UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

_______________________________________

SCHEDULE TO

 

(RULE 14d-100)

 

Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934

_______________________________________

 

Performance Shipping Inc.

(Name of Subject Company (Issuer)) 

_______________________________________

 

Sphinx Investment Corp.

(Offeror)

 

Maryport Navigation Corp.

(Parent of Offeror)

 

George Economou

(Affiliate of Offeror)

 

(Names of Filing Persons)

_______________________________________

 

Common shares, $0.01 par value

(including the associated Preferred stock purchase rights)
(Title of Class of Securities)

 

Y67305105
(CUSIP Number of Class of Securities)

_______________________________________


Kleanthis Spathias

c/o Levante Services Limited

Leoforos Evagorou 31, 2nd Floor, Office 21

1066 Nicosia, Cyprus

+35 722 010610

(Name, address and telephone number of person authorized to receive notices and communications on behalf of filing persons)

_______________________________________

 

With a copy to:

 

Richard M. Brand

Kiran S. Kadekar
Cadwalader, Wickersham & Taft LLP
200 Liberty Street
New York, NY 10281
(212) 504-6000

_______________________________________

 

¨Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

 

Check the appropriate boxes below to designate any transactions to which the statement relates:

 

xthird-party tender offer subject to Rule 14d-1.
¨issuer tender offer subject to Rule 13e-4.
¨going-private transaction subject to Rule 13e-3.
xamendment to Schedule 13D under Rule 13d-2.

 

Check the following box if the filing is a final amendment reporting the results of the tender offer: ¨

 

If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:

¨Rule 13e-4(i) (Cross-Border Issuer Tender Offer)
¨Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)

 

 

 

 

 

As permitted by General Instruction G to Schedule TO, this Schedule TO is also Amendment No. 4 to the Schedule 13D filed by Sphinx Investment Corp. (the “Offeror”), Maryport Navigation Corp. and Mr. George Economou on August 25, 2023 (and amended on August 31, 2023, September 4, 2023 and September 15, 2023) in respect of the Common Shares of the Company.

 

CUSIP No. Y67305105    

 
 
  1.

Names of Reporting Persons

Sphinx Investment Corp.

     
  2. Check the Appropriate Box if a Member of a Group (See Instructions)
    (a) o
    (b) x
     
  3. SEC Use Only
     
  4.

Source of Funds (See Instructions)

WC

     
  5. Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o
     
  6.

Citizenship or Place of Organization

Republic of the Marshall Islands

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person With

7.

Sole Voting Power

0

8.

Shared Voting Power

1,033,859*

9.

Sole Dispositive Power

0

10.

Shared Dispositive Power

1,033,859*

  11.

Aggregate Amount Beneficially Owned by Each Reporting Person

1,033,859*

  12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o
  13.

Percent of Class Represented by Amount in Row (11)

8.8%**

  14.

Type of Reporting Person (See Instructions)

CO

           

* All reported Common Shares are held by Sphinx Investment Corp. Sphinx Investment Corp. is a wholly-owned subsidiary of Maryport Navigation Corp., which is a Liberian company controlled by Mr. Economou.

** Based on the 11,734,683 Common Shares stated by the Issuer as being outstanding as at September 29, 2023 in its Report on Form 6-K, filed with the United States Securities and Exchange Commission (the “SEC”) on September 29, 2023 (the “September 29 2023 6-K”).

 

 

  

CUSIP No. Y67305105    

 
 
  1.

Names of Reporting Persons

Maryport Navigation Corp.

     
  2. Check the Appropriate Box if a Member of a Group (See Instructions)
    (a) o
    (b) x
     
  3. SEC Use Only
     
  4.

Source of Funds (See Instructions)

AF

     
  5. Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o
     
  6.

Citizenship or Place of Organization

Liberia

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person With

7.

Sole Voting Power

0

8.

Shared Voting Power

1,033,859*

9.

Sole Dispositive Power

0

10.

Shared Dispositive Power

1,033,859*

  11.

Aggregate Amount Beneficially Owned by Each Reporting Person

1,033,859*

  12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o
  13.

Percent of Class Represented by Amount in Row (11)

8.8%**

  14.

Type of Reporting Person (See Instructions)

CO

           

* All reported Common Shares are held by Sphinx Investment Corp. Sphinx Investment Corp. is a wholly-owned subsidiary of Maryport Navigation Corp., which is a Liberian company controlled by Mr. Economou.

** Based on the 11,734,683 Common Shares stated by the Issuer as being outstanding as at September 29, 2023 in its September 29 2023 6-K.

 

 

 

 

CUSIP No. Y67305105    

 
 
  1.

Names of Reporting Persons

George Economou

     
  2. Check the Appropriate Box if a Member of a Group (See Instructions)
    (a) o
    (b) x
     
  3. SEC Use Only
     
  4.

Source of Funds (See Instructions)

AF

     
  5. Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o
     
  6.

Citizenship or Place of Organization

Greece

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person With

7.

Sole Voting Power

0

8.

Shared Voting Power

1,033,859*

9.

Sole Dispositive Power

0

10.

Shared Dispositive Power

1,033,859*

  11.

Aggregate Amount Beneficially Owned by Each Reporting Person

1,033,859*

  12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o
  13.

Percent of Class Represented by Amount in Row (11)

8.8%**

  14.

Type of Reporting Person (See Instructions)

IN

           

* All reported Common Shares are held by Sphinx Investment Corp. Sphinx Investment Corp. is a wholly-owned subsidiary of Maryport Navigation Corp., which is a Liberian company controlled by Mr. Economou.

** Based on the 11,734,683 Common Shares stated by the Issuer as being outstanding as at September 29, 2023 in its September 29 2023 6-K.

 

 

 

 

SCHEDULE TO

 

This Tender Offer Statement on Schedule TO (together with any exhibits and annexes attached hereto, and as it may be amended or supplemented from time to time, this “Schedule TO”) is filed by Sphinx Investment Corp., a corporation organized under the laws of the Republic of the Marshall Islands (the “Offeror”), Maryport Navigation Corp., a corporation organized under the laws of the Republic of Liberia that is the direct parent of the Offeror (“Maryport”), and Mr. George Economou, who directly owns Maryport and controls each of the Offeror and Maryport. This Schedule TO relates to the tender offer by the Offeror to purchase all of the issued and outstanding common shares, par value $0.01 per share (the “Common Shares”), of Performance Shipping Inc., corporation organized under the laws of the Republic of the Marshall Islands (the “Company”) (including the associated preferred stock purchase rights (the “Rights”, and together with the Common Shares, the “Shares”) issued pursuant to the Stockholders’ Rights Agreement, dated as of December 20, 2021, between the Company and Computershare Inc. as Rights Agent (as it may be amended from time to time)), for $3.00 per Share in cash, without interest, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in (a) the Offer to Purchase, dated October 11, 2023, a copy of which is attached as Exhibit (a)(1)(A) (the “Offer to Purchase”), (b) the related Letter of Transmittal, a copy of which is attached as Exhibit (a)(1)(B) (the “Letter of Transmittal”), and (c) the related Notice of Guaranteed Delivery, a copy of which is attached as Exhibit (a)(1)(C) (the “Notice of Guaranteed Delivery”) (which three documents, including any amendments or supplements thereto, collectively constitute the “Offer”).

 

As permitted by General Instruction G to Schedule TO, this Schedule TO is also Amendment No. 4 to the Schedule 13D filed by the Offeror, Maryport and Mr. Economou on August 25, 2023 (and amended on August 31, 2023, September 4, 2023 and September 15, 2023) in respect of the Common Shares.

 

All the information set forth in the Offer to Purchase, including Schedule I and Schedule II thereto, is incorporated by reference herein in response to Items 1 through 9 and Item 11 of this Schedule TO, and is supplemented by the information specifically provided in this Schedule TO.

 

Item 1.Summary Term Sheet. The information set forth in the section of the Offer to Purchase entitled “Summary Term Sheet” is incorporated herein by reference.

 

Item 2.Subject Company Information.

 

(a)       The name of the subject company is Performance Shipping Inc. The address of its principal executive offices is 373 Syngrou Avenue, 175 64 Palaio Faliro, Athens, Greece. Its telephone number is + 30-216-600-2400.

 

(b)       The information set forth in the sections of the Offer to Purchase entitled “Summary Term Sheet” and “Introduction” is incorporated herein by reference.

 

(c)       The information set forth in Section 6 of the Offer to Purchase entitled “Price Range of the Shares; Dividends” is incorporated herein by reference.

 

Item 3.Identity and Background of Filing Person.

 

This Schedule TO is filed by the Offeror, Maryport and George Economou. The information set forth in the section of the Offer to Purchase entitled “Summary Term Sheet”; Section 8 of the Offer to Purchase entitled “Certain Information Concerning the Offeror”; and Schedule I to the Offer to Purchase is incorporated herein by reference.

 

Item 4.Terms of the Transaction.

 

The information set forth in the Offer to Purchase is incorporated herein by reference.

 

Item 5.Past Contacts, Transactions, Negotiations and Agreements.

 

The information set forth in the section of the Offer to Purchase entitled “Introduction”; Section 8 of the Offer to Purchase entitled “Certain Information Concerning the Offeror”; Section 10 of the Offer to Purchase entitled “Background of the Offer; Past Contacts and Negotiations with the Company”; Section 11 of the Offer to Purchase entitled “Purpose of the Offer; Plans for the Company”; and Section 12 of the Offer to Purchase entitled “Certain Effects of the Offer” is incorporated herein by reference.

 

 

 

 

Item 6.Purposes of the Transaction and Plans or Proposals.

 

The information set forth in the section of the Offer to Purchase entitled “Introduction”; Section 11 of the Offer to Purchase entitled “Purpose of the Offer; Plans for the Company”; and Section 12 of the Offer to Purchase entitled “Certain Effects of the Offer” is incorporated herein by reference.

 

Item 7.Source and Amount of Funds or Other Consideration.

 

The information set forth in Section 9 of the Offer to Purchase entitled “Source and Amount of Funds” is incorporated herein by reference.

 

Item 8.Interest in the Securities of the Subject Company.

 

The information set forth in the section of the Offer to Purchase entitled “Introduction” and Section 8 of the Offer to Purchase entitled “Certain Information Concerning the Offeror” is incorporated herein by reference.

 

Item 9.Persons/Assets, Retained, Employed, Compensated or Used.

 

The information set forth in Section 10 of the Offer to Purchase entitled “Background of the Offer; Past Contacts and Negotiations with the Company”; Section 11 of the Offer to Purchase entitled “Purpose of the Offer; Plans for the Company”; Section 12 of the Offer to Purchase entitled “Certain Effects of the Offer” and Section 16 of the Offer to Purchase entitled “Fees and Expenses” is incorporated herein by reference.

 

Item 10.Financial Statements.

 

Not applicable. In accordance with the instructions to Item 10 of Schedule TO, the financial statements of the Offeror, Maryport and George Economou are not material because (a) the consideration offered consists solely of cash; (b) the Offer is not subject to any financing condition; and (c) the Offer is for all outstanding securities of the subject class.

 

Item 11.Additional Information.

 

(a)(1) The information set forth in Section 8 of the Offer to Purchase entitled “Certain Information Concerning the Offeror”; Section 10 of the Offer to Purchase entitled “Background of the Offer; Past Contacts and Negotiations with the Company”; and Section 12 of the Offer to Purchase entitled “Certain Effects of the Offer” is incorporated herein by reference.

 

(a)(2), (3) The information set forth in Section 14 of the Offer to Purchase entitled “Conditions of the Offer”, Section 15 of the Offer to Purchase entitled “Certain Legal Matters; Regulatory Approvals; Appraisal Rights”, and Section 18 of the Offer to Purchase entitled “Legal Proceedings” is incorporated herein by reference.

 

(a)(4) The information set forth in Section 12 of the Offer to Purchase entitled “Certain Effects of the Offer” is incorporated herein by reference.

 

(a)(5) The information set forth in Section 15 of the Offer to Purchase entitled “Certain Legal Matters; Regulatory Approvals; Appraisal Rights” and Section 18 of the Offer to Purchase entitled “Legal Proceedings” is incorporated herein by reference.

 

(c) The information set forth in the Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery is incorporated herein by reference.

 

 

 

 

 

Item 12.Exhibits.

 

Exhibit Description 
(a)(1)(A) Offer to Purchase (filed herewith)
(a)(1)(B) Form of Letter of Transmittal (filed herewith)
(a)(1)(C) Form of Notice of Guaranteed Delivery (filed herewith)
(a)(1)(D) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (filed herewith)
(a)(1)(E) Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (filed herewith)
(a)(1)(F) Form of Summary Advertisement as published in the New York Times on October 11, 2023 (filed herewith)
(b) Not applicable.
(d) Not applicable.
(g) Not applicable.
(h) Not applicable.
107 Filing Fee Table (filed herewith)

 

 

Item 13.Information Required by Schedule 13E-3

 

Not applicable.

 

 

 

 

SIGNATURES

 

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

 

Date: October 11, 2023

  

  SPHINX INVESTMENT CORP.
   
  By: Levante Services Limited
   
  By: /s/ Kleanthis Costa Spathias
  Kleanthis Costa Spathias
  Director
   
  MARYPORT NAVIGATION CORP.
   
  By: Levante Services Limited
   
  By: /s/ Kleanthis Costa Spathias
  Kleanthis Costa Spathias
  Director
   
  George Economou
   
  /s/ George Economou
  George Economou

 

 

 

 

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit

Description 

(a)(1)(A) Offer to Purchase (filed herewith)
(a)(1)(B) Form of Letter of Transmittal (filed herewith)
(a)(1)(C) Form of Notice of Guaranteed Delivery (filed herewith)
(a)(1)(D) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees  (filed herewith)
(a)(1)(E) Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (filed herewith)
(a)(1)(F) Form of Summary Advertisement as published in the New York Times on October 11, 2023  (filed herewith)
(b) Not applicable.
(d) Not applicable.
(g) Not applicable.
(h) Not applicable.
107 Filing Fee Table (filed herewith)

 

 

 

Exhibit (a)(1)(A)

 

Offer to Purchase for Cash

All of the Outstanding Common Shares

(Including the Associated Preferred Stock Purchase Rights)

of

Performance Shipping Inc.

for

$3.00 Per Common Share (including the Associated Preferred Stock Purchase Right)

by

Sphinx Investment Corp.

 

 

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 p.m., NEW YORK CITY TIME, ON NOVEMBER 8, 2023, UNLESS THE OFFER IS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE “EXPIRATION DATE and Time”).

 

THE OFFER IS BEING MADE BY Sphinx Investment Corp., A corporation ORGANIZED UNDER THE LAWS OF THE Republic of the Marshall Islands (THE “OFFEROR”), TO PURCHASE ALL OF THE ISSUED AND OUTSTANDING COMMON SHARES, PAR VALUE $0.01 PER SHARE (THE “COMMON SHARES”), OF Performance Shipping Inc., A corporation organized under the laws of the Republic of the Marshall Islands (THE “COMPANY” OR “PERFORMANCE”) (INCLUDING THE ASSOCIATED preferred stock purchase RIGHTS (THE “RIGHTS”, AND TOGETHER WITH THE COMMON SHARES, THE “SHARES”) ISSUED PURSUANT TO THE  Stockholders’ Rights Agreement, DATED as of December 20, 2021, BETWEEN THE COMPANY AND Computershare Inc. as Rights Agent (AS IT MAY BE AMENDED FROM TIME TO TIME, THE “RIGHTS AGREEMENT”), FOR $3.00 PER SHARE IN CASH, WITHOUT INTEREST, LESS ANY APPLICABLE WITHHOLDING TAXES (THE “OFFER PRICE”), UPON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE (as it may be amended or supplemented) AND IN THE RELATED LETTER OF TRANSMITTAL and Notice of Guaranteed Delivery (as each may be amended or supplemented) (this offer to purchase, TOGETHER with the related letter of transmittal and NOTICE OF GUARANTEED DELIVERY, COLLECTIVELY CONSTITUTE THE “OFFER”). UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER.

 

THE OFFEROR IS A WHOLLY-OWNED DIRECT SUBSIDIARY OF MARYPORT NAVIGATION CORP., a corporation organized under the laws of the Republic of Liberia (“MARYPORT”) AND AN AFFILIATE OF INVESTOR AND BUSINESSMAN MR. GEORGE ECONOMOU, A CITIZEN OF GREECE.

 

ON September 15, 2023 AND AGAIN ON SEPTEMBER 25, 2023, THE OFFEROR DELIVERED TO THE COMPANY A NOTICE OF (i) NOMINATION OF Ioannis (JOHN) Liveris (THE “SPHINX NOMINEE”) for election to THE COMPANY’S BOARD OF DIRECTORS (the “BOARD”) AS A CLASS II DIRECTOR AT THE next annual Meeting OF THE COMPANY’S SHAREHOLDERS (INCLUDING ANY and all adjournments, postponements, continuations or reschedulings thereof, or any other meetings of shareholders of the Company held in lieu thereof, THE “2024 SHAREHOLDER MEETING”) and (ii) the Offeror’s proposal to bring before the 2024 Shareholder Meeting (a) an advisory, nonbinding proposal that the Board be declassified prior to the first Annual Meeting of the Company’s shareholders to be held after the 2024 Shareholder Meeting (the “Declassification Proposal”), and (b) four advisory, non-binding proposals (each, a “Vote of No-Confidence Proposal”) that the Company’s shareholders request the resignation from the Board of each of Andreas Michalopoulos, Loïsa Ranunkel, Alex Papageorgiou and Mihalis Boutaris.

 

 

 

 

The Offer is not conditioned upon the Sphinx Nominee being elected to the Board or on the passage of the declassification proposal or any vote of non-confidence proposal. THE OFFER IS also NOT CONDITIONED UPON THE OFFEROR OBTAINING FINANCING OR UPON ANY DUE DILIGENCE REVIEW OF THE COMPANY.

 

THE OFFER IS SUBJECT TO THE SATISFACTION or waiver, at or before THE EXPIRATION DATE and time, OF CERTAIN CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE, INCLUDING, AMONG OTHER THINGS, the following conditions: (i) there shall have been validly tendered into the Offer and not withdrawn a number of Shares which, together with any Shares then-owned by the Offeror, represents at least a majority of the issued and outstanding Shares on a fully-diluted basis  (assuming the exercise or conversion of all then-outstanding options (as defined below) and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof) (the “Minimum Tender Condition”); (ii) either (a) the Rights Agreement shall have been validly terminated and the rights shall have been redeemed, and the Certificate of Designation, Preferences and Rights of Series A Participating Preferred Stock (such certificate, the “Series A Certificate” and such stock, the “Series a Preferred Stock”) shall have been validly cancelled and no Series A Preferred Stock shall be outstanding, or (b) the Rights Agreement shall have been otherwise made inapplicable to the Offer and the Offeror and its affiliates (the applicable of clause (a) and clause (b), the “Poison Pill Condition”); (iii) the Board shall have validly waived the applicability of Article K of the Company’s Amended and Restated Articles of Incorporation (“Article K”) to the purchase of the Shares by the Offeror in the Offer so that the provisions of Article K would not, at or at any time following consummation of the Offer, prohibit, restrict or apply to any “business combination”, as defined in Article K, involving the Company and the Offeror or any affiliate or associate of the Offeror (the “Article K Condition”); (iv) the Company shall not have any securities outstanding, authorized or proposed for issuance other than (a) the Shares, (b) authorized Series A Preferred Stock (none of which shall have been issued), (c) the number of shares of Series B Convertible Cumulative Perpetual Preferred Stock (the “Series B Preferred Stock”) outstanding as of the date immediately preceding the date of this Offer to Purchase, (d) the warrants outstanding as of the date immediately preceding the date of this Offer to Purchase (which shall not be exercisable in the aggregate for more than the 7,904,221 Shares disclosed by the Company in its Form 6-K on September 29, 2023, and the terms of which such warrants shall not have been amended on or after the date of this Offer to Purchase), (e) (1) the options to purchase Shares under the Company’s Amended and Restated 2015 Equity Incentive Plan (as such plan was in effect as of the date immediately preceding the date of this Offer to Purchase) (the “Equity Incentive Plan”) outstanding, and subject to the terms as in effect, as of the date immediately preceding the date of this Offer to Purchase, and (2) any options to purchase shares under the Equity Incentive Plan that are issued pursuant to the Equity Incentive Plan on or after the date of this Offer to Purchase in the ordinary and usual course of business, consistent with past practice (clause (1) and clause (2), collectively, the “Options”); and (f) Shares authorized for issuance but not yet subject to awards under the Equity Incentive Plan (none of which shall, on or after the date of this Offer to Purchase, have been issued other than in the ordinary and usual course of business, consistent with past practice) (the “Equity Condition”); (v) (a) Section 4 of the Certificate of Designation, preferences and rights of Series C Convertible Cumulative Redeemable Perpetual Preferred Stock (such certificate, the “Series C Certificate” and such stock, the “Series C Preferred Stock”) shall no longer be in effect, (b) any and all shares of the Series C Preferred Stock held as of the date of this Offer to Purchase by any of Mango Shipping Corp. (“mango”), Mitzela Corp. (“mitzela”), and Giannakis (John) Evangelou, Antonios Karavias, Christos Glavanis, and Reidar Brekke, or by any affiliate of any of the foregoing, and any and all Shares purported to have been issued pursuant to the purported conversion of any such shares of Series C Preferred Stock, shall have been validly cancelled and (c) no other shares of Series C Preferred Stock shall be outstanding (clause (a), clause (b) and clause (c), collectively, the “Series C Condition”); (vi) the Certificate of Designation, Preferences and Rights of Series B Preferred Stock (the “Series B Certificate”) either (a)  shall have been validly cancelled or (b) shall not have been amended (the applicable of clause (a) and clause (b), the “Series B Condition”), and (vii) the size of the Board shall remain fixed at five members, with at least three of such authorized five Board seats either (a) then-being occupied by persons having been designated by us, (b) then-being vacant, with the company having publicly committed on a binding basis to fill such vacancies with persons designated by us or (c) then-being occupied by directors who shall have publicly submitted their irrevocable resignations from the board, effective no later than the Offeror’s purchase of the Shares tendered in the Offer, which such resignations shall have been publicly accepted by the Company (with the Company having publicly committed on a binding basis to fill the resulting vacancies with persons designated by us) (the applicable of clause (a), clause (b) and clause (c), the “Board Representation Condition”). THE OFFER IS ALSO SUBJECT TO THE SATISFACTION OR WAIVER OF OTHER CUSTOMARY CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. SEE SECTION 14 — “CONDITIONS OF THE OFFER”. THE CONDITIONS TO THE OFFER MUST BE SATISFIED AT OR BEFORE THE EXPIRATION DATE AND TIME, as it may be extended.

 

 

 

 

THE COMPLETION OF THE OFFER, EITHER ALONE OR TOGETHER WITH ANY CHANGES IN THE COMPOSITION OF THE COMPANY MANAGEMENT TEAM, MAY TRIGGER “CHANGE OF CONTROL” PROVISIONS IN CERTAIN MATERIAL CONTRACTS THAT THE COMPANY HAS PUBLICLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), AND/OR OTHER COMPANY CONTRACTS THAT HAVE NOT BEEN MADE AVAILABLE TO THE OFFEROR. SEE SECTION 12 — “CERTAIN EFFECTS OF THE OFFER”. FOR THE AVOIDANCE OF DOUBT, NONE OF THE EFFECTS DESCRIBED THEREIN WILL AFFECT THE CONSUMMATION OF THE OFFER IF ALL THE CONDITIONS TO THE OFFER ARE SATISFIED.

 

THIS OFFER TO PURCHASE REFERS TO A PROXY SOLICITATION. THIS OFFER TO PURCHASE IS NOT INTENDED TO AND DOES NOT CONSTITUTE (I) A SOLICITATION OF ANY PROXY, CONSENT OR AUTHORIZATION FOR OR WITH RESPECT TO THE 2024 Shareholder Meeting OR ANY OTHER MEETING OF COMPANY SHAREHOLDERS OR (II) A SOLICITATION OF ANY CONSENT OR AUTHORIZATION IN THE ABSENCE OF ANY SUCH MEETING. ANY SUCH SOLICITATION Is being or WILL BE MADE ONLY PURSUANT TO PROXY OR CONSENT SOLICITATION MATERIALS THAT COMPLY WITH THE APPLICABLE PROVISIONS OF MARSHALL ISLANDS LAW. ShareHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT THAT IS BEING FURNISHED ON SCHEDULE 13D SUBSTANTIALLY CONCURRENTLY WITH THE FILING OF THIS OFFER TO PURCHASE AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME (THE “PROXY STATEMENT”) AND (as, WHEN AND IF THEY BECOME AVAILABLE) ANY OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY THE OFFEROR AND ITS AFFILIATES FROM THE SHAREHOLDERS OF THE COMPANY FOR USE AT the 2024 Shareholder Meeting, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A PROXY STATEMENT AND A FORM OF PROXY is BEING MADE AVAILABLE AT NO CHARGE AT THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV.

 

Subject to applicable law, the Offeror reserves the right to amend the Offer in any respect (including amending the Offer Price).

 

A summary of the principal terms of the Offer begins on page ii. You should read this entire Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery carefully before deciding whether to tender your Shares in the Offer. Questions and requests for assistance or additional copies of this Offer to Purchase, the Letter of Transmittal, and the Notice of Guaranteed Delivery may be directed to the information agent for the Offer, Innisfree M&A Incorporated (whom we refer to as the “Information Agent”) at the location and telephone number set forth on the back cover of this Offer to Purchase. Shareholders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Offer.

 

The Information Agent for this Offer is:

 

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, New York 10022

 

Shareholders May Call Toll Free: (877) 800-5190

Banks and Brokers May Call Collect: (212) 750-5833

 

October 11, 2023

 

 

 

 

IMPORTANT INFORMATION

 

If you are a holder of Shares, regardless of where you are located, and you desire to tender all or any portion of your Shares to the Offeror pursuant to the Offer, you must follow the applicable procedures set forth below:

 

·If you are a registered holder of Shares, you should:

 

(a) properly complete and sign the Letter of Transmittal for the Offer, which is enclosed with this Offer to Purchase and also available from the Information Agent, in accordance with the instructions contained in the Letter of Transmittal, and mail or deliver the Letter of Transmittal (or a manually executed facsimile thereof) and any other documents required by the Letter of Transmittal to Continental Stock Transfer & Trust Company, in its capacity as Tender Offer Agent for the Offer (the “Tender Offer Agent”), such that they are received by the Tender Offer Agent before the Expiration Date and Time, and

 

(b) (i) if your Shares are certificated, deliver the certificates for your Shares and, if certificates have been issued in respect of Rights prior to the Expiration Date and Time, certificates representing the associated Rights, to the Tender Offer Agent along with the Letter of Transmittal (or a manually executed facsimile thereof), such that they are received by the Tender Offer Agent before the Expiration Date and Time or (ii) if your Shares are held via book-entry, tender your Shares by book-entry transfer by following the procedures described in Section 2 — “PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES”, such that they are received by the Tender Offer Agent before the Expiration Date and Time.

 

Do not send your Shares or any other documents directly to the Offeror, Maryport, Mr. George Economou or the Information Agent.

 

·If you hold your Shares through a broker, dealer, commercial bank, trust company or other nominee, you must contact that institution and have that institution tender your Shares on your behalf, such that they are received by the Tender Offer Agent before the Expiration Date and Time. Such institutions are likely to establish cutoff times and dates earlier than the Expiration Date and Time to receive instructions to tender Shares into the Offer. You should contact your broker, dealer, commercial bank, trust company or other nominee to determine the cutoff time and date that is applicable to you. If you are unable to perform the procedures described above prior to the Expiration Date and Time, you may still be able to tender your Shares to the Offeror pursuant to the Offer by following the procedures for guaranteed delivery described in Section 2 — “PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES”.

 

* * * * *

 

Questions and requests for assistance regarding the Offer or any of the terms of the Offer may be directed to Innisfree M&A Incorporated, as Information Agent, at the address and telephone number set forth below. Requests for additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery, and other tender offer materials may be directed to the Information Agent. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance. Copies of these materials are also freely available at the website maintained by the SEC at http://www.sec.gov.

 

 

 

 

The Information Agent for the Offer is:

 

 

501 Madison Avenue, 20th Floor

New York, New York 10022

 

Shareholders May Call Toll Free: (877) 800-5190

 

Banks and Brokers May Call Collect: (212) 750-5833

 

This Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery contain important information, and you should read such documents carefully and in their entirety before making a decision with respect to the Offer. THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES COMMISSION OR THE SECURITIES REGULATORY AUTHORITIES OF ANY OTHER JURISDICTION, NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION OR THE SECURITIES REGULATORY AUTHORITIES OF ANY OTHER JURISDICTION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL OR the Notice of Guaranteed Delivery. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

THE OFFER DOES NOT CONSTITUTE AN OFFER TO BUY OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES OF THE COMPANY TO ANY PERSON IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.

 

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF THE OFFEROR OR ITS AFFILIATES NOT CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL and Notice of Guaranteed Delivery, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE OFFEROR OR ANY OF ITS AFFILIATES.

 

 

 

 

TABLE OF CONTENTS

 

Page

 

FORWARD-LOOKING STATEMENTS i
   
SUMMARY TERM SHEET ii
   
INTRODUCTION 1
   
THE TENDER OFFER 4
   
1. TERMS OF THE OFFER 4
   
2. PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES 6
   
3. WITHDRAWAL RIGHTS 10
   
4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES 11
   
5. TAX CONSIDERATIONS 12
   
6. PRICE RANGE OF THE SHARES; DIVIDENDS 14
   
7. CERTAIN INFORMATION CONCERNING THE COMPANY 15
   
8. CERTAIN INFORMATION CONCERNING THE OFFEROR. 16
   
9. SOURCE AND AMOUNT OF FUNDS 18
   
10. BACKGROUND OF THE OFFER; PAST CONTACTS OR NEGOTIATIONS WITH THE COMPANY 18
   
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY 20
   
12. CERTAIN EFFECTS OF THE OFFER 23
   
13. DIVIDENDS AND DISTRIBUTIONS 26
   
14. CONDITIONS OF THE OFFER 27
   
15. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS; APPRAISAL RIGHTS 29
   
16. FEES AND EXPENSES 30
   
17. MISCELLANEOUS 30
   
18. LEGAL PROCEEDINGS 31
   
SCHEDULE I I-1
   
SCHEDULE II II-1

 

 

 

 

FORWARD-LOOKING STATEMENTS

 

This Offer to Purchase contains certain forward-looking statements with respect to certain of the Offeror’s, Maryport’s and Mr. George Economou’s current expectations and projections about future events. These statements, which sometimes use words such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “project,” “strategy,” “opportunity,” “future,” “plan,” “will likely result,” “will,” “shall,” “may,” “aim,” “predict,” “should,” “would,” “continue,” and words of similar meaning and/or other similar expressions that are predictions of or indicate future events and/or future trends, reflect the beliefs and expectations of the applicable of the Offeror, Maryport and Mr. George Economou at the date of this Offer to Purchase and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement.

 

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Statements contained in this Offer to Purchase regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Except as required by applicable law, none of the Offeror, Maryport, Mr. George Economou or any of their respective affiliates assumes any responsibility or obligation to publicly correct, update or review any of the forward-looking statements contained herein. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Offer to Purchase.

 

i

 

 

SUMMARY TERM SHEET

 

The information contained herein is a summary only, is not complete, and is not meant as a substitute for the more detailed descriptions and information contained elsewhere in this Offer to Purchase and in the related Letter of Transmittal and Notice of Guaranteed Delivery. You are urged to read carefully, in its entirety, each of this Offer to Purchase and the related Letter of Transmittal and Notice of Guaranteed Delivery, which contain additional important information. The information concerning Performance contained herein and elsewhere in this Offer to Purchase has been taken from or is based upon publicly available documents or records of Performance on file and freely available from the SEC, or other public sources at the time of the filing of this Offer to Purchase. Questions or requests for assistance may be directed to the Information Agent at the address and telephone number set forth for the Information Agent on the back cover of this Offer to Purchase. Unless otherwise indicated in this Offer to Purchase or the context otherwise requires, all references in this Offer to Purchase to “we”, “our” or “us” refer to the Offeror.

 

Securities Sought:   All of the issued and outstanding Shares.  Each Share is comprised of one Common Share of Performance, par value $0.01, together with one associated Right issued pursuant to the Rights Agreement.
Offer Price Per Share:   $3.00 per Share, without interest, in cash, less any applicable withholding taxes (the “Offer Price”), for each Share validly tendered and accepted for payment in the Offer.
Scheduled Expiration Date and Time of the Offer:   11:59 P.M., New York City time, on November 8, 2023, unless extended.
Offeror:   Sphinx Investment Corp., a corporation organized under the laws of the Republic of the Marshall Islands.

 

The remainder of this Summary Term Sheet includes some of the questions that you, as a holder of Shares, may have about the Offer, along with answers to those questions. As stated in more detail above, we urge you to read carefully the remainder of this Offer to Purchase and the Letter of Transmittal and Notice of Guaranteed Delivery because the information in this summary term sheet is a summary only, is not complete, and is not meant as a substitute for the more detailed descriptions and information contained elsewhere in this Offer to Purchase and in the related Letter of Transmittal and Notice of Guaranteed Delivery.

 

WHO IS OFFERING TO BUY MY SHARES?

