Filed Pursuant to Rule 424(b)(5)
Registration No. 333-222580
Prospectus Supplement
(To Prospectus dated February 8, 2018)
45,850,000 Common
Shares
Globus Maritime Limited
We are offering 45,850,000
of our common shares, $0.004 par value per share, directly to a small number of institutional investors pursuant to this prospectus
supplement and the accompanying prospectus. The offering price of the shares is $0.27. In a concurrent private placement, we are
also selling to the investors warrants to purchase an aggregate of up to 45,850,000 of our common shares at an exercise price of
$0.30 per share. The private placement warrants will be exercisable for a period of five and one-half years commencing on the date
of issuance. The private placement warrants and the common shares issuable upon the exercise of such warrants are not being registered
under the Securities Act of 1933, as amended, are not being offered pursuant to this prospectus supplement and the accompanying
prospectus, and are being offered pursuant to an exemption from the registration requirements of the Securities Act provided in
Section 4(a)(2) of the Securities Act and/or Rule 506(b) promulgated thereunder.
Our
common shares are listed on The Nasdaq Capital Market, or Nasdaq, under the symbol “GLBS”. We have sold no securities
pursuant to General Instruction I.B.5 of Form F-3 during the twelve calendar month period that ends on and includes the date of
this prospectus supplement. The aggregate market value of our common shares held by non-affiliates pursuant to Form F-3 General
Instruction I.B.5 is $37,236,762, based on 44,798,799 of
our common shares outstanding and held by non-affiliates as of the date of this prospectus
supplement and a price of $0.8312 per share, the closing price of our common shares on June 8, 2020.
We are thus currently eligible to offer and sell up to an aggregate of $12,412,254 of our common
shares pursuant to General Instruction I.B.5 of Form F-3.
Investing
in our common shares involves a high degree of risk. See “Risk Factors” beginning on page S-5 of this
prospectus supplement and page 3 of the accompanying prospectus and in our annual report on Form 20-F for the fiscal year
ended December 31, 2019, which is incorporated by reference herein, to read about the risks you should consider before
purchasing our common shares.
We have retained Maxim
Group LLC (whom we refer to herein as the Placement Agent) as our exclusive placement agent to use its reasonable best efforts
to solicit offers to purchase our common shares in this offering. The Placement Agent is not selling any of our common shares pursuant
to this prospectus supplement or the accompanying prospectus. We expect that delivery of our common shares being offered pursuant
to this prospectus supplement will be made to the Investors on or about June 30, 2020, subject to customary closing conditions.
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Per Share
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Total
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Public offering price
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$
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0.27
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$
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12,379,500
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Placement Agent’s fees (1)
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$
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0.0189
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$
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866,565
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Proceeds, before expenses, to the Company
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$
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0.2511
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$
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11,512,935
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(1) We
have agreed to pay the Placement Agent a cash fee equal to 7.0% of the gross proceeds. In addition, we have agreed to pay certain
expenses and advances of the Placement Agent, as discussed under “Plan of Distribution”.
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 supplement or the accompanying prospectus. Any representation to the contrary is a criminal
offense.
MAXIM GROUP LLC
The date of this prospectus supplement
is June 26, 2020
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
Page
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement
and the accompanying prospectus are part of a registration statement that we filed with the Commission utilizing a “shelf”
registration process. This document is in two parts. The first part is this prospectus supplement, which describes the specific
terms of this offering and the securities offered hereby and also adds to and updates information contained in the accompanying
prospectus and the documents incorporated by reference into this prospectus supplement and the accompanying prospectus. The second
part, the accompanying base prospectus, gives more general information and disclosure about the securities we may offer from time
to time, some of which does not apply to this offering of common shares. When we refer to the prospectus, we are referring to both
parts combined, and when we refer to the accompanying prospectus, we are referring to the base prospectus.
If the description
of this offering varies between this prospectus supplement and the accompanying prospectus, you should rely on the information
in this prospectus supplement. This prospectus supplement, the accompanying prospectus, any free writing prospectus and the documents
incorporated into each by reference include important information about us and the common shares being offered and other information
you should know before investing. You should read this prospectus supplement and the accompanying prospectus together with the
additional information described under the heading, “Where You Can Find Additional Information” in this prospectus
supplement and the accompanying prospectus before investing in our common shares.
Any statement made
in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed
to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus supplement
or in any other subsequently filed document that is also incorporated by reference into this prospectus modifies or supersedes
that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute
a part of this prospectus.
You should rely only
on the information contained in or incorporated by reference in this prospectus supplement, the accompanying prospectus and any
free writing prospectus. We have not authorized anyone to provide you with information that is different from the foregoing. If
anyone provides you with different or inconsistent information, you should not rely on it. We are offering to sell our common shares
only in jurisdictions where offers and sales are permitted. You should not assume that the information contained in this prospectus
supplement, the accompanying prospectus, any free writing prospectus or incorporated by reference in this prospectus supplement
or the accompanying prospectus is accurate as of any date other than the date of such document. Our business, financial condition,
results of operations and prospects may have changed since those dates.
Unless otherwise indicated,
all references to “$” and “dollars” in this prospectus supplement are to United States dollars, and financial
information presented in this prospectus is derived from financial statements that are incorporated by reference and were prepared
in accordance with International Financial Reporting Standards (IFRS). We have a fiscal year end of December 31.
CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement
includes “forward-looking statements,” as defined by U.S. federal securities laws, with respect to our financial condition,
results of operations and business and our expectations or beliefs concerning future events. Forward-looking statements provide
our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs,
plans, objectives, intentions, assumptions and other statements that are not historical facts or that are not present facts or
conditions. Forward-looking statements and information can generally be identified by the use of forward-looking terminology or
words, such as “anticipate,” “approximately,” “believe,” “continue,” “estimate,”
“expect,” “forecast,” “intend,” “may,” “ongoing,” “pending,”
“perceive,” “plan,” “potential,” “predict,” “project,” “seeks,”
“should,” “views” or similar words or phrases or variations thereon, or the negatives of those words or
phrases, or statements that events, conditions or results “can,” “will,” “may,” “must,”
“would,” “could” or “should” occur or be achieved and similar expressions in connection with
any discussion, expectation or projection of future operating or financial performance, costs, regulations, events or trends. The
absence of these words does not necessarily mean that a statement is not forward-looking. Forward-looking statements and information
are based on management’s current expectations and assumptions, which are inherently subject to uncertainties, risks and
changes in circumstances that are difficult to predict.
The forward-looking
statements in this prospectus supplement are based upon various assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, 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. As a result, you
are cautioned not to rely on any forward- looking statements.
In addition to these
important factors and matters discussed elsewhere herein and in the documents incorporated by reference herein, important factors
that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include
among other things:
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changes in shipping industry trends, including charter rates, vessel values and factors affecting
vessel supply and demand;
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changes in seaborne and other transportation patterns;
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changes in the supply of or demand for dry bulk commodities, including dry bulk commodities carried
by sea, generally or in particular regions;
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the strength of world economies;
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the stability of Europe and the Euro;
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fluctuations in interest rates and foreign exchange rates;
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changes in the number of newbuildings under construction in the dry bulk shipping industry;
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changes in the useful lives and the value of our vessels and the related impact on our compliance
with loan covenants;
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the aging of our fleet and increases in operating costs;
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changes in our ability to complete future, pending or recent acquisitions or dispositions;
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our ability to achieve successful utilization of our expanded fleet;
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changes to our financial condition and liquidity, including our ability to pay amounts that we
owe and obtain additional financing to fund capital expenditures, acquisitions and other general corporate activities;
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risks related to our business strategy, areas of possible expansion or expected capital spending
or operating expenses;
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changes in the availability of crew, number of off-hire days, classification survey requirements
and insurance costs for the vessels in our fleet;
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changes in our relationships with our contract counterparties, including the failure of any of
our contract counterparties to comply with their agreements with us;
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loss of our customers, charters or vessels;
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potential liability from future litigation and incidents involving our vessels;
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our future operating or financial results;
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our ability to continue as a going concern;
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acts of terrorism, other hostilities, pandemics or other calamities (including, without limitation,
the worldwide novel coronavirus outbreak of 2020);
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changes in global and regional economic and political conditions;
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our ability to continue as a going concern;
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potential exposure or loss from investment in derivative instruments;
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potential conflicts of interest involving our Chief Executive Officer, the Chairman of our board
of directors, or their family and other members of our senior management;
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changes in governmental rules and regulations or actions taken by regulatory authorities, particularly
with respect to the dry bulk shipping industry; and
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other factors listed from time to time in this prospectus supplement, registration statements,
reports or other materials that we have filed with or furnished to the Commission, including our most recent annual report on Form
20-F, which is incorporated by reference into this prospectus supplement.
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These factors could
cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other
unknown or unpredictable factors also could harm our results or developments. Consequently, there can be no assurance that actual
results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected
consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance
on such forward-looking statements.
We undertake no obligation
to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise,
except as required by law. If one or more forward-looking statements are updated, no inference should be drawn that additional
updates will be made with respect to those or other forward-looking statements.
ENFORCEABILITY OF CIVIL LIABILITIES
We a Republic of the
Marshall Islands corporation and our principal executive offices are located outside the United States. The majority of the directors,
officers and our independent registered public accounting firm reside outside the United States. In addition, substantially all
of our assets and the assets of certain of our directors, officers and our independent registered public accounting firm are located
outside the United States. As a result, it may not be possible for you to serve legal process within the United States upon us
or any of these persons. It may also not be possible for you to enforce, both in and outside the United States, judgments you may
obtain in United States 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 courts of such jurisdictions would enforce judgments of U.S. courts obtained in actions against us, our
directors or officers and such experts based upon the civil liability provisions of applicable U.S. federal and state securities
laws or would enforce, in original actions, liabilities against us, our directors or officers and such experts based on those laws.
SUMMARY
This summary highlights
certain information that appears elsewhere in this prospectus supplement or in documents incorporated by reference herein, and
this summary is qualified in its entirety by that more detailed information. This summary may not contain all of the information
that may be important to you. We urge you to carefully read this entire prospectus supplement, the accompanying prospectus and
the documents incorporated by reference herein and therein, including our financial statements and the related notes and the information
in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.
As an investor or prospective investor, you should also review carefully the sections entitled “Cautionary Statement Regarding
Forward-Looking Statements” and “Risk Factors” in this prospectus supplement, the accompanying prospectus and
in our annual report on Form 20-F for the year ended December 31, 2019, which is incorporated by reference herein.
Unless the context
otherwise requires, as used in this prospectus supplement, the terms “Company”, “Globus”, “we”,
“us”, and “our” refer to Globus Maritime Limited and all of its subsidiaries, and “Globus Maritime
Limited” refers only to Globus Maritime Limited and not to its subsidiaries. We use the term deadweight ton, or dwt, in describing
the size of our vessels. Dwt, expressed in metric tons each of which is equivalent to 1,000 kilograms, refers to the maximum weight
of cargo and supplies that a vessel can carry. Our reporting currency is the U.S. dollar and all references in this prospectus
to “$” or “dollars” are to U.S. dollars and financial information presented in this prospectus is derived
from the financial statements incorporated by reference in this prospectus that were prepared in accordance with international
financial reporting standards, or IFRS.
Overview
We are an integrated
international owner and operator of dry bulk vessels, focusing on the Panamax and Supramax sectors, providing marine transportation
services on a worldwide basis. We currently own 5 dry bulk vessels, 4 Supramaxes and 1 Panamax, with 300,571 dwt carrying capacity
and an average age of 12.1 years as of March 31, 2020. We own each of our vessels through separate, wholly owned subsidiaries,
four of which are incorporated in the Marshall Islands, and one of which is incorporated in Malta. All of our Supramax vessels
are geared. Geared vessels can operate in ports with minimal shore-side infrastructure. Due to the ability to switch between various
dry bulk cargo types and to service a wider variety of ports, the day rates for geared vessels tend to have a premium. Our vessels
can carry the majority of dry bulk commodities such as, coal, finished steel products, as well as minerals such as, iron ore, chromium
ore, and nickel ore. In addition, we are also engaged in the carriage of agribulks such as grains, soy bean, rice, and sugar. Our
fleet operates on a worldwide basis with presence in both the Pacific and Atlantic oceans.
Our operations
are managed by our Attica, Greece-based wholly owned subsidiary, Globus Shipmanagement Corp., which we refer to as our Manager,
which provides in-house commercial and technical management for our vessels and provided consulting services for an affiliated
ship-management company. Our Manager has entered into a ship management agreement with each of our wholly owned vessel-owning subsidiaries.
Virtually all aspects of our vessels are managed in-house including managing day-to-day vessel operations, such as supervising
the crewing, supplying, maintaining of vessels and other services. We believe that by having these critical management functions
in-house provides efficiency, fast reaction times, good communication among departments and effective cost management.
We intend to grow
our fleet through timely and selective acquisitions of modern vessels in a manner that we believe will provide an attractive return
on equity and will be accretive to our earnings and cash flow based on anticipated market rates at the time of purchase. Additionally,
we may target asset divestitures in line with our strategy as we look to grow and modernize our fleet. There is no guarantee however,
that we will be able to find suitable vessels to purchase or that such vessels will provide an attractive return on equity or be
accretive to our earnings and cash flow.
Our company was incorporated in 2006
in Jersey, and in 2010 we redomiciled into the Republic of the Marshall Islands.
Our
Fleet
Our Current Fleet
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Vessel
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Year Built
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Flag
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Direct Owner
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Shipyard
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Vessel Type
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Type of
Employment
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Delivery Date
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Carrying
Capacity
(dwt)
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m/v River Globe
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2007
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Marshall Islands
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Devocean Maritime
Ltd.
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Yangzhou Dayang
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Supramax
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Spot
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December 2007
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53,627
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m/v Sky Globe
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2009
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Marshall Islands
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Domina Maritime
Ltd.
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Taizhou Kouan
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Supramax
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Spot
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May 2010
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56,855
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m/v Star Globe
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2010
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Marshall Islands
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Dulac Maritime S.A.
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Taizhou Kouan
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Supramax
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Spot
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May 2010
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56,867
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m/v Moon Globe
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2005
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Marshall Islands
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Artful
Shipholding S.A.
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Hudong-Zhonghua
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Panamax
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Spot
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June 2011
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74,432
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m/v Sun Globe
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2007
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Malta
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Longevity Maritime Limited
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Tsuneishi Cebu
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Supramax
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Spot
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September 2011
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58,790
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Ave. Age:
12.1*
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Total dwt: 300,571
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*As of March 31, 2020
Our fleet is currently
comprised of a total of five dry bulk vessels consisting of one Panamax and four Supramaxes. The weighted average age of the vessels
we owned as of March 31, 2020 was 12.1 years, and their carrying capacity was 300,571 dwt.
M/V Sky Globe, Star
Globe, River Globe, Sun Globe are Supramax vessels that primarily trade in the Far East, Indian Ocean, South America and the Persian
Gulf. The vessels are engaged in the coal, ore and agribulk trades.
M/V Moon Globe is a
Panamax and trades primarily in the East Coast of South America, the Far East and the Mediterranean. The vessel is primarily engaged
in ore and agribulk trading.
All the above-mentioned
vessels are operating in the spot market or on short period charters.
Recent Developments
On June 22, 2020, we
closed a public offering and partial exercise of the underwriter’s overallotment option. In connection therewith, we issued
39,425,000 common shares and 39,425,000 Class A Warrants for aggregate proceeds, after deducting underwriting discounts and commissions
and underwriter expenses, but before other expenses payable by us, of approximately $12.6 million.
On June 25, 2020, we
repaid all amounts owed in complete satisfaction of our obligations pursuant to a Senior Convertible Note issued March 13, 2019.
Corporate Information
We
originally incorporated as Globus Maritime Limited on July 26, 2006 pursuant to the Companies (Jersey) Law 1991 (as amended) and
re-domiciled into the Marshall Islands on November 24, 2010. Our registered office is located at Ajeltake Road, Ajeltake Island,
Majuro, Marshall Islands MH 96960. Our registered agent in the Republic of the Marshall Islands
is The Trust Company of the Marshall Islands, Inc., Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
MH 96960. Our principal executive office is located at 128 Vouliagmenis Avenue, 3rd Floor, 166 74 Glyfada, Attica, Greece.
Our telephone number is +30 210 960 8300. Our corporate website address is http://www.globusmaritime.gr. The information contained
on or accessed through our website does not constitute part of, and is not incorporated into, this prospectus. The SEC maintains
a website that contains reports, proxy and information statements, and other information that we and other issuers file electronically
at http://www.sec.gov.
Going Concern
Our consolidated financial
statements as of and for the year ended December 31, 2019 and our unaudited interim consolidated financial statements for the three
months ended March 31, 2020 were prepared assuming that we will continue as a going concern and do not include any adjustments
that might be necessary if we are unable to continue as a going concern. However, there are substantial doubts about our ability
to continue as a going concern. We acknowledge that uncertainty remains over our ability to meet our liabilities as they fall due.
We may be unable to realize assets at their recognized values and to extinguish liabilities in the normal course of business at
the amounts stated in these consolidated financial statements. If we cannot secure the financing needed to continue as a viable
business, our shareholders may lose some or all of their investment in us. Our independent registered public accounting firm, Ernst
& Young (Hellas) Certified Auditors Accountants S.A., or EY, has issued their opinion with an explanatory paragraph in connection
with the consolidated financial statements for the year ended December 31, 2019 included in our annual report that includes an
emphasis of matter in relation to the substantial doubt about our ability to continue as a going concern.
THE OFFERING
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Issuer
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Globus Maritime Limited
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Common shares outstanding as of the date of this prospectus supplement
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46,111,666 common shares
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Common shares being offered
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45,850,000 common shares
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Common shares to be outstanding immediately after this offering
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91,961,666 common shares
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Use of proceeds
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We intend to use all of the net proceeds of this offering for general corporate purposes which may include, among other things, prepaying debt or partially funding the acquisition of modern dry bulk vessels in accordance with our growth strategy. However, we do not currently have definitive plans for any debt prepayments nor have we identified any potential acquisitions, and we can provide no assurance that we will be able to complete any debt prepayment or the acquisition of any vessel that we are able to identify. We expect that the net proceeds of this offering will be approximately $11.5 million net of the Placement Agent’s fees and other estimated offering expenses.
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Risk Factors
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Investing in our common shares involves a high degree of risk. See
“Risk Factors” beginning on page S-5 of this prospectus supplement and page 4 of the accompanying prospectus and
in our annual report on Form 20-F for the fiscal year ended December 31, 2019, which is incorporated by reference herein, to
read about the risks you should consider before purchasing our common shares.
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Listing
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Our common shares are listed on Nasdaq under the symbol “GLBS”.
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Concurrent
private placement
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In a concurrent
private placement, we are selling to the purchasers of our common shares in this offering warrants to purchase 45,850,000
of our common shares at an exercise price of $0.30 per share.
