| [  ] | REGISTRATION      STATEMENT PURSUANT TO SECTION 12(b) OR (g)                                     |
|----------------|--------------------------------------------------------------------------------------------------|
|           | OF      THE SECURITIES EXCHANGE ACT OF 1934                                                      |
|           |                                                                                             |
|           | OR                                                                                               |
|           |                                                                                             |
| [X]            | ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d)                                               |
|           | OF      THE SECURITIES EXCHANGE ACT OF 1934                                                      |
|           | For      the fiscal year ended December 31, 2007                                                 |
|           |                                                                                             |
|           | OR                                                                                               |
|           |                                                                                             |
| [  ] | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d)                                           |
|           | OF      THE SECURITIES EXCHANGE ACT OF 1934                                                      |
|           |                                                                                             |
|           | OR                                                                                               |
|           |                                                                                             |
| [  ] | SHELL      COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF                                     |
|           | THE      SECURITIES EXCHANGE ACT OF 1934                                                         |
|           |                                                                                             |
|           | Date      of event requiring this shell company report: N/A                                      |
|           | For      the transition period from: N/A to N/A                                                  |
|           | Commission      file number 000-50859                                                            |
|           |                                                                                             |
|           | TOP      SHIPS INC.                                                                              |
|           | (Exact      name of Registrant as specified in its charter)                                      |
|           |                                                                                             |
|           | Republic      of The Marshall Islands                                                            |
|           | (Jurisdiction      of incorporation or organization)                                             |
|           |                                                                                             |
|           | 1      Vas. Sofias and Meg. Alexandrou Str, 15124 Maroussi,  Greece                              |
|           | (Address      of principal executive offices)                                                    |
|           |                                                                                             |
|           |                                                                                             |
|           | Stamatis      N. Tsantanis, (Tel) +30 210 8128199, snt@topships.org, (Fax) +30 210      6141273, |
|           | 1      Vas. Sofias and Meg. Alexandrou Str, 15124 Maroussi,  Greece                              |
|           |                                                                                             |
|           |                                                                                             |
|           |                                                                                             |

| Common      Stock par value $0.01 per share | NASDAQ      Global Select Market |
|---------------------------------------------|----------------------------------|
| Preferred      Stock Purchase Rights        | NASDAQ      Global Select Market |

----

| NONE   |
|--------|
|   |

| NONE   |
|--------|
|   |

| Yes    |    X |   | No     |   |
|--------|---------------------|--------|--------|--------|
|   |                |   |   |   |

| Item      17 |   |   | Item      18 |      X |
|--------------|--------|--------|--------------|---------------------------------|
|         |   |   |         |                            |

|  U.S.      GAAP   | X |  |   | International Financial Reportings Standards as issued by the      International Accounting Standards      Board   |    |   | Other    |    | |
|---------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|

----

|           |                                                                                   | Page   |
|----------------|----------------------------------------------------------------------------------------|--------|
|           |                                                                                   |   |
| ITEM      1.   | IDENTITY      OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                             | 1      |
| ITEM      2.   | OFFER      STATISTICS AND EXPECTED TIMETABLE                                           | 1      |
| ITEM      3.   | KEY      INFORMATION                                                                   | 1      |
| ITEM      4.   | INFORMATION      ON THE COMPANY                                                        | 18     |
| ITEM      4A.  | UNRESOLVED      STAFF COMMENTS                                                         | 39     |
| ITEM      5.   | OPERATING      AND FINANCIAL REVIEW AND PROSPECTS                                      | 39     |
| ITEM      6.   | DIRECTORS,      SENIOR MANAGEMENT AND EMPLOYEES                                        | 67     |
| ITEM      7.   | MAJOR      SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                 | 73     |
| ITEM      8.   | FINANCIAL      INFORMATION                                                             | 74     |
| ITEM      9.   | THE      OFFER AND LISTING                                                             | 74     |
| ITEM      10.  | ADDITIONAL      INFORMATION                                                            | 75     |
| ITEM      11.  | QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                        | 89     |
| ITEM      12.  | DESCRIPTION      OF SECURITIES OTHER THAN EQUITY SECURITIES                            | 89     |
| ITEM      13.  | DEFAULTS,      DIVIDEND ARREARAGES AND DELINQUENCIES                                   | 90     |
| ITEM      14.  | MATERIAL      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF      PROCEEDS | 90     |
| ITEM      15.  | CONTROLS      AND PROCEDURES                                                           | 90     |
| ITEM      16.  |                                                                                   | 92     |
| ITEM      16A. | AUDIT      COMMITTEE FINANCIAL EXPERT                                                  | 92     |
| ITEM      16B. | CODE      OF ETHICS                                                                    | 92     |
| ITEM      16C. | PRINCIPAL      AUDITOR FEES AND SERVICES                                               | 93     |
| ITEM      16D. | EXEMPTIONS      FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                        | 93     |
| ITEM      16E. | PURCHASES      OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED      PURCHASES        | 93     |
| ITEM      17.  | FINANCIAL      STATEMENTS                                                              | 94     |
| ITEM      18.  | FINANCIAL      STATEMENTS                                                              | 94     |
| ITEM      19.  | EXHIBITS                                                                               |   |

----

| ·   | future      operating or financial results; |
|--------------------|---------------------------------------------|

| ·   | statements      about planned, pending or recent acquisitions, business strategy and      expected capital spending or operating expenses, including drydocking and      insurance costs; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | statements      about crude oil, refined petroleum products, dry commodities, tanker and      drybulk shipping market trends, including charter rates, vessel values and      factors affecting supply anddemand; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our      ability to obtain additional debt and equity  financing; |
|--------------------|-------------------------------------------------------------------|

| ·   | expectations      regarding the availability of vessel acquisitions;  and |
|--------------------|---------------------------------------------------------------------------|

| ·   | anticipated      developments with respect to pendinglitigation. |
|--------------------|------------------------------------------------------------------|

----

----

|                                                                          |   | Year Ended December 31,    |      |
|-------------------------------------------------------------------------------|--------|----------------------------|-----------|
|                                                                          |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Dollars      in thousands, except per share data and average daily    results |   | 2003(as adjusted)      (1) |      |   | 2004(as adjusted)      (1) |   |   | 2005(as adjusted)      (1) |   |   | 2006(as adjusted)      (1) |   |   | 2007 |   |
| INCOME      STATEMENT DATA                                                    |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                                      |   | $                          | 23,085    |   |   | $ | 93,829 |   |   | $ | 244,215 |   |   | $ | 310,043 |   |   | $ | 252,259 |   |
| Voyage      expenses                                                          |   |                       | 5,937     |   |   |   | 16,898 |   |   |   | 36,889 |   |   |   | 55,351 |   |   |   | 59,414 |   |
| Charter      hire expense                                                     |   |                       | -         |   |   |   | - |   |   |   | 7,206 |   |   |   | 96,302 |   |   |   | 94,118 |   |
| Amortization      of deferred gain on sale and leaseback of vessels           |   |                       | -         |   |   |   | - |   |   |   | (837 | ) |   |   | (8,110 | ) |   |   | (15,610 | ) |
| Other      vessel operating expenses                                          |   |                       | 8,420     |   |   |   | 16,859 |   |   |   | 47,315 |   |   |   | 66,082 |   |   |   | 67,914 |   |
| Dry-docking      costs(1)                                                     |   |                       | 2,414     |   |   |   | 7,365 |   |   |   | 10,478 |   |   |   | 39,333 |   |   |   | 25,094 |   |
| General      and administrative expenses(2)                                   |   |                       | 1,815     |   |   |   | 8,579 |   |   |   | 23,818 |   |   |   | 23,016 |   |   |   | 24,824 |   |
| Foreign      currency (gains) losses, net                                     |   |                       | 105       |   |   |   | 75 |   |   |   | (68 | ) |   |   | 255 |   |   |   | 176 |   |
| Gain      on sale of vessels(3)                                               |   |                       | -         |   |   |   | (1,889 | ) |   |   | (10,831 | ) |   |   | (12,667 | ) |   |   | (1,961 | ) |
| Depreciation                                                                  |   |                       | 3,604     |   |   |   | 13,108 |   |   |   | 47,055 |   |   |   | 35,266 |   |   |   | 27,408 |   |
|                                                                          |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      operating expenses(1),      (3)                                    |   |                       | 22,295    |   |   |   | 60,995 |   |   |   | 161,025 |   |   |   | 294,828 |   |   |   | 281,377 |   |
| Operating      income (loss) (1),      (3)                                    |   |                       | 790       |   |   |   | 32,834 |   |   |   | 83,190 |   |   |   | 15,215 |   |   |   | (29,118 | ) |
| Interest      and finance costs                                               |   |                       | (1,336    | ) |   |   | (5,201 | ) |   |   | (21,675 | ) |   |   | (26,442 | ) |   |   | (18,318 | ) |
| Fair      value change of financial instruments                               |   |                       | -         |   |   |   | - |   |   |   | 1,498 |   |   |   | (2,733 | ) |   |   | (4,904 | ) |
| Interest      income                                                          |   |                       | 1         |   |   |   | 481 |   |   |   | 1,774 |   |   |   | 3,022 |   |   |   | 3,248 |   |
| Other      income (expense), net                                              |   |                       | 364       |   |   |   | 80 |   |   |   | 134 |   |   |   | (67 | ) |   |   | 16 |   |
|                                                                          |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income (loss) (1),      (3)                                          |   | $                          | (181      | ) |   | $ | 28,194 |   |   | $ | 64,921 |   |   | $ | (11,005 | ) |   | $ | (49,076 | ) |
|                                                                          |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      (loss) per share, basic and diluted(4),(5)                      |   | $                          | (0.09     | ) |   | $ | 6.54 |   |   | $ | 6.97 |   |   | $ | (1.16 | ) |   | $ | (4.09 | ) |
| Weighted      average common shares outstanding, basic(4),(5)                 |   |                       | 2,000,000 |   |   |   | 4,307,483 |   |   |   | 9,308,923 |   |   |   | 10,183,424 |   |   |   | 11,986,857 |   |
| Weighted      average common shares outstanding, diluted(4),(5)               |   |                       | 2,000,000 |   |   |   | 4,307,483 |   |   |   | 9,310,670 |   |   |   | 10,183,424 |   |   |   | 11,986,857 |   |
|                                                                          |   |                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      declared per share(4),(5)                                      |   | $                          | 0.30      |   |   | $ | 1.80 |   |   | $ | 2.64 |   |   | $ | 23.13 |   |   |   | - |   |

----

| Dollars      in thousands, except per share data and average daily    results                                                                                                                                                                                                                                                                                        | 2003(as adjusted)      (1) | 2004(as adjusted)      (1) | 2005(as adjusted)      (1) | 2006(as adjusted)      (1) | 2007     |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|----------------------------|----------------------------|----------------------------|---------------|
| BALANCE      SHEET DATA, at end of period                                                                                                                                                                                                                                                                                                                            |                       |                       |                       |                       |          |
| Current      assets                                                                                             | $4,862                     | $141,051                   | $67,574                    | $72,799                    | $102,161      |
| Total      assets(1)                                                         | 53,555                     | 533,138                    | 970,386                    | 490,885                    | 776,019       |
| Current      liabilities, including current portion of long-term debt(1)                                                                                                                                                                                                                                                                                             |  9,008                |  42,811               |  76,143               |  45,416               |  153,290 |
| Total      long-term debt, including current portion                                                                                                                                                                                                                                                                                                                 | 34,403                     | 194,806                    | 564,103                    | 218,052                    | 438,884       |
| Stockholders'      equity(1)                                                                                                                                 | 14,171                     | 315,061                    | 359,147                    | 161,198                    | 211,408       |
|                                                                                                                                                                                                                                                                                                                                                                 |                       |                       |                       |                       |          |
| FLEET      DATA                                                                                                                                                                                                                                                                                                                                                      |                       |                       |                       |                       |          |
| Total      number of vessels at end of period                                                                                                                                                                                                                                                                                                                        | 5.0                        | 15.0                       | 27.0                       | 24.0                       | 23.0          |
| Average      number of vessels(6)                                                                                                                                                                                                                                                                                                                               | 4.4                        | 9.6                        | 21.7                       | 26.7                       | 22.4          |
| Total      voyage days for fleet(7)                                                                                                                                                                                                                                   | 1,517                      | 3,215                      | 7,436                      | 8,634                      | 7,032         |
| Total      time charter days for      fleet                                                                                                                                                                                                                                               | 543                        | 1,780                      | 5,567                      | 6,223                      | 4,720         |
| Total      spot market days for fleet                                                                                                                                                                                                                                                                                                                                | 974                        | 1,435                      | 1,869                      | 2,411                      | 2,312         |
| Total      calendar days for fleet(8)                                                                                                                                                                                                                                                                                                                           | 1,609                      | 3,517                      | 7,905                      | 9,747                      | 8,176         |
| Fleet      utilization(9)                                                                                                                                                                                      | 94.3%                      | 91.4%                      | 94.1%                      | 88.6%                      | 86.0%         |
|                                                                                                                                                                                                                                                                                                                                                                 |                       |                       |                       |                       |          |
| AVERAGE      DAILY RESULTS                                                                                                                                                                                                                                                                                                                                           |                       |                       |                       |                       |          |
| Time      charter equivalent(10)                                                                                                                                                           | $11,304                    | $23,929                    | $27,881                    | $29,499                    | $27,424       |
| Other      vessel operating expenses(11)                                                                                                                                                                                                                                                                                                                             | 5,233                      | 4,794                      | 5,985                      | 6,780                      | 8,307         |
| General      and administrative expenses(12)                                                                                                                                                                                                                                                                                                                         | 1,128                      | 2,439                      | 3,013                      | 2,361                      | 3,036         |
|                                                                                                                                                                                                                                                                                                                                                                 |                       |                       |                       |                       |          |

| (1)   |  The      Company has historically accounted for dry-docking costs that qualified as      “Planned Major Maintenance Activities” (“PMMA”) using the deferral method.      Beginning with the fourth quarter of 2007, the Company changed its      accounting policy for PMMA from the deferral method, under which the      Company amortized dry-docking costs over the estimated period of benefit      between dry-dockings, to the direct expense method, under which the      Company expenses all dry-docking costs as incurred. The Company believes      that the direct expense method is preferable as it eliminates the      significant amount of time and subjectivity involved to determine which      costs and activities related to dry-docking qualify as PMMA under the      deferral method. The Company reflected this change as a change in      accounting principle from an accepted accounting principle to a preferable      accounting principle in accordance with Statement of Financial Accounting      Standards No. 154, Accounting Changes and Error Corrections. The new      accounting principle is applied retrospectively to all periods      presented. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | General      and administrative expenses include management fees charged by a related      party, sub-manager fees and other general and administrative expenses. We      did not pay any compensation to members of our senior management or our      directors in the year ended December 31, 2003. During 2004, 2005,      2006 and 2007, we paid to the members of our senior management and to our      directors aggregate compensation of approximately $4.4 million, $8.1      million, $4.2 million and $4.8 million  respectively. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Due      to change in accounting policy for the dry-docking costs discussed in      footnote 1 above, the gain from the sale of vessels was adjusted to      exclude the unamortized dry-docking costs as of the date of the      sale. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | All      share and per share amounts have been restated to reflect the retroactive      effect of the stock dividend in May2004. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------|

----

| (5)   | On      March 20, 2008, the Company effected a 1-for-3 reverse stock split of its      common stock. There was no change in the number of authorized common      shares of the Company. All share and per share amounts in these financial      statements have been retroactively restated to reflect this stock      split. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)   | Average      number of vessels is the number of vessels that constituted our fleet for      the relevant period, as measured by the sum of the number of days each      vessel was a part of our fleet during the period divided by the number of      calendar days in that period. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7)   | Total      voyage days for fleet are the total days the vessels were in our      possession for the relevant period net of off hire days associated with      major repairs, dry-dockings or special or intermediate      surveys. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8)   | Calendar      days are the total days the vessels were in our possession for the      relevant period including off hire days associated with major repairs,      dry-dockings or special or intermediatesurveys. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9)   | Fleet      utilization is the percentage of time that our vessels were available for      revenue generating voyage days, and is determined by dividing voyage days      by fleet calendar days for the relevantperiod. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (10)   | Time      charter equivalent rate, or TCE rate, is a measure of the average daily      revenue performance of a vessel on a per voyage basis. Our method of      calculating TCE rate is consistent with industry standards and is      determined by dividing time charter equivalent revenues or TCE revenues by      voyage days for the relevant time period. TCE revenues are revenues minus      voyage expenses. Voyage expenses primarily consist of port, canal and fuel      costs that are unique to a particular voyage, which would otherwise be      paid by the charterer under a time charter contract, as well as      commissions. TCE revenues and TCE rate non-GAAP measures, provide      additional meaningful information in conjunction with shipping revenues,      the most directly comparable GAAP measure, because it assists Company’s      management in making decisions regarding the deployment and use of its      vessels and in evaluating their financial performance. The following table      reflects reconciliation of TCE revenues to shipping revenues as reflected      in the consolidated statements of operations and calculation of the TCE      rate (all amounts are expressed in thousands of U.S. dollars, except for      Average Daily Time Charter Equivalent amounts and Total Voyage      Days): |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                       |   | 2003   |   |   | 2004   |   |    | 2005   |   |   | 2006    |   |   | 2007   |    |
|--------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
| On a consolidated basis                    |   |   |   |   |   |   |    |   |   |   |    |   |   |   |    |
| Revenues                                   |   | $      | 23,085 |   |   | $      | 93,829  |   |   | $      | 244,215 |   |   | $      | 310,043 |   |   | $ | 252,259 |   |
| Less:                                      |   |   |   |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Voyage      expenses                       |   |   | (5,937 | )      |   |   | (16,898 | )      |   |   | (36,889 | )      |   |   | (55,351 | ) |   |   | (59,414 | ) |
|                                       |   |   |   |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Time      charter equivalent revenues      |   | $      | 17,148 |   |   | $      | 76,931  |   |   | $      | 207,326 |   |   | $      | 254,692 |   |   | $ | 192,845 |   |
|                                       |   |   |   |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      voyage days                     |   |   | 1,517  |   |   |   | 3,215   |   |   |   | 7,436   |   |   |   | 8,634   |   |   |   | 7,032 |   |
| Average      Daily Time Charter Equivalent |   | $      | 11,304 |   |   | $      | 23,929  |   |   | $      | 27,881  |   |   | $      | 29,499  |   |   | $ | 27,424 |   |