 

Sphinx Investment Corp., a corporation organized under the laws of the Republic of the Marshall Islands (the “Offeror”), is offering to buy your Shares. The Offeror is a wholly-owned direct subsidiary of Maryport Navigation Corp., a corporation organized under the laws of the Republic of Liberia (“Maryport”), which itself is directly wholly-owned by Mr. George Economou, who controls both of the Offeror and Maryport. The Offeror is the sole bidder in the Offer. The Offeror, Maryport and Mr. Economou beneficially own an aggregate of approximately 8.8% of the issued and outstanding Shares, based on the number of Shares publicly disclosed by the Company as outstanding as of September 29, 2023. See “Introduction” to this Offer to Purchase and Section 8 — “CERTAIN INFORMATION CONCERNING THE OFFEROR”.

 

ii

 

 

WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?

 

We are offering to purchase all of the issued and outstanding Shares. Each Share is comprised of one Common Share, par value $0.01, of Performance, together with one associated Right issued pursuant to the Rights Agreement. See the “Introduction” and Section 1 — “TERMS OF THE OFFER”.

 

According to the Company’s Form 6-K filed with the SEC on September 29, 2023, there were  11,734,683 Common Shares outstanding as of September 29, 2023.

 

WHAT ARE THE ASSOCIATED RIGHTS?

 

The associated Rights are preferred stock purchase rights issued pursuant to the Rights Agreement, dated December 20, 2021, between Performance and Computershare Inc., as Rights Agent, that are issued and outstanding. The Rights were issued to all of the holders of Common Shares, but (insofar as we are aware based on the Company’s current disclosures) currently are not represented by separate certificates. A tender of your Shares will include a tender of both your Common Shares and the associated Rights, unless certificates representing the Rights have been issued as provided in the Rights Agreement prior to the completion of the Offer, in which circumstance your Rights must be validly tendered alongside your Common Shares in order for you to validly tender into the Offer.

 

WHAT ARE YOUR PURPOSES FOR THE OFFER AND PLANS FOR THE COMPANY AFTER THE OFFER IS COMPLETED?

 

The Offeror believes that the Shares are currently undervalued due in part to the Company’s current dual class capital structure. The purpose of the Offer is to acquire at least a majority, and up to 100%, of the issued and outstanding Shares on a fully-diluted basis  (assuming the exercise or conversion of all then-outstanding Options and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof), which would following the consummation of the Offer represent at least a majority of the voting power of the Company securities, and the Shares will be the sole Company securities outstanding having the right or purporting to have the right to vote with respect to the election of directors. Following the successful consummation of the Offer (assuming it is consummated), the Offeror, Maryport and Mr. George Economou will have acquired beneficial ownership of a majority of the issued and outstanding Shares on a fully-diluted basis and will have designated a majority of the Board, and may be deemed to control the Company.

 

If, and to the extent that, the Offeror acquires control of the Company, the Offeror intends to conduct a review, subject to applicable law, of the Company and its assets, corporate structure, capitalization, operations, properties, policies, management and personnel and consider and determine what, if any, changes would be desirable in light of the circumstances which then exist, which may include selling all or any portion of the Shares acquired by the Offeror in the Offer and/or causing the Company to sell all or any portion of the assets of the Company or conduct one or more strategic transactions. In addition, if the Offeror acquires control of the Company, the Offeror expects to take further steps to improve the governance and management of the Company, which may among other things include making changes to the composition of the management team of the Company and/or making changes to the organizational documents of the Company, including, without limitation, the Company’s Amended and Restated Articles of Incorporation (the “Articles”) and the Amended and Restated Bylaws (the “Bylaws”). See also the immediately following Q&A entitled “Mr. George Economou directly or indirectly owns or controls other companies in the shipping industry. If the Offer is consummated, will the Company or any Company assets be integrated or combined with or sold to any such other shipping companies?”

 

iii

 

 

If we consummate the Offer, the Offeror further expects to seek to implement the declassification of the Board and to seek to effect the removal and replacement of all current members of the Board remaining on the Board. See Section 11 — “PURPOSE OF THE OFFER; PLANS FOR THE COMPANY”.

 

If we consummate the Offer, depending upon the number of Shares we acquire and other factors relevant to our equity ownership in the Company, we may in our discretion (but do not undertake any obligation to), subsequent to completion of the Offer, seek to acquire additional Shares through open market purchases, privately negotiated transactions, further tender or exchange offers or other transactions or a combination of the foregoing on such terms and at such prices as we shall determine, which may be more or less favorable than those of the Offer. We also reserve the right to dispose of the Shares that we have acquired and/or may acquire at any time for any reason or no reason, subject to any applicable legal restrictions.

 

The Offer is subject to the satisfaction or waiver, at or before the Expiration Date and Time, of, the following conditions, along with the other conditions described in Section 14 of the Offer to Purchase (such other conditions described in Section 14 of the Offer to Purchase, together with the conditions set forth below, the “Offer Conditions”): (i) there shall have been validly tendered into the Offer and not withdrawn a number of Shares which, together with any Shares then-owned by the Offeror, represents at least a majority of the issued and outstanding Shares on a fully-diluted basis  (assuming the exercise or conversion of all then-outstanding Options and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof) (i.e., the Minimum Tender Condition); (ii) either (a) the Rights Agreement shall have been validly terminated and the Rights shall have been redeemed, and the Series A Certificate shall have been validly cancelled and no Series A Preferred Stock shall be outstanding, or (b) the Rights Agreement shall have been otherwise made inapplicable to the Offer and the Offeror and its affiliates (i.e.,, the Poison Pill Condition); (iii) the Board shall have validly waived the applicability of Article K to the purchase of the Shares by the Offeror in the Offer so that the provisions of Article K would not, at or at any time following consummation of the Offer, prohibit, restrict or apply to any “business combination”, as defined in Article K, involving the Company and the Offeror or any affiliate or associate of the Offeror (i.e., the Article K Condition); (iv) the Company shall not have any securities outstanding, authorized or proposed for issuance other than (a) the Shares, (b) authorized Series A Preferred Stock (none of which shall have been issued), (c) the number of shares of Series B Preferred Stock outstanding as of the date immediately preceding the date of this Offer to Purchase, (d) the warrants outstanding as of the date immediately preceding the date of this Offer to Purchase (which shall not be exercisable in the aggregate for more than the 7,904,221 Shares disclosed by the Company in its Form 6-K on September 29, 2023, and the terms of which such warrants shall not have been amended on or after the date of this Offer to Purchase), (e) (1) the Options to purchase Shares under the Equity Incentive Plan (as such plan was in effect as of the date immediately preceding the date of this Offer to Purchase) outstanding, and subject to the terms as in effect, as of the date immediately preceding the date of this Offer to Purchase, and (2) any Options to purchase shares under the Equity Incentive Plan that are issued pursuant to the Equity Incentive Plan on or after the date of this Offer to Purchase in the ordinary and usual course of business, consistent with past practice; and (f) Shares authorized for issuance but not yet subject to awards under the Equity Incentive Plan (none of which shall, on or after the date of this Offer to Purchase, have been issued other than in the ordinary and usual course of business, consistent with past practice) (i.e., the Equity Condition); (v) (a) Section 4 of the Series C Certificate shall no longer be in effect, (b) any and all shares of the Series C Preferred Stock held as of the date of this Offer to Purchase by any of Mango, Mitzela, and Giannakis (John) Evangelou, Antonios Karavias, Christos Glavanis, and Reidar Brekke, or by any affiliate of any of the foregoing, and any and all Shares purported to have been issued pursuant to the purported conversion of any such shares of Series C Preferred Stock, shall have been validly cancelled and (c) no other shares of Series C Preferred Stock shall be outstanding (i.e., the Series C Condition); (vi) the Series B Certificate either (a)  shall have been validly cancelled or (b) shall not have been amended (i.e., the Series B Condition), and (vii) the size of the Board shall remain fixed at five members, with at least three of such authorized five Board seats either (a) then-being occupied by persons having been designated by us, (b) then-being vacant, with the company having publicly committed on a binding basis to fill such vacancies with persons designated by us or (c) then-being occupied by directors who shall have publicly submitted their irrevocable resignations from the Board, effective no later than the Offeror’s purchase of the Shares tendered in the Offer, which such resignations shall have been publicly accepted by the Company (with the Company having publicly committed on a binding basis to fill the resulting vacancies with persons designated by us) (i.e., the Board Representation Condition).

 

iv

 

 

The Offer Conditions must be satisfied at or before the Expiration Date and Time, as it may be extended, or waived by the Offeror.

 

See Section 11 — “PURPOSE OF THE OFFER; PLANS FOR THE COMPANY” and Section 14 — “CONDITIONS OF THE OFFER”.

 

MR. GEORGE ECONOMOU DIRECTLY OR INDIRECTLY OWNS OR CONTROLS OTHER COMPANIES IN THE SHIPPING INDUSTRY. IF THE OFFER IS CONSUMMATED, WILL THE COMPANY OR ANY COMPANY ASSETS BE INTEGRATED OR COMBINED WITH OR SOLD TO ANY OF SUCH OTHER SHIPPING COMPANIES?

 

None of the Offeror, Maryport or Mr. George Economou has made any final decision as to whether, if the Offer is consummated, the Company or any Company assets will be transferred to or combined or integrated with any other assets directly or indirectly owned or controlled by any of them; however, they reserve the right to do so in accordance with applicable law. Whether or not the Offeror, Maryport or Mr. George Economou would determine to do so would depend, among other things, on their assessment of the outcome of the post-Offer review of the Company and its assets, corporate structure, capitalization, operations, properties, policies, management and personnel referred to above. See the Q&A directly above entitled “What are your purposes for the Offer and plans for the Company after the Offer is completed?”

 

HOW MUCH ARE YOU OFFERING TO PAY, AND WHAT IS THE FORM OF PAYMENT?

 

We are offering to pay $3.00 per Share, without interest, in cash, less any applicable withholding taxes, for each Share validly tendered and accepted for payment in the Offer. See the “Introduction” and Section 11 — “PURPOSE OF THE OFFER; PLANS FOR THE COMPANY”.

 

IS THERE AN AGREEMENT GOVERNING THE OFFER?

 

No, there is no agreement governing the Offer.

 

WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?

 

On October 10, 2023, the last full trading day before the commencement of the Offer, the closing price of the Shares on the Nasdaq Capital Market was $1.68 per Share. The Offer represents a premium of 78.6% over the Company’s closing share price on October 10, 2023. We advise you to obtain a recent quotation for the Shares and further consult with your financial and other advisors in deciding whether to tender your Shares. See Section 6 — “PRICE RANGE OF THE SHARES; DIVIDENDS”.

 

WILL I HAVE TO PAY ANY FEES OR COMMISSIONS?

 

If you are the record owner of your Shares and you tender your Shares to the Offeror in the Offer, you will not have to pay brokerage fees or similar expenses to tender your Shares. If you own or hold your Shares through a broker, dealer, commercial bank, trust company or other nominee, and your broker, dealer, commercial bank, trust company or other nominee tenders your Shares on your behalf, your broker, dealer, commercial bank, trust company or other nominee may charge you a fee for doing so, which may reduce the net proceeds you would receive from tendering into the Offer. You should consult your broker, dealer, commercial bank, trust company or other nominee to determine whether any charges will apply. See “Introduction” to this Offer to Purchase.

 

v

 

 

WHAT DOES THE BOARD OF DIRECTORS OF PERFORMANCE THINK OF THE OFFER?

 

As of the date of this Offer to Purchase, the Board has not made a recommendation regarding the Offer.

 

The Board is required by law to file with the SEC and provide to shareholders, within ten business days from the date of this Offer to Purchase, a Schedule 14D-9 advising shareholders of whether it recommends acceptance or rejection of the Offer, expresses no opinion and remains neutral toward the Offer, or is unable to take a position with respect to the Offer. The Schedule 14D-9 will also contain other important information, and the Offeror recommends that holders of Shares review it carefully when it becomes available.

 

While we would hope that the Board would assess and form a recommendation with respect to this Offer in good faith and in a manner consistent with their fiduciary duties to the holders of the Shares, taken as a whole, there can be no assurances that they will do so.

 

DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?

 

Yes. The Offeror has sufficient funds, from its working capital and from funds that will be provided to it from Mr. George Economou’s existing liquid personal resources, to purchase all of the Shares validly tendered into the Offer. See Section 9 — “SOURCE AND AMOUNT OF FUNDS”.

 

IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?

 

We do not think our financial condition is relevant to your decision whether to tender in the Offer because (i) the Offer is being made for all outstanding Shares (other than the Shares beneficially owned by the Offeror and its affiliates), (ii)  you will receive payment solely in cash for any Shares that you tender into the Offer, (iii) as stated above, we have all of the financial resources necessary to consummate the Offer, and (iv) the Offer is not conditioned upon the Offeror obtaining financing. See Section  9 — “SOURCE AND AMOUNT OF FUNDS”.

 

DO YOU INTEND TO CONDUCT A PROXY SOLICITATION TO REPLACE ANY MEMBERS OF THE PERFORMANCE BOARD OF DIRECTORS OR TO PASS ANY OTHER PROPOSALS?

 

Yes. As disclosed by the Offeror, Maryport and Mr. George Economou in the Proxy Statement that is being furnished on Schedule 13D substantially concurrently with the filing of this Offer to Purchase, we are currently soliciting proxies (the “Proxy Solicitation”) for the election of the Sphinx Nominee to the Board at the upcoming 2024 Shareholder Meeting. If elected to the Board, the Sphinx Nominee would succeed Aliki Paliou, chairperson of the Board and sole shareholder of Mango, the Company’s controlling shareholder, whose current term on the Board expires at the 2024 Shareholder Meeting. We are also currently soliciting proxies in favor of the Declassification Proposal and the Vote of No Confidence Proposals.

 

vi

 

 

If the Offer is consummated, the Offeror will have acquired at least a majority of the issued and outstanding Shares on a fully diluted basis  (assuming the exercise or conversion of all then-outstanding Options and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof), which will represent at least a majority of the voting power of the Company securities, and the Shares will be the sole Company securities outstanding having the right or purporting to have the right to vote with respect to the election of directors. If the Offer is consummated prior to the record date established for the 2024 Shareholder Meeting, the Offeror intends to vote all of its Shares acquired in the Offer in favor of the election to the Board of the Sphinx Nominee and in favor of the Declassification Proposal and each Vote of No-Confidence Proposal. If the Offer is consummated, and irrespective of whether such consummation occurs before or after the record date for the 2024 Shareholder Meeting, the Offeror expects to seek to implement the declassification of the Board and seek to effect the removal and replacement of any members of the current Board then-remaining on the Board.

 

Currently, the Company has a classified Board, which is divided into three classes, with two directors serving in each of Class I and Class III, and one director serving in Class II. The term of a Class II director expires at the 2024 Shareholder Meeting. Under the Articles, a director may be removed only for cause and only by the affirmative vote of the holders of at least two-thirds of the Common Shares.  Any vacancies in the Board for any reason, and any created directorships resulting from any increase in the number of directors, may be filled by the vote of not less than a majority of the members of the Board then in office.

 

The affirmative vote of the holders of two-thirds or more of the outstanding Common Shares entitled to vote generally in the election of directors is required to amend, alter, change or repeal Article I of the Articles relating to the structure and composition of the Board, including the declassification of the Board.

 

Neither this Offer to Purchase nor the Offer constitutes (i) a solicitation of any proxy, consent or authorization for or with respect to the 2024 Shareholder Meeting or any other meeting of Company shareholders or (ii) a solicitation of any consent or authorization in the absence of any such meeting. Any such solicitation is being or will be made only pursuant to separate proxy or consent solicitation materials that comply with the applicable provisions of Marshall Islands law. Shareholders are advised to read the Proxy Statement that is being furnished on Schedule 13D substantially concurrently with the filing of this Offer to Purchase and (as, when and if they become available) other documents related to the solicitation of proxies by the Offeror and its affiliates from the shareholders of the Company for use at the 2024 Shareholder Meeting, because they will contain important information. A Proxy Statement and a form of proxy is being made available at no charge at the SEC’s website at http://www.sec.gov.

 

IS THE OFFER CONDITIONED UPON THE SPHINX NOMINEE BEING ELECTED TO THE BOARD?

 

No.  The Offer is not conditioned upon the Sphinx Nominee being elected to the Board. The Offer and the nomination of the Sphinx Nominee for election to the Board are independent of each other.

 

IS THE OFFER CONDITIONED UPON THE PASSAGE OF ANY OTHER SHAREHOLDER PROPOSAL EXPECTED TO BE MADE BY OFFEROR AT THE 2024 Shareholder MEETING?

 

No.  The Offer is not conditioned upon the passage of any other shareholder proposal expected to be made by the Offeror at the 2024 Shareholder Meeting, including, without limitation, the Declassification Proposal or any Vote of No-Confidence Proposal. The Offer and such shareholder proposals are independent of each other.

 

vii

 

 

WHAT ARE THE MOST SIGNIFICANT OFFER CONDITIONS?

 

·We are not obligated to purchase any Shares unless there shall have been validly tendered into the Offer and not withdrawn a number of Shares which, together with any Shares then-owned by the Offeror, represents at least a majority of the issued and outstanding Shares on a fully-diluted basis  (assuming the exercise or conversion of all then-outstanding Options and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof) (referred to as the Minimum Tender Condition).

 

·We are not obligated to purchase any Shares unless either (a) the Rights Agreement shall have been validly terminated and the Rights shall have been redeemed, and the Series A Certificate shall have been validly cancelled and no Series A Preferred Stock shall be outstanding, or (b) the Rights Agreement shall have been otherwise made inapplicable to the Offer and the Offeror and its affiliates (the applicable of clause (a) and clause (b) is referred to as the Poison Pill Condition). THIS CONDITION IS SOLELY WITHIN THE CONTROL OF THE COMPANY AND ITS BOARD.

 

·We are not obligated to purchase any Shares unless the Board shall have validly waived the applicability of Article K to the purchase of the Shares by the Offeror in the Offer so that the provisions of Article K would not, at or at any time following consummation of the Offer, prohibit, restrict or apply to any “business combination”, as defined in Article K, involving the Company and the Offeror or any affiliate or associate of the Offeror (referred to as the Article K Condition). THIS CONDITION IS SOLELY WITHIN THE CONTROL OF THE COMPANY AND ITS BOARD.

 

·We are not obligated to purchase any Shares unless the Company shall not have any securities outstanding, authorized or proposed for issuance other than (a) the Shares, (b) authorized Series A Preferred Stock (none of which shall have been issued), (c) the number of shares of Series B Preferred Stock outstanding as of the date immediately preceding the date of this Offer to Purchase, (d) the warrants outstanding as of the date immediately preceding the date of this Offer to Purchase (which shall not be exercisable in the aggregate for more than the 7,904,221 Shares disclosed by the Company in its Form 6-K on September 29, 2023, and the terms of which such warrants shall not have been amended on or after the date of this Offer to Purchase), (e) (1) the Options to purchase Shares under the Equity Incentive Plan (as such plan was in effect as of the date immediately preceding the date of this Offer to Purchase) outstanding, and subject to the terms as in effect, as of the date immediately preceding the date of this Offer to Purchase, and (2) any Options to purchase shares under the Equity Incentive Plan that are issued pursuant to the Equity Incentive Plan on or after the date of this Offer to Purchase in the ordinary and usual course of business, consistent with past practice; and (f) Shares authorized for issuance but not yet subject to awards under the Equity Incentive Plan (none of which shall, on or after the date of this Offer to Purchase, have been issued other than in the ordinary and usual course of business, consistent with past practice) (referred to as the Equity Condition). THIS CONDITION IS SOLELY WITHIN THE CONTROL OF THE COMPANY AND ITS BOARD.

 

·We are not obligated to purchase any Shares unless (a) Section 4 of the Series C Certificate shall no longer be in effect, (b) any and all shares of the Series C Preferred Stock held as of the date of this Offer to Purchase by any of Mango, Mitzela, and Giannakis (John) Evangelou, Antonios Karavias, Christos Glavanis, and Reidar Brekke, or by any affiliate of any of the foregoing, and any and all Shares purported to have been issued pursuant to the purported conversion of any such shares of Series C Preferred Stock, shall have been validly cancelled and (c) no other shares of Series C Preferred Stock shall be outstanding (clause (a), clause (b) and clause (c), collectively, referred to as the Series C Condition). THIS CONDITION IS WITHIN THE CONTROL OF THE COMPANY AND ITS BOARD.

 

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·We are not obligated to purchase any Shares unless the Series B Certificate either (a)  shall have been validly cancelled or (b) shall not have been amended (the applicable of clause (a) and clause (b), are referred to as the Series B Condition). THIS CONDITION IS SOLELY WITHIN THE CONTROL OF THE COMPANY.

 

·We are not obligated to purchase any Shares unless the size of the Board shall remain fixed at five members, with at least three of such authorized five Board seats either (a) then-being occupied by persons having been designated by us, (b) then-being vacant, with the company having publicly committed on a binding basis to fill such vacancies with persons designated by us or (c) then-being occupied by directors who shall have publicly submitted their irrevocable resignations from the board, effective no later than the Offeror’s purchase of the Shares tendered in the Offer, which such resignations shall have been publicly accepted by the Company (with the Company having publicly committed on a binding basis to fill the resulting vacancies with persons designated by us) (the applicable of clause (a), clause (b) and clause (c), collectively, the Board Representation Condition). THIS CONDITION IS SOLELY WITHIN THE CONTROL OF THE COMPANY AND ITS BOARD.

 

The Offer is also subject to other customary conditions; however, the Offer is not conditioned upon our obtaining financing or any due diligence review of the Company. See Section 14 — “CONDITIONS OF THE OFFER”.

 

The Offer Conditions must be satisfied at or before the Expiration Date and Time, as it may be extended.

 

Does the Offeror require any approvals from any governmental authorities in order to acquire the Shares pursuant to the Offer?

 

The Offeror is not aware of any approvals from any governmental authorities being required in order to acquire the Shares pursuant to the Offer. However, as of the date of this Offer to Purchase, the Company has not made available to the Offeror the non-public information that the Offeror would require in order to definitely confirm that no such approvals are required. If we later determine that any such approval is required, we reserve the right to amend this Offer accordingly.

 

Are there any limitations on the number of Shares that may be validly tendered in the Offer?

 

No.  There are no limitations on the number of Shares that may be validly tendered into the Offer.

 

IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?

 

If all of the Offer Conditions as set forth in Section 14 — “CONDITIONS OF THE OFFER” are satisfied or waived and we consummate the Offer, the number of shareholders and the number of Shares that are held by the public will be reduced and such number of shareholders and such number of Shares may be so small that there may no longer be an active public trading market (or, possibly, there may not be any public trading market) for the Shares, and to the extent that any such trading market exists, it may have more limited liquidity. Also, it is possible that Performance may no longer be required to make filings with the SEC or otherwise comply with the rules of the SEC relating to publicly held companies, and it may determine not to do so.

 

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If we consummate the Offer, the Offeror will have designated a majority of the members of the Board and have acquired at least a majority of the issued on a fully diluted basis  (assuming the exercise or conversion of all then-outstanding Options and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof), which will represent at least a majority of the voting power of the Company securities, and the Shares will be the sole Company securities outstanding having the right or purporting to have the right to vote with respect to the election of directors. As a result, we may be determined to have acquired control of the Company, and the ability of the shareholders other than us to exercise influence over Company decision-making may be limited. If, and to the extent that, the Offeror acquires control of the Company, the Offeror intends to conduct a review, subject to applicable law, of the Company and its assets, corporate structure, capitalization, operations, properties, policies, management and personnel and consider and determine what, if any, changes would be desirable in light of the circumstances which then exist, which may include selling all or any portion of the Shares acquired by the Offeror in the Offer and/or causing the Company to sell all or any portion of the assets of the Company or conduct one or more strategic transactions. In addition, if the Offeror acquires control of the Company, the Offeror expects to take further steps to improve the governance and management of the Company, which may among other things include making changes to the composition of the management team of the Company and/or making changes to the organizational documents of the Company, including, without limitation, the Articles and the Bylaws.

 

In addition, if the Offeror and its affiliates acquire a majority of the voting power of the Company’s outstanding securities, such control, among other things, would allow the Offeror and its affiliates to determine the outcome of the election of directors, subject to the provisions of the Articles which provide for a classified Board divided into three classes (to the extent that the Company continues to have a classified Board). If the Offer is consummated, the Offeror expects to seek to implement the declassification of the Board and to seek to effect the removal and replacement of any current members of the Board who are then-remaining on the Board.

 

Further, if the Offeror acquires at least two thirds of the issued and outstanding Common Shares  (assuming the exercise or conversion of all then-outstanding Options and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof) and therefore at least two-thirds of the voting power of the Company securities, the Offeror may be able to effect or determine the outcome of additional actions (either alone or, in some cases, with the cooperation of the Board), including, without limitation, the removal of any director or the entire Board for cause, and the amendment, alteration, change or repeal of Article I of the Articles relating to the structure and composition of the Board.

 

See the “Introduction” and Section 12 — “CERTAIN EFFECTS OF THE OFFER”. See also the Q&As above entitled “What are your purposes for the Offer and plans for the Company after the Offer is completed?” and “Mr. George Economou directly or indirectly owns or controls other companies in the shipping industry. If the Offer is consummated, will the Company or any Company assets be integrated or combined with or sold to any such other shipping companies?”

 

HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?

 

You will have until 11:59 P.M. midnight, New York City time, on November 8, 2023, unless the Offer is extended, to tender your Shares in the Offer. If you cannot deliver everything that is required to tender your Shares by that time, you may be able to use a guaranteed delivery procedure, which is described later in this Offer to Purchase. See Section 1 — “TERMS OF THE OFFER” and Section 2 — “PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES”.

 

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CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?

 

We may, in our sole discretion, extend the Offer from time to time and for any reason. For example, if any of the Offer Conditions have not been satisfied or waived, we could extend the Offer until such time as they are satisfied or waived.

 

In addition, if we make a material change to the terms of the Offer or the information concerning the Offer or if we waive a material condition of the Offer (as may be permitted under applicable law, including the applicable federal securities laws and the rules and regulations of the SEC thereunder (the “Securities Laws”), we will extend the Expiration Date and Time to the extent and for the period required by applicable law, including the Securities Laws.

 

See Section 1 — “TERMS OF THE OFFER”.

 

WILL YOU PROVIDE A SUBSEQUENT OFFERING PERIOD?

 

We may elect to provide a “subsequent offering period” in accordance with Rule 14d-11 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). A subsequent offering period, if one is provided, will be an additional period of time beginning after we have purchased Shares validly tendered during the Offer, during which shareholders may tender, but not withdraw, their Shares and receive the Offer Price. We do not currently intend to include a subsequent offering period, although we reserve the right to do so. See Section 1 — “TERMS OF THE OFFER”.

 

HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED OR IF A SUBSEQUENT OFFERING PERIOD IS PROVIDED?

 

If we extend the Offer or provide a subsequent offering period, we will inform Continental Stock Transfer & Trust Company (which is the Tender Offer Agent for the Offer) of that fact, and will make a public announcement not later than 9:00 a.m., New York City time, on the next business day after the day on which the Offer was scheduled to expire. See Section 1 — “TERMS OF THE OFFER”.

 

ARE THERE ANY CONSEQUENCES OF THE OFFER ON ANY MATERIAL CONTRACTS OF THE COMPANY?

 

Certain of the material contracts that the Company has publicly filed with the SEC (including, without limitation, (i) the Equity Incentive Plan; (ii) the Secured Loan Agreement, dated June 30, 2022, by and among Arno Shipping Company Inc. and Maloelap Shipping Company Inc., as borrowers, and Piraeus Bank S.A., as lender; (iii) the Loan Agreement dated November 1, 2022, by and between Alpha Bank S.A., as lender, and Garu Shipping Company Inc., as borrower; (iv) the Secured Loan Agreement, dated November 25, 2022 by and among Toka Shipping Company Inc. and Bock Shipping Company Inc., as borrowers, and Piraeus Bank S.A., as lender; and (v) the Loan Agreement dated December 7, 2022, by and between Alpha Bank S.A., as lender, and Arbar Shipping Company Inc., as borrower) contain provisions that may be triggered upon a “change of control” or “change in control” of the Company as such terms are defined in the applicable underlying material contracts. Further, Company contracts that are not filed with the SEC, which have not been made available to us, may also contain provisions that may be triggered upon a “change of control” or “change in control” of the Company. While the consummation of the Offer may trigger any of the foregoing provisions, the Offer is not conditioned upon obtaining any approvals, consents or waivers with respect to these material contracts. We also expect that the Company has or may enter into contracts with other companies controlled or influenced by members if the Paliou family, and if the Offer is successful, it is possible that the Company or such other companies may seek to terminate, cease performing under or determine not to renew any such contracts. We also cannot predict whether a successful Offer would adversely affect any of the Company’s other existing or prospective commercial relationships. See Section 12 — “CERTAIN EFFECTS OF THE OFFER”.

 

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IF THE OFFER IS CONSUMMATED, WILL PERFORMANCE CONTINUE AS A PUBLICLY LISTED COMPANY?

 

If all of the Offer Conditions as set forth in Section 14 — “CONDITIONS OF THE OFFER” are satisfied or waived by the Expiration Date and Time and we consummate the Offer, the number of shareholders and the number of Shares that are held by the public will be reduced and such number of shareholders and such number of Shares may be so small that there may no longer be an active public trading market (or, possibly, there may not be any public trading market) for the Shares, and to the extent that any such trading market exists, it may have more limited liquidity. Also, it is possible that the Company may no longer be required to make filings with the SEC or otherwise comply with the rules of the SEC relating to publicly held companies. In the event that the Company determines following a successful consummation of the Offer to engage in any strategic transaction (including without limitation as a result of the strategic review we expect to conduct following a successful Offer), there can be no guarantees that the Company would continue to be publicly-traded following any such strategic transaction. See Section 12 — “CERTAIN EFFECTS OF THE OFFER”.

 

ARE APPRAISAL RIGHTS AVAILABLE IN THE OFFER?

 

Appraisal rights are not available in the Offer. See Section 15 — “CERTAIN LEGAL MATTERS; REGULATORY APPROVALS; APPRAISAL RIGHTS”.

 

HOW DO I TENDER MY SHARES?

 

To tender your Shares, you must deliver the certificates representing your Shares and, if certificates have been issued in respect of Rights prior to the Expiration Date and Time, certificates representing the associated Rights, together with a completed Letter of Transmittal, to Continental Stock Transfer & Trust Company, the Tender Offer Agent for the Offer, before the Expiration Date and Time. If your Shares are held in “street name” through a broker, dealer, commercial bank, trust company or other nominee, the Shares can be tendered by your bank, broker or other nominee through The Depository Trust Company (“DTC”). If you cannot get any document or instrument that is required to be delivered to the Tender Offer Agent by the Expiration Date and Time, you may get additional time to do so by having a broker, a bank or other fiduciary that is a member of the Securities Transfer Agents Medallion Program or other eligible institution guarantee that the missing items will be received by the Tender Offer Agent within two Nasdaq trading days after the date of execution of the Notice of Guaranteed Delivery. For the tender to be valid, however, the Tender Offer Agent must receive the missing items within that two-trading-day period. See Section 2 — “PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES”.

 

IF I TENDER MY SHARES, WHEN AND HOW WILL I GET PAID?

 

If all of the Offer Conditions as set forth in Section 14 — “CONDITIONS OF THE OFFER” are satisfied or waived at or before the Expiration Date and Time and we consummate the Offer and accept your Shares for payment, we will pay you an amount equal to the number of Shares you validly tendered multiplied by the Offer Price per Share. See Section 1 — “TERMS OF THE OFFER” and Section 4 — “ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES”.

 

The Offeror expects to pay for the Shares validly tendered into the Offer promptly after the Expiration Date and Time, assuming all of the Offer Conditions have been satisfied or waived by such time. Payment for Shares validly tendered and accepted for payment pursuant to the Offer will be made by deposit of the aggregate Offer Price for all Shares validly tendered into and not withdrawn from the Offer with the Tender Offer Agent, which will act as your agent for the purpose of (i) receiving payments from us for your tendered Shares, as applicable, and (ii) transmitting such payments to you. If you are a record holder of the Shares, you will receive a check from the Tender Offer Agent, acting as your agent, for an amount equal to the aggregate Offer Price of your validly tendered Shares, as applicable, that we have accepted for payment. If you hold the Shares through a broker, dealer, commercial bank, trust company or other nominee, the Tender Offer Agent, acting as your agent, will credit DTC, for allocation by DTC to your broker, dealer, commercial bank, trust company or other nominee, with an amount equal to the aggregate Offer Price of your validly tendered Shares that we have accepted for payment.

 

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Under no circumstances will interest be paid by us on the purchase price for the Shares pursuant to the Offer, regardless of any delay in making such payments. We expressly reserve the right to delay acceptance for payment of, or payment for, the Shares in order to comply, in whole or in part, with any applicable laws or regulations. Any such delays, if they occur, will be effected in compliance with Section 14e-1(c) under the Exchange Act, which obligates a bidder to pay for or return tendered securities promptly after the termination or withdrawal of such bidder’s offer. All holders of Shares that validly tender, and do not withdraw, their Shares at or before the Expiration Date and Time, as it may be extended, will receive the same price per Share, regardless of whether they tender before or during any extension period of the Offer.

 

UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?

 

Tenders of Shares made pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and Time. If all of the Offer Conditions have been satisfied as of the Expiration Date and Time, the Offeror will deposit with the Tender Offer Agent the proceeds required to consummate the Offer and will promptly accept for payment and pay for all validly tendered Shares that have not been withdrawn. See Section 1 — “TERMS OF THE OFFER” and Section 3 — “WITHDRAWAL RIGHTS”.