We will receive gross proceeds from the concurrent private placement transaction solely to the extent such
warrants are exercised
for cash. The warrants and the common shares issuable upon the exercise of the warrants are not being offered pursuant to this
prospectus supplement and the accompanying prospectus. See “Private Placement Transaction”.
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The number of our common shares that will
be outstanding immediately after this offering as shown above excludes:
• 45,850,000
common shares issuable upon exercise of the warrants being issued in the private placement concurrently with this
offering;
• 39,155,000
common shares issuable upon the exercise of outstanding Class A warrants at an exercise price of $0.35 per share and expire in
June 2025;
• 3,571
common shares (and 3,571 common shares issuable upon the issuance of additional Class A warrants) issuable on further exercise
of the overallotment option granted to the representative of the underwriters in our public offering which closed on June 22, 2020;
and
• Up
to 303,964 of our common shares issuable to repay the amount outstanding under the $15 million credit facility with Firment Shipping
Inc., which we refer to as the Firment Shipping Credit Facility, based on approximately $851,100
of principal and interest outstanding on the date hereof and assuming full repayment of such amount at a conversion price of $2.80.
RISK FACTORS
An investment in
our common shares involves a high degree of risk. Before deciding to invest in our common shares, you should carefully consider
the risks described in the accompanying prospectus and under the heading “Risk Factors” beginning on page 8 of our
annual report on Form 20-F for the year ended December 31, 2019, which is incorporated by reference into this prospectus supplement.
In addition, you should carefully consider the other information in the annual report and other documents that are incorporated
by reference into this prospectus supplement. See “Where You Can Find Additional Information”. The risks and uncertainties
referred to above are not the only risks and uncertainties that we face. Additional risks and uncertainties not presently known
to us or that we currently deem immaterial may also impair our business operations. If any of these risks actually occurs, our
business, financial condition and results of operations could be materially adversely affected. In that case, you may lose all
or part of your investment in the common shares.
We have broad
discretion in the use of the net proceeds from this offering and may use the net proceeds in ways with which you disagree.
Our management will
have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not
improve our results of operations or enhance the value of our securities. You will be relying on the judgment of our management
with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess
whether the net proceeds are being used appropriately. The failure by our management to apply these funds effectively could result
in financial losses that could have a material adverse effect on our business, cause the price of our securities to decline. Pending
the application of these funds, we may invest the net proceeds from this offering in a manner that does not produce income or that
loses value.
We may issue
additional common shares or other equity securities without shareholder approval, which would dilute our existing shareholders’
ownership interests and may depress the market price of our common shares.
We may issue additional
common shares or other equity securities of equal or senior rank in the future without shareholder approval in connection with,
among other things, future vessel acquisitions, the repayment of outstanding indebtedness, and the conversion of convertible financial
instruments.
Our issuance of additional
common shares or other equity securities of equal or senior rank in these situations would have the following effects:
• our
existing shareholders’ proportionate ownership interest in us would decrease;
• the
proportionate amount of cash available for dividends payable on our common shares could decrease;
• the
relative voting strength of each previously outstanding common share could be diminished; and
• the
market price of our common shares could decline.
In addition, we may
be obligated to issue, upon exercise or conversion of outstanding warrants and credit facilities pursuant to the terms thereof:
• 45,850,000
common shares issuable upon the exercise of outstanding Class A warrants at an exercise price of $0.35 per share and expire in
June 2025;
• 3,571
common shares (and 3,571 common shares issuable upon the issuance of additional Class A warrants) issuable on further exercise
of the overallotment option granted to the representative of the underwriters in our public offering which closed on June 22, 2020;
and
• Up
to 303,964 of our common shares issuable to repay the amount outstanding under the $15 million credit facility with Firment Shipping
Inc., based on approximately $851,100 of principal and interest outstanding on the date hereof and assuming full repayment of such
amount at a conversion price of $2.80, but which number of shares could be increased if we borrow additional funds under that credit
facility.
We also issue, on a
quarterly basis, common shares to certain of our directors.
Our issuance of additional
common shares upon the exercise of such warrants and credit facilities would cause the proportionate ownership interest in us of
our existing shareholders, other than the exercising warrant or credit facility holder, to decrease; the relative voting strength
of each previously outstanding common share held by our existing shareholders to decrease; and, depending on our share price when
and if these warrants or notes are exercised, may result in dilution to our shareholders.
Future
issuances or sales, or the potential for future issuances or sales, of our common shares may cause the trading price of our securities
to decline and could impair our ability to raise capital through subsequent equity offerings.
We
have issued a significant number of our common shares and may do so in the future. Shares to be issued pursuant to the exercise
of our outstanding warrants, including the warrants being issued in the concurrent private placement, could cause the market price
of our common shares to decline, and could have an adverse effect on our earnings per share. In addition, future sales of our common
shares or other securities in the public markets, or the perception that these sales may occur, could cause the market price of
our common shares to decline, and could materially impair our ability to raise capital through the sale of additional securities.
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 depress the market price of our common shares and impair
our ability to raise capital through the sale of additional equity securities or make it more difficult or impossible for us to
sell equity securities in the future at a time and price that we deem appropriate. We cannot predict the effect that future sales
of common shares or other equity-related securities would have on the market price of our common shares.
Our
loan agreements and other financing arrangements contain, and we expect that other future loan agreements and financing arrangements
will contain, restrictive covenants that may limit our liquidity and corporate activities, which could limit our operational flexibility
and have an adverse effect on our financial condition and results of operations. In addition, because of the presence of cross-default
provisions in our loan agreements and financing arrangements, a default by us under one loan could lead to defaults under multiple
loans.
Our
loan agreements and other financial arrangements contain, and we expect that other future loan agreements and financing arrangements
will contain, customary covenants and event of default clauses, financial covenants, restrictive covenants and performance requirements,
which may affect operational and financial flexibility. Such restrictions could affect, and in many respects limit or prohibit,
among other things, our ability to pay dividends, incur additional indebtedness, create liens, sell assets, or engage in mergers
or acquisitions. These restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital
needs or otherwise restrict corporate activities. There can be no assurance that such restrictions will not adversely affect our
ability to finance our future operations or capital needs.
As
a result of these restrictions, we may need to seek permission from our lenders and other financing counterparties in order to
engage in some corporate actions. Our lenders’ and other financing counterparties’ interests may be different from
ours and we may not be able to obtain their permission when needed. This may prevent us from taking actions that we believe are
in our best interests, which may adversely impact our revenues, results of operations and financial condition.
A
failure by us to meet our payment and other obligations, including our financial covenants and any security coverage requirements,
could lead to defaults under our financing arrangements. Likewise, a decrease in vessel values or adverse market conditions could
cause us to breach our financial covenants or security requirements (the market values of dry bulk vessels have generally experienced
high volatility). In the event of a default that we cannot remedy, our lenders and other financing counterparties could then accelerate
their indebtedness and foreclose on the respective vessels in our fleet. The loss of any of our vessels could have a material adverse
effect on our business, results of operations and financial condition.
In
the recent past, we obtained waivers and deferrals of some major financial covenants under our loan facilities with our lenders
until the end of the third quarter of 2020. However, there can be no assurance that we will obtain similar waivers and deferrals
from our lenders in the future, if needed, as we have obtained in the past. We are currently in compliance with all applicable
financial covenants under our existing loan facilities. For more information regarding our current loan facilities, see please
see “Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Loan Arrangements”
in our annual report on Form 20-F for the fiscal year ended December 31, 2019, which is incorporated by reference herein.
Because
of the presence of cross-default provisions in our loan agreements, a default by us under a loan and the refusal of any one lender
to grant or extend a waiver could result in the acceleration of our indebtedness under our other loans. A cross-default provision
means that if we default on one loan, we would then default on our other loans containing a cross-default provision.
Pandemics such as the novel coronavirus
(COVID-19) make it very difficult for us to operate in the short-term and have unpredictable long-term consequences, all of which
could decrease the supply of and demand for the raw materials we transport, the rates that we are paid to carry our cargo, and
our financial outlook.
On March 11, 2020,
the World Health Organization declared the spread of a novel coronavirus (COVID-19) to be a global pandemic. In the name of public
health, governments around the world have shuttered workplaces, restricted travel, and put in place other measures which have resulted
in a dramatic decrease of economic activity, including a reduction of goods imported and exported worldwide. While some economies
have begun re-opening in limited capacities, it is impossible to predict the course the virus will take, how governments would
respond to a second or third wave of the virus, whether an effective vaccine can be produced economically at scale, and how the
behavior of our clients will change, if at all, due to the coronavirus pandemic’s economic shock. Some experts fear that
the economic consequences of COVID-19 could cause a recession that outlives the pandemic.
We have thus far been affected by COVID-19
as follows:
|
|
·
|
The pandemic has had a negative impact on our voyage revenues for the three-month period ended March 31, 2020, which reached $2.3 million, compared to $3.5 million to the same period in 2019. We attribute this 35% decrease to the low freight rates achieved in the first quarter of 2020, which we attribute mainly to the outbreak of the novel coronavirus.
|
|
|
·
|
Based upon increased volatility in the charter market and its effect on the recoverability of the carrying amount for our vessels, we concluded that the pandemic may have trigged the impairment of our vessels. We performed an impairment assessment of our vessels by comparing the discounted projected net operating cash flows for each vessel to its carrying value. As of March 31, 2020, the Company concluded that the recoverable amounts of the vessels were lower than their carrying amounts and recorded an impairment loss of $4.6 million.
|
|
|
·
|
Our vessels have been subject to quarantine checks upon arriving at certain ports. This has functionally limited the amount of cargo that the Company (and its competitors) are able to move because countries worldwide have imposed quarantine checks on arriving vessels, which have caused delays in loading and delivery of cargoes.
|
|
|
·
|
Due to quarantine restrictions placed on persons and additional procedures using commercial aviation and other forms of public transportation, our crew has had difficulty embarking and disembarking on our ships. This has not thus far functionally affected our ability to crew out vessels.
|
We expect that pandemics generally, including
the current novel coronavirus pandemic, could affect our business in the following ways, among others:
|
|
(1)
|
Pandemics generally reduce the demand for goods worldwide without a commensurate corresponding change in the number of vessels worldwide, thereby increasing competition for cargo and decreasing the market price for transporting dry bulk products.
|
|
|
(2)
|
Countries could impose quarantine checks and hygiene measures on arriving vessels, which functionally reduce the amount of cargo that we and our competitors are able to move by causing delays in loading and delivery of cargo.
|
|
|
(3)
|
The process of buying, selling, and maintaining vessels is made more onerous and time-intensive. For instance, delays may be caused at shipyards for newbuildings, drydocks and other works, in vessel inspections and related certifications by class societies, customers or government agencies, as well as delays and shortages or a lack of access to required spare parts and lack of berths or shortages in labor, which may in turn delay any repairs to, scheduled or unscheduled maintenance or modifications, or drydocking of, our vessels.
|
|
|
(4)
|
We have a decrease in productivity, generally, as people—including our office employees and crews, as well as our counterparties—get sick and take time off from work. We are particularly vulnerable to our crew members getting sick, as if even one of our crew members gets sick, local authorities could require us to detain and quarantine the ship and its crew for an unspecified amount of time, disinfect and fumigate the vessels, or take similar precautions, which would add costs, decrease our utilization, and substantially disrupt our cargo operations. If a vessel’s entire crew fell seriously ill, we may have substantial difficulty operating its vessel and may necessitate extraordinary external aid.
|
|
|
(5)
|
International transportation of personnel could be limited or otherwise disrupted. In particular, our crews generally work on a rotation basis, relying largely on international air transport for crew changes plan fulfillment. Any such disruptions could impact the cost of rotating our crew, and possibly impact our ability to maintain a full crew synthesis onboard all our vessels at any given time. It may also be difficult for our in-house technical teams to travel to ship yards to observe vessel maintenance, and we may need to hire local experts, which local experts may vary in skill and are difficult to supervise remotely, to conduct work we ordinarily address in-house.
|
|
|
(6)
|
Governments impose new regulations, directives or practices, which we may be obligated to implement at our own expense.
|
|
|
(7)
|
Any or all of the foregoing could lead our charterers to try to invoke force majeure clauses.
|
|
|
(8)
|
Credit tightening or declines in global financial markets, including to the prices of our publicly traded securities and the securities of our peers, could make it more difficult for us to access capital, including to finance our existing debt obligations.
|
Any of these public health threats and
related consequences could adversely affect our financial results.
It is too early to assess the full long-term
impact of the ongoing novel coronavirus pandemic on global markets, and particularly on the shipping industry. It may take some
time to materialize and may not be fully reflected in the results for the year ending December 31, 2020.
USE OF PROCEEDS
We intend to use all
of the net proceeds of this offering for general corporate purposes which may include, among other things, prepaying debt or partially
funding the acquisition of modern dry bulk vessels in accordance with our growth strategy. However, we do not currently have definitive
plans for any debt prepayments nor have we identified any potential acquisitions, and we can provide no assurance that we will
be able to complete any debt prepayment or the acquisition of any vessel that we are able to identify. We expect that the net proceeds
of this offering will be approximately $11.5 million net of the Placement Agent’s fees and other estimated offering expenses.
CAPITALIZATION
The following table
sets forth our capitalization as of March 31, 2020:
● on
an actual basis, based on 6,416,666 common shares outstanding as of March 31, 2020, and excludes, as of such date (1) 100,000 common
shares available for issuance under our 2012 Equity Incentive Plan; (2) up to 2,475,660 of our common shares issuable at our option
upon conversion of the Convertible Note, based on $2,475,660 of principal and interest outstanding on March 31, 2020 and assuming
full conversion of such amount at the floor price of the Convertible Note, it being noted that the Convertible Note has been fully
repaid as of the date of this prospectus supplement; and (3) up to 303,964 of our common shares issuable upon the issuance of shares
to repay the Firment Shipping Credit Facility, based on approximately $851,100 of principal and interest outstanding on the date
hereof and assuming full repayment of such amount at a conversion price of $2.80;
● on
an as adjusted basis, to reflect the issuance between March 31, 2020 and the date of this prospectus supplement of 5,000 Series
B preferred shares on June 12, 2020 , the issuance of 39,425,000 common shares and 39,425,000 Class A warrants exercisable into
39,425,000 common shares (and assuming no exercises of the Class A warrants other than the 270,000 Class A Warrants exercised on
June 24, 2020), and the payment in full on June 25, 2020 of all amounts owed pursuant to our Convertible Note; and
● on
an as further adjusted basis to give effect to the sale of common shares in this offering and the warrants being issued in the
concurrent private placement.
There have been no significant adjustments
to our capitalization since March 31, 2020, other than the adjustments described above. The historical data in the table is derived
from, and should be read in conjunction with, our historical consolidated financial statements incorporated by reference into this
prospectus supplement. You should also read this table in conjunction with the information in the section entitled “Operating
and Financial Review and Prospects” included in our annual report on Form 20-F, incorporated by reference herein.
|
|
|
Actual
|
|
|
As Adjusted
(unaudited)
|
|
|
As Further
Adjusted**
(unaudited)
|
|
|
|
|
(dollars in thousands except
per share and share data)
|
|
|
Capitalization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EnTrust Loan Facility
|
|
$
|
37,000
|
|
|
$
|
37,000
|
|
|
$
|
37,000
|
|
|
Firment Shipping Credit Facility
|
|
$
|
307
|
|
|
$
|
307
|
|
|
$
|
307
|
|
|
Convertible Note
|
|
$
|
798
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total debt (including current portion)
|
|
$
|
38,105
|
|
|
$
|
37,307
|
|
|
$
|
37,307
|
|
|
Preferred shares, $0.001 par value; 100,000,000 shares authorized, none issued*, actual and adjusted
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Common shares, $0.004 par value; 500,000,000 shares authorized, 6,416,666 shares issued and outstanding actual, 46,111,666 shares issued and outstanding as adjusted, 91,961,666 shares issued and outstanding as further adjusted
|
|
$
|
26
|
|
|
$
|
185
|
|
|
$
|
368
|
|
|
Class B Shares, $0.001 par value; 100,000 shares authorized, none issued, actual and adjusted
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Series B Preferred Shares, $0.001 par value; none issued actual; 5,000 issued as adjusted and further adjusted
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Share premium
|
|
$
|
146,326
|
|
|
$
|
159,099
|
|
|
$
|
170,429
|
|
|
Accumulated deficit
|
|
$
|
(144,650
|
)
|
|
$
|
(144,650
|
)
|
|
$
|
(144,650
|
)
|
|
Total shareholders’ equity
|
|
$
|
1,702
|
|
|
$
|
14,634
|
|
|
$
|
26,147
|
|
|
Total capitalization
|
|
$
|
39,807
|
|
|
$
|
51,941
|
|
|
$
|
63,454
|
|
Except as otherwise noted, all information
in this prospectus supplement reflects and assumes (i) no further exercise of the overallotment option granted to the representative
of the underwriters in our public offering which closed on June 22, 2020, and (ii) no exercise of Class A Warrants or the warrants
being issued in the concurrent private placement.
*Excludes 5,000 Series B Preferred Shares
accounted for elsewhere in this table.
** The As Further Adjusted common shares
and Additional paid-in capital do not include the unexercised portion of the overallotment option granted to the representative
of the underwriters.
PRIVATE PLACEMENT TRANSACTION
Concurrently with the sale of common shares
in this offering, we will issue and sell to the investors in this offering warrants to purchase up to an aggregate of 45,850,000
common shares at an exercise price equal to $0.30 per share.
The private placement warrants and the
common shares issuable upon the exercise of such warrants are not being registered under the Securities Act, are not being offered
pursuant to this prospectus supplement and the accompanying prospectus and are being offered pursuant to the exemption provided
in Section 4(a)(2) under the Securities Act and/or Rule 506(b) promulgated thereunder. Accordingly, purchasers may only sell common
shares issued upon exercise of the private placement warrants pursuant to an effective registration statement under the Securities
Act covering the resale of those shares, an exemption under Rule 144 under the Securities Act or another applicable exemption under
the Securities Act.
Exercisability.
The private placement warrants are exercisable for a period of five and one-half years commencing on the date of issuance. The
warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice
with payment in full in immediately available funds for the number of common shares purchased upon such exercise. If a registration
statement registering the resale of the common shares underlying the private placement warrants under the Securities Act is not
effective or available at any time after the six month anniversary of the date of issuance of the private placement warrants, the
holder may, in its sole discretion, elect to exercise the private placement warrant through a cashless exercise, in which case
the holder would receive upon such exercise the net number of common shares determined according to the formula set forth in the
warrant. If we do not issue the shares in a timely fashion, the warrant contains certain damages provisions. No fractional
common shares will be issued in connection with the exercise of a warrant.
