TOP SHIPS INC. — Interim / Quarterly Report 2008

Jun 20, 2008

6-K 1 d894612_6-k.htm TOP SHIPS d894612_6-k.htm Licensed to: Seward & Kissel LLP Document Created using EDGARizer 4.0.6.1 Copyright 1995 - 2008 EDGARfilings, Ltd., an IEC company. All rights reserved

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of June 2008

Commission File Number

TOP SHIPS INC.

(Translation of registrant’s name into English)

1 VAS. SOFIAS & MEG.

ALEXANDROU STREET

151 24, MAROUSSI

ATHENS, GREECE

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F [ X ] Form 40-F [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ___

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)7: ___

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [ X ]

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): ________.

INFORMATION CONTAINED IN THIS FORM 6-K REPORT

Attached to this report on Form 6-K as Exhibit 1 is the press release issued by Top Ships Inc. (the “Company”) announcing the Company’s first quarter financial results for the fiscal year 2008.

EXHIBIT 1

NEWS RELEASE for June 12, 2008

| Contact: | Stamatis Tsantanis, CFO | | --- | --- | | Allen & Caron Inc | TOP Ships Inc | | 212 691 8087 | 011 30 210 812 8199 | | michaelm@allencaron.com | snt@topships.org |

TOP SHIPS REPORTS FIRST QUARTER 2008 FINANCIAL RESULTS

· Net loss of $0.93 per share, including special items of $0.83 per share

· New time charter agreements for three dry-bulk vessels

· New employment agreements for all newbuilding vessels

ATHENS, GREECE (June 12, 2008) … TOP Ships Inc. (NasdaqGS:TOPS) today announced its operating results for the first quarter ended March 31, 2008.

For the three months ended March 31, 2008, the Company reported net loss of $18,841,000, or $0.93 per share, compared with net income of $2,999,000, or $0.28 per share, for the first quarter of 2007. The weighted average numbers of basic shares used in the computations were 20,295,240 and 10,777,043 for the first quarter of 2008 and 2007, respectively. The results for the first quarter of 2008 and 2007 include net charges of $16,737,000, or $0.83 per share and net revenues of $980,000, or $0.09 per share, respectively, of special items 1 that affected the Company's net results for the first quarter of 2008 and 2007 that are typically excluded by securities analysts in their published estimates of the Company's financial results, which are described in Appendix A of this release. For the three months ended March 31, 2008, operating loss was $2,434,000, compared with operating income of $3,448,000 for the first quarter of 2007. Revenues for the first quarter of 2008 were $72,637,000, compared to $73,988,000 recorded in the first quarter of 2007.

Evangelos J. Pistiolis, President and Chief Executive Officer of TOP Ships Inc., commented:

“In the first quarter of 2008 we had a net loss of $0.93 per share, including special items of $0.83 per share, consisting of cash and non-cash charges. The special cash charges we incurred were mainly a result of unplanned repairs on some of our vessels. Three of these vessels (Faultless, Noiseless and Bertram), which caused the majority of these unplanned cash expenses, were sold and delivered to new owners during the first and early second quarters.

---

1 See Appendix A to this release for information about special items.

We expect to recover approximately $6,500,000 from our insurance underwriters during the second, third and fourth quarters of 2008 with respect to these and previous unexpected repairs, that will significantly offset these charges.

The special non-cash charges we incurred relate mostly to the change of fair value of swaps that was caused by the significant decrease of the interest rates in the first quarter. All special items are described in the Appendix of this earnings release.

Consistent with our strategy to operate a fleet with a balanced employment profile, and in order to further reduce our spot market exposure, we concluded a number of significant time charter arrangements for our dry-bulk and tanker vessels.

Regarding our dry-bulk fleet, we have previously announced the time charter arrangements for the Cyclades and Astrale at $50,860 net per day for three years and $67,500 net per day for one year respectively. In addition, we have recently agreed to charter the Pepito for a period of five years at a net daily rate of $38,950. Finally we have agreed to extend the bareboat charter of the Voc Gallant after its current expiration in May 2009. The extended agreement will have an additional period of three years at a net daily bareboat rate of $23,580.

Regarding our tanker fleet, we have recently concluded chartering agreements for all six of our newbuilding product tankers with three major charterers. The new charter periods range between seven and ten years at daily rates between $14,300 and $14,550 on a bareboat basis. Since in bareboat agreements the charterers are responsible for the operating, maintenance and other administrative expenses, we estimate that the daily rates for these bareboat charters to be in excess of $21,500 for the period, on a time charter equivalent basis.