 

HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?

 

To withdraw Shares, you must deliver a written notice of withdrawal, or a facsimile of one, with the required information to the Tender Offer Agent while you still have the right to withdraw the Shares. See Section 3 — “WITHDRAWAL RIGHTS”.

 

DOES THE COMPANY CONTROL ANY OF THE CONDITIONS OF THE OFFER?

 

Yes. The Company has the ability to satisfy or frustrate the satisfaction of certain conditions of the Offer, including the Poison Pill Condition, the Article K Condition, the Equity Condition, the Series C Condition, the Series B Condition and the Board Representation Condition. As an example, if the Board does not validly waive the applicability of Article K to the purchase of the Shares by the Offeror in the Offer, then the Company will cause the Article K Condition to not be capable of being satisfied and will thereby deprive the Company’s shareholders of the ability to participate in the Offer. See Section 11 — “PURPOSE OF THE OFFER; PLANS FOR THE COMPANY”.

 

While we would hope that the Board would in good faith and in a manner consistent with their fiduciary duties to the holders of the Shares, taken as a whole, seek to cause the satisfaction of, and not seek to frustrate the satisfaction of, the conditions to the Offer, there can be no assurances that they will do so.

 

WHAT ARE THE TAX CONSEQUENCES OF THE OFFER?

 

If you are a U.S. holder, the receipt of the Offer Price pursuant to the Offer will be a taxable transaction for U.S. federal income tax purposes, and may also be a taxable transaction under applicable state, local, or foreign income or other tax laws. Shareholders are urged to consult with their own tax advisors to determine the particular tax consequences to them (including the application and effect of any state, local or foreign income and other tax laws) of the Offer. For a more detailed explanation of the U.S. federal income tax considerations and the Marshall Islands tax considerations relevant to the Offer, see Section 5 — “TAX CONSIDERATIONS”.

 

WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?

 

You can call Innisfree M&A Incorporated, our Information Agent for the Offer, toll free at (877) 800-5190. See the back cover of this Offer to Purchase.

 

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To the Holders of Common Shares and Associated Preferred Stock Purchase Rights of Performance Shipping Inc.:

 

INTRODUCTION

 

Sphinx Investment Corp. (THE “OFFEROR”) IS HEREBY MAKING AN OFFER TO PURCHASE ALL OF THE ISSUED AND OUTSTANDING COMMON SHARES, PAR VALUE $0.01 PER SHARE (THE “COMMON SHARES”), OF Performance SHIPPING INC. (“PERFORMANCE” OR THE “COMPANY”) (INCLUDING THE ASSOCIATED preferred stock purchase RIGHTS (THE “RIGHTS”, AND TOGETHER WITH THE COMMON SHARES, THE “SHARES”) ISSUED PURSUANT TO THE  Stockholders’ Rights Agreement, DATED as of December 20, 2021, BETWEEN THE COMPANY AND Computershare Inc. as Rights Agent (AS IT MAY BE AMENDED FROM TIME TO TIME, THE “RIGHTS AGREEMENT”) FOR $3.00 PER SHARE IN CASH, WITHOUT INTEREST, LESS ANY APPLICABLE WITHHOLDING TAXES, UPON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE AND IN THE RELATED LETTER OF TRANSMITTAL and Notice of Guaranteed Delivery (,WHICH, TOGETHER WITH ANY AMENDMENTS OR SUPPLEMENTS HERETO OR THERETO, COLLECTIVELY CONSTITUTE THE “OFFER”).

 

THE OFFEROR IS A WHOLLY-OWNED DIRECT SUBSIDIARY OF MARYPORT NAVIGATION CORP., a corporation organized under the laws of the Republic of Liberia (“MARYPORT”) AND AN AFFILIATE OF MR. GEORGE ECONOMOU.

 

ON September 15, 2023 AND AGAIN ON SEPTEMBER 25, 2023, THE OFFEROR DELIVERED TO THE COMPANY A NOTICE OF (i) NOMINATION OF Ioannis (JOHN) Liveris (THE “SPHINX NOMINEE”) for election to THE COMPANY’S BOARD OF DIRECTORS (the “BOARD”) AS A CLASS II DIRECTOR AT THE next annual Meeting OF THE COMPANY’S SHAREHOLDERS (INCLUDING ANY and all adjournments, postponements, continuations or reschedulings thereof, or any other meetings of shareholders of the Company held in lieu thereof, THE “2024 SHAREHOLDER MEETING”) and (ii) the Offeror’s proposal to bring before the 2024 Shareholder Meeting (a) an advisory, nonbinding proposal that the Board be declassified prior to the first Annual Meeting of the Company’s shareholders to be held after the 2024 Shareholder Meeting (the “Declassification Proposal”), and (b) four advisory, non-binding proposals (each, a “Vote of No-Confidence Proposal”) that the Company’s shareholders request the resignation from the Board of each of Andreas Michalopoulos, Loïsa Ranunkel, Alex Papageorgiou and Mihalis Boutaris.

 

The Offer is not conditioned upon the Sphinx Nominee being elected to the Board OR ON THE PASSAGE OF THE DECLASSIFICATION PROPOSAL OR ANY VOTE OF NO-CONFIDENCE PROPOSAL. THE OFFER IS also NOT CONDITIONED UPON THE OFFEROR OBTAINING FINANCING OR UPON ANY DUE DILIGENCE REVIEW OF THE COMPANY.

 

The Offer is subject to the satisfaction or waiver, at or before 11:59 p.m., New York City time, on November 8, 2023 (the “Expiration Date and Time”) (unless the Offeror shall have extended the period during which the Offer is open, in which event “Expiration Date and Time” shall mean the date and time at which the Offer, as so extended by the Offeror, shall expire) of certain Offer Conditions set forth in this Offer to Purchase, including, among other conditions, that:

 

·there shall have been validly tendered into the Offer and not withdrawn a number of Shares which, together with any Shares then-owned by the Offeror, represents at least a majority of the issued and outstanding Shares on a fully-diluted basis  (assuming the exercise or conversion of all then-outstanding Options (as defined below) and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof) (the “Minimum Tender Condition”);

 

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·either (a) the Rights Agreement shall have been validly terminated and the Rights shall have been redeemed, and the Certificate of Designation, Preferences and Rights of Series A Participating Preferred Stock (such certificate, the “Series A Certificate” and such stock, the “Series A Preferred Stock”) shall have been validly cancelled and no Series A Preferred Stock shall be outstanding, or (b) the Rights Agreement shall have been otherwise made inapplicable to the Offer and the Offeror and its affiliates (the applicable of clause (a) and clause (b), the “Poison Pill Condition”);

 

·the Board shall have validly waived the applicability of Article K of the Company’s Amended and Restated Articles of Incorporation (“Article K”) to the purchase of the Shares by the Offeror in the Offer so that the provisions of Article K would not, at or at any time following consummation of the Offer, prohibit, restrict or apply to any “business combination”, as defined in Article K, involving the Company and the Offeror or any affiliate or associate of the Offeror (the “Article K Condition”);

 

·the Company shall not have any securities outstanding, authorized or proposed for issuance other than (a) the Shares, (b) authorized Series A Preferred Stock (none of which shall have been issued), (c) the number of shares of Series B Convertible Cumulative Perpetual Preferred Stock (the “Series B Preferred Stock”) outstanding as of the date immediately preceding the date of this Offer to Purchase, (d) the warrants outstanding as of the date immediately preceding the date of this Offer to Purchase (which shall not be exercisable in the aggregate for more than the 7,904,221 Shares disclosed by the Company in its Form 6-K on September 29, 2023, and the terms of which such warrants shall not have been amended on or after the date of this Offer to Purchase), (e) (1) the options to purchase Shares under the Company’s Amended and Restated 2015 Equity Incentive Plan (as such plan was in effect as of the date immediately preceding the date of this Offer to Purchase) (the “Equity Incentive Plan”) outstanding, and subject to the terms as in effect, as of the date immediately preceding the date of this Offer to Purchase, and (2) any options to purchase shares under the Equity Incentive Plan that are issued pursuant to the Equity Incentive Plan on or after the date of this Offer to Purchase in the ordinary and usual course of business, consistent with past practice (clause (1) and clause (2), collectively, the “Options”); and (f) Shares authorized for issuance but not yet subject to awards under the Equity Incentive Plan (none of which shall, on or after the date of this Offer to Purchase, have been issued other than in the ordinary and usual course of business, consistent with past practice) (the “Equity Condition”);

 

·(a) Section 4 of the Certificate of Designation, preferences and rights of Series C Convertible Cumulative Redeemable Perpetual Preferred Stock (such certificate, the “Series C Certificate” and such stock, the “Series C Preferred Stock”) shall no longer be in effect, (b) any and all shares of the Series C Preferred Stock held as of the date of this Offer to Purchase by any of Mango Shipping Corp. (“Mango”), Mitzela Corp. (“Mitzela”), and Giannakis (John) Evangelou, Antonios Karavias, Christos Glavanis, and Reidar Brekke, or by any affiliate of any of the foregoing, and any and all Shares purported to have been issued pursuant to the purported conversion of any such shares of Series C Preferred Stock, shall have been validly cancelled and (c) no other shares of Series C Preferred Stock shall be outstanding (clause (a), clause (b) and clause (c), collectively, the “Series C Condition”);

 

·the Certificate of Designation, Preferences and Rights of Series B Preferred Stock (the “Series B Certificate”) either (a)  shall have been validly cancelled or (b) shall not have been amended (the applicable of clause (a) and clause (b), the “Series B Condition”); and

 

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·the size of the Board shall remain fixed at five members, with at least three of such authorized five Board seats either (a) then-being occupied by persons having been designated by us, (b) then-being vacant, with the company having publicly committed on a binding basis to fill such vacancies with persons designated by us or (c) then-being occupied by directors who shall have publicly submitted their irrevocable resignations from the Board, effective no later than the Offeror’s purchase of the Shares tendered in the Offer, which such resignations shall have been publicly accepted by the Company (with the Company having publicly committed on a binding basis to fill the resulting vacancies with persons designated by us) (the applicable of clause (a), clause (b) and clause (c), the “Board Representation Condition”).

 

The Offer is also subject to other customary conditions. See Section 14 — “CONDITIONS OF THE OFFER”.

 

The Offer Conditions must be satisfied at or before the Expiration Date and Time, as it may be extended.

 

According to the Company’s Form 6-K filed with the Securities and Exchange Commission (the “SEC”) on September 29, 2023, there were  11,734,683 Common Shares outstanding as of September 29, 2023. See Section 12 — “CERTAIN EFFECTS OF THE OFFER”.

 

The material U.S. federal income tax consequences and the Republic of the Marshall Islands tax consequences of the sale of Shares pursuant to the Offer are described in Section 5 — “TAX CONSIDERATIONS”.

 

Shareholders of record who hold Shares registered in their own name and tender their Shares directly to the Tender Offer Agent will not be obligated to pay brokerage fees, commissions, solicitation fees or, subject to Instruction 13 of the Letter of Transmittal, stock transfer taxes, if any, on the purchase of the Shares by the Offeror pursuant to the Offer. Shareholders who hold their Shares through a broker, dealer, commercial bank, trust company or other nominee should check with such institution as to whether they will be charged any service fees. The Offeror will pay all charges and expenses of Innisfree M&A Incorporated (the “Information Agent”) and Continental Stock Transfer & Trust Company (the “Tender Offer Agent”) incurred in connection with the Offer. See Section 16 — “FEES AND EXPENSES”.

 

THIS OFFER TO PURCHASE REFERS TO A PROXY SOLICITATION. THIS OFFER TO PURCHASE IS NOT INTENDED TO AND DOES NOT CONSTITUTE (I) A SOLICITATION OF ANY PROXY, CONSENT OR AUTHORIZATION FOR OR WITH RESPECT TO THE 2024 Shareholder Meeting OR ANY OTHER MEETING OF COMPANY SHAREHOLDERS OR (II) A SOLICITATION OF ANY CONSENT OR AUTHORIZATION IN THE ABSENCE OF ANY SUCH MEETING. ANY SUCH SOLICITATION Is being or WILL BE MADE ONLY PURSUANT TO PROXY OR CONSENT SOLICITATION MATERIALS THAT COMPLY WITH THE APPLICABLE PROVISIONS OF MARSHALL ISLANDS LAW. ShareHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT THAT IS BEING FURNISHED ON SCHEDULE 13D SUBSTANTIALLY CONCURRENTLY WITH THE FILING OF THIS OFFER TO PURCHASE AND (as, WHEN AND IF THEY BECOME AVAILABLE) OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY THE OFFEROR AND ITS AFFILIATES FROM THE SHAREHOLDERS OF THE COMPANY FOR USE AT the 2024 Shareholder Meeting, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A PROXY STATEMENT AND A FORM OF PROXY is BEING MADE AVAILABLE AT NO CHARGE AT THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV.

 

The Shares are registered under the Exchange Act. Accordingly, the Company is subject to the informational filing requirements of the Exchange Act and, in accordance therewith, is obligated to file periodic reports and other information with the SEC relating to its business, financial condition and other matters. The SEC maintains a website, and the reports and other information filed by the Company with the SEC may be accessed electronically at http://www.sec.gov.

 

Except as otherwise stated in this Offer to Purchase, the information concerning the Company contained herein has been taken from or is based upon reports and other documents on file with the SEC or otherwise publicly available.

 

THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL and Notice of Guaranteed Delivery CONTAIN IMPORTANT INFORMATION AND YOU SHOULD READ THEM IN THEIR ENTIRETY BEFORE MAKING ANY DECISION WITH RESPECT TO THE OFFER.

 

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THE TENDER OFFER

 

1.             TERMS OF THE OFFER.

 

In this Offer, the Offeror is offering to purchase all of the issued and outstanding Common Shares (including the associated Rights) of Performance for $3.00 per Share in cash, without interest, less any applicable withholding taxes (the “Offer Price”), upon the terms and subject to the conditions of the Offer.

 

Upon the terms and subject to the conditions of the Offer (including for the avoidance of doubt, if the Offer is extended or amended, the terms and conditions of such extension or amendment), the Offeror will accept for payment and pay for all Shares validly tendered into the Offer prior to the Expiration Date and Time and not properly withdrawn as permitted under Section 3 — “WITHDRAWAL RIGHTS”. Under no circumstances will interest be paid by us on the purchase price for Shares pursuant to the Offer, regardless of any delay in making such payments

 

The Offer is conditioned upon the satisfaction at or before the Expiration Date and Time of the Minimum Tender Condition, the Poison Pill Condition, the Article K Condition, the Equity Condition, the Series C Condition, the Series B Condition, the Board Representation Condition, and the other Offer Conditions set forth in Section 14 — “CONDITIONS OF THE OFFER”.

 

The Offeror may waive any or all of the conditions to its obligation to purchase Shares pursuant to the Offer, to the extent permitted by applicable law, including the requirements of Rule 14d-4 under the Exchange Act. The Offer is currently scheduled to expire at 11:59 p.m., New York City time, on November 8, 2023.

 

To the extent permitted by applicable law (including the requirements of Rule 14d-4 under the Exchange Act and other Securities Laws), the Offeror expressly reserves the right (but in no event shall be obligated), in its sole discretion, to waive any or all of the Offer Conditions.

 

If, on the Expiration Date and Time, any or all of the Offer Conditions have not been satisfied or waived, the Offeror reserves the right in its sole discretion, subject to complying with applicable Securities Laws and the rules and regulations of the Nasdaq Stock Market, to: (i) decline to purchase any of the Shares tendered, terminate the Offer and return all tendered Shares to tendering shareholders; (ii) waive any of the Offer Conditions (subject to the applicable law and terms of Section 14 hereof) and purchase all Shares validly tendered; (iii) extend the Offer and, subject to the right of shareholders to withdraw Shares until the Expiration Date and Time (and the right of the Offeror to decline to purchase any Shares to the extent permitted by the terms of the Offer and applicable law), retain the Shares that have been validly tendered during the period or periods for which the Offer is extended (which may delay acceptance for payment of, and the payment for, any Shares); and/or (iv) amend the Offer, including by increasing the consideration offered, in each case, by giving oral or written notice of such waiver, extension or amendment to the Tender Offer Agent and making a public announcement thereof. In addition, the Offeror will extend the Offer for any period required by applicable law, including the Securities Laws. The rights reserved by the Offeror in the preceding paragraphs are in addition to the Offeror’s rights pursuant to Section 14 hereof.

 

Rule 14e-1(c) under the Exchange Act requires the Offeror to promptly pay the consideration offered or return the securities deposited by or on behalf of shareholders promptly after the termination or withdrawal of the Offer.

 

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We may elect to provide a “subsequent offering period” in accordance with Rule 14d-11 under the Exchange Act. A subsequent offering period, if one is provided, will be an additional period of time beginning after we have purchased Shares validly tendered during the Offer, during which shareholders may tender, but not withdraw, their Shares and receive the Offer Price. We do not currently intend to include a subsequent offering period, although we reserve the right to do so.

 

If the Offeror makes a material change to the terms of the Offer or the information concerning the Offer or if the Offeror waives a material condition of the Offer, the Offeror will disseminate additional tender offer materials and extend the Offer if and to the extent required by Rules 14d-4(d)(1), 14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances, including the relative materiality of the terms or information changes. In the SEC’s view, an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to shareholders, and with respect to a change in price or a change in percentage of securities sought, a minimum 10 business day period generally is required to allow for adequate dissemination to shareholders and investor response. Accordingly, if, prior to the Expiration Date and Time, the Offeror decreases the number of Shares being sought or increases the consideration offered pursuant to the Offer, and if the Offer is scheduled to expire at any time earlier than the tenth business day from the date that notice of such increase or decrease is first published, sent or given to shareholders, the Offer will be extended at least until the expiration of such tenth business day.

 

If, at or before the Expiration Date and Time, the Offeror increases the consideration being paid for Shares accepted for payment in the Offer, such increased consideration will be paid to all shareholders whose Shares are purchased in the Offer, whether or not such Shares were tendered before the announcement of the increase in consideration.

 

Any extension, waiver or amendment of the Offer will be followed as promptly as practicable by public announcement thereof, such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date and Time. Subject to applicable law (including Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act, which require that material changes be promptly disseminated to shareholders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which the Offeror may choose to make any public announcement, the Offeror shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to a national news service. As used in this Offer to Purchase, “business day” means any day other than a Saturday, Sunday or a federal holiday, and shall consist of the time period from 12:01 a.m. through 12:00 midnight, New York City time.

 

A request is being made to the Company for the use of its shareholder list and security position listing for the purposes of disseminating the Offer to Purchase (and the related Letter of Transmittal and other relevant materials) to the holders of Shares. Upon compliance by the Company with such request, this Offer to Purchase, the related Letter of Transmittal and Notice of Guaranteed Delivery and other relevant materials will be mailed to registered holders of Shares and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the shareholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing, for subsequent transmittal to beneficial owners of Shares.

 

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2.             PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES.

 

VALID TENDERS. Except as set forth below, in order for the Shares to be validly tendered pursuant to the Offer, the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent’s Message (as hereinafter defined) in connection with a book-entry transfer of Shares, and any other documents required by the Letter of Transmittal, must be received by the Tender Offer Agent at its address set forth on the back cover of this Offer to Purchase prior to the Expiration Date and Time, and either (i) certificates representing tendered Shares and, if certificates have been issued in respect of Rights prior to the Expiration Date and Time, certificates representing the associated Rights, must be received by the Tender Offer Agent, or such Shares must be tendered pursuant to the procedure for book-entry transfer set forth below (and confirmation of receipt of such delivery must be received by the Tender Offer Agent), in each case prior to the Expiration Date and Time, or (ii) the guaranteed delivery procedures set forth below must be complied with. No alternative, conditional or contingent tenders will be accepted.

 

SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of Transmittal (i) if the Letter of Transmittal is signed by the holder(s) of record (which term, for purposes of this Section 2, includes any participant in DTC’s system whose name appears on a security position listing as the owner of the Shares) of the Shares tendered therewith, unless such holder or holders have completed either the box entitled “Special Delivery Instructions” or the box entitled “Special Payment Instructions” on the Letter of Transmittal or (ii) if the Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of the Securities Transfer Agents Medallion Program or any other “eligible guarantor institution”, as such term is defined in Rule 17Ad-15 of the Exchange Act (each, an “Eligible Institution” and collectively, “Eligible Institutions”). In all other cases, all signatures on a Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a certificate for Shares is issued in the name of a person or persons other than the signers of the Letter of Transmittal, or if payment is to be made or delivered to, or a certificate for Shares not accepted for payment or not tendered is to be issued in, the name(s) of a person or persons other than the holder(s) of record, then the Share certificate must be endorsed or accompanied by appropriate duly executed stock powers, in either case signed exactly as the name(s) of the holder(s) of record that appear on the Share certificate, with the signature(s) on such Share certificate or stock powers guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See Instructions 1 and 6 of the Letter of Transmittal.

 

If a certificate representing Shares or a certificate, if any, representing the associated Rights, is registered in the name of a person other than the signatory of the Letter of Transmittal (or a facsimile thereof), or if payment is to be made, or Shares not accepted for payment or not tendered are to be registered in the name of a person other than the registered holder, the applicable certificate must be endorsed or accompanied by an appropriate stock power, in either case signed exactly as the name(s) of the registered holder(s) appears on the certificate, with the signature(s) on the certificate or stock power guaranteed by an Eligible Institution. If the Letter of Transmittal, any certificates or stock powers are signed or endorsed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and, unless waived by the Offeror, proper evidence satisfactory to the Offeror of their authority to so act must be submitted. See Instruction 6 of the Letter of Transmittal.

 

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BOOK-ENTRY TRANSFER. The Tender Offer Agent will establish accounts with respect to the Shares at DTC for purposes of the Offer within two (2) business days after the date of this Offer to Purchase, and any financial institution that is a participant in DTC’s system may make book-entry delivery of the Shares by causing DTC to transfer such Shares into the Tender Offer Agent’s account in accordance with DTC’s procedure for such transfer. However, although delivery of Shares may be effected through book-entry transfer at DTC, a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or an Agent’s Message and any other required documents, must, in any case, be transmitted to and received by the Tender Offer Agent at its address set forth on the back cover of this Offer to Purchase prior to the Expiration Date and Time or the guaranteed delivery procedures described below must be complied with. The term “Agent’s Message” means a message transmitted through electronic means by DTC to, and received by, the Tender Offer Agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares that such participant has received, and agrees to be bound by, the terms of the Letter of Transmittal. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC’S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE TENDER OFFER AGENT.

 

GUARANTEED DELIVERY. If a shareholder desires to tender Shares pursuant to the Offer and such shareholder’s certificates representing Shares and, if certificates have been issued in respect of Rights prior to the Expiration Date and Time, certificates representing the associated Rights, are not immediately available (or the procedures for book-entry transfer cannot be completed on a timely basis) or time will not permit all required documents to reach the Tender Offer Agent prior to the Expiration Date and Time, such Shares may nevertheless be validly tendered, PROVIDED that all of the following conditions are satisfied:

 

(a)such tender is made by or through an Eligible Institution;

 

(b)the Tender Offer Agent receives, prior to the Expiration Date and Time, a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Offeror; and

 

(c)the certificates representing all tendered Shares and, if certificates have been issued in respect of Rights prior to the Expiration Date and Time, certificates representing the associated Rights, in proper form for transfer (or confirmation of a book-entry transfer of such Shares into the Tender Offer Agent’s account at DTC), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees (or, in connection with a book-entry transfer, an Agent’s Message) and any other documents required by the Letter of Transmittal are received by the Tender Offer Agent within two trading days after the date of such Notice of Guaranteed Delivery. A “trading day” is any day on which the Nasdaq Capital Market is open for business.

 

The Notice of Guaranteed Delivery may be delivered by hand, or may be transmitted by facsimile transmission or mail, to the Tender Offer Agent and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery.

 

DO NOT DELIVER ANY DOCUMENTS TO THE OFFEROR, MARYPORT, MR. GEORGE ECONOMOU, THE INFORMATION AGENT OR DTC. DELIVERY OF THE LETTER OF TRANSMITTAL OR ANY OTHER REQUIRED DOCUMENTS TO OFFEROR, MARYPORT, MR. GEORGE ECONOMOU OR THE INFORMATION AGENT OR DTC DOES NOT CONSTITUTE A VALID TENDER.

 

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DETERMINATION OF VALIDITY. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tendered Shares will be determined by the Offeror, in its sole discretion. The Offeror reserves the absolute right to reject any or all tenders of any Shares that it determines are not in appropriate form or the acceptance for payment of or payment for which may, in the opinion of the Offeror’s counsel, be unlawful. The Offeror also reserves the absolute right to waive any defect or irregularity in any tender with respect to any particular Shares or any particular shareholder. No tender of Shares will be deemed to have been validly made until all defects or irregularities relating thereto have been expressly waived or cured to the satisfaction of the Offeror. None of the Offeror, the Tender Offer Agent, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders, nor shall any of them incur any liability for failure to give any such notification.

 

BACKUP WITHHOLDING. Under U.S. federal income tax laws, backup withholding will apply to any payments made pursuant to the Offer unless you provide the Tender Offer Agent with your correct taxpayer identification number and certify that you are not subject to such backup withholding by completing the IRS Form W-9 included in the Letter of Transmittal. Currently, the backup withholding rate is 24%. If you are a non-resident alien or foreign entity not subject to backup withholding, you must give the Tender Offer Agent a completed applicable Form W-8 before receipt of any payment. See Section 5 — “TAX CONSIDERATIONS”.

 

OTHER REQUIREMENTS. By executing the Letter of Transmittal as set forth above, a tendering shareholder irrevocably appoints designees of the Offeror as such shareholder’s proxy, in the manner set forth in the Letter of Transmittal, with full power of substitution, to the full extent of such shareholder’s rights with respect to the Shares tendered by such shareholder and accepted for payment by the Offeror (and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after the date of this Offer to Purchase), effective if, when and to the extent that the Offeror accepts such Shares for payment pursuant to the Offer. Upon such acceptance for payment, all prior proxies given by such shareholder with respect to such Shares or other securities accepted for payment will, without further action, be revoked, and no subsequent proxies may be given by such shareholder nor any subsequent written consents executed (and, if given or executed, will not be deemed effective). Such designees of the Offeror will, with respect to such Shares and other securities or rights issuable in respect thereof, be empowered to exercise all voting and other rights of such shareholder as it, in its sole discretion, may deem proper in respect of any annual, special or adjourned meeting of the Company’s shareholders, action by written consent in lieu of any such meeting or otherwise.

 

The Offeror’s acceptance for payment of Shares validly tendered pursuant to any of the procedures described above will constitute a binding agreement between the tendering shareholder and the Offeror upon the terms and subject to the conditions of the Offer.

 

Representations and Agreements With Respect to Tenders. Each holder of Shares, by tendering its Shares in the Offer, irrevocably undertakes, represents, warrants and agrees (so as to bind the holder and the holder’s personal representatives, heirs, successors and assigns) as follows:

 

(a)that such holder has the full power and authority to tender and assign the Shares tendered, and that our acceptance for payment of the Shares tendered pursuant to the Offer will constitute a binding agreement containing the terms and conditions of the Offer, as between us and the tendering holder;

 

(b)that the tendering of Shares, and the execution of the Letter of Transmittal or the Notice of Guaranteed Delivery, as applicable, shall constitute: (i) an acceptance of the Offer in respect of the number of Shares identified therein, (ii) an undertaking to execute all further documents and give all further assurances which may be required to enable us to obtain the full benefit and to obtain title to the tendered Shares, and (iii) that each such holder’s acceptance shall be irrevocable, subject to the accepting holder not having withdrawn such acceptance;

 

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(c)that the Shares in respect to which the Offer is accepted or deemed to be accepted are fully paid and non-assessable, sold free from all liens, equities, charges and encumbrances and together with all rights attaching thereto, including voting rights and the right to all dividends or other distributions having a record date after such Shares have been accepted for purchase in accordance herewith;

 

(d)that the tendering of such holder’s Shares, and the execution of the Letter of Transmittal or the Notice of Guaranteed Delivery, as applicable, constitutes the irrevocable appointment of the Tender Offer Agent and its directors and agents as such holder’s attorney-in-fact and an irrevocable instruction to the attorney-in-fact to complete and execute any and all form(s) of transfer and other document(s) as may be necessary or required, at the discretion of the attorney-in-fact, in order to transfer those Shares validly tendered and not withdrawn, in our name or in the name of such other person(s) as the Offeror may direct, and to deliver such form(s) of transfer and other document(s) as may be required, together with other document(s) of title relating to such Shares, and to do all such other acts and things as may in the opinion of the attorney-in-fact be necessary or required for the purpose of, or in connection with, the acceptance of the Offer, and to vest title to the Shares in us or our nominees as aforesaid;

 

(e)that the tendering of such holder’s Shares, and the execution of the Letter of Transmittal or the Notice of Guaranteed Delivery, as applicable, constitutes, subject to the tendering holder of the Shares not having withdrawn its tender, an irrevocable authority and request (i) to the Offeror and its directors, officers and agents, to cause the registration of the transfer of the Shares pursuant to the Offer and the delivery of any and all document(s) of title in respect thereof to us or our nominees and (ii) to us or our agents, to act upon any instructions with regard to notices and payments that have been recorded in the records of the Offeror regarding such holder’s Shares;

 

(f)that this Section, “Procedure for Accepting the Offer and Tendering Shares”, shall be incorporated in and form part of the Letter of Transmittal, as applicable; and

 

(g)that such holder agrees to ratify each and every act or thing which may be done or effected by us or any of our directors or agents in the proper exercise of the power and authorities of any such person.

 

THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES AND, IF CERTIFICATES HAVE BEEN ISSUED IN RESPECT OF RIGHTS PRIOR TO THE EXPIRATION DATE AND TIME, CERTIFICATES REPRESENTING THE ASSOCIATED RIGHTS, IS AT THE OPTION AND SOLE RISK OF THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE TENDER OFFER AGENT. REGISTERED MAIL WITH RETURN RECEIPT REQUESTED OR OVERNIGHT COURIER, PROPERLY INSURED, IS RECOMMENDED FOR CERTIFICATES EVIDENCING SHARES SENT BY MAIL. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

 

If you are in any doubt about the procedure for tendering Shares into the Offer, please contact the Information Agent at its address and telephone number, as they appear on the back cover of this Offer to Purchase.

 

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3.             WITHDRAWAL RIGHTS.

 

Tenders of Shares made pursuant to the Offer are irrevocable except as otherwise provided in this Section 3 – WITHDRAWAL RIGHTS.

 

A shareholder may withdraw Shares that it has previously tendered pursuant to the Offer pursuant to the procedures set forth below at any time prior to the Expiration Date and Time. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn after December 10, 2023, which is the 60th day from the commencement of the Offer, unless such Shares have already been accepted for payment by the Offeror pursuant to the Offer. If all of the Offer Conditions have been satisfied as of the Expiration Date and Time, the Offeror will deposit with the Tender Offer Agent the proceeds required to consummate the Offer and will promptly accept for payment and pay for all validly tendered Shares that have not been withdrawn. For a withdrawal of Shares tendered to be effective, a written, telegraphic, or facsimile transmission notice of withdrawal must be timely received by the Tender Offer Agent at its address set forth on the back cover of this Offer to Purchase. Any notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name(s) in which the certificate(s) representing such Shares and the certificate(s), if any, representing the associated Rights, are registered, if different from that of the person who tendered such Shares. If certificates for Shares or the certificates, if any, for the associated Rights to be withdrawn have been delivered or otherwise identified to the Tender Offer Agent, the name of the registered holder and the serial numbers shown on the particular certificates evidencing such Shares or associated Rights, as applicable, to be withdrawn must also be furnished to the Tender Offer Agent prior to the physical release of the Shares to be withdrawn. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (except in the case of Shares tendered by an Eligible Institution). If Shares have been tendered pursuant to the procedures for book-entry transfer set forth in Section 2, any notice of withdrawal must specify the name and number of the account at DTC to be credited with such withdrawn Shares and must otherwise comply with DTC’s procedures.

 

Withdrawals of tenders of Shares may not be rescinded, and Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by again following the procedures described in Section 2 — “PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES” at any time prior to the Expiration Date and Time.

 

All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Offeror, in its sole discretion. None of the Offeror, the Tender Offer Agent, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal, nor shall any of them incur any liability for failure to give any such notification.

 

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4.             ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.

 

Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), the Offeror will accept for payment and will pay for Shares validly tendered into the Offer prior to the Expiration Date and Time and not properly withdrawn, promptly after the Expiration Date and Time. The Offeror expects to pay for the Shares validly tendered into the Offer promptly after the Expiration Date and Time, assuming all of the Offer Conditions have been satisfied or waived by such time. Payment for Shares validly tendered and accepted for payment pursuant to the Offer will be made by deposit of the aggregate Offer Price for all Shares validly tendered into and not withdrawn from the Offer with the Tender Offer Agent, which will act as your agent for the purpose of (i) receiving payments from us for your tendered Shares, as applicable, and (ii) transmitting such payments to you. If you are a holder of the Shares, you will receive a check from the Tender Offer Agent, acting as your agent, for an amount equal to the aggregate Offer Price of your validly tendered Shares, as applicable, that we have accepted for payment. If you hold the Shares through a broker, dealer, commercial bank, trust company or other nominee, the Tender Offer Agent, acting as your agent, will credit DTC, for allocation by DTC to your broker, dealer, commercial bank, trust company or other nominee, with an amount equal to the aggregate Offer Price of your validly tendered Shares that we have accepted for payment.