Exercise Limitation. A holder will
not have the right to exercise any portion of the private placement warrant if the holder (together with its affiliates) would
beneficially own in excess of 4.99% (or, upon election of the holder, 9.99%) of the number of our common shares outstanding immediately
after giving effect to the exercise, as such percentage of beneficial ownership is determined in accordance with the terms of the
warrants. However, any holder may increase or decrease such percentage, but not in excess of 9.99%, provided that any increase
will not be effective until the 61st day after such election.
Exercise Price Adjustment. The exercise
price of the private placement warrants is subject to appropriate adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting our common shares and also upon any distributions
of assets, including cash, stock or other property to our shareholders.
Exchange Listing. There is no established
trading market for the private placement warrants and we do not expect a market to develop. In addition, we do not intend to apply
for the listing of the private placement warrants on any national securities exchange or other trading market.
Fundamental Transactions. If a fundamental
transaction occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power
that we may exercise and will assume all of our obligations under the private placement warrants with the same effect as if such
successor entity had been named in the warrant itself. If holders of our common shares are given a choice as to the securities,
cash or property to be received in a fundamental transaction, then the holder shall be given the same choice as to the consideration
it receives upon any exercise of the private placement warrant following such fundamental transaction. In addition, we or the successor
entity, at the request of warrant holders, will be obligated to purchase any unexercised portion of the private placement warrants
in accordance with the terms of such warrants.
Rights as a Shareholder. Except
as otherwise provided in the private placement warrants or by virtue of such holder’s ownership of our common shares, the
holder of a private placement warrant will not have the rights or privileges of a holder of our common shares, including any voting
rights, until the holder exercises the warrant.
Resale/Registration Rights. We are
required to file a registration statement providing for the resale of the common shares issued and issuable upon the exercise of
the private placement warrants. Subject to certain exceptions, we are required to use commercially reasonable efforts to cause
such registration to become effective and to keep such registration statement effective at all times until no investor owns any
warrants or shares issuable upon exercise thereof.
TAX CONSIDERATIONS
Marshall Islands Tax Considerations
The following discussion
is based upon the opinion of Watson Farley & Williams LLP and the current laws of the Republic of the Marshall Islands
and is applicable only to persons who are not citizens of and do not reside in, maintain offices in or engage in business, transactions,
or operations in the Republic of the Marshall Islands.
Because we and our
subsidiaries do not, and we do not expect that we or any of our subsidiaries will, conduct business, transactions, or operations
in the Republic of the Marshall Islands, and because we anticipate that all documentation related to any offerings pursuant to
this prospectus supplement will be executed outside of the Republic of the Marshall Islands, under current Marshall Islands law
holders of our common shares will not be subject to Marshall Islands taxation or withholding on dividends. In addition, holders
of our common shares will not be subject to Marshall Islands stamp, capital gains or other taxes on the purchase, ownership or
disposition of the common shares, and you will not be required by the Republic of the Marshall Islands to file a tax return relating
to the sale of common shares.
It is the responsibility
of each shareholder to investigate the legal and tax consequences, under the laws of pertinent jurisdictions, including the Marshall
Islands, of its investment in us. Accordingly, each shareholder is urged to consult its tax counsel or other advisor with regard
to those matters. Further, it is the responsibility of each shareholder to file all state, local and non-U.S., as well as U.S.
federal, tax returns which may be required of such shareholder.
United States Tax Considerations
The following is a
discussion of material United States federal income tax consequences of the ownership and disposition of the Company’s common
shares that, subject to the representations, covenants, assumptions, conditions and qualifications described herein, may be relevant
to prospective shareholders and, unless otherwise noted in the following discussion, is the opinion of Watson Farley & Williams
LLP, our United States counsel, insofar as it relates to matters of United States federal income tax law and legal conclusions
with respect to those matters. The opinion of our counsel is dependent on the accuracy of representations made by us to them, including
descriptions of our operations contained herein. This discussion is based upon the provisions of the Internal Revenue Code of 1986,
as amended, or the Code, existing final, temporary and proposed regulations thereunder and current administrative rulings and court
decisions, all as in effect on the effective date of this prospectus supplement and all of which are subject to change, possibly
with retroactive effect. Changes in these authorities may cause the tax consequences to vary substantially from the consequences
described below. No rulings have been or are expected to be sought from the United States Internal Revenue Service, or the IRS,
with respect to any of the United States federal income tax consequences discussed below, and no assurance can be given that the
IRS will not take contrary positions.
The following summary
does not address all United States federal income tax consequences applicable to any given holder of our common shares, nor does
it address the United States federal income tax considerations applicable to categories of investors subject to special taxing
rules, such as expatriates, banks, real estate investment trusts, regulated investment companies, insurance companies, tax-exempt
organizations, dealers or traders in securities or currencies, partnerships, S corporations, estates and trusts, investors that
hold their common shares as part of a hedge, straddle or an integrated or conversion transaction, investors whose “functional
currency” is not the United States dollar or investors that own, directly, indirectly, or by attribution, 10% or more of
our stock by vote or value. Furthermore, the discussion does not address alternative minimum tax consequences or estate or gift
tax consequences, or any state tax consequences, and is limited to shareholders that will hold their common shares as “capital
assets” within the meaning of Section 1221 of the Code. Each shareholder is encouraged to consult and discuss with his or
her own tax advisor the United States federal, state, local and non-United States tax consequences particular to him or her of
the acquisition, ownership or disposition of common shares. Further, it is the responsibility of each shareholder to file all state,
local and non-United States, as well as United States federal, tax returns that may be required of it.
United States Federal Income Taxation of United States
Holders
As used herein,
“United States Holder” means a beneficial owner of the Company’s common shares that is an individual
citizen or resident of the United States for United States federal income tax purposes, a corporation or other entity taxable
as a corporation created or organized in or under the laws of the United States or any state thereof (including the District
of Columbia), an estate the income of which is subject to United States federal income taxation regardless of its source or a
trust where a court within the United States is able to exercise primary supervision over the administration of the trust and
one or more United States persons (as defined in the Code) have the authority to control all substantial decisions of the
trust (or a trust that has made a valid election under United States Department of the Treasury regulations to be treated as
a domestic trust). A “Non-United States Holder” generally means any owner (or beneficial owner) of common shares
that is not a United States Holder, other than a partnership. If a partnership holds common shares, the tax treatment of a
partner will generally depend upon the status of the partner and upon the activities of the partnership. Partners of
partnerships holding common shares should consult their own tax advisors regarding the tax consequences of an investment in
the common shares (including their status as United States Holders or Non-United States Holders).
Distributions
Subject to the discussion
of passive foreign investment companies, or PFICs, below, any distributions made by the Company with respect to the common shares
to a United States 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 the Company’s current or accumulated earnings and profits as determined
under United States federal income tax principles. Distributions in excess of the Company’s earnings and profits will be
treated as a nontaxable return of capital to the extent of the United States Holder’s tax basis in its common shares and,
thereafter, as capital gain.
Dividends
paid in respect of the Company’s common shares may qualify for the preferential rate attributable to qualified dividend income
if: (1) the common shares are readily tradable on an established securities market in the United States; (2) the Company is not
a PFIC for the taxable year during which the dividend is paid or in the immediately preceding taxable year; (3) the United States
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 and (4) the United States Holder is not under an obligation to make related payments with respect to
positions in substantially similar or related property. The first requirement currently is and has been met, as our common shares
are listed on the Nasdaq Capital Market tier of the Nasdaq Stock Market, which is an established securities market. Further, there
is no minimal trading requirement for shares to be “readily tradable,” so as long as our common shares remain listed
on the Nasdaq Capital Market or any other established securities market in the United States, the first requirement will be satisfied.
However, if our common shares are delisted and are not tradable on an established securities market in the United States, the first
requirement would not be satisfied, and dividends paid in respect of our common shares would not qualify for the preferential rate
attributable to qualified dividend income. The second requirement is expected to be met as more fully described below under “—Consequences
of Possible PFIC Classification.” Satisfaction of the final two requirements will depend on the particular circumstances
of each United States Holder. Consequently, if any of these requirements are not met, the dividends paid to individual United States
Holders in respect of the Company’s common shares would not be treated as qualified dividend income and would be taxed as
ordinary income at ordinary rates.
Amounts taxable as
dividends generally will be treated as income from sources outside the United States and will, depending on your circumstances,
be “passive” or “general” income which, in either case, is treated separately from other types of income
for purposes of computing the foreign tax credit allowable to you. However, if (1) the Company is 10% or more owned, by vote or
value, by United States persons, or is a PFIC and (2) at least 10% of the Company’s earnings and profits are attributable
to sources within the United States, then for foreign tax credit purposes, a portion of our dividends would be treated as derived
from sources within the United States. Under such circumstances, with respect to any dividend paid for any taxable year, the United
States source ratio of the Company’s dividends for foreign tax credit purposes would be equal to the portion of the Company’s
earnings and profits from sources within the United States for such taxable year, divided by the total amount of the Company’s
earnings and profits for such taxable year.
Consequences of Possible PFIC Classification
A non-United States
entity treated as a corporation for United States federal income tax purposes will be a PFIC in any taxable year in which, after
taking into account the income and assets of the corporation and certain subsidiaries pursuant to a “look through”
rule, either: (1) 75% or more of its gross income is “passive” income or (2) 50% or more of the average value of its
assets is attributable to assets that produce passive income or are held for the production of passive income. If a corporation
is a PFIC in any taxable year that a person holds shares in the corporation (and was not a qualified electing fund with respect
to such year, as discussed below), the shares held by such person will be treated as shares in a PFIC for all future years (absent
an election which, if made, may require the electing person to pay taxes in the year of the election). A United States Holder of
shares in a PFIC would be required to file an annual information return on IRS Form 8621 containing information regarding the PFIC
as required by United States Department of the Treasury regulations.
While there are legal
uncertainties involved in this determination, including as a result of adverse case law described herein, based upon the Company’s
and its subsidiaries’ expected operations as described herein and based upon the current and expected future activities and
operations of the Company and its subsidiaries, the income of the Company and such subsidiaries from time charters should not constitute
“passive income” for purposes of applying the PFIC rules, and the assets that the Company owns for the production of
this time charter income should not constitute passive assets for purposes of applying the PFIC rules.
Although there is no
legal authority directly on point, this view is based principally on the position that the gross income that the Company and its
subsidiaries derive from time charters constitutes services income rather than passive rental income. The Fifth Circuit Court of
Appeals decided in Tidewater Inc. v. United States, 565 F.3d 299 (5th Cir., 2009) that a typical time charter is a
lease, and not a contract for the provision of transportation services. In that case, the court was considering a tax issue that
turned on whether the taxpayer was a lessor where a vessel was under a time charter, and the court did not address the definition
of passive income or the PFIC rules; however, the reasoning of the case could have implications as to how the income from a time
charter would be classified under such rules. If the reasoning of the Tidewater case is applied to the Company’s
situation and the Company’s or its subsidiaries’ time charters are treated as leases, the Company’s or its subsidiaries’
time charter income could be classified as rental income and the Company would be a PFIC unless more than 25% of the income of
the Company (taking into account the subsidiary look through rule) is from spot charters plus other active income or an active
leasing exception applies. The IRS has announced that it will not follow the reasoning of the Tidewater case and would have treated
the income from the time charters at issue in that case as services income, including for other purposes of the Code. The Company
intends to take the position that all of its time, voyage and spot chartering activities will generate active services income and
not passive leasing income, but in the absence of direct legal authority specifically relating to the Code provisions governing
PFICs, the IRS or a court could disagree with this position. Although the matter is not free from doubt as described herein, based
on the current operations and activities of the Company and its subsidiaries and on the relative values of the vessels in the Company’s
fleet and the charter income in respect of the vessels, Globus Maritime Limited should not be treated as a PFIC during the taxable
year ended December 31, 2019.
Based on the Company’s
intention and expectation that the Company’s subsidiaries’ income from spot, time and voyage chartering activities
plus other active operating income will be greater than 25% of the Company’s total gross income at all relevant times and
that the gross value of the vessels subject to such time, voyage or spot charters will exceed the gross value of all the passive
assets the Company owns at all relevant times, Globus Maritime Limited does not expect that it will constitute a PFIC with respect
to a taxable year in 2020 or the near future thereafter.
The Company will try
to manage its vessels and its business so as to avoid being classified as a PFIC for a future taxable year; however there can be
no assurance that the nature of the Company’s assets, income and operations will remain the same in the future (notwithstanding
the Company’s current expectations). Additionally, no assurance can be given that the IRS or a court of law will accept the
Company’s position that the time charters that the Company’s subsidiaries have entered into or any other time charter
that the Company or a subsidiary may enter into will give rise to active income rather than passive income for purposes of the
PFIC rules, or that future changes of law will not adversely affect this position. The Company has not obtained a ruling from the
IRS on its time charters or its PFIC status and does not intend to seek one. Any contest with the IRS may materially and adversely
impact the market for the common shares and the prices at which they trade. In addition, the costs of any contest on the issue
with the IRS will result in a reduction in cash available for distribution and thus will be borne indirectly by the Company’s
shareholders.
If Globus Maritime
Limited were to be classified as a PFIC in any year, each United States Holder of the Company’s shares will be subject (in
that year and all subsequent years) to special rules with respect to: (1) any “excess distribution” (generally defined
as any distribution received by a shareholder in a taxable year that is greater than 125% of the average annual distributions received
by the shareholder in the three preceding taxable years or, if shorter, the shareholder’s holding period for the shares),
and (2) any gain realized upon the sale or other disposition of the common shares. Under these rules:
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the excess distribution or gain will be allocated ratably over the United States Holder’s holding period;
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the amount allocated to the current taxable year and any year prior to the first year in which the Company was a PFIC will be taxed as ordinary income in the current year; and
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the amount allocated to each of the other taxable years in the United States Holder’s holding period will be subject to United States federal income tax at the highest rate in effect for the applicable class of taxpayer for that year, and an interest charge will be added as though the amount of the taxes computed with respect to these other taxable years were overdue.
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In
order to avoid the application of the PFIC rules, United States Holders may make a qualified electing fund, or a QEF, election
provided in Section 1295 of the Code in respect of their common shares. Even if a United States Holder makes a QEF election for
a taxable year of the Company, if the Company was a PFIC for a prior taxable year during which such holder held the common shares
and for which such holder did not make a timely QEF election, the United States Holder would also be subject to the more adverse
rules described above. Additionally, to the extent any of the Company’s subsidiaries is a PFIC, an election by a United States
Holder to treat Globus Maritime Limited as a QEF would not be effective with respect to such holder’s deemed ownership of
the stock of such subsidiary and a separate QEF election with respect to such subsidiary is required. In lieu of the PFIC rules
discussed above, a United States Holder that makes a timely, valid QEF election will, in very general terms, be required to include
its pro rata share of the Company’s ordinary income and net capital gains, unreduced by any prior year losses, in income
for each taxable year (as ordinary income and long-term capital gain, respectively) and to pay tax thereon, even if no actual distributions
are received for that year in respect of the common shares and even if the amount of that income is not the same as the amount
of actual distributions paid on the common shares during the year. If the Company later distributes the income or gain on which
the United States Holder has already paid taxes under the QEF rules, the amounts so distributed will not again be subject to tax
in the hands of the United States Holder. A United States Holder’s tax basis in any common shares as to which a QEF election
has been validly made will be increased by the amount included in such United States Holder’s income as a result of the QEF
election and decreased by the amount of nontaxable distributions received by the United States Holder. On the disposition of a
common share, a United States Holder making the QEF election generally will recognize capital gain or loss equal to the difference,
if any, between the amount realized upon such disposition and its adjusted tax basis in the common share. In general, a QEF election
should be made by filing a Form 8621 with the United States Holder’s federal income tax return on or before the due date
for filing such United States Holder’s federal income tax return for the first taxable year for which the Company is a PFIC
or, if later, the first taxable year for which the United States Holder held common shares. In this regard, a QEF election is effective
only if certain required information is made available by the PFIC. Subsequent to the date that the Company first determines that
it is a PFIC, the Company will use commercially reasonable efforts to provide any United States Holder of common shares, upon request,
with the information necessary for such United States Holder to make the QEF election.
In addition to the
QEF election, Section 1296 of the Code permits United States Holders to make a “mark-to-market” election with respect
to marketable shares in a PFIC, generally meaning shares regularly traded on a qualified exchange or market and certain other shares
considered marketable under United States Department of the Treasury regulations. For this purpose, a class of shares is regularly
traded on a qualified exchange or market for any calendar year during which such class of shares is traded, other than in de minimis
quantities, on at least 15 days during each calendar quarter of the year. Our common shares historically have been regularly traded
on the Nasdaq Capital Market or the Nasdaq Global Market, which are established securities markets. However, if our common shares
were to be delisted, then the mark-to-market election generally would be unavailable to United States Holders. If a United States
Holder makes a mark-to-market election in respect of its common shares, such United States Holder generally would, in each taxable
year: (1) include as ordinary income the excess, if any, of the fair market value of the common shares at the end of the taxable
year over such United States Holder’s adjusted tax basis in the common shares, and (2) be permitted an ordinary loss in respect
of the excess, if any, of such United States Holder’s adjusted tax basis in the common shares over their 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 (with the United States Holder’s basis in the common shares being increased and decreased, respectively, by the
amount of such ordinary income or ordinary loss). The consequences of this election may be less favorable than those of a QEF election
for United States Holders that are sensitive to the distinction between ordinary income and capital gain.
United States Holders
are urged to consult their tax advisors as to the consequences of making a mark-to-market or QEF election, as well as other United
States federal income tax consequences of holding shares in a PFIC.
As previously indicated,
if the Company were to be classified as a PFIC for a taxable year in which the Company pays a dividend or the immediately preceding
taxable year, dividends paid by the Company would not constitute “qualified dividend income” and, hence, would not
be eligible for the reduced rate of United States federal income tax.
Sale, Exchange or Other Disposition
of Common Shares
A United States
Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of common shares in an amount
equal to the difference between the amount realized by the United States Holder from such sale, exchange or other disposition
and the United States Holder’s tax basis in such common shares. Assuming the Company does not constitute a PFIC for any
taxable year, this gain or loss will generally be treated as long-term capital gain or loss if the United States
Holder’s holding period is greater than one year at the time of the sale, exchange or other disposition. Long term
capital gains recognized by a United States Holder other than a corporation are generally taxed at preferential rates. A
United States Holder’s ability to deduct capital losses is subject to limitations.
A United States Holder
that purchases common shares and warrants in the concurrent private placement must allocate the purchase price paid between the
common shares and the warrants based on the relative fair market value of each at the time of issuance. Under United States federal
income tax law, each investor must make his or her own determination of such value based on all the relevant facts and circumstances.
Therefore, we strongly urge each investor to consult his or her tax advisor regarding the determination of value for these purposes.
The price allocated to each common share and each warrant should be the investor’s tax basis in each such common share and
warrant.
