safbulk Maritime, performs the commercial management of the BET fleet. Each of Safbulk Pty and Safbulk Maritime, which are controlled by members of the Restis family, and are collectively referred to throughout this prospectus as Safbulk, has entered into a brokerage agreement with Seanergy Management Corp. & BET respectively,  two of our wholly-owned subsidiaries, to provide these commercial management services, pursuant to which Safbulk is entitled to receive a commission of 1.25% calculated on the collected gross hire/freight/demurrage payable when such amounts are collected. See "Item 4. Information on the Company— Brokerage Agreements" in our Annual Report on Form 20-F for the year ended December 31, 2011, incorporated by reference herein. MCS carries out the commercial management of its fleet in-house, arranging and negotiating the terms of its vessels' time and bareboat charters based on market conditions.
 
Enterprises Shipping and Trading S.A., or EST, performs the technical management of our initial fleet of six vessels and the BET fleet. EST is controlled by members of the Restis family. Safbulk and EST presently do business with over 100 customers, the majority of which have been customers since inception.
 
MCS carries out the commercial management of its fleet in-house, arranging and negotiating the terms of its vessels' time and bareboat charters based on market conditions. M/S Fleet Ship Management Inc. and Wallem Shipmanagement Ltd. provide us with technical management services for our MCS fleet.

Safbulk's and EST's main objective is to ensure responsible and ethical management of services from the point of view of health, safety and environmental aspects. Towards this end they have adopted various models (EFQM, EBEN), standards (ISO 9001, ISO 14001 and OHSAS 18001) and codes (ISM Code).
 
EST, has earned a market reputation for excellence in the provision of services that is evident from many awards and certifications earned over the years including International Safety Management Certificate (1993), ISO 9001 Certification for Quality Management (1995), ISO 14001 Certification for Environmental Management System (2002), US Coast Guard AMVER Certification, EFQM "Committed to Excellence" (2004), "Recognized for Excellence" Certification (2005), "Recognized for Excellence-4 stars" Certification (2006), OHSAS 18001:1999 for Health and Safety (2007) and EBEN (European Business Ethics Network silver (2008) and gold (2009) awards.
 
Shipping Committee
 
We have established a shipping committee. The purpose of the shipping committee is to consider and vote upon all matters involving shipping and vessel finance in order to accelerate the pace of our decision making in respect of shipping business opportunities, such as the acquisition of vessels or companies. The shipping industry often demands very prompt review and decision-making with respect to business opportunities. In recognition of this, and in order to best utilize the experience and skills that our directors bring to us, our board of directors has delegated all such matters to the shipping committee. Transactions that involve the issuance of our securities or transactions with affiliates, however, shall not be delegated to the shipping committee but instead shall be considered by the entire board of directors. The shipping committee consists of three directors. In accordance with the Amended and Restated Charter of the Shipping Committee, two of the directors on the shipping committee are nominated by the Restis affiliate shareholders and one of the directors on the shipping committee is nominated by a majority of our Board of Directors and is an independent member of the Board of Directors. The members of the shipping committee are Mr. Dale Ploughman and Ms. Christina Anagnostara, who are the Restis affiliate shareholders' nominees, and Mr. Dimitris Panagiotopoulos, who is the Board's nominee.
 

 
4

 
 

In order to assure the continued existence of the shipping committee, our board of directors has agreed that the shipping committee may not be dissolved and that the duties or composition of the shipping committee may not be altered without the affirmative vote of not less than 80% of our board of directors. In addition, the duties of our chief executive officer, who is currently Mr. Ploughman, may not be altered without a similar vote. These duties and powers include voting the shares of stock that Seanergy owns in its subsidiaries. In addition to these agreements, we have amended certain provisions in our articles of incorporation and by-laws to incorporate these requirements.
 
As a result of these various provisions, in general, all shipping- related decisions will be made by the Restis family appointees to our board of directors, unless 80% of the board members vote to change the duties or composition of the shipping committee.
 
Our Corporate History
 
Incorporation of Seanergy and Seanergy Maritime
 
We were incorporated under the laws of the Republic of the Marshall Islands pursuant to the Marshall Islands Business Corporation Act, or the BCA, on January 4, 2008, under the name Seanergy Merger Corp., as a wholly owned subsidiary of Seanergy Maritime Corp., a Marshall Islands corporation, or Seanergy Maritime.  Seanergy Maritime was incorporated under the laws of the Republic of the Marshall Islands on August 15, 2006 as a blank check company formed to acquire, through a merger, capital stock exchange, asset acquisition or other similar business combination, one or more businesses in the maritime shipping industry or related industries. Seanergy Maritime, up to the date of the initial business combination, had not commenced any business operations and was considered a development stage enterprise. Seanergy Maritime is our predecessor.  We changed our name to Seanergy Maritime Holdings Corp. on July 11, 2008.
 
Initial Public Offering of Seanergy Maritime and Initial Business Combination
 
On September 28, 2007, Seanergy Maritime consummated its initial public offering of 23,100,000 units, with each unit consisting of one share of its common stock and one warrant. Each warrant entitled the holder to purchase one share of Seanergy Maritime common stock at an exercise price of $6.50. As a result of the Reverse Stock Split, each unit holder is entitled to a one-fifteenth share upon the exercise of each unit. The initial public offering generated $227,071,000 in net proceeds, after deducting certain deferred offering costs.  Upon the dissolution and liquidation of our predecessor, Seanergy Maritime Corp., all outstanding warrants and the underwriters’ Unit Purchase Option of Seanergy Maritime Corp. concurrently became the Company’s obligations and became exercisable to purchase the Company’s common shares.
 
We acquired our initial fleet of six dry bulk carriers from the Restis family for an aggregate purchase price of (i) $367,030,750 in cash, (ii) $28,250,000 (face value) in the form of a convertible promissory note, or the Note, and (iii) an aggregate of 4,308,075 shares of our common stock (or 287,205 shares as adjusted for the Reverse Stock Split), subject to us meeting an Earnings Before Interest, Taxes, Depreciation and Amortization, or EBITDA, target of $72.0 million to be earned between October 1, 2008 and September 30, 2009, which target was achieved and the additional consideration was recorded as an increase in goodwill of $17,275,000. This acquisition was made pursuant to the terms and conditions of a Master Agreement dated May 20, 2008 among us, Seanergy Maritime, our former parent, the several selling parties who are affiliated with members of the Restis family, and the several investing parties who are affiliated with members of the Restis family, and six separate memoranda of agreement, which we collectively refer to as the "MOAs," between our vessel-owning subsidiaries and each seller, each dated as of May 20, 2008.
 
BET Acquisition
 
On August 12, 2009, we closed on the acquisition of a 50% interest in BET from Constellation Bulk Energy Holdings, Inc., or Constellation. Following this acquisition, we controlled BET through our right to appoint a majority of the BET board of directors pursuant to a shareholder agreement with Mineral Transport Holdings, Inc., or Mineral Transport, a company controlled by members of the Restis family. The purchase price consisted of $1.00 and the acquisition of assets and the assumption of liabilities. The stock purchase was accounted for under the purchase method of accounting and accordingly the assets (vessels) acquired and the liabilities assumed have been recorded at their fair values. In addition to the vessels, the other assets acquired include $37.75 million in cash and restricted cash and $4.32 million in current receivables and inventories. The fair value of the vessels as of the closing of the acquisition was $126.0 million, and BET owed $143.10 million under its credit facility as of such date. On October 22, 2010, we purchased the remaining 50% non-controlling ownership interest in BET from Mineral Transport for consideration that was paid in the form of: (i) $7.0 million in cash paid to Mineral Transport and (ii) 24,761,905 shares of our common stock (or 1,650,794 shares as adjusted for the Reverse Stock Split) totaling $26.0 million determined based upon an agreed price of $1.05 per share (or $15.75 per share as adjusted for the Reverse Stock Split). The acquisition was treated as a transaction between entities under common control, and as such, the transaction was reported as of May 20, 2010, due to the expiration of a voting agreement leaving the Restis family as our controlling shareholders.
 
 
5

 
 
 
MCS Acquisition
 
On May 28, 2010, after entering into a share purchase agreement with Maritime Capital Shipping (Holdings) Limited, or Maritime Capital, a company controlled by members of the Restis family, we completed the final documentation for the acquisition of a 51% ownership interest in MCS for consideration of $33.0 million. The consideration was paid to Maritime Capital from the proceeds of our equity offering completed in February 2010 and from our cash reserves. On September 15, 2010, we completed the acquisition from Maritime Capital of the remaining 49% ownership interest in MCS for consideration that was paid in the form of: (i) cash in the amount of $3.0 million paid to Maritime Capital from our cash reserves and (ii) 24,761,905 shares of our common stock (or 1,650,794 shares as adjusted for the Reverse Stock Split) totaling $26.0 million at an agreed price of $1.05 per share (or $15.75 per share as adjusted for the Reverse Stock Split). The acquisition was treated as a transaction between entities under common control, and as such, the transaction was recorded at historical cost and was retrospectively reported as of May 20, 2010.
 
Equity Injection Plan
 
On January 31, 2012, we completed an equity injection plan with four entities affiliated with the Restis family.  In exchange for $10 million of cash, we issued an aggregate of 4,641,620 of our common shares to the four entities at a price of $2.15442.  The price was determined as the average closing price of the five trading days preceding the execution of the purchase plan.  Following the issuance of the shares and as of the date of this prospectus, we have 11,959,282 outstanding common shares.
 
Corporate Structure
 
We are incorporated in the Republic of the Marshall Islands under the name Seanergy Maritime Holdings Corp. Our executive offices are located at 1-3 Patriarchou Grigoriou, 166 74 Glyfada, Athens, Greece and our telephone number is  +30 213 0181507.
 
The Securities Offered by the Selling Shareholders
 
The selling shareholders listed herein are using this prospectus to offer up to an aggregate of 4,641,620 shares of our common stock.
 