 

If any delay would be in contravention of Rule 14e-1(c) of the Exchange Act, the Offeror will extend the Offer. See Section 1 — “TERMS OF THE OFFER”. The Offeror will not accept Shares for payment unless all of the Offer Conditions have been satisfied or waived. Under no circumstances will interest be paid by us on the purchase price for the Shares pursuant to the Offer, regardless of any delay in making such payments.

 

In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Tender Offer Agent of (i) certificates representing such Shares and, if certificates have been issued in respect of Rights prior to the Expiration Date and Time, certificates representing the associated Rights (or a timely confirmation of a book-entry transfer of such Shares into the Tender Offer Agent’s account at DTC, as described in Section 2 — “PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES”), (ii) a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees (or, in connection with a book-entry transfer, an Agent’s Message), and (iii) any other documents required by the Letter of Transmittal.

 

For purposes of the Offer, the Offeror will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered prior to the Expiration Date and Time when, as and if the Offeror gives oral or written notice to the Tender Offer Agent, as agent for the tendering shareholders, of the Offeror’s acceptance for payment of such Shares.

 

If, prior to the Expiration Date and Time, the Offeror increases the consideration to be paid for Shares pursuant to the Offer, the Offeror will pay such increased consideration for all Shares accepted for payment or paid for pursuant to the Offer, whether or not such Shares have been tendered, accepted for payment or paid for prior to such increase in the consideration.

 

If, for any reason, any Shares tendered by registered holders are not purchased in the Offer, or if any certificates are submitted for more Shares than the holder intended to tender, the certificates for such Shares that are not tendered or purchased will be returned. If, for any reason, any Shares tendered by book-entry transfer are not purchased in the Offer, such Shares will be credited to the account of the tendering party with DTC, without expense to the tendering holder of Shares, as promptly as practicable following the termination of the Offer.

 

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5.             TAX CONSIDERATIONS.

 

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS.

 

The following is a summary of the material U.S. federal income tax consequences of the Offer to U.S. Holders (as defined below) whose Shares are purchased pursuant to the Offer but does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), temporary and final Treasury regulations promulgated thereunder, judicial decisions and administrative rulings and practice, in each case in effect as of the date hereof. These authorities are subject to change, possibly with retroactive effect, so as to result in U.S. federal income tax consequences different from those set forth below. This discussion does not address aspects of United States federal taxation other than income taxation, nor does it address aspects of United States federal income taxation that may be applicable to particular shareholders, such as shareholders who are dealers in securities, traders in securities that elect to use a mark to market method of accounting, insurance companies, tax-exempt organizations, financial institutions, regulated investment companies, controlled foreign corporations, passive foreign investment companies, shareholders who hold their Shares as part of a straddle, hedge, conversion, synthetic security or constructive sale transaction for United States federal income tax purposes, shareholders that are accrual method taxpayers for United States federal income tax purposes and are required to accelerate the recognition of any item of gross income with respect to the Shares as a result of such income being recognized on an applicable financial statement, United States expatriates and former long-term residents, shareholders who have a functional currency other than the U.S. dollar, shareholders who are required to recognize income for U.S. federal income tax purposes no later than when such income is reported on an “applicable financial statement”, shareholders subject to the “base erosion and anti-avoidance” tax, shareholders who own (actually or under applicable constructive ownership rules) 10% or more of the Company’s stock, or shareholders who acquired their Shares in a compensation transaction.

 

This summary is limited to persons that hold their Shares as a “capital asset” within the meaning of Section 1221 of the Code. This discussion does not address any state, local, non-income or foreign tax consequences. There can be no assurance that the Internal Revenue Service (“IRS”) will not challenge the analysis or conclusions reached in this section, and no ruling from the IRS has been or will be sought on the transaction described herein or on any of the issues discussed below.

 

As used in this summary, the term "U.S. Holder" means a beneficial owner of Shares that is an individual U.S. citizen or resident, a U.S. corporation or other U.S. entity taxable as a corporation, an estate the income of which is subject to U.S. federal income taxation regardless of its source, or a trust if (a) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (b) it has made an election to be treated as a United States person.

 

If a partnership holds the Shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding the Series B Preferred Shares, you are encouraged to consult your tax advisor.

 

As indicated in the Company’s annual report on Form 20-F for the year ending December 31, 2022, the Company does not believe that it was a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes in 2022 and does not anticipate becoming a PFIC in the near future. Except as discussed below under “—Passive Foreign Investment Company Rules”, this summary assumes that the Company has not been a PFIC for any prior taxable year and will not be a PFIC for the current taxable year.

 

Treatment of Our Purchase of Shares

 

The receipt of cash in exchange for Shares will be a taxable transaction for U.S. federal income tax purposes. If you properly tender Shares and accept payment pursuant to this Offer to Purchase, you will generally recognize taxable gain or loss equal to the difference, if any, between the amount realized on the exchange and your adjusted tax basis in the tendered Shares. Your adjusted tax basis will generally be the amount you paid to acquire the Shares. Any gain or loss will be capital gain or loss and will be long-term capital gain or loss if your holding period for the Shares is longer than one year at the time of the sale. If you are a non-corporate U.S. Holder, any long-term capital gain you recognize is generally eligible for a reduced rate of taxation. The deductibility of capital losses is subject to limitations under the Code.

 

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Passive Foreign Investment Company Rules

 

In general, a non-U.S. corporation will be a PFIC for U.S. federal income tax purposes for any taxable year in which, after applying certain look-through rules, either (1) at least 75% of its gross income is “passive income” or (2) at least 50% of the average quarterly value of its assets consists of assets that produce “passive income” or are held for the production of “passive income.” As indicated in the Company’s annual report on Form 20-F for the year ending December 31, 2022, the Company does not believe that it was a PFIC for U.S. federal income tax purposes in 2022 and does not anticipate becoming a PFIC in the near future. However, because PFIC status depends upon the composition of the Company’s income and assets and the market value of the Company’s assets (including, among others, goodwill and less than 25% owned equity investments) from time to time, there can be no assurance that the Company has not been, or will not be, a PFIC for any taxable year.

 

If the Company was a PFIC for any taxable year in which you held Shares, your Shares will be treated as PFIC stock, even if the Company thereafter ceased to meet the threshold requirements for PFIC status, and you will generally be subject to adverse tax consequences on the sale of your Shares pursuant to the Offer. In particular, if the Company were a PFIC for any taxable year during which you held Shares, gain recognized by you on the sale of the Shares would be allocated ratably over your holding period for the Shares. The amounts allocated to the taxable year of the sale and to any year before the Company became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate on ordinary income in effect for individuals or corporations, as appropriate for that taxable year, and an interest charge would be imposed on the resulting tax liability. Certain elections, if made, may result in alternative treatments. You should consult your tax adviser about such elections.

 

You should consult your tax adviser concerning the Company’s PFIC status for any relevant taxable year and the tax considerations relevant to the sale of Shares pursuant to the Offer.

 

Information Reporting and Backup Withholding

 

Sales proceeds from a U.S. Holder’s sale of Shares within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting and may be subject to backup withholding (currently at a 24% rate) unless (i) you are a corporation or other exempt recipient or (ii) in the case of backup withholding, you provide a correct taxpayer identification number and certify that you are not subject to backup withholding. Backup withholding is not an additional tax. The amount of any backup withholding will be allowed as a credit against your U.S. federal income tax liability and may entitle you to a refund, provided that the required information is timely furnished to the IRS.

 

REPUBLIC OF THE MARSHALL ISLANDS TAX CONSIDERATIONS

 

The following discussion is based upon the current laws of the Republic of the Marshall Islands applicable to persons who are not citizens of and do not reside in, maintain offices in or carry on business or conduct transactions in the Republic of the Marshall Islands.

 

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Under current Marshall Islands law, no taxes or withholding will be imposed by the Republic of the Marshall Islands on the payment of the Offer Price for the Shares validly tendered to and accepted for purchase by the Offeror. In addition, no stamp, capital gains or other taxes will be imposed by the Republic of the Marshall Islands on gains realized by the tender and disposition by Holders of the Shares. Such persons also will not be required by the Republic of the Marshall Islands to file a tax return in connection with gains realized by the tender and disposition by such persons of the Shares. It is the responsibility of each holder to investigate the legal and tax consequences, under the laws of pertinent jurisdictions, including the Marshall Islands, of participation in the Offer, including the tender and disposition of any Shares held by each such holder.

 

 

THIS SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE LEGAL OR TAX ADVICE TO EITHER UNITED STATES HOLDERS OR NON-U.S. HOLDERS. BENEFICIAL OWNERS OF SHARES ARE, THEREFORE, URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES APPLICABLE TO THEM OF TENDERING THEIR SHARES OR THE APPLICABILITY OF U.S. FEDERAL, STATE OR LOCAL TAX LAWS OR NON-U.S. OR NON-INCOME TAX LAWS, ANY CHANGES IN APPLICABLE TAX LAWS AND ANY PENDING OR PROPOSED LEGISLATION OR REGULATIONS.

 

6.             PRICE RANGE OF THE SHARES; DIVIDENDS.

 

Common Shares are listed on the Nasdaq Capital Market and traded under the symbol “PSHG”. The following table sets forth, for each of the periods indicated, the high and low reported sales prices for the Common Shares, as reported on Nasdaq.

 

    High     Low  
2021            
Fourth Quarter   $91.50     $54.60  
2022            
First Quarter   $71.25     $37.50  
Second Quarter   $47.25     $8.26  
Third Quarter   $10.35     $3.15  
Fourth Quarter   $5.17     $2.99  
2023            
First Quarter   $3.69     $0.68  
Second Quarter   $0.99     $0.68  
Third Quarter   $2.49     $0.79  
Fourth Quarter (through October 10, 2023)   $2.04     $1.65  

 

The Rights currently trade together with the Common Shares. On October 10, 2023, the last full trading day before commencement of the Offer, the closing price of Common Shares reported on the Nasdaq Capital Market was $1.68 per Share. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES

 

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According to the Company’s Form 20-F for the year ended December 31, 2022, as of April 25, 2023, the Company had 7 shareholders of record.

 

According to the Company’s Form 20-F for the year ended December 31, 2022, on October 20, 2020, the Company announced that the Board approved a new variable quarterly dividend policy, after previously suspending the quarterly cash dividend on Common Shares since the quarter ended June 30, 2016. On November 9, 2020, the Company made a dividend payment in the aggregate amount of $0.01 per share (or $0.10 per share as adjusted for the reverse stock split effected on November 2, 2020) to the shareholders of record at the close of business on October 30, 2020, with respect to the third quarter of 2020. The Company reports that, if declared, the Company’s variable quarterly dividend is expected to be paid each February, May, August and November and will be subject to reserves for the replacement of the Company’s vessels, scheduled drydockings, intermediate and special surveys, dividends to holders of preferred shares, if paid in cash, and other purposes as the Board may from time to time determine are required, after taking into account contingent liabilities, the terms of any credit facility, the Company’s growth strategy and other cash needs as well as the requirements of Marshall Islands law, among other factors. In addition, the Company reports that any credit facilities that it may enter into in the future may include restrictions on its ability to pay dividends.

 

The Company further reports that the actual timing and amount of dividend payments, if any, will be determined by the Board and will be affected by various factors, including the Company’s cash earnings, financial condition and cash requirements, the loss of a vessel, the acquisition of one or more vessels, required capital expenditures, reserves established by the Board, increased or unanticipated expenses, a change in the Company’s dividend policy, additional borrowings or future issuances of securities.

 

According to the Company’s Form 20-F for the year ended December 31, 2022, the Company is a holding company, and it depends on the ability of its subsidiaries to distribute funds to the Company to satisfy its financial obligations and to make dividend payments. In addition, the Company reports that its existing or future credit facilities may include restrictions on its ability to pay dividends.

 

According to the Company’s Form 20-F for the year ended December 31, 2022, Marshall Islands law generally prohibits the payment of dividends other than from surplus (retained earnings and the excess of consideration received for the sale of shares above the par value of the shares) or while a company is insolvent or would be rendered insolvent by the payment of such a dividend.

 

In addition, (i) the Series B Certificate generally purports to provide that no dividend shall be declared or paid or set apart for payment on Common Shares unless full cumulative dividends on the Company’s Series B Preferred Stock have been or contemporaneously are being paid or declared and set aside for payment on all outstanding Series B Preferred Stock, and (ii) the Series C Certificate generally purports to provide that no dividend shall be declared or paid or set apart for payment on any Common Shares unless full cumulative dividends on Series C Preferred Stock have been or contemporaneously are being paid or declared and set aside for payment on all outstanding Series C Preferred Stock.

 

7.             CERTAIN INFORMATION CONCERNING THE COMPANY.

 

According to the Company’s Form 20-F for the year ended December 31, 2022, Performance Shipping Inc. (formerly Diana Containerships Inc.) is a corporation incorporated under the laws of the Republic of the Marshall Islands on January 7, 2010. It maintains its principal executive offices at 373 Syngrou Avenue, 175 64 Palaio Faliro, Athens, Greece. The Company’s telephone number at that address is +30 216 600 2400. The Company’s agent and authorized representative in the United States is its wholly owned subsidiary, established in the State of Delaware in July 2014 under the name Container Carriers (USA) LLC (which name was changed to Performance Shipping USA LLC as of November 20, 2020), which is located at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808.

 

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According to the Company’s Form 20-F for the year ended December 31, 2022, the Company provides global shipping transportation services through the ownership of tanker vessels. Each of its vessels is owned by a separate wholly owned subsidiary. As of April 27, 2023, the Company’s fleet consisted of eight Aframax tanker vessels with a combined carrying capacity of 851,825 DWT and a weighted average age of approximately 12.4 years, and also one newbuild LR2/Aframax tanker vessel of which it expects to take delivery in 2025.

 

According to the Company’s Form 6-K filed with the SEC on September 29, 2023, there were  11,734,683 Common Shares outstanding as of September 29, 2023.

 

The Company is a foreign private issuer listed on the Nasdaq Capital Market, and is subject to the information and reporting requirements of the Exchange Act and in accordance therewith is obligated to file reports and other information with the SEC relating to its business, financial condition and other matters. The SEC maintains a website, and the reports and other information filed by the Company with the SEC may be accessed electronically at http://www.sec.gov.

 

Except as otherwise stated in this Offer to Purchase, the information concerning the Company contained herein has been taken from or is based upon reports and other documents on file with the SEC or otherwise publicly available.

 

8.             CERTAIN INFORMATION CONCERNING THE OFFEROR.

 

Sphinx Investment Corp., or the Offeror, is a corporation organized under the laws of the Republic of the Marshall Islands. It is a wholly-owned direct subsidiary of Maryport Navigation Corp. The business address of the Offeror is c/o Levante Services Limited, Leoforos Evagorou 31, 2nd Floor, Office 21 1066 Nicosia, Cyprus, where the business phone number is +35 722 010610. The principal business of the Offeror is the making of investments in securities. The Offeror is controlled and indirectly 100% owned by Mr. George Economou.

 

Maryport is a corporation organized under the laws of the Republic of Liberia and is the direct parent of the Offeror. The principal business address of Maryport is c/o Levante Services Limited, Leoforos Evagorou 31, 2nd Floor, Office 21 1066 Nicosia, Cyprus, where the business phone number is +35 722 010610. The principal business of Maryport Navigation Corp. is the making of investments in securities. Maryport is controlled and directly 100% owned by George Economou.

 

George Economou is a citizen of Greece. Mr. Economou’s principal business address is c/o Levante Services Limited, Leoforos Evagorou 31, 2nd Floor, Office 21 1066 Nicosia, Cyprus, where the business phone number is +35 722 010610. Mr. Economou’s current principal occupation or employment is set forth on Schedule I attached hereto and is incorporated by reference herein. Also set forth on Schedule I and incorporated by reference herein are Mr. Economou’s material occupations, positions, offices or employments during the past five years, including the principal business and address of any business corporation or other organization in which such occupation, position, office or employment was carried on.

 

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The name, position, citizenship, business address, current principal occupation or employment, material occupations, positions, offices or employments during the past five years and the principal business, address and the business phone number of any business corporation or other organization in which such occupation, position, office or employment was carried on, of each executive officer and director of the Offeror and Maryport are set forth on Schedule I attached hereto and incorporated by reference herein.

 

None of the Offeror, Maryport or Mr. Economou nor, to their respective knowledge, any of the persons listed on Schedule I hereto, have been, during the past five years: (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors); or (b) a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

 

Except as set forth in this Offer to Purchase, none of the Offeror, Maryport or Mr. Economou nor, to their respective knowledge, any of the persons listed on Schedule I hereto, has had any transaction that occurred during the past two years with the Company or any of its executive officers, directors or affiliates that is required to be reported under the rules and regulations of the SEC applicable to the Offer. Except as set forth in this Offer to Purchase, there have been no negotiations, transactions or material contacts during the past two years between the Offeror, Maryport, or any of their respective subsidiaries, or Mr. Economou, or, to their respective knowledge, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and the Company or its affiliates, on the other hand, concerning any merger, consolidation or acquisition, tender offer for or other acquisition of any class of the Company’s securities, election of the Company’s directors or sale or other transfer of a material amount of the Company’s assets.

 

As of the date of this Offer to Purchase, the Offeror, Maryport and Mr. Economou beneficially own, in the aggregate, 1,033,859 Common Shares representing approximately 8.8% of the issued and outstanding Shares. The foregoing percentage is based upon the 11,734,683 Shares stated by the Company as being outstanding as of September 29, 2023 in its Form 6-K filed with the SEC on September 29, 2023.

 

All Shares described above are held by the Offeror. Each of the Offeror, Maryport and Mr. Economou has shared voting power and shared dispositive power with regard to such Shares.

 

Each of Maryport and Mr. Economou, by virtue of their relationships to the Offeror, may be deemed to indirectly beneficially own (as that term is defined in Rule 13d-3 under the Exchange Act) the Shares which the Offeror owns directly and beneficially. Each of Maryport and Mr. Economou disclaims beneficial ownership of such Shares for all other purposes.

 

Other than as disclosed on Schedule II attached hereto, none of the Offeror, Maryport or Mr. Economou, nor, to their respective knowledge, any of the persons listed on Schedule I hereto, have effected any transaction in the Shares during the past 60 days. The information set forth on Schedule II is incorporated herein by reference.

 

Pursuant to Rule 14d-3 under the Exchange Act, the Offeror, Maryport and Mr. Economou have filed with the SEC a Tender Offer Statement on Schedule TO (as it may be amended from time to time, the “Schedule TO”), of which this Offer to Purchase forms a part, and exhibits to the Schedule TO. The SEC maintains a web site on the Internet at http://www.sec.gov that contains the Schedule TO and its exhibits and other information that the Offeror has filed electronically with the SEC.

 

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9.             SOURCE AND AMOUNT OF FUNDS.

 

The total amount of funds required by the Offeror to purchase all of the outstanding Shares pursuant to the Offer ((i) assuming for these purposes (based on the Company’s public disclosures made prior to the date of this Offer to Purchase) that (A) there are 11,734,683 Shares outstanding, and (B) there are outstanding Company warrants, Options, and shares of Series C Preferred Stock that are exercisable for or convertible into approximately an aggregate of 9,826,665 Shares ((1) assuming solely for purposes of making this calculation that the Series C Preferred Stock would be validly convertible into Shares (notwithstanding that the Offeror disputes the validity of the Series C Preferred Stock and their convertibility into Common Stock) and (2) excluding (on the basis of the Series C Condition, among other things) any Shares purported to be issued or issuable upon conversion of Series C Preferred Stock disclosed as held by Mango and Mitzela but including (notwithstanding that the Offeror disputes the validity of the Series C Preferred Stock and their convertibility into Common Stock) any Shares purported to be issued or issuable upon conversion of Series C Preferred Stock held by Giannakis (John) Evangelou, Antonios Karavias, Christos Glavanis, and Reidar Brekke (notwithstanding the Series C Condition) because the Offeror is not able to determine to its satisfaction from the Company’s public filings the number of shares of Series C Preferred Stock that any of them may hold) and that (except as described in the preceding parenthetical) all such Options and derivative securities are so exercised for or converted into Shares and validly tendered into the Offer), and (ii) excluding the 1,033,859 Shares beneficially owned by the Offeror and its affiliates as of the date of this Offer), is estimated to be approximately $61,582,467. The Offeror has sufficient funds, from its working capital and from funds that will be provided to it from Mr. George Economou’s existing liquid personal resources, to purchase the Shares in the Offer. Given our cash position and access to capital, the Offer is not conditioned on the Offeror entering into any financing arrangements or obtaining any financing. We have no specific alternative financing arrangements or alternative financing plans in connection with the Offer.

 

10.           BACKGROUND OF THE OFFER; PAST CONTACTS OR NEGOTIATIONS WITH THE COMPANY.

 

The following is a chronology of material events leading up to the Offer:

 

Between August 7, 2023 and August 24, 2023, the Offeror purchased an aggregate of 1,033,859 Common Shares in open market purchases for a total purchase price of $1,483,268, including fees and expenses.

 

On August 25, 2023, the Offeror, Maryport and Mr. Economou filed an initial beneficial ownership report on Schedule 13D, disclosing their beneficial ownership of approximately 9.5% of the then-outstanding Common Shares. On that same date, the Offeror, Maryport and Mr. Economou sent a letter to the Company seeking confirmation that the Board would (i) not attempt to utilize the new shareholder repurchase plan it announced on August 22, 2023 (the “Plan”) as a defensive measure to purport to cause the Offeror, Maryport and Mr. Economou to trigger any poison pill, including, without limitation, the Rights Agreement and (ii) update the public markets in real time with respect to purchases made under the Plan.

 

On August 31, 2023, the Offeror sent a letter to the Board, which was furnished by the Offeror on such same date on its Schedule 13D, stating the belief of the Offeror, Maryport and Mr. Economou that the Company’s dual-class capital structure, together with the issuer exchange offer commenced by the Company on December 20, 2021, through which the Company effected such structure (the “2022 Exchange Offer”), violated both Marshall Islands law and Nasdaq Listing Rules and that such structure was implemented as a result of multiple breaches of fiduciary duties; and demanding that the Board immediately publicly acknowledge (i) the impropriety and invalidity of the Company’s current dual class structure, (ii) that the voting, conversion and other preferential rights purported to be given to the Series C Preferred Stock are invalid and (iii) that no votes or consents purported to be cast or given by holders of the Series C Preferred Stock into Common Shares, and no requests for conversion of the Series C Preferred Stock, be counted or recognized.

 

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On September 1, 2023, the Company, through its counsel, sent a letter to the Offeror declining to provide the ongoing public disclosures requested by the Offeror, Maryport and Mr. Economou in their August 25, 2023 letter. On such same date Company CEO Mr. Michalopoulos filed an initial Schedule 13D with respect to the securities he acquired in the 2022 Exchange – almost 6 months late – and the Board Chairperson Aliki Paliou filed an amendment more than two months late to her initial Schedule 13D – which itself had also been filed more than two months late. The Offeror also observed that notwithstanding the fact that Mr. Michalopoulos and Ms. Paliou purport to beneficially own in the aggregate more than 67% of the Common Shares through their ownership of Series C Preferred Stock, and also hold key Board and officer positions at the Company, at no time did any of their (generally late) Schedule 13D’s or amendments thereto disclose against Item 4 of Schedule 13D any plans or proposals with respect to the 2022 Exchange Offer, or the issuance of the Series B Preferred Shares, the Series C Preferred Stock or the many dilutive issuance that occurred following the 2022 Exchange Offer.

 

On September 4, 2023, the Offeror sent a letter to the Board (i) observing that Company director Andreas Nikolaos Michalopoulos, who is the husband of the Board Chairperson Aliki Paliou, also indirectly acquired Series C Preferred Stock in the 2022 Exchange Offer alongside Ms. Paliou and (ii) demanding that the Board investigate the reasons (i) why Mr. Michalopoulos’s initial Schedule 13D appeared to have been filed almost 6 months late, (ii) why Ms. Paliou’s initial Schedule 13D and recent Schedule 13D amendment were both filed more than 2 months late, (iii) why no Schedule 13D disclosures were made by either of them in connection with the 2022 Exchange Offer, and (iv) how Ms. Paliou and Mr. Michalopoulos believe they can take the position that they are not a “group” for purposes of Section 13(d)(3) of the Exchange Act or Rule 13d-3 promulgated thereunder. The letter also asked that the Board provide the market with an explanation behind the increase from 10,910,319 Common Shares to 11,309,236 Common Shares outstanding during the last two weeks of August and confirm that this increase was not a result of further insider transactions.

 

On September 5, 2023, the Company, through its counsel, replied to the letters of August 31, 2023, and September 4, 2023, from counsel to the Offeror, attempting to refute the assertions raised by the Offeror and its affiliates in such letters and stating definitively that “the Board’s independent directors reject” the assertions made in the Offeror’s letters “after careful consideration of the [l]etters”. Such letter did not elaborate on what “careful consideration” the Board undertook in the mere five days since the Offeror raised its concerns with the Board, nor does the letter state that the Board investigated or intended to investigate any of the matters raised by the Offeror, stating only that the Board would “inquire” as to why Ms. Paliou and Mr. Michalopoulos had been late in making their public disclosures on Schedule 13D.

 

As a result of the failure of the Board to show any interest in taking corrective action, on September 15, 2023, the Offeror delivered a notice to the Company, notifying the Company of its decision to propose the nomination of, and to nominate, the Sphinx Nominee for election to the Board at the 2024 Shareholder Meeting and to propose and bring before the meeting each of the other proposals. On such same date, the Offeror delivered a letter to the Company to exercise its right under the Marshall Islands Business Corporations Act 1990, as amended, to inspect certain books and records of the Company, including without limitation copies of minutes of meetings of the Board at which the 2022 Exchange Offer was discussed. Such books and records demand was also accompanied by a draft confidentiality agreement.

 

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Also on September 15, 2023, the Company issued a press release regarding the Offeror’s delivery on such date of its notice of nomination and shareholder proposals and books and record demand and, among other things, questioning the intentions of the Offeror and Mr. Economou.

 

On September 19, 2023 and September 20, 2023, counsel to the Offeror sent correspondence to counsel to the Company, inquiring as to the Company’s response, respectively, to the Offeror’s notice of nomination and shareholder proposals, dated September 15, 2023 and the Offeror’s books and records demand, dated September 15, 2023.

 

On September 22, 2023, counsel to the Company responded to the Offeror’s books and records demand, indicating that the Company would cooperate in part but also disputing the validity of certain demands made by the Offeror, including the demands made by the Offeror for board minutes and board member communications.

 

On September 25, 2023, the Offeror delivered a supplemental notice of nomination and shareholder proposals to the Company, which was substantially the same in content as the notice delivered by the Company on September 15, 2023.

 

On September 26, 2023, counsel to the Offeror and counsel to the Company held a conference call to discuss the Offeror’s books and records demand, on which Company counsel agreed to provide certain of the demanded items to the Offeror the Offeror’s counsel further explained to Company counsel on such call why in their view the Company had no basis for continuing to refuse to provide the Offeror access to Company board minutes; however, Company counsel declined to substantively engage with the Offeror’s counsel on that topic.

 

On October 2, 2023, more than two weeks after the Offeror first provided the Company’s counsel with a draft confidentiality agreement, the Company’s counsel provided a markup of such confidentiality agreement to the Offeror’s counsel. Since such time, the Offeror’s counsel has attempted to reach an agreement with Company counsel on a form of confidentiality agreement.

 

On October 10, 2023, counsel to the Offeror sent to counsel to the Company, on behalf of the Offeror, a signed affidavit pursuant to Section 81 of the BCA and a signed confidentiality agreement, each of which would become effective upon the Company countersigning the confidentiality agreement and providing certain of the materials demanded in the Offeror’s September 15, 2023 demand letter.  Such communication also stated counsel to the Offeror’s view that the Offeror had more than satisfied all of the requirements pursuant to Section 81 of the BCA and the Offeror looked forward to the Company promptly complying with its legal obligations under such same section. Such communication further  conveyed the Offeror’s concern about the timeliness of the Company’s responses to the Offeror’s demand letter and objected to the Company’s refusal to provide the board materials and communications requested by the Offeror in its demand letter. On such same date, counsel to the Company rejected the versions of the affidavit and confidentiality agreement provided by counsel to the Offeror and requested further changes.

 

On October 11, 2023, we commenced this Offer.

 

Substantially concurrently with (but immediately after) the commencement of this Offer on October 11, 2023, the Offeror, Maryport and Mr. Economou are furnishing the Proxy Statement on an amendment to its Schedule 13D.

 

On or about the date of this Offer to Purchase, the Offeror is delivering to the Company a request and demand pursuant to Rule 14d-5(a) of the Exchange Act for use of its shareholder list and security position listings for the purpose of disseminating the materials relating to the Offer to the holders of Shares.

 

11.           PURPOSE OF THE OFFER; PLANS FOR THE COMPANY.

 

PURPOSE OF THE OFFER. The purpose of the Offer is to acquire at least a majority, and up to 100%, of the issued and outstanding Shares on a fully diluted basis (assuming the exercise or conversion of all then-outstanding Options and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof), which will represent at least a majority of the voting power of the Company securities, and the Shares will be the sole Company securities outstanding having the right or purporting to have the right to vote with respect to the election of directors. Following the successful consummation of the Offer (assuming it is consummated), the Offeror may be deemed to control the Company.

 

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PLANS FOR THE COMPANY. The Offeror believes that the Shares are currently undervalued due in part to the Company’s current dual class capital structure. The purpose of the Offer is to acquire at least a majority, and up to 100%, of the issued and outstanding Shares on a fully-diluted basis  (assuming the exercise or conversion of all then-outstanding Options (as defined below) and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof), which would following the consummation of the Offer represent at least a majority of the voting power of the Company securities, and the Shares will be the sole Company securities outstanding having the right or purporting to have the right to vote with respect to the election of directors. Following the successful consummation of the Offer (assuming it is consummated), the Offeror, Maryport and Mr. George Economou will have acquired beneficial ownership of a majority of the issued and outstanding Shares on a fully-diluted basis and will have designated a majority of the Board, and may be deemed to control the Company.

 

If, and to the extent that, the Offeror acquires control of the Company, the Offeror intends to conduct a review, subject to applicable law, of the Company and its assets, corporate structure, capitalization, operations, properties, policies, management and personnel and consider and determine what, if any, changes would be desirable in light of the circumstances which then exist, which may include selling all or any portion of the Shares acquired by the Offeror in the Offer and/or causing the Company to sell all or any portion of the assets of the Company or conduct one or more strategic transactions. Further, while none of the Offeror, Maryport or Mr. George Economou has made any final decision as to whether, if the Offer is consummated, the Company or any Company assets will be transferred to or combined or integrated with any other assets directly or indirectly owned or controlled by any of them; however, they reserve the right to do so in accordance with applicable law. Whether or not the Offeror, Maryport or Mr. George Economou would determine to do so would depend, among other things, on their assessment of the outcome of the post-Offer review of the Company and its assets, corporate structure, capitalization, operations, properties, policies, management and personnel referred to above. In addition, if the Offeror acquires control of the Company, the Offeror expects to take further steps to improve the governance and management of the Company, which may among other things include making changes to the composition of the management team of the Company and/or making changes to the organizational documents of the Company, including, without limitation, the Company’s Articles and the Amended and Bylaws. We are currently separately conducting the Proxy Solicitation for the election of the Sphinx Nominee on the Board at the upcoming 2024 Shareholder Meeting. If elected to the Board, the Sphinx Nominee would replace Aliki Paliou, a chairperson of the Board and sole shareholder of Mango, the Company’s controlling shareholder. The Proxy Solicitation also relates to the Declassification Proposal and the Vote of No-Confidence Proposals.

 

If we consummate the Offer, depending upon the number of Shares we acquire and other factors relevant to our equity ownership in the Company, we may in our discretion (but do not undertake any obligation to), subsequent to completion of the Offer, seek to acquire additional Shares through open market purchases, privately negotiated transactions, further tender or exchange offers or other transactions or a combination of the foregoing on such terms and at such prices as we shall determine, which may be more or less favorable than those of the Offer. We also reserve the right to dispose of the Shares that we have acquired and/or may acquire at any time for any reason or no reason, subject to any applicable legal restrictions.

 

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If we consummate the Offer, depending upon the number of Shares we acquire and other factors relevant to our equity ownership in the Company, we will seek to implement each of the foregoing actions to the extent not undertaken as a result of the Proxy Solicitation, including the declassification of the Board and the removal and replacement of all current members of the Board remaining on the Board, subject to the provisions of the Articles, which provide that a director may be removed only for cause and only by the affirmative vote of the holders of at least two-thirds of the Common Shares. The Offeror also expects to take further steps to improve the governance and management of the Company, which may among other things include making changes to the composition of the management team of the Company or changing the terms of employment of executive officers.

 

Neither this Offer to Purchase nor the Offer constitutes (i) a solicitation of a proxy, consent or authorization for or with respect to the 2024 Shareholder Meeting or any other meeting of Company shareholders or (ii) a solicitation of a consent or authorization in the absence of any such meeting. Any such solicitation is being or will be made only pursuant to proxy or consent solicitation materials that comply with the applicable provisions of Marshall Islands law. Shareholders are advised to read the Proxy Statement that is being furnished on Schedule 13D substantially concurrently with the filing of this Offer to Purchase and (as, when and if they become available) other documents related to the solicitation of proxies by the Offeror and its affiliates from the shareholders of the Company for use at the 2024 Shareholder Meeting, because they will contain important information. A Proxy Statement and a form of proxy is being made available at no charge at the SEC’s website at http://www.sec.gov.