Finally we are continuing our efforts to unwind additional charter-in contracts in order to further reduce our leasing expenditure.”

The following key indicators serve to highlight changes in the financial performance of the Company’s vessels during the first quarters of 2007 and 2008:

| | Suezmax Vessels | | | | | | --- | --- | --- | --- | --- | --- | | | Three Months Ended March 31, | | | | | | (In U.S. Dollars unless otherwise stated) | 2007 | 2008 | | Change | | | Total available ship days | 1,170 | | 970 | | -17.1 % | | Total operating days | 1,084 | | 724 | | -33.2 % | | Utilization | 92.6 | % | 74.6 | % | -19.4 % | | TCE 2 per ship per day under spot voyage charter | 38,565 | | 47,548 | | 23.3 % | | TCE per ship per day under time charter | 35,123 | | 38,574 | | 9.8 % | | Average TCE | 37,428 | | 43,123 | | 15.2 % | | Other vessel operating expenses per ship per day | 8,231 | * | 15,391 | * | 87.0 % | | | Handymax Vessels | | | | | | | Three Months Ended March 31, | | | | | | (In U.S. Dollars unless otherwise stated) | 2007 | 2008 | | Change | | | Total available ship days | 990 | | 728 | | -26.5 % | | Total operating days | 911 | | 621 | | -31.8 % | | Utilization | 92.0 | % | 85.3 | % | -7.3 % | | TCE per ship per day under spot voyage charter | - | | 16,000 | | - | | TCE per ship per day under time charter | 20,279 | | 18,360 | | -9.5 % | | Average TCE | 20,279 | | 18,356 | | -9.5 % | | Other vessel operating expenses per ship per day | 6,576 | | 10,789 | * | 64.1 % | | | Tanker Fleet | | | | | | | Three Months Ended March 31, | | | | | | (In U.S. Dollars unless otherwise stated) | 2007 | 2008 | | Change | | | Total available ship days | 2,160 | | 1,698 | | -21.4 % | | Total operating days | 1,995 | | 1,345 | | -32.6 % | | Utilization | 92.4 | % | 79.2 | % | -14.2 % | | TCE per ship per day under spot voyage charter | 38,565 | | 47,462 | | 23.1 % | | TCE per ship per day under time charter | 24,467 | | 25,746 | | 5.2 % | | Average TCE | 29,597 | | 31,688 | | 7.1 % | | Other vessel operating expenses per ship per day | 7,473 | | 13,418 | | 79.6 % | | | Drybulk Fleet | | | | | | | Three Months Ended March 31, | | | | | | (In U.S. Dollars unless otherwise stated) | 2007 | 2008 | | Change | | | Total available ship days | - | | 390 | | - | | Total operating days | - | | 385 | | - | | Utilization | - | | 98.7 | % | - | | TCE per ship per day under spot voyage charter | - | | - | | - | | TCE per ship per day under time charter | - | | 51,151 | | - | | Average TCE | - | | 51,151 | | - | | Other vessel operating expenses per ship per day | - | | 7,842 | * | - |

---

2 Time charter equivalent rate, or TCE rate, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE rate is consistent with industry standards and is determined by dividing time charter equivalent revenues or TCE revenues by voyage days for the relevant time period. TCE revenues are revenues minus voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE revenues and TCE rate non-GAAP measures, provide additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company’s management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance.

| | Total Fleet | | | | --- | --- | --- | --- | | | Three Months Ended March 31, | | | | (In U.S. Dollars unless otherwise stated) | 2007 | 2008 | Change | | Total available ship days | 2,160 | 2,088 | -3.3 % | | Total operating days | 1,995 | 1,730 | -13.3 % | | Utilization | 92.4 % | 82.9 % | -10.3 % | | TCE per ship per day under spot voyage charter | 38,565 | 47,462 | 23.1 % | | TCE per ship per day under time charter | 24,467 | 32,927 | 34.6 % | | Average TCE | 29,597 | 36,019 | 21.7 % | | Other vessel operating expenses per ship per day | 7,473 | 12,376 | 65.6 % | | General and administrative expenses per ship per day** | 2,406 | 3,690 | 53.3 % |

• The daily Other vessel operating expenses for the Suezmax, Handymax and Drybulk Vessels for the first quarter of 2007 include approximately $332, $0 and $0, respectively, and for the first quarter of 2008 include approximately $5,269, $1,621 and $890, respectively, for specific unexpected repairs.

