FreeSeas Announces $25.0 Million Offering of Preferred Stock and Warrants
May 22 2014 - 2:18PM
FreeSeas Inc. (Nasdaq:FREE)
("FreeSeas''
or the "Company''), a transporter of dry-bulk cargoes
through the ownership and operation of a fleet of five Handysize
vessels and one Handymax vessels, announced today that it entered
into a placement agent agreement with Dawson James Securities, Inc.
on May 21, 2014, to sell up to $25 million of Series D Convertible
Preferred Stock and Series C Warrants. The offering is expected to
close on May 28, 2014. The securities will be sold in 250,000
units, at a purchase price of $100 per unit, with each unit
consisting of one share of our Series D Convertible Preferred Stock
and Series C Warrants to purchase 200% of the shares of common
stock underlying the Series D Preferred Stock, at an exercise price
of 130% of the Series D Preferred Stock conversion price on the
initial issuance date of the Series D Preferred Stock, rounded to
the nearest whole cent.
Each share of Series D Preferred Stock will have a stated value
of $100 and will be convertible into a number of shares of common
stock equal to $100 divided by the conversion price in effect at
the time of conversion. The initial conversion price of each share
of Series D Preferred Stock will be the lesser of (i) $1.09 (the
closing bid price of our common stock on May 16, 2014) and (ii) the
greater of (1) the closing bid price of our common stock on the
date immediately prior to the closing of this offering (which is
expected to be May 28, 2014) and (2) $0.981.
Following the closing of the offering, presuming the maximum
offering is completed, FreeSeas will pay approximately $22 million
of the offering proceeds to Credit Suisse to eliminate all of its
debt obligations owed to Credit Suisse, which are approximately $37
million. Upon Credit Suisse's receipt of such $22 million,
Credit Suisse will also cancel all the remaining debt owed by
FreeSeas and its subsidiaries, which is approximately $15 million.
Following such payment and cancellation, FreeSeas will no longer
owe any amounts to Credit Suisse, Credit Suisse will release any
and all liens it has on the assets of the Company and its
subsidiaries and Credit Suisse will release all corporate
guarantees received from the Company's subsidiaries.
Any remaining offering proceeds will be used for general
corporate purposes.
Dawson James Securities, Inc. is acting as the exclusive
placement agent on a best efforts basis in connection with this
offering.
A registration statement on Form F-1 relating to this offering
has been filed with the Securities and Exchange Commission and is
effective. A preliminary prospectus relating to the offering has
been filed with the SEC and is available on the SEC's website
at www.sec.gov. Copies of the final prospectus relating to the
offering, when available, may be obtained from Dawson James
Securities, Inc., 1 North Federal Highway, Boca Raton, Florida
33432, (561) 391-5555, or from the above-mentioned SEC website.
The foregoing summaries of the offering, the securities to be
issued in connection therewith and the full terms and conditions of
the Series D Preferred Stock and the Series C Warrant (including,
without limitation, the exchange feature and the mandatory exercise
feature contained therein) do not purport to be complete and are
qualified in their entirety by reference to the definitive
documents attached as exhibits to such Form F-1.
This press release shall not constitute an offer to sell, or the
solicitation of an offer to buy, these securities, nor shall there
be any sale of these securities in any state or jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
their registration or qualification under the securities laws of
any such state or jurisdiction.
About FreeSeas Inc.
FreeSeas Inc. is a Marshall Islands corporation with principal
offices in Athens, Greece. FreeSeas is engaged in the
transportation of drybulk cargoes through the ownership and
operation of drybulk carriers. Currently, it has a fleet of
Handysize and Handymax vessels. FreeSeas' common stock trades on
the NASDAQ Capital Market under the symbol FREE. Risks and
uncertainties are described in reports filed by FreeSeas Inc. with
the U.S. Securities and Exchange Commission, which can be obtained
free of charge on the SEC's website at http://www.sec.gov. For more
information about FreeSeas Inc., please visit the corporate
website, www.freeseas.gr.
Forward-Looking Statements
This press release contains forward-looking statements (as
defined in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended)
concerning future events and the Company's growth strategy and
measures to implement such strategy. Words such as "expects,"
"intends," "plans," "believes," "anticipates," "hopes," "estimates"
and variations of such words and similar expressions are intended
to identify forward-looking statements. Although the Company
believes that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such
expectations will prove to be correct. These statements involve
known and unknown risks and are based upon a number of assumptions
and estimates which are inherently subject to significant
uncertainties and contingencies, many of which are beyond the
control of the Company. Actual results may differ materially from
those expressed or implied by such forward-looking statements.
Factors that could cause actual results to differ materially
include, but are not limited to, changes in the demand for dry bulk
vessels; competitive factors in the market in which the Company
operates; risks associated with operations outside the United
States; and other factors listed from time to time in the Company's
filings with the Securities and Exchange Commission. The Company
expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Company's
expectations with respect thereto or any change in events,
conditions or circumstances on which any statement is based.
CONTACT: FreeSeas Inc.
Dimitris Papadopoulos, Chief Financial Officer
011-30-210-45-28-770
Fax: 011-30-210-429-10-10
dp@freeseas.gr
www.freeseas.gr
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