Recent Developments
 
Sale of the African Zebra
 
 On February 9, 2012, the Company announced it entered into a memorandum of agreement with an unaffiliated third party for the sale of the Handymax drybulk carrier, the African Zebra, for a gross sale price of $4.1 million and on February 15, 2012 the vessel was delivered to its new owners. The African Zebra was a 38,632 dwt Handymax bulk carrier built in 1985 and the Company used the proceeds to reduce debt. The sale resulted in a book loss of approximately $2.4 million. Following the sale of African Zebra, the Company's fleet consisted of four Capesize, three Panamax, two Supramax and ten Handysize dry bulk carriers with an average age of 13.7 years.
 

 
6

 
 

Amendment to Credit Facilities Agreements with Marfin
 
On January 31, 2012, we amended the Marfin term and revolving credit facilities agreements.  The amendment includes the (i) extension of the term and revolving facilities' maturity dates from September 2015 to December 2018; (ii) suspension of the requirement to pay principal installments on the  term  facility for 2012; (iii) amendment of the amortization schedule from 2013 onwards; (iv) payment of $3.2 million on the outstanding revolving facility; (v) waiver of all financial covenants as of  December 31, 2011; (vi) waiver of all financial covenants, including the security margin, for the period commencing from January 1, 2012 through and including December 31, 2013; and (vii) amendment of the financial  undertakings and the applicable security margins from 2014 onwards.  Furthermore, the applicable margin has been increased by 50 basis points per annum on the term and revolving facilities.  For more information regarding the Marfin credit facilities, please read "Item 5. Operating and Financial Review and Prospects–B. Liquidity and Capital Resources–Credit Facilities" in our Annual Report on Form 20-F for the year ended December 31, 2011 incorporated by reference herein.
 
Amendment to Loan Facility Agreement with Citibank
 
On February 7, 2012, we entered into a supplemental agreement for certain covenant waivers under the loan facility by and among Bulk Energy Transport (Holdings) Limited, our subsidiary, and Citibank, as agent, and the other financial institutions referred to in the Citibank restated loan agreement.  The lenders have agreed to grant waivers on all previous covenant breaches and to temporarily grant waivers to the minimum equity ratio and minimum liquidity amount and reduce the security margin covenant from 125% to 100% until January 1, 2013.  In addition, BET must maintain a minimum amount of $14.5 million in cash in the BET account with Citibank. The applicable margin has been increased by 100 basis points per annum. For more information regarding the Citibank loan, please read "Item 5. Operating and Financial Review and Prospects–B. Liquidity and Capital Resources–Credit Facilities" in our Annual Report on Form 20-F for the year ended December 31, 2011 incorporated by reference herein.
 
NASDAQ Notifications and Reverse Stock Split
 
On January 28, 2011, we were notified by NASDAQ that we were no longer in compliance with NASDAQ Listing Rule 5450(a)(1) because the closing bid price of our common stock for 30 consecutive business days, from December 14, 2010 to January 26, 2011, had been below the minimum $1.00 per share bid price requirement for continued listing on the NASDAQ Global Market.
 
In response, we conducted a 1-for-15 reverse stock split on June 24, 2011. Our stock began trading on a split adjusted basis on NASDAQ on June 27, 2011. No fractional shares were issued in connection with the reverse split and shareholders who otherwise held fractional shares of our common stock received a cash payment instead. Also, on the effective date, the Company's issued and outstanding warrants were adjusted pursuant to the terms of the respective governing agreements. On a per warrant basis, the exercise price of the 1,138,917 warrants did not change following the reverse stock split and, accordingly, in order for the holder to purchase one whole share of the Company's common stock the number of warrants to be exercised will increase by a multiple of fifteen. The price of the 1,000,000 Unit Warrants was automatically adjusted.
 
On January 24, 2012, we were notified by NASDAQ that we were no longer in compliance with NASDAQ Listing Rule 5450(b)(1)(C) because the market value of the publicly held shares of our common stock for 30 consecutive business days, from December 6, 2011 to January 23, 2012 had been below the minimum $5,000,000 market value of publicly held shares requirement for continued listing on the NASDAQ Global Market. This notification had no effect on the listing of the Company's common stock, and the applicable grace period to regain compliance was 180 calendar days, expiring on July 23, 2012.  The Company regained compliance at the end of February 2012, when during the applicable grace period the Company's minimum market value of our publicly held shares was $5,000,000 or greater for a minimum of ten consecutive business days.
 

 
7

 

THE OFFERING
 
The summary below describes the principal terms of the securities being offered hereunder. Certain of the terms and conditions described below are subject to important limitations and exceptions.
 
Securities Offered by the selling shareholders
4,641,620
 
 
Common Shares to be Outstanding before and after this Offering
11,959,282 common shares
 
 
Use of Proceeds
We will not receive any proceeds from the sale of the common shares by the selling shareholders.
 
 
U.S. Federal Income Tax
Considerations
See "Taxation — United States Taxation" for a general summary of the U.S. federal income taxation of the ownership and disposition of our securities. Holders are urged to consult their respective tax advisers with respect to the application of the U.S. federal income tax laws to their own particular situation as well as any tax consequences of the ownership and disposition of our common shares arising under the federal estate or gift tax rules or under the laws of any state, local, foreign or other taxing jurisdiction or under any applicable treaty.
 
 
Trading Symbol for Our Common Shares
Our common shares are traded on the NASDAQ Global Market under the symbol "SHIP".
 
 
Risk Factors
Investing in our securities involves substantial risk. You should carefully consider all the information in this prospectus prior to investing in our common shares. In particular, we urge you to consider carefully the factors set forth in the section of this prospectus entitled "Risk Factors" beginning on page 13 and under the heading "Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2011, filed on March 19, 2012, as amended.


 
8

 

RISK FACTORS
 
You should carefully consider the risks described below and discussed under the caption "Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2011, filed on March 19, 2012, as amended, and incorporated by reference herein, as well as the other information included in this prospectus before deciding to invest in our securities.
 
If the share price of our common shares fluctuates after this offering, you could lose a significant part of your investment.

The market price of our common shares may be influenced by many factors, many of which are beyond our control, including the following:
 
 
·
the failure of securities' analysts to publish research about us after this offering, or analysts making changes in their financial estimates;
 
 
·
announcements by us or our competitors of significant contracts, acquisitions or capital commitments;
 
 
·
variations in quarterly operating results;
 
 
·
general economic conditions;
 
 
·
terrorist or piracy acts;
 
 
·
future sales of our common shares or other securities; and
 
 
·
investors' perception of us and the dry bulk industry.
 
As a result of these factors, investors in our common shares may not be able to resell their common shares at or above the initial offering price. These broad market and industry factors may materially reduce the market price of our common shares, regardless of our operating performance.

 
We may issue additional common shares or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of our common shares.
 
Our amended and restated articles of incorporation authorize our board of directors to, among other things, issue additional common shares or preferred shares or securities convertible or exchangeable into equity securities, without shareholder approval. We may issue such additional equity or convertible securities to raise additional capital. The issuance of any additional shares of common or preferred shares or convertible securities could be substantially dilutive to our shareholders. Moreover, to the extent that we issue restricted stock units, stock appreciation rights, options or warrants to purchase our common shares in the future and those stock appreciation rights, options or warrants are exercised or as the non-vested share units vest, our shareholders may experience further dilution. Holders of shares of our common stock have no preemptive rights that entitle such holders to purchase their pro rata share of any offering of shares of any class or series and, therefore, such sales or offerings could result in increased dilution to our shareholders.
 
Future sales of our common shares could have an adverse effect on our share price.
 
The market price of our common shares could decline due to sales, or the announcements of proposed sales, of a large number of common shares in the market, including sales of common shares by our large shareholders, or the perception that these sales could occur. These sales, or the perception that these sales could occur, could also make it more difficult or impossible for us to sell equity securities in the future at a time and price that we deem appropriate to raise funds through future offerings of common stock.
 
 
9

 
 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 
This prospectus  contains certain forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management's expectations, hopes, beliefs, intentions or strategies regarding the future and other statements other than statements of historical fact. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:
 
 
·
our future operating or financial results;
 
 
·
our financial condition and liquidity, including our ability to obtain additional financing in the future to fund capital expenditures, acquisitions and other general corporate activities;
 
 
·
our ability to pay dividends in the future;
 
 
·
dry bulk shipping industry trends, including charter rates and factors affecting vessel supply and demand;
 
 
·
future, pending or recent acquisitions, business strategy, areas of possible expansion, and expected capital spending or operating expenses;
 
 
·
the useful lives and changes in the value of our vessels and their impact on our compliance with loan covenants;
 
 
·
availability of crew, number of off-hire days, dry-docking requirements and insurance costs;
 
 
·
global and regional economic and political conditions;
 
 
·
our ability to leverage the relationships and reputation in the dry bulk shipping industry of Safbulk Pty and Safbulk Maritime, SwissMarine Services S.A., or SwissMarine, and EST;
 
 
·
changes in seaborne and other transportation patterns;
 
 
·
changes in governmental rules and regulations or actions taken by regulatory authorities;
 
 
·
potential liability from future litigation and incidents involving our vessels;
 
 
·
acts of terrorism and other hostilities; and
 
 
·
other factors discussed in "Risk Factors."
 
The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading "Risk Factors." Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws and/or if and when management knows or has a reasonable basis on which to conclude that previously disclosed projections are no longer reasonably attainable.
 
 
10

 
 

CAPITALIZATION
 
 
The following table sets forth our capitalization as of December 31, 2011:
 
 
·
on a historical basis without any adjustment to reflect subsequent events; and
 
 
·
on an as adjusted basis to give effect to:
 
(i) the payment of debt in the aggregate amount of $20.7 million consisting of (a) the repayment of $3.2 million under the Marfin revolving facility; (b) the prepayment of $4.0 million under the Marfin term loan facility; (c) the repayment of $0.6 million under the UOB loan facility; (d) the repayment of $2.6 million under the HSBC loan facility; (e) the prepayment of $8.2 million under the DVB loan facility; and (f) the repayment of $2.1 million under the DVB loan facility; and (ii) the issuance of an aggregate of 4,641,620 common shares to four entities affiliated with members of the Restis family in exchange for $10.0 million at a price of $2.15442 per share.
 
There have been no other material changes in our capitalization since December 31, 2011 through March 27, 2012.
 
You should read this table in conjunction with our historical consolidated financial statements, together with the respective notes thereto, included in this prospectus.
 