Net Investment Income Tax
A United States Holder
that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, is
subject to a 3.8% tax on the lesser of (1) such United States Holder’s “net investment income” (or undistributed
“net investment income” in the case of estates and trusts) for the relevant taxable year and (2) the excess of such
United States Holder’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of
individuals will be between $125,000 and $250,000, depending on the individual’s circumstances). A United States Holder’s
net investment income will generally include its gross dividend income and its net gains from the disposition of the common shares,
unless such dividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade
or business that consists of certain passive or trading activities). Net investment income generally will not include a United
States Holder’s pro rata share of the Company’s income and gain (if we are a PFIC and that United States Holder makes
a QEF election, as described above in “—Consequences of Possible PFIC Classification”). However, a United States
Holder may elect to treat inclusions of income and gain from a QEF election as net investment income. Failure to make this election
could result in a mismatch between a United States Holder’s ordinary income and net investment income. If you are a United
States Holder that is an individual, estate or trust, you are urged to consult your tax advisor regarding the applicability of
the net investment income tax to your income and gains in respect of your investment in the common shares.
United States Federal Income Taxation
of Non-United States Holders
A Non-United States
Holder will generally not be subject to United States federal income tax on dividends paid in respect of the common shares or on
gains recognized in connection with the sale or other disposition of the common shares provided that the Non-United States Holder
makes certain tax representations regarding the identity of the beneficial owner of the common shares, that such dividends or gains
are not effectively connected with the Non-United States Holder’s conduct of a United States trade or business and that,
with respect to gain recognized in connection with the sale or other disposition of the common shares by a non-resident alien individual,
such individual is not present in the United States for 183 days or more in the taxable year of the sale or other disposition and
other conditions are met. If the Non-United States Holder is engaged in a United States trade or business for United States federal
income tax purposes, the income from the common shares, including dividends and gain from the sale, exchange or other disposition
of the common shares, that is effectively connected with the conduct of that trade or business will generally be subject to regular
United States federal income tax in the same manner as discussed above relating to the taxation of United States Holders.
Backup Withholding and Information
Reporting
Information reporting
to the IRS may be required with respect to payments on the common shares and with respect to proceeds from the sale of the common
shares. With respect to Non-United States Holders, copies of such information returns may be made available to the tax authorities
in the country in which the Non-United States Holder resides under the provisions of any applicable income tax treaty or exchange
of information agreement. A “backup” withholding tax may also apply to those payments if:
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a holder of the common shares fails to provide certain identifying information (such as the holder’s taxpayer identification number or an attestation to the status of the holder as a Non-United States Holder);
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such holder is notified by the IRS that he or she has failed to report all interest or dividends required to be shown on his or her federal income tax returns; or
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in certain circumstances, such holder has failed to comply with applicable certification requirements.
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Backup withholding
is not an additional tax and may be refunded (or credited against the holder’s United States federal income tax liability,
if any), provided that certain required information is furnished to the IRS in a timely manner.
Non-United States Holders
may be required to establish their exemption from information reporting and backup withholding by certifying their status on IRS
Form W-8BEN, W-8BEN-E, W-8ECI or W-8IMY, as applicable.
United States Holders
of common shares may be required to file forms with the IRS under the applicable reporting provisions of the Code. For example,
such United States Holders may be required, under Sections 6038, 6038B and/or 6046 of the Code, and the regulations thereunder,
to supply the IRS with certain information regarding the United States Holder, other United States Holders and the Company if (1)
such person owns at least 10% of the total value or 10% of the total combined voting power of all classes of shares entitled to
vote or (2) the acquisition of our common shares, when aggregated with certain other acquisitions that may be treated as related
under applicable regulations, exceeds $100,000 in value. In the event a United States Holder fails to file a form when required
to do so, the United States Holder could be subject to substantial tax penalties. You should consult your tax advisor regarding
the filing of these forms.
Individual United States
Holders who hold certain specified foreign assets with values in excess of certain dollar thresholds are required to report such
assets on IRS Form 8938 with their United States federal income tax return, subject to certain exceptions (including an exception
for foreign assets held in accounts maintained by financial institutions). Stock in a foreign corporation, including our common
shares, is a specified foreign asset for this purpose. Penalties apply for failure to properly complete and file Form 8938. You
should consult your tax advisor regarding the filing of this form.
We encourage each
United States Holder and Non-United States Holder to consult with his, her or its own tax advisor as to the particular tax consequences
to him, her or it of holding and disposing of the Company’s common shares, including the applicability of any federal, state,
local or foreign tax laws and any proposed changes in applicable law.
PLAN OF DISTRIBUTION
Pursuant to an engagement
letter agreement between us and the Placement Agent, we have engaged the Placement Agent to act as the exclusive placement agent
in connection with this offering. The Placement Agent is not purchasing or selling any of the common shares we are offering by
this prospectus supplement, and are not required to arrange the purchase or sale of any specific number of shares or dollar amount,
but the Placement Agent has agreed to use “reasonable best efforts” to arrange for the sale of the shares offered hereby.
Our agreement with
the Placement Agent provides that the obligations of the Placement Agent are subject to certain conditions precedent, including,
among other things, the absence of any material adverse change in our business and the receipt of customary opinions and closing
certificates.
We
have agreed to indemnify Maxim Group LLC against specified liabilities, including liabilities under the Securities Act, and to
contribute to payments Maxim Group LLC may be required to make in respect thereof.
The Placement Agent
shall arrange for the sale of the shares we are offering pursuant to this prospectus supplement to one or more investors through
a securities purchase agreement, dated June 26, 2020, directly between the investors and us. All of the shares offered hereby will
be sold at the same price and, we expect, at a single closing. We established the price following negotiations with prospective
investors and with reference to the prevailing market price of our common shares, recent trends in such price and other factors.
It is possible that not all of the shares we are offering pursuant to this prospectus supplement will be sold at the closing, in
which case our net proceeds would be reduced. We expect that the sale of the shares will be completed on or around the date indicated
on the cover page of this prospectus supplement.
Under the securities
purchase agreement, we have agreed not to contract to issue or announce the issuance or proposed issuance of any common shares
or common share equivalents for 15 days following the closing of this offering with certain exceptions.
Fees and Expenses
We
have agreed to pay the Placement Agent a placement agent fee equal to 7.0% of the aggregate purchase price of our common shares
sold in this offering. The following table shows the per share and total cash Placement Agent’s fees we will pay to the Placement
Agent in connection with the sale of our common shares offered pursuant to this prospectus supplement and the accompanying prospectus,
assuming the purchase of all of the shares offered hereby.
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Per Share
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Total
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Public offering price
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$
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0.27
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$
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12,379,500
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Placement Agent’s fees (1)
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$
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0.0189
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$
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866,565
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Proceeds, before expenses, to the Company
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$
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0.2511
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$
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11,512,935
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(1)
In addition, we have agreed to reimburse Maxim Group LLC’s actual out-of-pocket expenses, up to $45,000, in the aggregate.
We estimate that the total expenses of the offering payable by us, excluding the placement agent’s fees, will be approximately
$150,000.
The
placement agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions
received by it and any profit realized on the resale of the shares sold by it while acting as principal might be deemed to be underwriting
discounts or commissions under the Securities Act. As underwriter, the placement agent would be required to comply with the requirements
of the Securities Act and the Securities Exchange Act of 1934, as amended, or the Exchange Act, including, without limitation,
Rule 415(a)(4) under the Securities Act and Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations
may limit the timing of purchases and sales of shares by the placement agent acting as principal. Under these rules and regulations,
the placement agent:
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may not engage in any stabilization activity in connection with our securities; and
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•
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may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed its participation in the distribution.
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This
prospectus supplement and the accompanying prospectus may be made available in electronic format on websites or through other
online services maintained by the placement agent or by an affiliate. Other than this prospectus supplement and the
accompanying prospectus, the information on the placement agent’s website and any information contained in any other
website maintained by the placement agent is not part of this prospectus supplement and the accompanying prospectus or the
registration statement of which this prospectus supplement and the accompanying prospectus form a part, has not been approved
and/or endorsed by us or the placement agent, and should not be relied upon by investors.
The
foregoing does not purport to be a complete statement of the terms and conditions of the placement agency agreement and the securities
purchase agreement. A copy of the securities purchase agreement with the purchasers will be included as an exhibit to our Current
Report on Form 6-K filed or to be filed with the SEC and incorporated by reference into the registration statement of which this
prospectus supplement and the accompanying prospectus form a part. See ”Information Incorporated by Reference” and ”Where
You Can Find More Information”.
No
action has been or will be taken in any jurisdiction (except in the United States) that would permit a public offering of the securities
offered by this prospectus supplement and accompanying prospectus, or the possession, circulation or distribution of this prospectus
supplement and accompanying prospectus or any other material relating to us or the securities offered hereby in any jurisdiction
where action for that purpose is required. Accordingly, the securities offered hereby may not be offered or sold, directly or indirectly,
and neither of this prospectus supplement and accompanying prospectus nor any other offering material or advertisements in connection
with the securities offered hereby may be distributed or published, in or from any country or jurisdiction except in compliance
with any applicable rules and regulations of any such country or jurisdiction. The placement agent may arrange to sell securities
offered by this prospectus supplement and accompanying prospectus in certain jurisdictions outside the United States, either directly
or through affiliates, where they are permitted to do so.
As
part of compensation for a prior financing, we previously agreed, until March 22, 2021, to grant Maxim Group LLC the right of first
refusal to act as to act as sole underwriter and sole book-running manager and/or sole placement agent, as the case may be, for
any and all future public and private offerings of equity, equity-linked, convertible or debt securities of Globus Maritime Limited
or any successor to Globus Maritime Limited, but not, for the avoidance of doubt, a right of first refusal relating to Globus Maritime
Limited obtaining commercial or bank financing or any offerings that have no underwriter, placement agent, finder or by third party
introduction where an individual/entity is receiving compensation and/or a fee.
Relationships
The placement agent
and its affiliates may provide from time to time in the future certain commercial banking, financial advisory, investment banking
and other services for us in the ordinary course of their business, for which they may receive customary fees and commissions.
In addition, from time to time, the placement agent and its affiliates may effect transactions for their own account or the account
of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or
loans, and may do so in the future. However, except as disclosed in this prospectus supplement, we have no present arrangements
with the placement agent for any further services.
Transfer Agent and Registrar
The registrar and transfer
agent for our common shares is Computershare Inc. Its address is Computershare Investor Services, 462 South 4th Street, Suite 1600,
Louisville, KY, 40202, and its telephone number is +1 (781) 575 4223 or +1 (800) 368 5948.
Listing
Our
common shares are listed on The Nasdaq Capital Market, or Nasdaq, under the symbol “GLBS”.
EXPENSES
The following
are the estimated expenses of the issuance and distribution of the securities offered by this prospectus supplement, all of which
will be paid by us.
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Registration fees
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$
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1,541
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*
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Legal fees and expenses
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100,000
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Accounting fees and expenses
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40,000
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Miscellaneous
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8,459
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Total:
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$
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150,000
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*The Registration
Fee of $6,225, covering all of the securities being offered by Globus Maritime Limited (but not by selling shareholders) under
the registration statement on Form F-3 (File No. 333- 222580) filed with the Commission with an effective date of February 8, 2018,
of which this prospectus supplement forms a part, was previously paid. We allocate the cost of this fee on an approximately pro-rata
basis with each offering.
LEGAL MATTERS
Certain legal matters
in connection with the sale of the common shares offered hereby will be passed upon for us by Watson Farley & Williams LLP,
New York, New York with respect to matters of United States and Marshall Islands law. Loeb & Loeb LLP, New York, New York will
advise on certain legal matters in connection with the offering on behalf of the Placement Agent.
EXPERTS
The consolidated financial
statements of Globus Maritime Limited appearing in Globus Maritime Limited’s Annual Report (Form 20-F) for the year ended
December 31, 2019, have been audited by Ernst & Young (Hellas) Certified Auditors Accountants S.A., independent registered
public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph describing conditions that
raise substantial doubt about the Company’s ability to continue as a going concern as described in Note 2 to the consolidated
financial statements), included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing. Ernst
& Young (Hellas) Certified Auditors Accountants S.A. is located at Chimarras 8B, 15125, Maroussi, Athens, Greece and is registered
as a corporate body with the public register for company auditors-accountants kept with the Body of Certified-Auditors-Accountants,
or SOEL, Greece with registration number 107.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
As required by the
Securities Act of 1933, as amended, we filed a registration statement relating to the securities offered by this prospectus supplement
and its accompanying prospectus with the Commission. This prospectus supplement and its accompanying prospectus are a part of that
registration statement, which includes additional information.
Government Filings
We file annual and
other reports with the Commission. You may read and copy any document that we file and obtain copies at prescribed rates from the
Commission’s Public Reference Room 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. The Commission maintains a website (http://www.sec.gov) that contains
reports, proxy and information statements and other information regarding issuers that file electronically with the Commission.
Further information about our company is available on our website at http://www.globusmaritime.gr. The information on our website,
however, is not, and should not be, deemed to be a part of this prospectus supplement.
Information Incorporated
by Reference
The Commission
allows us to “incorporate by reference” information that we file with it. This 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 supplement and accompanying prospectus, and information that we file later with
the Commission prior to the termination of this offering will also be considered to be part of this prospectus supplement and
the accompanying prospectus and will automatically update and supersede previously filed information, including information
contained in this prospectus supplement and the accompanying prospectus.
We incorporate by reference the documents
listed below:
We are also incorporating
by reference all subsequent annual reports on Form 20-F that we file with the Commission and reports on Form 6-K that we furnish
to the Commission after the date of this prospectus supplement that state they are incorporated by reference into this prospectus
supplement until we file a post-effective amendment indicating that the offering of the securities made by this prospectus supplement
has been terminated. In all cases, you should rely on the later information over different information included in this prospectus
supplement or the accompanying prospectus.
You should rely only
on the information contained in or incorporated by reference in this prospectus supplement, the accompanying prospectus and any
free writing prospectus. We have not authorized anyone to provide you with information that is different. If anyone provides you
with different or inconsistent information, you should not rely on it. We are offering to sell our common shares only in jurisdictions
where offers and sales are permitted. The information contained in or incorporated by reference in this document is accurate only
as of the date such information was issued, regardless of the time of delivery of this prospectus supplement or any sale of our
common shares.
Upon written or oral
request, we will provide to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of any or all
of the information that has been incorporated by reference in the prospectus but not delivered with the prospectus at no cost to
the requester. You may request a free copy of the above mentioned filings or any subsequent filing we incorporate by reference
into this prospectus supplement by contacting us at the following address:
Globus Maritime Limited
c/o Globus Shipmanagement Corp.
128 Vouliagmenis Avenue
3rd Floor
166 74 Glyfada
Athens, Greece
+30 210 960 8300
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 IFRS. As a “foreign private issuer”,
we are exempt from the rules under the Securities and Exchange Act of 1934, as amended, or the 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 Nasdaq, those proxy statements do not conform to Schedule 14A of the proxy rules promulgated under the Exchange Act. In addition,
as a “foreign private issuer”, our officers and directors are exempt from the rules under the Exchange Act relating
to short swing profit reporting and liability.
PROSPECTUS
$50,000,000 of Common Shares
15,000,000 Common Shares offered by the
Selling Shareholder
Through this prospectus, we may periodically
offer common shares with an aggregate offering price to the public of $50,000,000. The prices and other terms of the common shares
that we may offer will be determined at the time of their offering and will be described in a supplement to this prospectus. In
addition, the Selling Shareholder listed herein (the “Selling Shareholder”) or any of its pledgees, donees, transferees
or successors in interest, may sell in one or more offerings pursuant to this prospectus up to 15 million of our common shares,
2.5 million of which are issued and outstanding on the date hereof and 12.5 million of which are issuable upon the exercise of
warrants (which if all exercised would result in gross proceeds to the Company of $20 million).
We and the Selling Shareholder or any of
its pledgees, donees, transferees or successors in interest, may sell any or all of these common shares on any stock exchange,
market or trading facility on which the shares are traded or in privately negotiated transactions at fixed prices that may be changed,
at market prices prevailing at the time of sale or at negotiated prices.
Information on the Selling Shareholder
or any of its pledgees, donees, transferees or successors in interest, and the times and manners in which we or it may offer and
sell our common shares is described under the sections entitled “Selling Shareholder”, “The Offering”,
and “Plan of Distribution” in this prospectus. We will not receive any of the proceeds from the sale of our common
shares by the Selling Shareholder, but may receive up to $50,000,000 in exchange for common shares that we sell.
Our common shares are listed on the Nasdaq
Capital Market under the symbol “GLBS.” As of February 6, 2018, non-affiliates held 13,283,568 of the 32,013,967 of
our outstanding common shares, which at the closing sales price of $1.07 per share, meant the aggregate market value of our common
shares held by non-affiliates was $14,213,418. As of the date hereof, we have not offered any securities pursuant to General Instruction
I.B.5 of Form F-3 during the twelve calendar month period ending on (and including) the date of this prospectus.
An investment in these securities
is speculative and involves a high degree of risk. See the section entitled “Risk Factors” which begins on page
4 of this prospectus, and other risk factors contained in any applicable prospectus supplement and in the documents incorporated
by reference herein and therein.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is February
8, 2018
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
As permitted under
the rules of the Securities and Exchange Commission, or the Commission, this prospectus incorporates important business information
about us that is contained in documents that we have previously filed with the Commission but that are not included in or delivered
with this prospectus. You may obtain copies of these documents, without charge, from the website maintained by the Commission at
www.sec.gov, as well as other sources. You may also obtain copies of the incorporated documents, without charge, upon written or
oral request to Globus Maritime Limited, 128 Vouliagmenis Avenue, 3rd Floor, 166 74 Glyfada, Athens, Greece, or by telephone at
+30 210 960 8300. See “Where You Can Find Additional Information.”
You should rely only
on the information contained or incorporated by reference in this prospectus. Neither we nor the Selling Shareholder have authorized
any person to provide information other than that provided in this prospectus and the documents incorporated by reference. Neither
we nor the Selling Shareholder are making an offer to sell common shares in any state or other jurisdiction where the offer or
sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other
than the date on the front of this prospectus regardless of its time of delivery, and you should not consider any information in
this prospectus or in the documents incorporated by reference herein to be investment, legal or tax advice. We encourage you to
consult your own counsel, accountant and other advisors for legal, tax, business, financial and related advice regarding an investment
in our securities.
Unless otherwise indicated
or unless the context requires otherwise, all references in this prospectus to “Globus,” the “Company,”
“we,” “us,” “our,” or similar references, mean Globus Maritime Limited and, where applicable,
its consolidated subsidiaries. In addition, we use the term deadweight, or dwt, in describing the size of vessels. Dwt expressed
in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel
can carry. To the extent the Selling Shareholder transfers our common shares or our warrants and the shares are not unrestricted,
we may add the recipients of those common shares and warrants as Selling Shareholders via a prospectus supplement or post-effective
amendment. Any references to the “Selling Shareholder” shall be deemed to be references to each such additional Selling
Shareholder.
