| x |
Preliminary
Proxy Statement
|
| o |
Confidential,
For Use of the Commission
Only (as permitted by
Rule 14a-6(e)(2))
|
| o |
Definitive
Proxy Statement
|
| o |
Definitive
Additional Materials
|
| o |
Soliciting
Material Under Rule 14a-12
|
| o |
No
fee required.
|
| x |
Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
|
| 1) |
Title
of each class of securities to which transaction
applies:
|
| 2) |
Aggregate
number of securities to which transaction
applies:
|
| 3) |
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is
calculated
and state how it was determined):
|
| 4) |
Proposed
maximum aggregate value of
transaction:
|
| 5) |
Total
fee paid:
|
| o |
Fee
paid previously with preliminary
materials:
|
| o |
Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number,
or
the form or schedule and the date of its
filing.
|
| 1) |
Amount
previously paid:
|
| 2) |
Form,
Schedule or Registration Statement
No.:
|
| 3) |
Filing
Party:
|
| 4) |
Date
Filed:
|
| |
|
|
|
Prokopios
(Akis) Tsirigakis
Chairman
of the Board of Directors of Star Maritime Acquisition
Corp.
|
||
|
Wilmington,
Delaware
, 2007
|
||
| By order of the Board of Directors, | ||
| |
|
|
|
Prokopios
(Akis) Tsirigakis
Chairman
of the Board of Directors of Star Maritime Acquisition
Corp.
|
||
|
Wilmington,
Delaware
,
2007
|
||
|
QUESTIONS
AND ANSWERS ABOUT THE STAR MARITIME SPECIAL MEETING
|
1
|
|
|
HOW
TO OBTAIN ADDITIONAL INFORMATION
|
6
|
|
|
SUMMARY
|
7
|
|
|
SUMMARY FINANCIAL
INFORMATION
|
14
|
|
|
MARKET
PRICE AND DIVIDEND INFORMATION
|
20
|
|
|
RISK
FACTORS
|
21
|
|
|
FORWARD-LOOKING
STATEMENTS
|
34
|
|
|
THE
STAR MARITIME SPECIAL MEETING
|
35
|
|
|
BACKGROUND
AND REASONS FOR THE REDOMICILIATION MERGER
|
38
|
|
|
THE
ACQUISITION AGREEMENTS
|
45
|
|
|
ACQUISITION
FINANCING
|
49
|
|
|
THE
MERGER AGREEMENT
|
50
|
|
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INFORMATION
CONCERNING STAR MARITIME ACQUISITION CORP.
|
53
|
|
|
SELECTED FINANCIAL
INFORMATION OF STAR MARITIME ACQUISITION CORP.
|
57
|
|
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION OF
STAR MARITIME
ACQUISITION CORP.
|
61
|
|
|
INFORMATION
CONCERNING STAR BULK CARRIERS CORP.
|
64
|
|
|
SELECTED
FINANCIAL INFORMATION OF STAR BULK CARRIERS CORP.
|
77
|
|
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OF STAR BULK CARRIERS CORP.
|
78
|
|
| THE INTERNATIONAL DRY BULK SHIPPING INDUSTRY |
83
|
|
|
DIVIDEND
POLICY OF STAR BULK
|
95
|
|
|
STAR
BULK’S FORECASTED CASH AVAILABLE FOR DIVIDENDS, RESERVES AND
EXTRAORDINARY
EXPENSES
|
96
|
|
|
CAPITALIZATION
OF STAR MARITIME
|
100
|
|
|
DILUTION
|
101
|
|
|
RELATED
PARTY TRANSACTIONS
|
102
|
|
|
DESCRIPTION
OF STAR MARITIME SECURITIES
|
104
|
|
|
DESCRIPTION
OF STAR BULK SECURITIES
|
107
|
|
|
COMPARISON
OF STAR MARITIME AND STAR BULK STOCKHOLDER RIGHTS
|
108
|
|
|
COMPARISON
OF MARSHALL ISLANDS CORPORATE LAW TO DELAWARE CORPORATE
LAW
|
115
|
|
|
TAX
CONSIDERATIONS
|
118
|
|
|
EXPERTS
|
127
|
|
|
LEGAL
MATTERS
|
127
|
|
|
STOCKHOLDER
PROPOSALS AND OTHER MATTERS
|
127
|
|
|
INDUSTRY
AND MARKET DATA
|
128
|
|
|
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
|
128
|
|
|
ENFORCEABILITY
OF CIVIL LIABILITIES
|
128
|
|
|
GLOSSARY
OF SHIPPING TERMS
|
130
|
|
|
INDEX
TO FINANCIAL STATEMENTS
|
F-1
|
|
Appendix
A
|
Memorandum
of Agreement relating to the A Duckling dated January 12,
2007 between
Star Bulk Carriers Corp., as buyer, and A Duckling Corporation,
as
seller.
|
|
Appendix
B
|
Memorandum
of Agreement relating to the B Duckling dated January 12,
2007 between
Star Bulk Carriers Corp., as buyer, and B Duckling Corporation,
as
seller.
|
|
Appendix
C
|
Memorandum
of Agreement relating to the C Duckling dated January 12,
2007 between
Star Bulk Carriers Corp., as buyer, and C Duckling Corporation,
as
seller.
|
|
Appendix
D
|
Memorandum
of Agreement relating to the F Duckling dated January 12,
2007 between
Star Bulk Carriers Corp., as buyer, and F Duckling Corporation,
as
seller.
|
|
Appendix
E
|
Memorandum
of Agreement relating to the G Duckling dated January 12,
2007 between
Star Bulk Carriers Corp., as buyer, and G Duckling Corporation,
as
seller.
|
|
Appendix
F
|
Memorandum
of Agreement relating to the I Duckling dated January 12,
2007 between
Star Bulk Carriers Corp., as buyer, and I Duckling Corporation,
as
seller.
|
|
Appendix
G
|
Memorandum
of Agreement relating to the J Duckling dated January 12,
2007 between
Star Bulk Carriers Corp., as buyer, and J Duckling Corporation,
as
seller.
|
|
Appendix
H
|
Memorandum
of Agreement relating to the Mommy Duckling dated January
12, 2007 between
Star Bulk Carriers Corp., as buyer, and Mommy Duckling Corporation,
as
seller.
|
|
Appendix
I
|
Supplemental
Agreement, dated January 12, 2007.
|
|
Appendix
J
|
Master
Agreement, dated January 12, 2007.
|
|
Appendix
K
|
Agreement
and Plan of Merger by and between Star Maritime Acquisition
Corp. and Star
Bulk Carriers Corp.
|
|
Appendix
L
|
Form
of Proxy.
|
| Q: |
What
is the purpose of this
document?
|
|
A:
|
This
document serves as Star Maritime’s proxy statement and as the prospectus
of Star
Bulk.