** The daily General and Administrative expenses include approximately $218 and $322 for the first quarter of 2007 and 2008, respectively, of non-cash restricted stock expense, specific legal fees and depreciation for other fixed assets.

Fleet Report:

As of March 31, 2008, the Company’s fleet consisted of 23 vessels, or 2.1 million dwt (including 12 owned, one under capital lease and 10 vessels sold and leased back for a period of five to seven years) as compared to 24 vessels, or 2.5 million dwt on March 31, 2007 (including 18 vessels sold and leased back for a period of 5 to 7 years).

In December 2007, the Company entered into an agreement to sell the vessel M/T Noiseless to an unrelated party. The gain from the sale of $0.6 million was recognized upon the delivery of the vessel to the buyer on January 30, 2008.

In January 2008, the Company agreed to sell the vessel M/T Stainless to an unrelated party and entered into a bareboat charter with the buyer until July 31, 2008 (the vessel’s delivery date). According to the terms of the bareboat charter, all bareboat hire payments made up to the end of the charter period will be deducted from the purchase price and ownership of the vessel will be transferred to the buyer at the end of the charter period. As ownership of the vessel will be transferred to the buyer at the end of the bareboat charter, the Company classified the charter and vessel’s sale as a capital lease.

In August 2007, the Company entered into an agreement to acquire the M/V Astrale, a panamax drybulk vessel of 75,933 dwt built in Japan in 2000, from an unrelated third party with an expected delivery date between January and March 2008. In February 2008, the Company agreed with the owners of the M/V Astrale to charter the vessel up to April 27, 2008, for a daily hire. On May 1, 2008, the Company took ownership of the M/V Astrale, which was entered into a time charter contract for a period of 1 year at a net daily rate of $67,500. As the ownership of the vessel was transferred to the Company at the end of the charter the Company accounted for the purchase and related charter as a capital lease.

In February 2008, the Company took delivery of the M/V Voc Gallant, a super handymax, or supramax, drybulk vessel of 51,200 dwt built in China in 2002, from an unrelated third party. The vessel was chartered back to the sellers for a period of 18 months at a daily net rate of $25,650 on a bareboat basis. This employment agreement was later extended for an additional period of three years at a daily net rate of $23,580.

In March 2008, the Company took delivery of the M/V Pepito, a panamax drybulk vessel of 75,928 dwt built in Japan in 2001 and entered into a time charter contract for a period of 5 years at a net daily rate of $38,950.

In March 2008, the owner and lessor of M/T Faultless agreed to sell the vessel to a third party. The Company and the lessor mutually agreed to terminate the bareboat charter. The Company had sold the vessel in 2006 in a sale and lease-back transaction. The termination of the bareboat charter became effective upon the vessel’s delivery to its new owners, on March 31, 2008.

In April 2008, the Company entered into an agreement to sell the vessel M/V Bertram with an attached time charter contract to a third party and the vessel was delivered to its new owners later in the month. Until its delivery, an amount of $4.2 million, relating to the fair value of the time charter contract, had been amortized to the Company’s revenues. Consequently, on the delivery to its new owners, the Company wrote-off the unamortized amount, which resulted in a loss of approximately $2.0 million that will be recognized in the second quarter of 2008.

Fleet Deployment:

During the first quarter of 2008, the Company had approximately 79% of the fleet’s operating days on long-term employment contracts. As of March 31, 2008, seventeen of the Company’s 23 vessels were on time charter contracts with an average term of over two years with all but nine of the time charters including profit sharing agreements.

Tanker Vessels:

During the first quarter of 2008, seven of the Company’s Suezmax tankers operated in the spot market, earning on average $47,548 per vessel per day on a time charter equivalent (TCE) basis.

During the first quarter of 2008, five of the Company’s Suezmax tankers operated under time charter contracts, earning on average $38,574 per vessel per day on a time charter equivalent (TCE) basis.

Seven out of the eight Company’s Handymax tankers operate under long term employment agreements that provide for a base rate and additional profit-sharing.

During the first quarter of 2008, seven of the Company’s Handymax tankers earned on average $18,360 per vessel per day on a time charter equivalent (TCE) basis, including the profit-sharing allocated to the Company.

During the first quarter of 2008, one of the Company’s Handymax tankers operated in the spot market, earning on average $16,000 per vessel per day on a time charter equivalent (TCE) basis.