(All figures in thousands of dollars, except for share amounts)
 
 
 
 
 
 
Debt:
 
Historical
 
 
As Adjusted
 
Long-term term facility financing (secured), including current portion of $45,817 and $33,018 (as adjusted)
 
 
346,403
 
 
 
325,703
 
Total debt
 
 
346,403
 
 
 
325,703
 
 
 
 
 
 
 
 
 
 
Shareholders' equity:
 
 
 
 
 
 
 
 
Preferred stock, $0.0001 par value; 25,000,000 shares authorized; none issued
 
 
--
 
 
 
--
 
Common stock, $0.0001 par value; 500,000,000 authorized shares as at December 31, 2011; 7,317,662 and 11,959,282 shares issued and outstanding as of December 31, 2011 and as adjusted, respectively
 
 
1
 
 
 
1
 
Additional paid-in capital
 
 
279,292
 
 
 
289,292
 
Accumulated deficit
 
 
(202,370
)
 
 
(202,370
)
Total equity
 
 
76,923
 
 
 
86,923
 
Total capitalization
 
 
423,326
 
 
 
412,626
 
 

 
11

 
 

SELECTED HISTORICAL FINANCIAL AND OTHER DATA
 
The following table presents selected consolidated financial data of Seanergy as of and for the years ended December 31, 2011, 2010, 2009, 2008 and 2007. The information is only a summary and should be read in conjunction with the audited consolidated financial statements and related notes included in "Item 5. Operating and Financial Review and Prospects" of our Annual Report on Form 20-F, as amended, for the year ended December 31, 2011 incorporated by reference herein. The selected consolidated financial data is a summary of, and is derived from, our audited consolidated financial statements and notes thereto, which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. Balance sheet data as of December 31, 2009, 2008 and 2007 and income statement data for the years ended December 31, 2008 and 2007 is derived from our audited financial statements not included herein.
 
Our fleet operations commenced in August 2008, upon the consummation of our initial business combination. During the period from our inception to the date of our initial business combination, we were a development stage enterprise.
 
Amounts in the tables below are in thousands of U.S. dollars, except for share and per share data.
 
     Year Ended December 31,  
   
2011
   
2010
   
2009
   
2008
   
2007
 
Statement of Income Data:
                             
Vessel revenue, net
    104,060       95,856       87,897       34,453       -  
Direct voyage expenses
    (2,541 )     (2,399 )     (753 )     (151 )     -  
Vessel operating expenses
    (34,727 )     (30,667 )     (16,222 )     (3,180 )     -  
Voyage expenses - related party
    (661 )     (434 )     (1,119 )     (440 )     -  
Management fees - related party
    (2,415 )     (2,328 )     (1,715 )     (388 )     -  
Management fees
    (576 )     (316 )     -       -       -  
General and administration expenses
    (8,070 )     (7,606 )     (5,928 )     (2,161 )     (445 )
General and administration expenses - related party
    (603 )     (697 )     (742 )     (109 )     -  
Amortization of deferred dry-docking costs
    (7,313 )     (3,657 )     (1,045 )     -       -  
Depreciation
    (28,856 )     (29,328 )     (26,812 )     (9,929 )     -  
Goodwill impairment loss
    (12,910 )     -       -       (44,795 )     -  
Vessels' impairment loss
    (188,995 )     -       -       (4,530 )     -  
Gain from acquisition of subsidiary
    -       -       6,813       -       -  
Operating (loss) income
    (183,607 )     18,424       40,374       (31,230 )     (445 )
Interest and finance costs
    (13,482 )     (12,931 )     (7,230 )     (3,895 )     (45 )
Interest and finance costs – shareholders
    -       -       (386 )     (182 )     (13 )
Interest income
    60       358       430       3,361       1,948  
Loss on interest rate swaps
    (641 )     (4,164 )     (1,575 )     -       -  
Foreign currency exchange gains (losses), net
    (46 )     14       (44 )     (39 )     -  
Net (loss) income before taxes
    (197,716 )     1,701       31,569       (31,985 )     1,445  
Income taxes
    (40 )     (60 )     -       -       -  
Net (loss) income
    (197,756 )     1,641       31,569       (31,985 )     1,445  
Less: Net income attributable to the noncontrolling interest
    -       (1,509 )     (1,517 )     -       -  
Net (loss) income attributable to Seanergy Maritime Holdings Corp. Shareholders
    (197,756 )     132       30,052       (31,985 )     1,445  
Net (loss) income per common share
                                       
Basic
    (27.04 )     0.02       17.42       (18.14 )     1.84  
Diluted
    (27.04 )     0.02       14.77       (18.14 )     1.44  
Weighted average common shares outstanding
                                       
Basic
    7,314,636       5,861,129       1,725,531       1,763,486       783,606  
Diluted
    7,314,636       5,861,129       2,035,285       1,763,486       1,002,419  
 
                                       
Dividends declared per share
    -       -       -       2.76       -  

 
12

 

   
As of December 31,
 
   
2011
 
2010
 
2009
 
2008
 
2007
 
Balance Sheet Data:
                           
Total current assets
 
 
43,432
 
68,459
 
 
67,473
 
29,814
 
 
235,213
 
Vessels, net
 
 
381,129
 
597,372
 
 
444,820
 
345,622
 
 
-
 
Total assets
 
 
436,476
 
696,401
 
 
538,452
 
378,202
 
 
235,213
 
Total current liabilities, including current portion of long-term debt
 
 
58,697
 
72,791
 
 
42,138
 
32,999
 
 
5,995
 
Long-term debt, net of current portion
 
 
300,586
 
346,168
 
 
267,360
 
213,638
 
 
-
 
Total Seanergy shareholders' equity
 
 
76,923
 
274,665
 
 
208,489
 
131,565
 
 
148,369
 
Non controlling interest
 
 
-
 
-
 
 
18,330
 
-
 
 
-
 
Total equity
 
 
76,923
 
274,665
 
 
226,819
 
131,565
 
 
148,369
 
 
   
Year Ended December 31,
 
 
 
2011
   
2010
   
2009
   
2008
   
2007
 
Cash Flow Data:
 
 
   
 
   
 
   
 
   
 
 
Net cash provided by (used in) operating activities
    26,439       31,537       43,208       25,700       1,585  
Net cash provided by (used in) investing activities
    -       7,885       36,353       (142,919 )     (232,923 )
Net cash (used in) provided by financing activities
    (62,492 )     (49,242 )     (43,497 )     142,551       233,193  


 

 
13

 
 

DIVIDEND POLICY
 
We had initially expressed an intent to pay dividends in the aggregate amount of $1.20 (or $18.00 as amended for the Reverse Stock Split) per common share on a quarterly basis beginning in the quarter ended March 31, 2009 following the acquisition of the six vessels that comprised our initial fleet. We have, however, determined to suspend the payment of any dividends based on restrictions imposed on us by our senior lender. We have not paid dividends since 2008 and we have not yet determined when any dividend payments will be resumed, if at all. In the event we determine to resume any dividend payments, under the terms of the waiver obtained with respect to our loan facilities' security margin clause, the written approval of Marfin will be required before the payment of any dividends. The declaration and payment of any dividend is subject to the discretion of our board of directors. The timing and amount of dividend payments will be in the discretion of our board of directors and be dependent upon our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in our loan agreements, the provisions of Marshall Islands law affecting the payment of dividends to shareholders and other factors. Our board of directors may review and amend our dividend policy from time to time in light of our plans for future growth and other factors.
 

 
14

 
 


USE OF PROCEEDS
 
We will not receive any proceeds from the sale of our common stock by the selling shareholders.


 
15

 
 

PRICE RANGE OF OUR COMMON SHARES
 
Our common shares are currently listed on the NASDAQ Global Market under the symbol "SHIP".
 
The table below sets forth the high and low closing prices for each of the periods indicated for our shares of common stock on the NASDAQ Global Market. Seanergy Maritime's shares of common stock were originally listed on the American Stock Exchange. On October 15, 2008, Seanergy Maritime's shares of common stock commenced trading on the NASDAQ Global Market. Following the dissolution of Seanergy Maritime, our shares of common stock started trading on the NASDAQ Global Market on January 28, 2009.
 
We refer you to "Item 9. The Offer and Listing" and the historical share prices for each of the periods indicated for our common shares, included in our Annual Report on Form 20-F for the year ended December 31, 2011 incorporated by reference into this prospectus.
 
 
 
High
 
Low
March 1 through March 28, 2012
  $ 3.97     $ 3.25  

 

 
16

 
 

DESCRIPTION OF CAPITAL STOCK
 
The following description of our common stock, together with the additional information we include in any applicable prospectus supplements, summarizes the material terms and provisions of the common stock offered under this prospectus.  For the complete terms of our common stock, please refer to our amended and restated Articles of Incorporation and our second amended and restated by-laws that are filed as exhibits to the registration statement of which this prospectus forms a part. The Marshall Islands Business Corporation Act, or BCA, may also affect the terms of these securities.
 
Authorized Capitalization
 
Under our amended and restated articles of incorporation, we are authorized to issue 500,000,000 shares of our common stock, par value $0.0001 per share, of which 11,959,282 are issued and outstanding as of the date of this prospectus and 25,000,000 shares of preferred stock, par value $0.0001 per share, of which none are outstanding as of the date of this prospectus.
 
Common Stock
 
As of the date of this prospectus, we have 11,959,282 common shares outstanding out of 500,000,000 common shares authorized to be issued. In addition, we have a total of 209,260 shares of common stock reserved for issuance upon the exercise of the Unit Purchase Option and our 1,138,917 Underwriter Warrants which are outstanding and exercisable to purchase an aggregate of 75,927 of our common shares.  In addition, we have 8,746,666 shares of common stock reserved for issuance under the Seanergy Maritime Holdings Corp. 2011 Equity Incentive Plan.
 
Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of shareholders. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of shares of common stock are entitled to receive ratably all dividends, if any, declared by our board of directors out of funds legally available for dividends. Holders of common stock do not have conversion, redemption or preemptive rights to subscribe to any of our securities. All outstanding shares of common stock are fully paid and non-assessable. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of any shares of preferred stock which we may issue in the future. There are no limitations on the right of non-residents of the Republic of the Marshall Islands to hold or vote shares of our common stock.
 
Our common shares are listed on the NASDAQ Global Market under the symbol "SHIP".
 