----

|                                       | 2003    | 2004     | 2005     | 2006     | 2007     |
|--------------------------------------------|---------|----------|----------|----------|----------|
| Tanker Fleet                               |    |     |     |     |     |
| Revenues                                   | $23,085 | $93,829  | $244,215 | $310,043 | $248,944 |
| Less:                                      |    |     |     |     |     |
| Voyage      expenses                       | (5,937) | (16,898) | (36,889) | (55,351) | (59,253) |
|                                       |    |     |     |     |     |
| Time      charter equivalent revenues      | $17,148 | $76,931  | $207,326 | $254,692 | $189,691 |
|                                       |    |     |     |     |     |
| Total      voyage days                     | 1,517   | 3,215    | 7,436    | 8,634    | 6,991    |
| Average      Daily Time Charter Equivalent | $11,304 | $23,929  | $27,881  | $29,499  | $27,134  |

|                                       |   | 2007   |   |
|--------------------------------------------|--------|--------|--------|
| Drybulk Fleet                              |   |   |   |
| Revenues                                   |   | $      | 1,902  |   |
| Less:                                      |   |   |   |   |
| Voyage      expenses                       |   |   | (161   | ) |
|                                       |   |   |   |   |
| Time      charter equivalent revenues      |   | $      | 1,741  |   |
|                                       |   |   |   |   |
| Total      voyage days                     |   |   | 41     |   |
| Average      Daily Time Charter Equivalent |   | $      | 42,463 |   |
|                                       |   |   |   |   |

| (11)   | Daily      other vessel operating expenses, which includes crew costs, provisions,      deck and engine stores, lubricating oil, insurance, maintenance and      repairs is calculated by dividing other vessel operating expenses by fleet      calendar days for the relevant timeperiod. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (12)   | Daily      general and administrative expenses are calculated by dividing general and      administrative expenses by fleet calendar days for the relevant time      period. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | demand      for refined petroleum products and crude oil for tankers and drybulk      commodities for drybulk vessels; |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| ·   | changes      in crude oil production and refining capacity as well as drybulk commodity      production and resulting shifts in trade flows for crude oil, petroleum      product and drybulk commodities; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      location of regional and global crude oil refining facilities and drybulk      commodities markets that affect the distance refined petroleum products      and crude oil or drybulk commodities are to be moved by    sea; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | global      and regional economic and politicalconditions; |
|--------------------|------------------------------------------------------------|

| ·   | the      globalization of manufacturing and other developments in international      trade; |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | changes      in seaborne and other transportation patterns, including changes in the      distances over which cargoes are transported and, with regard to drybulk,      the supply of and rates for alternate means of    transportation; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | environmental      and other regulatory developments; |
|--------------------|-------------------------------------------------------|

| ·   | currency      exchange rates; and |
|--------------------|-----------------------------------|

| ·   | weather. |
|--------------------|----------|

----

| ·   | the      number of newbuilding deliveries; |
|--------------------|--------------------------------------------|

| ·   | the      scrapping rate of older vessels; |
|--------------------|-------------------------------------------|

| ·   | the      price of steel; |
|--------------------|--------------------------|

| ·   | the      lead times required to purchase newvessels; |
|--------------------|------------------------------------------------------|

| ·   | vessel      casualties; |
|--------------------|-------------------------|

| ·   | hanges      in environmental and other regulations that may limit the useful lives of      vessels; |
|--------------------|-----------------------------------------------------------------------------------------------------|

| ·   | port      or canal congestion; |
|--------------------|--------------------------------|

| ·   | the      number of vessels that are out of service at a given time;    and |
|--------------------|----------------------------------------------------------------------------|

| ·   | changes      in global crude oil and drybulk commodity  production. |
|--------------------|---------------------------------------------------------------------|

| ·   | the      United States Oil Pollution Act of 1990, or OPA, which imposes strict      liability for the discharge of oil into the 200-mile United States      exclusive economic zone, the obligation to obtain certificates of      financial responsibility for vessels trading in United States waters and      the requirement that newly constructed tankers that trade in United States      waters be constructed withdouble-hulls; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      International Convention on Civil Liability for Oil Pollution Damage of      1969 entered into by many countries (other than the United States)      relating to strict liability for pollution damage caused by the discharge      of oil;  |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      International Maritime Organization, or IMO, International Convention for      the Prevention of Pollution from Ships with respect to strict technical      and operational requirements fortankers; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | the      IMO International Convention for the Safety of Life at Sea of 1974, or      SOLAS, with respect to crew and passenger  safety; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      International Convention on Load Lines of 1966 with respect to the      safeguarding of life and property through limitations on load capability      for vessels on international voyages;and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      United States Marine Transportation Security Act of  2002. |
|--------------------|---------------------------------------------------------------------|

| ·   | general      economic and market conditions affecting the international tanker and      drybulk shipping industries; |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

| ·   | competition      from other shipping companies; |
|--------------------|-------------------------------------------------|

| ·   | types,      sizes and ages of vessels; |
|--------------------|----------------------------------------|

| ·   | other      modes of transportation; |
|--------------------|-------------------------------------|

| ·   | cost      of newbuildings; |
|--------------------|----------------------------|

| ·   | price      of steel; |
|--------------------|----------------------|

| ·   | governmental      or other regulations; |
|--------------------|-----------------------------------------|

----

| ·   | prevailing      level of charter rates; and |
|--------------------|---------------------------------------------|

| ·   | technological      advances. |
|--------------------|------------------------------|

----

----

| ·   | locating      and acquiring suitable vessels; |
|--------------------|-----------------------------------------------|

| ·   | identifying      and consummating acquisitions or jointventures; |
|--------------------|------------------------------------------------------------------|

| ·   | integrating      any acquired business successfully with our existing      operations; |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | enhancing      our customer base; |
|--------------------|-----------------------------------|

| ·   | managing      expansion; and |
|--------------------|------------------------------|

| ·   | obtaining      required financing. |
|--------------------|------------------------------------|

----

| ·   | increase      our vulnerability to general economic downturns and adverse competitive      and industry conditions; |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | require      us to dedicate a substantial portion, if not all, of our cash flow from      operations to payments on our indebtedness, thereby reducing the      availability of our cash flow to fund working capital, capital      expenditures and other general corporate  purposes; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | limit      our flexibility in planning for, or reacting to, changes in our business      and the industry in which weoperate; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | place      us at a competitive disadvantage compared to competitors that have less      debt or better access to capital; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

|        ·   | limit      our ability to raise additional financing on satisfactory terms or at all;      and |
|--------------------------------|------------------------------------------------------------------------------------------------|

| ·   | adversely      impact our ability to comply with the financial and other restrictive      covenants in the indenture governing the notes and the credit agreements      governing the debts of our subsidiaries, which could result in an event of      default under such agreements. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | incur      additional indebtedness; |
|--------------------|-------------------------------------|

| ·   | create      liens on our assets; |
|--------------------|----------------------------------|

| ·   | sell      capital stock of our subsidiaries; |
|--------------------|----------------------------------------------|

| ·   | engage      in mergers or acquisitions; |
|--------------------|-----------------------------------------|

| ·   | pay      dividends; |
|--------------------|---------------------|

| ·   | make      capital expenditures or otherinvestments; |
|--------------------|-----------------------------------------------------|

| ·   | change      the management of our vessels or terminate or materially amend the      management agreement relating to each vessel;  and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | sell      our vessels. |
|--------------------|------------------------|

----

----

| ·   | marine      disaster; |
|--------------------|-----------------------|

| ·   | piracy; |
|--------------------|---------|

| ·   | environmental      accidents; |
|--------------------|-------------------------------|

| ·   | cargo      and property losses or damage; and |
|--------------------|-----------------------------------------------|

| ·   | mechanical      failure, human error, war, terrorism, political action in various      countries, labor strikes or adverse weather  conditions. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

----

|                   |   | Dwt    |    | YearBuilt | Charter Type |              | Expiry |   |    | Daily Base Rate |   | Profit SharingAbove Base Rate (2008) |   | Daily Charter Hire Expense |                |
|------------------------|--------|--------|---------|-----------|--------------|-------------------|--------|--------|---------|-----------------|--------|--------------------------------------|--------|----------------------------|---------------------|
| 9      Suezmax Tankers |   |   |    |      |         |              |   |   |    |            |   |                                 |   |
| TimelessC              |   |   | 154,970 |      | 1991         | Spot              |   |   |    |            |   |                                 |   |                       | $                   | 25,000 |   |
| FlawlessC              |   |   | 154,970 |      | 1991         | Spot              |   |   |    |            |   |                                 |   |                       | $                   | 25,000 |   |
| StoplessC              |   |   | 154,970 |      | 1991         | Time      Charter |   |   | Q3/2008 |            |   | $                                    | 35,000 |                       | 50%      thereafter |   | $ | 25,000 |   |
| PricelessC             |   |   | 154,970 |      | 1991         | Spot              |   |   |    |            |   |                                 |   |                       |                |   | $ | 25,000 |   |
| EndlessE               |   |   | 135,915 |      | 1992         | Time      Charter |   |   | Q3/2008 | D               |   | $                                    | 36,500 |                       | None                |   |   |   |   |
| LimitlessE             |   |   | 136,055 |      | 1993         | Spot              |   |   |    |            |   |                                 |   |                       |                |   |   |   |   |
| StormlessE             |   |   | 150,038 |      | 1993         | Time      Charter |   |   | Q2/2010 |            |   | $                                    | 36,000 | F                          | None                |   |   |   |   |
| Ellen      PE.         |   |   | 146,286 |      | 1996         | Time      Charter |   |   | Q2/2008 | A               |   | $                                    | 44,500 |                       | None                |   |   |   |   |
| EdgelessE              |   |   | 147,048 |      | 1994         | Spot              |   |   |    |            |   |                                 |   |                       |                |   |   |   |   |

----

|                    |   | Dwt    |      | YearBuilt | Charter Type |                  | Expiry |   |    | Daily Base Rate |   | Profit SharingAbove Base Rate (2008) |   | Daily Charter Hire Expense |                                    |
|-------------------------|--------|--------|-----------|-----------|--------------|-----------------------|--------|--------|---------|-----------------|--------|--------------------------------------|--------|----------------------------|-----------------------------------------|
| 8      Handymax Tankers |   |   |      |      |         |                  |   |   |    |            |   |                                 |   |
| SovereignB              |   |   | 47,084    |      | 1992         | Time      Charter     |   |   | Q3/2009 |            |   | $                                    | 14,000 |                       | 50%      thereafter                     |   | $ | 11,600 |   |
| RelentlessB             |   |   | 47,084    |      | 1992         | Time      Charter     |   |   | Q3/2009 |            |   | $                                    | 14,000 |                       | 50%      thereafter                     |   | $ | 11,500 |   |
| VanguardC               |   |   | 47,084    |      | 1992         | Time      Charter     |   |   | Q1/2010 |            |   | $                                    | 15,250 |                       | 50%      thereafter                     |   | $ | 13,200 |   |
| SpotlessC               |   |   | 47,094    |      | 1991         | Time      Charter     |   |   | Q1/2010 |            |   | $                                    | 15,250 |                       | 50%      thereafter                     |   | $ | 13,200 |   |
| DoubtlessC              |   |   | 47,076    |      | 1991         | Time      Charter     |   |   | Q1/2010 |            |   | $                                    | 15,250 |                       | 50%      thereafter                     |   | $ | 13,200 |   |
| FaithfulC               |   |   | 45,720    |      | 1992         | Time      Charter     |   |   | Q2/2010 |            |   | $                                    | 14,500 |                       | 100%      first $500 + 50% thereafter   |   | $ | 13,200 |   |
| DauntlessE              |   |   | 46,168    |      | 1999         | Time      Charter     |   |   | Q1/2010 |            |   | $                                    | 16,250 |                       | 100%      first $1,000 + 50% thereafter |   |   |   |   |
| Ioannis      PE.        |   |   | 46,346    |      | 2003         | Time      Charter     |   |   | Q4/2010 |            |   | $                                    | 18,000 |                       | 100%      first $1,000 + 50% thereafter |   |   |   |   |
|                    |   |   |      |      |         |                  |   |   |    |            |   |                                 |   |                       |                                    |   |   |   |   |
| Total      Tanker dwt   |   |   | 1,708,878 |      |         |                  |   |   |    |            |   |                                 |   |                       |                                    |   |   |   |   |
|                    |   |   |      |      |         |                  |   |   |    |            |   |                                 |   |                       |                                    |   |   |   |   |
| 5      Drybulk Vessels  |   |   |      |      |         |                  |   |   |    |            |   |                                 |   |                       |                                    |   |   |   |
| CycladesE               |   |   | 75,681    |      | 2000         | Time      Charter     |   |   | Q2/2011 |            |   | $                                    | 50,860 |                       | None                                    |   |   |   |   |
| AmalfiE                 |   |   | 45,526    |      | 2000         | Time      Charter     |   |   | Q1/2009 |            |   | $                                    | 22,000 |                       | None                                    |   |   |   |   |
| Voc      GallantE       |   |   | 51,200    |      | 2002         | Bareboat      Charter |   |   | Q2/2009 |            |   | $                                    | 25,650 |                       | None                                    |   |   |   |   |
| PepitoE                 |   |   | 75,928    |      | 2001         | Time      Charter     |   |   | Q2/2013 |            |   | $                                    | 38,950 |                       | None                                    |   |   |   |   |
| AstraleE                |   |   | 75,933    |      | 2000         | Time      Charter     |   |   | Q2/2009 |            |   | $                                    | 67,500 |                       | None                                    |   |   |   |   |
|                    |   |   |      |      |         |                  |   |   |    |            |   |                                 |   |                       |                                    |   |   |   |   |
| Total      Drybulk dwt  |   |   | 324,268   |      |         |                  |   |   |    |            |   |                                 |   |                       |                                    |   |   |   |   |
|                    |   |   |      |      |         |                  |   |   |    |            |   |                                 |   |                       |                                    |   |   |   |   |
| TOTAL      DWT          |   |   | 2,033,146 |      |         |                  |   |   |    |            |   |                                 |   |                       |                                    |   |   |   |   |
|                    |   |   |      |      |         |                  |   |   |    |            |   |                                 |   |                       |                                    |   |   |   |   |

| A.      Charterers have option to extend contract for an additional one-year      period       |
|------------------------------------------------------------------------------------------------|
| B.      Vessels sold and leased back in August and September 2005 for a period of      7 years |
| C.      Vessels sold and leased back in March 2006 for a period of 5      years                |
| D.      Charterers have option to extend contract for an additional four-year      period      |
| E.      Owned vessels                                                                          |
| F.      Base rate will change to $35,000 in May 2008 until    expiration.                      |

----

----

----

| ·   | 25      year old tankers must be of double-hull construction or of a mid-deck      design with double-sided construction,unless: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| ·   | 30      year old tankers must be of double-hull construction or mid-deck design      with double sided construction; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | all      tankers will be subject to enhancedinspections. |
|--------------------|----------------------------------------------------------|

| ·   | is      the subject of a contract for a major conversion or original construction      on or after July 6, 1993; |
|--------------------|------------------------------------------------------------------------------------------------------------------|

| ·   | commences      a major conversion or has its keel laid on or after January 6, 1994;      or |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | completes      a major conversion or is a newbuilding delivered on or after July 6,      1996. |
|--------------------|------------------------------------------------------------------------------------------------|

----

| Category      of Oil Tankers                                                                                                                                                                                                                                                                                                                                                                                                   |   | Date      or Year                                                                                                                                                                                                                                                                                                                                                       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Category      1 - oil tankers of 20,000 dwt and above carrying crude oil, fuel oil,      heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and above      carrying other oils, which do not comply with the requirements for      protectively located segregated ballast tanks                                                                                                                                  |   | April      5, 2005 for ships delivered on April 5, 1982 or earlier; or 2005 for ships      delivered after April 5, 1982                                                                                                                                                                                                                                                |
| Category      2 - oil tankers of 20,000 dwt and above carrying crude oil, fuel oil,      heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and above      carrying other oils, which do comply with the protectively located      segregated ballast tank requirements and Category      3 - oil tankers of 5,000 dwt and above but less than the tonnage specified      for Category 1 and 2 tankers. |   | April      5, 2005 for ships delivered on April 5, 1977 or earlier 2005      for ships delivered after April 5, 1977 but before January 1,      19782006      for ships delivered in 1978 and 19792007      for ships delivered in 1980 and 19812008      for ships delivered in 19822009      for ships delivered in 19832010      for ships delivered in 1984 orlater |

| ·   | the      oil tanker conversion was completed before July 6, 1996; |
|--------------------|-------------------------------------------------------------------|

| ·   | the      conversion included the replacement of the entire cargo section and      fore-body and the tanker complies with all the relevant provisions of      MARPOL Convention applicable at the date of completion of the major      conversion; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      original delivery date of the oil tanker will apply when considering the      15 years of age threshold relating to the first technical specifications      survey to be completed in accordance with MARPOL Convention. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

In December 2003, the MEPC adopted a new regulation 13H on theprevention of oil pollution from oil tankers when carrying heavy grade oil, orHGO, which includes most of the grades of marine fuel. The new regulation bansthe carriage of HGO in single hull oil tankers of 5,000 dwt and above afterApril 5, 2005, and in single hull oil tankers of 600 dwt and above but less than5,000 dwt, no later than the anniversary of their delivery in2008.  

| ·   | crude      oils having a density at 15oC higher than 900 kg/m3; |
|--------------------|----------------------------------------------------------------------|

| ·   | fuel      oils having either a density at 15oC higher than 900 kg/ m3 or a kinematic      viscosity at 50oC higher than 180 mm2/s; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | bitumen,      tar and their emulsions. |
|--------------------|----------------------------------------|

----

----

| ·   | natural      resource damages and related assessmentcosts; |
|--------------------|------------------------------------------------------------|

| ·   | real      and personal property damages; |
|--------------------|------------------------------------------|

| ·   | net      loss of taxes, royalties, rents, profits or earnings    capacity; |
|--------------------|----------------------------------------------------------------------------|

| ·   | net      cost of public services necessitated by a spill response, such as      protection from fire, safety or health hazards, and loss of subsistence      use of natural resources. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

OPA previously limited the liability of responsible parties tothe greater of $1,200 per gross ton or $10 million per tanker that is over 3,000gross tons (subject to possible adjustment for inflation).  Amendmentsto OPA signed into law in July 2006 increased these limits on the liability ofresponsible parties to the greater of $1,900 per gross ton or $16 million perdouble hull tanker that is over 3,000 gross tons.  The actspecifically permits individual states to impose their own liability regimeswith regard to oil pollution incidents occurring within their boundaries, andsome states have enacted legislation providing for unlimited liability fordischarge of pollutants within their waters. In some cases, states which haveenacted this type of legislation have not yet issued implementing regulationsdefining tanker owners’ responsibilities under these laws. CERCLA, which appliesto owners and operators of vessels, contains a similar liability regime andprovides for cleanup, removal and natural resource damages. Liability underCERCLA is limited to the greater of $300 per gross ton or $5million.