 

The Offer and the nomination of the Sphinx Nominee for election to the Board are independent of each other. In addition, the Offer is not conditioned upon the passage of any other shareholder proposal expected to be made by the Offeror at the 2024 Shareholder Meeting, including, without limitation, the Declassification Proposal or any Vote of No-Confidence Proposal. The Offer and such shareholder proposals are independent of each other.

 

The Offer is not conditioned upon the Offeror obtaining any financing or upon any due diligence review of the Company. The Offer is subject to the following Offer Conditions, in addition to other customary conditions : (i) there shall have been validly tendered into the Offer and not withdrawn a number of Shares which, together with any Shares then-owned by the Offeror, represents at least a majority of the issued and outstanding Shares on a fully-diluted basis  (assuming the exercise or conversion of all then-outstanding Options and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof) (i.e., the Minimum Tender Condition); (ii) either (a) the Rights Agreement shall have been validly terminated and the Rights shall have been redeemed, and the Series A Certificate shall have been validly cancelled and no Series A Preferred Stock shall be outstanding, or (b) the Rights Agreement shall have been otherwise made inapplicable to the Offer and the Offeror and its affiliates (i.e., the Poison Pill Condition); (iii) the Board shall have validly waived the applicability of Article K to the purchase of the Shares by the Offeror in the Offer so that the provisions of Article K would not, at or at any time following consummation of the Offer, prohibit, restrict or apply to any “business combination”, as defined in Article K, involving the Company and the Offeror or any affiliate or associate of the Offeror (i.e., the Article K Condition); (iv) the Company shall not have any securities outstanding, authorized or proposed for issuance other than (a) the Shares, (b) authorized Series A Preferred Stock (none of which shall have been issued), (c) the number of shares of Series B Preferred Stock outstanding as of the date immediately preceding the date of this Offer to Purchase, (d) the warrants outstanding as of the date immediately preceding the date of this Offer to Purchase (which shall not be exercisable in the aggregate for more than the 7,904,221 Shares disclosed by the Company in its Form 6-K on September 29, 2023, and the terms of which such warrants shall not have been amended on or after the date of this Offer to Purchase), (e) (1) the Options to purchase Shares under the Equity Incentive Plan (as such plan was in effect as of the date immediately preceding the date of this Offer to Purchase) outstanding, and subject to the terms as in effect, as of the date immediately preceding the date of this Offer to Purchase, and (2) any Options to purchase shares under the Equity Incentive Plan that are issued pursuant to the Equity Incentive Plan on or after the date of this Offer to Purchase in the ordinary and usual course of business, consistent with past practice; and (f) Shares authorized for issuance but not yet subject to awards under the Equity Incentive Plan (none of which shall, on or after the date of this Offer to Purchase, have been issued other than in the ordinary and usual course of business, consistent with past practice) (i.e., the Equity Condition); (v) (a) Section 4 of the Series C Certificate shall no longer be in effect, (b) any and all shares of the Series C Preferred Stock held as of the date of this Offer to Purchase by any of Mango, Mitzela, and Giannakis (John) Evangelou, Antonios Karavias, Christos Glavanis, and Reidar Brekke, or by any affiliate of any of the foregoing, and any and all Shares purported to have been issued pursuant to the purported conversion of any such shares of Series C Preferred Stock, shall have been validly cancelled and (c) no other shares of Series C Preferred Stock shall be outstanding (i.e., the Series C Condition); (vi) the Series B Certificate either (a)  shall have been validly cancelled or (b) shall not have been amended (i.e., the Series B Condition), and (vii) the size of the Board shall remain fixed at five members, with at least three of such authorized five Board seats either (a) then-being occupied by persons having been designated by us, (b) then-being vacant, with the company having publicly committed on a binding basis to fill such vacancies with persons designated by us or (c) then-being occupied by directors who shall have publicly submitted their irrevocable resignations from the Board, effective no later than the Offeror’s purchase of the Shares tendered in the Offer, which such resignations shall have been publicly accepted by the Company (with the Company having publicly committed on a binding basis to fill the resulting vacancies with persons designated by us) (i.e., the Board Representation Condition).

 

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See Section 14 — “CONDITIONS OF THE OFFER”.

 

The Offer Conditions must be satisfied at or before the Expiration Date and Time, as it may be extended.

 

Subject to applicable law, the Offeror reserves the right to amend the Offer in any respect (including amending the Offer Price).

 

Except as described in this Offer to Purchase, the Offeror does not have any present plans or proposals that would result in the acquisition by any person of additional securities of the Company, the disposition of securities of the Company, an extraordinary transaction, such as a merger, reorganization or liquidation, involving the Company or its subsidiaries, or the sale or transfer of a material amount of assets of the Company or its subsidiaries.

 

12.           CERTAIN EFFECTS OF THE OFFER.

 

EFFECT ON THE MARKET FOR THE SHARES. If all of the Offer Conditions are satisfied or waived and we consummate the Offer, the number of shareholders and the number of Shares that are held by the public will be reduced and such number of shareholders and such number of Shares may be so small that there may no longer be an active public trading market (or, possibly, there may not be any public trading market) for the Shares, and to the extent that any such trading market exists, it may have more limited liquidity. Also, it is possible that Performance may no longer be required to make filings with the SEC or otherwise comply with the rules of the SEC relating to publicly held companies, and it may determine not to do so.

 

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EFFECT ON THE SHARE PRICE. The Offeror cannot predict whether the reduction in the number of Shares that might otherwise trade publicly, or the fact that the Offeror would have designated a majority of the Board and would own a majority of the Shares on a fully-diluted basis, would have an adverse or beneficial effect on the market price for, or marketability of, the Shares or whether it would cause future market prices to be greater or less than the Offer Price – nor can the Offeror predict whether any positive effects on the Share price (if any) resulting from the cancellation of Series C Preferred Stock or the satisfaction of any of the other Offer Conditions could would offset the consequences of any decreased Share liquidity (or result in post-Offer market prices of Shares being higher than the Offer Price).

 

MATERIAL CONTRACTS. Certain of the material contracts that the Company has publicly filed with the SEC, including, without limitation, (i) the Equity Incentive Plan; (ii) the Secured Loan Agreement, dated June 30, 2022, by and among Arno Shipping Company Inc. and Maloelap Shipping Company Inc., as borrowers, and Piraeus Bank S.A., as lender; (iii) the Loan Agreement dated November 1, 2022, by and between Alpha Bank S.A., as lender, and Garu Shipping Company Inc., as borrower; (iv) the Secured Loan Agreement, dated November 25, 2022, by and among Toka Shipping Company Inc. and Bock Shipping Company Inc., as borrowers, and Piraeus Bank S.A., as lender; and (v) the Loan Agreement dated December 7, 2022, by and between Alpha Bank S.A., as lender, and Arbar Shipping Company Inc., as borrower, contain provisions that may be triggered upon a “change of control” or “change in control” of the Company as such terms are defined in the applicable underlying material contracts. The occurrence of a “change of control” or “change in control” of the Company may result in an event of default, cross default and/or accelerated obligations under certain of the agreements that govern the outstanding indebtedness of the Company and its subsidiaries. In addition, for purposes of the Equity Incentive Plan, the occurrence of a “change in control” would result in the vesting of all awards outstanding thereunder. The determination as to whether these provisions are triggered will depend, among other factors, on the number of Shares that are validly tendered in the Offer and the constitution of the Board and the Company’s management team. Further, Company contracts that are not publicly filed with the SEC, which have not been made available to us, may also contain provisions that may be triggered upon a “change of control” or “change in control” of the Company. We also expect that the Company has or may enter into contracts with other companies controlled or influenced by members if the Paliou family, and if the Offer is successful, it is possible that the Company or such other companies may seek to terminate, cease performing under or determine not to renew any such contracts. We also cannot predict whether a successful Offer would adversely affect any of the Company’s other existing or prospective commercial relationships.

 

While the consummation of the Offer may trigger any of the foregoing provisions, the Offer is not conditioned upon obtaining any approvals, consents or waivers with respect to these material contracts. The Offeror believes that the most advantageous course of action would be for the Company to seek to obtain such approvals, consents or waivers. However, if the Company refuses to do so, then the Offeror plans to use its commercially reasonable efforts to negotiate with such third parties (to the extent it is able to do so prior to the consummation of the Offer) and to seek to obtain appropriate financing, refinancing or bridge financing from third parties or from affiliates of the Offeror such that the trigger of these provisions will not be detrimental to the Company.

 

STOCK EXCHANGE LISTING. The Shares are currently listed and traded on the Nasdaq Capital Market, which constitutes the principal trading market for the Shares. Depending upon the number of Shares purchased pursuant to the Offer and/or the number of shareholders of the Company following the consummation of the Offer, the Shares may no longer meet the requirements of the Nasdaq Stock Market for continued listing on the Nasdaq Capital Market. The rules of the Nasdaq Stock Market establish certain criteria that, if not met, could lead to the delisting of the Shares from the Nasdaq Capital Market. Among such criteria are the number of shareholders, the number of Shares publicly held and the aggregate market value of the Shares publicly held. If, as a result of the purchase of the Shares pursuant to the Offer or otherwise, the Shares no longer meet the requirements of the Nasdaq Stock Market for continued listing, and listing of the Shares is discontinued by the Nasdaq Stock Market, the market for the Shares could be adversely affected. If the Nasdaq Stock Market were to delist the Shares, it is possible that the Shares would continue to trade in the over-the-counter market or would qualify for listing on another securities exchange (although there can be no assurances that the Company would seek such a listing, even if it were available), and that price or other quotations would be reported by such exchange or through other sources. The extent of the public market for the Shares and the availability of any price or quotation information would depend upon such factors as the number of shareholders and/or the aggregate market value of the publicly traded Shares remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration under the Exchange Act, as described below, and other factors. We cannot predict whether delisting of the Shares from the Nasdaq Capital Market, and the listing or quotation of the Shares on another exchange or through another source (if any), would have an adverse or beneficial effect on the market price for or marketability of the Shares or whether it would cause future market prices to be greater or less than the Offer Price.

 

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EXCHANGE ACT REGISTRATION. The Shares are currently registered under the Exchange Act which requires, among other things, that the Company furnish certain information to its shareholders and the SEC. Such registration may be terminated upon application of the Company to the SEC if such Shares are not listed on a national securities exchange and there are fewer than 300 holders of record of the Shares. The termination of the registration of the Shares under the Exchange Act would cause the Company to no longer be subject to the reporting requirements of the Exchange Act applicable to it as a foreign private issuer, and would substantially reduce the information required to be furnished by the Company to its shareholders and to the SEC. Furthermore, if registration of the Shares under the Exchange Act were terminated, the ability of “affiliates” of the Company and persons holding “restricted securities” of the Company to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended, may be impaired or, with respect to certain persons, eliminated. If the Shares were no longer registered under the Exchange Act, the Shares would no longer be eligible for the Nasdaq Capital Market listing.

 

Margin Regulations. The Shares are currently “margin securities” under the regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which has the effect, among other things, of allowing brokers to extend credit on the collateral of such Shares. Depending upon factors similar to those described above regarding listing and market quotations, it is possible that the Shares might no longer constitute “margin securities” for the purposes of the Federal Reserve Board’s margin regulations, and therefore, could no longer be used as collateral for loans made by brokers.

 

ACCOUNTING TREATMENT. We believe that the accounting treatment of the Offer is not material to the decision of holders of Shares to tender their Shares in the Offer.

 

tAXATION. As indicated in the Company’s annual report on Form 20-F for the year ending December 31, 2022, the Company believes that in 2022 it was exempt from U.S. federal income taxation on its U.S-source shipping income under Section 883 of the Code because it satisfied the “50% Ownership Test”, as defined therein, including the substantiation and reporting requirements to claim the benefits of the 50% Ownership Test. Because satisfaction of the 50% Ownership Test depends on both the residence of the shareholders of the Company on at least half the number of days in the taxable year and the willingness and ability of those shareholders to cooperate with the Company’s compliance with the substantiation and reporting requirements under the 50% Ownership Test, we believe that if the Offer is consummated, it is likely that the Company will be unable to satisfy the 50% Ownership Test in 2023, and, as a result, may be subject to U.S. federal income taxation on its U.S.-source shipping income in 2023.

 

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CONTROL. As described above in more detail, including in the Section of this Offer to Purchase entitled PURPOSE OF THE OFFER; PLANS FOR THE COMPANY, if we consummate the Offer, the Offeror will have designated a majority of the Board and will have acquired at least a majority of the issued and outstanding Common Shares on a fully diluted basis (assuming the exercise or conversion of all then-outstanding Options and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof), and the Shares will be the sole Company securities outstanding having the right or purporting to have the right to vote with respect to the election of directors. The Offeror is indirectly wholly-owned by Mr. George Economou. Mr. Economou and members of his family also directly or indirectly own interests in and manage oil tankers as well as dry bulk ships, through various affiliates, and as a result may be deemed to be engaged in the same or a similar business to the Company. In this respect, the Offeror or its affiliates or related persons could be deemed to have commercial interests with respect to the Company that are in addition to or different from those of Company shareholders that are not engaged in such businesses.

 

13.           DIVIDENDS AND DISTRIBUTIONS.

 

If, on or after the date of this Offer to Purchase, the Company should (i) split, combine or otherwise change the Shares or its capitalization, (ii) acquire or otherwise cause a reduction in the number of outstanding Shares or (iii) issue or sell any additional Shares, shares of any other class or series of capital stock, other voting securities or any securities convertible into, or options, rights or warrants, conditional or otherwise, to acquire, any of the foregoing, then, without prejudice to the Offeror’s rights under Section 14, the Offeror, in its sole discretion, may make such adjustments to the Offer Price and other terms of the Offer as it deems appropriate to reflect such split, combination or other change.

 

If, on or after the date of this Offer to Purchase, the Company should declare or pay any dividend on the Shares or make any other distribution (including the issuance of additional shares of capital stock pursuant to a stock dividend or stock split, the issuance of other securities or the issuance of rights for the purchase of any securities) with respect to the Shares that is payable or distributable to shareholders of record on a date prior to the transfer to the name of the Offeror or its nominee or transferee on the Company’s stock transfer records of the Shares purchased pursuant to the Offer, then, without prejudice to the Offeror’s rights under Section 14, (i) the Offer Price per Share payable by the Offeror pursuant to the Offer will be reduced to the extent any such dividend in excess of the usual cash dividend or distribution is payable in cash and (ii) any non-cash dividend, distribution or right shall be received and held by the tendering shareholder for the account of the Offeror and will be required to be promptly remitted and transferred by each tendering shareholder to the Tender Offer Agent for the account of the Offeror, accompanied by appropriate documentation of transfer. Pending such remittance and subject to applicable law, the Offeror will be entitled to all of the rights and privileges as owner of any such non-cash dividend, distribution or right and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by the Offeror, in its sole discretion.

 

Notwithstanding the foregoing, the Offeror will not for the avoidance of doubt be obligated to purchase any Shares and consummate the Offer if any of the foregoing actions has an effect of causing the Equity Condition not to be satisfied at or before the Expiration Date and Time.

 

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In the event that we make any change in the Offer Price or other terms of the Offer, including the number or type of securities offered to be purchased, we will inform the Company’s shareholders of this development and extend the Expiration Date and Time of the Offer, in each case to the extent required by applicable law.

 

14.           CONDITIONS OF THE OFFER.

 

Notwithstanding any other provision of the Offer, and in addition to (and not in limitation of) the Offeror’s rights to extend and amend the Offer, the Offeror shall not be required to accept for payment or pay for any Shares validly tendered pursuant to the Offer, and may terminate or amend the Offer and may postpone the acceptance for payment of and payment for, Shares validly tendered, if (i) any one or more of the Minimum Tender Condition, the Poison Pill Condition, the Article K Condition, the Equity Condition, the Series C Condition, the Series B Condition, or the Board Representation Condition is not satisfied or waived prior to the Expiration Date and Time, or (ii) at any time at or prior to the Expiration Date and Time any of the following conditions (together with the conditions referred to in clause (i), the “Offer Conditions”) shall occur:

 

(a)the consummation of the Offer would result in a violation of (i) any provision of the Marshall Islands Business Corporations Act (the “BCA”); or (ii) any other applicable law, including the Securities Laws;

 

(b)a preliminary or permanent injunction or other order of any U.S. federal or state court, Marshall Islands court, Greek court, or any other court, government or governmental authority or agency shall have been issued and remain in effect which: (i) makes illegal, delays or otherwise directly or indirectly restrains or prohibits the making of the Offer or the acceptance for payment, purchase of or payment for any Shares by the Offeror; (ii) imposes or confirms limitations on the ability of the Offeror effectively to exercise full rights of ownership of any Shares, including, without limitation, the right to vote any Shares acquired by the Offeror pursuant to the Offer or otherwise on all matters properly presented to the Company’s shareholders; (iii) imposes or confirms limitations on the ability of the Offeror to fully exercise the voting rights conferred pursuant to its appointment as proxy in respect of all validly tendered Shares which it accepts for payment; (iv) requires divestiture by the Offeror of any Shares, or (v) seeks to impose a Burdensome Condition (as defined below);

 

(c)there shall have occurred: (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market in the United States; (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, Marshall Islands or Greece; (iii) any limitation by any governmental authority on, or other event which might affect, the extension of credit by lending institutions or result in any imposition of currency controls in the United States, Marshall Islands or Greece; (iv) a commencement of a war or armed hostilities or other national or international calamity directly or indirectly involving the United States, Marshall Islands or Greece; (v) a material change in United States or other currency exchange rates or a suspension or a limitation on the markets thereof; or (vi) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof;

 

(d)there shall have been threatened in writing, instituted or pending any action or proceeding before any court or governmental agency or other regulatory or administrative agency or commission or by any other person, challenging the acquisition of any Shares pursuant to the Offer or otherwise directly or indirectly relating to the Offer;

 

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(e)the Company or the Board, or any of the Company’s subsidiary entities or any governing body thereof, shall have authorized, proposed or announced its intention to propose any material change to the Articles or bylaws or such subsidiary entity’s articles of incorporation or bylaws (other than any cancellation of the Series A Certificate, Series B Certificate or the Series C Certificate (or Section 4 thereof) in connection with the Offer), any merger, consolidation or business combination or reorganization transaction, acquisition of assets, disposition of assets or material change in the Company’s or such subsidiary entity’s capitalization or indebtedness, or any comparable event not in the ordinary course of business;

 

(f)any required approval, permit, authorization, extension, action or non-action, waiver or consent of any governmental authority or agency in the U.S., Marshall Islands, Greece, or any other jurisdiction required to consummate the Offer shall not have been obtained (or shall not have been obtained on terms reasonably satisfactory to the Offeror) or any waiting period or extension thereof imposed by any such government or governmental authority with respect to the Offer shall not have expired or been terminated;

 

(g)we or any of our affiliates and the Company reach any agreement or understanding pursuant to which it is agreed that the Offer will be terminated; or

 

(h)a tender offer or exchange offer for some or all of the Shares shall have been made or publicly announced or proposed to be made, supplemented or amended by any person other than the Offeror.

 

For purposes of this Offer to Purchase, “Burdensome Condition” means any agreement, consent, action, condition, restriction, or other mitigation involving the Company or any of its subsidiaries that would be, or would reasonably be expected to be, individually or in the aggregate, materially adverse to the businesses, assets or financial condition of the Company and its subsidiaries, taken as a whole, or any proffer, consent or agreement by the Offeror or any of its affiliates, including Maryport and Mr. George Economou, to (i) prohibit or limit their, its or his ownership of any portion of their, its or his respective businesses or assets (without giving effect to the consummation of the Offer), (ii) divest, hold, separate or otherwise dispose of any portion of their or his respective businesses or assets (without giving effect to the consummation of the Offer), or (iii) impose any other limitation on their or his ability to effectively control or operate their, its or his respective businesses or otherwise affect their, its or his ability to control their respective operations (without giving effect to the consummation of the Offer).

 

The foregoing conditions are for the sole benefit of the Offeror and may be asserted by the Offeror regardless of the circumstances giving rise to any such condition, and may be waived by the Offeror, at any time and from time to time, at or prior to the Expiration Date and Time, in the sole discretion of the Offeror and subject to the applicable rules and regulations of the SEC (including the requirements of Rule 14d-4 under the Exchange Act). The failure by the Offeror at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time prior to the Expiration Date and Time. Should the Offer be terminated pursuant to the foregoing provisions, all tendered Shares not theretofore accepted for payment pursuant thereto shall forthwith be returned to the tendering shareholders.

 

The Offer is not conditioned upon the Offeror obtaining financing.

 

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15.          CERTAIN LEGAL MATTERS; REGULATORY APPROVALS; APPRAISAL RIGHTS.

 

GENERAL. Except as described in this Offer to Purchase, based on a review of publicly available filings by the Company with the SEC and other publicly available information concerning the Company, the Offeror is not aware of any license or regulatory permit that appears to be material to the business of the Company and that might be adversely affected by the Offeror’s acquisition of Shares pursuant to the Offer, or of any approval or other action by any governmental, administrative or regulatory agency or authority, in the United States, the Republic of the Marshall Islands, Greece, or elsewhere, that would be required for the acquisition or ownership of Shares by the Offeror pursuant to the Offer. However, as of the date of this Offer to Purchase, the Company has not made available to the Offeror the non-public information that the Offeror would require in order to definitely confirm that no such license or permit would be adversely affected or that no such approvals are required. If we later determine that any such approval is required or that the Offeror’s acquisition of Shares pursuant to the Offer would adversely affect any license or regulatory permit that we consider to be material to the business, we reserve the right to amend the conditions to the Offer accordingly. See Section 14 — “CONDITIONS OF THE OFFER”

 

BUSINESS COMBINATION PROVISIONS. The Company is a Marshall Islands corporation. The rights (or in the case of the Series C Preferred Stock, purported rights) of its shareholders currently derive from the Articles, the Series A Certificate, the Series B Certificate, the Series C Certificate, the Bylaws, and the BCA. While the provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States, the BCA does not contain specific provisions regarding “business combinations” between Marshall Islands corporations and “interested shareholders”. However, Article K of the Articles generally provides that the Company may not engage in any business combination with any Interested Shareholder for a period of three years following the time of the transaction in which the person became an Interested Shareholder, unless (i) prior to such time, either the business combination or the transaction which resulted in the shareholder becoming an Interested Shareholder is approved by the Board; (ii) upon consummation of the transaction which resulted in the shareholder becoming an Interested Shareholder, the Interested Shareholder owned at least 85% of the voting stock of the Company outstanding at the time the transaction commenced; (iii) at or subsequent to such time, the business combination is approved by the Board and authorized at an annual or special meeting of shareholders by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the Interested Shareholder; or (iv) the shareholder became an Interested Shareholder prior to the consummation of the initial public offering of the Company’s commons stock. For the purposes of Article K, “Interested Shareholder” generally means any person (other than the Company and any majority-owned subsidiary of the Company) that (x) is the owner of 15% or more of the Company’s outstanding voting shares, or (y) the Company’s affiliate or associate who was the owner of 15% or more of the Company’s outstanding voting shares at any time within the three-year period immediately prior to the determination date (subject to certain exceptions).

 

The Offer is conditioned upon, among other things, the Board having validly waived the applicability of Article K to the purchase of the Shares by the Offeror in the Offer so that the provisions of Article K would not, at or following consummation of the Offer, prohibit, restrict or apply to any business combination involving the Company and the Offeror or any affiliate or associate of the Offeror. See Section 14 — “CONDITIONS OF THE OFFER”.

 

Antitrust and Regulatory Laws. Under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), certain acquisitions may not be consummated unless certain information has been furnished to the Federal Trade Commission and the Antitrust Division of the Department of Justice and certain waiting period requirements have been satisfied.

 

29

 

 

Based on a review of the publicly available information relating to the Company and its business, the Offeror has determined that no antitrust notification filing or waiting period under the HSR Act is required to consummate the Offer, and therefore HSR clearance is not a condition to the consummation of the Offer.

 

APPRAISAL RIGHTS. Appraisal rights are not available in the Offer.

 

16.           FEES AND EXPENSES.

 

The Offeror has retained Innisfree M&A Incorporated to be the Information Agent and Continental Stock Transfer & Trust Company to be the Tender Offer Agent in connection with the Offer. The Information Agent may contact holders of Shares by mail, e-mail, telephone, facsimile, telegraph and personal interview and may request banks, brokers, dealers and other nominees to forward materials relating to the Offer to beneficial owners of Shares.

 

The Information Agent and the Tender Offer Agent each will receive reasonable and customary compensation for their respective services in connection with the Offer, will be reimbursed for reasonable out-of-pocket expenses, and will be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities under the Securities Laws.

 

It is estimated that the expenses incurred in connection with the Offer (including, without limitation, Tender Offer Agent fees and expenses, Information Agent fees and expenses, SEC filing fees, printing and mailing costs, legal fees and summary advertisement costs) will be approximately $575,000.

 

The Offeror will not pay any fees or commissions to any broker or dealer or to any other person (other than to the Tender Offer Agent and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will, upon request, be reimbursed by the Offeror for customary mailing and handling expenses incurred by them in forwarding offering materials to their customers.

 

17.           MISCELLANEOUS.

 

The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In those jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Offeror by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by the Offeror.

 

30

 

 

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF THE OFFEROR OR ITS AFFILIATES NOT CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL and Notice of Guaranteed Delivery, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE OFFEROR OR ANY OF ITS AFFILIATES.

 

The Offeror, Maryport and Mr. Economou have filed with the SEC a Schedule TO pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, furnishing certain additional information with respect to the Offer. The SEC maintains a website at http://www.sec.gov that contains the Schedule TO and the exhibits thereto and other information that the Offeror has filed electronically with the SEC. Additionally, requests for copies of this Offer to Purchase, the related Letter of Transmittal and Notice of Guaranteed Delivery, and all other related materials may be directed to the Information Agent or brokers, dealers, commercial banks and trust companies and copies will be furnished promptly at the Offer’s expense.

 

18.           LEGAL PROCEEDINGS.

 

As of the date of this Offer, none of the Offeror, Maryport or Mr. Economou are party to any legal proceedings relating to this Offer to Purchase.

 

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[THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

32

 

 

SCHEDULE I

 

EXECUTIVE OFFICER(S),
DIRECTOR(S) and
controlling person
OF
Sphinx Investment Corp. and Maryport Navigation Corp.

 

The names and positions of the executive officers, directors and controlling person of the Offeror and Maryport are set forth below. The following sets forth with respect to each executive officer, director and controlling person such person’s (a) name, (b) present principal occupation or employment and the name and principal business of any corporation or other organization in which such employment or occupation is conducted and (c) material occupations, positions, offices or employment during at least the last five years, giving the name, principal business and address of any corporation or other organization in which such occupation, position, office or employment was carried on.

 

Sphinx Investment Corp. (Offeror)

 

Levante Services Limited is the sole director and executive officer of the Offeror. The sole director and executive officer of Levante Services Limited is Kleanthis Costa Spathias.

 

Maryport Navigation Corp.

 

Levante Services Limited is the sole director and executive officer of Maryport. The sole director and executive officer of Levante Services Limited is Kleanthis Costa Spathias.

 

GEORGE ECONOMOU

 

George Economou is a citizen of Greece. Mr. Economou’s principal business address is c/o Levante Services Limited, Leoforos Evagorou 31, 2nd Floor, Office 21 1066 Nicosia, Cyprus, where the business phone number is +35 722 010610. The principal occupation of Mr. Economou is investor and business executive, and such business is conducted through, among other entities, the Offeror and Maryport.

 

LEVANTE SERVICES LIMITED

 

Levante Services Limited is a corporation organized under the laws of the Republic of Liberia. Levante’s principal business address is Leoforos Evagorou 31, 2nd Floor, Office 21 1066 Nicosia, Cyprus, where the business phone number is +35 722 010610. The principal business of Levante is acting as director, president, treasurer and secretary of Sphinx, Maryport and other companies.

 

KLEANTHIS Costa SPATHIAS

 

Kleanthis Costa Spathias is a citizen of the United Kingdom. Mr. Spathias’s principal business address is c/o Levante Services Limited, Leoforos Evagorou 31, 2nd Floor, Office 21 1066 Nicosia, Cyprus, where the business phone number is +35 722 010610. The principal occupation of Mr. Spathias is the provision of director and secretarial services and such business is conducted through, among other entities, Levante.

 

Schedule I-1

 

 

SCHEDULE II

 

TRANSACTIONS BY
Sphinx Investment Corp., Maryport Navigation Corp.
AND
George Economou WITHIN THE PAST SIXTY (60) DAYS

 

The table below indicates the date of each purchase and sale of Shares by the Offeror, Maryport and George Economou within the past sixty (60) days and the number of Shares in each such purchase and sale. All such transactions were purchases of Shares effected in the open market, and the table includes commissions paid in the per Share prices.

 

  Trade Date Person Effecting Transaction Buy/Sell Quantity Price
($)
1. 08/07/2023 Sphinx Investment Corp. Buy 21,700 $1.14
2. 08/08/2023 Sphinx Investment Corp. Buy 30,000 $1.16
3. 08/09/2023 Sphinx Investment Corp. Buy 12,315 $1.14
4. 08/10/2023 Sphinx Investment Corp. Buy 41,431 $1.25
5. 08/11/2023 Sphinx Investment Corp. Buy 52,605 $1.25
6. 08/14/2023 Sphinx Investment Corp. Buy 99,900 $1.39
7. 08/14/2023 Sphinx Investment Corp. Buy 100 $1.30
8. 08/15/2023 Sphinx Investment Corp. Buy 120,000 $1.43
9. 08/16/2023 Sphinx Investment Corp. Buy 80,000 $1.44
10. 08/17/2023 Sphinx Investment Corp. Buy 60,000 $1.53
11. 08/17/2023 Sphinx Investment Corp. Buy 20,000 $1.46
12. 08/18/2023 Sphinx Investment Corp. Buy 70,000 $1.52
13. 08/21/2023 Sphinx Investment Corp. Buy 120,000 $1.57
14. 08/21/2023 Sphinx Investment Corp. Buy 15,808 $1.55
15. 08/22/2023 Sphinx Investment Corp. Buy 100,000 $1.56
16. 08/22/2023 Sphinx Investment Corp. Buy 30,000 $1.49
17. 08/23/2023 Sphinx Investment Corp. Buy 100,000 $1.41
18. 08/23/2023 Sphinx Investment Corp. Buy 30,000 $1.40
19. 08/24/2023 Sphinx Investment Corp. Buy 30,000 $1.42

 

Schedule II-1

 

 

Manually signed facsimile copies of the Letter of Transmittal will be accepted. Letters of Transmittal and certificates for Shares and certificates, if any, for the associated Rights, should be sent or delivered by each shareholder of the Company or its, his or her broker, dealer, commercial bank, trust company or other nominee to the Tender Offer Agent at its address set forth below:

 

The Tender Offer Agent for the Offer is:

 

 

Continental Stock Transfer & Trust Company

 

Mail or deliver the Letter of Transmittal, together with the certificate(s) (if any) representing your shares, to:

 

By Mail or Overnight Courier: By Facsimile Transmission
(for eligible institutions only):
   
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Corporate Actions Department
212-616-7610
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Corporate Actions Department

 

DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY TO THE TENDER OFFER AGENT.

 

Any questions or requests for assistance may be directed to the Information Agent at its address and telephone numbers set forth below. Requests for additional copies of this Offer to Purchase and the Letter of Transmittal may be directed to the Information Agent or the Tender Offer Agent. Shareholders may also contact their brokers, dealers, commercial banks, trust companies or other nominees for assistance concerning the Offer.

 

The Information Agent for the Offer is:

 

 

501 Madison Avenue, 20th Floor

New York, New York 10022

 

Shareholders May Call Toll Free: (877) 800-5190

Banks and Brokers May Call Collect: (212) 750-5833

 

 

Exhibit (a)(1)(B)

 

Letter of Transmittal

To Tender for Cash

Common Shares

(Including the Associated Preferred Stock Purchase Rights)

of

Performance Shipping Inc.

Pursuant to the Offer to Purchase dated October 11, 2023

by

Sphinx Investment Corp.

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 p.m., NEW YORK CITY TIME, ON NOVEMBER 8, 2023, UNLESS THE OFFER IS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE “EXPIRATION DATE and Time”). 

 

THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

 

DESCRIPTION OF SHARES TENDERED

Name(s) and Address(es) of Registered Holder(s)
(Please Fill in Exactly as Name(s) Appears on Share Certificate(s))

Share Certificate(s) Tendered
(Attach Additional List, if Necessary)

 

Share Certificate Number(s)*

Shares and Rights Represented by Share Certificate(s)*

Number of Shares and Rights Tendered**

       
       
       
  Total Shares    
*Need not be completed by shareholders tendering by book-entry transfer.
**Unless otherwise indicated, all Shares represented by certificates delivered to the Tender Offer Agent will be deemed to have been tendered. See Instruction 5.

 

 

 

¨       CHECK HERE IF CERTIFICATES HAVE BEEN LOST, DESTROYED OR STOLEN, SEE INSTRUCTION 8.