Drybulk Vessels:

During the first quarter of 2008, all Company’s drybulk vessels operated under time charter contracts, earning on average $51,151 per vessel per day on a time charter equivalent (TCE) basis, including the amortization of the fair value of time charter contracts of $15,842 per vessel per day.

The following table presents the Company’s current fleet list and employment:

		Year Built	Charter Type			Daily Base Rate		Profit Sharing Above Base Rate (2008)
9
Suezmax Tankers
Timeless B	154,970	1991	Spot
Flawless B	154,970	1991	Spot
Stopless B	154,970	1991	Time
Charter	Q3/2008		$ 35,000		50%
thereafter
Priceless B	154,970	1991	Spot
Endless D	135,915	1992	Time
Charter	Q3/2008	C	$ 36,500		None
Limitless D	136,055	1993	Spot
Stormless D	150,038	1993	Time
Charter	Q2/2010		$ 35,000		None
Ellen
P D .	146,286	1996	Time
Charter	Q2/2009		$ 44,500		None
Edgeless D	147,048	1994	Spot
8
Handymax Tankers
Sovereign A	47,084	1992	Spot
Relentless A	47,084	1992	Time
Charter	Q3/2009		$ 14,000		50%
thereafter
Vanguard B	47,084	1992	Time
Charter	Q1/2010		$ 15,250		50%
thereafter
Spotless B	47,094	1991	Time
Charter	Q1/2010		$ 15,250		50%
thereafter
Doubtless B	47,076	1991	Time
Charter	Q1/2010		$ 15,250		50%
thereafter
Faithful B	45,720	1992	Time
Charter	Q2/2010		$ 14,500		100%
first $500 + 50% thereafter
Dauntless D	46,168	1999	Time
Charter	Q1/2010		$ 16,250		100%
first $1,000 + 50% thereafter
Ioannis
P D .	46,346	2003	Time
Charter	Q4/2010		$ 18,000		100%
first $1,000 + 50% thereafter
6
Newbuilding Product Tankers
Hull
S-1025	50,000	2009	Bareboat
Charter	Q1-2/2019		$ 14,400		None
Hull
S-1026	50,000	2009	Bareboat
Charter	Q1-2/2019		$ 14,550		None
Hull
S-1027	50,000	2009	Bareboat
Charter	Q1-2/2016		$ 14,300		None
Hull
S-1029	50,000	2009	Bareboat
Charter	Q1-2/2016		$ 14,300		None
Hull
S-1031	50,000	2009	Bareboat
Charter	Q1-2/2019		$ 14,550		None
Hull
S-1033	50,000	2009	Bareboat
Charter	Q1-2/2019		$ 14,550		None
Total
Tanker dwt	2,008,878
5
Drybulk Vessels
Cyclades D	75,681	2000	Time
Charter	Q2/2011		$ 50,860		None
Amalfi D	45,526	2000	Time
Charter	Q1/2009		$ 22,000		None
Voc
Gallant D	51,200	2002	Bareboat
Charter	Q2/2012		$ 25,650	F	None
Pepito D	75,928	2001	Time
Charter	Q2/2013		$ 38,950		None
Astrale D	75,933	2000	Time
Charter	Q2/2009		$ 67,500		None
Total
Drybulk dwt	324,268
TOTAL
DWT	2,333,146

| A. Vessels sold and leased back in August and September 2005 for a period of

7 years
B.
Vessels sold and leased back in March 2006 for a period of 5
years
C.
Charterers have option to extend contract for an additional four-year
period
D.
Owned vessels E.
For the newbuilding product tankers we refer to the initial charter
period excluding extension options F.
From May/June 2009 until May/June 2012 the net daily base rate will
be $23,580

Liquidity and Capital Resources

As of March 31, 2008, Top Ships had total indebtedness under senior secured credit facilities of $502.4 million with its lenders, the Royal Bank of Scotland (“RBS”), HSH Nordbank (“HSH”), DVB Bank, ALPHA BANK and EMPORIKI BANK maturing from 2008 through 2015.

Since the Company’s formation, the sources of funds have been cash from operations, long-term borrowings and equity provided by the shareholders. The Company’s principal use of funds has been capital expenditures to establish and grow its fleet, maintain the quality of its vessels, comply with international shipping standards and environmental laws and regulations, fund working capital requirements and make principal repayments on outstanding served loan facilities. The Company expects to rely upon operating cash flows, long-term borrowings and equity financings to implement its future growth plan.