----

| ·   | discharging      at the Louisiana Offshore Oil Port, also known as the LOOP;    or |
|--------------------|------------------------------------------------------------------------------------|

| ·   | unloading      with the aid of another vessel, a process referred to in the industry as      lightering, within authorized lightering zones more than 60 miles      off-shore. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | address      a “worst case” scenario and identify and ensure, through contract or other      approved means, the availability of necessary private response resources      to respond to a “worst casedischarge”; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | describe      crew training and drills; and |
|--------------------|---------------------------------------------|

| ·   | identify      a qualified individual with full authority to implement removal      actions. |
|--------------------|---------------------------------------------------------------------------------------------|

----

----

| Category      of Oil Tankers                                                                                                                                                                                                                                                                                                                                                                                                               |   | Date      or Year                                                                                                                                                                                                                                                                                                                             |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Category      1 - oil tankers of 20,000 dwt and above carrying crude oil, fuel oil,      heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and above      carrying other oils, which do not comply with the requirements for      protectively located segregated ballast tanks                                                                                                                                              |   | 2003      for ships delivered in 1980 or earlier2004      for ships delivered in 19812005      for ships delivered in 1982 or later                                                                                                                                                                                                           |
| Category      2 – oil tankers of 20,000 dwt and above carrying crude oil, fuel oil,      heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and above      carrying other oils, which do comply with the protectively located      segregated ballast tank requirements and Category      3 – oil tankers of 5,000 dwt and above but less than the tonnage specified      for Category 1 and 2 tankers. |   | 2003      for ships delivered in 1975 or earlier2004      for ships delivered in 19762005      for ships delivered in 19772006      for ships delivered in 1978 and 19792007      for ships delivered in 1980 and 19812008      for ships delivered in 19822009      for ships delivered in 19832010      for ships delivered in 1984 orlater |

----

| ·   | on-board      installation of automatic identification systems to provide a means for      the automatic transmission of safety-related information from among      similarly equipped ships and shore stations, including information on a      ship’s identity, position, course, speed and navigational      status; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | on-board      installation of ship security alert systems, which do not sound on the      vessel but only alerts the authorities onshore; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      development of vessel securityplans; |
|--------------------|-----------------------------------------------|

| ·   | ship      identification number to be permanently marked on a vessel’s      hull; |
|--------------------|-----------------------------------------------------------------------------------------|

| ·   | a      continuous synopsis record kept onboard showing a vessel’s history      including, name of the ship and of the state whose flag the ship is      entitled to fly, the date on which the ship was registered with that      state, the ship’s identification number, the port at which the ship is      registered and the name of the registered owner(s) and their registered      address; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | compliance      with flag state security certification  requirements. |
|--------------------|-----------------------------------------------------------------------|

----

----

----

----

| (a)   | TOP      Tanker Management Inc. |
|-----------------|---------------------------------|

| (b)   | Top      Bulker Management Inc. |
|-----------------|---------------------------------|

| (c)   | Top      Tankers (U.K.) Limited |
|-----------------|---------------------------------|

| (d)   | Helidona      Shipping Company Limited |
|-----------------|----------------------------------------|

| (e)   | Gramos      Shipping Company Inc. |
|-----------------|-----------------------------------|

| (f)   | Vermio      Shipping Company Limited |
|-----------------|--------------------------------------|

| (g)   | Rupel      Shipping Company Inc. |
|-----------------|----------------------------------|

| (h)   | Mytikas      Shipping Company Ltd. |
|-----------------|------------------------------------|

| (i)   | Litochoro      Shipping Company Ltd. |
|-----------------|--------------------------------------|

| (j)   | Falakro      Shipping Company Ltd. |
|-----------------|------------------------------------|

| (k)   | Pageon      Shipping Company Ltd. |
|-----------------|-----------------------------------|

| (l)   | Vardousia      Shipping Company Ltd. |
|-----------------|--------------------------------------|

| (m)   | Psiloritis      Shipping Company Ltd. |
|-----------------|---------------------------------------|

| (n)   | Parnon      Shipping Company Ltd. |
|-----------------|-----------------------------------|

| (o)   | Menalo      Shipping Company Ltd. |
|-----------------|-----------------------------------|

| (p)   | Pintos      Shipping Company Ltd. |
|-----------------|-----------------------------------|

| (q)   | Pylio      Shipping Company Ltd. |
|-----------------|----------------------------------|

| (r)   | Idi      Shipping Company Ltd. |
|-----------------|--------------------------------|

| (s)   | Taygetus      Shipping Company Ltd. |
|-----------------|-------------------------------------|

| (t)   | Kalidromo      Shipping Company Limited |
|-----------------|-----------------------------------------|

| (u)   | Olympos      Shipping Company Limited (MarshallIslands) |
|-----------------|---------------------------------------------------------|

| (v)   | Olympos      Shipping Company Limited, (British Cayman  Islands) |
|-----------------|------------------------------------------------------------------|

| (w)   | Kisavos      Shipping Company Limited |
|-----------------|---------------------------------------|

| (x)   | Imitos      Shipping Company Limited |
|-----------------|--------------------------------------|

| (y)   | Parnis      Shipping Company Limited |
|-----------------|--------------------------------------|

| (z)   | Parnasos      Shipping Company Limited |
|-----------------|----------------------------------------|

| (aa)   | Vitsi      Shipping Company Limited |
|------------------|-------------------------------------|

| (bb)   | Giona      Shipping Company Limited |
|------------------|-------------------------------------|

| (cc)   | Lefka      Shipping Company Limited |
|------------------|-------------------------------------|

| (dd)   | Agrafa      Shipping Company Limited |
|------------------|--------------------------------------|

| (ee)   | Agion      Oros Shipping Company Limited |
|------------------|------------------------------------------|

| (ff)   | Nedas      Shipping Company Limited |
|------------------|-------------------------------------|

| (gg)   | Ilisos      Shipping Company Limited |
|------------------|--------------------------------------|

| (hh)   | Sperhios      Shipping Company Limited |
|------------------|----------------------------------------|

| (ii)   | Ardas      Shipping Company Limited |
|------------------|-------------------------------------|

| (jj)   | Kifisos      Shipping Company Limited |
|------------------|---------------------------------------|

| (kk)   | Noir      Shipping S.A. |
|------------------|-------------------------|

| (ll)   | Amalfi      Shipping Company Limited |
|------------------|--------------------------------------|

| (mm)   | Jeke      Shipping Company Limited |
|------------------|------------------------------------|

| (nn)   | Japan      I Shipping Company Limited |
|------------------|---------------------------------------|

| (oo)   | Japan      II Shipping Company Limited |
|------------------|----------------------------------------|

| (pp)   | Japan      III Shipping Company Limited |
|------------------|-----------------------------------------|

----

----

----

----

| ·   | Our      vessels operated an aggregate of 2,312 days, or 32.9%, in the      spot market during 2007, compared to 2,411 days, or 27.9%, in the      spot market during 2006. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      average daily spot rate was $32,249 for 2007 compared to an average daily      spot rate of $45,328 in 2006, due to a weaker spot tanker      market. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Time      charter equivalent revenues from our vessels’ spot trading decreased by      31.7% for 2007 to $74.6 million, compared to $109.3 million in 2006. Spot      market revenues were 38.7% of time charter equivalent revenues in 2007,      compared to 42.9% of time charter equivalent revenues generated in the      spot market during 2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our      vessels operated an aggregate of 4,720 days, or 67.1%, on time      charter contracts during 2007, compared to 6,223 days, or 72.1%, on time      charter contracts during the prioryear. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      average daily time charter rate was $25,060 for 2007 compared to average      daily time charter rate of $23,366 for2006. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Time      charter equivalent revenues from our time charter contracts decreased by      18.6% for 2007 to $118.3 million, compared to $145.4 million in 2006. Time      charter revenues were 61.3%, of time charter equivalent revenues in 2007,      compared to 57.1% during 2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Revenues      from profit sharing, which represents the excess of the base rate,      decreased by 51.1% in 2007 to $15.6 million, compared to $31.9 million in      2006. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                                                |   | 2006   |    |   | 2007   |   |
|---------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Dollars      in thousands                                           |   |   |    |   |   |   |
| Revenues                                                            |   | $      | 310,043 |   |   | $      | 248,944 |   |
| Less      Voyage expenses                                           |   |   | (55,351 | )      |   |   | (59,253 | ) |
| Time      charter equivalent revenues                               |   |   | 254,692 |   |   |   | 189,691 |   |
| Charter      hire expense                                           |   |   | 96,302  |   |   |   | 94,118 |   |
| Amortization      of deferred gain on sale and leaseback of vessels |   |   | (8,110  | )      |   |   | (15,610 | ) |
| Other      vessel operating expenses                                |   |   | 66,082  |   |   |   | 67,225 |   |
| Dry-docking      costs                                              |   |   | 39,333  |   |   |   | 25,094 |   |
| Depreciation                                                        |   |   | 35,266  |   |   |   | 26,560 |   |
| Sub-Manager      fees                                               |   |   | 2,755   |   |   |   | 1,821 |   |
| Other      general and administrative expenses                      |   |   | 20,261  |   |   |   | 22,729 |   |
| Gain      on sale of vessels                                        |   |   | (12,667 | )      |   |   | (1,961 | ) |
|                                                                |   |   |    |   |   |   |   |   |
| Operating      income (loss)                                        |   | $      | 15,470  |   |   | $      | (      30,285 | ) |
|                                                                |   |   |    |   |   |   |   |   |
|                                                                |   |   |    |   |   |   |   |   |
| Dollars      in thousands, except average daily results             |   |   |    |   |   |   |   |   |
| Revenues                                                            |   | $      | 310,043 |   |   | $      | 248,944 |   |
| Less      Voyage expenses                                           |   |   | (55,351 | )      |   |   | (59,253 | ) |
| Time      charter equivalent revenues                               |   |   | 254,692 |   |   |   | 189,691 |   |
| Total      voyage days for fleet                                    |   |   | 8,634   |   |   |   | 6,991 |   |
| Average      Daily Time Charter Equivalent (TCE)                    |   | $      | 29,499  |   |   | $      | 27,134 |   |
|                                                                |   |   |    |   |   |   |   |   |

----

| ·   | Our      tankers operated an aggregate of 2,312 days, or 33.1%, in the      spot market during 2007, compared to 2,411 days, or 27.9%, in the      spot market during 2006. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      average daily spot rate was $32,249 for 2007 compared to an average daily      spot rate of $45,328 in 2006, due to a weaker spot tanker      market. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Time      charter equivalent revenues from our tankers’ spot trading decreased by      31.7% for 2007 to $74.6 million, compared to $109.3 million in 2006. Spot      market revenues were 39.3% of time charter equivalent revenues in 2007,      compared to 42.9% of time charter equivalent revenues generated in the      spot market during 2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our      tankers operated an aggregate of 4,679 days, or 66.9%, on time      charter contracts during 2007, compared to 6,223 days, or 72.1%, on time      charter contracts during the prioryear. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      average daily time charter rate was $24,606 for 2007 compared to average      daily time charter rate of $23,366 for2006. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Time      charter equivalent revenues from our time charter contracts decreased by      20.8% for 2007 to $115.1 million, compared to $145.4 million in 2006. Time      charter revenues were 60.7%, of time charter equivalent revenues in 2007,      compared to 57.1% during 2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Revenues      from profit sharing, which represents the excess of the base rate,      decreased by 51.1% in 2007 to $15.6 million, compared to $31.9 million in      2006. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                                                      |   | 2007   |      |
|-----------------------------------------------------------------------------------------------------------|--------|--------|-----------|
| Dollars      in thousands                                                                                 |   |   |      |
| Revenues                                                                                                  |   | $      | 1,902     |   |
| Less      Voyage expenses                                                                                 |   |   | (161      | ) |
| Time      charter equivalent revenues                                                                     |   |   | 1,741     |   |
| Other      vessel operating expenses                                                                      |   |   | 689       |   |
| Depreciation                                                                                              |   |   | 848       |   |
| Sub-Manager      fees                                                                                     |   |   | 7         |   |
| Other      general and administrative expenses                                                            |   |   | 267       |   |
|                                                                                                      |   |   |      |   |
| Operating      income (loss)                                                                              |   | $      | (      70 | ) |
|                                                                                                      |   |   |      |   |
|                                                                                                      |   |   |      |   |
| Dollars      in thousands, except average daily results                                                   |   |   |      |   |
| Revenues                                                                                                  |   | $      | 1,902     |   |
| Less      Voyage expenses                                                                                 |   |   | (161      | ) |
| Time      charter equivalent revenues                                                                     |   |   | 1,741     |   |
| Total      voyage days for fleet                                                                          |   |   | 41        |   |
| Average      Daily Time Charter Equivalent (TCE)                                                          |   | $      | 42,463    |   |
|                                                                                                      |   |   |      |   |
| Dollars      in thousands, except average daily results                                                   |   |   |      |   |
| Revenues      (including amortization of time charter fair value)                                         |   | $      | 3,315     |   |
| Less      Voyage expenses                                                                                 |   |   | (161      | ) |
| Time      charter equivalent revenues                                                                     |   |   | 3,154     |   |
| Total      voyage days for fleet                                                                          |   |   | 41        |   |
| Average      Daily Time Charter Equivalent (TCE) (including amortization of time      charter fair value) |   | $      | 76,902    |   |

----

|                                  |   | 2005   |    |   | 2006   |   |
|---------------------------------------|--------|--------|---------|--------|--------|--------|
| Dollars      in thousands             |   |   |    |   |   |   |
| Revenues                              |   | $      | 244,215 |   |   | $      | 310,043 |   |
| Less      Voyage expenses             |   |   | (36,889 | )      |   |   | (55,351 | ) |
|                                  |   |   |    |   |   |   |   |   |
| Time      charter equivalent revenues |   | $      | 207,326 |   |   | $      | 254,692 |   |

| ·   | Our      tankers operated an aggregate of 2,411 days, or 27.9%, in the      spot market during 2006, compared to 1,869 days, or 25.1%, in the      spot market during the prior year. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      average daily spot rate was $45,328 for 2006 compared to average daily      spot rate of $43,713 for the prioryear. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| ·   | Revenues      from our vessels’ spot trading increased by 33.8% to $109,286,000,      compared to $81,700,000 in 2005. Spot market revenues were 42.9%, of time      charter equivalent revenues in 2006, compared to 39.4%, of time charter      equivalent revenues generated in the spot market during the prior      year. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our      tankers operated an aggregate of 6,223 days, or 72.1%, on time      charter contracts during 2006, compared to 5,567 days, or 74.9%, on time      charter contracts during the prioryear. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      average daily time charter rate was $23,366 for 2006 compared to average      daily time charter rate of $22,566 for the prior  year. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Revenues      from our time charter contracts increased by 15.7% to $145,406,000,      compared to $125,626,000 in 2005. Time charter revenues were 57.1%, of      time charter equivalent revenues in 2006, compared to 60.6% during the      prior year. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 1.   | The      increase in other vessel operating expenses by $18.8 million, or      39.7%, to $66.1 million for 2006 compared to $47.3 million for      the prior year. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | The      increase in dry-docking costs by $28.8 million, or 274.3%, to $39.3      million for 2006 compared to $10.5 million for  2005. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| 3.   |  The      13 sale and leaseback transactions concluded in 2006, which resulted      in: |
|----------------|----------------------------------------------------------------------------------------------|

| ·   | The      increase of charter hire expense by $89.1 million, or 1,237.5%, to      $96.3 million for 2006 compared to $7.2 million for the prior      year, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      decrease of the vessel depreciation expense by $11.8 million, or      25.0%, to $35.3 million for 2006 compared to $47.1 million for      the prior year, and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      amortization of deferred gain on sale and leaseback of vessels, which      increased by $7.3 million, or 912.5%, to $8.1 million for 2006 compared to      $0.8 million for the prioryear. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| B. | Liquidity      and capital resources |
|----|--------------------------------------|

----

----

| E. | Off      Balance Sheet Arrangements |
|----|-------------------------------------|

----

| F. | Tabular      Disclosure of ContractualObligations |
|----|---------------------------------------------------|

|                                                    |   | Payments due by period |      |
|---------------------------------------------------------|--------|------------------------|-----------|
|                                                    |   |                   |      |   |   |   |   |   | 2-3 |   |   |   | 4-5 |   |   | More than |   |
| Contractual Obligations:                                |   | Total                  |      |   | 1 year |   |   | years |   |   | years |   |   | 5 years |   |
|                                                    |   | (in thousands of $)    |      |
| (1)      (i) Long term debt      A                      |   |                   | 444,313   |   |   |   | 107,488 |   |   |   | 76,255 |   |   |   | 101,313 |   |   |   | 159,257 |   |
| (ii)      Interest      B                               |   |                   | 101,444   |   |   |   | 23,019 |   |   |   | 36,288 |   |   |   | 26,036 |   |   |   | 16,101 |   |
| (2)      Newbuildings      C                            |   |                   | 242,573   |   |   |   | 128,421 |   |   |   | 114,152 |   |   |   | - |   |   |   | - |   |
| (3)      Operating leases      D                        |   |                   | 21,992    |   |   |   | 2,140 |   |   |   | 4,254 |   |   |   | 4,254 |   |   |   | 11,344 |   |
| (4)Lease      payments under sale and leasebacks      E |   |                   | 260,555   |   |   |   | 72,022 |   |   |   | 143,998 |   |   |   | 42,330 |   |   |   | 2,205 |   |
| Total                                                   |   |                   | 1,070,877 |   |   |   | 333,090 |   |   |   | 374,947 |   |   |   | 173,933 |   |   |   | 188,907 |   |

| A.      Relates to the outstanding balance as of December 31, 2007, consisted of      1(a) ($93.0 million), 1(b)(i) ($102.9 million), 1(b)(ii) ($56.8 million),      1(c)(i) ($112.6 million), 1(c)(ii) ($31.0 million) and 1(d) ($48.0      million), discussed below. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| B.      Interest payments are calculated using the Company’s weighted average      interest rate, excluding swaps, as of December 31, 2007, of 6.12%, applied      on the amortized long term debt as presented in the table      above.                          |
| C.      Relates to the remaining construction installments for the construction of      six newbuildings                                                                                                                                                                |
| D.      Relates to the minimum rentals payable for the office  space                                                                                                                                                                                                    |
| E.      Relates to remaining lease payments for the eleven vessels that were sold      and leasedback as of December 31, 2007                                                                                                                                           |
|                                                                                                                                                                                                                                                                    |

----

|   | (i) | for      a notional amount of $28.6 million, with effective date of June 30, 2005      and for a period of four years, with a fixed interest rate of 4.66% plus      the applicable bank margin, in order to hedge portion of the variable      interest rate exposure. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | for      a notional amount of $10.0 million, with effective date of September 30,      2006 and for a period of seven years, with an initial fixed interest rate      of 4.23%, in order to hedge portion of the variable interest rate      exposure. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | for      a notional amount of $10.0 million, with effective date of September 30,      2006 and for a period of seven years, with an initial fixed interest rate      of 4.11%, in order to hedge portion of the variable interest rate      exposure. |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| -   | Applicable      margin increase, from March 7, 2008, and during the waiver period to 135      basis points, |
|---------------|-------------------------------------------------------------------------------------------------------------|

| -   | Full      dividend restriction as long as we are not in compliance with the same      covenant, |
|---------------|-------------------------------------------------------------------------------------------------|

| -   | Amendment      of minimum liquidity from $10.0 million to $30.0 million, including      restricted cash, |
|---------------|----------------------------------------------------------------------------------------------------------|

| -   | Amendment      of the definition of the asset cover ratio from 130% to    140%. |
|---------------|---------------------------------------------------------------------------------|

----

| -   | Applicable      margin increase, from March 7, 2008, and during the waiver period to 135      basis points, |
|---------------|-------------------------------------------------------------------------------------------------------------|

| -   | Full      dividend restriction as long as we are not in compliance with the same      covenant, |
|---------------|-------------------------------------------------------------------------------------------------|

| -   | Amendment      of minimum liquidity from $25.0 million to $30.0 million, including      restricted cash, |
|---------------|----------------------------------------------------------------------------------------------------------|

| -   | Amendment      of the definition of the asset cover ratio from 130% and 135% to 140% and      145%. |
|---------------|-----------------------------------------------------------------------------------------------------|

----

----

----

|   | (i) | for      a notional amount of $50.0 million, with effective date of July 3, 2006      and for a period of seven years, with an initial interest rate of 4.63%,      in order to hedge portion of the variable interest rate      exposure. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | for      a notional amount of $10.0 million, with effective date of July 3, 2006      and for a period of seven years, with an initial interest rate of 4.70%,      in order to hedge portion of the variable interest rate      exposure. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

| Name                        | Age    | Position                                              |
|-----------------------------|--------|-------------------------------------------------------|
|                        |   |                                                  |
| Thomas      F. Jackson      | 60     | Director      and Chairman of the Board               |
| Evangelos      J. Pistiolis | 35     | Director,      President and Chief Executive Officer  |
| Stamatios      N. Tsantanis | 36     | Director      and Chief Financial Officer             |
| Vangelis      G. Ikonomou   | 43     | Director      and Executive Vice President            |
| Michael      G. Docherty    | 48     | Director                                              |
| Christopher      J. Thomas  | 48     | Director                                              |
| Roy      Gibbs              | 58     | Director                                              |
| Stavros      Emmanuel       | 65     | Chief      Operating Officer of TOP Tanker Management |
| George      Goumopoulos     | 58     | Chief      Technical Officer of TOP Tanker Management |
| Demetris      P. Souroullas | 45     | Vice      President                                   |
| Eirini      Alexandropoulou | 36     | Secretary                                             |