Preferred Stock
 
Our amended and restated articles of incorporation authorizes the issuance of 25,000,000 shares of blank check preferred stock with such designation, rights and preferences as may be determined from time to time by our board of directors. Accordingly, our board of directors is empowered, without shareholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of our common stock. The preferred stock could be utilized as a method of discouraging, delaying or preventing a change in control of us. Although there is no current intent to issue any shares of preferred stock, we cannot assure you that we will not do so in the future.
 
Purpose
 
Our purpose, as stated in our amended and restated articles of incorporation, is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the BCA. Our amended and restated articles of incorporation and by-laws do not impose any limitations on the ownership rights of our shareholders.
 
Directors
 
Our directors are elected by a majority of the votes cast by shareholders entitled to vote. There is no provision for cumulative voting.
 

 
17

 
 

Under our second amended and restated by-laws, our board of directors must consist of at least one but no more than 13 members, as fixed by the board of directors. Our directors shall be divided into three classes: Class A, Class B and Class C. The number of directors in each class shall be as nearly equal as possible. At each annual meeting, directors to replace those directors whose terms expire at such annual meeting shall be elected to hold office until the third succeeding annual meeting. Each director shall serve his respective term of office until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal, or the earlier termination of his term of office. Our board of directors has the authority to fix the amounts which shall be payable to the members of the board of directors for attendance at any meeting or for services rendered to us.
 
Interested Transactions
 
Our by-laws provide that a contract or transaction between us and one or more of our directors or officers, or between us and any other corporation, partnership, association or other organization in which one or more of its directors or officers are our directors or officers, or have a financial interest, will not be void or voidable, if the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to our board of directors or its committee and the board of directors or the committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of disinterested directors, or, if the votes of the disinterested directors are insufficient to constitute an act of the board of directors as provided in the BCA, by unanimous vote of the disinterested directors or the material facts as to his or their relationship or interest in such contract or transaction are disclosed in good faith or known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board of Directors or a committee thereof or the stockholders. Common or interested Directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
 
Shareholder Meetings
 
Under our by-laws, annual shareholder meetings will be held at a time and place selected by our board of directors. Our board of directors may set a record date between 15 and 60 days before the date of any meeting to determine the shareholders that will be eligible to receive notice and vote at the meeting.
 
Dissenters' Rights of Appraisal and Payment
 
Under the BCA, our shareholders have the right, subject to certain exceptions, to dissent from various corporate actions, including any plan of merger or consolidation to which we are a party or sale or exchange of all or substantially all of our property and assets not made in the usual course of our business, and receive payment of the fair value of their shares, subject to such exceptions. In the event of any further amendment of our articles of incorporation, a shareholder also has the right, subject to such exceptions, to dissent and receive payment for his or her shares if the amendment alters certain rights with respect to those shares. The dissenting shareholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting shareholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the high court of the Republic of the Marshall Islands or in any appropriate court in any jurisdiction in which the company's shares are primarily traded on a local or national securities exchange.
 
Shareholders' Derivative Actions
 
Under the BCA, any of our shareholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the shareholder bringing the action is a holder of our common shares both at the time the derivative action is commenced and at the time of the transaction to which the action relates.
 
Limitations on Liability and Indemnification of Officers and Directors
 
The BCA authorizes corporations to limit or eliminate the personal liability of directors and officers to corporations and their shareholders for monetary damages for breaches of directors' fiduciary duties.  Our by-laws include a provision that eliminates the personal liability of directors for monetary damages for actions taken as a director to the fullest extent permitted by law.
 

 
18

 
 

 
Our by-laws provide that we must indemnify our directors and officers to the fullest extent authorized by law.  We are also expressly authorized to advance certain expenses (including attorneys' fees) to our directors and officers and carry directors' and officers' insurance policies providing indemnification for our directors, officers and certain employees for some liabilities. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors and executive officers.
 
The limitation of liability and indemnification provisions in our articles of incorporation and by-laws may discourage shareholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our shareholders. In addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
 
There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.
 
Anti-Takeover Effect of Certain Provisions of our Articles of Incorporation and by-laws
 
Several provisions of our articles of incorporation and by-laws, which are summarized below, may have anti-takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our board of directors to maximize shareholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover provisions, which are summarized below, could also discourage, delay or prevent: (i) the merger or acquisition of our Company by means of a tender offer, a proxy contest or otherwise that a shareholder may consider in its best interest; and (ii) the removal of incumbent officers and directors.
 
Classified Board of Directors
 
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, serving staggered, three year terms. Approximately one-third of our board of directors will be elected each year. This classified board provision could discourage a third party from making a tender offer for our common shares or attempting to obtain control of us. It could also delay shareholders who do not agree with the policies of our board of directors from removing a majority of our board of directors for two years.
 
Blank Check Preferred Stock
 
Our articles of incorporation authorize our board of directors to establish one or more series of preferred stock and to determine, with respect to any series of preferred stock, the terms and rights of that series.
 
Election and Removal of Directors
 
Our by-laws require parties other than the board of directors to give advance written notice of nominations for the election of directors. Our by-laws also provide that our directors may be removed with cause by a majority vote of the outstanding shares of our capital stock entitled to vote generally in the election of directors. No Director may be removed without cause by either the stockholders or the Board of Directors. Except as otherwise provided by applicable law, cause for the removal of a Director shall be deemed to exist only if the Director whose removal is proposed: (i) has been convicted or has been granted immunity to testify in any proceeding in which another has been convicted, of a felony by a court of competent jurisdiction and that conviction is no longer subject to direct appeal; (ii) has been found to have been negligent or guilty of misconduct in the performance of his duties to the Corporation in any matter of substantial importance to the Corporation by (A) the affirmative vote of at least 80% of the directors then in office at any meeting of the Board of Directors called for that purpose or (B) a court of competent jurisdiction; or (iii) has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetence directly affects his ability to serve as a director of the Corporation. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.
 

 
19

 
 

 
Limited Actions by Shareholders
 
Our by-laws provide that any action required or permitted to be taken by our shareholders must be effected at an annual or special meeting of shareholders or by the unanimous written consent of our shareholders. Our by-laws also provide that our board of directors or Chief Executive Officer may call special meetings of our shareholders and the business transacted at the special meeting is limited to the purposes stated in the notice.
 
Advance Notice Requirements for Shareholders Proposals and Director Nominations
 
Our articles of incorporation and by-laws provide that shareholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of shareholders must provide timely notice of their proposal in writing to the corporate secretary. Generally, to be timely, a shareholder's notice must be received at our principal executive offices not less than 150 days nor more than 180 days prior to the one-year anniversary date of the immediately preceding annual meeting of stockholders; provided however, that in the event that the annual meeting is called for a date that is more than 30 days after such anniversary date, notice by the stockholder, to be timely, must be so received not later than the close of business on the tenth day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs. In no event shall the public disclosure of any adjournment of an annual meeting of the stockholders commence a new time period for the giving of the stockholder's notice described herein.. Our articles of incorporation and by-laws also specify requirements as to the form and content of a shareholder's notice. These provisions may impede a shareholder's ability to bring matters before an annual meeting of shareholders or make nominations for directors at an annual meeting of shareholders.
 
Reverse Split of Common Stock
 
A reverse split of our common stock at a ratio of one-for-fifteen took effect at the commencement of business on June 24, 2011. There was no change in the number of authorized shares or the par value per share of our common stock. The share and per share amounts contained in this prospectus have been adjusted to reflect the one-for-fifteen reverse split, except where noted otherwise.
 

 
20

 
 

SELLING AND PRINCIPAL SHAREHOLDERS
 
The following table shows certain information as of March 26, 2012 regarding (i) the number of shares of our common stock owned by the selling shareholders; (ii) information regarding the beneficial owners of more than five percent of our common shares; (iii) each of our executive officers and directors; and (iv) our officers and directors as a group. The table assumes that all shares of our common stock offered for sale in the prospectus are sold.
 
From time to time the selling shareholders named in the table below may offer pursuant to this prospectus up to an aggregate of 4,641,620 shares of our common stock. We have filed the registration statement of which this prospectus forms a part in order to permit the selling shareholders or their respective transferees, donees, pledgees or successors-in-interest to offer these securities for resale from time to time.
 
The 4,641,620 shares of our common stock covered by this prospectus were acquired by the Restis affiliate shareholders, consisting of United Capital Investments Corp., Atrion Shipholding S.A., Plaza Shipholding Corp., and Comet Shipholding Inc. in connection with an equity injection plan completed on January 31, 2012 under which the Restis affiliate shareholders purchased 4,641,620 common shares of the Company in exchange for $10 million at a price of $2.15442 per share, which was the average closing price of common shares for the five trading days preceding the execution of the share purchase agreement dated as of January 4, 2012.
 
   
Common Stock Beneficially
 
Number of Shares
 
Beneficially Owned
   
Owned Before the Offering
 
Offered by Selling
 
After the Offering
Selling shareholder
 
Number
   
Percent(2)
   
Shareholders
  Number   Percent(2 )
United Capital Investments Corp.(3)(4)
 
2,622,727
   
21.9
%
 
1,160,405
 
 
1,462,322
 
12.2
%
Atrion Shipholding S.A. (3)(5)
 
2,522,149
   
21.1
%
 
1,160,405
 
 
1,361,744
 
11.4
%
Plaza Shipholding Corp. (3)(6)
 
2,526,388
   
21.1
%
 
1,160,405
 
 
1,365,983
 
11.4
%
Comet Shipholding Inc. (3)(7)
 
2,522,168
   
21.1
%
 
1,160,405
 
 
1,361,763
 
11.4
%
Dale Ploughman (1)
 
12,000
   
*
   
-
   
-
 
*
Christina Anagnostara (1)
 
667
   
*
   
-
   
-
 
*
All directors and officers as a group (1)
 
12,667
   
*
     
-
 
-
 
*
)

* Less than one percent
 
(1)
The business address of each of the directors and officers is 1-3 Patriarchou Grigoriou, 166 74 Glyfada, Athens, Greece.
   
(2)
Based on 11,959,282 shares of our common stock issued and outstanding as of the date of this prospectus.
   