ENFORCEABILITY
OF CIVIL LIABILITIES
We are a Marshall
Islands company, and our principal executive office is located outside of the United States, in Greece. Most of our directors,
officers and the experts named in this registration statement and prospectus reside outside the United States. In addition, a substantial
portion of our assets and the assets of certain of our directors, officers and experts 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 United States courts against us or
these persons.
CAUTIONARY STATEMENT
REGARDING FORWARD LOOKING STATEMENTS
This prospectus includes
“forward-looking statements,” as defined by U.S. federal securities laws, with respect to our financial condition,
results of operations and business and our expectations or beliefs concerning future events. Forward-looking statements provide
our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs,
plans, objectives, intentions, assumptions and other statements that are not historical facts or that are not present facts or
conditions. Forward-looking statements and information can generally be identified by the use of forward-looking terminology or
words, such as “anticipate,” “approximately,” “believe,” “continue,” “estimate,”
“expect,” “forecast,” “intend,” “may,” “ongoing,” “pending,”
“perceive,” “plan,” “potential,” “predict,” “project,” “seeks,”
“should,” “views” or similar words or phrases or variations thereon, or the negatives of those words or
phrases, or statements that events, conditions or results “can,” “will,” “may,” “must,”
“would,” “could” or “should” occur or be achieved and similar expressions in connection with
any discussion, expectation or projection of future operating or financial performance, costs, regulations, events or trends. The
absence of these words does not necessarily mean that a statement is not forward-looking. Forward-looking statements and information
are based on management’s current expectations and assumptions, which are inherently subject to uncertainties, risks and
changes in circumstances that are difficult to predict.
All forward-looking
statements involve risks and uncertainties. The occurrence of the events described, and the achievement of the expected results,
depend on many events, some or all of which are not predictable or within our control. Actual results may differ materially from
expected results.
In addition, important
factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements
include:
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general dry bulk shipping market conditions, including fluctuations in charterhire rates and vessel values;
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the strength of world economies;
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the stability of Europe and the Euro;
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fluctuations in interest rates and foreign exchange rates;
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changes in demand in the dry bulk shipping industry, including the market for our vessels;
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changes in our operating expenses, including bunker prices, dry docking and insurance costs;
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changes in governmental rules and regulations or actions taken by regulatory authorities;
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potential liability from pending or future litigation;
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general domestic and international political conditions;
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potential disruption of shipping routes due to accidents or political events;
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the availability of financing and refinancing;
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our ability to meet requirements for additional capital and financing to grow our business;
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vessel breakdowns and instances of off-hire;
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potential exposure or loss from investment in derivative instruments;
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potential conflicts of interest involving our Chief Executive Officer, the Chairman of our board of directors, or their family and other members of our senior management;
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our ability to complete acquisition transactions as planned; and
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other important factors described in “Risk Factors” and in other places incorporated by reference.
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We have based these
statements on assumptions and analyses formed by applying our experience and perception of historical trends, current conditions,
expected future developments and other factors we believe are appropriate in the circumstances. All future written and verbal forward-looking
statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements
contained or referred to in this section. We undertake no obligation, and specifically decline any obligation, except as required
by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus might not occur.
See the sections entitled
“Risk Factors” of this prospectus and in our Annual Report on Form 20-F for the year ended December 31, 2016,
which is incorporated herein by reference, for a more complete discussion of these risks and uncertainties and for other risks
and uncertainties. These factors and the other risk factors described in this prospectus are not necessarily all of the important
factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking
statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no assurance that actual
results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected
consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance
on such forward-looking statements.
WHERE YOU CAN FIND
ADDITIONAL INFORMATION
As required by the
Securities Act, we filed a registration statement relating to the securities offered by this prospectus with the Commission. This
prospectus is a part of that registration statement, which includes additional information.
Government Filings
We file annual and
special reports with the Commission. You may read and copy any document that we file and obtain copies at prescribed rates from
the Commission’s Public Reference Room 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. The Commission maintains a website (http://www.sec.gov) that contains
reports, proxy and information statements and other information regarding issuers that file electronically with the Commission.
Our filings are also available on our website at http://www.globusmaritime.gr. The information on our website, however, is not,
and should not be deemed to be, a part of this prospectus.
This prospectus and
any applicable prospectus supplement are part of a registration statement that we filed with the Commission and do not contain
all of the information in the registration statement. The full registration statement may be obtained from the Commission or us,
as indicated below. Documents establishing the terms of the offered securities are filed as exhibits to the registration statement.
Statements in this prospectus or any applicable prospectus supplement about these documents are summaries and each statement is
qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more
complete description of the relevant matters. You may inspect a copy of the registration statement at the Commission’s Public
Reference Room in Washington, D.C., as well as through the Commission’s website.
Information Incorporated by Reference
The Commission allows
us to “incorporate by reference” information that we file with it. This 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 later with the Commission prior to the termination of this offering will also
be considered to be part of this prospectus and will automatically update and supersede previously filed information, including
information contained in this document.
The following documents,
filed with or furnished to the SEC, are specifically incorporated by reference and form an integral part of this prospectus:
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Our reports on Form 6-K furnished on July 6, 2017, August 2, 2017, September 7, 2017, October 4, 2017, October 19, 2017, November 13, 2017, December 1, 2017, December 7, 2017, December 15, 2017, December 22, 2017, January 12, 2018, and February 5, 2018.
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We are also incorporating
by reference all subsequent Annual Reports on Form 20-F that we file with the Commission and certain reports on Form 6-K that we
furnish to the Commission after the date of this prospectus (if they state that they are incorporated by reference into this prospectus)
until we file a post-effective amendment indicating that the offering of the securities made by this prospectus has been terminated.
In all cases, you should rely on the later information over different information included in this prospectus or the applicable
prospectus supplement.
You should rely only
on the information contained or incorporated by reference in this prospectus and any applicable prospectus supplement. We have
not, and any underwriters have not, authorized any other person to provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely on it. We are not, and any underwriters are not, making an offer
to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing
in this prospectus and any applicable prospectus supplement as well as the information we previously filed or furnished with the
Commission and incorporated by reference, is accurate as of the dates on the front cover of those documents only. Our business,
financial condition and results of operations and prospects may have changed since those dates.
You may request a
free copy of the above mentioned filing or any subsequent filing we incorporate by reference to this prospectus by writing or telephoning
us at the following address:
Globus Maritime Limited
c/o Globus Shipmanagement Corp.
128 Vouliagmenis Avenue
3rd Floor
166 74 Glyfada
Athens, Greece
+30 210 960 8300
Information provided by the Company
We will make available
to 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 International Financial Reporting
Standards. As a “foreign private issuer,” we are exempt from the rules under the 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 the Nasdaq Capital Market, those proxy statements do not conform to Schedule 14A of the proxy rules promulgated under the Exchange
Act. In addition, as a “foreign private issuer,” our officers and directors are exempt from the rules under the Exchange
Act relating to short swing profit reporting and liability.
PROSPECTUS SUMMARY
This summary highlights
information that appears later in this prospectus and is qualified in its entirety by the more detailed information and financial
statements included or incorporated by reference elsewhere in this prospectus. This summary may not contain all of the information
that may be important to you. As an investor or prospective investor, you should carefully review the entire prospectus, including
the section of this prospectus entitled “Risk Factors” and the more detailed information that appears later in this
prospectus before making an investment in our common shares.
Our Business
Our Company
We are an integrated
dry bulk shipping company, providing marine transportation services on a worldwide basis. We own, operate and manage a fleet of
dry bulk vessels that transport iron ore, coal, grain, steel products, cement, alumina and other dry bulk cargoes internationally.
Our Manager also provides ship-management consulting services regarding vessels that we do not own. We intend to grow our fleet
through timely and selective acquisitions of modern vessels in a manner that we believe will provide an attractive return on equity
and will be accretive to our earnings and cash flow based on anticipated market rates at the time of purchase. There is no guarantee
however, that we will be able to find suitable vessels to purchase or that such vessels will provide an attractive return on equity
or be accretive to our earnings and cash flow.
Our operations are
managed by our Athens, Greece-based wholly owned subsidiary, Globus Shipmanagement Corp., which we refer to as our Manager, which
provides in-house commercial and technical management for our vessels. Our Manager has entered into a ship management agreement
with each of our wholly owned vessel-owning subsidiaries to provide services that include managing day-to-day vessel operations,
such as supervising the crewing, supplying, maintaining of vessels and other services, and has also entered into a consultancy
agreement with another ship-management company to consult for such ship-management company
We originally incorporated
as Globus Maritime Limited on July 26, 2006 pursuant to the Companies (Jersey) Law 1991 (as amended), and began operations in September
2006. On November 24, 2010, we redomiciled into the Marshall Islands. Our common shares trade on the NASDAQ Global Market under
the ticker “GLBS.”
The following table
presents information concerning our vessels, each of which is owned by a wholly owned subsidiary of Globus Maritime Limited. We
use the term deadweight ton, or “dwt,” in describing the size of vessels. Deadweight ton or “dwt” is a
unit of a vessel’s capacity for cargo, fuel oil, stores and crew, measured in metric tons. A vessel’s dwt or total
deadweight is the total weight the vessel can carry when loaded to a particular line.
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Vessel
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Year
Built
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Flag
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Direct
Owner
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Shipyard
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Vessel Type
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Delivery
Date
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Carrying
Capacity
(dwt)
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m/v Sun Globe
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2007
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Malta
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Longevity Maritime Limited
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Tsuneishi Cebu
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Supramax
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September 2011
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58,790
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m/v River Globe
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2007
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Marshall Islands
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Devocean Maritime Ltd.
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Yangzhou Dayang
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Supramax
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December 2007
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53,627
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m/v Sky Globe
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2009
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Marshall Islands
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Domina Maritime Ltd.
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Taizhou Kouan
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Supramax
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May 2010
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56,855
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m/v Star Globe
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2010
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Marshall Islands
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Dulac Maritime S.A.
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Taizhou Kouan
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Supramax
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May 2010
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56,867
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m/v Moon Globe
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2005
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Marshall Islands
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Artful Shipholding S.A.
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Hudong-Zhonghua
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Panamax
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June 2011
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74,432
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Total:
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300,571
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Corporate Information
Our executive office
is located at the office of our Manager at 128 Vouliagmenis Avenue, 3rd Floor, 166 74 Glyfada, Athens, Greece. Our telephone number
is +30 210 960 8300. Our registered agent in the Marshall Islands is The Trust Company of the Marshall Islands, Inc. and our registered
address in the Marshall Islands is Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960. We
maintain our website at www.globusmaritime.gr. Information that is available on or accessed through our website does not constitute
part of, and is not incorporated by reference into, this registration statement on Form F-3 or the prospectus.
Recent and Other Developments
On October 19, 2017,
we entered into a Share and Warrant Purchase Agreement (the “October 2017 SPA”) pursuant to which we sold for $2.5
million an aggregate of 2.5 million of our common shares, par value $0.004 per share and a warrant (the “October 2017 Warrant”)
to purchase 12.5 million of our common shares at a price of $1.60 per share (subject to adjustment as more fully described herein
in “Description of Capital Stock - Description of the Warrant”) to an investor in a private placement (the “October
2017 Private Placement”). These securities were issued in transactions exempt from registration under the Securities Act
of 1933, as amended (the “Securities Act”). On that day, we also entered into a registration rights agreement with
the purchaser providing it with certain rights relating to registration under the Securities Act of the 2.5 million common shares
issued in connection with the October 2017 Private Placement and the common shares underlying the October 2017 Warrant. As of the
date hereof, the October 2017 Warrant has not been exercised.
In this registration
statement and prospectus, we are registering the resale of (a) the 2.5 million common shares sold in the October 2017 Private Placement,
(b) the 12.5 million common shares issuable upon exercise of the October 2017 Warrant, and the primary offering of common shares
with an aggregate offering price to the public of $50,000,000.
Under the terms of
the October 2017 Warrant, the Selling Shareholder may not exercise its warrant to the extent such exercise would cause the Selling
Shareholder, together with its affiliates and attribution parties, to beneficially own a number of common shares which would exceed
4.99% (which may be increased upon no less than 61 days’ notice, but not to exceed 9.99%) of our then outstanding common
shares immediately following such exercise, excluding for purposes of such determination common shares issuable upon exercise of
the October 2017 Warrant which have not been exercised. This provision does not limit the Selling Shareholder from acquiring up
to 4.99% of our common shares, selling all of their common shares, and re-acquiring up to 4.99% of our common shares. We refer
to this as the “Blocker Provision”.
The October 2017 Warrant
contains a provision whereby its holder has the right to a cashless exercise if, six months after its issuance, a registration
statement covering their resale is not effective. If for any reason we are unable to keep such a registration statement active
and our share price is higher than the $1.60 exercise price, we could be required to issue shares without receiving cash consideration.
The October 2017 Warrant is exercisable for 24 months after its issuance.
On February 8, 2017,
we entered into a Share and Warrant Purchase Agreement pursuant to which we sold for $5 million an aggregate of 5 million of our
common shares (the “February 2017 Common Shares”) and warrants (the “February 2017 Warrants”) to purchase
25 million of our common shares at a price of $1.60 per share to a number of investors in a private placement (the “February
2017 Private Placement”). These securities were issued in transactions exempt from registration under the Securities Act.
One of the investors, Robelle Holding Co., was owned and to our knowledge remains owned and controlled by the sister of our Chief
Executive Officer, who is also the daughter of our Chairman.
On February 9, 2017
we entered into a registration rights agreement with the purchasers in the February 2017 Private Placement providing them with
certain rights relating to registration under the Securities Act of the common shares issued in the February 2017 Private Placement
and the common shares underlying the February 2017 Warrants.
In connection with
the closing of the February 2017 Private Placement, we also entered into two loan amendment agreements (each, a “Loan Amendment
Agreement”) with each of two of our lenders.
One loan amendment
agreement was entered into by the Company with Firment Trading Limited, a Marshall Islands corporation (“Firment”),
a related party to us (it is an affiliate of our chairman) and the lender of the then outstanding loan in the principal amount
of $18,523,787 to the Company (the “Firment Credit Facility”), pursuant to which Firment released an amount equal to
$16,885,000 (but to have an amount equal to $1,638,787 remain outstanding, and to continue to accrue under the Firment Credit Facility
as though it were principal) of the Firment Credit Facility and the Company issued to Firment Shipping Inc., an affiliate of Firment
16,885,000 common shares (the “Firment Shares”) and a warrant to purchase 6,230,580 common shares at a price of $1.60
per share (subject to adjustment, the “Firment Warrant”, together with Firment Shares, the “Firment Securities”).
Subsequent to the closing of the February 2017 private placement, Globus repaid the outstanding amount on the Firment Credit Facility
in its entirety.
The other loan amendment
agreement was entered into by the Company with Silaner Investments Limited, a Cypriot company (“Silaner”), a related
party to us (it is an affiliate of our chairman) and the lender of the then outstanding loan in the principal amount of $3,189,048
to the Company (the “Silaner Credit Facility”), pursuant to which Silaner agreed to release an amount equal to the
outstanding principal of $3,115,000 (but to have an amount equal to the accrued and unpaid interest of $74,048 remain outstanding,
and to continue to accrue under the Silaner Credit Facility as though it were principal) of the Silaner Credit Facility and the
Company issued to Firment Shipping Inc., an affiliate of Silaner 3,115,000 common shares (the “Silaner Shares”) and
a warrant to purchase 1,149,437 common shares at a price of $1.60 per share (subject to adjustment, the “Silaner Warrant”,
together with the Silaner Shares, the “Silaner Securities”). Subsequent to the closing of the February 2017 private
placement, Globus repaid the outstanding amount on the Silaner Credit Facility in its entirety.
The February 2017
Warrants, the Firment Warrant and the Silaner Warrant are each exercisable for 24 months after their respective issuance. We refer
to the entry into the Loan Amendment Agreements and Registration Rights Agreements and the issuances of the 5 million common shares,
the February 2017 Warrants, Firment Securities, and the Silaner Securities as the “February 2017 Transactions.”
On April 13, 2017,
we filed a registration statement on Form F-3 which registered the resale of the February 2017 Common Shares and the common shares
issuable upon the exercise of the February 2017 Warrants, the Firment Warrant, and the Silaner Warrant. Subsequent to the filing
of the registration statement, three investors partially exercised their warrants, purchasing 1,856,808 of our common shares for
aggregate gross proceeds to us of approximately $3.0 million.
On June 23, 2017,
we reached an agreement with DVB Bank SE to amend the DVB Loan Agreement, including amendments to relax or waive certain covenants
for the period from April 1, 2017 to April 1, 2018 (the “Restructuring period”). The amendments with respect to the
restructuring period were subject to a $1.7 million prepayment that was made in September 2017, which is the aggregated amount
of two quarterly installments for each tranche, and another $1.7 million was deferred to the balloon payment of each tranche.
On July 10, 2017,
we reached an agreement with HSH Nordbank AG to amend the HSH Loan Agreement including amendments to relax or waive certain covenants
of the original loan agreement until March 3, 2018. The Company paid in September 2017 $1 million for repayment of debt and the
four scheduled principal installments due within 2017, each amounting to $693,595, were deferred to the balloon payment. In addition,
the Company undertook to raise new equity of at least $1.8 million.
THE OFFERING
We are registering
the sale of common shares with an aggregate offering price to the public of $50,000,000, and could receive up to $50,000,000 in
connection therewith.
U.S. securities laws
currently limit the value of the common shares that we may sell under this prospectus. For such time as our “public float”—measured
as the value of our share price (as of a date within 60 days before the date of the sale) times the number of shares held by non-affiliates—is
less than $75.0 million, existing law limits the value of shares that we can sell under this prospectus at one-third of our “public
float”, less prior amounts sole through prior primary offerings of securities on Form F-3 within the past 12 months. The
public float is measured at the time of sale, and will necessarily change with the value of our share price and the number of shares
held by non-affiliates. The aggregate value of the stock that we are able to sell is therefore highly contingent on our share price.
In addition, our selling
shareholder named in the table located on page 9 of this prospectus (the “Selling Shareholder”) is offering an aggregate
of 15 million common shares, 2.5 million of which are currently issued and outstanding and 12.5 million of which are issuable upon
the exercise of a currently outstanding warrant, subject to the terms and limitations contained within the October 2017 Warrant.
See “Description of Capital Stock - Description of the Warrant” on page 13 of this prospectus. We will not
receive any proceeds upon the sale of common shares by the Selling Shareholder, but we will receive the exercise price of $1.60
each time the October 2017 Warrant is fully or partially exercised for cash. See “Use of Proceeds” on page
7 of this prospectus.
RISK FACTORS
Investing in our common
shares involves a high degree of risk. You should carefully consider the risks set forth below and the discussion of risks under
the heading “Item 3. Key Information—D. Risk Factors” in our Annual Report on Form 20-F for the year ended December 31,
2016, filed with the Commission on April 11, 2017, and the other documents that are incorporated by reference in this prospectus.