In December 2007 and in April 2008, the Company raised $120.0 million of equity capital to fund its diversification in the dry bulk sector and its newbuilding program. All drybulk vessels of the Company have been chartered in long-term employment agreements that are expected to provide a secured stream of drybulk revenues. Moreover, the long-term employment agreements for the majority of the tanker fleet, in combination with the significantly improved spot market rates are expected to increase tanker revenues.

Therefore, the Company expects that its working capital generation, in combination with the existing cash balances and its recent equity offerings will be sufficient to cover its liquidity requirements for the next year, other than the financing of the newbuildings. The Company is currently in the process of obtaining debt financing for the newbuildings.

As of March 31, 2008, the Company has three interest rate swap agreements with RBS for the amounts of $28.5 million, $10.0 million and $10.0 million for a remaining period of one, five and five years, respectively. Under these agreements the interest rate is fixed at an effective annual rate of 4.66% (in addition to the applicable margin), 4.23% and 4.11%, respectively. The Company also has one interest rate swap agreement with HSH for the amount of $36.4 million for a remaining period of three years, at a fixed interest rate of 4.80% in addition to the applicable margin. The Company also has one interest rate swap agreement with Egnatia Bank for the amount of $10.0 million for a remaining period of five years, respectively. Under this agreement the interest rate is fixed at an effective annual rate of 4.76%. In addition, the Company has two interest rate swap agreements with HSH for the amounts of $17.9 million and $8.3 million for a remaining period of five years. The above swaps of $10.0 million, $10.0 million and $10.0 million, include steepening terms based on the two and 10 year U.S. Dollar swap difference, which is calculated quarterly in arrears. The interest rate for the remaining balance of the loans is LIBOR, plus the margin.

In November 2007, the Company entered into an interest rate derivative product. Under this agreement, the Company will pay five annual interest payments on a notional amount of $85.0 million. Based on the cumulative performance of a portfolio of systematic foreign exchange trading strategies, the interest payments will have a minimum floor at 0.00% and a cap at 7.50%.

In April 2008, the Company mutually agreed with Deutsche Bank for the termination of the $50.0 million swap. The Company is in the process of restructuring all or part of the then outstanding amount.

In May 2008, the Company entered into an interest rate swap agreement for a notional amount of $20.0 million for a seven year period. This swap includes steepening terms based on the two and 10 year Euro swap difference, which is calculated quarterly in arrears.

On March 31, 2008, the Company’s ratio of indebtedness to total capital was approximately 72.1%.

In April 2008, the Company privately placed 7.3 million common unregistered shares for aggregate proceeds of approximately $51.0 million with various investors. The 7.3 million shares were sold for $7.00 per share, which represents a discount of 15.5 percent based on the closing share price of $8.28 on April 23, 2008.

In April 2008, following the sale of M/V Bertram, the then outstanding loan amount was fully repaid. In May 2008, the Company took delivery of the drybulk vessel M/V Astrale. The acquisition cost was partially financed through a long-term bank loan, maturing in April 2013.

In addition, in May 2008, the Company paid the second installment for the construction of two vessels, which was partly financed from the revolving credit facility with RBS. Finally, in May 2008, following the private placement, the Company prepaid a portion from the bridge loan with DVB Bank.

Conference Call and Webcast

Top Ships’ management team will host a conference call to review the results and discuss other corporate news and its outlook on Thursday, June 12, 2008, at 11:00 AM EDT.

Those interested in listening to the live webcast may do so by going to the Company's website at http://www.topships.org, or by going to http://www.investorcalendar.com.

The telephonic replay of the conference call will be available by dialling 1-877 660-6853 (from the US and Canada) or +1 201 612 7415 (from outside the US and Canada) and by entering account number 286 and conference ID number 286450. An online archive will also be available immediately following the call at the sites noted above. Both are available for one week, through June 19, 2008.

About TOP Ships Inc.

TOP Ships Inc., formerly known as TOP Tankers Inc., is an international provider of worldwide seaborne crude oil and petroleum products and of drybulk transportation services. The Company operates a combined tanker and drybulk fleet as follows:

-- a fleet of 17 tankers, consisting of 9 double-hull Suezmax tankers and 8 double-hull Handymax tankers, with a total carrying capacity of approximately 1.7 million dwt, of which 83% are sister ships. Eleven of the Company's 17 tankers are on time charter contracts with an average term of two years with all but three of the time charters including profit sharing agreements above their base rates. In addition, the Company has ordered six newbuilding product tankers, which are expected to be delivered in the first half of 2009.