----

----

----

|   | i. | Grants      to Company’s CEO. The Company’s CEO shall not sell, assign, exchange,      transfer, pledge, hypothecate or otherwise dispose of or encumber any of      the Shares other than to a company, which is wholly owned by the Company’s      CEO. The restrictions lapse on the earlier of (i) one year from the grant      date or (ii) termination of the Company’s CEO employment with the Company      for any reason. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ii. | Grants      to Other Participants. The Participants (officers, independent members of      the Board and Company’s employees) shall not sell, assign, exchange,      transfer, pledge, hypothecate or otherwise dispose of or encumber any of      the Shares. The restrictions lapse on one year from the grant date      conditioned upon the Participant’s continued employment with the Company      from the date of the agreement (i.e. July 1, 2005, January 3, 2006, or      July 6, 2006) until the date the restrictions lapse (the “restricted      period”). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                         |   | Number      of non-vested shares |    |   | Weighted      average grant date fair value per non-vested share |   |
|------------------------------|--------|----------------------------------|---------|--------|------------------------------------------------------------------|--------|
| As      at January 1, 2005   |   |                             | --      |   |                                                             |   | -- |   |
| Granted                      |   |                             | 19,950  |   |                                                             | $      | 47.46 |   |
| Forfeited                    |   |                             | (66     | )      |                                                             | $      | 47.46 |   |
| As      at December 31, 2005 |   |                             | 19,884  |   |                                                             | $      | 47.46 |   |
| Granted                      |   |                             | 47,916  |   |                                                             | $      | 24.78 |   |
| Vested                       |   |                             | (19,534 | )      |                                                             | $      | 38.13 |   |
| Forfeited                    |   |                             | (1,300  | )      |                                                             | $      | 31.92 |   |
| As      at December 31, 2006 |   |                             | 46,966  |   |                                                             | $      | 28.62 |   |
| Granted                      |   |                             | 213,333 |   |                                                             | $      | 23.97 |   |
| Vested                       |   |                             | (46,634 | )      |                                                             | $      | 24.78 |   |
| Forfeited                    |   |                             | (332    | )      |                                                             | $      | 18.69 |   |
| As      at December 31, 2007 |   |                             | 213,333 |   |                                                             | $      | 23.97 |   |

----

|                                                       |   | Number      of vested shares |    |
|------------------------------------------------------------|--------|------------------------------|---------|
| As      at January 1, 2005                                 |   |                         | --      |   |
| Granted                                                    |   |                         | 63,333  |   |
| As      at December 31, 2005                               |   |                         | 63,333  |   |
| Granted                                                    |   |                         | 100,416 |   |
| Non-vested      shares granted in 2005, vested during 2006 |   |                         | 19,534  |   |
| As      at December 31, 2006                               |   |                         | 183,283 |   |
| Non-vested      shares granted in 2006, vested during 2007 |   |                         | 46,634  |   |
| As      at December 31, 2007                               |   |                         | 229,917 |   |

| ·   | The      Company holds annual meetings of shareholders under the BCA, similar to      Nasdaq requirements. |
|--------------------|------------------------------------------------------------------------------------------------------------|
|               |                                                                                                       |

| ·   | In      lieu of obtaining an independent review of related party transactions for      conflicts of interests, the disinterested members of the Board of      Directors approve related party transactions under the  BCA. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      lieu of obtaining shareholder approval prior to the issuance of designated      securities, the Company complies with provisions of the BCA providing that      the Board of Directors approves shareissuances. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company’s Board does not hold regularly scheduled meetings at which only      independent directors are present. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

----

|  Title of Class                        |  Identity of Person or Group                          | AmountOwned | Percentof Class |
|---------------------------------------------|------------------------------------------------------------|-------------|-----------------|
| Common      Stock, par value $.01 per share | Sphinx      Investment Corp.*                              | 4,133,333   | 14.8%           |
|                                        | QVT      Financial LP**                                    | 2,899,568   | 10.4%           |
|                                        | Kingdom      Holdings Inc.***                              | 1,065,393   | 3.8%            |
|                                        | Evangelos      Pistiolis****                               | 854,126     | 3.1%            |
|                                        | Officers      and directors other Evangelos      Pistiolis | 478,600     | 1.7%            |
|                                        | All      officers and directors as a group                 | 1,332,726   | 4.8%            |
|                                        |                                                       |        |            |

| * | As      at April 23, 2008. |
|---|----------------------------|

| ** | As      at May 9, 2008. |
|----|-------------------------|

| *** | A      company owned primarily by adult relatives of our President, Chief      Executive Officer and Director, Evangelos  Pistiolis. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|

| **** | By      virtue of the shares owned indirectly through Sovereign Holdings Inc., a      company wholly-owned by EvangelosPistiolis. |
|------|-----------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                             |   | HIGH |   |   | LOW    |   |
|----------------------------------------------------------------------------------|--------|------|--------|--------|--------|--------|
| For      the Fiscal Year Ended December 31, 2007*                                |   | $    | 25.20  |   |   | $      | 9.09 |   |
| For      the Fiscal Year Ended December 31, 2006*                                |   | $    | 54.96  |   |   | $      | 13.83 |   |
| For      the Fiscal Year Ended December 31, 2005*                                |   | $    | 66.00  |   |   | $      | 36.81 |   |
| For      the Fiscal Year Ended December 31, 2004 (beginning July 23,      2004)* |   | $    | 72.42  |   |   | $      | 31.53 |   |

|  For      the Quarter Ended* |   |   |   |   |   |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|
| March      31, 2008               |   | $      | 10.65  |   |   | $      | 6.06 |   |
| December      31, 2007            |   | $      | 22.23  |   |   | $      | 9.09 |   |
| September      30, 2007           |   | $      | 25.20  |   |   | $      | 14.88 |   |
| June      30, 2007                |   | $      | 22.41  |   |   | $      | 13.44 |   |
| March      31, 2007               |   | $      | 15.75  |   |   | $      | 13.35 |   |
| December      31, 2006            |   | $      | 19.14  |   |   | $      | 13.83 |   |
| September      30, 2006           |   | $      | 20.16  |   |   | $      | 16.35 |   |
| June      30, 2006                |   | $      | 38.88  |   |   | $      | 18.15 |   |
| March      31, 2006               |   | $      | 54.96  |   |   | $      | 35.40 |   |
| December      31, 2005            |   | $      | 45.03  |   |   | $      | 36.81 |   |
| September      30, 2005           |   | $      | 50.70  |   |   | $      | 41.25 |   |
| June      30, 2005                |   | $      | 58.14  |   |   | $      | 42.63 |   |
| March      31, 2005               |   | $      | 66.00  |   |   | $      | 42.75 |   |

|                            |   |   |   |   |   |   |
|---------------------------------|--------|--------|--------|--------|--------|--------|
| For      the Month*             |   | HIGH   |   |   | LOW    |   |
| May      2008 (to May 20, 2008) |   | $      | 10.37  |   |   | $      | 7.85 |   |
| April      2008                 |   | $      | 8.99   |   |   | $      | 7.50 |   |
| March      2008                 |   | $      | 9.58   |   |   | $      | 6.75 |   |
| February      2008              |   | $      | 9.87   |   |   | $      | 7.62 |   |
| January      2008               |   | $      | 10.65  |   |   | $      | 6.06 |   |
| December      2007              |   | $      | 14.10  |   |   | $      | 9.09 |   |
| November      2007              |   | $      | 18.00  |   |   | $      | 9.45 |   |
| October      2007               |   | $      | 22.23  |   |   | $      | 17.10 |   |
| September      2007             |   | $      | 22.02  |   |   | $      | 16.65 |   |
| August      2007                |   | $      | 22.20  |   |   | $      | 14.88 |   |
| July      2007                  |   | $      | 25.20  |   |   | $      | 19.80 |   |

|                                                              |   |   |
|-------------------------------------------------------------------|--------|--------|
| *Adjusted      for the 1:3 reverse split effective March 20, 2008 |   |   |

----

----

| ·   | prior      to the date of the transaction that resulted in the shareholder becoming      an interested shareholder, the Board approved either the business      combination or the transaction that resulted in the shareholder becoming      an interested shareholder; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | upon      consummation of the transaction that resulted in the shareholder becoming      an interested shareholder, the interested shareholder owned at least 85%      of the voting stock of the corporation outstanding at the time the      transaction commenced; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | at      or subsequent to the date of the transaction that resulted in the      shareholder becoming an interested shareholder, 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 66 2/3% of the      outstanding voting stock that is not owned by the interested shareholder;      and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      shareholder became an interested shareholder prior to the consummation of      the initial public offering. |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

----

----

----

----

| (1) | we      are organized in a foreign country (our “country of organization”) that      grants an “equivalent exemption” to corporations organized in the United      States; and |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | either |
|-----|--------|

|   |   | (A) | more      than 50% of the value of our stock is owned, directly or indirectly, by      individuals who are “residents” of our country of organization or of      another foreign country that grants an “equivalent exemption” to      corporations organized in the United States, which we refer to as the “50%      Ownership Test,” or |
|--------|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | (B) | our      stock is “primarily and regularly traded on an established securities      market” in our country of organization, in another country that grants an      “equivalent exemption” to United States corporations, or in the United      States, which we refer to as the “Publicly-Traded  Test”. |
|--------|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | We      have, or are considered to have, a fixed place of business in the United      States involved in the earning of shipping income;  and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | substantially      all of our U.S. source shipping income is attributable to regularly      scheduled transportation, such as the operation of a vessel that follows a      published schedule with repeated sailings at regular intervals between the      same points for voyages that begin or end in the United      States. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | is      a United States citizen or resident, United States corporation or other      United States entity taxable as a corporation, an estate the income of      which is subject to United States federal income taxation regardless of      its source, or a trust if a court within the United States is able to      exercise primary jurisdiction over the administration of the trust and one      or more United States persons have the authority to control all      substantial decisions of the trust, |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | owns      the common stock as a capital asset, generally, for investment purposes,      and |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | owns      less than 10% of our common stock for United States federal income tax      purposes. |
|--------------------|-------------------------------------------------------------------------------------------------|

----

| ·   | at      least 75% of our gross income for such taxable year consists of passive      income (e.g., dividends, interest, capital gains and rents derived other      than in the active conduct of a rental business),  or |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | at      least 50% of the average value of the assets held by the corporation      during such taxable year produce, or are held for the production of,      passive income. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ·   | the      excess distribution or gain would be allocated ratably over the      Non-Electing Holders aggregate holding period for the common      stock; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      amount allocated to the current taxable year would be taxed as ordinary      income; and |
|--------------------|---------------------------------------------------------------------------------------------------|

| ·   | the      amount allocated to each of the other taxable years would be subject to      tax at the highest rate of tax in effect for the applicable class of      taxpayer for that year, and an interest charge for the deemed deferral      benefit would be imposed with respect to the resulting tax attributable to      each such other taxable year. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | the      gain is effectively connected with the Non-U.S. Holder's conduct of a      trade or business in the United States. If the Non-U.S. Holder is entitled      to the benefits of an income tax treaty with respect to that gain, that      gain is taxable only if it is attributable to a permanent establishment      maintained by the Non-U.S. Holder in the United States;  or |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      Non-U.S. Holder is an individual who is present in the United States for      183 days or more during the taxable year of disposition and other      conditions are met. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | fail      to provide an accurate taxpayer identification  number; |
|--------------------|-------------------------------------------------------------------|

| ·   | are      notified by the Internal Revenue Service that you have failed to report      all interest or dividends required to be shown on your federal income tax      returns; or |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | in      certain circumstances, fail to comply with applicable certification      requirements. |
|--------------------|------------------------------------------------------------------------------------------------|

----

----

|                                                                 |   |   |      |
|----------------------------------------------------------------------|--------|--------|-----------|
| Interest Expense Sensitivity to 100 Basis Point      Change in LIBOR |   |   |      |
|                                                                 |   |   |      |
| December      31, 2008                                               |   |   | 2,481,323 |   |
| December      31, 2009                                               |   |   | 1,915,292 |   |
| December      31, 2010                                               |   |   | 1,698,875 |   |
| December      31, 2011                                               |   |   | 1,457,054 |   |
| December      31, 2012                                               |   |   | 1,080,305 |   |
| December      31, 2013                                               |   |   | 837,782   |   |

----

----

| c) | Report      of Independent Registered Public AccountingFirm |
|----|-------------------------------------------------------------|

----

| d) | Changes      in internal control over financialreporting |
|----|----------------------------------------------------------|

----

----

----

|                                                                                                           |   | Page           |
|----------------------------------------------------------------------------------------------------------------|--------|----------------|
| Reports      of Independent Registered Public Accounting Firms                                                 |   | F-1      / F-2 |
|                                                                                                           |   |           |
| Consolidated      Balance Sheets as of December 31, 2006 and 2007                                              |   | F-3            |
|                                                                                                           |   |           |
| Consolidated      Statements of Operations for the years ended December 31,2005,      2006 and 2007            |   |  F-4      |
|                                                                                                           |   |           |
| Consolidated      Statements of Stockholders' Equity for the years ended December 31, 2005,      2006 and 2007 |   |  F-5      |
|                                                                                                           |   |           |
| Consolidated      Statements of Cash Flows for the years ended December 31, 2005, 2006 and      2007           |   |  F-6      |
|                                                                                                           |   |           |
| Notes      to Consolidated Financial Statements                                                                |   | F-7            |
|                                                                                                           |   |           |

----

----

----

| TOP SHIPS INC.                                                                                                                                                                             |   |               |    |   |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|--------|--------|--------|
|                                                                                                                                                                                       |   |               |    |   |   |   |
| CONSOLIDATED      BALANCE SHEETS                                                                                                                                                           |   |               |    |   |   |   |
| DECEMBER      31, 2006 AND 2007                                                                                                                                                            |   |               |    |   |   |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |
| (Expressed      in thousands of U.S. Dollars - except share and per share      data)                                                                                                       |   |               |    |   |   |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |
|                                                                                                                                                                                       |   | 2006               |    |   | 2007   |   |
|                                                                                                                                                                                       |   | (as      adjusted) |    |   |   |   |
|                                                                                                                                                                                       |   | Note      3        |    |   |   |   |
| ASSETS                                                                                                                                                                                     |   |               |    |   |   |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |
| CURRENT      ASSETS:                                                                                                                                                                       |   |               |    |   |   |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |
| Cash      and cash equivalents                                                                                                                                                             |   | $                  | 29,992  |   |   | $      | 26,012 |   |
| Trade      accounts receivable, net                                                                                                                                                        |   |               | 27,187  |   |   |   | 15,184 |   |
| Insurance      claims                                                                                                                                                                      |   |               | 247     |   |   |   | 51 |   |
| Inventories      (Note 6)                                                                                                                                                                  |   |               | 6,460   |   |   |   | 7,958 |   |
| Advances      to various creditors                                                                                                                                                         |   |               | 3,707   |   |   |   | 1,108 |   |
| Prepayments      and other (Note 7)                                                                                                                                                        |   |               | 5,206   |   |   |   | 5,580 |   |
| Vessel      held for sale (Note 9)                                                                                                                                                         |   |               | -       |   |   |   | 46,268 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| Total      current assets                                                                                                                                                                  |   |               | 72,799  |   |   |   | 102,161 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| FIXED      ASSETS:                                                                                                                                                                         |   |               |    |   |   |   |   |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| Advances      for vessels acquisitions / under construction (Note 8)                                                                                                                       |   |               | 28,683  |   |   |   | 66,026 |   |
| Vessels,      net (Notes 9, 10 and 11)                                                                                                                                                     |   |               | 306,418 |   |   |   | 553,891 |   |
| Other      fixed assets, net (Note 5)                                                                                                                                                      |   |               | 3,195   |   |   |   | 5,711 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| Total      fixed assets                                                                                                                                                                    |   |               | 338,296 |   |   |   | 625,628 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| OTHER      NON CURRENT ASSETS:                                                                                                                                                             |   |               |    |   |   |   |   |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| Long-term      receivables (Note 14)                                                                                                                                                       |   |               | 29,790  |   |   |   | 22,628 |   |
| Restricted      cash (Notes 11 and 14)                                                                                                                                                     |   |               | 50,000  |   |   |   | 26,500 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| Total      assets                                                                                                                                                                          |   | $                  | 490,885 |   |   | $      | 776,917 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| LIABILITIES AND      STOCKHOLDERS' EQUITY                                                                                                                                                  |   |               |    |   |   |   |   |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| CURRENT      LIABILITIES:                                                                                                                                                                  |   |               |    |   |   |   |   |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| Current      portion of long-term debt (Note 11)                                                                                                                                           |   | $                  | 16,588  |   |   | $      | 79,332 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| Debt      related to vessel held for sale (Notes 11 and 23)                                                                                                                                |   |               | -       |   |   |   | 28,156 |   |
| Current      portion of financial instruments (Note 11)                                                                                                                                    |   |               | -       |   |   |   | 6,105 |   |
| Accounts      payable                                                                                                                                                                      |   |               | 14,991  |   |   |   | 21,341 |   |
| Accrued      liabilities (Note 12)                                                                                                                                                         |   |               | 12,161  |   |   |   | 11,906 |   |
| Unearned      revenue                                                                                                                                                                      |   |               | 1,676   |   |   |   | 6,450 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| Total      current liabilities                                                                                                                                                             |   |               | 45,416  |   |   |   | 153,290 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| FAIR      VALUE OF BELOW MARKET TIME CHARTER (Note 10)                                                                                                                                     |   |               | -       |   |   |   | 29,199 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| FINANCIAL      INSTRUMENTS, net of current portion (Note 11)                                                                                                                               |   |               | 3,384   |   |   |   | 10,683 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| LONG-TERM      DEBT, net of current portion (Note 11)                                                                                                                                      |   |               | 201,464 |   |   |   | 331,396 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| DEFERRED      GAIN ON SALE AND LEASEBACK OF VESSELS (Note 14)                                                                                                                              |   |               | 79,423  |   |   |   | 40,941 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| COMMITMENTS      AND CONTINGENCIES (Note 13)                                                                                                                                               |   |               |    |   |   |   |   |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| STOCKHOLDERS'      EQUITY:                                                                                                                                                                 |   |               |    |   |   |   |   |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| Preferred      stock, $0.01 par value; 20,000,000 shares authorized; none      issued                                                                                                      |   |               | -       |   |   |   | - |   |
| Common      stock, $0.01 par value; 100,000,000 shares authorized; 10,809,701 and      20,508,575 shares issued and outstanding at December 31, 2006 and 2007,      respectively (Note 15) |   |               | 108     |   |   |   | 205 |   |
| Additional      paid-in capital (Note 15)                                                                                                                                                  |   |               | 116,971 |   |   |   | 216,150 |   |
| Accumulated      other comprehensive income (loss) (Note 16)                                                                                                                               |   |               | (6      | )      |   |   | 4 |   |
| Retained      earnings / (Accumulated deficit)                                                                                                                                             |   |               | 44,125  |   |   |   | (4,951 | ) |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| Total      stockholders' equity                                                                                                                                                            |   |               | 161,198 |   |   |   | 211,408 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
| Total liabilities and stockholders' equity                                                                                                                                                 |   | $                  | 490,885 |   |   | $      | 776,917 |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |
|                                                                                                                                                                                       |   |               |    |   |   |   |   |   |