As a proxy statement, this document is being provided to
Star Maritime
stockholders because the Star Maritime board of directors
is soliciting
their proxies to vote to approve, at a special meeting of
stockholders,
the merger of Star Maritime with and into its wholly-owned
Marshall
Islands subsidiary, Star Bulk, with Star Bulk as the surviving
corporation. Star Bulk has entered into definitive agreements
to acquire a
fleet of eight drybulk carriers from certain subsidiaries
of TMT for
an aggregate purchase price of $345,237,520, consisting of
$224,500,000 in
cash and 12,537,645 shares of common stock. As a prospectus,
Star
Bulk
is
providing this document to Star Maritime stockholders because
Star
Bulk
is
offering its shares in exchange for shares of Star Maritime
common stock
and Star Bulk is assuming the outstanding warrants of Star
Maritime in the
Redomiciliation Merger. The registration statement on Form
F-1/F-4 of
which this joint proxy statement/prospectus is a part is
being filed by
Star Bulk to register the shares being offered in exchange
for shares of
Star Maritime, the 20,000,000 warrants of Star Maritime that
will be
assumed by Star Bulk, the
20,000,000 shares of Star Bulk common stock issuable upon
exercise of such
warrants and to register up to 14,144,607 shares of common
stock
that Star Bulk will issue to TMT or subsequently to TMT's
affiliates in respect of the stock consideration portion of the
aggregate purchase price of the vessels in the initial fleet.
The shares
of common stock that Star Bulk will issue in exchange for
shares of Star
Maritime are referred to herein as the Merger Consideration.
|
|
Q:
|
What
matters will we be asked to vote on at the Star
Maritime
special meeting?
|
|
A:
|
There
is one proposal on which you are being asked to vote. At
the special
meeting, you will be asked to consider and vote upon a
proposal to approve and authorize the
merger of Star Maritime with and into its wholly-owned Marshall
Islands subsidiary, Star Bulk, with Star Bulk as the surviving
corporation. Star Bulk has entered into definitive agreements
to acquire a
fleet of eight drybulk carriers from
certain wholly-owned subsidiaries of TMT for an aggregate
purchase price
of $345,237,520, consisting of $224,500,000 in cash and 12,537,645
shares
of common stock of Star Bulk. As
a result of the Redomiciliation Merger (i) the separate
corporate existance of Star Maritime will cease; (ii) each
outstanding share of Star Maritime common stock, par value
$0.0001 per
share, will be converted into the right to receive one share
of Star Bulk
common stock, par value $0.01 per share; and (ii) each outstanding
warrant
of Star Maritime will be assumed by Star Bulk with the same
terms and
restrictions, except that each will be exercisable for common
stock of
Star Bulk.
|
|
Q:
|
Could
you tell me more about the definitive agreements to acquire
the vessels?
|
|
A:
|
Star
Bulk will acquire the fleet of eight drybulk carriers pursuant
to separate
memoranda of agreement, which we collectively refer to as
the
MOAs, by and between Star Bulk and the vessel-owning subsidiaries
of
TMT, each as supplemented by a Supplemental Agreement by and among
Star Maritime, Star Bulk and TMT, and a Master Agreement
by and among Star
Maritime, Star Bulk and TMT. We refer to the MOAs, the Supplemental
Agreement and the Master Agreement collectively as the Acquisition
Agreements. The acquisition of the vessels by Star Bulk is
contingent
upon, among other things, the approval and consummation of
the
Redomiciliation Merger. Copies
of the MOAs are attached to this joint proxy statement/prospectus
as
Appendices A-H. A copy of the Supplemental Agreement is attached
to this
joint proxy statement/prospectus as Appendix I. A copy of
the Master
Agreement is attached to this joint proxy statement/prospectus
as Appendix
J.
|
|
Q:
|
Could
you tell me more about the parties to the Acquisition
Agreements?
|
|
A:
|
Star
Maritime was organized under the laws of the State of Delaware
on May 13,
2005 and is a Business Combination Company™,
or BCC™,
which is a blank check company formed to acquire, through
a merger,
capital stock exchange, asset acquisition or similar business
combination,
one or more target businesses in the shipping industry. A
target business includes one or more entities with agreements
to acquire
vessels or an operating business in the shipping
industry. Following our formation, our officers and directors
were the holders of 9,026,924 shares of common stock representing
all of
our then issued and outstanding capital stock. On December 21, 2005,
we consummated our initial public offering of 18,867,500
units, at a price
of $10.00 per unit, which we refer to as the Initial Public
Offering, each
unit consisting of one share of Star Maritime common stock
and one warrant
to purchase one share of Star Maritime common stock. In addition,
we
completed a private placement of an aggregate of 1,132,500
units, which we
refer to as the Private Placement, to Messrs. Tsirigakis
and Syllantavos,
our senior executive officers and Messrs. Pappas and Erhardt,
two of our
directors. The gross proceeds of the Private Placement of
$11,325,500 were
used to pay all fees and expenses of the Initial Public Offering.