-- a fleet of five drybulk vessels. Four of the Company's five drybulk vessels have time charter contracts for an average period of 30 months.

Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward- looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "will," "may," "should," "expect" "pending" and similar expressions identify forward-looking statements. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, failure of a seller to deliver one or more vessels or of a buyer to accept delivery of one or more vessels, inability to procure acquisition financing, default by one or more charterers of our ships, changes in the demand for crude oil and petroleum products, changes in demand for dry bulk shipping capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.

TABLES FOLLOW

| TOP

SHIPS INC.
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
(Expressed
in thousands of U.S. Dollars - except for share and per share
data)
	Three
Months Ended
	March
31,
	2007	2007		2008
	As
originally reported under the deferral method	As
computed under the direct expense method
	(Unaudited)	(Unaudited)		(Unaudited)
REVENUES:
Revenues	$ 73,988	$	73,988	$	72,637
EXPENSES:
Voyage
expenses	14,942		14,942		10,324
Charter
hire expense	29,498		29,498		17,988
Amortization
of deferred gain on sale and leaseback of vessels	(2,433	)	(2,433	)	(1,297	)
Other
vessel operating expenses	16,141		16,141		25,842
Dry-docking
costs	-		1,984		4,049
Depreciation	5,239		5,239		10,510
Amortization
of dry-docking costs	4,036		-		-
General
and administrative expenses	5,198		5,198		7,705
Foreign
currency (gains) / losses, net	(29	)	(29	)	532
Gain
on sale of vessel	-		-		(582	)
Operating
income (loss)	1,396		3,448		(2,434	)
OTHER
INCOME (EXPENSES):
Interest
and finance costs	(2,973	)	(2,973	)	(7,946	)
Fair
value change of financial instruments	1,711		1,711		(8,859	)
Interest
income	825		825		430
Other,
net	(12	)	(12	)	(32	)
Total
other expenses, net	(449	)	(449	)	(16,407	)
Net
Income (loss)	$ 947	$	2,999	$	(18,841	)
Earnings
(loss) per share, basic and diluted	$ 0.09	$	0.28	$	(0.93	)
Weighted
average common shares outstanding, basic	10,777,043		10,777,043		20,295,240
Weighted
average common shares outstanding, diluted	10,785,688		10,785,688		20,295,240

| TOP

SHIPS INC.
CONSOLIDATED
CONDENSED BALANCE SHEETS
(Expressed
in thousands of U.S. Dollars - except for share and per share
data)
	December
31,	March
31,
	2007	2008
ASSETS	(Unaudited)	(Unaudited)
CASH
AND CASH EQUIVALENTS	$ 26,012	$ 8,375
OTHER
CURRENT ASSETS	29,881	31,026
NET
INVESTMENT IN CAPITAL LEASE	-	42,300
VESSEL
HELD FOR SALE	46,268	-
ADVANCES
FOR VESSELS ACQUISITIONS / UNDER CONSTRUCTION	66,026	60,504
VESSEL
UNDER CAPITAL LEASE	-	76,532
VESSELS,
NET	553,891	641,422
OTHER
NON-CURRENT ASSETS	28,339	26,536
RESTRICTED
CASH	26,500	30,000
Total
assets	$ 776,917	$ 916,695
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT
PORTION OF LONG-TERM DEBT	$ 107,488	$ 124,459
OBLIGATIONS
UNDER CAPITAL LEASE	-	68,571
OTHER
CURRENT LIABILITIES	45,802	69,229
FINANCIAL
INSTRUMENTS, NET OF CURRENT PORTION	10,683	13,658
FAIR
VALUE OF BELOW MARKET TIME CHARTER	29,199	35,748
LONG-TERM
DEBT, NET OF CURRENT PORTION	331,396	373,630
DEFERRED
GAIN ON SALE AND LEASEBACK OF VESSELS	40,941	38,352
Total
liabilities	565,509	723,647
COMMITMENTS
AND CONTINGENCIES
STOCKHOLDERS'
EQUITY	211,408	193,048
Total
liabilities and stockholders' equity	$ 776,917	$ 916,695