----

| TOP      SHIPS INC.                                                                  |   |               |      |   |               |   |       |   |   |
|--------------------------------------------------------------------------------------|--------|--------------------|-----------|--------|--------------------|--------|------------|--------|--------|
|                                                                                 |   |               |      |   |               |   |       |   |   |
| CONSOLIDATED      STATEMENTS OF OPERATIONS                                           |   |               |      |   |               |   |       |   |   |
| FOR      THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007                            |   |               |      |   |               |   |       |   |   |
|                                                                                 |   |               |      |   |               |   |       |   |   |
| (Expressed      in thousands of U.S. Dollars - except share and per share      data) |   |               |      |   |
|                                                                                 |   |               |      |   |               |   |       |   |   |
|                                                                                 |   |               |      |   |               |   |       |   |   |
|                                                                                 |   | 2005               |      |   | 2006               |   |       | 2007   |   |
|                                                                                 |   | (as      adjusted) |      |   | (as      adjusted) |   |       |   |   |
|                                                                                 |   | Note      3        |      |   | Note      3        |   |       |   |   |
| REVENUES:                                                                            |   |               |      |   |               |   |       |   |   |
|                                                                                 |   |               |      |   |               |   |       |   |   |
| Revenues      (Notes 1 and 10)                                                       |   | $                  | 244,215   |   |               | $      | 310,043    |   |   | $ | 252,259 |   |
|                                                                                 |   |               |      |   |               |   |       |   |   |   |   |   |
| EXPENSES:                                                                            |   |               |      |   |               |   |       |   |   |   |   |   |
|                                                                                 |   |               |      |   |               |   |       |   |   |   |   |   |
| Voyage      expenses (Note 18)                                                       |   |               | 36,889    |   |               |   | 55,351     |   |   |   | 59,414 |   |
| Charter      hire expense (Note 14)                                                  |   |               | 7,206     |   |               |   | 96,302     |   |   |   | 94,118 |   |
| Amortization      of deferred gain on sale and leaseback of vessels (Note14)         |   |               | (837      | )      |               |   | (8,110     | )      |   |   | (15,610 | ) |
| Other      vessel operating expenses (Note 18)                                       |   |               | 47,315    |   |               |   | 66,082     |   |   |   | 67,914 |   |
| Dry-docking      costs                                                               |   |               | 10,478    |   |               |   | 39,333     |   |   |   | 25,094 |   |
| Depreciation      (Note 9)                                                           |   |               | 47,055    |   |               |   | 35,266     |   |   |   | 27,408 |   |
| Sub-Manager      fees (Note 1)                                                       |   |               | 3,159     |   |               |   | 2,755      |   |   |   | 1,828 |   |
| Other      general and administrative expenses                                       |   |               | 20,659    |   |               |   | 20,261     |   |   |   | 22,996 |   |
| Foreign      currency (gains) / losses, net                                          |   |               | (68       | )      |               |   | 255        |   |   |   | 176 |   |
| Gain      on sale of vessels (Note 9)                                                |   |               | (10,831   | )      |               |   | (12,667    | )      |   |   | (1,961 | ) |
|                                                                                 |   |               |      |   |               |   |       |   |   |   |   |   |
| Operating      income (loss)                                                         |   |               | 83,190    |   |               |   | 15,215     |   |   |   | (29,118 | ) |
|                                                                                 |   |               |      |   |               |   |       |   |   |   |   |   |
| OTHER      INCOME (EXPENSES):                                                        |   |               |      |   |               |   |       |   |   |   |   |   |
|                                                                                 |   |               |      |   |               |   |       |   |   |   |   |   |
| Interest      and finance costs (Notes 11 and 20)                                    |   |               | (21,675   | )      |               |   | (26,442    | )      |   |   | (18,318 | ) |
| Fair      value change of financial instruments (Note 11)                            |   |               | 1,498     |   |               |   | (2,733     | )      |   |   | (4,904 | ) |
| Interest      income                                                                 |   |               | 1,774     |   |               |   | 3,022      |   |   |   | 3,248 |   |
| Other,      net                                                                      |   |               | 134       |   |               |   | (67        | )      |   |   | 16 |   |
|                                                                                 |   |               |      |   |               |   |       |   |   |   |   |   |
| Total      other income (expenses), net                                              |   |               | (18,269   | )      |               |   | (26,220    | )      |   |   | (19,958 | ) |
|                                                                                 |   |               |      |   |               |   |       |   |   |   |   |   |
| Net      Income (loss)                                                               |   | $                  | 64,921    |   |               | $      | (11,005    | )      |   | $ | (49,076 | ) |
|                                                                                 |   |               |      |   |               |   |       |   |   |   |   |   |
| Earnings      (loss) per share, basic and diluted (Note 17)                          |   | $                  | 6.97      |   |               | $      | (1.16      | )      |   | $ | (4.09 | ) |
|                                                                                 |   |               |      |   |               |   |       |   |   |   |   |   |
| Weighted      average common shares outstanding, basic                               |   |               | 9,308,923 |   |               |   | 10,183,424 |   |   |   | 11,986,857 |   |
|                                                                                 |   |               |      |   |               |   |       |   |   |   |   |   |
| Weighted      average common shares outstanding, diluted                             |   |               | 9,310,670 |   |               |   | 10,183,424 |   |   |   | 11,986,857 |   |

| The      accompanying notes are an integral part of these consolidated financial      statements. |   |   |
|---------------------------------------------------------------------------------------------------|--------|--------|

----

| TOP      SHIPS INC.                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CONSOLIDATED      STATEMENTS OF STOCKHOLDERS' EQUITY                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FOR      THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Expressed      in thousands of U.S. Dollars - except share and per share      data) |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                                        |   |                |    |   | Common      Stock |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |
|---------------------------------------------------------------------------------------------|--------|---------------------|---------|--------|-------------------|-----------|------------|----------------|--------|--------|--------------------------|--------|--------|-------------------------------------------------|----------|--------|---------------------------------------------|--------|
|                                                                                        |   | ComprehensiveIncome |    |   | #      of Shares  |      |       | Par      Value |   |   | AdditionalPaid-inCapital |   |   | AccumulatedOtherComprehensiveIncome      (loss) |     |   | RetainedEarnings      /(AccumulatedDeficit) |   |   | Total |   |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |
| BALANCE,      December 31, 2004 (as reported)                                               |   |                |    |   |              | 9,276,997 |       |           | $      | 93     |                     |   | $      | 294,425                                         |     |   | $                                           | (248   | ) |   | $ | 27,539 |   |   | $ | 321,809 |   |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |
| Cumulative      effect of change in accounting principle for dry-docking    costs           |   |                |    |   |              | -         |       |           |   | -      |                     |   |   | -                                               |     |   |                                        | -      |   |   |   | (6,748 | ) |   |   | (6,748 | ) |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |
| BALANCE,      December 31, 2004 (as adjusted - Note 3)                                      |   |                |    |   |              | 9,276,997 |       |           | $      | 93     |                     |   | $      | 294,425                                         |     |   | $                                           | (248   | ) |   | $ | 20,791 |   |   | $ | 315,061 |   |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |
| Net      income (as adjusted - Note 3)                                                      |   | $                   | 64,921  |   |              |      | -          |           |   |   | -                        |   |   |                                            | -        |   |                                        |   | - |   |   |   | 64,921 |   |   |   | 64,921 |   |
| Dividends      paid (US dollars 0.21 per share)                                             |   |                | -       |   |              |      | -          |           |   |   | -                        |   |   |                                            | -        |   |                                        |   | - |   |   |   | (5,844 | ) |   |   | (5,844 | ) |
| Dividends      paid (US dollars 0.21 per share)                                             |   |                | -       |   |              |      | -          |           |   |   | -                        |   |   |                                            | -        |   |                                        |   | - |   |   |   | (5,897 | ) |   |   | (5,897 | ) |
| Dividends      paid (US dollars 0.25 per share)                                             |   |                | -       |   |              |      | -          |           |   |   | -                        |   |   |                                            | -        |   |                                        |   | - |   |   |   | (7,020 | ) |   |   | (7,020 | ) |
| Dividends      paid (US dollars 0.21 per share)                                             |   |                | -       |   |              |      | -          |           |   |   | -                        |   |   |                                            | -        |   |                                        |   | - |   |   |   | (5,898 | ) |   |   | (5,898 | ) |
| Issuance      of restricted shares, net of forfeitures                                      |   |                | -       |   |              |      | 83,216     |           |   |   | 1                        |   |   |                                            | 3,477    |   |                                        |   | - |   |   |   | - |   |   |   | 3,478 |   |
| Other      comprehensive income                                                             |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| -      Unrealized gain on cash flow hedges                                                  |   |                | 1,517   |   |              |      | -          |           |   |   | -                        |   |   |                                            | -        |   |                                        |   | 1,517 |   |   |   | - |   |   |   | 1,517 |   |
| -      Reclassification of gains to earnings due to discontinuance of cash flow      hedges |   |                | (1,171  | )      |              |      | -          |           |   |   | -                        |   |   |                                            | -        |   |                                        |   | (1,171 | ) |   |   | - |   |   |   | (1,171 | ) |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      income                                                                   |   | $                   | 65,267  |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| BALANCE,      December 31, 2005 (as adjusted - Note 3)                                      |   |                |    |   |              |      | 9,360,213  |           |   | $      | 94                       |   |   | $                                               | 297,902  |   |                                        | $      | 98 |   |   | $ | 61,053 |   |   | $ | 359,147 |   |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss (as adjusted - Note 3)                                                        |   | $                   | (11,005 | )      |              |      | -          |           |   |   | -                        |   |   |                                            | -        |   |                                        |   | - |   |   |   | (11,005 | ) |   |   | (11,005 | ) |
| Dividends      paid (US dollars 0.21 per share)                                             |   |                | -       |   |              |      | -          |           |   |   | -                        |   |   |                                            | -        |   |                                        |   | - |   |   |   | (5,923 | ) |   |   | (5,923 | ) |
| Dividends      paid (US dollars 5.00 per share)                                             |   |                | -       |   |              |      | -          |           |   |   | -                        |   |   |                                            | (141,028 | )      |                                        |   | - |   |   |   | - |   |   |   | (141,028 | ) |
| Dividends      paid (US dollars 2.50 per share)                                             |   |                | -       |   |              |      | -          |           |   |   | -                        |   |   |                                            | (70,515  | )      |                                        |   | - |   |   |   | - |   |   |   | (70,515 | ) |
| Issuance      of restricted shares, net of forfeitures                                      |   |                | -       |   |              |      | 147,034    |           |   |   | 1                        |   |   |                                            | 3,709    |   |                                        |   | - |   |   |   | - |   |   |   | 3,710 |   |
| Issuance      of common stock                                                               |   |                | -       |   |              |      | 1,302,454  |           |   |   | 13                       |   |   |                                            | 26,903   |   |                                        |   | - |   |   |   | - |   |   |   | 26,916 |   |
| Other      comprehensive income                                                             |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| -      Accumulated unrecognized actuarial losses                                            |   |                | -       |   |              |      | -          |           |   |   | -                        |   |   |                                            | -        |   |                                        |   | (6 | ) |   |   | - |   |   |   | (6 | ) |
| -      Reclassification of gains to earnings due to discontinuance of cash flow      hedges |   |                | (98     | )      |              |      | -          |           |   |   | -                        |   |   |                                            | -        |   |                                        |   | (98 | ) |   |   | - |   |   |   | (98 | ) |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      loss                                                                     |   | $                   | (11,103 | )      |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| BALANCE,      December 31, 2006 (as adjusted - Note 3)                                      |   |                |    |   |              |      | 10,809,701 |           |   | $      | 108                      |   |   | $                                               | 116,971  |   |                                        | $      | (6 | ) |   | $ | 44,125 |   |   | $ | 161,198 |   |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss                                                                               |   | $                   | (49,076 | )      |              |      | -          |           |   |   | -                        |   |   |                                            | -        |   |                                        |   | - |   |   |   | (49,076 | ) |   |   | (49,076 | ) |
| Issuance      of restricted shares, net of forfeitures                                      |   |                | -       |   |              |      | 213,000    |           |   |   | 2                        |   |   |                                            | 933      |   |                                        |   | - |   |   |   | - |   |   |   | 935 |   |
| Issuance      of common stock                                                               |   |                | -       |   |              |      | 9,485,874  |           |   |   | 95                       |   |   |                                            | 98,246   |   |                                        |   | - |   |   |   | - |   |   |   | 98,341 |   |
| Other      comprehensive income                                                             |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| -      Accumulated unrecognized actuarial gain                                              |   |                | 10      |   |              |      | -          |           |   |   | -                        |   |   |                                            | -        |   |                                        |   | 10 |   |   |   | - |   |   |   | 10 |   |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      loss                                                                     |   | $                   | (49,066 | )      |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| BALANCE,      December 31, 2007                                                             |   |                |    |   |              |      | 20,508,575 |           |   | $      | 205                      |   |   | $                                               | 216,150  |   |                                        | $      | 4 |   |   | $ | (4,951 | ) |   | $ | 211,408 |   |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |                |    |   |              |      |       |           |   |   |                     |   |   |                                            |     |   |                                        |   |   |   |   |   |   |   |   |   |   |   |

----

| TOP SHIPS INC.                                                      |   |               |     |   |               |   |     |   |   |
|---------------------------------------------------------------------|--------|--------------------|----------|--------|--------------------|--------|----------|--------|--------|
|                                                                |   |               |     |   |               |   |     |   |   |
| CONSOLIDATED      STATEMENTS OF CASH FLOWS                          |   |               |     |   |               |   |     |   |   |
| FOR      THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007           |   |               |     |   |
|                                                                |   |               |     |   |               |   |     |   |   |
| (Expressed      in thousands of U.S. Dollars)                       |   |               |     |   |               |   |     |   |   |
|                                                                |   |               |     |   |               |   |     |   |   |
|                                                                |   |               |     |   |               |   |     |   |   |
|                                                                |   | 2005               |     |   | 2006               |   |     | 2007   |   |
|                                                                |   | (as      adjusted) |     |   | (as      adjusted) |   |     |   |   |
|                                                                |   | Note      3        |     |   | Note      3        |   |     |   |   |
| Cash      Flows from (used in) Operating Activities:                |   |               |     |   |               |   |     |   |   |
|                                                                |   |               |     |   |               |   |     |   |   |
| Net      income (loss)                                              |   |               | 64,921   |   |               |   | (11,005  | )      |   |   | (49,076 | ) |
| Adjustments      to reconcile net income to net cash                |   |               |     |   |               |   |     |   |   |   |   |   |
|  provided      by operating activities:                        |   |               |     |   |               |   |     |   |   |   |   |   |
| Depreciation                                                        |   |               | 47,055   |   |               |   | 35,594   |   |   |   | 28,043 |   |
| Amortization      and write off of deferred financing costs         |   |               | 1,407    |   |               |   | 4,534    |   |   |   | 2,081 |   |
| Stock-based      compensation expense                               |   |               | 3,478    |   |               |   | 3,710    |   |   |   | 935 |   |
| Change      in fair value of financial instruments                  |   |               | (327     | )      |               |   | 3,711    |   |   |   | 4,904 |   |
| Amortization      of deferred gain on sale and leaseback of vessels |   |               | (837     | )      |               |   | (8,110   | )      |   |   | (15,610 | ) |
| Amortization      of fair value of below market time charter        |   |               | -        |   |               |   | -        |   |   |   | (1,413 | ) |
| (Gain)      / loss on sale of other fixed assets                    |   |               | -        |   |               |   | (10      | )      |   |   | 69 |   |
| Gain      on sale of vessels                                        |   |               | (10,831  | )      |               |   | (12,667  | )      |   |   | (1,961 | ) |
| (Increase)      Decrease in:                                        |   |               |     |   |               |   |     |   |   |   |   |   |
| Trade      accounts receivable                                      |   |               | (19,556  | )      |               |   | 12,340   |   |   |   | 12,003 |   |
| Insurance      claims                                               |   |               | (160     | )      |               |   | 11       |   |   |   | (1,656 | ) |
| Inventories                                                         |   |               | (3,087   | )      |               |   | (152     | )      |   |   | (1,498 | ) |
| Due      from related parties                                       |   |               | 219      |   |               |   | -        |   |   |   | - |   |
| Advances      to various creditors                                  |   |               | (1,230   | )      |               |   | (624     | )      |   |   | 2,599 |   |
| Prepayments      and other                                          |   |               | (15      | )      |               |   | (4,270   | )      |   |   | (374 | ) |
| Increase      (Decrease) in:                                        |   |               |     |   |               |   |     |   |   |   |   |   |
| Accounts      payable                                               |   |               | 2,047    |   |               |   | 2,586    |   |   |   | 6,350 |   |
| Accrued      liabilities                                            |   |               | 9,531    |   |               |   | (1,142   | )      |   |   | (1,460 | ) |
| Unearned      revenue                                               |   |               | 2,058    |   |               |   | (3,436   | )      |   |   | 4,774 |   |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| Net      Cash from (used in) Operating Activities                   |   |               | 94,673   |   |               |   | 21,070   |   |   |   | (11,290 | ) |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| Cash      Flows from (used in) Investing Activities:                |   |               |     |   |               |   |     |   |   |   |   |   |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| Advances      for vessels acquisition / under construction          |   |               | -        |   |               |   | (28,683  | )      |   |   | (37,343 | ) |
| Vessel      acquisitions and improvements                           |   |               | (677,111 | )      |               |   | (18      | )      |   |   | (355,045 | ) |
| Insurance      claims recoveries                                    |   |               | -        |   |               |   | -        |   |   |   | 1,852 |   |
| Increase      in restricted cash                                    |   |               | -        |   |               |   | (36,500  | )      |   |   | - |   |
| Decrease      in restricted cash                                    |   |               | -        |   |               |   | -        |   |   |   | 23,500 |   |
| Net      proceeds from sale of vessels                              |   |               | 153,085  |   |               |   | 599,176  |   |   |   | 51,975 |   |
| Net      proceeds from sale of fixed assets                         |   |               | -        |   |               |   | 255      |   |   |   | 74 |   |
| Acquisition      of other fixed assets                              |   |               | (833     | )      |               |   | (2,639   | )      |   |   | (3,295 | ) |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| Net      Cash from (used in) Investing Activities                   |   |               | (524,859 | )      |               |   | 531,591  |   |   |   | (318,282 | ) |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| Cash      Flows from (used in) Financing Activities:                |   |               |     |   |               |   |     |   |   |   |   |   |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| Proceeds      from long-term debt                                   |   |               | 472,549  |   |               |   | 20,000   |   |   |   | 316,851 |   |
| Principal      payments of long-term debt                           |   |               | (31,180  | )      |               |   | (19,119  | )      |   |   | (26,955 | ) |
| Prepayment      of long-term debt                                   |   |               | (68,853  | )      |               |   | (350,399 | )      |   |   | (65,582 | ) |
| Increase      in restricted cash                                    |   |               | (3,500   | )      |               |   | -        |   |   |   | - |   |
| Derivative      upfront receipt                                     |   |               | -        |   |               |   | -        |   |   |   | 8,500 |   |
| Issuance      of common stock, net of issuance costs                |   |               | -        |   |               |   | 26,916   |   |   |   | 98,341 |   |
| Payment      of financing costs                                     |   |               | (5,632   | )      |               |   | (63      | )      |   |   | (5,563 | ) |
| Dividends      paid                                                 |   |               | (30,504  | )      |               |   | (217,466 | )      |   |   | - |   |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| Net      Cash from (used in) Financing Activities                   |   |               | 332,880  |   |               |   | (540,131 | )      |   |   | 325,592 |   |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| Net      increase (decrease) in cash and cash equivalents           |   |               | (97,306  | )      |               |   | 12,530   |   |   |   | (3,980 | ) |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| Cash      and cash equivalents at beginning of year                 |   |               | 114,768  |   |               |   | 17,462   |   |   |   | 29,992 |   |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| Cash      and cash equivalents at end of year                       |   |               | 17,462   |   |               |   | 29,992   |   |   |   | 26,012 |   |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| SUPPLEMENTAL      CASH FLOW INFORMATION                             |   |               |     |   |               |   |     |   |   |   |   |   |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| Interest      paid                                                  |   |               | 18,683   |   |               |   | 22,307   |   |   |   | 13,731 |   |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| NON-CASH      TRANSACTIONS                                          |   |               |     |   |               |   |     |   |   |   |   |   |
|                                                                |   |               |     |   |               |   |     |   |   |   |   |   |
| Fair      value of below market time charter                        |   |               | -        |   |               |   | -        |   |   |   | 30,612 |   |
| Amounts      owed for capital expenditures                          |   |               | -        |   |               |   | -        |   |   |   | 1,215 |   |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 1. | Basis      of Presentation and GeneralInformation: |
|----|----------------------------------------------------|