 

You have received this Letter of Transmittal in connection with the offer (the “Offer”) by Sphinx Investment Corp., a corporation organized under the laws of the Republic of the Marshall Islands (the “Offeror”), to purchase all of the outstanding common shares, par value $0.01 per share (the “Common Shares”), of Performance Shipping Inc., a corporation organized under the laws of the Republic of the Marshall Islands (the “Company”) (including the associated preferred stock purchase rights (the “Rights”, and together with the Common Shares, “Shares”) issued pursuant to the Stockholders’ Rights Agreement, dated as of December 20, 2021, between the Company and Computershare Inc. as Rights Agent, as it may be amended from time to time) at a price of $3.00 per Share in cash, without interest, less any applicable withholding of taxes, upon the terms set forth in the Offer to Purchase, dated as of October 11, 2023, and any amendments and supplements thereto (the “Offer to Purchase”).

 

 

 

 

 

Delivery of Documents to the Tender Offer Agent may be made as follows:

 

 

 

Continental Stock Transfer & Trust Company

 

By Mail or Overnight Courier: By Facsimile Transmission
(for eligible institutions only):
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Corporate Actions Department
212-616-7610
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Corporate Actions Department

This document should be read in conjunction with the Offer to Purchase. All terms and conditions contained in the Offer to Purchase are deemed to be incorporated in and form part of this Letter of Transmittal. Terms used but not defined in this Letter of Transmittal have the meanings given to them in the Offer to Purchase. In the event of an inconsistency between the terms and procedures in this Letter of Transmittal or the Notice of Guaranteed Delivery and the Offer to Purchase, the terms and procedures in the Offer to Purchase shall govern.

 

You should read carefully the instructions set forth herein before you complete this Letter of Transmittal. You may request assistance or additional copies of the Offer to Purchase and this Letter of Transmittal from the Information Agent at:

 

 

501 Madison Avenue, 20th Floor

New York, New York 10022

Shareholders May Call Toll Free: (877) 800-5190

Banks and Brokers May Call Collect: (212) 750-5833

 

If you wish to accept the Offer, deliver this Letter of Transmittal properly completed and duly executed, and all other required documents, to the Tender Offer Agent at its address set forth on the first page of this document as soon as possible and in any event before the Expiration Date and Time. Note that, in some circumstances, your signature on the Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of the Security Transfer Agents Medallion Program or any other “eligible guarantor institution”.

 

Do not detach any part of this form.

 

If you hold your Shares through a broker, dealer, commercial bank, trust company or other nominee, you must contact that institution and have that institution tender your Shares on your behalf, such that they are received by the Tender Offer Agent before the Expiration Date and Time. Such institutions are likely to establish cutoff times and dates earlier than the Expiration Date and Time to receive instructions to tender Shares into the Offer. You should contact your broker, dealer, commercial bank, trust company or other nominee to determine the cutoff time and date that is applicable to you and any fees that may be assessed by your broker, dealer, commercial bank, trust company or other nominee in connection with your tender.

 

 

 

 

If you cannot get any document or instrument that is required to be delivered to the Tender Offer Agent by the Expiration Date and Time, you may get additional time to do so by having a broker, dealer, commercial bank, trust company or other nominee that is a member of the Securities Transfer Agents Medallion Program or other eligible institution guarantee that the missing items will be received by the Tender Offer Agent within two Nasdaq trading days after the date of execution of the Notice of Guaranteed Delivery, attached as Exhibit (a)(1)(C) to Schedule TO filed by the Offeror, Maryport and George Economou.

 

DO NOT DELIVER ANY DOCUMENTS TO THE OFFEROR, MARYPORT NAVIGATION CORP. (“MARYPORT”), GEORGE ECONOMOU, THE INFORMATION AGENT OR The Depository Trust Company (“DTC”). DELIVERY OF THIS LETTER OF TRANSMITTAL OR ANY OTHER REQUIRED DOCUMENTS TO THE OFFEROR, MARYPORT, GEORGE ECONOMOU, THE INFORMATION AGENT OR DTC DOES NOT CONSTITUTE A VALID TENDER.

 

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE IRS FORM W-9 (OR AS APPLICABLE, IRS FORM W-8) SET FORTH BELOW.

 

INSOFAR AS WE ARE AWARE BASED ON THE COMPANY’S CURRENT DISCLOSURES, THE RIGHTS ARE PRESENTLY EVIDENCED BY THE CERTIFICATES FOR THE COMMON SHARES AND ARE NOT REPRESENTED BY SEPARATE CERTIFICATES. HOWEVER, IN THE FUTURE THE COMPANY MAY ISSUE SEPARATE CERTIFICATES REPRESENTING THE RIGHTS. UNLESS AND UNTIL ANY SUCH SEPARATE CERTIFICATES REPRESENTING RIGHTS ARE ISSUED, A TENDER BY A SHAREHOLDER OF SUCH SHAREHOLDER’S COMMON SHARES WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS. FROM AND AFTER SUCH TIME AS ANY SEPARATE CERTIFICATES REPRESENTING RIGHTS HAVE BEEN ISSUED, A SHAREHOLDER WILL ALSO BE REQUIRED TO TENDER SUCH CERTIFICATES REPRESENTING THE RIGHTS ALONGSIDE THE TENDER BY SUCH SHAREHOLDER OF SUCH SHAREHOLDER’S COMMON SHARES IN ORDER FOR SUCH TENDER TO BE VALID. UNLESS SPECIFICALLY STATED OTHERWISE, ALL REFERENCES IN THIS LETTER OF TRANSMITTAL TO “SHARES” SHALL INCLUDE BOTH COMMON SHARES AND THE RIGHTS.

 

This Letter of Transmittal is to be completed by shareholders either (i) if certificates representing Shares are to be forwarded herewith or, (ii) (unless an Agent’s Message (as defined in Instruction 2) is utilized) if delivery is to be made by book-entry transfer to the account maintained by the Tender Offer Agent at DTC, pursuant to the procedures set forth in Section 2 of the Offer to Purchase entitled “PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES”. Shareholders whose certificates are not immediately available, or who cannot deliver their certificates or confirmation of the book-entry transfer of their Shares into the Tender Offer Agent’s account at DTC (“Book-Entry Confirmation”) and all other documents required hereby to the Tender Offer Agent at or prior to the Expiration Date and Time, must tender their Shares according to the guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase entitled “PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES”. See Instruction 2.

 

The Offer is not being made to (nor will tender of Shares be accepted from or on behalf of) shareholders in any jurisdiction where it would be illegal to do so.

 

 

 

 

¨CHECK HERE IF YOU ARE ENCLOSING YOUR TENDERED CERTIFICATES WITH THIS LETTER OF TRANSMITTAL.

 

¨CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY

 

THE TENDER OFFER AGENT AT DTC AND COMPLETE THE FOLLOWING:

 

Name of Tendering Institution ___________________________________________________________

 

Account Number ______________________ Transaction Code Number __________________

 

¨CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE TENDER OFFER AGENT AND COMPLETE THE FOLLOWING:

 

Names(s) of Registered Holder(s): _______________________________________________________

 

Window Ticket Number (if any) _________________________________________________________

 

Date of Execution of Notice of Guaranteed Delivery: _________________________________________

 

Name of Institution that Guaranteed Delivery: ______________________________________________

 

 

 

You must sign this Letter of Transmittal in the appropriate space provided below and complete the enclosed Internal Revenue Service (“IRS”) Form W-9, or, if you are a shareholder that is not a U.S. person for U.S. federal income tax purposes (as defined below in “Backup Withholding; IRS Forms”), provide a properly completed IRS Form W-8, available from the Tender Offer Agent or the IRS website at http://www.irs.gov. Shareholders that are not U.S. persons or that have questions regarding their status for U.S. federal income tax purposes should consult their tax advisors to determine which IRS Form is appropriate.

 

 

 

 

NOTE: SIGNATURES MUST BE PROVIDED BELOW

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

 

Ladies and Gentlemen:

 

The undersigned hereby tenders to Sphinx Investment Corp., a corporation organized under the laws of the Republic of the Marshall Islands (the “Offeror”), the common shares, par value $0.01 per share (the “Common Shares”), of Performance Shipping Inc., a corporation organized under the laws of the Republic of the Marshall Islands (the “Company”) (including the associated preferred stock purchase rights (the “Rights”, and together with the Common Shares, the “Shares”) issued pursuant to the Stockholders’ Rights Agreement, dated as of December 20, 2021, between the Company and Computershare Inc. as Rights Agent, as it may be amended from time to time), pursuant to the Offeror’s offer to purchase all of the issued and outstanding Shares of the Company for $3.00 per Share in cash, without interest, less any applicable withholding of taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase dated October 11, 2023 as it may be amended or supplemented (the “Offer to Purchase”), receipt of which is hereby acknowledged, and in this Letter of Transmittal and the related Notice of Guaranteed Delivery (which three documents, including any amendments or supplements hereto and thereto, collectively constitute the “Offer”).

 

Subject to, and effective upon, acceptance for payment of and payment for Shares validly tendered herewith in accordance with the terms and subject to the conditions of the Offer, the undersigned hereby sells, assigns, and transfers to, or upon the order of, the Offeror all right, title and interest in, to and under all of Shares that are being tendered hereby (and any and all other Shares or other securities or rights issued or issuable in respect of such Shares) and irrevocably appoints the Tender Offer Agent (or any other entity designated by the Offeror) and its directors, officers, employees and agents (and each and any of the foregoing) as the true and lawful agents and attorneys-in-fact (in each case acting individually or with one or much such other agents or attorneys -in-fact) of the undersigned with respect to such Shares (and any and all other Shares or securities or rights issued or issuable in respect of such Shares), with full power of substitution and re-substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (a) deliver certificates representing such Shares (and any such other Shares or securities or rights), or transfer ownership of such Shares (and any and all other Shares or securities or rights issued or issuable in respect of such Shares) on the account books maintained by DTC, together in either such case with all accompanying evidences of transfer and authenticity, to or upon the order of the Offeror upon receipt by the Tender Offer Agent, as the undersigned’s agent, of the purchase price (adjusted, if appropriate, as provided in the Offer to Purchase), (b) present such Shares (and any such other Shares or securities or rights) for registration and transfer on the books of the Company, (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any such other Shares or securities or rights), all in accordance with the terms of the Offer, and (d) complete and execute any and all form(s) of transfer and other document(s) as may be necessary or required, at the discretion of such attorney-in-fact, in order to transfer those Shares validly tendered and not validly withdrawn, into the Offeror’s name or into the name of such other person(s) as the Offeror may direct, and to deliver such form(s) of transfer and other document(s) as may be required, together with other document(s) of title relating to such Shares, and to do all such other acts and things as may in the opinion of such attorney-in-fact be necessary or required for the purpose of, or in connection with, the acceptance of the Offer, and to vest title to Shares in the Offeror or its nominees as aforesaid.

 

The undersigned hereby irrevocably appoints the Offeror and any designee of the Offeror and their respective directors, officers, employees and agents (and each and any of the foregoing) as the true and lawful attorneys-in-fact and proxies (in each case acting individually or with one or much such other attorneys -in-fact or proxies) of the undersigned, each with full power of substitution and re-substitution, to vote in such manner as any such attorney-in-fact and proxy or its substitute shall, in its sole discretion, deem proper, and otherwise act (including pursuant to written consent) with respect to all Shares tendered hereby which have been accepted for payment by the Offeror prior to the time of such vote or action (and any and all other Shares or securities or rights issued or issuable in respect of such Shares), which the undersigned is entitled to vote at any meeting of shareholders (whether annual or special and whether or not an adjourned meeting) of the Company, or by consent in lieu of any such meeting, or otherwise. This proxy and power of attorney is coupled with an interest in Shares tendered hereby, is irrevocable, is granted in consideration of, and is effective upon, the acceptance for payment of such Shares (and any and all other Shares or securities or rights issued or issuable in respect of such Shares) by the Offeror in accordance with the terms of the Offer. Such acceptance for payment shall revoke all prior proxies granted by the undersigned at any time with respect to such Shares (and any and all other Shares or securities or rights issued or issuable in respect of such Shares) and no subsequent proxies will be given (and if given will be deemed to be ineffective) with respect thereto by the undersigned.

 

 

 

 

The undersigned hereby irrevocably undertakes, represents, warrants and agrees (so as to bind the undersigned and its, his or her personal representatives, heirs, successors and assigns) as follows:

 

(a)that the undersigned has the full power and authority to tender, sell, assign and transfer the Shares tendered (and any and all other Shares or securities or rights issued or issuable in respect of such Shares), and that the Offeror’s acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement containing the terms and conditions of the Offer, as between the Offeror and the tendering shareholder;

 

(b)that the tendering of Shares hereby, and the execution of this Letter of Transmittal, shall constitute: (i) an acceptance of the Offer in respect of the number of Shares identified herein, (ii) an undertaking to execute all further documents and give all further assurances which may be required to enable the Offeror to obtain the full benefit and to obtain title to the tendered Shares, and (iii) that the undersigned’s acceptance shall be irrevocable, subject to the undersigned not having validly withdrawn such acceptance;

 

(c)that the Shares tendered hereby (and any and all other Shares or securities or rights issued or issuable in respect of such Shares) are fully paid and non-assessable, sold free from all liens, equities, charges and encumbrances and together with all rights attaching thereto, including voting rights and the right to all dividends or other distributions having a record date after such Shares have been accepted for purchase in accordance herewith;

 

(d)that the tendering of Shares hereby, and the execution of this Letter of Transmittal, constitutes the irrevocable appointment of the Tender Offer Agent and its directors, officers, employees and agents as such holder’s attorney-in-fact and an irrevocable instruction to the attorney-in-fact to complete and execute any and all form(s) of transfer and other document(s) as may be necessary or required, at the discretion of the attorney-in-fact, in order to transfer those Shares validly tendered and not validly withdrawn, in the Offeror’s name or in the name of such other person(s) as the Offeror may direct, and to deliver such form(s) of transfer and other document(s) as may be required, together with other document(s) of title relating to such Shares, and to do all such other acts and things as may in the opinion of the attorney-in-fact be necessary or required for the purpose of, or in connection with, the acceptance of the Offer, and to vest title to the Shares in the Offeror or its nominees as aforesaid;

 

(e)that the tendering of Shares hereby, and the execution of this Letter of Transmittal, constitutes, subject to the undersigned not having validly withdrawn its tender, an irrevocable authority and request (i) to the Offeror and its directors, officers and agents, to cause the registration of the transfer of the Shares pursuant to the Offer and the delivery of any and all document(s) of title in respect thereof to the Offeror or its nominees and (ii) to the Offeror or the Offeror’s agents, to act upon any instructions with regard to notices and payments that have been recorded in the records of the Offeror regarding such holder’s Shares;

 

(f)that the Section of the Offer to Purchase entitled “Procedure for Accepting the Offer and Tendering Shares”, is incorporated in and forms part of this Letter of Transmittal; and

 

(g)that the undersigned agrees to ratify each and every act or thing which may be done or effected by the Offeror, Maryport, George Economou, or any of their directors, officers, employees or agents in the proper exercise of the power and authorities of any such person.

 

 

 

 

The undersigned, upon request, will execute and deliver any additional documents deemed by the Tender Offer Agent or the Offeror to be necessary or desirable to complete the sale, assignment and transfer of Shares tendered hereby (and any such other Shares or securities or rights).

 

No authority herein conferred or agreed to be conferred in this Letter of Transmittal shall be affected by, and all such authority shall survive, the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators and legal representatives of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable.

 

The undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 2 of the Offer to Purchase entitled “PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES” and in the instructions hereto will constitute a binding agreement between the undersigned and the Offeror upon the terms and subject to the conditions of the Offer.

 

The undersigned hereby affirms its understanding that the Tender Offer Agent will act as agent for all tendering shareholders for the purpose of (i) receiving payment from the Offeror for tendered Shares and (ii) transmitting payment to the tendering shareholders. Accordingly, upon the Offeror’s deposit with the Tender Offer Agent the proceeds required to consummate the Offer, the Offeror’s obligation to make payment for the Shares will be satisfied, and tendering shareholders must thereafter look solely to the Tender Offer Agent for payment of the amounts owed to them by reason of the acceptance of Shares pursuant to the Offer.

 

The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase, the Offeror may not be required to accept for payment any of Shares tendered hereby.

 

Unless otherwise indicated herein under “Special Payment Instructions” or “Bank Wire”, please issue the check for the purchase price (less the amount of any federal income and withholding tax required to be withheld) and/or return any certificates representing Shares not tendered or accepted for payment in the name(s) of the registered shareholder(s) appearing under “Description of Shares Tendered.” Similarly, unless otherwise indicated under “Special Delivery Instructions,” please mail the check for the purchase price (less the amount of any federal income and backup withholding tax required to be withheld) and/or return any certificates representing Shares not tendered or accepted for payment (and accompanying documents, as appropriate) to the registered holder(s) appearing under “Description of Shares Tendered” at the address shown below such registered shareholder(s) name(s). In the event that either or both the Special Delivery Instructions and the Special Payment Instructions are completed, please issue the check for the purchase price and/or return any certificates representing Shares not tendered or accepted for payment in the name(s) of, and deliver such check and/or return such certificates to, the person or persons so indicated. Shareholders tendering Shares by book-entry transfer may request that any Shares not accepted for payment be returned by crediting such shareholder’s account maintained at DTC. The undersigned recognizes that the Offeror has no obligation pursuant to the “Special Payment Instructions” to transfer any Shares from the name of the registered shareholder(s) thereof if the Offeror does not accept for payment any Shares so tendered hereby. In the event that the “Bank Wire” box is validly completed, please wire my payment pursuant to such wire instructions in lieu of sending a check.

 

 

 

 

SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 6, 7 and 13)

 

To be completed ONLY if the check for the purchase price of Shares purchased (less the amount of any federal income and backup withholding tax required to be withheld) or certificates for Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned.

 

Issue:  ¨        check

             ¨       certificate(s) to:

 

Name:                                                                                 

                        (Please Print)

Address:                                                                            
                                                                                           
                                                                                           
                                                                                           

                          (Zip Code)

 

                                                                                           

              (Taxpayer Identification No.)

 

 

SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 6, 7 and 13)

 

To be completed ONLY if the check for the purchase price of Shares purchased (less the amount of any federal income and backup withholding tax required to be withheld) or certificates for Shares not tendered or not purchased are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned’s signature(s).

 

 

 

Issue:  ¨        check

             ¨       certificate(s) to:

 

Name:                                                                                 

                        (Please Print)

Address:                                                                            
                                                                                           
                                                                                           
                                                                                           

                          (Zip Code)

 

                                                                                           

              (Taxpayer Identification No.)

 

 

 

BANK WIRE INSTRUCTIONS

(See Instruction 7)

 

To be completed ONLY if you wish to receive payment by wire and not by check.

 

NOTE: If you do not validly complete the information below, a check for the proceeds will be delivered to you at the address as it appears on the first page of this Letter of Transmittal for any payment due to you. The name on the bank account must match the registration and include all registered holders. If you choose to receive a wire, a $50 wire fee will be deducted from your payment. You may also be contacted to verbally confirm your wire instructions below. Please wire the entitled funds as follows:

 

ABA Routing Number  
Bank Name  
Bank Address  
Name on Bank Account  
Account Number (DDA)  
For Further Credit Acct #  
For Further Credit Acct Name  
SWIFT / IBAN (req’d for Intl wires)  
By completion of this Bank Wire Instructions box, the undersigned hereby agrees that the above wire instructions are true and correct and by endorsing this Letter of Transmittal the person authorized to act on behalf of this account is directing the Tender Offer Agent to make payment to the bank account described above.

 

 

 

 

 

IMPORTANT

 

SHAREHOLDER: SIGN HERE
(Please complete and return the enclosed IRS Form W-9 or an appropriate IRS Form W-8, as applicable)

 

___________________________________________________________________________________________________________________________

___________________________________________________________________________________________________________________________

Signature(s) of Owners

 

Dated                  ,                     

Name(s)                                                                                                                                                                    

                                                                                                                                                                                  

                                                       (Please Print)

 

Capacity (Full Title)                                                                                                                                               

Address                                                                                                                                                                  

                                                                                                                                                                                  

                                                       (Include Zip Code)

 

Area Code and Telephone Number                                                                                                                    

 

(Must be signed by registered holder(s) exactly as name(s) appear(s) on common share certificate(s), and, if certificates have been issued in respect of the Rights prior to the expiration of the Offer, certificate(s) representing the associated Rights, or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 6.)

 

 

Guarantee of Signature(s) 

(If required, see Instructions 1 and 6)

 

FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE BELOW.

 

Authorized Signature(s)                                                                                                                                       

Name                                                                                                                                                                       

Name of Firm                                                                                                                                                          

Address                                                                                                                                                                  

                                                                                                                                                                                  

                                                (Include Zip Code)

 

Area Code and Telephone Number                                                                                                                    

Dated                  ,                     

 

 

 

 

INSTRUCTIONS

Forming Part of the Terms and Conditions of the Offer

 

1.       Guarantee of Signatures.

 

No signature guarantee on this Letter of Transmittal is required (i) if this Letter of Transmittal is signed by the registered shareholder(s) (which term, for purposes of this document, shall include any participant in DTC whose name appears on a security position listing as the owner of Shares) tendered herewith, unless such shareholder has completed either the box entitled “Special Delivery Instructions” or the box entitled “Special Payment Instructions” on this Letter of Transmittal, or (ii) if such Shares are tendered for the account of the Securities Transfer Agents Medallion Program or any other “eligible guarantor institution”, as such term is defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended (each, an “Eligible Institution” and collectively, “Eligible Institutions”). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. Shareholders may also need to have any certificates they deliver endorsed or accompanied by a stock power, and the signatures on these documents also may need to be guaranteed. See Instruction 6.

 

2.       Delivery of Letter of Transmittal and Certificates.

 

This Letter of Transmittal is to be completed by shareholders either if certificates representing Shares and, if certificates have been issued in respect of Rights prior to the Expiration Date and Time, certificates representing the Rights, are to be forwarded herewith to the Tender Offer Agent or, unless an Agent’s Message (as defined below) is utilized, if tenders of Shares are to be made pursuant to the procedures for delivery by book-entry transfer set forth in Section 2 of the Offer to Purchase entitled “PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES”. Certificates representing all physically tendered Shares, or any Book-Entry Confirmation of Shares, as the case may be, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees (or, in connection with a book-entry transfer, an Agent’s Message) and any other documents required by this Letter of Transmittal must be received by the Tender Offer Agent at its address set forth herein on or prior to the Expiration Date and Time. If a shareholder’s certificate(s) representing Shares are not immediately available (or the procedure for the book-entry transfer cannot be completed on a timely basis) or time will not permit all required documents to reach the Tender Offer Agent on or prior to the Expiration Date and Time, such shareholder’s Shares may nevertheless be tendered if the procedures for guaranteed delivery set forth in Section 2 of the Offer to Purchase entitled “PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES”. are followed. Pursuant to such procedure, (i) such tender must be made by or through an Eligible Institution, (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Offeror, must be received by the Tender Offer Agent on or prior to the Expiration Date and Time, and (iii) the certificates representing all tendered Shares, in proper form for transfer, or Book-Entry Confirmation of Shares, as the case may be, in each case together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees (or, in connection with a book-entry transfer, an Agent’s Message) and any other documents required by this Letter of Transmittal, must be received by the Tender Offer Agent within two Nasdaq trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in the Section of the Offer to Purchase entitled “PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES”.

 

The term “Agent’s Message” means a message transmitted through electronic means by DTC to, and received by, the Tender Offer Agent and forming a part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the DTC participant tendering Shares that such participant has received, and agrees to be bound by, this Letter of Transmittal. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC’S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE TENDER OFFER AGENT.

 

 

 

 

THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATE(S) REPRESENTING SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE OPTION AND SOLE RISK OF THE TENDERING SHAREHOLDER. THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE TENDER OFFER AGENT. IF SUCH DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

 

3.       No Alternative, Conditional or Contingent Tenders.

 

No alternative, conditional or contingent tenders will be accepted, and no fractional Shares will be purchased. All tendering shareholders, by execution of this Letter of Transmittal (or facsimile hereof), waive any right to receive any notice of the acceptance of their Shares for payment.

 

4.       Inadequate Space.

 

If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate signed schedule attached hereto.

 

5.       Partial Tenders (Not Applicable to Shareholders Who Tender Shares by Book-Entry Transfer).

 

If fewer than all Shares represented by any certificate submitted are to be tendered, fill in the number of Shares that are to be tendered in the box entitled “Number of Shares Tendered”. In such case, new certificate(s) representing the remainder of Shares that were represented by the old certificate(s) will be sent to the registered shareholder(s), unless otherwise provided in the appropriate box on this Letter of Transmittal, as promptly as practicable after the Expiration Date and Time. All Shares represented by certificate(s) delivered to the Tender Offer Agent will be deemed to have been tendered unless otherwise indicated.

 

6.       Signatures on Letter of Transmittal, Stock Powers and Endorsements.

 

If this Letter of Transmittal is signed by the registered shareholder(s) of Shares tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face(s) of the certificate(s) without alteration, enlargement or any change whatsoever. If any of Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Shares are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates.

 

If this Letter of Transmittal is signed by the registered shareholder(s) of Shares listed and tendered hereby, no endorsements of certificates or separate stock powers are required, unless payment or certificates for Shares not tendered or accepted for payment are to be issued to a person other than the registered shareholder(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution.

 

If this Letter of Transmittal or any certificates or stock powers are signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Offeror of such person’s authority so to act must be submitted.

 

If this Letter of Transmittal is signed by a person other than the registered shareholder(s) of Shares tendered hereby, the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered shareholder(s) appear on the certificates. Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution, unless the signature is that of an Eligible Institution.

 

7.       Special Payment, Payment by Wire and Delivery Instructions.

 

If a check and/or certificates representing Shares not tendered or accepted for payment are to be issued in the name of a person other than the signer of this Letter of Transmittal or if a check is to be sent and/or such certificates are to be returned to someone other than the signer of this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Shareholders tendering Shares by book-entry transfer may request that Shares not accepted for payment be credited to such account maintained at DTC as such shareholder may designate herein. If no such instructions are given, such Shares not accepted for payment will be returned by crediting the account at DTC designated above.

 

 

 

 

If you desire to receive payment be wire in lieu of payment by check, please duly complete the above “Bank Wire Instructions” box; if such box is not validly completed, you will receive a check for any payment you may be due. Please note that a $50 wire fee will be payable to the extent you elect to receive payment by wire.

 

8.       Lost, Destroyed, Mutilated or Stolen Certificates.

 

If any certificate(s) representing Shares has been lost, destroyed, mutilated or stolen, the shareholder should promptly contact the Information Agent. The shareholder will then be instructed as to the steps that must be taken in order to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed, mutilated or stolen certificates have been followed.

 

9.       Conditions for Completion of the Offer; Waiver.

 

The Offeror is not required to accept for payment nor, subject to any applicable rules and regulations of the U.S. Securities and Exchange Commission, required to pay for any tendered Shares unless the conditions set forth in Section 14 of the Offer to Purchase entitled “Conditions of Offer” are satisfied or waived in accordance therewith. The Offeror reserves the right to waive any of the specified conditions of the Offer in the case of any Shares tendered.

 

The Offeror is not obligated and does not intend to extend the Offer beyond the Expiration Date and Time. However, the Offeror reserves the right, at its own election, to extend the Offer in accordance with applicable law.

 

10.       Determination of Validity.

 

All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tendered Shares will be determined by the Offeror, in its sole discretion. The Offeror reserves the absolute right to reject any or all tenders of any Shares that it determines are not in appropriate form or the acceptance for payment of or payment for which may, in the opinion of the Offeror’s counsel, be unlawful. The Offeror also reserves the absolute right to waive any defect or irregularity in any tender with respect to any particular Shares or any particular shareholder. No tender of Shares will be deemed to have been validly made until all defects or irregularities relating thereto have been expressly waived or cured to the satisfaction of the Offeror. THE UNDERSIGNED UNDERSTANDS THAT THE OFFEROR’S INTERPRETATION OF THE TERMS AND CONDITIONS OF THE OFFER (INCLUDING THIS LETTER OF TRANSMITTAL AND THE INSTRUCTIONS HERETO) WILL BE FINAL AND BINDING TO THE FULLEST EXTENT PERMITTED BY LAW. ALL QUESTIONS AS TO THE FORM OF DOCUMENTS AND THE VALIDITY, FORM, ELIGIBILITY (INCLUDING TIME OF RECEIPT) AND ACCEPTANCE FOR PAYMENT OF ANY SHARES WILL BE DETERMINED BY THE OFFEROR IN ITS DISCRETION, WHICH DETERMINATION WILL BE FINAL AND BINDING TO THE FULLEST EXTENT PERMITTED BY LAW. None of the Offeror, the Tender Offer Agent, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders, nor shall any of them incur any liability for failure to give any such notification. None of the Offeror, the Tender Offer Agent, the Information Agent or any other person is or will be obligated to give notice of any defects or irregularities in tenders and none of them will incur any liability for failure to give any such notice.

 

11.       Requests for Assistance or Additional Copies.

 

Requests for assistance may be directed to the Information Agent at the address set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and the IRS Form W-9 may be obtained from the Information Agent at its address set forth below or from your broker, dealer, commercial bank, trust company or other nominee.

 

 

 

 

12.       Withdrawals.

 

Tenders of Shares made pursuant to the Offer are irrevocable except as otherwise provided here. A shareholder may withdraw Shares that it has previously tendered pursuant to the Offer pursuant to the procedures set forth below at any time prior to the Expiration Date and Time. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn after December 10, 2023, which is the 60th day from the commencement of the Offer, unless such Shares have already been accepted for payment by the Offeror pursuant to the Offer.

 

The Offeror expects to accept all Shares validly tendered into the Offer and not withdrawn promptly following the Expiration Date and Time.

 

For a withdrawal of Shares tendered to be effective, a written, telegraphic, or facsimile transmission notice of withdrawal must be timely received by the Tender Offer Agent at its address set forth set forth on the first page of this document. Any notice of withdrawal must specify:

 

·the name of the person who tendered Shares to be withdrawn;
·the number of Shares to be withdrawn; and
·the name(s) in which the certificate(s) representing such Shares and the certificate(s), if any, representing the Rights, are registered, if different from that of the person who tendered such Shares.

 

If certificates for Shares or the certificates, if any, for the Rights to be withdrawn have been delivered or otherwise identified to the Tender Offer Agent, the name of the registered holder and the serial numbers shown on the particular certificates evidencing such Shares or associated Rights, as applicable, to be withdrawn must also be furnished to the Tender Offer Agent prior to the physical release of Shares to be withdrawn.

 

The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (except in the case of Shares tendered by an Eligible Institution).

 

If Shares have been tendered pursuant to the procedures for book-entry transfer, any notice of withdrawal must specify the name and number of the account at DTC to be credited with such withdrawn Shares and must otherwise comply with DTC’s procedures.

 

Withdrawals of tenders of Shares may not be rescinded, and Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered at any time before the Expiration Date and Time.

 

All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by us, in our discretion. None of the Offeror, the Tender Offer Agent, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal, nor shall any of them incur any liability for failure to give any such

 

13.       Share Transfer Taxes

 

Offeror will pay any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not accepted for payment are to be returned in the name of, any person other than the registered shareholder(s), or if a transfer tax is imposed for any reason other than the sale or transfer of Shares to the Offeror pursuant to the Offer, then the amount of any stock transfer taxes (whether imposed on the registered shareholder(s), such other person or otherwise) will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted herewith.

 

14.       Backup Withholding; IRS Forms

 

Under U.S. federal income tax laws, unless certain certification requirements are met, the Tender Offer Agent generally will be required to withhold at the applicable backup withholding rate from any payments made to certain shareholders pursuant to the Offer. In such cases, in order to avoid such backup withholding, each tendering shareholder, and, if applicable, each other payee, must provide the Tender Offer Agent with such shareholder’s or payee’s correct taxpayer identification number (“TIN”) and certify that such shareholder or payee is not subject to such backup withholding by properly completing the enclosed IRS Form W-9, or if such shareholder or payee is not a U.S. person for U.S. federal income tax purposes, by submitting an appropriate and properly completed IRS Form W-8, available from the Tender Offer Agent or the IRS website at http://www.irs.gov. Shareholders that are not U.S. persons or that have questions regarding their status for U.S. federal income tax purposes should consult their tax advisors to determine which IRS Form is appropriate. For a shareholder or payee that is an individual, the TIN is often the social security number of such individual.

 

 

 

 

The shareholder or payee is required to give the Tender Offer Agent the TIN of the registered shareholder or of the last transferee appearing on the transfers attached to, or endorsed on, Shares. If Shares are registered in two (2) or more names or a name that is not in the name of the actual shareholder, you should review the instructions on the enclosed IRS Form W-9 for additional guidance on which number to report. If a TIN is required, and if the shareholder or payee does not provide the Tender Offer Agent with its correct TIN, the IRS may impose a U.S. $50 penalty on the shareholder or payee. If the tendering shareholder has not been issued a TIN but has applied for a TIN or intends to apply for a TIN in the near future, in order to avoid backup withholding such tendering shareholder should review and comply with the instructions on the enclosed IRS Form W-9 or, if applicable, IRS Form W-8, available from the Tender Offer Agent or the IRS website at http://www.irs.gov.

 

For U.S. federal tax purposes, a holder is considered a U.S. person if the holder is: (1) a citizen or individual resident of the United States, (2) a partnership, corporation, or entity treated as a partnership or corporation, organized in or under the laws of the United States or any state thereof or the District of Columbia, (3) a trust that (i) is subject to (a) the primary supervision of a court within the United States and (b) the authority of one or more U.S. persons to control all substantial decisions of the trust or (ii) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person or (4) an estate that is subject to U.S. federal income tax on its income regardless of its source.