As a
result, the entire gross proceeds of the Initial Public Offering
of
$188,675,000 were deposited in a trust account maintained
by American
Stock Transfer & Trust Company, as trustee, which we refer to as the
Trust Account. If we do not complete the Redomiciliation Merger or
another business combination transaction with a target business
by December 21, 2007, we will be liquidated and we will
distribute to all holders of our shares issued in the
Initial Public Offering in proportion to their respective
equity
interests, an aggregate sum equal to the amount in the Trust
Account,
including any interest (net of any taxes payable) not previously
released
to us, plus any remaining net assets. Our officers and directors
have
agreed to waive their respective rights to participate in
any liquidation
distribution should we fail to consummate a business combination
transaction with respect to the aggregate of 9,026,924 shares
of common
stock issued to them prior to our Initial Public Offering
and with respect
to the aggregate of 1,132,500 shares of common stock acquired
by certain
of our officers and directors in the Private Placement. In
the event of
our liquidation, we would not distribute funds from the Trust
Account with
respect to the Star Maritime warrants, which would expire
worthless.
|
|
TMT
is a global shipping company with its management
headquarters located in Taiwan. TMT has approximately 50 years of
experience in the shipping industry. TMT owns and/or operates
or invests
in vessels in several shipping sectors, including crude oil
tankers,
drybulk carriers and liquified natural gas, or LNG,
carriers.
|
| Q: |
When
and where is the special meeting of Star
Maritime
stockholders?
|
|
A:
|
The
special meeting of Star
Maritime
stockholders will take place at ,
New York, New York, on ,
2007, at 10:00 a.m.
|
|
Q:
|
Who
may vote at the special
meeting?
|
|
A:
|
Only
holders of record of shares of Star
Maritime
common stock as of the close of business on
,
2007 may vote at the special meeting. As of March 9, 2007,
there were
29,026,924 shares of Star
Maritime
common stock outstanding and entitled to vote.
|
| Q: |
What
is the required vote to approve and authorize the Redomiciliation
Merger?
|
|
Q:
|
Has
the board of directors of Star
Maritime
recommended approval of the Redomiciliation
Merger?
|
|
A:
|
Yes.
Star
Maritime’s
board of directors has unanimously recommended to its stockholders
that
they vote “FOR”
the approval and authorization of the Redomiciliation Merger
at the
special meeting. For
various shipping regulatory and tax reasons, the Republic of the
Marshall Islands is an attractive country of incorporation
for
international shipping companies. The merger of Star Maritime
with and
into Star Bulk with Star Bulk as the surviving corporation
will enable
Star Bulk, which will be an operating company, to benefit
from such
advantages. Please
read “Background and Reasons for the Merger—Recommendations
of the Board of Directors”
for a discussion of the factors that the Star
Maritime’s
board of directors considered in deciding to recommend the
approval and
authorization of the Redomiciliation
Merger.
|
|
Q:
|
What
will I receive in the Redomiciliation
Merger?
|
|
A:
|
Pursuant
to the Merger Agreement, each outstanding share of Star
Maritime
common stock will be converted into the right to receive
one share of Star
Bulk common stock and each outstanding warrant of Star Maritime
will be
assumed by Star Bulk and contain the same terms and restrictions
except
that each will be exercisable for common stock of Star Bulk.
|
| Q: |
What
are the tax consequences of the Redomiciliation Merger to
me?
|
|
A.
|
A
holder of Star Maritime stock or warrants should not recognize
any taxable
gain or loss as a result of the Redomiciliation Merger. The
Redomiciliation Merger has been structured so that upon completion
of the
Redomiciliation Merger and issuance of Star Bulk shares to
TMT, the
stockholders of Star Maritime will own less than 80% of Star
Bulk.
Therefore, Star Bulk intends to take the position on its
U.S. federal
income tax return that it is not subject to Section 7874(b)
of the U.S.
Internal Revenue Code of 1986, as amended, or the Code, after the
Redomiciliation Merger and therefore should not be subject
to U.S. federal
income tax as a U.S. domestic corporation on its worldwide
income after
the Redomiciliation Merger. However, Star Maritime has not
sought a ruling
from the U.S. Internal Revenue Service, or the IRS, on this
point.
Therefore, there is no assurance that the IRS would not seek
to assert
that Star Bulk is subject to U.S. federal income tax on its
worldwide
income after the Redomiciliation Merger, although Star Maritime
believes
that such an assertion would not be
successful.
|
|
Q:
|
What
if I object to the Redomiciliation
Merger?
|
|
A:
|
Under
Star Maritime’s Certificate of Incorporation, holders of shares of Star
Maritime common stock have the right to redeem such shares
for cash if
such stockholder votes against the Redomiciliation Merger,
elects to
exercise redemption rights and the Redomiciliation Merger is approved
and completed. In order to exercise redemption rights,
an eligible
stockholder must vote against the Redomiciliation Merger
and elect to
exercise redemption rights on the enclosed proxy card.
If a stockholder
votes against the Redomiciliation Merger but fails to properly
exercise
redemption rights, such stockholder will not be entitled
to have its
shares redeemed for cash. Stockholders exercising redemption
rights will
be entitled to receive, for each share of common stock
redeemed, the pro
rata portion of the Trust Account in which the proceeds
of the Company’s
Initial Public Offering are held, plus interest earned
thereon (net of
taxes). The actual redemption price will be equal to $10.21
per share,
based on funds in the Trust Account as of December 31, 2006. If
you exercise your redemption rights, then you will be exchanging
your
shares of Star Maritime’s common stock for cash and will no longer own
these shares. You will only be entitled to receive cash
for these shares
if you continue to hold these shares through the effective
date of the
Redomiciliation Merger and then tender your stock certificate
to Star
Maritime. If the Redomiciliation Merger is not completed,
then these
shares will not be redeemed for cash. A stockholder who
exercises
redemption rights will continue to own any warrants to
acquire Star
Maritime common stock owned by such stockholder as such
warrants will
remain outstanding and unaffected by the exercise of redemption
rights.
See “Description of Star Maritime Securities—Common
Stock.”
|
|
Q:
|
How
can I vote?
|
|
A:
|
Please
vote your shares of Star
Maritime
common stock as soon as possible after carefully reading and
considering the information contained in this joint proxy
statement/prospectus.