(3)
Each of United Capital Investments Corp., Atrion Shipholding S.A., Plaza Shipholding Corp. and Comet Shipholding Inc. is an affiliate of members of the Restis family. The address of each of United Capital Investments Corp., Atrion Shipholding S.A., Plaza Shipholding Corp., and Comet Shipholding Inc., is c/o 11 Poseidonos Avenue, 16777 Elliniko, Athens, Greece, Attn: Evan Breibart.
   
(4)
Victor Restis is the controlling person of United Capital Investments Corp.
   
(5)
Bella Restis is the controlling person of Atrion Shipholding S.A.
   
(6)
Katia Restis is the controlling person of Plaza Shipholding Corp.
   
(7)
Claudia Restis is the controlling person of Comet Shipholding Inc.


 
21

 
 

HOW THE SHARES MAY BE DISTRIBUTED
 
The selling shareholders and any of their pledgees, donees, transferees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The selling shareholders may use any one or more of the following methods when selling shares:
 
 
·
ordinary brokerage transactions and transactions in which the broker-dealer solicits investors;
 
 
·
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
 
 
·
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
 
 
·
an exchange distribution in accordance with the rules of the applicable exchange;
 
 
·
privately negotiated transactions;
 
 
·
to cover short sales made after the date that the registration statement of which this prospectus forms a part is declared effective by the Commission;
 
 
·
broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per security;
 
 
·
a combination of any such methods of sale; and
 
 
·
any other method permitted pursuant to applicable law.
 
The selling shareholders are statutory underwriters under Section 2(a)(11) of the Securities Act. The selling shareholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.
 
In connection with sales of the shares or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the common stock in the course of hedging in positions they assume. The selling shareholders may also sell their shares of our common stock short and deliver the shares of common stock covered by a prospectus filed as part of a registration statement to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders may also loan or pledge their shares of our common stock to broker-dealers that in turn may sell such shares.
 
Broker-dealers engaged by the selling shareholders may arrange for other broker-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling shareholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling shareholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.
 
The selling shareholders may from time to time pledge or grant a security interest in some or all of the shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell shares from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus.
 
 
22

 
 
 
Upon us being notified in writing by a selling shareholder that any material arrangement has been entered into with a broker-dealer for the sale of common stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling shareholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such shares of common stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon us being notified in writing by a selling shareholder that a donee or pledgee intends to sell more than 500 shares of common stock a supplement to this prospectus will be filed if then required in accordance with applicable securities law.
 
The selling shareholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
 
The selling shareholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Discounts, concessions, commissions and similar selling expenses, if any, that can be attributed to the sale of securities will be paid by the selling shareholder and/or the purchasers. Each selling shareholder has represented and warranted to us that it acquired the securities subject to this prospectus in the ordinary course of such selling shareholder's business and, at the time of its purchase of such securities such selling shareholder had no agreements or understandings, directly or indirectly, with any person to distribute any such securities. We have advised each selling shareholder that it may not use shares registered on the registration statement of which this prospectus forms a part to cover short sales of common stock made prior to the date on which the registration statement shall have been declared effective by the Commission. If a selling shareholder uses this prospectus for any sale of common shares, it will be subject to the prospectus delivery requirements of the Securities Act. The selling shareholders will be responsible to comply with the applicable provisions of the Securities Act and Exchange Act, and the rules and regulations thereunder promulgated, including, without limitation, Regulation M, as applicable to such selling shareholders in connection with resales of their respective common shares under the registration statement of which this prospectus is a part.
 
We will pay all fees and expenses incident to the registration of the common shares.
 

 
23

 
 

REPUBLIC OF THE MARSHALL ISLANDS COMPANY CONSIDERATIONS
 
Our corporate affairs are governed by our amended and restated articles of incorporation and second amended and restated by-laws, and by the BCA. The provisions of the BCA resemble provisions of the corporation laws of a number 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 similar legislative provisions, there have been few, if any, court cases interpreting the BCA in the Republic of The Marshall Islands and we can not predict whether Marshall Islands courts would reach the same conclusions as courts in the United States. Thus, you may have more difficulty in protecting your interests in the face of actions by the management, directors or controlling shareholders than would shareholders of a corporation incorporated in a United States jurisdiction which has developed a substantial body of case law. The following table provides a comparison between the statutory provisions of the BCA and the Delaware General Corporation Law relating to shareholders' rights.
 

Marshall Islands
 
Delaware
 
Shareholder Meetings
   
Held at a time and place as designated in the by-laws.
May be held at such time or place as designated in the certificate of incorporation or the by-laws, 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 such person or persons as may be authorized by the articles of incorporation or by the by-laws.
Special meetings of the shareholders may be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the by-laws.
   
May be held within or without the Marshall Islands.
May be held within or without Delaware.
   
Notice:
Notice:
   
Whenever shareholders are required to take any action at a meeting, written notice of the meeting 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 the person calling the meeting.
Whenever shareholders are required to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, and the means of remote communication, if any.
   
A copy of the notice of any meeting shall be given personally or sent by 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
   
Any action required to be taken by a meeting of shareholders may be taken without meeting if consent is in writing and is signed by all the shareholders entitled to vote.
Any action required to be taken at a meeting of shareholders may be taken without a meeting if a consent for such action is in writing and is signed by shareholders having not fewer than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
   
Any person authorized to vote may authorize another person or persons to act for him by proxy.
Any person authorized to vote may authorize another person or persons to act for him by proxy.
   
Unless otherwise provided in the articles of incorporation, a majority of shares entitled to vote constitutes a quorum. In no event shall a quorum consist of fewer than one-third of the shares entitled to vote at a meeting.
For stock corporations, the certificate of incorporation or by-laws may specify the number of shares required to constitute a quorum but in no event shall a quorum consist of less than one-third of shares entitled to vote at a meeting. In the absence of such specifications, a majority of shares entitled to vote shall constitute a quorum.
 
 
 
24

 
 

Marshall Islands
 
Delaware
 
When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders.
When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders.
   
The articles of incorporation may provide for cumulative voting in the election of directors.
The certificate of incorporation may provide for cumulative voting in the election of directors.
   
   
Any two or more domestic corporations may merge into a single corporation if approved by the board and if authorized by a majority vote of the holders of outstanding shares at a shareholder meeting.
Any two or more corporations existing under the laws of the state may merge into a single corporation pursuant to a board resolution and upon the majority vote by shareholders 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 a corporation, if not made in the corporation's usual or regular course of business, once approved by the board, shall be authorized by the affirmative vote of two-thirds of the shares of those entitled to vote at a shareholder meeting.
Every corporation may at any meeting of the board sell, lease or exchange all or substantially all of its property and assets as its board deems expedient and for the best interests of the corporation when so authorized by a resolution adopted by the holders of 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 class of another domestic corporation may merge such other corporation into itself without the authorization of the shareholders of any corporation.
Any corporation owning at least 90% of the outstanding shares of each class of another corporation may merge the other corporation into itself and assume all of its obligations without the vote or consent of shareholders; however, in case the parent corporation is not the surviving corporation, the proposed merger shall be approved by a majority of the outstanding stock of the parent corporation entitled to vote at a duly called shareholder meeting.
   
Any mortgage, pledge of or creation of a security interest in all or any part of the corporate 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 authorized without the vote or consent of shareholders, except to the extent that the certificate of incorporation 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 by-laws, by the shareholders, 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 by-laws, unless the certificate of incorporation fixes the number of directors, in which case a change in the number shall be made only by an amendment to the certificate of incorporation.
   
If the board is authorized to change the number of directors, it can only do so by a majority of the entire board and so long as no decrease in the number shall shorten the term of any incumbent director.
If the number of directors is fixed by the certificate of incorporation, a change in the number 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 a majority of the shares entitled to vote unless the certificate of incorporation otherwise provides.
 
 
25

 
 

Marshall Islands
 
Delaware
 
If the articles of incorporation or the by-laws so provide, any or all of the directors may be removed without cause by vote of the shareholders.
In the case of a classified board, shareholders may effect removal of any or all directors only for cause.
 
Dissenters' Rights of Appraisal
   
Shareholders have a right to dissent from any plan of merger, consolidation or sale of all or substantially all assets not made in the usual course of business, and receive payment of the fair value of their shares.
Appraisal rights shall be available for the shares of any class or series of stock of a corporation in a merger or consolidation, subject to limited exceptions, such as a merger or consolidation of corporations listed on a national securities exchange in which listed stock is the offered consideration.
   
   
A holder of any adversely affected shares who does not vote on or consent in writing to an amendment to the articles of incorporation has the right to dissent and to receive payment for such shares if the amendment:
 
   
Alters or abolishes any preferential right of any outstanding shares having preference; or
 
   
Creates, alters, or abolishes any provision or right in respect to the redemption of any outstanding shares; or
 
   
Alters or abolishes any preemptive right of such holder to acquire shares 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 to new 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 such shares or certificates. It shall be made to appear that the plaintiff is such a holder at the time of bringing the action and that he was such a holder at the time of the transaction of which he complains, or that his shares or his interest therein devolved upon him by operation of law.
In any derivative suit instituted by a shareholder of a corporation, it shall be averred in the complaint that the plaintiff was a shareholder of the corporation at the time of the transaction of which he complains or that such shareholder's stock thereafter devolved upon such shareholder by operation of law.
   
A complaint shall set forth with particularity the efforts of the plaintiff to secure the initiation 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 first demands that the corporation sue on its own behalf and that demand is refused (unless it is shown that such demand would have been futile).
   
Such action shall not be discontinued, compromised or settled, without the approval of the High Court of the Republic of The Marshall Islands.
 
   
Reasonable expenses including attorney's fees may be awarded if the action is successful.
 
   
A corporation may require a plaintiff bringing a derivative suit to give security for reasonable expenses if the plaintiff owns less than 5% of any class of stock and the shares have a value of less than $50,000.
 