|   | The      accompanying consolidated financial statements include the accounts of Top      Ships Inc. (formerly Top Tankers Inc and Ocean Holdings Inc.), (“TOP”) and      its wholly-owned subsidiaries (collectively the “Company”). Ocean Holdings      Inc. was formed on January 10, 2000, under the laws of Marshall Islands,      was renamed to Top Tankers Inc. and Top Ships Inc. in May 2004 and      December 2007 respectively, and is the sole owner of all outstanding      shares of the followingsubsidiaries: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a)    | TOP Tanker      Management Inc., (the “Manager”) established on May 24, 2004, under      the laws of Marshall Islands, is responsible for all of the chartering,      operational and technical management of the Company’s fleet. The Company’s      ship-owning subsidiaries have a management agreement with the Manager,      under which management services are provided in exchange for a fixed      monthly fee per vessel.                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
|   |   | The      Manager has subcontracted the day to day technical management of the      vessels to unaffiliated ship management companies, Unicom Management      Services Ltd, V. Ships Management Limited, Hanseatic Shipping Company Ltd      and Interorient Maritime Enterprises Inc. (collectively the      “Sub-Managers”). The Sub-Managers provide day to day operational and      technical services to the Company’s vessels at a fixed monthly fee per      vessel. Such fees for the years ended December 31, 2005, 2006 and 2007      totaled $3,159, $2,755 and $1,828 respectively and are separately      reflected in the accompanying consolidated statements of operations. At      December 31, 2006 and 2007 the amount due to the Sub-Managers totaled      $1,739 and $269 respectively and is included in Accounts Payable in the      accompanying consolidated balance sheets. |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (b)    | Top Bulker      Management Inc, incorporated on April 7, 2005 under the laws of      Marshall Islands, for the purpose to undertake in 2005 the management of a      fleet of bulk carriers which have not been acquired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (c)    | Top Tankers      (U.K.) Limited, incorporated in England and Wales on January 12,      2005, as a representative office in London.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (d)    | Helidona      Shipping Company Limited (“Helidona”), incorporated in the Marshall      Islands in May 2003, owner of the 29,998 DWT (built in 1989), tanker      vessel “Yapi”, which was sold in September 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (e)    | Gramos      Shipping Company Inc. (“Gramos”), incorporated in the Marshall      Islands in January 2003, owner of the 45,720 DWT (built in 1992), tanker      vessel “Faithful”, which was acquired in July 2003 from Vermio      Shipping Company Limited, which is a subsidiary of TOP,      incorporated in the Marshall Islands in December 2001, owner of vessel      “Faithful” for the period from February 2002 to July 2003. The vessel was      sold and leased back in March 2006.                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (f)    | Rupel      Shipping Company Inc. (“Rupel”), incorporated in the Marshall      Islands in January 2003, owner of the 44,646 DWT (built in 1992) tanker      vessel “Fearless”, which was sold in July 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (g)    | Mytikas      Shipping Company Ltd. (“Mytikas”), incorporated in the Marshall      Islands in February 2004, owner of the 136,055 DWT (built in 1993) tanker      vessel “Limitless”, which was acquired in March 2004, sold and leased back      in April 2006 and reacquired in May 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (h)    | Litochoro      Shipping Company Ltd. (“Litochoro”), incorporated in the Marshall      Islands in March 2004, owner of the 135,915 DWT (built in 1992) tanker      vessel “Endless”, which was acquired in March 2004, sold and leased back      in April 2006 and reacquired in May 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (i)    | Falakro      Shipping Company Ltd. (“Falakro”), incorporated in Liberia in July      2004, owner of the 47,076 DWT (built in 1991) tanker vessel “Doubtless”,      which was acquired in August 2004 and sold and leased back in March      2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 1. | Basis      of Presentation and General Information -  (continued): |
|----|--------------------------------------------------------------------|

|   | (j)    | Pageon      Shipping Company Ltd. (“Pageon”), incorporated in Cyprus in July      2004, owner of the 47,084 DWT (built in 1992) tanker vessel “Vanguard”,      which was acquired in August 2004 and sold and leased back in March      2006.                                                                                                                                                |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (k)    | Vardousia      Shipping Company Ltd. (“Vardousia”), incorporated in Cyprus in July      2004, owner of the 47,084 DWT (built in 1992) tanker vessel “Invincible”,      which was acquired in August 2004, sold and leased back in September 2005      and sold by its new owners in July 2007.                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (l)    | Psiloritis      Shipping Company Ltd. (“Psiloritis”), incorporated in Liberia in      July 2004, owner of the 47,084 DWT (built in 1991) tanker vessel      “Victorious”, which was acquired in August 2004, sold and leased back in      September 2005 and sold by its new owners in August  2007.                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (m)    | Parnon      Shipping Company Ltd. (“Parnon”), incorporated in Cyprus in July      2004, owner of the 47,084 DWT (built in 1992) tanker vessel “Relentless”,      which was acquired in August 2004 and sold and leased back in September      2005.                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (n)    | Menalo      Shipping Company Ltd. (“Menalo”), incorporated in Cyprus in July      2004, owner of the 47,084 DWT (built in 1991) tanker vessel “Restless”,      which was acquired in August 2004, sold and leased back in August 2005 and      sold by its new owners in September 2007.                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (o)    | Pintos      Shipping Company Ltd. (“Pintos”), incorporated in Cyprus in July      2004, owner of the 47,084 DWT (built in 1992) tanker vessel “Sovereign”,      which was acquired in August 2004 and sold and leased back in August      2005.                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (p)    | Pylio      Shipping Company Ltd. (“Pylio”), incorporated in Liberia in July      2004, owner of the 154,970 DWT (built in 1991) tanker vessel “Flawless”,      which was acquired in September 2004 and sold and leased back in March      2006.                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (q)    | Idi      Shipping Company Ltd. (“Idi”), incorporated in Liberia in July      2004, owner of the 47,094 DWT (built in 1991) tanker vessel “Spotless”,      which was acquired in September 2004 and sold and leased back in March      2006.                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (r)    | Taygetus      Shipping Company Ltd. (“Taygetus”), incorporated in Liberia in July      2004, owner of the 154,970 DWT (built in 1991) tanker vessel “Timeless”,      which was acquired in September 2004 and sold and leased back in March      2006.                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (s)    | Kalidromo      Shipping Company Limited (“Kalidromo”),      incorporated in the Marshall Islands in May 2003, owner of the 31,766 DWT      (built in 1980) tanker vessel “Tireless”, which was sold in September      2004.                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (t)    | Olympos      Shipping Company Limited (“Olympos”), incorporated in the Marshall      Islands in May 2003, owner of the 29,990 DWT (built in 1985), tanker      vessel “Med Prologue” which was sold in December 2004 and Olympos      Shipping Company Limited, which is a subsidiary of TOP,      incorporated in British Cayman Islands in December 1999, former owner of      the vessel. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (u)    | Kisavos      Shipping Company Limited (“Kisavos”), incorporated in the Marshall      Islands in November 2004, owner of the 154,970 DWT (built in 1991) tanker      vessel “Priceless”, which was acquired in February 2005 and sold and      leased back in March 2006.                                                                                                                     |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 1. | Basis      of Presentation and General Information -  (continued): |
|----|--------------------------------------------------------------------|

|   | (v)    | Imitos      Shipping Company Limited (“Imitos”), incorporated in the Marshall      Islands in November 2004, owner of the 149,554 DWT (built in 1992) tanker      vessel “Noiseless”, which was acquired in April 2005, sold and leased back      in April 2006 and reacquired in May 2007. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                |
|   | (w)    | Parnis      Shipping Company Limited (“Parnis”), incorporated in the Marshall      Islands in November 2004, owner of the 149,599 DWT (built in 1992) tanker      vessel “Stainless”, which was acquired in April 2005, sold and leased back      in April 2006 and reacquired in May 2007. |
|   |   |                                                                                                                                                                                                                                                                                                                |
|   | (x)    | Parnasos      Shipping Company Limited (“Parnasos”), incorporated in Liberia in      November 2004, owner of the 154,970 DWT (built in 1992) tanker vessel      “Faultless”, which was acquired in April 2005 and sold and leased back in      April 2006.                                  |

|   | (y)    | Vitsi      Shipping Company Limited (“Vitsi”), incorporated in Liberia in      November 2004, owner of the 154,970 DWT (built in 1991) tanker vessel      “Stopless”, which was acquired in April 2005 and sold and leased back in      March 2006.     |   |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |   |                                                                                                                                                                                                                                                                            |   |
|   | (z)    | Giona      Shipping Company Limited (“Giona”), incorporated in Marshall      Islands in March 2005, owner of the 46,217 DWT (built in 1999) tanker      vessel “Taintless”, which was acquired in March 2005 and sold in November      2006.            |   |
|   |   |                                                                                                                                                                                                                                                                            |   |
|   | (aa)   | Lefka      Shipping Company Limited (“Lefka”), incorporated in Marshall      Islands in March 2005, owner of the 46,168 DWT (built in 1999) tanker      vessel “Dauntless”, which was acquired in March 2005.                                           |   |
|   |   |                                                                                                                                                                                                                                                                            |
|   | (bb)   | Agrafa      Shipping Company Limited (“Agrafa”), incorporated in Marshall      Islands in March 2005, owner of the 46,185 DWT (built in 1999) tanker      vessel “Soundless”, which was acquired in April 2005 and sold in November      2006.          |
|   |   |                                                                                                                                                                                                                                                                            |
|   | (cc)   | Agion Oros      Shipping Company Limited (“Agion Oros”), incorporated in Marshall      Islands in February 2005, owner of the 47,262 DWT (built in 1998) tanker      vessel “Topless”, which was acquired in April 2005 and sold in December      2006. |
|   |   |                                                                                                                                                                                                                                                                            |
|   | (dd)   | Nedas      Shipping Company Limited (“Nedas”), incorporated in Marshall      Islands in April 2005, owner of the 150,038 DWT (built in 1993) tanker      vessel “Stormless”, which was acquired in October 2005.                                        |
|   |   |                                                                                                                                                                                                                                                                            |
|   | (ee)   | Ilisos      Shipping Company Limited (“Ilisos”), incorporated in Marshall      Islands in April 2005, owner of the 46,346 DWT (built in 2003) tanker      vessel “Ioannis P.”, which was acquired in November  2005.                                    |
|   |   |                                                                                                                                                                                                                                                                            |
|   | (ff)   | Sperhios      Shipping Company Limited (“Sperhios”), incorporated in Marshall      Islands in April 2005, owner of the 146,286 DWT (built in 1996) tanker      vessel “Ellen P.”, which was acquired in November 2005.                                  |
|   |   |                                                                                                                                                                                                                                                                            |
|   | (gg)   | Ardas      Shipping Company Limited (“Ardas”), incorporated in Marshall      Islands in April 2005, owner of the 147,048 DWT (built in 1993) tanker      vessel “Errorless”, which was acquired in November 2005 and sold in April      2007.           |
|   |   |                                                                                                                                                                                                                                                                            |
|   | (hh)   | Kifisos      Shipping Company Limited (“Kifisos”), incorporated in Marshall      Islands in April 2005, owner of the 147,048 DWT (built in 1994) tanker      vessel “Edgeless”, which was acquired in December 2005.                                    |
|   |   |                                                                                                                                                                                                                                                                            |
|   | (ii)   | Noir      Shipping S.A. (“Noir”), incorporated in Marshall Islands in June      2007, owner of the 73,506 DWT (built in 1995) drybulk vessel “Bertram”,      which was acquired in November2007.                                                        |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 1. | Basis      of Presentation and General Information -  (continued): |
|----|--------------------------------------------------------------------|

|   | (jj)   | Amalfi      Shipping Company Limited (“Amalfi”), incorporated in Marshall      Islands in July 2007, owner of the 45,526 DWT (built in 2000) drybulk      vessel “Amalfi”, which was acquired in December 2007.                             |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                |
|   | (kk)   | Jeke      Shipping Company Limited (“Jeke”), incorporated in Liberia in July      2007, owner of the 51,200 DWT (built in 2002) drybulk vessel “Voc      Gallant”, which was acquired in February 2008 (Note23).                            |
|   |   |                                                                                                                                                                                                                                                                |
|   | (ll)   | Japan I      Shipping Company Limited (“Japan I”), incorporated in Liberia in      August 2007, to be the owner of the 75,928 DWT (built in 2001) drybulk      vessel “Pepito”, which was acquired in  March 2008 (Note      23). |
|   |   |                                                                                                                                                                                                                                                                |
|   | (mm)   | Japan II      Shipping Company Limited (“Japan II”), incorporated in Liberia in      August 2007, to be the owner of the 75,933 DWT (built in 2000) drybulk      vessel “Astrale”, which is expected to be acquired late April      2008.   |
|   |   |                                                                                                                                                                                                                                                                |
|   | (nn)   | Japan III      Shipping Company Limited (“Japan III”), incorporated in Liberia in      August 2007, owner of the 75,681 DWT (built in 2000) drybulk vessel      “Cyclades”, which was acquired in December2007.                             |

|   |   | The      Company is an international provider of worldwide seaborne crude oil and      petroleum products transportation services and of drybulk transportation      services, through the ownership and operation of the vessels mentioned      above.                                                                                                                                                                                     |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   | On      December 31, 2007, seven vessels were operating under voyage      charters, fourteen vessels under long-term time charters, with an average      duration of over 24 months and two vessels, one of which was operating      under long-term time charter, were undergoing their special survey. Nine      out of fifteen time charters include profit sharing agreements, which are      settled on a calendar quarter basis. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   | The      Revenues in the accompanying consolidated statements of income are      analyzed as follows:                                                                                                                                                                                                                                                                                                                                       |

|   | Revenues                         |    | Year      Ended December 31, |
|--------|----------------------------------|---------|------------------------------|
|   |                             |    | 2005                         | 2006 | 2007 |
|   | Voyage      revenues             | 115,079 | 158,558                      | 128,663 |
|   | Time      Charter revenues  | 129,136 | 151,485                      | 123,596 |
|   | Total                            | 244,215 | 310,043                      | 252,259 |

|   |   | Future      minimum time-charter receipts, based on vessels committed to      non-cancellable time charter contracts, as of December 31, 2007, will be      $102,930, $66,671 and $14,939 during 2008, 2009 and 2010,      respectively. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.     | Significant      Accounting Policies: |
|--------|---------------------------------------|
|   |                                  |   |
|   | (a)                                   | Principles      of Consolidation: The accompanying consolidated financial      statements have been prepared in accordance with U.S generally accepted      accounting principles (“US GAAP”) and include the accounts and operating      results of Top Ships Inc. and its wholly-owned subsidiaries referred      to in Note 1. All significant intercompany balances and transactions      have been eliminated inconsolidation. |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 2. | Significant      Accounting Policies - (continued): |
|----|-----------------------------------------------------|

|   | (b)    | Use of      Estimates:      The preparation of consolidated financial statements in conformity with      U.S generally accepted accounting principles requires management to make      estimates and assumptions that affect the reported amounts of assets and      liabilities and disclosure of contingent assets and liabilities at the      date of the consolidated financial statements and the reported amounts of      revenues and expenses during the reporting period. Actual results could      differ from those estimates.                                                                                                                                                                                                                                           |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | (c)    | Other      Comprehensive Income      (Loss): The Company follows the provisions of Statement of      Financial Accounting Standards “Statement of Comprehensive Income”      (SFAS 130), which requires separate presentation of certain      transactions, which are recorded directly as components of stockholders’      equity.                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | (d)    | Foreign      Currency Translation: The Company’s functional currency is the U.S.      Dollar because all vessels operate in international shipping markets, and      therefore primarily transact business in U.S. Dollars. The Company’s books      of accounts are maintained in U.S. Dollars. Transactions involving other      currencies during the year are converted into U.S. Dollars using the      exchange rates in effect at the time of the transactions. At the balance      sheet dates, monetary assets and liabilities, which are denominated in      other currencies, are translated to reflect the year-end exchange rates.      Resulting gains or losses are reflected separately in the accompanying      consolidated statements of operations. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | (e)    | Cash and      Cash      Equivalents: The Company considers highly liquid investments such      as time deposits and certificates of deposit with an original maturity of      three months or less to be cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | (f)    | Restricted      Cash:      In relation to the sale and leaseback transactions, the Company should      maintain during the bareboat charter period consolidated cash balances of      at least $25,000, which will be included in restricted cash along with all      other potential cash restrictions imposed by the loan agreements (Notes 11      and 14).                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | (g)    | Trade      Accounts      Receivable,      net:      The amount shown as Trade Accounts Receivable, net at each balance sheet      date, includes estimated recoveries from charterers for hire, freight and      demurrage billings, net of a provision for doubtful accounts. At each      balance sheet date, all potentially uncollectible accounts are assessed      individually, combined with the application of a historical recoverability      ratio, for purposes of determining the appropriate provision for doubtful      accounts. Provision for doubtful accounts at December 31, 2006 and 2007      totalled $283 and $801, and is summarized as      follows:                                                                                           |

|   |                                | Provision      for doubtful accounts |
|--------|-------------------------------------|--------------------------------------|
|   | Balance,      December 31, 2004     | 132                                  |
|   | —Additions                    | 337                                  |
|   | —Reversals      / write-offs  | (153)                                |
|   | Balance,      December 31, 2005     | 316                                  |
|   | —Additions                    | 508                                  |
|   | —Reversals      / write-offs  | (541)                                |
|   | Balance,      December 31, 2006     | 283                                  |
|   | —Additions                    | 1,302                                |
|   | —      Reversals / write-offs | (784)                                |
|   | Balance,      December 31, 2007     | 801                                  |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 2.     | Significant      Accounting Policies - (continued): |
|--------|-----------------------------------------------------|
|   |                                                |   |
|   | (h)                                                 | Insurance      Claims: Insurance claims, relating mainly to crew medical expenses      and hull and machinery incidents are recorded upon collection or agreement      with the relevant party of the collectible amount. |
|   |                                                |   |
|   | (i)                                                 | Inventories:      Inventories consist of bunkers, lubricants and consumable stores which are      stated at the lower of cost or market. Cost, which consists of the      purchase price, is determined by the first in, first out      method. |
|   |                                                |   |
|   | (j)                                                 | Vessel      Cost:  Vessels are stated at cost, which consists of the      contract price, pre-delivery costs incurred during the construction of      newbuildings, capitalized interest and any material expenses incurred upon      acquisition (improvements and delivery costs). Subsequent expenditures for      conversions and major improvements are also capitalized when they      appreciably extend the life, increase the earning capacity or improve the      efficiency or safety of the vessels. Repairs and maintenance are charged      to expense as incurred and are included in Other vessel operating expenses      in the accompanying consolidated statements of  operations. |
|   |                                                |   |
|   | (k)                                                 | Impairment      of Long-Lived Assets: Long-lived assets and certain      identifiable intangibles held and used by the Company are reviewed for      impairment whenever events or changes in circumstances indicate that the      carrying amount of the assets may not be recoverable. When the estimate of      undiscounted cash flows, excluding interest charges, expected to be      generated by the use of the asset is less than its carrying amount, the      Company evaluates the asset for an impairment loss. Measurement of the      impairment loss is based on the fair value of the asset. In this respect,      management regularly reviews the carrying amount of the vessels in      connection with the estimated recoverable amount for each of the Company’s      vessels. The review for impairment of each vessel’s carrying amount as of      December 31, 2006 and 2007, did not result in an indication that the      carrying amounts are not recoverable. |
|   |                                                |   |
|   | (l)                                                 | Assets      Held for      Sale: It is the      Company’s policy to dispose of vessels when suitable opportunities occur      and not necessarily to keep them until the end of their useful life. The      Company classifies vessels as being held for sale when: management has      committed to a plan to sell the vessels; the vessels are available for      immediate sale in their present condition; an active program to locate a      buyer and other actions required to complete the plan to sell the vessels      have been initiated; the sale of the vessels is probable, and transfer of      the asset is expected to qualify for recognition as a completed sale      within one year; the vessels are being actively marketed for sale at a      price that is reasonable in relation to their current fair value and      actions required to complete the plan to sell indicate that it is unlikely      that significant changes to the plan will be made or that the plan will be      withdrawn. Long-lived assets classified as held for sale are measured at      the lower of their carrying amount or fair value less cost to sell. These      vessels are not depreciated once they meet the criteria to be classified      as held for sale. At December 31, 2007, the tanker vessel M/T Noiseless      was classified as held for sale and its carrying amount of $46,268 is      separately reflected in the 2007 accompanying consolidated balance      sheet. |
|   |                                                |   |
|   | (m)                                                 | Vessel      Depreciation: Depreciation is calculated using the straight-line      method over the estimated useful life of the vessels, after deducting the      estimated salvage value. Each vessel’s salvage value is equal to the      product of its lightweight tonnage and estimated scrap rate. Management      estimates the useful life of the Company’s vessels to be 25 years      from the date of initial delivery from the shipyard. Second hand vessels      are depreciated from the date of their acquisition through their remaining      estimated useful life. When regulations place limitations over the ability      of a vessel to trade on a worldwide basis, its useful life is adjusted at      the date such regulations areadopted. |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 2. | Significant      Accounting Policies - (continued): |
|----|-----------------------------------------------------|