You may vote your shares prior to the special meeting by
signing and
returning the enclosed proxy card. If you hold your shares
in “street
name” (which means, in other words, that you hold your shares through
a
bank, brokerage firm or nominee), you must vote in accordance
with the
instructions on the voting instruction card that your bank,
brokerage firm
or nominee provides to you.
|
|
Q:
|
If
my shares are held in “street name” by my bank, brokerage firm or nominee,
will they automatically vote my shares for
me?
|
|
A:
|
No.
Your bank, brokerage firm or nominee cannot vote your shares
without
instructions from you. You should instruct your bank, brokerage
firm or
nominee how to vote your shares, following the instructions
contained in
the voting instruction card that your bank, brokerage firm
or nominee
provides to you.
|
|
Q:
|
What
if I abstain from voting or fail to instruct my bank, brokerage
firm or
nominee?
|
|
A:
|
Abstaining
from voting or failing to instruct your bank, brokerage firm
or nominee to
vote your shares will have the same effect as a vote “against” the
Redomiciliation Merger.
|
|
Q:
|
Can
I change my vote after I have mailed my proxy
card?
|
|
A:
|
Yes.
You may change your vote at any time before your proxy is
voted at the
special meeting. You may revoke your proxy by executing and
returning a
proxy card dated later than the previous one, by attending
the special
meeting
in
person
and casting your vote by ballot or by submitting a written
revocation
stating that you would like to revoke your proxy. If you
hold your shares
through a bank, brokerage firm or nominee, you should follow
the
instructions of your bank, brokerage firm or nominee regarding
the
revocation of proxies. You should send any notice of revocation
or your
completed new proxy card, as the case may be,
to:
|
|
Q:
|
Should
I send in my stock certificates
now?
|
|
A:
|
No.
After we complete the Redomiciliation Merger, you will receive
written
instructions for returning your stock certificates. These
instructions
will tell you how and where to send in your stock certificates
in order to
receive the Merger Consideration.
|
|
Q:
|
When
is the Redomiciliation Merger expected to occur?
|
|
A:
|
Assuming
the requisite the stockholder vote, we expect that the
Redomiciliation
Merger will occur during the third quarter of 2007. Our
Certificate of
Incorporation provides that if we have entered into definitive
agreements
to effect a business combination prior to June 21, 2007,
we must
consummate such business combination by December 21, 2007.
Our agreements
with TMT qualify as definitive agreements for these
purposes.
|
| Q: |
May
I seek statutory appraisal rights with respect to my
shares?
|
| A: |
Under
applicable Delaware law, you do not have appraisal rights
with respect to
your shares.
|
| Q: |
What
happens if the Redomiciliation Merger is not
consummated?
|
| A: |
The
acquisition of the eight drybulk carriers from TMT is contingent
upon the
approval and consummation of the Redomiciliation Merger.
If Star Maritime
does not consummate the Redomiciliation Merger or another
transaction with a target business by December 21, 2007, then
pursuant to Article SIXTH of its Certificate of Incorporation,
Star
Maritime's officers must take all actions necessary in
accordance with the
Delaware General Corporation Law to dissolve and liquidate
Star Maritime
within 60 days of that date. Following dissolution, Star Maritime
would no longer exist as a corporation. In any liquidation,
the funds held
in the Trust Account, plus any interest earned thereon
(net of taxes),
together with any remaining out-of-trust net assets will
be distributed
pro-rata to holders
of shares of Star Maritime common stock who acquired such
shares of common
stock in Star Maritime’s Initial Public Offering or in the aftermarket.
Holders of shares issued prior to our Initial Public
Offering
including in the Private Placement have waived any right
to any
liquidation distribution with respect to such
shares.
|
| Q: |
What
happens post-Redomiciliation Merger to the funds deposited
in the Trust
Account?
|
| A: |
Star
Maritime stockholders exercising redemption rights
will receive their pro
rata portion of the Trust Account. The balance of the funds in the
account will be retained by Star Bulk and utilized
to fund a portion of
the cash portion of the purchase price for the eight
vessels to be
acquired by Star Bulk.
|
| Q: |
What
other important considerations are
there?
|
| A: |
You
should also be aware that in pursuing the Redomiciliation
Merger, Star
Maritime has incurred substantial expenses. Star
Maritime currently has
limited available funds outside the Trust Account
and will, therefore, be
required to borrow funds or make arrangements with
vendors and service
providers in reliance on the expectation that such
expenses will be paid
by Star Bulk following consummation of the Redomiciliation
Merger. If for
any reason the Redomiciliation Merger is not consummated,
Star Maritime's
creditors may seek to satisfy their claims from funds
in the Trust
Account. This could result in further depletion of the Trust
Account,
which would reduce a stockholder's pro
rata portion of the Trust Account upon
liquidation.
|
| Q: |
Who
will manage Star
Bulk?
|
| A: |
Messrs.
Tsirigakis and Syllantavos, who currently serve as
the Chief Executive
Officer and director and Chief Financial Officer
and director of Star
Maritime, respectively, will serve in these roles
at Star Bulk following
the Redomiciliation Merger. In addition, Messrs.
Pappas, Erhardt and Søfteland,
who currently serve as directors of Star Maritime,
as well as Messrs. Nobu
Su and Peter Espig, each of whom are nominees of TMT, will serve as
directors of Star Bulk.
|
| Q: |
What
is the anticipated dividend policy of Star
Bulk?
|
| A: |
Star
Bulk currently intends to pay quarterly dividends
to the holders of its
common shares in February, May, August and November,
in amounts that will
allow it to retain a portion of its cash flows
to fund vessel or fleet
acquisitions, and for debt repayment and dry-docking
and
operating costs, as determined by its management and board
of
directors. The payment of dividends is not guaranteed
or assured and may
be discontinued at the sole discretion of Star
Bulk’s board of directors
and may not be paid in the anticipated amounts
and frequency set forth in
this joint proxy statement/prospectus. Star Bulk’s board of directors will
continually review its dividend policy and make
adjustments that it
believes appropriate. See “Dividend Policy of Star
Bulk.”
|
|
Star
Maritime Acquisition Corp.