 
26

 
 

TAXATION
 
The following is a summary of the material U.S. federal and Marshall Islands income tax consequences of the ownership and disposition of our common stock as well as the material U.S. federal and Marshall Islands income tax consequences applicable to us and our operations. The discussion below of the U.S. federal income tax consequences to "U.S. Holders" will apply to a beneficial owner of our common stock that is treated for U.S. federal income tax purposes as:
 
 
·
an individual citizen or resident of the United States;
 
 
·
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia; or
 
 
·
an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or a trust if (i) a U.S. court can exercise primary supervision over the trust's administration and one or more U.S. persons are authorized to control all substantial decisions of the trust, or (ii) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
 
If you are not described as a U.S. Holder and are not an entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes, you will be considered a "Non-U.S. Holder." The U.S. federal income tax consequences applicable to Non-U.S. Holders is described below under the heading "Non-U.S. Holders."
 
This summary is based on the Code, its legislative history, Treasury regulations promulgated thereunder, published rulings and court decisions, all as currently in effect. These authorities are subject to change, possibly on a retroactive basis.
 
This summary does not address all aspects of U.S. federal income taxation that may be relevant to any particular holder based on such holder's individual circumstances.  In particular, this discussion considers only holders that purchase common stock in connection with this offering and will own and hold our common stock as capital assets within the meaning of Section 1221 of the Code and does not address the potential application of the alternative minimum tax or the U.S. federal income tax consequences to holders that are subject to special rules, including:
 
 
·
financial institutions or "financial services entities";
 
 
·
broker-dealers;
 
 
·
taxpayers who have elected mark-to-market accounting;
 
 
·
tax-exempt entities;
 
 
·
governments or agencies or instrumentalities thereof;
 
 
·
insurance companies;
 
 
·
regulated investment companies;
 
 
·
real estate investment trusts;
 
 
·
certain expatriates or former long-term residents of the United States;
 

 
27

 
 

 
·
persons that actually or constructively own 10% or more of our voting shares;
 
 
·
persons that hold our warrants;
 
 
·
persons that hold our common stock or warrants as part of a straddle, constructive sale, hedging, conversion or other integrated transaction; or
 
 
·
persons whose functional currency is not the U.S. dollar.
 
This summary does not address any aspect of U.S. federal non-income tax laws, such as gift or estate tax laws, or state, local or non-U.S. tax laws. Additionally, this discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our common stock through such entities. If a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our common stock, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership.
 
 We have not sought, nor will we seek, a ruling from the Internal Revenue Service, or the IRS, as to any U.S. federal income tax consequence described herein. The IRS may disagree with the description herein, and its determination may be upheld by a court.
 
Because of the complexity of the tax laws and because the tax consequences to any particular holder of our common stock may be affected by matters not discussed herein, each such holder is urged to consult with its tax advisor with respect to the specific tax consequences of the ownership and disposition of our common stock, including the applicability and effect of state, local and non-U.S. tax laws, as well as U.S. federal tax laws.
 
United States Federal Income Tax Consequences
 
Taxation of Operating Income: In General
 
 Unless exempt from United States federal income taxation under the rules discussed below, a foreign corporation is subject to United States federal income taxation in respect of any income that is derived 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 shipping pool, partnership, strategic alliance, joint operating agreement, code sharing arrangements 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 those uses, 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 is attributable to transportation that begins or ends, but that does not both begin and end, in the United States, exclusive of certain U.S. territories and possessions, constitutes income from sources within the United States, which we refer to as "U.S.-Source Gross Transportation Income" or "USSGTI."
 
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 prohibited by law from engaging in transportation that produces income 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. Shipping income derived from sources outside the United States will not be subject to any United States federal income tax.
 
In the absence of exemption from tax under Section 883, our USSGTI would be subject to a 4% tax imposed without allowance for deductions as described below.
 
Exemption of Operating Income from United States Federal Income Taxation
 
Under Section 883 of the Code and the regulations thereunder, we will be exempt from United States federal income taxation on our U.S.-source shipping income if:
 

 
28

 
 
 
 
·
we are organized in a foreign country (our "country of organization") that grants an "equivalent exemption" to corporations organized in the United States; and
         
either
 
 
·
more than 50% of the value of our stock is owned, directly or indirectly, by "qualified shareholders," that are persons (i) who are "residents" of our country of organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States, and (ii) who comply with certain documentation requirements, which we refer to as the "50% Ownership Test;" or
 
 
·
our stock is primarily and regularly traded on one or more established securities markets in our country of organization, in another country that grants an "equivalent exemption" to United States corporations, or in the United States, which we refer to as the "Publicly-Traded Test."
 
The jurisdictions where we and our ship-owning subsidiaries are incorporated grant "equivalent exemptions" to United States corporations. Therefore, we will be exempt from United States federal income taxation with respect to our U.S.-source shipping income if we satisfy either the 50% Ownership Test or the Publicly-Traded Test.
 
Our ability to discuss the Publicly-Traded Test is discussed below.
 
The regulations provide, in pertinent part, that the stock of a foreign corporation will be considered to be "primarily traded" on an established securities market in a country if the number of shares of each class of stock that is traded during the taxable year on all established securities markets in that country exceeds the number of shares in each such class that is traded during that year on established securities markets in any other single country. Our common stock, our sole class of our issued and outstanding stock, is "primarily traded" on the Nasdaq Global Market, which is an established securities market for these purposes.
 
The regulations also require that our stock be "regularly traded" on an established securities market. Under the regulations, our stock will be considered to be "regularly traded" if one or more classes of our stock representing 50% or more 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, are listed on one or more established securities markets, which we refer to as the "listing threshold." Our common stock, our sole class of issued and outstanding stock, is listed on the Nasdaq Global Market, and accordingly, we will satisfy this listing requirement.
 
The regulations further require that with respect to each class of stock relied upon to meet the listing requirements: (i) such class of the stock is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year or 1/6 of the days in a short taxable year; and (ii) the aggregate number of shares of such class of stock traded on such market is at least 10% of the average number of shares of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxable year. We believe we will satisfy the trading frequency and trading volume tests. Even if we do not satisfy both tests, the regulations provide that the trading frequency and trading volume tests will be deemed satisfied by a class of stock if, as we expect to be the case with our common stock, such class of stock is traded on an established market in the United States and such class of stock is regularly quoted by dealers making a market in such stock.
 
Notwithstanding the foregoing, the regulations provide, in pertinent part, that a class of stock will not be considered to be "regularly traded" on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class of stock are owned, actually or constructively under specified stock attribution rules, on more than half the days during the taxable year by persons who each own directly or indirectly 5% or more of the vote and value of such class of stock, who we refer to as "5% Shareholders." We refer to this restriction in the regulations as the "Closely-Held Rule." The Closely-Held Rule will not disqualify us, however, if we can establish that our qualified 5% Shareholders own sufficient shares in our closely-held block of stock to preclude the shares in the closely-held block that are owned by non-qualified 5% Shareholders from representing 50% or more of the value of such class of stock for more than half of the days during the tax year, which we refer to as the exception to the Closely-Held Rule.
 

 
29

 
 

For purposes of being able to determine our 5% Shareholders, the regulations permit us to rely on Schedule 13G and Schedule 13D filings with the Securities and Exchange Commission. The regulations further provide that an investment company that is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Shareholder for such purposes.
 
Both before and after this offering, we do not believe that we are subject to the Closely-Held Rule and therefore satisfy the Publicly-Traded Test.    However, there are factual circumstances beyond our control that could cause us to lose the benefit of the Section 883 exemption. For example, there is a risk that we could no longer qualify for exemption under Code section 883 for a particular taxable year if shareholders with a five percent or greater interest in the common shares were to own 50% or more of our outstanding common shares on more than half the days of the taxable year.
 
Under the regulations, if we do not satisfy the Publicly-Traded Test and therefore are subject to the 5 Percent Override Rule, we would have to satisfy certain substantiation requirements regarding the identity of our shareholders in order to qualify for the Code Section 883 exemption. These requirements are onerous and there is no assurance that we would be able to satisfy them.
 
Taxation in Absence of Exemption
 
To the extent the benefits of Section 883 are unavailable, our USSGTI, to the extent not considered to be "effectively connected" with the conduct 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, otherwise referred to as the "4% Tax." 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 Section 883 exemption are unavailable and our USSGTI is considered to be "effectively connected" with the 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 currently imposed at rates of up to 35%. In addition, we may be subject to the 30% "branch profits" taxes on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of our U.S. trade or business.
 
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 published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.
 
We do not 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 "effectively connected" with the conduct of a U.S. trade or business.
 
United States Taxation of Gain on Sale of Vessels
 
Regardless of whether we qualify for exemption under Section 883, we will not be subject to United States federal income taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under United States federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the 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 vessel by us will be considered to occur outside of the United States.
 
 
30

 
 

United States Tax Taxation Related to the BET
 
As further described in "Item 4. Information on the Company – A. History and Development of the Company" of in our Annual Report on Form 20-F, on August 12, 2009, we closed on the acquisition of a 50% controlling interest in BET from Constellation, and on October 22, 2010, we purchased the remaining 50% non-controlling interest in BET from Mineral Transport. Concurrently with our August 12, 2009 acquisition of a 50% interest in BET, BET and its ship-owning subsidiaries requested and received the IRS' permission to make a check-the-box election after the fact as if the check-the-box election was made at the formation of BET. Without this check-the-box election, the USSGTI of each ship-owning corporation in the BET fleet would have been subject to the 4% Tax on its USSGTI for the 2008 and 2009 tax years since the ship-owning corporations would not otherwise qualify for Section 883 relief under the Section 883 regulations. Our ability to obtain a Section 883 exemption for our 50%, and subsequently 100%, interests in the USSGTI generated by operation of the BET fleet depends on our ability to qualify for the benefits of the Section 883 exemption for each of the relevant tax years as further above in this section.
 
United States Federal Income Taxation of U.S. Holders
 
Taxation of Distributions Paid on Common Stock
 
Subject to the passive foreign investment company, or PFIC, rules discussed below, any distributions made by us with respect to common shares to a U.S. Holder will generally constitute dividends, which may be taxable as ordinary income or "qualified dividend income" as described in more detail below, to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of our earnings and profits will be treated first as a non-taxable 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 as capital 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 they receive from us.
 