|   | (n) | Other Fixed      Assets, Net: Other fixed assets, net consists of furniture, office      equipment, cars and leasehold improvements, stated at cost, which consists      of the purchase / contract price less accumulated depreciation.      Depreciation is calculated using the straight-line method over the      estimated useful life of the assets, while leasehold improvements are      depreciated over the lease term, as presented  below: |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Description                 | Useful Life      (years) |
|--------|-----------------------------|--------------------------|
|   | Leasehold      improvements | 12                       |
|   | Cars                        | 6                        |
|   | Office      equipment       | 5                        |
|   | Furniture      and fittings | 5                        |
|   | Computer      equipment     | 3                        |

|   | (o)    | Accounting      for Dry-Docking Costs: All dry-docking costs are accounted for      under the direct expense method, under which they are expensed as incurred      and included in Other vessel operating expenses in the consolidated      statement of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | (p)    | Sale and      Leaseback Transactions: The gains on sale      of vessel sale and leaseback transactions are deferred and amortized to      income over the lease period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | (q)    | Financing      Costs: Fees incurred and paid to the lenders for obtaining new      loans or refinancing existing ones are recorded as a contra to debt      and such fees are amortized to interest expense over the life of the      related debt using the effective interest method. Unamortized fees      relating to loans repaid or refinanced are expensed when a repayment or      refinancing is made and charged to interest and finance    costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | (r)    | Pension and      Retirement Benefit Obligations—Crew:  The ship-owning      companies included in the consolidation, employ the crew on board, under      short-term contracts (usually up to nine months) and accordingly, they are      not liable for any pension or post retirement benefits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | (s)    | Staff      leaving Indemnities –Administrative      personnel: The Company’s employees are entitled to termination      payments in the event of dismissal or retirement with the amount of      payment varying in relation to the employee’s compensation, length of      service and manner of termination (dismissed or retired). Employees who      resign, or are dismissed with cause are not entitled to termination      payments. The Company’s liability on an actuarially determined basis, at      December 31, 2006 and 2007 amounted to $190 and $288,      respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | (t)    | Accounting      for Revenue and Expenses: Revenues are generated from voyage and      time charter agreements. Time charter revenues are recorded over the term      of the charter as service is provided. Profit sharing represents the      excess between an agreed daily base rate and the actual rate generated by      the vessel every quarter, if any, and is settled and recorded on a      quarterly basis. Under a voyage charter the revenues, including demurrages      and associated voyage costs, with the exception of port expenses which are      recorded as incurred, are recognized on a proportionate performance method      over the duration of the voyage. A voyage is deemed to commence upon the      latest between the completion of discharge of the vessel’s previous cargo      and the charter party date of the current voyage and is deemed to end upon      the completion of discharge of the current cargo. Demurrage income      represents payments by the charterer to the Company when loading or      discharging time exceeded the stipulated time in the voyage charter.      Vessel operating expenses are accounted for on the accrual basis. Unearned      revenue represents cash received prior to year-end related to revenue      applicable to periods after December 31 of each  year. |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 2. | Significant      Accounting Policies - (continued): |
|----|-----------------------------------------------------|

|   |   | When      vessels are acquired with time charters attached and the rates on such      charters are below market on the acquisition date, the Company allocates      the total cost between the vessel and the fair value of below market time      charter based on the relative fair values of the vessel and the liability      acquired. The fair value of the attached time charter is computed as the      present value of the difference between the contractual amount to be      received over the term of the time charter and management’s estimates of      the market time charter rate at the time of acquisition. The fair value of      below market time charter is amortized over the remaining period of the      time charter as an increase torevenues. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (u)    | Stock      Incentive Plan: All share-based      compensation provided to employees and to non-employee directors, for      their services as directors, is included in Other general and      administrative expenses in the consolidated income statements. The shares      that do not contain any future service vesting conditions are considered      vested shares and recognized in full on the grant date. The shares that      contain a time-based service vesting condition are considered non-vested      shares on the grant date and recognized over the vesting period. The      shares, vested and non-vested are measured at fair value, which is equal      to the market value of the Company’s common stock on the grant      date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (v)    | Earnings      per Share: Basic earnings per share are computed by dividing net      income by the weighted average number of common shares deemed outstanding      during the year. Diluted earnings per share reflect the potential dilution      that could occur if securities or other contracts to issue common stock      were exercised.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (w)    | Related      Parties: The Company considers as related parties the affiliates of      the Company; entities for which investments are accounted for by the      equity method; principal owners of the Company; its management; members of      the immediate families of principal owners of the Company; and other      parties with which the Company may deal if one party controls or can      significantly influence the management or operating policies of the other      to an extent that one of the transacting parties might be prevented from      fully pursuing its own separate interests. Another party also is a related      party if it can significantly influence the management or operating      policies of the transacting parties and can significantly influence the      other to an extent that one or more of the transacting parties might be      prevented from fully pursuing its own separate interests. An Affiliate is      a party that, directly or indirectly through one or more intermediaries,      controls, is controlled by, or has common control with the Company.      Control is the possession, direct or indirect, of the power to direct or      cause the direction of the management and policies of an enterprise      through ownership, by contract and otherwise. Immediate Family is family      members whom a principal owner or a member of management might control or      influence or by whom they might be controlled or influenced because of the      family relationship. Management is the persons who are responsible for      achieving the objectives of the Company and who have the authority to      establish policies and make decisions by which those objectives are to be      pursued. Management normally includes members of the board of directors,      the CEO, CFO, Vice President in charge of principal business functions and      other persons who perform similar policy making functions. Persons without      formal titles may also be members of management. Principal owners are      owners of record or known beneficial owners of more than 10% of the voting      interests of the Company. |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 2.     | Significant      Accounting Policies - (continued): |
|--------|-----------------------------------------------------|
|   |                                                |   |
|   | (x)                                                 | Derivatives: Derivative      instrument (including certain derivative instruments embedded in other      contracts) are recorded in the balance sheet as either an asset or      liability measured at its fair value, with changes in the derivatives’      fair value recognized currently in earnings unless specific hedge      accounting criteria are met. |
|   |                                                |   |
|   |                                                | During      2005, 2006 and 2007, the Company engaged in interest rate swap agreements      in order to hedge the exposure of interest rate fluctuations associated      with the cash flows on a portion of the Company’s variable rate borrowings      (Note 11). In addition, during 2007, the Company entered into an interest      rate derivative product, which is marked to market through earnings (Note      11). The main description of the product is as follows: a portfolio      of six systematic FX trading strategies, providing comprehensive and      highly diversified currency exposure. Each strategy is underpinned by a      clear macro rationale but is fully systematic –a “transparent box”.      Investors can tailor their portfolio with carry and non-carry strategies.      Excess returns exceed those of many other asset classes with low      correlation to other asset classes. In addition, it improved the      Company’s short term liquidity by $8,500. The Company wanted to invest      into currency trading through a low volatility product and this product      offers investors a unique opportunity to access systematic macro-driven      currency trading strategies in both principal protected and non-principal      protected format. Lastly, the product provides an opportunity for      investors who cannot easily access FX markets, to transparently implement      dynamic and innovative strategies. |
|   |                                                |   |
|   |                                                | For      swap agreements that are designated and qualified as cash flow hedges      their fair value is included in financial instruments in the accompanying      consolidated balance sheets with changes in the effective portion of the      instruments’ fair value recorded in accumulated other comprehensive income      (loss). The ineffective portion of the change in fair value of the      derivative financial instruments is immediately recognized in the income      statement. If the hedged item is a forecasted transaction that becomes      probable of not occurring, then the derivative financial instrument no      longer qualifies as an effective cash flow hedge from that date and, as a      result, cumulative fair value changes that were previously recorded in      accumulated other comprehensive income (loss) are immediately reclassified      into earnings. In all other instances, when a derivative financial      instrument ceases to qualify as an effective cash flow hedge but if it is      still possible the hedged forecasted transaction may occur, hedge      accounting ceases from that date and the instrument is prospectively      marked to market through earnings, but previously recorded changes in fair      value remain in accumulated other comprehensive income until the hedged      item affects earnings or until it becomes probable that the hedged      forecasted transaction will not occur. |
|   |                                                |   |
|   |                                                | The      Company monitors its positions, the credit ratings of counterparties and      the level of contracts it enters into with any one party. The Company has      a policy of entering into contracts with parties that meet stringent      qualifications and, given the high level of credit quality of its      derivative counterparty, the Company does not believe it is necessary to      obtain collateral for sucharrangements. |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 2.     | Significant      Accounting Policies - (continued): |
|--------|-----------------------------------------------------|
|   |                                                |   |
|   | (y)                                                 | Consolidation      of Variable Interest Entities: FASB      Interpretation No. 46R addresses the consolidation of business enterprises      (variable interest entities) to which the usual condition (ownership of a      majority voting interest) of consolidation does not apply. The      Interpretation focuses on financial interests that indicate control. It      concludes that in the absence of clear control through voting interests, a      company’s exposure (variable interest) to the economic risks and potential      rewards from the variable interest entity’s assets and activities are the      best evidence of control. Variable interests are rights and obligations      that convey economic gains or losses from changes in the value of the      variable interest entity’s assets and liabilities. Variable interests may      arise from financial instruments, service contracts, and other      arrangements. If an enterprise holds a majority of the variable interests      of an entity, it would be considered the primary beneficiary. The primary      beneficiary would be required to include assets, liabilities, and the      results of operations of the variable interest entity in its financial      statements. |

|   | (z) | Recent      Accounting Pronouncements: |
|--------|-----|----------------------------------------|

|   |   | (i)    | FSP No. AUG AIR-1: In      September 2006, the FASB Staff issued FSP No. AUG AIR-1, “Accounting for      Planned Major Maintenance Activities,” (“FSP No. AUG AIR-1”). FSP No. AUG      AIR-1 prohibits the use of the accrue-in-advance method of accounting for      planned major maintenance activities in annual and interim financial      reporting periods, if no liability is required to be recorded for an asset      retirement obligation based on a legal obligation for which the event      obligating the entity has occurred. FSP No. AUG AIR-1 also requires      disclosures regarding the method of accounting for planned major      maintenance activities and the effects of implementing the FSP. The      guidance in FSP No. AUG AIR-1 is effective for the Company as of January      1, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   | ii)    | FASB Statement No. 157:      In September 2006, the FASB issued SFAS No. 157, “Fair Value      Measurement” (“SFAS 157”). SFAS 157 addresses standardizing the      measurement of fair value for companies that are required to use a fair      value measure of recognition for recognition or disclosure purposes. The      FASB defines fair value as “the price that would be received to sell an      asset or paid to transfer a liability in an orderly transaction between      market participants at the measure date”. SFAS 157 is effective for      financial statements issued for fiscal years beginning after November 15,      2007.  The Company will adopt SFAS 157 effective January 1,      2008. In February 2008, the FASB issued FASB Staff Position (“FSP”) FASB      157-2 “Effective Date of FASB Statement No. 157” (“FSP FASB 157-2”). FSP      FASB 157-2, which was effective upon issuance, delays the effective date      of SFAS 157 for nonfinancial assets and liabilities, except for items      recognized or disclosed at fair value at least once a year, to fiscal      years beginning after November 15, 2008. FSP FASB 157-2 also covers      interim periods within the fiscal years for items within the scope of this      FSP. The adoption of this statement is not expected to have a material      effect on the Company’s financial position, results of operations and cash      flows. |
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   | iii)   | FASB Statement No. 159:      In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for      Financial Assets and Financial Liabilities” (“SFAS 159”), which permits      entities to choose to measure many financial instruments and certain other      items at fair value. SFAS 159 is effective as of the beginning of an      entity’s first fiscal year that begins after November 15, 2007. Earlier      adoption is permitted as of the beginning of a fiscal year that begins on      or before November 15, 2007, provided the entity also elects to apply the      provisions of FASB Statement No. 157, “Fair Value Measurements”. The      Company will adopt SFAS 159 effective January 1, 2008. The adoption of      this statement is not expected to have a material effect on the Company’s      financial position, results of operations and cash  flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 2. | Significant      Accounting Policies - (continued): |
|----|-----------------------------------------------------|

|   |   | iv)    | FASB Statement No. 141R:      In December 2007, the FASB issued SFAS No. 141R, “Business Combinations”      (“SFAS 141R”). SFAS 141R establishes principles and requirements on how      the acquirer in a business combination recognizes and measures in its      financial statements the identifiable assets acquired, the liabilities      assumed and any noncontrolling interest in the entity acquired. In      addition, SFAS 141R provides guidance on the recognition and measurement      of goodwill acquired in the business combination or a gain from a bargain      purchase as well as what information to disclose to enable users of the      financial statements to evaluate the nature and financial impact of the      business combination. SFAS 141R is effective for fiscal years beginning      after December 15, 2008 and will be adopted by the Company in the first      quarter of fiscal year 2009. The Company is currently evaluating the      potential impact, if any, of the adoption of this statement on its      financial condition or results of operations.                                                                                                                                                                                                                                                                                   |
|--------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | v)     | FASB Statement No. 160:      In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests      in Consolidated Financial Statements - an Amendment of ARB No. 51” (“SFAS      160”). SFAS 160 establishes principles and requirements on how to treat      the portion of equity in a subsidiary that is not attributable directly or      indirectly to a parent. This is commonly known as a minority interest. The      objective of SFAS 160 is to improve relevance, comparability, and      transparency concerning ownership interests in subsidiaries held by      parties other than the parent by providing disclosures that clearly      identify between interests of the parent and interest of the      noncontrolling owners and the related impacts on the consolidated      statement of operations and the consolidated statement of financial      position. SFAS 160 also provides guidance on disclosures related to      changes in the parent’s ownership interest and deconsolidation of a      subsidiary. SFAS 160 is effective for fiscal years beginning after      December 15, 2008, and will be adopted by the Company in the first quarter      of fiscal year 2009. The Company is currently evaluating the potential      impact, if any, of the adoption of this statement on its financial      condition or results of operations. |
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | vi)    | FASB Statement No. 161:      In March 2008, the FASB issued FASB Statement No. 161, “Disclosures about      Derivative Instruments and Hedging Activities”. The new standard is      intended to improve financial reporting about derivative instruments and      hedging activities by requiring enhanced disclosures to enable investors      to better understand their effects on an entity’s financial position,      financial performance, and cash flows. It is effective for financial      statements issued for fiscal years and interim periods beginning after      November 15, 2008, with early application encouraged. The Company is      currently evaluating the effect that this statement may have on future      financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

|   | (aa) | Reclassification of Prior Year      Balances: Certain amounts in the 2005 and 2006 consolidated      financial statements have been reclassified to conform to the 2007      presentation. The reclassification had no impact on the results of      operations of the Company. Fair Value Change of Financial Instruments for      the years ended December 31, 2005 and 2006 has been presented on a      separate line in the consolidated statements of operations to conform to      the current year presentation. Fair Value Change of Financial Instruments      was previously reported within Interest and Finance  Costs. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 3.     | Change      in Accounting Principle for Dry-docking Costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Change in      Accounting Principle for Dry-docking Costs: The Company has      historically accounted for dry-docking costs that qualified as “Planned      Major Maintenance Activities” (“PMMA”) using the deferral method.      Beginning with the fourth quarter of 2007 the Company changed its      accounting policy for PMMA from the deferral method, under which the      Company amortized dry-docking costs over the estimated period of benefit      between dry-dockings, to the direct expense method, under which the      Company expenses all dry-docking costs as incurred. The Company believes      that the direct expense method is preferable as it eliminates the      significant amount of time and subjectivity involved to determine which      costs and activities related to dry-docking qualify as PMMA under the      deferral method. The Company reflected this change as a change in      accounting principle from an accepted accounting principle to a preferable      accounting principle in accordance with Statement of Financial Accounting      Standards No. 154, Accounting Changes and Error      Corrections. The new accounting principle is applied      retrospectively to all periods presented. When the accounting principle      was retrospectively applied, net income for the year ended December 31,      2005 and 2006 decreased by $3,763 and $26,146, or $0.41 and $2.57 per      share, respectively. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      following financial statement line items were affected by the change in      accounting principle.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

|                                            |   |                                       |    |   |                                             |   |    |                  |   |   |                                             |   |   |                                           |    |   |                  |   |
|-------------------------------------------------|--------|--------------------------------------------|---------|--------|--------------------------------------------------|--------|---------|-----------------------|--------|--------|--------------------------------------------------|--------|--------|------------------------------------------------|---------|--------|-----------------------|--------|
| CONSOLIDATED      BALANCE SHEETS                |   |                                       |    |   |                                             |   |    |                  |   |   |                                             |   |   |                                           |    |   |
| DECEMBER      31, 2006 AND 2007                 |   |                                       |    |   |                                             |   |    |                  |   |   |                                             |   |   |                                           |    |   |                  |   |
|                                            |   |                                       |    |   |                                             |   |    |                  |   |   |                                             |   |   |                                           |    |   |                  |   |
| (Expressed      in thousands of U.S. Dollars)   |   |                                       |    |   |                                             |   |    |                  |   |   |                                             |   |   |                                           |    |   |
|                                            |   |                                       |    |   |                                             |   |    |                  |   |   |                                             |   |   |                                           |    |   |                  |   |
|                                            |   | December      31, 2006                     |    |   | December      31, 2007                           |   |
|                                            |   |                                       |    |   |                                             |   |    |                  |   |   |                                             |   |   |                                           |    |   |                  |   |
|                                            |   | As      reported under the deferral method |    |   | As      computed under the direct expense method |   |    | Effect      of change |   |   | As      reported under the direct expense method |   |   | As      computed under the deferral method (a) |    |   | Effect      of change |   |
|                                            |   |                                       |    |   |                                             |   |    |                  |   |   |                                             |   |   |                                           |    |   |                  |   |
| Deferred      charges, net                      |   | $                                          | 31,850  |   |                                             | $      | -       |                  |   | $      | (31,850                                          | )      |   | $                                              | -       |   |                  | $      | 42,525 |   |   | $ | 42,525 |   |
| Total      assets                               |   | $                                          | 522,735 |   |                                             | $      | 490,885 |                  |   | $      | (31,850                                          | )      |   | $                                              | 776,917 |   |                  | $      | 819,442 |   |   | $ | 42,525 |   |
| Accrued      liabilities                        |   | $                                          | 7,354   |   |                                             | $      | 12,161  |                  |   | $      | 4,807                                            |   |   | $                                              | -       |   |                  | $      | - |   |   | $ | - |   |
| Total      current liabilities                  |   | $                                          | 40,609  |   |                                             | $      | 45,416  |                  |   | $      | 4,807                                            |   |   | $                                              | -       |   |                  | $      | - |   |   | $ | - |   |
| Retained      earnings / (Accumulated deficit)  |   | $                                          | 80,782  |   |                                             | $      | 44,125  |                  |   | $      | (36,657                                          | )      |   | $                                              | (4,951  | )      |                  | $      | 37,574 |   |   | $ | 42,525 |   |
| Total      stockholders' equity                 |   | $                                          | 197,855 |   |                                             | $      | 161,198 |                  |   | $      | (36,657                                          | )      |   | $                                              | 211,408 |   |                  | $      | 253,933 |   |   | $ | 42,525 |   |
| Total      liabilities and stockholders' equity |   | $                                          | 522,735 |   |                                             | $      | 490,885 |                  |   | $      | (31,850                                          | )      |   | $                                              | 776,917 |   |                  | $      | 819,442 |   |   | $ | 42,525 |   |