 

Certain shareholders or payees (including, among others, all corporations and certain foreign persons) are not subject to backup withholding and tax information reporting requirements. Such shareholders should nevertheless complete the enclosed IRS Form W-9 without crossing out Part 2 to avoid possible erroneous backup withholding or submit to the Tender Offer Agent a properly completed IRS Form W-8 signed under penalties of perjury, attesting to the exempt status of such shareholders or payees (whichever is applicable). IRS Forms W-8 are available from the Tender Offer Agent or the IRS website at http://www.irs.gov. Please review the instructions on the enclosed IRS Form W-9 for additional guidance on which shareholders are exempt from backup withholding.

 

Failure to complete the enclosed Form W-9 or to submit an applicable IRS Form W-8 will not, by itself, cause Shares to be deemed invalidly tendered, but will require the Tender Offer Agent to withhold from any payments made pursuant to the Offer.

 

Backup withholding is not an additional U.S. federal income tax. Rather, the U.S. federal income tax liability of a person subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained provided that the required information is timely furnished to the IRS. Failure to complete and return the enclosed IRS Form W-9 or an applicable IRS Form W-8 will result in backup withholding from any payments made to you pursuant to the Offer. IRS Forms W-9 and W-8 are available from the Tender Offer Agent or the IRS website at http://www.irs.gov. Shareholders should consult their tax advisors to determine which such IRS Form is appropriate.

 

For a discussion of certain U.S. federal income tax consequences of the Offer, see the Offer to Purchase under the heading “Tender Offer — Tax Considerations”.

 

15.       Tender Constitutes an Agreement.

 

The tender of Shares pursuant to any one of the procedures described above will constitute your acceptance of the Offer, as well as your representation and warranty with respect to each of the matters set forth above (including, without limitation, your representation and warranty that you have the full power and authority to tender, sell, assign and transfer the Shares tendered). The Offeror’s acceptance for payment of Shares tendered by you pursuant to the Offer will constitute a binding agreement between you and the Offeror with respect to such Shares, upon the terms and subject to the conditions of the Offer.

 

 

 

 

***

IMPORTANT: This Letter of Transmittal (or a manually signed facsimile thereof), together with any signature guarantees and any other required documents, must be received by the Tender Offer Agent before the Expiration Date and Time or the tendering shareholders must comply with the procedures for guaranteed delivery.

 

Questions or requests for assistance or additional copies of the Offer to Purchase, the Letter of Transmittal and any other documents may be directed to the Information Agent at its address and telephone number set forth below. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.

 

 

The Information Agent for the Offer is:

 

501 Madison Avenue, 20th Floor

New York, New York 10022

Shareholders May Call Toll Free: (877) 800-5190

Banks and Brokers May Call Collect:

(212) 750-5833

 

 

 

 

 

 

 

 

Form W-9 (Rev. October 2018) Department of the Treasury Internal Revenue Service Request for Taxpayer Identification Number and Certification ▶ Go to www.irs.gov/FormW9 for instructions and the latest information. Give Form to the requester. Do not send to the IRS. Print or type. See Specific Instructions on page 3. 1 Name (as shown on your income tax return). Name is required on this line; do not leave this line blank. 2 Business name/disregarded entity name, if different from above 3 Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the following seven boxes. Individual/sole proprietor or single-member LLC C Corporation S Corporation Partnership Trust/estate Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=Partnership) ▶ Note: Check the appropriate box in the line above for the tax classification of the single-member owner. Do not check LLC if the LLC is classified as a single-member LLC that is disregarded from the owner unless the owner of the LLC is another LLC that is not disregarded from the owner for U.S. federal tax purposes. Otherwise, a single-member LLC that is disregarded from the owner should check the appropriate box for the tax classification of its owner. Other (see instructions) ▶ 4 Exemptions (codes apply only to certain entities, not individuals; see instructions on page 3): Exempt payee code (if any) Exemption from FATCA reporting code (if any) (Applies to accounts maintained outside the U.S.) 5 Address (number, street, and apt. or suite no.) See instructions. 6 City, state, and ZIP code Requester’s name and address (optional) 7 List account number(s) here (optional) Part I Taxpayer Identification Number (TIN) Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the instructions for Part I, later. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN, later. Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and Number To Give the Requester for guidelines on whose number to enter. Social security number – – or Employer identification number – Part II Certification Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and 2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and 3. I am a U.S. citizen or other U.S. person (defined below); and 4. The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions for Part II, later. Sign Here Signature of U.S. person ▶ Date ▶ General Instructions Section references are to the Internal Revenue Code unless otherwise noted. Future developments. For the latest information about developments related to Form W-9 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/FormW9. Purpose of Form An individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns include, but are not limited to, the following. • Form 1099-INT (interest earned or paid) • Form 1099-DIV (dividends, including those from stocks or mutual funds) • Form 1099-MISC (various types of income, prizes, awards, or gross proceeds) • Form 1099-B (stock or mutual fund sales and certain other transactions by brokers) • Form 1099-S (proceeds from real estate transactions) • Form 1099-K (merchant card and third party network transactions) • Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition) • Form 1099-C (canceled debt) • Form 1099-A (acquisition or abandonment of secured property) Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN. If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What is backup withholding, later. Cat. No. 10231X Form W-9 (Rev. 10-2018)

 

 

 

Form W-9 (Rev. 10-2018) Page 2 By signing the filled-out form, you: 1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued), 2. Certify that you are not subject to backup withholding, or 3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners' share of effectively connected income, and 4. Certify that FATCA code(s) entered on this form (if any) indicating that you are exempt from the FATCA reporting, is correct. See What is FATCA reporting, later, for further information. Note: If you are a U.S. person and a requester gives you a form other than Form W-9 to request your TIN, you must use the requester’s form if it is substantially similar to this Form W-9. Definition of a U.S. person. For federal tax purposes, you are considered a U.S. person if you are: • An individual who is a U.S. citizen or U.S. resident alien; • A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States; • An estate (other than a foreign estate); or • A domestic trust (as defined in Regulations section 301.7701-7). Special rules for partnerships. Partnerships that conduct a trade or business in the United States are generally required to pay a withholding tax under section 1446 on any foreign partners’ share of effectively connected taxable income from such business. Further, in certain cases where a Form W-9 has not been received, the rules under section 1446 require a partnership to presume that a partner is a foreign person, and pay the section 1446 withholding tax. Therefore, if you are a U.S. person that is a partner in a partnership conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your U.S. status and avoid section 1446 withholding on your share of partnership income. In the cases below, the following person must give Form W-9 to the partnership for purposes of establishing its U.S. status and avoiding withholding on its allocable share of net income from the partnership conducting a trade or business in the United States. • In the case of a disregarded entity with a U.S. owner, the U.S. owner of the disregarded entity and not the entity; • In the case of a grantor trust with a U.S. grantor or other U.S. owner, generally, the U.S. grantor or other U.S. owner of the grantor trust and not the trust; and • In the case of a U.S. trust (other than a grantor trust), the U.S. trust (other than a grantor trust) and not the beneficiaries of the trust. Foreign person. If you are a foreign person or the U.S. branch of a foreign bank that has elected to be treated as a U.S. person, do not use Form W-9. Instead, use the appropriate Form W-8 or Form 8233 (see Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities). Nonresident alien who becomes a resident alien. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a “saving clause.” Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of income even after the payee has otherwise become a U.S. resident alien for tax purposes. If you are a U.S. resident alien who is relying on an exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items. 1. The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien. 2. The treaty article addressing the income. 3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions. 4. The type and amount of income that qualifies for the exemption from tax. 5. Sufficient facts to justify the exemption from tax under the terms of the treaty article. Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to the U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese student who qualifies for this exception (under paragraph 2 of the first protocol) and is relying on this exception to claim an exemption from tax on his or her scholarship or fellowship income would attach to Form W-9 a statement that includes the information described above to support that exemption. If you are a nonresident alien or a foreign entity, give the requester the appropriate completed Form W-8 or Form 8233. Backup Withholding What is backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS 24% of such payments. This is called “backup withholding.” Payments that may be subject to backup withholding include interest, tax-exempt interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, payments made in settlement of payment card and third party network transactions, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding. You will not be subject to backup withholding on payments you receive if you give the requester your correct TIN, make the proper certifications, and report all your taxable interest and dividends on your tax return. Payments you receive will be subject to backup withholding if: 1. You do not furnish your TIN to the requester, 2. You do not certify your TIN when required (see the instructions for Part II for details), 3. The IRS tells the requester that you furnished an incorrect TIN, 4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable interest and dividends only), or 5. You do not certify to the requester that you are not subject to backup withholding under 4 above (for reportable interest and dividend accounts opened after 1983 only). Certain payees and payments are exempt from backup withholding. See Exempt payee code, later, and the separate Instructions for the Requester of Form W-9 for more information. Also see Special rules for partnerships, earlier. What is FATCA Reporting? The Foreign Account Tax Compliance Act (FATCA) requires a participating foreign financial institution to report all United States account holders that are specified United States persons. Certain payees are exempt from FATCA reporting. See Exemption from FATCA reporting code, later, and the Instructions for the Requester of Form W-9 for more information. Updating Your Information You must provide updated information to any person to whom you claimed to be an exempt payee if you are no longer an exempt payee and anticipate receiving reportable payments in the future from this person. For example, you may need to provide updated information if you are a C corporation that elects to be an S corporation, or if you no longer are tax exempt. In addition, you must furnish a new Form W-9 if the name or TIN changes for the account; for example, if the grantor of a grantor trust dies. Penalties Failure to furnish TIN. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. Civil penalty for false information with respect to withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.

 

 

 

Form W-9 (Rev. 10-2018) Page 3 Criminal penalty for falsifying information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. Misuse of TINs. If the requester discloses or uses TINs in violation of federal law, the requester may be subject to civil and criminal penalties. Specific Instructions Line 1 You must enter one of the following on this line; do not leave this line blank. The name should match the name on your tax return. If this Form W-9 is for a joint account (other than an account maintained by a foreign financial institution (FFI)), list first, and then circle, the name of the person or entity whose number you entered in Part I of Form W-9. If you are providing Form W-9 to an FFI to document a joint account, each holder of the account that is a U.S. person must provide a Form W-9. a. Individual. Generally, enter the name shown on your tax return. If you have changed your last name without informing the Social Security Administration (SSA) of the name change, enter your first name, the last name as shown on your social security card, and your new last name. Note: ITIN applicant: Enter your individual name as it was entered on your Form W-7 application, line 1a. This should also be the same as the name you entered on the Form 1040/1040A/1040EZ you filed with your application. b. Sole proprietor or single-member LLC. Enter your individual name as shown on your 1040/1040A/1040EZ on line 1. You may enter your business, trade, or “doing business as” (DBA) name on line 2. c. Partnership, LLC that is not a single-member LLC, C corporation, or S corporation. Enter the entity's name as shown on the entity's tax return on line 1 and any business, trade, or DBA name on line 2. d. Other entities. Enter your name as shown on required U.S. federal tax documents on line 1. This name should match the name shown on the charter or other legal document creating the entity. You may enter any business, trade, or DBA name on line 2. e. Disregarded entity. For U.S. federal tax purposes, an entity that is disregarded as an entity separate from its owner is treated as a “disregarded entity.” See Regulations section 301.7701-2(c)(2)(iii). Enter the owner's name on line 1. The name of the entity entered on line 1 should never be a disregarded entity. The name on line 1 should be the name shown on the income tax return on which the income should be reported. For example, if a foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes has a single owner that is a U.S. person, the U.S. owner's name is required to be provided on line 1. If the direct owner of the entity is also a disregarded entity, enter the first owner that is not disregarded for federal tax purposes. Enter the disregarded entity's name on line 2, “Business name/disregarded entity name.” If the owner of the disregarded entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a U.S. TIN. Line 2 If you have a business name, trade name, DBA name, or disregarded entity name, you may enter it on line 2. Line 3 Check the appropriate box on line 3 for the U.S. federal tax classification of the person whose name is entered on line 1. Check only one box on line 3. IF the entity/person on line 1 is a(n) . . . THEN check the box for . . . • Corporation Corporation • Individual • Sole proprietorship, or • Single-member limited liability company (LLC) owned by an individual and disregarded for U.S. federal tax purposes. Individual/sole proprietor or single-member LLC • LLC treated as a partnership for U.S. federal tax purposes, • LLC that has filed Form 8832 or 2553 to be taxed as a corporation, or • LLC that is disregarded as an entity separate from its owner but the owner is another LLC that is not disregarded for U.S. federal tax purposes. Limited liability company and enter the appropriate tax classification. (P= Partnership; C= C corporation; or S= S corporation) • Partnership Partnership • Trust/estate Trust/estate Line 4, Exemptions If you are exempt from backup withholding and/or FATCA reporting, enter in the appropriate space on line 4 any code(s) that may apply to you. Exempt payee code. • Generally, individuals (including sole proprietors) are not exempt from backup withholding. • Except as provided below, corporations are exempt from backup withholding for certain payments, including interest and dividends. • Corporations are not exempt from backup withholding for payments made in settlement of payment card or third party network transactions. • Corporations are not exempt from backup withholding with respect to attorneys’ fees or gross proceeds paid to attorneys, and corporations that provide medical or health care services are not exempt with respect to payments reportable on Form 1099-MISC. The following codes identify payees that are exempt from backup withholding. Enter the appropriate code in the space in line 4. 1—An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2) 2—The United States or any of its agencies or instrumentalities 3—A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities 4—A foreign government or any of its political subdivisions, agencies, or instrumentalities 5—A corporation 6—A dealer in securities or commodities required to register in the United States, the District of Columbia, or a U.S. commonwealth or possession 7—A futures commission merchant registered with the Commodity Futures Trading Commission 8—A real estate investment trust 9—An entity registered at all times during the tax year under the Investment Company Act of 1940 10—A common trust fund operated by a bank under section 584(a) 11—A financial institution 12—A middleman known in the investment community as a nominee or custodian 13—A trust exempt from tax under section 664 or described in section 4947

 

 

 

Form W-9 (Rev. 10-2018) Page 4 The following chart shows types of payments that may be exempt from backup withholding. The chart applies to the exempt payees listed above, 1 through 13. IF the payment is for . . . THEN the payment is exempt for . . . Interest and dividend payments All exempt payees except for 7 Broker transactions Exempt payees 1 through 4 and 6 through 11 and all C corporations. S corporations must not enter an exempt payee code because they are exempt only for sales of noncovered securities acquired prior to 2012. Barter exchange transactions and patronage dividends Exempt payees 1 through 4 Payments over $600 required to be reported and direct sales over $5,0001 Generally, exempt payees 1 through 52 Payments made in settlement of payment card or third party network transactions Exempt payees 1 through 4 1 See Form 1099-MISC, Miscellaneous Income, and its instructions. 2 However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys’ fees, gross proceeds paid to an attorney reportable under section 6045(f), and payments for services paid by a federal executive agency. Exemption from FATCA reporting code. The following codes identify payees that are exempt from reporting under FATCA. These codes apply to persons submitting this form for accounts maintained outside of the United States by certain foreign financial institutions. Therefore, if you are only submitting this form for an account you hold in the United States, you may leave this field blank. Consult with the person requesting this form if you are uncertain if the financial institution is subject to these requirements. A requester may indicate that a code is not required by providing you with a Form W-9 with “Not Applicable” (or any similar indication) written or printed on the line for a FATCA exemption code. A—An organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37) B—The United States or any of its agencies or instrumentalities C—A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities D—A corporation the stock of which is regularly traded on one or more established securities markets, as described in Regulations section 1.1472-1(c)(1)(i) E—A corporation that is a member of the same expanded affiliated group as a corporation described in Regulations section 1.1472-1(c)(1)(i) F—A dealer in securities, commodities, or derivative financial instruments (including notional principal contracts, futures, forwards, and options) that is registered as such under the laws of the United States or any state G—A real estate investment trust H—A regulated investment company as defined in section 851 or an entity registered at all times during the tax year under the Investment Company Act of 1940 I—A common trust fund as defined in section 584(a) J—A bank as defined in section 581 K—A broker L—A trust exempt from tax under section 664 or described in section 4947(a)(1) M—A tax exempt trust under a section 403(b) plan or section 457(g) plan Note: You may wish to consult with the financial institution requesting this form to determine whether the FATCA code and/or exempt payee code should be completed. Line 5 Enter your address (number, street, and apartment or suite number). This is where the requester of this Form W-9 will mail your information returns. If this address differs from the one the requester already has on file, write NEW at the top. If a new address is provided, there is still a chance the old address will be used until the payor changes your address in their records. Line 6 Enter your city, state, and ZIP code. Part I. Taxpayer Identification Number (TIN) Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible to get an SSN, your TIN is your IRS individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below. If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN. If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN (or EIN, if the owner has one). Do not enter the disregarded entity’s EIN. If the LLC is classified as a corporation or partnership, enter the entity’s EIN. Note: See What Name and Number To Give the Requester, later, for further clarification of name and TIN combinations. How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security Card, from your local SSA office or get this form online at www.SSA.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/Businesses and clicking on Employer Identification Number (EIN) under Starting a Business. Go to www.irs.gov/Forms to view, download, or print Form W-7 and/or Form SS-4. Or, you can go to www.irs.gov/OrderForms to place an order and have Form W-7 and/or SS-4 mailed to you within 10 business days. If you are asked to complete Form W-9 but do not have a TIN, apply for a TIN and write “Applied For” in the space for the TIN, sign and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you are subject to backup withholding on payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester. Note: Entering “Applied For” means that you have already applied for a TIN or that you intend to apply for one soon. Caution: A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8. Part II. Certification To establish to the withholding agent that you are a U.S. person, or resident alien, sign Form W-9. You may be requested to sign by the withholding agent even if item 1, 4, or 5 below indicates otherwise. For a joint account, only the person whose TIN is shown in Part I should sign (when required). In the case of a disregarded entity, the person identified on line 1 must sign. Exempt payees, see Exempt payee code, earlier. Signature requirements. Complete the certification as indicated in items 1 through 5 below.

 

 

 

Form W-9 (Rev. 10-2018) Page 5 1. Interest, dividend, and barter exchange accounts opened before 1984 and broker accounts considered active during 1983. You must give your correct TIN, but you do not have to sign the certification. 2. Interest, dividend, broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct TIN to the requester, you must cross out item 2 in the certification before signing the form. 3. Real estate transactions. You must sign the certification. You may cross out item 2 of the certification. 4. Other payments. You must give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN. “Other payments” include payments made in the course of the requester’s trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services (including payments to corporations), payments to a nonemployee for services, payments made in settlement of payment card and third party network transactions, payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations). 5. Mortgage interest paid by you, acquisition or abandonment of secured property, cancellation of debt, qualified tuition program payments (under section 529), ABLE accounts (under section 529A), IRA, Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, but you do not have to sign the certification. What Name and Number To Give the Requester For this type of account: Give name and SSN of: 1. Individual The individual 2. Two or more individuals (joint account) other than an account maintained by an FFI The actual owner of the account or, if combined funds, the first individual on the account1 3. Two or more U.S. persons (joint account maintained by an FFI) Each holder of the account 4. Custodial account of a minor (Uniform Gift to Minors Act) The minor2 5. a. The usual revocable savings trust (grantor is also trustee) b. So-called trust account that is not a legal or valid trust under state law The grantor-trustee1 The actual owner1 6. Sole proprietorship or disregarded entity owned by an individual The owner3 7. Grantor trust filing under Optional Form 1099 Filing Method 1 (see Regulations section 1.671-4(b)(2)(i)(A)) The grantor* For this type of account: Give name and EIN of: 8. Disregarded entity not owned by an individual The owner 9. A valid trust, estate, or pension trust Legal entity4 10. Corporation or LLC electing corporate status on Form 8832 or Form 2553 The corporation 11. Association, club, religious, charitable, educational, or other tax-exempt organization The organization 12. Partnership or multi-member LLC The partnership 13. A broker or registered nominee The broker or nominee For this type of account: Give name and EIN of: 14. Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments The public entity 15. Grantor trust filing under the Form 1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulations section 1.671-4(b)(2)(i)(B)) The trust 1 List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that person’s number must be furnished. 2 Circle the minor’s name and furnish the minor’s SSN. 3 You must show your individual name and you may also enter your business or DBA name on the “Business name/disregarded entity” name line. You may use either your SSN or EIN (if you have one), but the IRS encourages you to use your SSN. 4 List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) Also see Special rules for partnerships, earlier. *Note: The grantor also must provide a Form W-9 to trustee of trust. Note: If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed. Secure Your Tax Records From Identity Theft Identity theft occurs when someone uses your personal information such as your name, SSN, or other identifying information, without your permission, to commit fraud or other crimes. An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund. To reduce your risk: • Protect your SSN, • Ensure your employer is protecting your SSN, and • Be careful when choosing a tax preparer. If your tax records are affected by identity theft and you receive a notice from the IRS, respond right away to the name and phone number printed on the IRS notice or letter. If your tax records are not currently affected by identity theft but you think you are at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Theft Hotline at 1-800-908-4490 or submit Form 14039. For more information, see Pub. 5027, Identity Theft Information for Taxpayers. Victims of identity theft who are experiencing economic harm or a systemic problem, or are seeking help in resolving tax problems that have not been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059. Protect yourself from suspicious emails or phishing schemes. Phishing is the creation and use of email and websites designed to mimic legitimate business emails and websites. The most common act is sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.

 

 

 

Form W-9 (Rev. 10-2018) Page 6 The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts. If you receive an unsolicited email claiming to be from the IRS, forward this message to phishing@irs.gov. You may also report misuse of the IRS name, logo, or other IRS property to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484. You can forward suspicious emails to the Federal Trade Commission at spam@uce.gov or report them at www.ftc.gov/complaint. You can contact the FTC at www.ftc.gov/idtheft or 877-IDTHEFT (877-438-4338). If you have been the victim of identity theft, see www.IdentityTheft.gov and Pub. 5027. Visit www.irs.gov/IdentityTheft to learn more about identity theft and how to reduce your risk. Privacy Act Notice Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting the above information. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities, states, the District of Columbia, and U.S. commonwealths and possessions for use in administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer. Certain penalties may also apply for providing false or fraudulent information.

 

Exhibit (a)(1)(C)

 

NOTICE OF GUARANTEED DELIVERY

For

Tender of Common Shares

(Including the Associated Preferred Stock Purchase Rights)

of

Performance Shipping Inc.

Pursuant to the Offer to Purchase

dated October 11, 2023

by

Sphinx Investment Corp.

 

(not to be used for Signature Guarantees)

 

 

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 p.m., NEW YORK CITY TIME, ON NOVEMBER 8, 2023, UNLESS THE OFFER IS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE “EXPIRATION DATE and Time”).

 

This Notice of Guaranteed Delivery, or one substantially equivalent hereto, must be used to accept the Offer (as defined below) if (i) certificates representing common shares, par value $0.01 per share (the “Common Shares”), of Performance Shipping Inc., a corporation organized under the laws of the Republic of the Marshall Islands (the “Company”) (including the associated preferred stock purchase rights (the “Rights”, and together with the Common Shares, the “Shares”) issued pursuant to the Stockholders’ Rights Agreement, dated as of December 20, 2021, between the Company and Computershare Inc. as Rights Agent, as it may be amended from time to time), or (if certificates have been issued in respect of the Rights prior to the Expiration Date and Time) certificates representing the associated Rights, are not immediately available, (ii) the procedures for book-entry transfer described in Section 2 of the Offer to Purchase (as defined below) cannot be completed on a timely basis, or (iii) time will not permit all required documents to reach Continental Stock Transfer & Trust Company (the “Tender Offer Agent”) prior to the Expiration Date and Time. This Notice of Guaranteed Delivery may be delivered by hand, or may be transmitted by facsimile transmission or mail, to the Tender Offer Agent at the addresses and facsimile number set forth below. See Section 2 of the Offer to Purchase.

 

INSOFAR AS WE ARE AWARE BASED ON THE COMPANY’S CURRENT DISCLOSURES, THE RIGHTS ARE PRESENTLY EVIDENCED BY THE CERTIFICATES FOR THE COMMON SHARES AND ARE NOT REPRESENTED BY SEPARATE CERTIFICATES. HOWEVER, IN THE FUTURE THE COMPANY MAY ISSUE SEPARATE CERTIFICATES REPRESENTING THE RIGHTS. UNLESS AND UNTIL ANY SUCH SEPARATE CERTIFICATES REPRESENTING RIGHTS ARE ISSUED, A TENDER BY A SHAREHOLDER OF SUCH SHAREHOLDER’S COMMON SHARES WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS. FROM AND AFTER SUCH TIME AS ANY SEPARATE CERTIFICATES REPRESENTING RIGHTS HAVE BEEN ISSUED, A SHAREHOLDER WILL ALSO BE REQUIRED TO TENDER SUCH CERTIFICATES REPRESENTING THE RIGHTS ALONGSIDE THE TENDER BY SUCH SHAREHOLDER OF SUCH SHAREHOLDER’S COMMON SHARES IN ORDER FOR SUCH TENDER TO BE VALID. UNLESS SPECIFICALLY STATED OTHERWISE, ALL REFERENCES IN THIS NOTICE OF GUARANTEED DELIVERY TO “SHARES” SHALL INCLUDE BOTH COMMON SHARES AND THE RIGHTS.

  

The Tender Offer Agent for the Offer is:

 

 

 

Continental Stock Transfer & Trust Company

 

By Mail or Overnight Courier: By Facsimile Transmission
(for eligible institutions only):
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Corporate Actions Department
212-616-7610
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Corporate Actions Department

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY TO THE TENDER OFFER AGENT.

 

 

 

 

THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN “ELIGIBLE INSTITUTION” UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE APPROPRIATE LETTER OF TRANSMITTAL.

 

The Eligible Institution that completes this form must communicate the guarantee to the Tender Offer Agent and must deliver the Letter of Transmittal or an Agent’s Message (as defined in Section 2 of the Offer to Purchase) and certificates representing the Shares to the Tender Offer Agent within the time period specified herein. Failure to do so could result in a financial loss to such Eligible Institution.

 

Ladies and Gentlemen:

 

The undersigned hereby tenders to Sphinx Investment Corp., a corporation organized under the laws of the Republic of the Marshall Islands (the “Offeror”), pursuant to the Offeror’s offer to purchase all of the issued and outstanding Shares of the Company for $3.00 per Share in cash, without interest, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase dated October 11, 2023 as it may be amended or supplemented (the “Offer to Purchase”) and in this Notice of Guaranteed Delivery and the related Letter of Transmittal (which three documents, including any amendments or supplements hereto or thereto, collectively constitute the “Offer”), receipt of all of which is hereby acknowledged, the number of Shares specified below pursuant to the guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase.

 

All authority herein conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall survive the death or incapacity of the undersigned and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and other legal representatives of the undersigned.

 

Number of Shares Being Tendered:______________________

 

Certificate No(s) (if available): _________________________

 

¨Check here if Shares will be tendered by book entry transfer.

 

DTC Account Number:_______________________________

 

Date:_____________________________________________

 

Name(s) of Record Holder(s):

 

__________________________________________________________________________________

(Please type or print)

 

Address(es) of Record Holder(s):

__________________________________________________________________________________

 

__________________________________________________________________________________

(Include Zip Code)

 

Area Code and Tel. No. of Record Holder(s): _____________________________________________________________

(Daytime telephone number)

 

Signature(s): ______________________________________________________________________

 

 

 

 

 

THE GUARANTEE SET FORTH BELOW MUST BE COMPLETED

 

GUARANTEE

(Not to Be Used for Signature Guarantee)

 

The undersigned, a member in good standing of the Securities Transfer Agents Medallion Program or any other “eligible guarantor institution”, as such term is defined in Rule 17Ad-15 of the Exchange Act (each, an “Eligible Institution”), (a) represents that the above named person(s) own(s) the Shares tendered hereby within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (b) represents that such tender of Shares complies with Rule 14e-4 under the Exchange Act, and (c) guarantees delivery to the Tender Offer Agent, at its address set forth above, of certificates representing the Shares tendered hereby in proper form for transfer, or confirmation of book-entry transfer of such Shares into the Tender Offer Agent’s accounts at The Depository Trust Company, in each case with delivery of a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees, or an Agent’s Message in the case of a book-entry transfer, and any other required documents, within two (2) Nasdaq trading days after the date of execution of this Notice of Guaranteed Delivery.

 

Name of Firm:_______________________________________________________________

 

Authorized Signature: _________________________________________________________

 

Name (Please Type or Print): ___________________________________________________

 

Title: ______________________________________________________________________

 

Address: ___________________________________________________________________

 

Zip Code: __________________________________________________________________

 

Telephone No.: ____________________________________________________________________

 

Date: _____________________________________________________________________________

 

NOTE: DO NOT SEND CERTIFICATES REPRESENTING TENDERED SHARES WITH THIS NOTICE OF GUARANTEED DELIVERY. CERTIFICATES REPRESENTING TENDERED SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.

 

DO NOT DELIVER ANY DOCUMENTS TO THE OFFEROR, MARYPORT NAVIGATION CORP. (“MARYPORT”), GEORGE ECONOMOU, THE INFORMATION AGENT OR The Depository Trust Company (“DTC”). DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY OR ANY OTHER REQUIRED DOCUMENTS TO THE OFFEROR, MARYPORT, GEORGE ECONOMOU, THE INFORMATION AGENT OR DTC DOES NOT CONSTITUTE A VALID TENDER.

 

 

Exhibit (a)(1)(D)

 

LETTER TO BROKERS, DEALERS

COMMERCIAL BANKS, TRUST COMPANIES

AND OTHER NOMINEES

 

Offer to Purchase for Cash

All of the Outstanding Common Shares

(Including the Associated Preferred Stock Purchase Rights)

 

of

Performance Shipping Inc.

for

$3.00 Per Common Share (including the Associated Preferred Stock Purchase Right)

by

Sphinx Investment Corp.

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 p.m., NEW YORK CITY TIME, ON NOVEMBER 8, 2023, UNLESS THE OFFER IS
EXTENDED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE “EXPIRATION DATE and Time”).

 

October 11, 2023

 

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

 

We have been appointed by Sphinx Investment Corp., a corporation organized under the laws of the Republic of the Marshall Islands (the “Offeror”), to act as Information Agent in connection with the Offeror’s offer to purchase all of the issued and outstanding common shares, par value $0.01 per share (the “Common Shares”), of Performance Shipping Inc., corporation organized under the laws of the Republic of the Marshall Islands (the “Company”) (including the associated preferred stock purchase rights (the “Rights”, and together with the Common Shares, the “Shares”) issued pursuant to the Stockholders’ Rights Agreement, dated as of December 20, 2021, between the Company and Computershare Inc. as Rights Agent (as it may be amended from time to time, the “Rights Agreement”)), for $3.00 per Share in cash, without interest, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 11, 2023 (the “Offer to Purchase”), the related Letter of Transmittal (the “Letter of Transmittal”), and the related Notice of Guaranteed Delivery (the “Notice of Guaranteed Delivery”) (which three documents, including any amendments or supplements thereto, collectively constitute the “Offer”).

 

Consummation of the Offer is subject to certain conditions as described in the Offer to Purchase. See Section 14 of the Offer to Purchase. Subject to the terms and conditions specified in the Offer, which conditions may be waived by the Offeror, at any time and from time to time, at or prior to the Expiration Date and Time, in the sole discretion of the Offeror and subject to the applicable rules and regulations of the Securities and Exchange Commission, the Offeror will accept for payment and will pay for all Shares validly tendered into the Offer prior to the Expiration Date and Time and not properly withdrawn as permitted under Section 3 of the Offer to Purchase.

 

Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee.

 

For your information and for forwarding to your clients, we are enclosing the following documents:

 

1.The Offer to Purchase.

 

2.The Letter of Transmittal for your use in accepting the Offer and for the information of your clients, including a Certification of Taxpayer Identification Number on IRS Form W-9. Facsimile copies of the Letter of Transmittal (with manual signatures) may be used to tender Shares. If applicable, the applicable Form W-8 can be obtained from the IRS’s web site.

 

3.A printed form of letter that may be sent to your clients for whose account you hold Shares in your name or in the name of your nominee with space provided for obtaining such clients’ instructions with regard to the Offer.

 

 

 

 

4.A Notice of Guaranteed Delivery to be used to accept the Offer if (i) certificates representing the Shares, or (if certificates have been issued in respect of the Rights prior to the Expiration Date and Time) certificates representing the associated Rights, are not immediately available, (ii) the procedures for book-entry transfer described in Section 2 of the Offer to Purchase cannot be completed on a timely basis, or (iii) time will not permit all required documents to reach Continental Stock Transfer & Trust Company (the “Tender Offer Agent”) prior to the Expiration Date and Time.

 

5.IRS Form W-9. Under U.S. federal income tax laws, backup withholding will apply to any payments made pursuant to the Offer unless a holder of Shares provides the Tender Offer Agent with such holder’s correct taxpayer identification number and certifies that such holder is not subject to such backup withholding by completing the IRS Form W-9 included in the Letter of Transmittal (or, if applicable, the applicable Form W-8, which can be obtained from the IRS’s web site).

 

6.A return envelope addressed to the Tender Offer Agent.

 

Your attention is directed to the following:

 

1.The Offer price is $3.00 per Share, without interest, in cash, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase.