Please see the section of this prospectus entitled “Incorporation by Reference of Certain Documents.” Any of the following
risks could materially and adversely affect our business, financial condition, results of operations or cash flows. In such a case,
you may lose all or part of your original investment.
RISKS RELATED TO
THIS OFFERING
Our shareholders were significantly
diluted by virtue of the October 2017 Private Placement and the February 2017 Transactions and it is unclear whether the full ramification
of those transactions have been reflected in our stock price.
As described above
under the caption “Recent and Other Developments”, in October 2017 we sold 2.5 million common shares and a warrant
to purchase 12.5 million common shares in exchange for $2.5 million in cash, and in February 2017 we issued in the aggregate 25
million common shares and warrants to issue an additional 32,380,017 common shares in exchange for $20 million of debt cancellation
and $5 million in cash. Prior to the February 2017 transactions, a total of 2,627,674 common shares were issued and outstanding.
Our share price has not proportionately decreased to reflect the additional number of common shares that are issued and issuable
pursuant to exercise of our outstanding warrants, and it remains to be seen how the market will perceive this change in our increased
number of shares. If the market views these transactions negatively, our share price could substantially depreciate.
Our stock price has been volatile and no assurance can
be made that it will not substantially depreciate.
As you can see from
our stock price history contained within this prospectus under the caption “Per Share Market Information”, our stock
price has been volatile recently. The closing price of our common shares within the past 24 months has ranged from a low of $0.30
on January 29, 2016 to a peak of $14.23 on November 16, 2016. Adjusting for the 4:1 stock split we effected on October 20, 2016,
this represents a 4643% increase from January 29, 2016. Our closing stock price as of February 6, 2018 was $1.07. We can offer
no comfort or assurance that our stock price will stop being volatile or not substantially depreciate.
Our existing shareholders will be
diluted each time our outstanding warrants are exercised.
As of February 6,
2018, our warrant holders had the right to purchase an aggregate of 43,023,209 common shares. The number of common shares issuable
upon exercise and price of exercise are subject to adjustment as more fully described in “Description of Capital Stock -
Description of the Warrant”. We expect the exercise of such outstanding warrants to dilute the value of our shares.
A substantial number
of common shares are being offered by this prospectus, and we cannot predict if and when the purchasers may sell such shares in
the public markets. Furthermore, in the future, we may issue additional common shares or other equity or debt securities convertible
into common shares in connection with a financing, acquisition, litigation settlement, employee arrangements, or otherwise. Any
such issuance could result in substantial dilution to our existing shareholders and could cause our stock price to decline.
The sale of a substantial amount of
our common shares, whether by us or the Selling Shareholder, could adversely affect the prevailing market price of our common shares.
We are registering
the sale of common shares with an aggregate offering price to the public of $50,000,000. Furthermore, the Selling Shareholder holds
an outstanding warrant to purchase an aggregate of 12.5 million common shares at an exercise price of $1.60 per share and 2.5 million
common shares. Both the number of common shares issuable upon exercise of the warrant and the exercise price are subject to adjustment
as more fully described in “Description of Capital Stock - Description of the Warrant”. Sales of substantial amounts
of our common shares in the public market, or the perception that such sales might occur, could adversely affect the market price
of our common shares, and the market value of our other securities.
A substantial number
of common shares are being offered by this prospectus, and we cannot predict if and when the Selling Shareholder may sell such
shares in the public markets. Furthermore, in the future, we may issue additional common shares pursuant to this prospectus or
other equity or debt securities, including securities convertible into common shares, in connection with a financing, acquisition,
litigation settlement, employee arrangements, or otherwise. Any such issuance could result in substantial dilution to our existing
shareholders and could cause our stock price to decline.
Certain shareholders hold registration
rights, which may have an adverse effect on the market price of our common shares.
In connection with
the February 2017 Transactions, we issued to Firment Shipping Inc. 20 million common shares and warrants to purchase 7,380,017
common shares. Firment Shipping Inc. has the right to register those common shares for resale pursuant to a registration rights
agreement we entered into with its affiliate, Firment Trading Limited, although 7,380,017 are currently registered for resale.
The resale of those common shares in addition to the offer and sale of the other securities included in this registration statement
and prospectus may have an adverse effect on the market price of our common shares.
Our warrants could have cashless exercise
at our expense if, six months after the warrants were issued, the underlying common shares issuable upon exercise of the warrants
are not registered for sale pursuant to an effective registration statement.
The October 2017 Warrant,
the February 2017 Warrants, the Firment Warrant, and the Silaner Warrant all contain a provision whereby the warrant’s holder
has the right to a cashless exercise if, six months after their issuance, a registration statement covering their resale is not
effective. If for any reason we are unable to keep such a registration statement active and our share price is higher than the
$1.60 exercise price, we could be required to issue shares without receiving cash consideration. As 43,023,209 common shares are
issuable upon exercise of those warrants, this could mean that we issue all such shares but do not receive $68,837,134 (which is
the $1.60 exercise price multiplied by 43,023,209), which would dilute our shareholders and likely decrease our share price.
If we are unable to deliver common
shares free of restrictive legends where required by the October 2017 SPA, the October 2017 Warrant, the February 2017 SPA, and
the February 2017 Warrant, we must make whole any purchaser who loses money by purchasing common shares on the market to complete
a trade.
Each of the October
2017 SPA, the October 2017 Warrant, the February 2017 SPA, and the February 2017 Warrant require us, within the later of (a) five
full trading days of a warrant’s exercise and (b) three full trading days after receipt of the purchase price in connection
with such exercise, to issue common shares, which, where called for in the warrants and the October 2017 SPA and the February 2017
SPA, must be free of restrictive legends. We are similarly obligated, where called for pursuant to the terms of the October 2017
SPA and February 2017 SPA, to remove restrictive legends from 2.5 million common shares issued to the purchaser in the October
2017 Private Placement that are being registered in this prospectus. (The common shares issued to the purchaser in the February
2017 SPA have been separately registered for resale). If we are unable to deliver proof that the above has occurred when required
and if a warrant or shareholder has traded the common shares that we have failed to deliver unlegended, penalty provisions of the
SPA and warrants require us to make whole any warrant holder or shareholder who loses money by purchasing shares on the common
market to complete its trade. Depending on our share price during this time and the number of shares to which the payments relate,
we could be required to pay a substantial sum.
We may breach the covenants contained
in the DVB Loan Agreement and the HSH Loan Agreement.
On June 23, 2017 and
July 10, 2017, we entered into agreements with DVB Bank SE and HSH Nordbank AG to amend the DVB Loan Agreement and the HSH Loan
Agreement, respectively, including amendments that will provide for the relaxation and/or waiver of certain financial covenants,
including maintaining a minimum liquidity and minimum net worth. We may not be able to meet these relaxed terms and cannot guarantee
that we will be able to obtain new waivers or extensions to these waivers, if needed, when these waivers expire on April 1, 2018
(in the case of the DVB Loan Agreement) and March 3, 2018 (in the case of the HSH Loan Agreement).
If we are unable to
obtain further waivers or extent our existing waivers or meet the terms of these loan agreements without them, we may breach covenants
contained in such loan agreements constituting an event of default. If an event of default occurs under the DVB Loan Agreement
or the HSH Loan Agreement the respective lender could elect to declare the outstanding debt, together with accrued interest and
other fees, to be immediately due and payable and proceed against the collateral securing that debt, which could constitute all
or substantially all of our assets.
Our loan agreements include covenants regarding the continued
service of our officers and directors.
Some
of our loan agreements include covenants regarding the continued service of our officers and directors, which covenants would be
breached if certain of our directors resigned, died, were not reelected, or otherwise could not continue to serve the Company in
such capacity. In one of those events occurred, the lender under those loan agreements could declare an event of default. Each
of our outstanding loan arrangements also contains a cross-default provision that may be triggered by a default under any of our
other loans. A cross-default provision means that a default on one loan could result in a default on all of our other loans. Because
of the presence of cross-default provisions in these secured loan arrangements, the refusal of any one lender to grant or extend
a relaxation or waiver could result in most of our indebtedness being accelerated even if our other secured lenders have relaxed
or waived covenant defaults under their respective loan arrangements. If our indebtedness is accelerated, it will be very difficult
in the current financing environment for us to refinance our debt or obtain additional financing and we could lose our vessels
if our lenders foreclose their liens, and our ability to conduct our business would be severely impaired.
Our stock price has fluctuated below
the minimum required to continue the listing of our common shares on Nasdaq.
We are required to
meet certain qualitative and financial tests (including a minimum bid price for our common shares of $1.00 per share, at least
500,000 publicly held shares, at least 300 public holders, and a market value of publicly held securities of $1 million), as well
as other corporate governance standards, to maintain the listing of our common shares on the Nasdaq Capital Market. In calendar
year 2017 to date, our stock price has fluctuated from a high of $12.50 on January 23, 2017 to a low of $0.86 on May 23, 2017,
which low price falls beneath the $1.00 per share requirement imposed by the Nasdaq Capital Market to continue listing our shares.
There can be no assurance
that we will be able to maintain compliance with the minimum bid price, shareholders’ equity, number of publicly held shares
or other listing standards in the future. We may receive notices from Nasdaq that we have failed to meet its requirements, and
proceedings to delist our stock could be commenced. If we are unable to maintain or regain compliance in a timely manner and our
common shares are delisted, it could be more difficult to buy or sell our common shares and obtain accurate quotations, and the
price of our shares could suffer a material decline. Delisting of our shares would breach a number of our credit facilities and
loan arrangements, some of which contain cross default provisions. Delisting may also impair our ability to raise capital. We refer
you to our annual report on Form 20-F for more information about our listing requirements.
USE OF PROCEEDS
This prospectus registers
the sale of common shares with an aggregate offering price to the public of $50,000,000. We could receive up to $50,000,000 in
connection therewith.
This prospectus also
registers for resale 15 million common shares, of which:
|
|
·
|
2.5 million have already been issued to the Selling Shareholder, and we will not receive any proceeds from sales of common shares by the Selling Shareholder.
|
|
|
|
|
|
|
·
|
Up to 12.5 million are issuable upon the exercise of warrant (upon the conditions further described in “Description of Capital Stock - Description of the Warrant”). We will receive $1.60 each time a warrant is exercised (up to a total of approximately $20 million), but we will not receive any proceeds from the sales of these common shares by the Selling Shareholder.
|
We intend to use any
proceeds received from our sales or the exercise of the warrants for working capital and general corporate purposes, and will specify
in an amendment to this prospectus or a prospectus supplement if we intend to use the proceeds for other purposes. We will incur
all costs associated with this registration statement and prospectus (other than underwriting discounts and commissions and any
transfer taxes), which we anticipate to be approximately $35,000.
PER SHARE MARKET
PRICE INFORMATION
Since April 11, 2016
our common shares have traded on the Nasdaq Capital Market under the symbol “GLBS”. Prior to April 11, 2016, our common
shares traded on the Nasdaq Global Select Market. You should carefully review the high and low prices of our common shares in the
tables for the months, quarters and years indicated under the heading Item 9. “The Offer and Listing” in our annual
report on Form 20-F for the year ended December 31, 2016, which is incorporated by reference herein.
On October 20, 2016,
we effected a four to one reverse stock split which reduced number of outstanding common shares from 10,510,741 to 2,627,674 shares
(adjustments were made based on fractional shares). The share prices below have been adjusted to reflect the stock split.
The table below sets
forth the high and low prices for each of the periods indicated for our common shares as reported, from April 11, 2016 onwards,
by the NASDAQ Capital Market, and prior to April 11, 2016, from the Nasdaq Global Select Market.
|
Period Ended
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|
High
|
|
|
Low
|
|
|
|
|
|
|
|
|
|
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Monthly
|
|
|
|
|
|
|
|
|
|
February 2018 (through and including February 6, 2018)
|
|
$
|
1.38
|
|
|
$
|
0.99
|
|
|
January 2018
|
|
$
|
1.46
|
|
|
$
|
1.13
|
|
|
December 2017
|
|
$
|
2.01
|
|
|
$
|
1.04
|
|
|
November 2017
|
|
$
|
2.26
|
|
|
$
|
0.91
|
|
|
October 2017
|
|
$
|
1.25
|
|
|
$
|
0.90
|
|
|
September 2017
|
|
$
|
1.08
|
|
|
$
|
0.88
|
|
|
August 2017
|
|
$
|
1.15
|
|
|
$
|
0.90
|
|
|
|
|
|
|
|
|
|
|
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Quarterly
|
|
|
|
|
|
|
|
|
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Fourth Quarter 2017
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|
$
|
2.26
|
|
|
$
|
0.90
|
|
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Third Quarter 2017
|
|
$
|
1.89
|
|
|
$
|
0.88
|
|
|
Second Quarter 2017
|
|
$
|
4.96
|
|
|
$
|
0.86
|
|
|
First Quarter 2017
|
|
$
|
12.50
|
|
|
$
|
3.00
|
|
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Fourth Quarter 2016
|
|
$
|
14.23
|
|
|
$
|
1.66
|
|
|
Third Quarter 2016
|
|
$
|
3.28
|
|
|
$
|
1.64
|
|
|
Second Quarter 2016
|
|
$
|
5.16
|
|
|
$
|
1.00
|
|
|
First Quarter 2016
|
|
$
|
0.88
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
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Yearly
|
|
|
|
|
|
|
|
|
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2017
|
|
$
|
12.50
|
|
|
$
|
0.86
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|
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2016
|
|
$
|
7.09
|
|
|
$
|
0.20
|
|
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2015
|
|
$
|
10.16
|
|
|
$
|
0.60
|
|
|
2014
|
|
$
|
17.76
|
|
|
$
|
8.88
|
|
|
2013
|
|
$
|
16.84
|
|
|
$
|
6.80
|
|
CAPITALIZATION
The following table sets forth our capitalization
table as of September 30, 2017, on
|
|
·
|
An as Adjusted basis, as of February 7, 2018, to give effect to:
|
|
|
o
|
the October 2017 Private Placement, in which 2.5 million common shares and warrants to purchase 12.5 million common shares were sold for $2.5 million in cash. (We have assumed no exercise of the October 2017 Warrants in the adjusted figures below.)
|
|
|
o
|
the February 2017 Transactions, pursuant to which February 2017 Warrants issued and were partially exercised within November 2017, December 2017 and January 2018, resulting in the issuance of 1,349,808 common shares. We have assumed no further exercise of such warrants in the adjusted figures below.
|
|
|
o
|
The issuance of 10,526 and 8,548 common shares in October 2017 and January 2018, being the share based payment of the Non- Executive Directors of the Company for the 3rd quarter 2017 and the 4th quarter of 2017, respectively.
|
|
|
|
As of Sep 30, 2017
|
|
|
|
|
Actual
|
|
|
As Adjusted
|
|
|
|
|
(dollars in thousands except
per share and share data)
|
|
|
Capitalization:
|
|
|
|
|
|
|
|
|
|
Total debt (including current portion)
|
|
$
|
41,797
|
|
|
$
|
41,517
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares, $0.001 par value; 100,000,000 shares authorized, none issued, actual and as adjusted
|
|
|
—
|
|
|
|
—
|
|
|
Common shares, $0.004 par value; 500,000,000 shares authorized, 28,145,085 shares issued and outstanding actual, 32,013,967 shares issued and outstanding as adjusted (assuming no further exercise of the Company’s outstanding warrants)
|
|
$
|
113
|
|
|
$
|
128
|
|
|
Additional paid-in capital
|
|
$
|
135,740
|
|
|
$
|
140,405
|
|
|
Accumulated deficit
|
|
$
|
(94,452
|
)
|
|
$
|
(94,452
|
)
|
|
Total shareholders’ equity
|
|
$
|
41,401
|
|
|
$
|
46,081
|
|
|
Total capitalization
|
|
$
|
83,198
|
|
|
$
|
87,598
|
|
Other than the adjustments
described above, there have been no significant adjustments to our capitalization since September 30, 2017. This table should be
read in conjunction with the consolidated financial statements and related notes included in our annual report for the year ended
December 31, 2016, on Form 20-F filed with the Commission on April 11, 2017 and incorporated by reference herein.
SELLING SHAREHOLDER
Based solely upon
information furnished to us by the Selling Shareholder, the following table sets forth information with respect to the beneficial
ownership of our common shares held as of the date of this prospectus (or to be held, as noted below) by the Selling Shareholder.
The Selling Shareholder is offering an aggregate of up to 15 million of our common shares, 2.5 million of which are outstanding
and 12.5 million of which may be issued upon exercise of the October 2017 Warrant, which was acquired in a private transaction.
The Selling Shareholder may sell some, all or none of its shares covered by this prospectus. The Selling Shareholder may also transfer
its warrant. We may update this table by filing a prospectus supplement in the event the Selling Shareholder transfers its warrants.
Under the terms of
the warrants, the Selling Shareholder may not exercise its warrant to the extent such exercise would cause the Selling Shareholder,
together with its affiliates and attribution parties, to beneficially own a number of common shares which would exceed 4.99% (which
may be increased upon no less than 61 days’ notice, but not to exceed 9.99%) of our then outstanding common shares following
such exercise, excluding for purposes of such determination common shares issuable upon exercise of the warrants which have not
been exercised. We refer to this as the “Blocker Provision”.
The Blocker Provision
does not limit the Selling Shareholder from acquiring up to 4.99% of our common shares, selling all of its common shares, and re-acquiring
up to 4.99% of our common shares. Until the warrants expire or the Selling Shareholder exercises and sells all of its common shares,
the calculation of the number of common shares issuable to the Selling Shareholder at any given point in time will change based
upon the total number of common shares outstanding. Accordingly, the table below assumes that the Blocker Provision does not exist,
with the effect that beneficial ownership of the Selling Shareholder is presented (for purposes of disclosure in this prospectus
only) on a fully as exercised basis:
|
Selling Shareholder
|
|
Common
Shares
Prior to the
Offering(1)
|
|
|
Percentage
of Class
(2)
|
|
|
Total
Common
Shares
Offered
Hereby
|
|
|
Percentage
of the
Class
Following
the
Offering (3)
|
|
|
United Capital Investments Corp. (4)
|
|
|
15,000,000
|
(5)
|
|
|
34
|
%
|
|
|
15,000,000
|
|
|
|
0
|
%
|
|
(1)
|
These figures assume full exercise of the Selling Shareholder’s warrant (as though the Blocker Provisions were not in effect).
|
|
(2)
|
These percentages assume full exercise of the Selling Shareholder’s warrant (as though the Blocker Provisions did not exist) and without exercise of any of the Company’s other outstanding warrants.
|
|
(3)
|
Assumes that the Selling Shareholder sells all of its common shares offered hereby.
|
|
(4)
|
United Capital Investments Corp. is a Liberian corporation with registered address at 80 Broad Street, Monrovia, Liberia.
|
|
(5)
|
12.5 million of these commons shares are issuable upon exercise of the Selling Shareholder’s warrant, and assumes that the Blocker Provisions are not in effect.
|
PLAN OF DISTRIBUTION
We and the Selling
Shareholder may sell our common shares through underwriters, through agents, to dealers, in private transactions, at market prices
prevailing at the time of sale, at prices related to the prevailing market prices, or at negotiated prices.