103
Foulk Road
Wilmington,
Delaware 19803
Telephone: (302)
656-1950
|
|
| · |
Star
Maritime’s officers and directors were issued a total of 9,026,924
shares
of Star Maritime common stock prior to the Initial Public
Offering. These
shares, without taking into account any discount that may
be associated
with certain restrictions on these shares, collectively have
a market
value of approximately $89,998,432 based on Star Maritime’s share price of
$9.97 as of March 9, 2007. Except for up to 200,000 shares
that may be
required to be surrendered by such individuals for cancellation
upon the
exercise of redemption rights by the holders of Star Maritime's
common stock, none of the 9,026,924 shares issued prior to
the Initial
Public Offering to these individuals may be released from escrow
until December 15, 2008 during which time the value of the
shares may
increase or decrease; however, since such shares were acquired
for $.003
per share, the holders are likely to benefit from the Redomiciliation
Merger notwithstanding any decrease in the market price
of the
shares. Further, if the Redomiciliation Merger is not approved
and Star
Maritime fails to consummate an alternative transaction within
the
requisite period and the Company is therefore required to
liquidate, such
shares do not carry the right to receive any distributions
upon
liquidation.
|
| · |
Messrs.
Tsirigakis and Syllantavos, our senior executive officers
and Messrs.
Pappas and Erhadt, two of our directors, purchased an aggregate
of
1,132,500 units in the Private Placement at a purchase price of
$10.00 per unit. Star Maritime’s officers and directors agreed to
vote their common shares included in the units in favor of the
Redomiciliation Merger and thereby waive redemption rights
with respect
to those shares. If the Redomiciliation Merger is not approved
and
Star Maritime fails to consummate an alternative transaction
within the
requisite period and Star Maritime is therefore required
to
liquidate, those shares do not carry the right to receive
distributions upon liquidation.
|
| · |
After
the completion of the Redomiciliation Merger, Mr. Tsirigakis
will serve as
Star Bulk’s Chief Executive Officer and President and Mr. Syllantavos
will
serve as Star Bulk’s Chief Financial Officer. Star Bulk’s board of
directors will be comprised of seven directors. Each of the
five
current directors of Star Maritime will serve as directors of Star
Bulk. In addition Mr. Su and Mr. Espig, each a nominee of
TMT, will serve
as directors. Mr. Pappas and Mr. Su will each serve as
non-executive Co-Chairman of the board of Star Bulk. Such individuals
will, following the Redomiciliation Merger, be compensated
in such manner,
and in such amounts, as Star Bulk’s board of directors may determine to be
appropriate. See “Information Concerning Star Bulk—Compensation
of Directors and Senior
Management.”
|
| · |
Star
Bulk has entered into time charters for two vessels in the
initial fleet with TMT. Effective as of the Redomiciliation Merger,
Mr. Nobu Su and Mr. Peter Espig of TMT will serve on Star
Bulk's board of
directors.
|
| · |
Upon
satisfaction or waiver of all obligations of all parties,
arising
underneath Merger Agreement, the Supplement Agreement and
the MOAs;
and
|
| · |
if
the Redomiciliation Merger is not approved by the required
vote of Star
Maritime’s stockholders;
|
| · | if the other conditions precedent set forth in the Master Agreement are not satisfied or waived. |
|
As
of February 5, 2007
|
||||
|
Assets
|
||||
|
Current
assets
|
||||
|
Cash
and cash equivalents
|
1,000
|
|||
|
Total
current assets
|
1,000
|
|||
|
Total
assets
|
1,000
|
|||
|
Liabilities
and Shareholders' Equity
|
||||
|
Commitments
and contingencies (Note 4)
|
-
|
|||
|
Shareholders’
Equity
|
|
|||
|
Common
stock (100,000,000 shares authorized, par value $0.01 per
share,
500 issued and outstanding)
|
5
|
|||
| Preferred stock (25,000,000 shares authorized, par value $0.01 per share, none issued and outstanding) | ||||
|
Paid-in
capital
|
995
|
|||
|
Total
shareholders' equity
|
1,000
|
|||
|
Total
liabilities and shareholders’ equity
|
1,000
|
|||
|
|
December
31, 2006
|
December
31, 2005
|
|||||
|
ASSETS
|
|||||||
|
Current
Assets
|
|||||||
|
Cash
|
$
|
2,118,141
|
$
|
593,281
|
|||
|
Investments
in trust account
|
192,915,257
|
188,858,542
|
|||||
|
Prepaid
expenses and other current assets
|
149,647
|
118,766
|
|||||
|
|
|||||||
|
Total
Current Assets
|
195,183,045
|
189,570,589
|
|||||
|
|
|||||||
|
Property
and Equipment, net
|
3,256
|
-
|
|||||
|
Deferred
tax asset
|
-
|
9,000
|
|||||
|
|
|||||||
|
TOTAL
ASSETS
|
$
|
195,186,301
|
$
|
189,579,589
|
|||
|
|
|||||||
|
LIABILITIES
& STOCKHOLDERS’ EQUITY
|
|||||||
|
Liabilities
|