Dividends paid on common shares to a U.S. Holder which is an individual, trust, or estate (a "U.S. Non-Corporate Holder") will generally be treated as "qualified dividend income" that is taxable to such shareholders at preferential U.S. federal income tax rates (currently through 2012) provided that (1) the common shares are readily tradable on an established securities market in the United States (such as the Nasdaq Global Market on which the common shares are listed); (2) we are not a PFIC for the taxable year during which the dividend is paid or the immediately preceding taxable year (which we do not believe we are, have been or will be); and (3) the U.S. Non-Corporate Holder has owned the common shares for more than 60 days in the 121-day period beginning 60 days before the date on which the common shares become ex-dividend.
 
Legislation has been previously introduced in the U.S. Congress which, if enacted in its present form, would preclude the dividends paid by is from qualifying for such preferential rates prospectively from the date of the enactment. Any dividends paid by us which are not eligible for these preferential rates will be taxed as ordinary income to a U.S. Holder.  Further, in the absence of legislation extending the term of the preferential tax rates for qualified dividend income, all dividends received by a taxpayer in tax years beginning on January 1, 2013 or later will be taxed at ordinary graduated tax rates.
 
Special rules may apply to any ''extraordinary dividend''—generally, a dividend in an amount which is equal to or in excess of 10% of a shareholder's adjusted basis in a common share—paid by us. If we pay an ''extraordinary dividend'' on its common stock that is treated as ''qualified dividend income,'' then any loss derived by a U.S. Non-Corporate Holder from the sale or exchange of such common stock will be treated as long-term capital loss to the extent of such dividend.
 
Sale, Exchange or other Disposition of Common Shares
 
Assuming we do not constitute a PFIC for any taxable year, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares 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 in the common shares is greater than one year at the time of the sale, exchange or other disposition. A U.S. Holder's ability to deduct capital losses is subject to certain limitations.
 

 
31

 
 

 
Passive Foreign Investment Company Rules
 
Special 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 will be 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 conduct of 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 its proportionate share of the income and assets, respectively, of any of its subsidiary corporations in which it owns at least 25% of the value of the subsidiary's stock (including, for example, BET). Income earned, or deemed earned, by us in connection with the performance of services would not constitute passive income. By contrast, rental income would generally constitute "passive income" unless we are treated under specific rules as deriving its rental income in the active conduct of a trade or business.
 
Based on our current operations and future projections, we do not believe that we are, nor do we expect to become, a PFIC with respect to any taxable year. Although there is no legal authority directly on point, our belief is based principally on the position that, for purposes of determining whether we are a PFIC, the gross income we derive or are deemed to derive from the time chartering and voyage chartering activities of our wholly-owned subsidiaries should constitute services income, rather than rental income. Correspondingly, we believe that such income does 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, do not constitute passive assets for purposes of determining whether we are a PFIC.  We believe there is substantial legal authority supporting its position consisting of case law and Internal Revenue Service pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes.  It should be noted that in the absence of any legal authority specifically relating to the statutory provisions governing PFICs, the Internal Revenue Service or a court could disagree with this position. In addition, although we intend to conduct its affairs in a manner to avoid being classified as a PFIC with respect to any taxable year, there can be no assurance that the nature of our operations will not change in the future.
 
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 taxation rules depending on 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 an alternative to making a QEF election, a U.S. Holder should be able to make a "mark-to-market" election with respect to the common shares, as discussed below.  In addition, if we were to be treated as a PFIC for any taxable year after 2010, a U.S. Holder would be required to file an annual report with the IRS for that year with respect to such holder's common stock.
 
Taxation of U.S. Holders Making a Timely QEF Election
 
If a U.S. Holder makes a timely QEF election, which U.S. Holder is referred to as an "Electing Holder," the Electing Holder must report each year for U.S. federal income tax purposes his pro rata share of the our ordinary earnings and its net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless of whether or not distributions were received from us by the Electing Holder. The Electing Holder's adjusted tax basis in the common shares will be increased to reflect taxed but undistributed earnings 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 will not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of the common shares.
 

 
32

 
 

 
Taxation of U.S. Holders Making a "Mark-to-Market" Election
 
Alternatively, if we were to be treated as a PFIC for any taxable year and, as anticipated, our common shares is treated as "marketable stock," a U.S. Holder would be allowed to make a "mark-to-market" election with respect to our common shares. If that election is made, the U.S. Holder generally would include as ordinary income in each taxable year the excess, if any, of the fair market value of the common shares at the end of the taxable year over such holder's adjusted tax basis in the common shares. The U.S. Holder would also be permitted an ordinary loss in respect of the excess, if any, of the U.S. Holder's adjusted tax basis in the common shares over its fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. A U.S. Holder's tax basis in his common shares would be adjusted to reflect any such income or loss amount. Gain realized on the sale, exchange or other disposition of the common shares would be treated as ordinary income, and any loss realized on the sale, exchange 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 by the U.S. Holder.
 
Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election
 
Finally, if we were to be treated as a PFIC for any taxable year, a U.S. Holder who does not make either a QEF election or a "mark-to-market" election for that year, whom we refer to as a "Non-Electing Holder," would be subject to special rules with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing Holder on our common stock in a taxable year in excess of 125 percent 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 stock), and (2) any gain realized on the sale, exchange or other disposition of our common stock. Under these special rules:
 
 
·
the excess distribution or gain would be allocated ratably over the Non-Electing Holders' aggregate holding period for the common stock;
 
 
·
the amount allocated to the current taxable year and any taxable year before we became a passive foreign investment company 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 an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
 
These 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 with its acquisition of our common stock. If a Non-Electing Holder who is an individual dies while owning our common stock, such holder's successor generally would not receive a step-up in tax basis with respect to such stock.
 
United States Federal Income Taxation of Non-U.S. Holders
 
Dividends paid to a Non-U.S. Holder with respect to our common stock generally should not be subject to U.S. federal income tax, unless the dividends are effectively connected with the Non-U.S. Holder's conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains in the United States).
 
In addition, a Non-U.S. Holder generally should not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our common stock unless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains 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 in the taxable year of sale or other disposition and certain other conditions are met (in which case such gain from United States sources may be subject to tax at a 30% rate or a lower applicable tax treaty rate).
 

 
33

 
 
 
Dividends and gains that are effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally should be subject to tax in the same manner as for a U.S. Holder and, if the Non-U.S. Holder is a corporation for U.S. federal income tax purposes, it also may be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.
 
Backup Withholding and Information Reporting
 
In general, information reporting for U.S. federal income tax purposes should apply to distributions made on our common stock within the United States to a non-corporate U.S. Holder and to the proceeds from sales and other dispositions of our common stock to or through a U.S. office of a broker by a non-corporate U.S. Holder. Payments made (and sales and other dispositions effected at an office) outside the United States will be subject to information reporting in limited circumstances.
 
In addition, backup withholding of U.S. federal income tax, currently at a rate of 28%, generally should apply to distributions paid on our common stock to a non-corporate U.S. Holder and the proceeds from sales and other dispositions of our common stock by a non-corporate U.S. Holder, who:
 
 
·
fails to provide an accurate taxpayer identification number;
 
 
·
is notified by the IRS that backup withholding is required; or
 
 
·
in certain circumstances, fails to comply with applicable certification requirements.
 
A Non-U.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreign status, under penalties of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.
 
Backup withholding is not an additional tax. Rather, the amount of any backup withholding generally should be allowed as a credit against a U.S. Holder's or a Non-U.S. Holder's U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.
 
Pursuant to recently enacted legislation, individuals 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) who hold "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 which the 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 by applicable Treasury regulations).  Specified foreign financial assets would include, among other assets, the common shares, unless the shares held through an account maintained with 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 willful neglect. 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 required to 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 close until 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 consult their own tax advisors regarding their reporting obligations under this legislation.
 
Marshall Islands Tax Consequences
 
Seanergy is incorporated in the Marshall Islands. Under current Marshall Islands law, Seanergy is not subject to tax on income or capital gains, no Marshall Islands withholding tax will be imposed upon payment of dividends by Seanergy to its shareholders, and holders of common stock of Seanergy that are not residents of or domiciled or carrying on any commercial activity in the Marshall Islands will not be subject to Marshall Islands tax on the sale or other disposition of such common stock.
 

 
34

 
 

EXPENSES RELATING TO THIS OFFERING
 
Set forth below is an itemization of the total expenses that we expect to incur in connection with this distribution.  With the exception of the Commission registration fee, all amounts are estimates.
 
Commission registration fee
 
$
2,000
 
Blue sky fees and expenses
 
$
 
*
Printing expenses
 
$
 
*
Legal fees and expenses
 
$
 
*
Accounting fees and expenses
 
$
 
*
Transfer Agent fees
 
$
 
*
Miscellaneous
 
$
 
*
Total
 
$
 
*

*           To be provided by amendment or as an exhibit to Report on Form 6-K that is incorporated by reference into this prospectus.

LEGAL MATTERS
 
The validity of the securities offered by this prospectus and certain other legal matters relating to United States law are being passed upon for us by Seward & Kissel LLP, New York, New York.
 
EXPERTS
 
The consolidated financial statements and management's assessment of the effectiveness of internal control over financial reporting (which is included in Management's Report on Internal Control over Financial Reporting) incorporated in this Prospectus by reference to the Annual Report on Form 20-F for the year ended December 31, 2011 have been so incorporated in reliance on the report of PricewaterhouseCoopers S.A, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
 
The consolidated financial statements of MCS as of December 31, 2009, 2008 and 2007 and for each of the years ended December 31, 2009 and 2008 and for the period from April 30, 2007 (Date of Incorporation) to December 31, 2007 included in this Registration Statement have been so included in reliance on the report of PricewaterhouseCoopers, independent accountants, given on the authority of said firm as experts in auditing and accounting.
 
WHERE YOU CAN FIND MORE INFORMATION
 
We have filed with the Securities and Exchange Commission a registration statement on Form F-1 under the Securities Act with respect to the common shares offered hereby. For the purposes of this section, the term registration statement on Form F-1 means the original registration statement on Form F-1 and any and all amendments including the schedules and exhibits to the original registration statement or any amendment. This prospectus does not contain all of the information set forth in the registration statement on Form F-1 we filed. Each statement made in this prospectus concerning a document filed as an exhibit to the registration statement on Form F-1 is qualified by reference to that exhibit for a complete statement of its provisions. The registration statement on Form F-1, including its exhibits and schedules, may be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling 1 (800) SEC-0330, and you may obtain copies at prescribed rates from the Public Reference Section of the Securities and Exchange Commission at its principal office in Washington, D.C. 20549. The Securities and Exchange Commission maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Securities and Exchange Commission.
 