In addition, we and
the Selling Shareholder may sell our common shares included in this prospectus through:
|
|
·
|
a block trade in which a broker-dealer may resell a portion of the block, as principal, in order to facilitate the transaction;
|
|
|
·
|
purchases by a broker-dealer, as principal, and resale by the broker-dealer for its account;
|
|
|
·
|
ordinary brokerage transactions and transactions in which a broker solicits purchasers; or
|
|
|
·
|
trading plans entered into by the Selling Shareholder pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans.
|
In addition, we and
the Selling Shareholder may enter into option or other types of transactions that require us or them to deliver our securities
to a broker-dealer, who will then resell or transfer the securities under this prospectus. The Selling Shareholder may enter into
hedging transactions with respect to our securities. For example, the Selling Shareholder may:
|
|
·
|
enter into transactions involving short sales of our common shares by broker-dealers;
|
|
|
·
|
sell common shares short and deliver the shares to close out short positions;
|
|
|
·
|
enter into option or other types of transactions that require the Selling Shareholder to deliver common shares to a broker-dealer, who will then resell or transfer the common shares under this prospectus; or
|
|
|
·
|
loan or pledge the common shares to a broker-dealer, who may sell the loaned shares or, in the event of default, sell the pledged shares.
|
The Selling Shareholder
may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus. We may also choose
to sell securities separately from this prospectus in a transaction exempt from registration under the Securities Act, or to conduct
an offering that is registered under a separate registration statement on Form F-1 or another registration statement.
The Selling Shareholder
may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in
privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the
third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale
transactions. If so, the third party may use securities pledged by the Selling Shareholder or borrowed from the Selling Shareholder
or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from the
Selling Shareholder in settlement of those derivatives to close out any related open borrowings of stock. The third party in such
sale transactions will be an underwriter and will be identified in the applicable prospectus supplement (or a post-effective amendment).
In addition, the Selling Shareholder may otherwise loan or pledge securities to a financial institution or other third party that
in turn may sell the securities short using this prospectus. Such financial institution or other third party may transfer its economic
short position to investors in our securities or in connection with a concurrent offering of other securities.
The Selling Shareholder
and any broker-dealers or other persons acting on our behalf or on the behalf of the Selling Shareholder that participate with
the Selling Shareholder in the distribution of the securities may be deemed to be underwriters and any commissions received or
profit realized by them on the resale of the securities may be deemed to be underwriting discounts and commissions under the Securities
Act of 1933, as amended, or the Securities Act. As a result, we have informed the Selling Shareholder, that Regulation M, promulgated
under the Exchange Act, may apply to sales by the Selling Shareholder in the market. We and the Selling Shareholder may agree to
indemnify any broker, dealer or agent that participates in transactions involving the sale of our common shares against certain
liabilities, including liabilities arising under the Securities Act.
At the time that any
particular offering of securities is made, to the extent required by the Securities Act, a prospectus supplement will be distributed,
setting forth the terms of the offering, including the aggregate number of securities being offered, the purchase price of the
securities, the initial offering price of the securities, the names of any underwriters, dealers or agents, any discounts, commissions
and other items constituting compensation from us and any discounts, commissions or concessions allowed or re-allowed or paid to
dealers. Furthermore, the Selling Shareholder may agree, subject to certain exemptions, that for a certain period from the date
of the prospectus supplement under which the securities are offered, they will not, without the prior written consent of an underwriter,
offer, sell, contract to sell, pledge or otherwise dispose of any of our common shares or any securities convertible into or exchangeable
for our common shares. However, an underwriter, in its sole discretion, may release any of the securities subject to these lock-up
agreements at any time without notice. We expect an underwriter to exclude from these lock-up agreements securities exercised and/or
sold pursuant to trading plans entered into by the Selling Shareholder pursuant to Rule 10b5-1 under the Exchange Act, that are
in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for
periodic sales of the Selling Shareholder’s securities on the basis of parameters described in such trading plans.
Underwriters or agents
could make sales in privately negotiated transactions and/or any other method permitted by law, including sales deemed to be an
at-the-market offering as defined in Rule 415 promulgated under the Securities Act, which includes sales made directly on or through
the Nasdaq Capital Market, the existing trading market for our common shares, or sales made to or through a market maker other
than on an exchange.
As a result of requirements
of the Financial Industry Regulatory Authority, or FINRA, formerly the National Association of Securities Dealers, Inc., the maximum
commission or discount to be received by any FINRA member or independent broker/dealer may not be greater than eight percent (8%) of
the gross proceeds received by the Selling Shareholder for the sale of any securities being registered pursuant to Rule 415 promulgated
by the Commission under the Securities Act. If more than 5% of the net proceeds of any offering of common shares made under this
prospectus will be received by a FINRA member participating in the offering or affiliates or associated persons of such a FINRA
member, the offering will be conducted in accordance with FINRA Rule 5121.
The Selling Shareholder
represented and warranted to us that it acquired the securities subject to this registration statement and prospectus with no intent
to distribute the securities.
DESCRIPTION OF
CAPITAL STOCK
We refer you to “Item
10. Additional Information B. Memorandum and Articles of Association” contained within our Annual Report on Form 20-F for
the year ended December 31, 2016, which was filed on April 11, 2017 and is incorporated by reference into this prospectus, for
the description of our capital stock.
Transfer Agent
The registrar and transfer agent for our
common shares is Computershare Inc.
Share History
October 2017 Private Placement
On October 19, 2017,
we entered into a Share and Warrant Purchase Agreement (the “October 2017 SPA”) pursuant to which we sold for $2.5
million an aggregate of 2.5 million of our common shares share and a warrant (the “October 2017 Warrant”) to purchase
12.5 million of our common shares at a price of $1.60 per share (subject to adjustment as more fully described herein in “Description
of Capital Stock - Description of the Warrant”) to an investor in a private placement (the “October 2017 Private Placement”).
These securities were issued in transactions exempt from registration under the Securities Act of 1933, as amended (the “Securities
Act”). On that day, we also entered into a registration rights agreement with the purchaser providing it with certain rights
relating to registration under the Securities Act of the 2.5 million common shares issued in connection with the October 2017 Private
Placement and the common shares underlying the October 2017 Warrant. As of the date hereof, the October 2017 Warrant has not been
exercised.
In this registration
statement and prospectus, we are registering the resale of (a) the 2.5 million common shares sold in the October 2017 Private Placement,
(b) the 12.5 million common shares issuable upon exercise of the October 2017 Warrant, and the primary offering of common shares
with an aggregate offering price to the public of $50,000,000.
Under the terms of
the October 2017 Warrant, the Selling Shareholder may not exercise its warrant to the extent such exercise would cause the Selling
Shareholder, together with its affiliates and attribution parties, to beneficially own a number of common shares which would exceed
4.99% (which may be increased upon no less than 61 days’ notice, but not to exceed 9.99%) of our then outstanding common
shares immediately following such exercise, excluding for purposes of such determination common shares issuable upon exercise of
the October 2017 Warrant which have not been exercised. This provision does not limit the Selling Shareholder from acquiring up
to 4.99% of our common shares, selling all of their common shares, and re-acquiring up to 4.99% of our common shares. We refer
to this as the “Blocker Provision”.
The October 2017 Warrant
contains a provision whereby its holder has the right to a cashless exercise if, six months after its issuance, a registration
statement covering their resale is not effective. If for any reason we are unable to keep such a registration statement active
and our share price is higher than the $1.60 exercise price, we could be required to issue shares without receiving cash consideration.
The October 2017 Warrant is exercisable for 24 months after its issuance.
February 2017 Transactions
On February 8, 2017,
we entered into a Share and Warrant Purchase Agreement pursuant to which we sold for $5 million an aggregate of 5 million of our
common shares (the “February 2017 Common Shares”) and warrants (the “February 2017 Warrants”) to purchase
25 million of our common shares at a price of $1.60 per share to a number of investors in a private placement (the “February
2017 Private Placement”). These securities were issued in transactions exempt from registration under the Securities Act.
One of the investors, Robelle Holding Co., was owned and to our knowledge remains owned and controlled by the sister of our Chief
Executive Officer, who is also the daughter of our Chairman.
On February 9, 2017
we entered into a registration rights agreement with the purchasers in the February 2017 Private Placement providing them with
certain rights relating to registration under the Securities Act of the common shares issued in the February 2017 Private Placement
and the common shares underlying the February 2017 Warrants.
In connection with
the closing of the February 2017 Private Placement, we also entered into two loan amendment agreements (each, a “Loan Amendment
Agreement”) with each of two of our lenders.
One loan amendment
agreement was entered into by the Company with Firment Trading Limited, a Marshall Islands corporation (“Firment”),
a related party to us (it is an affiliate of our chairman) and the lender of the then outstanding loan in the principal amount
of $18,523,787 to the Company (the “Firment Credit Facility”), pursuant to which Firment released (the “Firment
Loan Amendment”) an amount equal to $16,885,000 (but to have an amount equal to $1,638,787 remain outstanding, and to continue
to accrue under the Firment Credit Facility as though it were principal) of the Firment Credit Facility and the Company issued
to Firment Shipping Inc., an affiliate of Firment 16,885,000 common shares (the “Firment Shares”) and a warrant to
purchase 6,230,580 common shares at a price of $1.60 per share (subject to adjustment, the “Firment Warrant”, together
with Firment Shares, the “Firment Securities”). Subsequent to the closing of the February 2017 private placement, Globus
repaid the outstanding amount on the Firment Credit Facility in its entirety.
The other loan amendment
agreement was entered into by the Company with Silaner Investments Limited, a Cyprus company (“Silaner”), a related
party to us (it is an affiliate of our chairman) and the lender of the then outstanding loan in the principal amount of $3,189,048
to the Company (the “Silaner Credit Facility”), pursuant to which Silaner agreed to release (the “Silaner Loan
Amendment”) an amount equal to the outstanding principal of $3,115,000 (but to have an amount equal to the accrued and unpaid
interest of $74,048 remain outstanding, and to continue to accrue under the Silaner Credit Facility as though it were principal)
of the Silaner Credit Facility and the Company issued to Firment Shipping Inc., an affiliate of Silaner 3,115,000 common shares
(the “Silaner Shares”) and a warrant to purchase 1,149,437 common shares at a price of $1.60 per share (subject to
adjustment, the “Silaner Warrant”, together with the Silaner Shares, the “Silaner Securities”). Subsequent
to the closing of the February 2017 private placement, Globus repaid the outstanding amount on the Silaner Credit Facility in its
entirety.
The February 2017
Warrants, the Firment Warrant and the Silaner Warrant are each exercisable for 24 months after their respective issuance. We refer
to the entry into the Loan Amendment Agreements and Registration Rights Agreements and the issuances of the 5 million common shares,
the February 2017 Warrants, Firment Securities, and the Silaner Securities as the “February 2017 Transactions.”
On April 13, 2017,
we filed a registration statement on Form F-3 which registered the resale of the February 2017 Common Shares and the common shares
issuable upon the exercise of the February 2017 Warrants, the Firment Warrant, and the Silaner Warrant. Subsequent to the filing
of the registration statement, three investors partially exercised their warrants, purchasing 1,856,808 of our common shares for
aggregate gross proceeds to us of approximately $3.0 million.
On June 23, 2017,
we reached an agreement with DVB Bank SE to amend the DVB Loan Agreement, including amendments to relax or waive certain covenants
for the period from April 1, 2017 to April 1, 2018 (the “Restructuring period”). The amendments with respect to the
restructuring period were subject to a $1.7 million prepayment that was made in September 2017, which is the aggregated amount
of two quarterly installments for each tranche, and another $1.7 million was deferred to the balloon payment of each tranche.
On July 10, 2017,
we reached an agreement with HSH Nordbank AG to amend the HSH Loan Agreement including amendments to relax or waive certain covenants
of the original loan agreement until March 3, 2018. The Company paid in September 2017 $1 million for repayment of debt and the
four scheduled principal installments due within 2017, each amounting to $693,595, were deferred to the balloon payment. In addition,
the Company undertook to raise new equity of at least $1.8 million.
Description of the Warrant
The October 2017 Warrant
underlying 12.5 million of the common shares being registered in this prospectus were issued on October 19, 2017 and have an exercise
price of $1.60 per share. Both the number of shares issuable and the exercise price are subject to adjustments under customary
conditions including share dividends and stock splits, as provided under the terms of the October 2017 Warrant.
Under the terms of
the October 2017 Warrant issued pursuant to the October 2017 SPA, the Selling Shareholder may not exercise the October 2017 Warrant
to the extent such exercise would cause the Selling Shareholder, together with its affiliates and attribution parties, to beneficially
own a number of our common shares which would exceed 4.99% (which may be increased upon no less than 61 days’ notice, but
not to exceed 9.99%) of our then outstanding common shares following such exercise, excluding for purposes of such determination
common shares issuable upon exercise of the October 2017 Warrant which have not been exercised. This provision does not limit the
Selling Shareholder from acquiring up to 4.99% of our common shares, selling all of their common shares, and re-acquiring up to
4.99% of our common shares. We refer to this as the “Blocker Provisions”.
The October 2017 Warrant
was immediately exercisable upon its issuance and will expire two years after its issuance (October 19, 2019). It contains a penalty
provision whereby the warrant’s holder has the right to a cashless exercise if, six months after its issuance, a registration
statement covering their resale is not effective. If for any reason we are unable to keep such a registration statement active
and our share price is higher than the $1.60 exercise price, we could be required to issue shares without receiving cash consideration.
The October 2017 Warrants
and October 2017 SPA require us, within the later of (a) five full trading days of the exercise of a warrant and (b) three full
trading days after receipt of the purchase price for such exercised warrants, to issue common shares, which, where called for in
the warrants and the October 2017 SPA, must be free of restrictive legends. We are similarly obligated, where called for pursuant
to the terms of the October 2017 SPA, to remove restrictive legends from 2.5 million common shares issued to purchasers in the
October 2017 Private Placement being registered for resale in this prospectus. If we are unable to deliver proof that the above
has occurred when required and if a warrant or shareholder has traded the common shares that we have failed to deliver unlegended,
penalty provisions of the October 2017 SPA and October 2017 Warrant require us to make whole any warrant holder or shareholder
who loses money by purchasing shares on the common market to complete its trade.
Listing
Our
common stock is listed on The NASDAQ Capital Market under the symbol “GLBS”.
TAX CONSIDERATIONS
Marshall Islands Tax Considerations
The following discussion
is based upon the opinion of Watson Farley & Williams LLP and the current laws of the Republic of the Marshall Islands
and is applicable only to persons who are not citizens of and do not reside in, maintain offices in or engage in business, transactions,
or operations in the Republic of the Marshall Islands.
Because we and our
subsidiaries do not, and we do not expect that we or any of our subsidiaries will, conduct business, transactions, or operations
in the Republic of the Marshall Islands, and because we anticipate that all documentation related to any offerings pursuant to
this prospectus will be executed outside of the Republic of the Marshall Islands, under current Marshall Islands law holders of
our common shares will not be subject to Marshall Islands taxation or withholding on dividends. In addition, holders of our common
shares will not be subject to Marshall Islands stamp, capital gains or other taxes on the purchase, ownership or disposition of
common shares, and you will not be required by the Republic of the Marshall Islands to file a tax return relating to the shares
of common shares.
It is the responsibility
of each shareholder to investigate the legal and tax consequences, under the laws of pertinent jurisdictions, including the Marshall
Islands, of its investment in us. Accordingly, each shareholder is urged to consult its tax counsel or other advisor with regard
to those matters. Further, it is the responsibility of each shareholder to file all state, local and non-U.S., as well as U.S.
federal, tax returns which may be required of such shareholder.
United States Tax Considerations
The following is a
discussion of material United States federal income tax consequences of the ownership and disposition of the Company’s common
shares that, subject to the representations, covenants, assumptions, conditions and qualifications described herein, may be relevant
to prospective shareholders and, unless otherwise noted in the following discussion, is the opinion of Watson Farley &
Williams LLP, our United States counsel, insofar as it relates to matters of United States federal income tax law and legal conclusions
with respect to those matters. The opinion of our counsel is dependent on the accuracy of representations made by us to them, including
descriptions of our operations contained herein. This discussion is based upon the provisions of the Internal Revenue Code of 1986,
as amended, or the Code, existing final, temporary and proposed regulations thereunder and current administrative rulings and court
decisions, all as in effect on the effective date of this prospectus and all of which are subject to change, possibly with retroactive
effect. Changes in these authorities may cause the tax consequences to vary substantially from the consequences described below.
No rulings have been or are expected to be sought from the United States Internal Revenue Service, or the IRS, with respect to
any of the United States federal income tax consequences discussed below, and no assurance can be given that the IRS will not take
contrary positions.
The following summary
does not deal with all United States federal income tax consequences applicable to any given holder of our common shares, nor does
it address the United States federal income tax considerations applicable to categories of investors subject to special taxing
rules, such as expatriates, banks, real estate investment trusts, regulated investment companies, insurance companies, tax-exempt
organizations, dealers or traders in securities or currencies, partnerships, S corporations, estates and trusts, investors that
hold their common shares as part of a hedge, straddle or an integrated or conversion transaction, investors whose “functional
currency” is not the United States dollar or investors that own, directly, indirectly, or by attribution, 10% or more of
our stock by vote or value. Furthermore, the discussion does not address alternative minimum tax consequences or estate or gift
tax consequences, or any state tax consequences, and is limited to shareholders that will hold their common shares as “capital
assets” within the meaning of Section 1221 of the Code. Each shareholder is encouraged to consult, and discuss with his or
her own tax advisor the United States federal, state, local and non-United States tax consequences particular to him or her of
the acquisition, ownership or disposition of common shares. Further, it is the responsibility of each shareholder to file all state,
local and non-United States, as well as United States federal, tax returns that may be required of it.
United States Federal Income
Taxation of United States Holders
As used herein, “United
States Holder” means a beneficial owner of the Company’s common shares that is an individual citizen or resident of
the United States for United States federal income tax purposes, a corporation or other entity taxable as a corporation created
or organized in or under the laws of the United States or any state thereof (including the District of Columbia), an estate the
income of which is subject to United States federal income taxation regardless of its source or a trust where a court within the
United States is able to exercise primary supervision over the administration of the trust and one or more United States persons
(as defined in the Code) have the authority to control all substantial decisions of the trust (or a trust that has made a valid
election under United States Department of the Treasury regulations to be treated as a domestic trust). A “Non-United States
Holder” generally means any owner (or beneficial owner) of common shares that is not a United States Holder, other than a
partnership. If a partnership holds common shares, the tax treatment of a partner will generally depend upon the status of the
partner and upon the activities of the partnership. Partners of partnerships holding common shares should consult their own tax
advisors regarding the tax consequences of an investment in the common shares (including their status as United States Holders
or Non-United States Holders).