|||||||
|
Accounts
payable & accrued expenses
|
$
|
603,520
|
$
|
344,638
|
|||
|
Deferred
Interest on investments
|
2,163,057
|
||||||
|
Deferred
underwriting fees
|
4,000,000
|
4,000,000
|
|||||
|
Income
taxes payable
|
206,687
|
|
|||||
|
Total
Liabilities
|
6,973,264
|
4,344,638
|
|||||
|
Common
Stock, $.0001 par value, 6,599,999 shares subject to possible
redemption,
at redemption value of $9.80 per share
|
64,679,990
|
64,679,990
|
|||||
|
|
|||||||
|
Commitments
|
|||||||
|
|
|||||||
|
Stockholders’
Equity
|
|||||||
|
Preferred
Stock, $.0001 par value; authorized, 1,000,000 shares;
none issued or
outstanding
|
-
|
||||||
|
Common
Stock, $.0001 par value, authorized, 100,000,000 shares;
29,026,924 shares
issued and outstanding
|
2,903
|
2,903
|
|||||
|
(including
6,599,999 shares subject to possible redemption)
|
|||||||
|
Additional
paid in capital
|
120,441,727
|
120,441,727
|
|||||
|
Earnings
accumulated in the development stage
|
3,088,417
|
110,331
|
|||||
|
Total
Stockholders’ Equity
|
123,533,047
|
120,554,961
|
|||||
|
|
|||||||
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
195,186,301
|
$
|
189,579,589
|
|||
|
|
For
the Year
Ended
December
31,
2006
|
May
13, 2005
(date
of inception)
to
December
31,
2005
|
May
13, 2005
(date
of inception)
to
December
31,
2006
|
|||||||
|
|
|
|
|
|||||||
|
Operating
expenses
|
||||||||||
|
Professional
fees
|
$
|
596,423
|
$
|
19,600
|
$
|
616,023
|
||||
|
Insurance
|
112,242
|
4,234
|
116,476
|
|||||||
|
Due
diligence costs
|
262,877
|
-
|
262,877
|
|||||||
|
Other
|
239,558
|
26,377
|
265,935
|
|||||||
|
Total
operating expenses
|
1,211,100
|
50,211
|
1,261,311
|
|||||||
|
Interest
income
|
4,395,873
|
183,542
|
4,579,415
|
|||||||
|
Income
before provision for income taxes
|
3,184,773
|
133,331
|
3,318,104
|
|||||||
|
Provision
for income taxes
|
206,687
|
23,000
|
229,687
|
|||||||
|
Net
income
|
$
|
2,978,086
|
$
|
110,331
|
$
|
3,088,417
|
||||
|
Earnings
per share (basic and diluted)
|
$
|
0.10
|
$
|
0.01
|
$
|
0.14
|
||||
|
Weighted
average shares outstanding - basic and diluted
|
29,026,924
|
9,918,282
|
21,601,120
|
|||||||
|
For
the Year Ended December 31, 2006
|
May
13, 2005 (date of inception) to December 31, 2005
|
May
13, 2005 (date of inception) to December 31, 2006
|
||||||||
|
Cash
flows from operating activities:
|
|
|
|
|||||||
|
Net
Income
|
$
|
2,978,086
|
$
|
110,331
|
$
|
3,088,417
|
||||
|
Adjustments
to reconcile net income to net cash used in operating
activities:
|
|
|
|
|||||||
|
Depreciation
|
408
|
|
408
|
|||||||
|
Changes
in operating assets and liabilities:
|
|
|
-
|
|||||||
|
Increase
in value of trust account
|
(4,056,715
|
)
|
(183,542
|
)
|
(4,240,257
|
)
|
||||
|
Increase
in prepaid expenses and other current assets
|
(30,881
|
)
|
(118,766
|
)
|
(149,647
|
)
|
||||
|
Decrease
(increase) in deferred tax asset
|
9,000
|
(9,000
|
)
|
-
|
||||||
|
Increase
in accounts payable and accrued expenses
|
429,467
|
174,053
|
603,520
|
|||||||
|
Increase
in deferred interest
|
2,163,057
|
-
|
2,163,057
|
|||||||
|
Increase
in taxes payable
|
206,687
|
-
|
206,687
|
|||||||
|
Net
cash provided by (used in) operating activities
|
1,699,109
|
(26,924
|
)
|
1,672,185
|
||||||
|
|
||||||||||
|
Cash
flows from investing activities:
|
|
|
|
|||||||
|
Payment
to trust account
|
-
|
(188,675,000
|
)
|
(188,675,000
|
)
|
|||||
|
Capital
expenditures
|
(3,664
|
)
|
-
|
(3,664
|
)
|
|||||
|
Net
cash used in investing activities
|
(3,664
|
)
|
(188,675,000
|
)
|
(188,678,664
|
)
|
||||
|
|
||||||||||
|
Cash
flows from financing activities:
|
|
|
|
|||||||
|
Gross
proceeds from public offering
|
|
188,675,000
|
188,675,000
|
|||||||
|
Gross
proceeds from private placement
|
|
11,325,000
|
11,325,000
|
|||||||
|
Proceeds
of note payable to stockholder
|
-
|
590,000
|
590,000
|
|||||||
|
Repayment
of note payable to stockholder
|
-
|
(590,000
|
)
|
(590,000
|
)
|
|||||
|
Proceeds
from sale of shares of common stock
|
-
|
25,000
|
25,000
|
|||||||
|
Payment
of offering costs
|
(170,585
|
)
|
(10,729,795
|
)
|
(10,900,380
|
)
|
||||
|
Net
cash provided by financing activities
|
(170,585
|
)
|
189,295,205
|
189,124,620
|
||||||
|
Net
cash increase for period
|
1,524,860
|
593,281
|
2,118,141
|
|||||||
|
Cash
at beginning of period
|
593,281
|
-
|
-
|
|||||||
|
Cash
at end of period
|
$
|
2,118,141
|
$
|
593,281
|
$
|
2,118,141
|
||||
|
Supplemental
cash disclosure
|
|
|
|
|||||||
|
Interest
paid
|
$
|
-
|
$
|
9,163
|
$
|
9,163
|
||||
|
Supplemental
schedule of non-cash financing activities
|
|
|
|
|||||||
|
Accrual
of deferred underwriting fees
|
$
|
-
|
$
|
4,000,000
|
$
|
4,000,000
|
||||
|
Accrual
of offering costs
|
$
|
-
|
$
|
170,585
|
|
|||||
|
Star
Maritime Acquisition Corp.