| TOP

SHIPS INC.
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS
(Expressed
in thousands of U.S. Dollars)
	Three
Months Ended
	March
31,
	2007	2007		2008
	As
originally reported under the deferral method	As
computed under the direct expense method
	(Unaudited)	(Unaudited)		(Unaudited)
Cash
Flows from (used in) Operating Activities:
Net
income (loss)	$ 947	$	2,999	$	(18,841	)
Adjustments
to reconcile net income to net cash
provided
by operating activities:
Depreciation
and amortization	9,483		5,447		12,087
Stock-based
compensation expense	151		151		483
Change
in fair value of financial instruments	(1,711	)	(1,711	)	8,859
Amortization
of deferred gain on sale and leaseback of vessels	(2,433	)	(2,433	)	(1,297	)
Amortization
of fair value below market time charter	-		-		(6,099	)
Loss
on sale of other fixed assets	61		61		25
Gain
on sale of vessels	-		-		(582	)
Payments
for dry-docking	(6,791	)	-		-
Change
in operating assets and liabilities	5,165		358		13,634
Net
Cash from Operating Activities	4,872		4,872		8,269
Cash
Flows from (used in) Investing Activities:
Principal
payments received under capital lease	-		-		3,700
Principal
payments paid under capital lease	-		-		(928	)
Advances
for vessels acquisitions / under construction	(14,778	)	(14,778	)	(14,768	)
Vessel
acquisitions and improvements	-		-		(115,747	)
Insurance
claims recoveries	-		-		125
Increase
in restricted cash	-		-		(3,500	)
Net
proceeds from sale of vessels	-		-		47,867
Net
proceeds from sale of other fixed assets	28		28		49
Acquisition
of other fixed assets	(1,247	)	(1,247	)	(520	)
Net
Cash used in Investing Activities	(15,997	)	(15,997	)	(83,722	)
Cash
Flows from (used in) Financing Activities:
Proceeds
from long-term debt	10,000		10,000		100,180
Payments
of long-term debt	(4,250	)	(4,250	)	(42,085	)
Cancellation
of fractional shares	-		-		(2	)
Payment
of financing costs	-		-		(277	)
Net
Cash from Financing Activities	5,750		5,750		57,816
Net
decrease in cash and cash equivalents	(5,375	)	(5,375	)	(17,637	)
Cash
and cash equivalents at beginning of period	29,992		29,992		26,012
Cash
and cash equivalents at end of period	$ 24,617	$	24,617	$	8,375
SUPPLEMENTAL
CASH FLOW INFORMATION
Interest
paid	$ 1,443	$	1,443	$	5,477
NON-CASH
TRANSACTIONS
Fair
value below market time charter	$ -	$	-	$	12,647
Amounts
owed for capital expenditures	$ -	$	-	$	2,469

APPENDIX A – SPECIFIC ITEMS AFFECTING NET INCOME (LOSS)

Set forth below are some of the significant items of income and expense that affected the Company's net results for the first quarter of 2007 and 2008, all of which items are typically excluded by securities analysts in their published estimates of the Company's financial results:

| (Expressed in thousands of U.S. Dollars - except for share and per share

data)
	Three
Months Ended
Description	March
31, 2007							March
31, 2008
	As originally reported under the deferral
method			As computed under the direct expense
method
	(unaudited)							(unaudited)
	$	Per Share		$		Per Share		$		Per Share
Reported
net income (loss)	947		0.09		2,999		0.28		(18,841	)	(0.93	)
Restricted
share plan to officers and personnel (1)	151		0.01		151		0.01		483		0.02
Change
of fair value of financial instruments	(1,711	)	(0.16		(1,711	)	(0.16	)	8,859		0.44
Specific
legal fees (2)	192		0.02		192		0.02		-		-
Amortization
of financing fees (3)	-		-		-		-		758		0.04
Specific
repairs (4)	388		0.04		388		0.04		6,637		0.33
Total	(980	)	(0.09	)	(980	)	(0.09	)	16,737		0.83
Net
income (loss) after specific items	(33	)	0.00		2,019		0.19		(2,104	)	(0.10	)

| (1) | Relates to stock-based compensation expense | | --- | --- | | (2) | Relates to legal fees incurred due to the class action lawsuit | | (3) | Amortization of financing fees relating to bridge loan with DVB | | (4) | Special unexpected repairs |

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TOP SHIPS INC.

(registrant)

| Dated: June

20, 2008
Evangelos J.
Pistiolis
Chief Executive
Officer

SK 23116 0001 894612