 

2.The Offer is being made for all of the issued and outstanding Shares.

 

3.THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 p.m., NEW YORK CITY TIME, ON NOVEMBER 8, 2023, UNLESS THE OFFER IS EXTENDED.

 

4.The Offer is not conditioned upon the Offeror obtaining any financing or upon any due diligence review of the Company. The Offer is subject to the satisfaction or waiver, at or before the Expiration Date and Time, of the following conditions: (i) there shall have been validly tendered into the Offer and not withdrawn a number of Shares which, together with any Shares then-owned by the Offeror, represents at least a majority of the issued and outstanding Shares on a fully-diluted basis  (assuming the exercise or conversion of all then-outstanding options and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof); (ii) either (a) the Rights Agreement shall have been validly terminated and the Rights shall have been redeemed, and the Certificate of Designation, Preferences and Rights of Series A Participating Preferred Stock (the “Series A Preferred Stock”) shall have been validly cancelled and no Series A Preferred Stock shall be outstanding, or (b) the Rights Agreement shall have been otherwise made inapplicable to the Offer and the Offeror and its affiliates; (iii) the Company’s Board of Directors (the “Board”) shall have validly waived the applicability of Article K of the Company’s Amended and Restated Articles of Incorporation (“Article K”) to the purchase of the Shares by the Offeror in the Offer so that the provisions of Article K would not, at or at any time following consummation of the Offer, prohibit, restrict or apply to any “business combination”, as defined in Article K, involving the Company and the Offeror or any affiliate or associate of the Offeror; (iv) the Company shall not have any securities outstanding, authorized or proposed for issuance other than (a) the Shares, (b) authorized Series A Preferred Stock (none of which shall have been issued), (c) the number of shares of Series B Convertible Cumulative Perpetual Preferred Stock (the “Series B Preferred Stock”) outstanding as of the date immediately preceding the date of this Offer to Purchase, (d) the warrants outstanding as of the date immediately preceding the date of this Offer to Purchase (which shall not be exercisable in the aggregate for more than the 7,904,221 Shares disclosed by the Company in its Form 6-K on September 29, 2023, and the terms of which such warrants shall not have been amended on or after the date of this Offer to Purchase), (e) (1) the options to purchase Shares under the Company’s Amended and Restated 2015 Equity Incentive Plan (as such plan was in effect as of the date immediately preceding the date of this Offer to Purchase) (the “Equity Incentive Plan”) outstanding, and subject to the terms as in effect, as of the date immediately preceding the date of this Offer to Purchase, and (2) any options to purchase shares under the Equity Incentive Plan that are issued pursuant to the Equity Incentive Plan on or after the date of this Offer to Purchase in the ordinary and usual course of business, consistent with past practice; and (f) Shares authorized for issuance but not yet subject to awards under the Equity Incentive Plan (none of which shall, on or after the date of this Offer to Purchase, have been issued other than in the ordinary and usual course of business, consistent with past practice); (v) (a) Section 4 of the Certificate of Designation, preferences and rights of Series C Convertible Cumulative Redeemable Perpetual Preferred Stock (the “Series C Preferred Stock”) shall no longer be in effect, (b) any and all shares of the Series C Preferred Stock held as of the date of this Offer to Purchase by any of Mango Shipping Corp., Mitzela Corp., and Giannakis (John) Evangelou, Antonios Karavias, Christos Glavanis, and Reidar Brekke, or by any affiliate of any of the foregoing, and any and all Shares purported to have been issued pursuant to the purported conversion of any such shares of Series C Preferred Stock, shall have been validly cancelled and (c) no other shares of Series C Preferred Stock shall be outstanding; (vi) the Certificate of Designation, Preferences and Rights of Series B Preferred Stock either (a) shall have been validly cancelled or (b) shall not have been amended; and (vii) the size of the Board shall remain fixed at five members, with at least three of such authorized five Board seats either (a) then-being occupied by persons having been designated by the Offeror, (b) then-being vacant, with the Company having publicly committed on a binding basis to fill such vacancies with persons designated by the Offeror or (c) then-being occupied by directors who shall have publicly submitted their irrevocable resignations from the Board, effective no later than the Offeror’s purchase of the Shares tendered in the Offer, which such resignations shall have been publicly accepted by the Company (with the Company having publicly committed on a binding basis to fill the resulting vacancies with persons designated by the Offeror). The Offer is also subject to other customary conditions. See Section 14 of the Offer to Purchase.

 

 

 

 

5.Shareholders of record who hold Shares registered in their own name and tender their Shares directly to the Tender Offer Agent will not be obligated to pay brokerage fees, commissions, solicitation fees or, subject to Instruction 13 of the Letter of Transmittal, stock transfer taxes, if any, on the purchase of the Shares by the Offeror pursuant to the Offer.

 

Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Offeror will accept for payment and will pay for Shares validly tendered into the Offer prior to the Expiration Date and Time and not properly withdrawn, promptly after the Expiration Date and Time. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Tender Offer Agent of (i) certificates representing such Shares and, if certificates have been issued in respect of Rights prior to the Expiration Date and Time, certificates representing the associated Rights (or a timely confirmation of a book-entry transfer of such Shares into the Tender Offer Agent’s account at The Depository Trust Company, as described in Section 2 of the Offer to Purchase), (ii) a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees (or, in connection with a book-entry transfer, an Agent’s Message (as defined in Section 2 of the Offer to Purchase), and (iii) any other documents required by the Letter of Transmittal.

 

Insofar as the Offeror is aware based on the Company’s current disclosures, the Rights currently are not represented by separate certificates. A tender of the Shares will include a tender of both the Common Shares and the associated Rights, unless certificates representing the Rights have been issued as provided in the Rights Agreement prior to the completion of the Offer, in which circumstance the Rights must be validly tendered alongside the Common Shares in order for a holder of Shares to validly tender into the Offer.

 

If a holder of Shares desires to tender Shares pursuant to the Offer and such holder’s certificates representing Shares, or (if certificates have been issued in respect of the Rights prior to the Expiration Date and Time), certificates representing the associated Rights, are not immediately available (or the procedures for book-entry transfer cannot be completed on a timely basis) or time will not permit all required documents to reach the Tender Offer Agent prior to the Expiration Date and Time, such Shares may nevertheless be validly tendered by following the guaranteed delivery procedures specified under Section 2 of the Offer to Purchase.

 

The Offeror will not pay any fees or commissions to any broker or dealer or to any other person (other than to the Tender Offer Agent and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer. The Offeror will, however, upon request, reimburse you for customary mailing and handling expenses incurred by you in forwarding offering materials to your clients. The Offeror will pay any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer, except as otherwise provided in Instruction 13 of the Letter of Transmittal.

 

YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 p.m., NEW YORK CITY TIME, ON NOVEMBER 8, 2023, UNLESS THE OFFER IS EXTENDED.

 

Any questions or requests for assistance with respect to the Offer should be directed to, and additional copies of the enclosed materials may be obtained by contacting, the undersigned at (212) 750-5833.

 

Very truly yours,

 

501 Madison Avenue, 20th Floor

New York, New York 10022

Shareholders May Call Toll Free: (877) 800-5190

Banks and Brokers May Call Collect: (212) 750-5833

 

 

 

 

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF OFFEROR OR THE COMPANY, THE Tender Offer Agent OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.

 

 

 

 

 

 

Exhibit (a)(1)(E)

 

LETTER TO CLIENTS

 

Offer to Purchase for Cash

All of the Outstanding Common Shares

(Including the Associated Preferred Stock Purchase Rights)

of

Performance Shipping Inc.

for

$3.00 Per Common Share (including the Associated Preferred Stock Purchase Right) 

by 

Sphinx Investment Corp.

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 p.m., NEW YORK CITY TIME, ON NOVEMBER 8, 2023, UNLESS THE OFFER IS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE “EXPIRATION DATE and Time”).

 

October 11, 2023

 

To Our Clients:

 

Enclosed for your consideration is an Offer to Purchase, dated October 11, 2023 (the “Offer to Purchase”) and the related Letter of Transmittal and Notice of Guaranteed Delivery (which three documents, including any amendments or supplements thereto, collectively constitute the “Offer”) relating to the offer by Sphinx Investment Corp., a corporation organized under the laws of the Republic of the Marshall Islands (the “Offeror”) to purchase all of the issued and outstanding common shares, par value $0.01 per share (the “Common Shares”), of Performance Shipping Inc., corporation organized under the laws of the Republic of the Marshall Islands (the “Company”) (including the associated preferred stock purchase rights (the “Rights”, and together with the Common Shares, the “Shares”) issued pursuant to the Stockholders’ Rights Agreement, dated as of December 20, 2021, between the Company and Computershare Inc. as Rights Agent (as it may be amended from time to time, the “Rights Agreement”)), for $3.00 per Share in cash, without interest, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer.

 

WE ARE THE HOLDER OF RECORD (DIRECTLY OR INDIRECTLY) OF SHARES FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US OR OUR NOMINEES AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL ACCOMPANYING THIS LETTER IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.

 

We request instructions as to whether you wish to have us tender on your behalf any or all of the Shares held by us for your account, pursuant to the terms and subject to the conditions set forth in the Offer.

 

Your attention is directed to the following:

 

1.The Offer price is $3.00 per Share, without interest, in cash, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase.

 

2.The Offer is being made for all of the issued and outstanding Shares.

 

3.THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 p.m., NEW YORK CITY TIME, ON NOVEMBER 8, 2023, UNLESS THE OFFER IS EXTENDED.

 

 

 

 

4.The Offer is not conditioned upon the Offeror obtaining any financing or upon any due diligence review of the Company. The Offer is subject to the satisfaction or waiver, at or before the Expiration Date and Time, of the following conditions: (i) there shall have been validly tendered into the Offer and not withdrawn a number of Shares which, together with any Shares then-owned by the Offeror, represents at least a majority of the issued and outstanding Shares on a fully-diluted basis  (assuming the exercise or conversion of all then-outstanding options and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof); (ii) either (a) the Rights Agreement shall have been validly terminated and the Rights shall have been redeemed, and the Certificate of Designation, Preferences and Rights of Series A Participating Preferred Stock (the “Series A Preferred Stock”) shall have been validly cancelled and no Series A Preferred Stock shall be outstanding, or (b) the Rights Agreement shall have been otherwise made inapplicable to the Offer and the Offeror and its affiliates; (iii) the Company’s Board of Directors (the “Board”) shall have validly waived the applicability of Article K of the Company’s Amended and Restated Articles of Incorporation (“Article K”) to the purchase of the Shares by the Offeror in the Offer so that the provisions of Article K would not, at or at any time following consummation of the Offer, prohibit, restrict or apply to any “business combination”, as defined in Article K, involving the Company and the Offeror or any affiliate or associate of the Offeror; (iv) the Company shall not have any securities outstanding, authorized or proposed for issuance other than (a) the Shares, (b) authorized Series A Preferred Stock (none of which shall have been issued), (c) the number of shares of Series B Convertible Cumulative Perpetual Preferred Stock (the “Series B Preferred Stock”) outstanding as of the date immediately preceding the date of this Offer to Purchase, (d) the warrants outstanding as of the date immediately preceding the date of this Offer to Purchase (which shall not be exercisable in the aggregate for more than the 7,904,221 Shares disclosed by the Company in its Form 6-K on September 29, 2023, and the terms of which such warrants shall not have been amended on or after the date of this Offer to Purchase), (e) (1) the options to purchase Shares under the Company’s Amended and Restated 2015 Equity Incentive Plan (as such plan was in effect as of the date immediately preceding the date of this Offer to Purchase) (the “Equity Incentive Plan”) outstanding, and subject to the terms as in effect, as of the date immediately preceding the date of this Offer to Purchase, and (2) any options to purchase shares under the Equity Incentive Plan that are issued pursuant to the Equity Incentive Plan on or after the date of this Offer to Purchase in the ordinary and usual course of business, consistent with past practice; and (f) Shares authorized for issuance but not yet subject to awards under the Equity Incentive Plan (none of which shall, on or after the date of this Offer to Purchase, have been issued other than in the ordinary and usual course of business, consistent with past practice); (v) (a) Section 4 of the Certificate of Designation, preferences and rights of Series C Convertible Cumulative Redeemable Perpetual Preferred Stock (the “Series C Preferred Stock”) shall no longer be in effect, (b) any and all shares of the Series C Preferred Stock held as of the date of this Offer to Purchase by any of Mango Shipping Corp., Mitzela Corp., and Giannakis (John) Evangelou, Antonios Karavias, Christos Glavanis, and Reidar Brekke, or by any affiliate of any of the foregoing, and any and all Shares purported to have been issued pursuant to the purported conversion of any such shares of Series C Preferred Stock, shall have been validly cancelled and (c) no other shares of Series C Preferred Stock shall be outstanding; (vi) the Certificate of Designation, Preferences and Rights of Series B Preferred Stock either (a) shall have been validly cancelled or (b) shall not have been amended; and (vii) the size of the Board shall remain fixed at five members, with at least three of such authorized five Board seats either (a) then-being occupied by persons having been designated by the Offeror, (b) then-being vacant, with the Company having publicly committed on a binding basis to fill such vacancies with persons designated by the Offeror or (c) then-being occupied by directors who shall have publicly submitted their irrevocable resignations from the Board, effective no later than the Offeror’s purchase of the Shares tendered in the Offer, which such resignations shall have been publicly accepted by the Company (with the Company having publicly committed on a binding basis to fill the resulting vacancies with persons designated by the Offeror). The Offer is also subject to other customary conditions. See Section 14 of the Offer to Purchase.

 

5.Shareholders of record who hold Shares registered in their own name and tender their Shares directly to Continental Stock Transfer & Trust Company (the Tender Offer Agent) will not be obligated to pay brokerage fees, commissions, solicitation fees or, subject to Instruction 13 of the Letter of Transmittal, share transfer taxes, if any, on the purchase of the Shares by the Offeror pursuant to the Offer.

 

If you wish to have us tender any or all of your Shares, please complete, sign and return the instruction form set forth below. An envelope to return your instructions to us is enclosed. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified on the instruction form set forth below. Please forward your instructions to us as soon as possible to allow us ample time to tender your Shares on your behalf prior to the Expiration Date and Time.

 

The Offer is made solely by the Offer to Purchase and the related Letter of Transmittal and Notice of Guaranteed Delivery and any supplements and amendments thereto. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In those jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Offeror by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by the Offeror.

 

 

 

Instructions with Respect to the

 

Offer to Purchase for Cash

All of the Outstanding Common Shares

(Including the Associated Preferred Stock Purchase Rights)

 

of

 

Performance Shipping Inc.

 

for

 

$3.00 Per Common Share (including the Associated Preferred Stock Purchase Right)

 

by

 

Sphinx Investment Corp.

 

 

 

The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated October 11, 2023 (the “Offer to Purchase”) and the related Letter of Transmittal and Notice of Guaranteed Delivery (which three documents, including any amendments or supplements thereto, collectively constitute the “Offer”) relating to the offer by Sphinx Investment Corp., a corporation organized under the laws of the Republic of the Marshall Islands (the “Offeror”) to purchase all of the issued and outstanding common shares, par value $0.01 per share (the “Common Shares”), of Performance Shipping Inc., corporation organized under the laws of the Republic of the Marshall Islands (the “Company”) (including the associated preferred stock purchase rights (the “Rights”, and together with the Common Shares, the “Shares”) issued pursuant to the Stockholders’ Rights Agreement, dated as of December 20, 2021, between the Company and Computershare Inc. as Rights Agent (as it may be amended from time to time)), for $3.00 per Share in cash, without interest, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer.

 

The undersigned hereby instructs you to tender to the Offeror the number of Shares indicated below (or, if no number is indicated below, all Shares) held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer.

 

Number of Shares to be Tendered: ____________ Shares*

 

Date: _______________________________________________

 

  SIGN HERE
Signature(s)  
(Print Name(s))  
(Print Address(es))  
(Area Code and Telephone Number(s))  
(Taxpayer Identification or Social Security Number(s)  

 

* Unless otherwise indicated, it will be assumed that all of the undersigned’s Shares held by you for the undersigned’s account are to be tendered.

 

The method of delivery of this document is at the risk of the undersigned. If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

 

PLEASE RETURN THIS FORM TO THE BROKERAGE FIRM MAINTAINING THE UNDERSIGNED’S ACCOUNT, NOT TO Continental Stock Transfer & Trust Company (THE TENDER OFFER AGENT), Innisfree M&A Incorporated (tHE INFORMATION AGENT), OFFEROR, THE COMPANY, The Depository Trust Company, OR ANY AFFILIATE OF ANY OF THE FOREGOING.

 

 

 

Exhibit (a)(1)(F)

 

This announcement is neither an offer to purchase nor a solicitation of an offer to sell any securities of Performance Shipping Inc. The Offer (as defined below) is being made solely by the Offer to Purchase of Sphinx Investment Corp., dated October 11, 2023, and the related Letter of Transmittal and Notice of Guaranteed Delivery and any amendments or supplements thereto. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In those jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Sphinx Investment Corp. by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Sphinx Investment Corp.

 

Notice of Offer to Purchase for Cash

 

All of the Outstanding Common Shares

(Including the Associated Preferred Stock Purchase Rights)

of

Performance Shipping Inc.

for

$3.00 Per Common Share (including the Associated Preferred Stock Purchase Right)

by

Sphinx Investment Corp.

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 p.m., NEW YORK CITY TIME, ON NOVEMBER 8, 2023, UNLESS THE OFFER IS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE “EXPIRATION DATE and Time”).

 

The Offer is being made by Sphinx Investment Corp. (the “Offeror”) to purchase all of the issued and outstanding common shares, par value $0.01 per share (the “Common Shares”), of Performance Shipping Inc. (the “Company”) (including the associated preferred stock purchase rights (the “Rights”, and together with the Common Shares, the “Shares”) issued pursuant to the Stockholders’ Rights Agreement, dated as of December 20, 2021, between the Company and Computershare Inc. as Rights Agent (as it may be amended from time to time, the “Rights Agreement”)) for $3.00 per Share in cash, without interest, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 11, 2023 (the “Offer to Purchase”) and in the related Letter of Transmittal and Notice of Guaranteed Delivery (which, together with any amendments or supplements thereto, collectively constitute the “Offer”).

 

The Offer is subject to the satisfaction or waiver, at or before the Expiration Date and Time, of the following conditions: (i) there shall have been validly tendered into the Offer and not withdrawn a number of Shares which, together with any Shares then-owned by the Offeror, represents at least a majority of the issued and outstanding Shares on a fully-diluted basis  (assuming the exercise or conversion of all then-outstanding options and other derivative securities regardless of the exercise or conversion price, the vesting schedule or other terms and conditions thereof); (ii) either (a) the Rights Agreement shall have been validly terminated and the Rights shall have been redeemed, and the Certificate of Designation, Preferences and Rights of Series A Participating Preferred Stock (the “Series A Preferred Stock”) shall have been validly cancelled and no Series A Preferred Stock shall be outstanding, or (b) the Rights Agreement shall have been otherwise made inapplicable to the Offer and the Offeror and its affiliates; (iii) the Board of Directors of the Company (the “Board”) shall have validly waived the applicability of Article K of the Company’s Amended and Restated Articles of Incorporation (“Article K”) to the purchase of the Shares by the Offeror in the Offer so that the provisions of Article K would not, at or at any time following consummation of the Offer, prohibit, restrict or apply to any “business combination”, as defined in Article K, involving the Company and the Offeror or any affiliate or associate of the Offeror; (iv) the Company shall not have any securities outstanding, authorized or proposed for issuance other than (a) the Shares, (b) authorized Series A Preferred Stock (none of which shall have been issued), (c) the number of shares of Series B Convertible Cumulative Perpetual Preferred Stock (the “Series B Preferred Stock”) outstanding as of the date immediately preceding the date of this Offer to Purchase, (d) the warrants outstanding as of the date immediately preceding the date of this Offer to Purchase (which shall not be exercisable in the aggregate for more than the 7,904,221 Shares disclosed by the Company in its Form 6-K on September 29, 2023, and the terms of which such warrants shall not have been amended on or after the date of this Offer to Purchase), (e) (1) the options to purchase Shares under the Company’s Amended and Restated 2015 Equity Incentive Plan (as such plan was in effect as of the date immediately preceding the date of this Offer to Purchase) (the “Equity Incentive Plan”) outstanding, and subject to the terms as in effect, as of the date immediately preceding the date of this Offer to Purchase, and (2) any options to purchase shares under the Equity Incentive Plan that are issued pursuant to the Equity Incentive Plan on or after the date of this Offer to Purchase in the ordinary and usual course of business, consistent with past practice; and (f) Shares authorized for issuance but not yet subject to awards under the Equity Incentive Plan (none of which shall, on or after the date of this Offer to Purchase, have been issued other than in the ordinary and usual course of business, consistent with past practice); (v) (a) Section 4 of the Certificate of Designation, preferences and rights of Series C Convertible Cumulative Redeemable Perpetual Preferred Stock (the “Series C Preferred Stock”) shall no longer be in effect, (b) any and all shares of the Series C Preferred Stock held as of the date of this Offer to Purchase by any of Mango Shipping Corp., Mitzela Corp., and Giannakis (John) Evangelou, Antonios Karavias, Christos Glavanis, and Reidar Brekke, or by any affiliate of any of the foregoing, and any and all Shares purported to have been issued pursuant to the purported conversion of any such shares of Series C Preferred Stock, shall have been validly cancelled and (c) no other shares of Series C Preferred Stock shall be outstanding; (vi) the Certificate of Designation, Preferences and Rights of Series B Preferred Stock either (a) shall have been validly cancelled or (b) shall not have been amended; and (vii) the size of the Board shall remain fixed at five members, with at least three of such authorized five Board seats either (a) then-being occupied by persons having been designated by the Offeror, (b) then-being vacant, with the Company having publicly committed on a binding basis to fill such vacancies with persons designated by the Offeror or (c) then-being occupied by directors who shall have publicly submitted their irrevocable resignations from the Board, effective no later than the Offeror’s purchase of the Shares tendered in the Offer, which such resignations shall have been publicly accepted by the Company (with the Company having publicly committed on a binding basis to fill the resulting vacancies with persons designated by the Offeror). The Offer is also subject to other customary conditions. See Section 14 of the Offer to Purchase.

 

 

 

 

Upon the terms and subject to the conditions of the Offer, the Offeror will accept for payment and pay for Shares validly tendered prior to the Expiration Date and Time and not properly withdrawn, promptly after the Expiration Date and Time. In order for the Shares to be validly tendered pursuant to the Offer, the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent’s Message (as defined in the Offer to Purchase) in connection with a book-entry transfer of Shares, and any other documents required by the Letter of Transmittal, must be received by Continental Stock Transfer & Trust Company (the “Tender Offer Agent”) at its address set forth on the back cover of the Offer to Purchase prior to the Expiration Date and Time, and either (i) certificates representing tendered Shares and, if certificates have been issued in respect of Rights prior to the Expiration Date and Time, certificates representing the associated Rights, must be received by the Tender Offer Agent, or such Shares must be tendered pursuant to the procedure for book-entry transfer set forth in Section 2 of the Offer to Purchase (and confirmation of receipt of such delivery must be received by the Tender Offer Agent), in each case prior to the Expiration Date and Time, or (ii) the guaranteed delivery procedures set forth in the Offer to Purchase must be complied with. No alternative, conditional or contingent tenders will be accepted.

 

For purposes of the Offer, the Offeror will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered prior to the Expiration Date and Time and not properly withdrawn when, as and if the Offeror gives oral or written notice to the Tender Offer Agent, as agent for the tendering shareholders, of the Offeror’s acceptance for payment of such Shares.

 

Payment for Shares validly tendered and accepted for payment pursuant to the Offer will be made by deposit of the aggregate Offer Price for all Shares validly tendered into and not withdrawn from the Offer with the Tender Offer Agent, which will act as agent for the tendering shareholders for the purpose of receiving payments from the Offeror and transmitting such payments to tendering shareholders.

 

The Offeror does not currently intend to include a subsequent offering period in accordance with Rule 14d-11 under the Exchange Act, although it reserves the right to do so. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER.

 

If, on the Expiration Date and Time, any or all of the Offer conditions have not been satisfied or waived, the Offeror reserves the right in its sole discretion, subject to complying with applicable federal securities laws and the rules and regulations of the U.S. Securities and Exchange Commission thereunder (the “Securities Laws”) and the rules and regulations of the Nasdaq Stock Market, to: (i) decline to purchase any of the Shares tendered, terminate the Offer and return all tendered Shares to tendering shareholders; (ii) waive any of the Offer Conditions (subject to the applicable law and terms of Section 14 of the Offer to Purchase) and purchase all Shares validly tendered; (iii) extend the Offer and, subject to the right of shareholders to withdraw Shares until the Expiration Date and Time, retain the Shares that have been validly tendered during the period or periods for which the Offer is extended (which may delay acceptance for payment of, and the payment for, any Shares); and/or (iv) amend the Offer, including by increasing the consideration offered, in each case, by giving oral or written notice of such waiver, extension or amendment to the Tender Offer Agent and making a public announcement thereof. In addition, the Offeror will extend the Offer for any period required by applicable law, including the Securities Laws.

 

 

 

 

If the Offeror extends the Offer or provides a subsequent offering period, the Offeror will inform the Tender Offer Agent of that fact, and will make a public announcement not later than 9:00 a.m., New York City time, on the next business day after the day on which the Offer was scheduled to expire.

 

The rights reserved by the Offeror in the preceding paragraphs are in addition to the Offeror’s rights pursuant to Section 14 of the Offer to Purchase.

 

If the Offeror makes a material change to the terms of the Offer or the information concerning the Offer or if the Offeror waives a material condition of the Offer, the Offeror will disseminate additional tender offer materials and extend the Offer if and to the extent required by Rules 14d-4(d)(1), 14d-6(c) and 14e-1 under the Exchange Act.

 

A shareholder may withdraw Shares that it has previously tendered pursuant to the Offer at any time prior to the Expiration Date and Time. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn after December 10, 2023, which is the 60th day from the commencement of the Offer, unless such Shares have already been accepted for payment by the Offeror pursuant to the Offer. For a withdrawal of Shares tendered to be effective, a written, telegraphic, or facsimile transmission notice of withdrawal must be timely received by the Tender Offer Agent at its address set forth on the back cover of the Offer to Purchase. Any notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name(s) in which the certificate(s) representing such Shares and the certificate(s), if any, representing the associated Rights, are registered, if different from that of the person who tendered such Shares. If certificates for Shares or the certificates, if any, for the associated Rights to be withdrawn have been delivered or otherwise identified to the Tender Offer Agent, the name of the registered holder and the serial numbers shown on the particular certificates evidencing such Shares or associated Rights, as applicable, to be withdrawn must also be furnished to the Tender Offer Agent prior to the physical release of the Shares to be withdrawn. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in the Offer to Purchase) (except in the case of Shares tendered by an Eligible Institution). If Shares have been tendered pursuant to the procedures for book-entry transfer set forth in Section 2 of the Offer to Purchase, any notice of withdrawal must specify the name and number of the account at DTC to be credited with such withdrawn Shares and must otherwise comply with DTC’s procedures.

 

Withdrawals of tenders of Shares may not be rescinded, and Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by again following the procedures described in Section 2 of the Offer to Purchase.

 

The receipt by a holder of Shares of the Offer price pursuant to the Offer will be a taxable transaction for U.S. federal income tax purposes, and may also be a taxable transaction under applicable state, local, or foreign income or other tax laws. If a holder of Shares properly tenders Shares and accepts payment pursuant to the Offer, such holder of Shares will generally recognize taxable gain or loss equal to the difference, if any, between the amount realized on the exchange and such holder’s adjusted tax basis in the tendered Shares. Such holder’s adjusted tax basis will generally be the amount such holder paid to acquire the Shares. For a more detailed description of certain United States federal income tax consequences and the Republic of the Marshall Islands tax consequences of the Offer, see the Offer to Purchase. Shareholders are urged to consult with their own tax advisors to determine the particular tax consequences to them (including the application and effect of any state, local or foreign income and other tax laws) of the Offer.

 

The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the Rules and Regulations under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference.

 

A request is being made to the Company for the use of its shareholder list and security position listing for the purposes of disseminating the Offer to Purchase (and the related Letter of Transmittal and other relevant materials) to the holders of Shares. Upon compliance by the Company with such request, the Offer to Purchase, the related Letter of Transmittal and Notice of Guaranteed Delivery and other relevant materials will be mailed to registered holders of Shares and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the shareholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing, for subsequent transmittal to beneficial owners of Shares.

 

 

 

 

For an explanation of certain effects of the Offer on the Shares and the rights of holders thereof as a result of the transaction, see the section of the Offer to Purchase entitled “CERTAIN EFFECTS OF THE OFFER”.

 

THIS SUMMARY ADVERTISEMENT DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE COMPLETE TEXT OF THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL, WHICH CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.

 

The Offer to Purchase and the related Letter of Transmittal and Notice of Guaranteed Delivery are being filed with the SEC and will be made available through the SEC’s web site at http://www.sec.gov. Questions or requests for assistance may be directed to the Information Agent at the address and telephone numbers set forth for the Information Agent on the back cover of the Offer to Purchase. Requests for additional copies of the Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be directed to the Information Agent at the address and telephone numbers set forth below, and such copies will be furnished promptly at the Offeror’s expense. Shareholders may also contact their brokers, dealers, commercial banks, trust companies or other nominees for assistance concerning the Offer.

 

 

 


 

The Tender Offer Agent for the Offer is:

 

 

 

Continental Stock Transfer & Trust Company

 

By Mail or Overnight Courier: By Facsimile Transmission
(for eligible institutions only):
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Corporate Actions Department
212-616-7610
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Corporate Actions Department

The Information Agent for the Offer is:

 

 

501 Madison Avenue, 20th Floor

New York, New York 10022

Shareholders May Call Toll Free: (877) 800-5190

Banks and Brokers May Call Collect: (212) 750-5833

 

 

October 11, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 107

Calculation of Filing Fee Tables

 

SC TO-T

(Form Type)

 

Performance Shipping Inc.

(Name of Subject Company (Issuer))

 

Sphinx Investment Corp.

(Offeror)

 

Maryport Navigation Corp.

(Parent of Offeror)

 

George Economou

(Affiliate of Offeror)

 

(Names of Filing Persons)

 

Table 1: Transaction Valuation

 

  Transaction Valuation Fee Rate Amount of Filing Fee
Fees to Be Paid $61,582,467* 0.0001476 $9,089.57**
Fees Previously Paid $0.00   $0.00
Total Transaction Valuation $61,582,467    
Total Fees Due for Filing     $9,089.57
Total Fees Previously Paid     $0.00
Total Fee Offsets     $0.00
Net Fee Due     $9,089.57

 

*Estimated solely for purposes of calculating the amount of the filing fee. The transaction valuation was calculated by multiplying (i) the sum of (A) 10,700,824 common shares, par value $0.01 per share (the “Shares”) of Performance Shipping Inc. (the “Company”) issued and outstanding (i.e., the 11,734,683 Common Shares stated by the Company as outstanding as of September 29, 2023 less the 1,033,859 Shares owned by Sphinx Investment Corp. (the “Offeror”) and its affiliates), (B) the 7,904,221 Shares stated by the Company as being issuable pursuant to various warrants as of September 29, 2023, (C) 31,441 Shares stated by the Company as being reserved for issuance under the Company’s Amended and Restated 2015 Equity Incentive Plan as at June 30, 2023, and (D) 1,891,003 Shares estimated to be issuable upon conversion of the shares of the Company’s Series C Convertible Cumulative Redeemable Perpetual Preferred Stock (the “Series C Preferred Stock”) held by persons other than Mango Shipping Corp. (“Mango”) and Mitzela Corp. (“Mitzela”) (calculated as (1) the 1,473,638 shares of Series C Preferred Stock stated by the Company as outstanding as of September 29, 2023 less (2) the sum of (x) the 1,314,792 shares of Series C Preferred Stock stated by Mango as being held by Mango as of September 29, 2023 and (y) the 56,342 shares of Series C Preferred Stock stated by Mitzela as being held by Mitzela as of September 1, 2023, converted into Shares at a conversion rate of 18.4480982543, which conversion rate was calculated by dividing the 24,255,412 Shares stated by Mango as being beneficially owned by it through its ownership of Series C Preferred Stock as of September 29, 2023 by the 1,314,792 shares of Series C Preferred Stock stated by Mango as being held by Mango as of September 29, 2023 (and further assuming no further dividend arrears with respect to the Series C Preferred Stock since September 29, 2023))1); by (ii) $3.00, which is the offer price per Share. The calculation of the filing fee is based on publicly available filings by the Company, Mango and Mitzela with the Securities and Exchange Commission.

 

**The amount of the filing fee was calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended, by multiplying the transaction value by 0.0001476.

 

 

1                    The Offeror has assumed, solely for purposes of calculating the amount of the filing fee, that the Series C Preferred Stock would be convertible into Shares, notwithstanding that the Offeror disputes the validity of the Series C Preferred Stock and its convertibility into Shares. The Offeror has further assumed the conversion into Shares of any Series C Preferred Stock that may be held by any of Giannakis (John) Evangelou, Antonios Karavias, Christos Glavanis, and Reidar Brekke (notwithstanding that the Offer requires the cancellation of any such Shares) because the Offeror is not able to determine to its satisfaction from the Company’s public filings the number of shares of Series C Preferred Stock that any of them may hold.

 

 

 


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