|
Pro
Forma Adjustments (with no stock
redemption)
|
Combined
|
Additional
Pro Forma Adjustments
(with 6,599,999 shares of common stock
redemption)
|
Combined
(stock redemption)
|
||||||||||||||||
|
ASSETS
|
||||||||||||||||||||
|
CURRENT
ASSETS:
|
||||||||||||||||||||
|
Cash
and cash equivalents
|
2,118,141
|
40,000,000
|
(a)
|
|
1,633,398
|
66,843,047
|
(h)
|
|
1,633,398
|
|||||||||||
|
192,915,257
|
(b)
|
|
(64,679,990
|
)
|
(i)
|
|
||||||||||||||
|
(224,500,000
|
)
|
(c)
|
|
|
(2,163,057
|
)
|
(j)
|
|
|
|||||||||||
|
(4,900,000
|
)
|
(e)
|
|
|||||||||||||||||
|
(4,000,000
|
)
|
(f)
|
|
|||||||||||||||||
|
Investment
in trust account
|
192,915,257
|
(192,915,257
|
)
|
(b)
|
|
-
|
-
|
|||||||||||||
|
Prepaid
expenses and other current assets
|
149,647
|
149,647
|
149,647
|
|||||||||||||||||
|
Total
current assets
|
195,183,045
|
1,783,045
|
1,783,045
|
|||||||||||||||||
|
Fixed
assets, net
|
3,256
|
3,256
|
3,256
|
|||||||||||||||||
|
Vessels,
net
|
345,200,000
|
(c)
|
|
345,200,000
|
345,200,000
|
|||||||||||||||
|
Total
assets
|
195,186,301
|
346,986,301
|
346,986,301
|
|||||||||||||||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||
|
CURRENT
LIABILITIES:
|
||||||||||||||||||||
|
Accounts
payable and accrued expenses
|
603,520
|
603,520
|
603,520
|
|||||||||||||||||
|
Deferred
interest on investment
|
2,163,057
|
(2,163,057
|
)
|
(g)
|
|
-
|
-
|
|||||||||||||
|
Deferred
underwriting fees
|
4,000,000
|
(4,000,000
|
)
|
(f)
|
|
-
|
-
|
|||||||||||||
|
Income
taxes payable
|
206,687
|
206,687
|
206,687
|
|||||||||||||||||
|
Total
current liabilities
|
6,973,264
|
810,207
|
810,207
|
|||||||||||||||||
|
Long-term
debt
|
-
|
40,000,000
|
(a)
|
|
40,000,000
|
66,843,047
|
(h)
|
|
106,843,047
|
|||||||||||
|
Total
liabilities
|
6,973,264
|
40,810,207
|
107,653,254
|
|||||||||||||||||
|
Common
Stock, 6,599,999 subject to possible redemption at a
redemption value of
$9.80 per share
|
64,679,990
|
(64,679,990
|
)
|
(d)
|
|
-
|
-
|
|||||||||||||
|
Commitments
|
-
|
|||||||||||||||||||
|
STOCKHOLDERS'
EQUITY
|
||||||||||||||||||||
|
Preferred
stock, $.0001 par value; authorized, 1,000,000 shares,
none issued or
outstanding
|
-
|
-
|
||||||||||||||||||
|
Common
stock, $.0001 par value; authorized, 100,000,000 shares;
29,026,924 shares
issued and outstanding (including 6,599,999 shares subject
to possible
redemption)
|
2,903
|
1,254
|
(c)
|
|
||||||||||||||||
|
660
|
(d)
|
|
4,817
|
(660
|
)
|
(i)
|
|
4,137
|
||||||||||||
|
Additional
paid-in capital
|
120,441,727
|
120,698,746
|
(c)
|
|
300,919,803
|
(20
|
)
|
(k)
|
|
|||||||||||
|
64,679,330
|
(d)
|
|
|
(64,679,330
|
)
|
(i)
|
|
|||||||||||||
|
(4,900,000
|
)
|
(e)
|
|
20
|
(k)
|
|
236,240,493
|
|||||||||||||
|
Earnings
accumulated in the development stage
|
3,088,417
|
2,163,057
|
(g)
|
|
5,251,474
|
(2,163,057
|
)
|
(j)
|
|
3,088,417
|
||||||||||
|
|
-
|
|||||||||||||||||||
|
Total
stockholders' equity
|
123,533,047
|
306,176,094
|
239,333,047
|
|||||||||||||||||
|
Total
liabilities and stockholders' equity
|
195,186,301
|
346,986,301
|
-
|
346,986,301
|
||||||||||||||||
|
(a)
|
Reflects
the drawdown of the loan of $40,000,000 under the credit
facility
described in “Acquisition Financing”. Star
Bulk has received indication letters from international
shipping lenders
that will, subject to the approval of the Agreement and
Plan of Merger,
provide Star Bulk with a credit facility of up to $120,000,000
with an
eight-year term and secured by five of the eight drybulk
carriers that
Star Bulk has agreed to acquire from TMT. Star Bulk intends
to draw down
$40,000,000 under the credit facility on the effective
date of the
Redomiciliation Merger to fund a portion of the cash
consideration of the
aggregate purchase price of in the initial fleet. The
remaining funds
under the credit facility may be used to replace funds
from our Trust
Account used to pay costs relating to the redemption
of Star Maritime
stockholders who vote against the Redomiciliation Merger
and elect to
redeem their shares. Any excess un-drawn funds under
the credit facility
may be used for additional vessel acquisitions and to
provide working
capital.
|
|
(b)
|
To
transfer the total Investment in trust account balance
to the operating
cash account.
|
|
(c)
|
Reflects
the purchase of Star Maritime’s acquisition
of eight drybulk carriers from certain subsidiaries of
TMT for an
aggregate purchase price of $345.2 million consisting
of $224.5 million
payable in cash and $120.7 million payable in 12,537,645
common shares of
Star Bulk.
|
|
(d)
|
In
conjunction with the Redomiciliation Merger, all non-redeemed
common stock
forfeits redemption rights.
|
|
(e)
|
To
record transaction costs comprised of: advisor fees of
$2.8 million, legal
fees of $1.1 million, $0.7 million in accounting fees
and other fees of
$0.3 million.
|
|
(f)
|
To
reflect payment of underwriters’ deferred compensation, related to
services provided in connection with Star Maritime’s Initial Public
Offering in December 2005.
|
|
(g)
|
To
record interest on Trust Account previously
deferred.
|
|
(h)
|
To
drawdown an additional $66.8 million under the Company’s credit facility
of up to $120 million to replace funds from the Trust Account used
for the payment of redemption value and deferred interest
to
investors.