 

 
35

 
 

Information Provided by the Company
 
We will furnish holders of our common shares with annual reports containing audited financial statements and a report by our independent registered public accounting firm. The audited financial statements will be prepared in accordance with U.S. GAAP. As a "foreign private issuer," we are exempt from the rules under the Securities Exchange Act prescribing the furnishing and content of proxy statements to shareholders. While we furnish proxy statements to shareholders in accordance with the rules of any stock exchange on which our common shares may be listed in the future, those proxy statements will not conform to Schedule 14A of the proxy rules promulgated under the Securities Exchange Act. In addition, as a "foreign private issuer," our officers and directors are exempt from the rules under the Securities Exchange Act relating to short swing profit reporting and liability.
 
DOCUMENTS INCORPORATED BY REFERENCE
 
The SEC  allows us to "incorporate by reference" into this prospectus the information we file with, and furnish to it, which means that we can disclose important information to you by referring you to those filed documents. The information incorporated by reference is considered to be a part of this prospectus, and certain information that we file or furnish with SEC after the date of this prospectus may update and supersede the information in this prospectus, as indicated in that filing. We hereby incorporate by reference the documents listed below:
 
 
·
our Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on March 19, 2012, as amended.
 
This prospectus may contain information that updates or modifies information in one or more of the documents incorporated by reference in this prospectus.
 
You may request a paper copy of our SEC filings, at no cost, by writing to or telephoning us at the following address:
 
Seanergy Maritime Holdings Corp.
Attn: Theodora Mitropetrou
1 – 3 Patriarchou Grigoriou
16674 Glyfada
Athens, Greece
Telephone:   +30 213 0181507


 
36

 
 
 
 
 
INDEX TO FINANCIAL STATEMENTS OF MARITIME CAPITAL SHIPPING LIMITED
 
   
Page
     
Consolidated Financial Statements of Maritime Capital Shipping Limited
 
   
Report of Independent Auditors
 
 
F-2
Consolidated Balance Sheets at 31 December 2009, 2008 and 2007
 
 
F-3
Consolidated income statements for the years ended 31 December 2009 and 2008 and for the period from 30 April 2007
(date of incorporation) to 31 December 2007
 
 
 
F-5
Consolidated statements of comprehensive income for the years ended 31 December 2009 and 2008 and for the period from 30 April 2007 (date of incorporation) to 31 December 2007
 
 
 
F-5
Consolidated statements of changes in shareholder's equity for the years ended 31 December 2009 and 2008 and for the period from 30 April 2007 (date of incorporation) to 31 December 2007
 
 
 
F-7
Consolidated statements of cash flows for the years ended 31 December 2009 and 2008 and for the period from 30 April 2007 (date of incorporation) to 31 December 2007
 
   
F-8
 
Notes to the Consolidated Financial Statements
 
 
F-9
 

 
 

 
F-1

 
 


MARITIME CAPITAL SHIPPING LIMITED
(incorporated in Bermuda with limited liability)

Report of Independent Auditors


To the Board of Directors and Shareholders


In our opinion, the accompanying consolidated balance sheets and the related consolidated income statements, consolidated statements of comprehensive income, consolidated statements of changes in shareholders' equity and the consolidated statements of cash flows present fairly, in all material respects, the financial position of Maritime Capital Shipping Limited and its subsidiaries as at 31 December 2009, 2008 and 2007, and the results of their operations and their cash flows for the years ended 31 December 2009 and 2008 and for the period from 30 April 2007 (date of incorporation) to 31 December 2007 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.  These consolidated financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.  We conducted our audits of these consolidated financial statements in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.






/s/ PricewaterhouseCoopers

Hong Kong,
July 20, 2010


 
F-2

 

MARITIME CAPITAL SHIPPING LIMITED
(incorporated in Bermuda with limited liability)

CONSOLIDATED BALANCE SHEETS
AS AT 31 DECEMBER 2009, 2008 AND 2007
(IN THOUSANDS OF US DOLLARS)


   
Note
   
2009
   
2008
   
2007
 
                         
ASSETS
                       
                         
Non-current assets
                       
Vessels, dry dock and other fixed assets
    5       308,890       595,641       271,679  
Goodwill
    6       -       167       167  
Deposits paid for acquisition of vessels
             -        -       20,188  
Derivative financial assets
    13       -       -       11  
                                 
              308,890       595,808       292,045  
                                 
Current assets
                               
Inventories
            658       955       191  
Other assets
    8       2,129       5,414       868  
Derivative financial assets
    13       -       -       494  
Restricted bank deposits
    9       6,101       6,627       -  
Cash and cash equivalents
    9       18,784       28,380       25,505  
                                 
              27,672       41,376       27,058  
                                 
                                 
Total assets
            336,562       637,184       319,103  
                                 
LIABILITIES
                               
                                 
Non-current liabilities
                               
Long term borrowings
    12       -       320,319       165,539  
Derivative financial liabilities
    13       -       9,867       1,405  
                                 
              -       330,186       166,944  
                                 
Current liabilities
                               
Other liabilities
    14       7,670       11,336       10,315  
Current income tax liabilities
    17       1,010       651       -  
Current portion of long term borrowings
    12       319,382       53,855       22,456  
Derivative financial liabilities
    13       10,190       6,527       841  
                                 
              338,252       72,369       33,612  
                                 
Total liabilities
            338,252       402,555       200,556  

The accompanying notes are an integral part of these consolidated financial statements.

 
F-3

 

MARITIME CAPITAL SHIPPING LIMITED
(incorporated in Bermuda with limited liability)

CONSOLIDATED BALANCE SHEETS (CONTINUED)
AS AT 31 DECEMBER 2009, 2008 AND 2007
(IN THOUSANDS OF US DOLLARS)



   
Note
   
2009
   
2008
   
2007
 
                         
EQUITY
                       
                         
Share capital
    10       198       198       117  
Share premium
    10       201,678       201,678       114,168  
(Accumulated deficit)/retained earnings
     11       (195,342 )     47,181       5,813  
Reserves
    11       (8,224 )     (14,428 )     (1,551 )
                                 
Total shareholders' (deficit)/equity
            (1,690 )     234,629       118,547  
                                 
                                 
TOTAL EQUITY AND LIABILITIES
            336,562       637,184       319,103  


 









The accompanying notes are an integral part of these consolidated financial statements.

 
F-4

 

MARITIME CAPITAL SHIPPING LIMITED
(incorporated in Bermuda with limited liability)

CONSOLIDATED INCOME STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 AND FOR THE PERIOD
FROM 30 APRIL 2007 (DATE OF INCORPORATION) TO 31 DECEMBER 2007
(IN THOUSANDS OF US DOLLARS)



   
Note
   
2009
   
2008
   
2007
 
                         
                         
Revenue from vessels
          87,427       133,423       9,214  
                               
Cost of services
                             
- vessel operating costs
    15       (18,357 )     (12,661 )     (310 )
- depreciation
    5,15       (32,358 )     (26,408 )     (1,260 )
                                 
General and other administrative expenses
    15       (2,622 )     (9,238 )     (1,356 )
                                 
Impairment of assets
    5,6,15       (258,977 )     (4,670 )     -  
                                 
Operating (loss)/profit
            (224,887 )     80,446       6,288  
                                 
Finance income
    16       53       1,088       723  
                                 
Finance costs
    16       (17,330 )     (17,647 )     (1,182 )
                                 
(Loss)/profit before income tax
            (242,164 )     63,887       5,829  
                                 
Income tax expense
    17       (359 )     (702 )     (16 )
                                 
Net (loss)/profit for the year/period
            (242,523 )     63,185       5,813  
                                 
                                 
Dividend
    18       -       21,817       -  
                                 

















The accompanying notes are an integral part of these consolidated financial statements.

 
F-5

 

MARITIME CAPITAL SHIPPING LIMITED
(incorporated in Bermuda with limited liability)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 AND FOR THE PERIOD
FROM 30 APRIL 2007 (DATE OF INCORPORATION) TO 31 DECEMBER 2007
(IN THOUSANDS OF US DOLLARS)



   
2009
   
2008
   
2007
 
                   
                   
Net (loss)/profit for the year/period
    (242,523 )     63,185       5,813  
                         
Other comprehensive income/ (loss)
                       
Cash flow hedges
                       
- fair value gains/(losses), net of tax
    6,204       (14,653 )     (1,741 )
                         
Other comprehensive income/ (loss) for the year/period, net of tax
    6,204       (14,653 )     (1,741 )
                         
Total comprehensive (loss)/income for the year/period
    (236,319 )     48,532       4,072  



 



The accompanying notes are an integral part of these consolidated financial statements.

 
F-6

 

MARITIME CAPITAL SHIPPING LIMITED
(incorporated in Bermuda with limited liability)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 AND FOR THE PERIOD
FROM 30 APRIL 2007 (DATE OF INCORPORATION) TO 31 DECEMBER 2007
(IN THOUSANDS OF US DOLLARS)


   
Share
capital
   
Share
premium
   
Reserves
   
Retained
earnings/
(accumulated
deficit)
 
                         
Balance as at 30 April 2007
    -       -       -       -  
                                 
Profit for the period
    -       -       -       5,813  
                                 
Other comprehensive loss
                               
Cash flow hedges
    -       -       (1,741 )     -  
                                 
Transactions with owners
                               
Issuance of ordinary shares (Note 10)
    117       117,211       -       -  
Share issue costs (Note 10)
    -       (3,043 )     -       -  
Employee expense for share options
    -       -       190       -  
                                 
Total transactions with owners
    117       114,168       190       -  
                                 
Balance as at 31 December 2007
    117       114,168       (1,551 )     5,813  
                                 
Profit for the year
    -       -       -       63,185  
                                 
Other comprehensive loss
                               
Cash flow hedges
    -       -       (14,653 )     -  
                                 
Transactions with owners
                               
Issuance of ordinary shares (note 10)
    81       87,510       -       -  
Dividend (note 18)
    -       -       -       (21,817 )
Employee expense for share options
    -       -       1,776       -