Distributions
Subject to the discussion
of passive foreign investment companies, or PFICs, below, any distributions made by the Company with respect to the common shares
to a United States 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 the Company’s current or accumulated earnings and profits as determined
under United States federal income tax principles. Distributions in excess of the Company’s earnings and profits will be
treated as a nontaxable return of capital to the extent of the United States Holder’s tax basis in its common shares and,
thereafter, as capital gain.
Dividends paid in
respect of the Company’s common shares may qualify for the preferential rate attributable to qualified dividend income if:
(1) the common shares are readily tradable on an established securities market in the United States; (2) the Company is not a PFIC
for the taxable year during which the dividend is paid or in the immediately preceding taxable year; (3) the United States 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 and (4) the United States Holder is not under an obligation to make related payments with respect to positions
in substantially similar or related property. The first requirement currently is and has been met, as our common shares are listed
on the Nasdaq Capital Market tier of the Nasdaq Stock Market, which is an established securities market. Further, there is no minimal
trading requirement for shares to be “readily tradable,” so as long as our common shares remain listed on the Nasdaq
Capital Market or any other established securities market in the United States, the first requirement will be satisfied. However,
if our common shares are delisted and are not tradable on an established securities market in the United States, the first requirement
would not be satisfied, and dividends paid in respect of our common shares would not qualify for the preferential rate attributable
to qualified dividend income. The second requirement is expected to be met as more fully described below under “—Consequences
of Possible PFIC Classification.” Satisfaction of the final two requirements will depend on the particular circumstances
of each United States Holder. Consequently, if any of these requirements are not met, the dividends paid to individual United States
Holders in respect of the Company’s common shares would not be treated as qualified dividend income and would be taxed as
ordinary income at ordinary rates.
Amounts taxable as
dividends generally will be treated as income from sources outside the United States and will, depending on your circumstances,
be “passive” or “general” income which, in either case, is treated separately from other types of income
for purposes of computing the foreign tax credit allowable to you. However, if (1)(A) in the case of a United States Holder’s
taxable year ending before December 31, 2018, the Company is 50% or more owned, by vote or value, by United States persons, or
(B) in the case of a United States Holder’s taxable year ending on or after December 31, 2018, the Company is 10% or more
owned, by vote or value, by United States persons, or is a PFIC and (2) at least 10% of the Company’s earnings and profits
are attributable to sources within the United States, then for foreign tax credit purposes, a portion of our dividends would be
treated as derived from sources within the United States. Under such circumstances, with respect to any dividend paid for any taxable
year, the United States source ratio of the Company’s dividends for foreign tax credit purposes would be equal to the portion
of the Company’s earnings and profits from sources within the United States for such taxable year, divided by the total amount
of the Company’s earnings and profits for such taxable year.
Consequences
of Possible PFIC Classification
A non-United States
entity treated as a corporation for United States federal income tax purposes will be a PFIC in any taxable year in which, after
taking into account the income and assets of the corporation and certain subsidiaries pursuant to a “look through”
rule, either: (1) 75% or more of its gross income is “passive” income or (2) 50% or more of the average value of its
assets is attributable to assets that produce passive income or are held for the production of passive income. If a corporation
is a PFIC in any taxable year that a person holds shares in the corporation (and was not a qualified electing fund with respect
to such year, as discussed below), the shares held by such person will be treated as shares in a PFIC for all future years (absent
an election which, if made, may require the electing person to pay taxes in the year of the election). A United States Holder of
shares in a PFIC would be required to file an annual information return on IRS Form 8621 containing information regarding the PFIC
as required by United States Department of the Treasury regulations.
While there are legal
uncertainties involved in this determination, including as a result of adverse case law described herein, based upon the Company’s
and its subsidiaries’ expected operations as described herein and based upon the current and expected future activities and
operations of the Company and its subsidiaries, the income of the Company and such subsidiaries from time charters should not constitute
“passive income” for purposes of applying the PFIC rules, and the assets that the Company owns for the production of
this time charter income should not constitute passive assets for purposes of applying the PFIC rules.
Although there is
no legal authority directly on point, this view is based principally on the position that the gross income that the Company and
its subsidiaries derive from time charters constitutes services income rather than passive rental income. The Fifth Circuit Court
of Appeals decided in Tidewater Inc. v. United States, 565 F.3d 299 (5th Cir., 2009) that a typical time charter is a lease,
and not a contract for the provision of transportation services. In that case, the court was considering a tax issue that turned
on whether the taxpayer was a lessor where a vessel was under a time charter, and the court did not address the definition of passive
income or the PFIC rules; however, the reasoning of the case could have implications as to how the income from a time charter would
be classified under such rules. If the reasoning of the Tidewater case is applied to the Company’s situation and the
Company’s or its subsidiaries’ time charters are treated as leases, the Company’s or its subsidiaries’
time charter income could be classified as rental income and the Company would be a PFIC unless more than 25% of the income of
the Company (taking into account the subsidiary look through rule) is from spot charters plus other active income or an active
leasing exception applies. The IRS has announced that it will not follow the reasoning of the Tidewater case and would have treated
the income from the time charters at issue in that case as services income, including for other purposes of the Code. The Company
intends to take the position that all of its time, voyage and spot chartering activities will generate active services income and
not passive leasing income, but in the absence of direct legal authority specifically relating to the Code provisions governing
PFICs, the IRS or a court could disagree with this position. Although the matter is not free from doubt as described herein, based
on the current operations and activities of the Company and its subsidiaries and on the relative values of the vessels in the Company’s
fleet and the charter income in respect of the vessels, Globus Maritime Limited should not be treated as a PFIC during the taxable
year ended December 31, 2016.
Based on the Company’s
intention and expectation that the Company’s subsidiaries’ income from spot, time and voyage chartering activities
plus other active operating income will be greater than 25% of the Company’s total gross income at all relevant times and
that the gross value of the vessels subject to such time, voyage or spot charters will exceed the gross value of all the passive
assets the Company owns at all relevant times, Globus Maritime Limited does not expect that it will constitute a PFIC with respect
to a taxable year in 2017 or the near future thereafter.
The Company will try
to manage its vessels and its business so as to avoid being classified as a PFIC for a future taxable year; however there can be
no assurance that the nature of the Company’s assets, income and operations will remain the same in the future (notwithstanding
the Company’s current expectations). Additionally, no assurance can be given that the IRS or a court of law will accept the
Company’s position that the time charters that the Company’s subsidiaries have entered into or any other time charter
that the Company or a subsidiary may enter into will give rise to active income rather than passive income for purposes of the
PFIC rules, or that future changes of law will not adversely affect this position. The Company has not obtained a ruling from the
IRS on its time charters or its PFIC status and does not intend to seek one. Any contest with the IRS may materially and adversely
impact the market for the common shares and the prices at which they trade. In addition, the costs of any contest on the issue
with the IRS will result in a reduction in cash available for distribution and thus will be borne indirectly by the Company’s
shareholders.
If Globus Maritime
Limited were to be classified as a PFIC in any year, each United States Holder of the Company’s shares will be subject (in
that year and all subsequent years) to special rules with respect to: (1) any “excess distribution” (generally defined
as any distribution received by a shareholder in a taxable year that is greater than 125% of the average annual distributions received
by the shareholder in the three preceding taxable years or, if shorter, the shareholder’s holding period for the shares),
and (2) any gain realized upon the sale or other disposition of the common shares. Under these rules:
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the excess distribution or gain will be allocated ratably over the United States Holder’s holding period;
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the amount allocated to the current taxable year and any year prior to the first year in which the Company was a PFIC will be taxed as ordinary income in the current year; and
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the amount allocated to each of the other taxable years in the United States Holder’s holding period will be subject to United States federal income tax at the highest rate in effect for the applicable class of taxpayer for that year, and an interest charge will be added as though the amount of the taxes computed with respect to these other taxable years were overdue.
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In order to avoid
the application of the PFIC rules, United States Holders may make a qualified electing fund, or a QEF, election provided in Section
1295 of the Code in respect of their common shares. Even if a United States Holder makes a QEF election for a taxable year of the
Company, if the Company was a PFIC for a prior taxable year during which such holder held the common shares and for which such
holder did not make a timely QEF election, the United States Holder would also be subject to the more adverse rules described above.
Additionally, to the extent any of the Company’s subsidiaries is a PFIC, an election by a United States Holder to treat Globus
Maritime Limited as a QEF would not be effective with respect to such holder’s deemed ownership of the stock of such subsidiary
and a separate QEF election with respect to such subsidiary is required. In lieu of the PFIC rules discussed above, a United States
Holder that makes a timely, valid QEF election will, in very general terms, be required to include its pro rata share of the Company’s
ordinary income and net capital gains, unreduced by any prior year losses, in income for each taxable year (as ordinary income
and long-term capital gain, respectively) and to pay tax thereon, even if no actual distributions are received for that year in
respect of the common shares and even if the amount of that income is not the same as the amount of actual distributions paid on
the common shares during the year. If the Company later distributes the income or gain on which the United States Holder has already
paid taxes under the QEF rules, the amounts so distributed will not again be subject to tax in the hands of the United States Holder.
A United States Holder’s tax basis in any common shares as to which a QEF election has been validly made will be increased
by the amount included in such United States Holder’s income as a result of the QEF election and decreased by the amount
of nontaxable distributions received by the United States Holder. On the disposition of a common share, a United States Holder
making the QEF election generally will recognize capital gain or loss equal to the difference, if any, between the amount realized
upon such disposition and its adjusted tax basis in the common share. In general, a QEF election should be made by filing a Form
8621 with the United States Holder’s federal income tax return on or before the due date for filing such United States Holder’s
federal income tax return for the first taxable year for which the Company is a PFIC or, if later, the first taxable year for which
the United States Holder held common shares. In this regard, a QEF election is effective only if certain required information is
made available by the PFIC. Subsequent to the date that the Company first determines that it is a PFIC, the Company will use commercially
reasonable efforts to provide any United States Holder of common shares, upon request, with the information necessary for such
United States Holder to make the QEF election.
In addition to the
QEF election, Section 1296 of the Code permits United States Holders to make a “mark-to-market” election with respect
to marketable shares in a PFIC, generally meaning shares regularly traded on a qualified exchange or market and certain other shares
considered marketable under United States Department of the Treasury regulations. For this purpose, a class of shares is regularly
traded on a qualified exchange or market for any calendar year during which such class of shares is traded, other than in de minimis
quantities, on at least 15 days during each calendar quarter of the year. Our common shares historically have been regularly traded
on the Nasdaq Capital Market or the Nasdaq Global Market, which are established securities markets. However, if our common shares
were to be delisted, then the mark-to-market election generally would be unavailable to United States Holders. If a United States
Holder makes a mark-to-market election in respect of its common shares, such United States Holder generally would, in each taxable
year: (1) include as ordinary income the excess, if any, of the fair market value of the common shares at the end of the taxable
year over such United States Holder’s adjusted tax basis in the common shares, and (2) be permitted an ordinary loss in respect
of the excess, if any, of such United States Holder’s adjusted tax basis in the common shares over their 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 (with the United States Holder’s basis in the common shares being increased and decreased, respectively, by the
amount of such ordinary income or ordinary loss). The consequences of this election may be less favorable than those of a QEF election
for United States Holders that are sensitive to the distinction between ordinary income and capital gain.
United States Holders
are urged to consult their tax advisors as to the consequences of making a mark-to-market or QEF election, as well as other United
States federal income tax consequences of holding shares in a PFIC.
As previously indicated,
if the Company were to be classified as a PFIC for a taxable year in which the Company pays a dividend or the immediately preceding
taxable year, dividends paid by the Company would not constitute “qualified dividend income” and, hence, would not
be eligible for the reduced rate of United States federal income tax.
Sale,
Exchange or Other Disposition of Common Shares
A United States Holder
generally will recognize taxable gain or loss upon a sale, exchange or other disposition of common shares in an amount equal to
the difference between the amount realized by the United States Holder from such sale, exchange or other disposition and the United
States Holder’s tax basis in such common shares. Assuming the Company does not constitute a PFIC for any taxable year, this
gain or loss will generally be treated as long-term capital gain or loss if the United States Holder’s holding period is
greater than one year at the time of the sale, exchange or other disposition. Long term capital gains recognized by a United States
Holder other than a corporation are generally taxed at preferential rates. A United States Holder’s ability to deduct capital
losses is subject to limitations.
Net
Investment Income Tax
A United States Holder
that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, is
subject to a 3.8% tax on the lesser of (1) such United States Holder’s “net investment income” (or undistributed
“net investment income” in the case of estates and trusts) for the relevant taxable year and (2) the excess of such
United States Holder’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of
individuals will be between $125,000 and $250,000, depending on the individual’s circumstances). A United States Holder’s
net investment income will generally include its gross dividend income and its net gains from the disposition of the common shares,
unless such dividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade
or business that consists of certain passive or trading activities). Net investment income generally will not include a United
States Holder’s pro rata share of the Company’s income and gain (if we are a PFIC and that United States Holder makes
a QEF election, as described above in “—Consequences of Possible PFIC Classification”). However, a United States
Holder may elect to treat inclusions of income and gain from a QEF election as net investment income. Failure to make this election
could result in a mismatch between a United States Holder’s ordinary income and net investment income. If you are a United
States Holder that is an individual, estate or trust, you are urged to consult your tax advisor regarding the applicability of
the net investment income tax to your income and gains in respect of your investment in the common shares.
United States
Federal Income Taxation of Non-United States Holders
A Non-United States
Holder will generally not be subject to United States federal income tax on dividends paid in respect of the common shares or on
gains recognized in connection with the sale or other disposition of the common shares provided that the Non-United States Holder
makes certain tax representations regarding the identity of the beneficial owner of the common shares, that such dividends or gains
are not effectively connected with the Non-United States Holder’s conduct of a United States trade or business and that,
with respect to gain recognized in connection with the sale or other disposition of the common shares by a non-resident alien individual,
such individual is not present in the United States for 183 days or more in the taxable year of the sale or other disposition and
other conditions are met. If the Non-United States Holder is engaged in a United States trade or business for United States federal
income tax purposes, the income from the common shares, including dividends and gain from the sale, exchange or other disposition
of the common stock, that is effectively connected with the conduct of that trade or business will generally be subject to regular
United States federal income tax in the same manner as discussed above relating to the taxation of United States Holders.
Backup Withholding
and Information Reporting
Information reporting
to the IRS may be required with respect to payments on the common shares and with respect to proceeds from the sale of the common
shares. With respect to Non-United States Holders, copies of such information returns may be made available to the tax authorities
in the country in which the Non-United States Holder resides under the provisions of any applicable income tax treaty or exchange
of information agreement. A “backup” withholding tax may also apply to those payments if:
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a holder of the common shares fails to provide certain identifying information (such as the holder’s taxpayer identification number or an attestation to the status of the holder as a Non-United States Holder);
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such holder is notified by the IRS that he or she has failed to report all interest or dividends required to be shown on his or her federal income tax returns; or
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in certain circumstances, such holder has failed to comply with applicable certification requirements.
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Backup withholding
is not an additional tax and may be refunded (or credited against the holder’s United States federal income tax liability,
if any), provided that certain required information is furnished to the IRS in a timely manner.
Non-United States
Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status
on IRS Form W-8BEN, W-8BEN-E, W-8ECI or W-8IMY, as applicable.
United States Holders
of common shares may be required to file forms with the IRS under the applicable reporting provisions of the Code. For example,
such United States Holders may be required, under Sections 6038, 6038B and/or 6046 of the Code, and the regulations thereunder,
to supply the IRS with certain information regarding the United States Holder, other United States Holders and the Company if (1)
such person owns at least 10% of the total value or 10% of the total combined voting power of all classes of shares entitled to
vote or (2) the acquisition of our common shares, when aggregated with certain other acquisitions that may be treated as related
under applicable regulations, exceeds $100,000 in value. In the event a United States Holder fails to file a form when required
to do so, the United States Holder could be subject to substantial tax penalties. You should consult your tax advisor regarding
the filing of these forms.
Individual United
States Holders who hold certain specified foreign assets with values in excess of certain dollar thresholds are required to report
such assets on IRS Form 8938 with their United States federal income tax return, subject to certain exceptions (including an exception
for foreign assets held in accounts maintained by financial institutions). Stock in a foreign corporation, including our common
shares, is a specified foreign asset for this purpose. Penalties apply for failure to properly complete and file Form 8938. You
should consult your tax advisor regarding the filing of this form.
We encourage each
United States Holder and Non-United States Holder to consult with his, her or its own tax advisor as to the particular tax consequences
to him, her or it of holding and disposing of the Company’s common shares, including the applicability of any federal, state,
local or foreign tax laws and any proposed changes in applicable law.
EXPENSES
The following are the estimated expenses
of the issuance and distribution of the securities being registered under the registration statement of which this prospectus forms
a part, all of which will be paid by us.
|
Commission registration fee
|
|
$
|
9,104
|
|
|
FINRA filing fee
|
|
$
|
*
|
|
|
Legal fees and expenses
|
|
$
|
*
|
|
|
Accounting fees and expenses
|
|
$
|
*
|
|
|
Printing and typesetting expenses
|
|
$
|
*
|
|
|
Blue sky fees and expenses
|
|
$
|
*
|
|
|
Miscellaneous
|
|
$
|
*
|
|
|
Total
|
|
$
|
*
|
|
*To be provided by a prospectus supplement
or as an exhibit to a Report on Form 6-K that is incorporated by reference into this registration statement and prospectus.
LEGAL MATTERS
The validity of the
securities offered by this prospectus with respect to Marshall Islands law and certain other legal matters relating to United States
and Marshall Islands law will be passed upon for us by Watson Farley & Williams LLP, New York, New York.
EXPERTS
The consolidated financial
statements of Globus Maritime Limited appearing in Globus Maritime Limited’s Annual Report (Form 20-F) for the year ended
December 31, 2016, have been audited by Ernst & Young (Hellas) Certified Auditors Accountants S.A., independent registered
public accounting firm, as set forth in their report thereon, included therein, and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts
in accounting and auditing. Ernst & Young (Hellas) Certified Auditors Accountants S.A. is located at 8B Chimarras street, 15125,
Maroussi, Greece and is registered as a corporate body with the public register for company auditors-accountants kept with the
Body of Certified-Auditors-Accountants ("SOEL"), Greece with registration number 107.
$50,000,000 of Common Shares
15,000,000 Common Shares offered by the
Selling Shareholder
PROSPECTUS
February 8, 2018
Globus Maritime (NASDAQ:GLBS)
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From Mar 2024 to Apr 2024
Globus Maritime (NASDAQ:GLBS)
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From Apr 2023 to Apr 2024