|
|
(i)
|
Reflects
the redemption of 32.99% of Star Maritime shares of common
stock issued in
the Company’s Initial Public Offering (“IPO shares”), at December 31, 2006
redemption value of $9.80 per share. The number of shares
assumed
redeemed, 6,599,999, is based on 32.99% of the IPO shares
outstanding
prior to the Redomiciliation Merger and represents the
maximum number of
shares that may be redeemed without precluding the consummation
of the
Redomiciliation Merger.
|
|
(j)
|
To
reflect the payment of interest earned by the redeeming
shareholders.
|
| (k) |
Reflects
the 200,000 common shares certain of our officers and
directors have
agreed to surrender for cancellation upon the consummation
of a business
combination in the event public stockholders exercise
their right to have
Star Maritime redeem their shares for
cash.
|
|
Units
|
Common
Stock
|
Warrants
|
|||||||||||||||||
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
||||||||||||||
|
2005:
|
|||||||||||||||||||
|
Fourth
Quarter (December 16 to December 31)
|
$10.00
|
$9.82
|
NA
|
NA
|
NA
|
NA
|
|||||||||||||
|
2006:
|
|
||||||||||||||||||
|
First
Quarter (January 1 to February 27)1
|
$10.25
|
$9.84
|
NA
|
NA
|
NA
|
NA
|
|||||||||||||
|
First
Quarter (February 27 to March 31)
|
NA
|
NA
|
$9.92
|
$9.62
|
$1.25
|
$0.87
|
|||||||||||||
|
Second
Quarter (April 1 to June 30)
|
NA
|
NA
|
$10.16
|
$9.47
|
$1.20
|
$0.87
|
|||||||||||||
|
Third
Quarter (July 1 to September 31)
|
NA
|
NA
|
$9.74
|
$9.45
|
$1.06
|
$0.70
|
|||||||||||||
|
Fourth
Quarter (October 1 to December 31)
|
NA
|
NA
|
$9.90
|
$9.60
|
$0.84
|
$0.55
|
|||||||||||||
|
|
|
||||||||||||||||||
|
2007:
|
|
|
|||||||||||||||||
|
First
Quarter (January 1 to January
16)2
|
NA
|
NA
|
$9.93
|
$9.87
|
$0.87
|
$0.72
|
|||||||||||||
|
First
Quarter (January 17 to March
9)
|
NA
|
NA
|
$10.02
|
$9.86
|
$1.72
|
$0.72
|
|
||||||||||||
|
•
|
Star
Maritime’s directors would, consistent with Delaware law and the
obligations described in its amended and restated certificate
of
incorporation to dissolve, prior to the passing of the
December 21, 2007
deadline, convene and adopt a specific plan of dissolution
and
liquidation, which it would then vote to recommend to
its stockholders; at
such time it would also cause to be prepared a preliminary
proxy statement
setting out such plan of dissolution and liquidation
as well as the
board’s recommendation of such
plan;
|
|
•
|
upon
such deadline, it would file a preliminary proxy statement
with the
Securities and Exchange Commission;
|
|
•
|
if
the Securities and Exchange Commission does not review
the preliminary
proxy statement, then, approximately 10 days following
the passing of such
deadline, it would mail the proxy statements to its stockholders,
and
approximately 30 days following the passing of such deadline
it would
convene a meeting of stockholders, at which they would
either approve or
reject the plan of dissolution and liquidation;
and
|
|
•
|
if
the Securities and Exchange Commission does review the
preliminary proxy
statement, Star Maritime currently estimates that it
would receive their
comments approximately 30 days following the passing
of such deadline.
Star Maritime would mail the proxy statements to stockholders
following
the conclusion of the comment and review process (the
length of which
cannot be predicted with any certainty, and which may
be substantial) and
it would convene a meeting of its stockholders at which
they would either
approve or reject the plan of dissolution and
liquidation.
|
| · |
demand
for and production of drybulk products;
|
| · |
the
distance cargo is to be moved by
sea;
|
| · |
global
and regional economic and political conditions;
|
| · |
environmental
and other regulatory developments; and
|
| · |
changes
in seaborne and other transportation patterns, including
changes in the
distances over which cargo is transported due to geographic
changes in
where commodities are produced and cargoes are used.
|
| · |
the
number of newbuilding deliveries;
|
| · |
the
scrapping rate of older vessels;
|
| · |
vessel
casualties;
|
| · |
price
of steel;
|
| · |
number
of vessels that are out of service;
|
| · |
changes
in environmental and other regulations that may limit the
useful life of
vessels; and
|
| · |
port
or canal congestion.
|
| · |
actual
or anticipated fluctuations in quarterly and annual
results;
|
| · |
limited
operating history;
|
| · |
mergers
and strategic alliances in the shipping
industry;
|
| · |
market
conditions in the industry;
|
| · |
changes
in government regulation;
|
| · |
fluctuations
in Star
Bulk’s
quarterly revenues and earnings and those of its publicly
held
competitors;
|
| · |
shortfalls
in Star
Bulk’s
operating results from levels forecasted by securities
analysts;
|
| · |
announcements
concerning Star
Bulk
or
its competitors; and
|
| · |
the
general state of the securities markets.
|
| · |
the
delivery and operation of assets of Star Bulk, the surviving
corporation in the Redomiciliation
Merger;
|
| · |
Star
Bulk’s future operating or financial
results;
|
| · |
future,
pending or recent acquisitions, business strategy, areas
of possible
expansion, and expected capital spending or operating expenses;
and
|
| · |
drybulk
market trends, including charter rates and factors affecting
vessel supply
and demand.
|
| · |
by
executing and returning a proxy card dated later than the
previous one to
Star Maritime at
103 Foulk Road, Wilmington, Delaware 19803; Attention: Corporate
Secretary;
|
| · |
by
attending the special meeting
in
person
and casting your vote by ballot; or
|
| · |
by
submitting a written revocation to Star Maritime at
103 Foulk Road, Wilmington, Delaware 19803; Attention: Corporate
Secretary.
|