| CONSOLIDATED STATEMENTS OFOPERATIONS                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| FOR      THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Expressed      in thousands of U.S. Dollars)             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                              |   | 2005                                   |    | 2006   |                                             | 2007   |
|---------------------------------------------------|--------|----------------------------------------|---------|--------|--------------------------------------------------|--------|
|                                              |   | Asreportedunder      thedeferralmethod |    |   | As      computed under the direct expense method |   |   | Effect      of change |   |   | Asreportedunder      thedeferralmethod |   |   | As      computedunder      thedirect      expensemethod |   |   | Effect      ofchange |   |   | Asreportedunder      thedirectexpensemethod |   |   | As      computed under the deferral method (a) |   |   | Effect      of change |   |
|                                              |   |                                   |    |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dry-docking      costs                            |   | $                                      | -       |   |                                             | $      | 10,478 |   |   | $ | 10,478 |   |   | $ | - |   |   | $ | 39,333 |   |   | $ | 39,333 |   |   | $ | 25,094 |   |   | $ | - |   |   | $ | (25,094 | ) |
| Amortization      of dry-docking costs            |   | $                                      | 5,999   |   |                                             | $      | - |   |   | $ | (5,999 | ) |   | $ | 13,187 |   |   | $ | - |   |   | $ | (13,187 | ) |   | $ | - |   |   | $ | 19,226 |   |   | $ | 19,226 |   |
| Gain      on sale of vessels                      |   | $                                      | (10,115 | )      |                                             | $      | (10,831 | ) |   | $ | (716 | ) |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Operating      income (loss)                      |   | $                                      | 86,953  |   |                                             | $      | 83,190 |   |   | $ | (3,763 | ) |   | $ | 41,361 |   |   | $ | 15,215 |   |   | $ | (26,146 | ) |   | $ | (29,118 | ) |   | $ | (23,250 | ) |   | $ | 5,868 |   |
| Net      Income (loss)                            |   | $                                      | 68,684  |   |                                             | $      | 64,921 |   |   | $ | (3,763 | ) |   | $ | 15,141 |   |   | $ | (11,005 | ) |   | $ | (26,146 | ) |   | $ | (49,076 | ) |   | $ | (43,208 | ) |   | $ | 5,868 |   |
| Earnings      (loss) per share, basic and diluted |   | $                                      | 7.38    |   |                                             | $      | 6.97 |   |   | $ | (0.41 | ) |   | $ | 1.41 |   |   | $ | (1.16 | ) |   | $ | (2.57 | ) |   | $ | (4.09 | ) |   | $ | (3.60 | ) |   | $ | 0.49 |   |

| 3. | Change      in Accounting Principle for Dry-Docking Costs –    (continued): |
|----|-----------------------------------------------------------------------------------|

| CONSOLIDATED STATEMENTS OF CASHFLOWS                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| FOR      THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Expressed      in thousands of U.S. Dollars)             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                 |   | 2005                                       |    | 2006   |                                             | 2007   |
|------------------------------------------------------|--------|--------------------------------------------|---------|--------|--------------------------------------------------|--------|
|                                                 |   | As      reported under the deferral method |    |   | As      computed under the direct expense method |   |   | Effect      of change |   |   | As      reported under the deferral method |   |   | As      computed under the direct expense method |   |   | Effect      of change |   |   | As      reported under the direct expense method |   |   | As      computed under the deferral method (a) |   |   | Effect      of change |   |
|                                                 |   |                                       |    |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income (loss)                               |   | $                                          | 68,684  |   |                                             | $      | 64,921 |   |   | $ | (3,763 | ) |   | $ | 15,141 |   |   | $ | (11,005 | ) |   | $ | (26,146 | ) |   | $ | (49,076 | ) |   | $ | (43,208 | ) |   | $ | 5,868 |   |
| Adjustments      to reconcile net income to net cash |   |                                       |    |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  provided      by operating activities:         |   |                                       |    |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of dry-docking costs               |   | $                                          | 5,999   |   |                                             | $      | - |   |   | $ | (5,999 | ) |   | $ | 13,187 |   |   | $ | - |   |   | $ | (13,187 | ) |   | $ | - |   |   | $ | 19,226 |   |   | $ | 19,226 |   |
| (Gain)      on sale of vessels                       |   | $                                          | (10,115 | )      |                                             | $      | (10,831 | ) |   | $ | (716 | ) |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Payments      for dry-docking                        |   | $                                          | (10,478 | )      |                                             | $      | - |   |   | $ | 10,478 |   |   | $ | (34,526 | ) |   | $ | - |   |   | $ | 34,526 |   |   | $ | - |   |   | $ | (29,901 | ) |   | $ | (29,901 | ) |
| Accrued      liabilities                             |   | $                                          | -       |   |                                             | $      | - |   |   | $ | - |   |   | $ | (5,949 | ) |   | $ | (1,142 | ) |   | $ | 4,807 |   |   | $ | (1,460 | ) |   | $ | 3,347 |   |   | $ | 4,807 |   |

| (a) | The      amounts disclosed under the deferral method for the year ended and at      December 31, 2007 are based on the estimated effect of not changing the      dry-docking accounting method to the direct expense method for this      period. Accordingly, these estimated period amounts have not been      previously reported, but are being disclosed in accordance with the      requirements of SFAS No. 154. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 4.     | Segment      Reporting:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      Company reports financial information and evaluates its operations by      charter revenues and not by the length of ship employment for its      customers, i.e., spot or time charters. The Company does not have discrete      financial information to evaluate the operating results for each such type      of charter. Although revenue can be identified for these types of      charters, management cannot and does not identify expenses, profitability      or other financial information for these charters. As a result,      management, including the chief operating decision maker, reviews      operating results solely by revenue per day and operating results of the      fleet. Furthermore, when the Company charters a vessel to a charterer, the      charterer is free to trade the vessel worldwide and, as a result, the      disclosure of geographic information is impracticable. The Company’s      acquisition of drybulk vessels in 2007 has resulted in the Company      determining that it operates under two reportable segments, as a provider      of international seaborne transportation services, carrying      petroleum products and crude oil (Tanker Fleet) and, drybulk      commodities for the steel, electric utility, construction and agri-food      industries (Drybulk Fleet). The accounting policies applied to the      reportable segments are the same as those used in the preparation of the      Company’s consolidated financial statements. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      following table present results for these segments for the year ended      December 31, 2007:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

| Year      ended December 31, 2007                                   |   | Tanker      Fleet |    |   | Drybulk      Fleet |   |   | Unallocated      (1) |   |   | Total  |   |
|---------------------------------------------------------------------|--------|-------------------|---------|--------|--------------------|--------|--------|----------------------|--------|--------|--------|--------|
|                                                                |   |              |    |   |               |   |   |                 |   |   |   |   |
| REVENUES:                                                           |   |              |    |   |               |   |   |                 |   |   |   |   |
|                                                                |   |              |    |   |               |   |   |                 |   |   |   |   |
| Revenues                                                            |   |              | 248,944 |   |               |   | 1,902  |                 |   |   | 1,413  |   |   |   | 252,259 |   |
|                                                                |   |              |    |   |               |   |   |                 |   |   |   |   |   |   |   |   |
| EXPENSES:                                                           |   |              |    |   |               |   |   |                 |   |   |   |   |   |   |   |   |
|                                                                |   |              |    |   |               |   |   |                 |   |   |   |   |   |   |   |   |
| Voyage      expenses                                                |   |              | 59,253  |   |               |   | 161    |                 |   |   | -      |   |   |   | 59,414 |   |
| Charter      hire expense                                           |   |              | 94,118  |   |               |   | -      |                 |   |   | -      |   |   |   | 94,118 |   |
| Amortization      of deferred gain on sale and leaseback of vessels |   |              | (15,610 | )      |               |   | -      |                 |   |   | -      |   |   |   | (15,610 | ) |
| Other      vessel operating expenses                                |   |              | 67,225  |   |               |   | 689    |                 |   |   | -      |   |   |   | 67,914 |   |
| Dry-docking      costs                                              |   |              | 25,094  |   |               |   | -      |                 |   |   | -      |   |   |   | 25,094 |   |
| Depreciation                                                        |   |              | 26,560  |   |               |   | 848    |                 |   |   | -      |   |   |   | 27,408 |   |
| Sub-Manager      fees                                               |   |              | 1,821   |   |               |   | 7      |                 |   |   | -      |   |   |   | 1,828 |   |
| Other      general and administrative expenses                      |   |              | 22,729  |   |               |   | 267    |                 |   |   | -      |   |   |   | 22,996 |   |
| Foreign      currency (gains) / losses, net                         |   |              | -       |   |               |   | -      |                 |   |   | 176    |   |   |   | 176 |   |
| Gain      on sale of vessels                                        |   |              | (1,961  | )      |               |   | -      |                 |   |   | -      |   |   |   | (1,961 | ) |
|                                                                |   |              |    |   |               |   |   |                 |   |   |   |   |   |   |   |   |
| Operating      income (loss)                                        |   |              | (30,285 | )      |               |   | (70    | )                    |   |   | 1,237  |   |   |   | (29,118 | ) |
|                                                                |   |              |    |   |               |   |   |                 |   |   |   |   |   |   |   |   |

|   | (1)      Unallocated amounts relate to the drybulk vessels' amortization of the      fair value of below market time charter contracts acquired of $1,413 less      the foreign currency losses, net of $176. These amounts are unallocated as      they are not included in the financial information used by the chief      operating decision maker to allocate the Company’s    resources. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | During      2007, 33% of the Company’s revenues derived from time charter      agreements. During 2005, 2006 and 2007 two charterers, relating only      to the Tanker Fleet, individually accounted for more than 10% of the      Company’s revenues as follows: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Charterer |   | Year      Ended December 31, |
|--------|-----------|--------|------------------------------|
|   |      |   | 2005                         | 2006 | 2007 |
|   | A         | 20%    | 11%                          | - |
|   | B         | 32%    | 29%                          | 23% |
|   | C         | -      | -                            | 10% |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 4.     | Segment      Reporting – (continued):                                                                         |
|--------|---------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                |
|   | A      reconciliation of segment assets to amounts presented in the consolidated      balance sheets is as follows: |

|                                |   |              |    |   |               |   |    |                 |   |   |   |   |
|-------------------------------------|--------|-------------------|---------|--------|--------------------|--------|---------|----------------------|--------|--------|--------|--------|
| As      of December 31, 2007        |   | Tanker      Fleet |    |   | Drybulk      Fleet |   |    | Unallocated      (1) |   |   | Total  |   |
|                                |   |              |    |   |               |   |    |                 |   |   |   |   |
| Accounts      receivable trade, net |   |              | 14,867  |   |               |   | 317     |                 |   |   | -      |   |   |   | 15,184 |   |
| Vessel      held for sale           |   |              | 46,268  |   |               |   | -       |                 |   |   | -      |   |   |   | 46,268 |   |
| Vessels,      net                   |   |              | 355,228 |   |               |   | 198,663 |                 |   |   | -      |   |   |   | 553,891 |   |
| Total      assets                   |   |              | 504,147 |   |               |   | 223,186 |                 |   |   | 49,584 |   |   |   | 776,917 |   |
|                                |   |              |    |   |               |   |    |                 |   |   |   |   |   |   |   |   |
| Year      ended December 31, 2007   |   |              |    |   |               |   |    |                 |   |   |   |   |   |   |   |   |
|                                |   |              |    |   |               |   |    |                 |   |   |   |   |   |   |   |   |
| Expenditures      for vessels       |   |              | 187,360 |   |               |   | 167,685 |                 |   |   | -      |   |   |   | 355,045 |   |

| 5.     | Transactions      with Related Parties:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Pyramis      Technical Co. S.A.: On July 9, 2004, the Company entered into an      agreement to lease office space in Athens, Greece from Pyramis Technical      Co. SA, which is wholly owned by the father of the Company’s Chief      Executive Officer. The agreement was for duration of six years beginning      July 2004 with a lessee’s option for an extension of four years. The      monthly rental was Euro 39,000 and effective January 1, 2006 was adjusted      for inflation to Euro 40,365. Other general and administrative expenses      for the years ended December 31, 2005 and 2006 include $586 and $705,      respectively of rentals paid to Pyramis Technical Co. S.A. In January 2006      the Company entered into an agreement to lease office space in Athens,      Greece, with an unrelated party. The change in office location, due to      necessary refurbishments, took place in October 2006; therefore, the      Company paid to Pyramis Technical Co. S.A the October rent plus four-month      rentals as termination compensation. In April and August 2006, the Company      entered into an agreement with Pyramis Technical Co. S.A. for the      renovation of the new premises. The total contracted cost totaled Euro      2,499,360, of which Euro 2,855,436 (including the applicable VAT) or      $3,767 was paid up to December 31, 2007. The amount of $3,872 related to      renovation works, discussed above, is included in Other fixed assets, net,      in the accompanying 2007 consolidated balance sheet and is depreciated      over the lease period, which is 12 years. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 6.     | Inventories:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The      amounts shown in the accompanying consolidated balance sheets are analyzed      as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

|   |                   |   | December      31, |
|--------|------------------------|--------|-------------------|
|   |                   |   | 2006              |   | 2007 |
|   | Bunkers                |   | 4,624             |   | 5,723 |
|   | Lubricants             |   | 1,319             |   | 1,839 |
|   | Consumable      stores |   | 517               |   | 396 |
|   |                   |   | 6,460             |   | 7,958 |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 7.     | Prepayments      and Other:                                                                          |
|--------|------------------------------------------------------------------------------------------------------|
|   |                                                                                                 |
|   | The      amounts shown in the accompanying consolidated balance sheets are analyzed      as follows: |

|   |                   |   | December      31, |
|--------|------------------------|--------|-------------------|
|   |                   |   | 2006              |   | 2007 |
|   | Prepaid      expenses  |   | 3,874             |   | 3,013 |
|   | Other      receivables |   | 1,332             |   | 2,567 |
|   |                   |   | 5,206             |   | 5,580 |

| 8.     | Advances      for Vessels Acquisitions / under Construction:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | In      October 2006, the Company entered into an agreement for the construction      of six handymax Product / Chemical tankers. The total contract price is      $285,380 and is payable in five installments as follows: 15% is payable      upon arrangement of the Refund Guarantee, 15% is payable upon commencement      of steel cutting, 20% is payable upon keel laying, 20% is payable upon      launching and 30% upon delivery of the vessel. The vessels’ construction      is partially financed from long-term bank financing discussed in Note 11.      The first installment for four of the six vessels of $28,638 was paid in      December 2006. In January 2007, the first installment for the remaining      two vessels of $14,169 was paid and is also included in Advances for      vessels acquisitions / under construction, in the accompanying      consolidated balance sheets. The vessels are expected to be delivered      during the first six months of 2009. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | During      July 2007, the Company entered into an agreement to acquire one 2002 built      super handymax, or supramax, drybulk vessel of 51,200 dwt, built in China      from unrelated third party. The vessel will be chartered back to the      sellers for a period of 18 months at a daily net rate of $25,650 on a      bareboat basis. The purchase price of the vessel is $54,500, of which the      Company paid in July 2007 a deposit of $5,450 and the remaining $49,050      upon delivery of the vessel on February 1, 2008 (Note  23).                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | During      August 2007, the Company entered into agreements to acquire two drybulk      vessels from unrelated third parties as follows: i) one 2001 built panamax      vessel of 75,928 dwt, built in Japan, ii) one 2000 built panamax vessel of      75,933 dwt, built in Japan. The vessels are scheduled to be delivered to      the Company between February 2008 and March 2008 and to enter into time      charter contracts. The aggregate purchase price of the vessels is      $148,000, of which the Company paid in August 2007 a deposit totaling in      aggregate $14,800 and the remaining $133,200 will be paid upon delivery of      the vessels, which is expected in March 2008.                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The      Advances for vessels acquisitions / under construction as of December 31,      2006 and 2007 are analyzed asfollows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

|                            |   | Construction      installments |   |  Acquisitions |   | Capitalized      interest |   | Capitalized      costs |   | Total  |
|---------------------------------|--------|--------------------------------|--------|--------------------|--------|---------------------------|--------|------------------------|--------|--------|
| Balance,      December 31, 2006 |   | 28,638                         |   | -                  |   | 34                        |   | 11                     |   | 28,683 |
| -      Additions                |   | 14,169                         |   | 20,250             |   | 2,661                     |   | 263                    |   | 37,343 |
| Balance,      December 31, 2007 |   | 42,807                         |   | 20,250             |   | 2,695                     |   | 274                    |   | 66,026 |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 9.     | Vessels,      net:                                                                             |
|--------|------------------------------------------------------------------------------------------------|
|   |                                                                                           |
|   | The      amounts in the accompanying consolidated balance sheets are analyzed as      follows: |

|   |                             | VesselCost | AccumulatedDepreciation | Net      BookValue |
|--------|----------------------------------|------------|-------------------------|--------------------|
|   | Balance,      December 31, 2005  | 936,391    | (49,637)                | 886,754            |
|   | —Acquisitions              | 18         | —                 | 18                 |
|   | —Disposals                 | (605,085)  | 59,997                  | (545,088)          |
|   | —Depreciation              | —    | (35,266)                | (35,266)           |
|   | Balance,      December 31, 2006  | 331,324    | (24,906)                | 306,418            |
|   | —Vessel      held for sale | (48,582)   | 2,314                   | (46,268)           |
|   | —Acquisitions              | 371,162    | -                       | 371,162            |
|   | —Disposals                 | (55,638)   | 5,625                   | (50,013)           |
|   | —Depreciation              | -          | (27,408)                | (27,408)           |
|   | Balance,      December 31, 2007  | 598,266    | (44,375)                | 553,891            |

|   | In      July and September 2005, vessels Fearless and Yapi were sold for an      aggregate price of $38,348. These sales, after the related sale expenses      of $5,968 resulted in a gain of $10,831, which is separately reflected in      the accompanying 2005 consolidated statement of income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | In      August and September 2005, the Company sold the Restless, Sovereign,      Relentless, Invincible and Victorious for an aggregate price of $120,705,      net of related sales expenses of $5,545, and entered simultaneously into      bareboat charter agreements to leaseback the vessels for a period of seven      years (Note 14).                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | In      March and April 2006, the Company sold the Flawless, Timeless, Priceless,      Stopless, Doubtless, Vanguard, Faithful, Spotless, Limitless, Endless,      Faultless, Noiseless and Stainless for an aggregate price of $529,616, net      of related sales expenses of $20,384, and entered simultaneously into      bareboat charter agreements to leaseback the vessels for periods of five      to seven years (Note 14). According to the terms of the agreements, 10% of      the gross aggregate sales price, $55,000, has been withheld by the      purchaser and will be paid to the Company not later than three months      after the end of bareboat charter period or upon the resale of the vessels      by the purchaser, if earlier.                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | In      November and December 2006, vessels Taintless, Soundless and Topless were      sold for an aggregate price of $127,450. These sales, after the related      sale expenses of $2,890 resulted in a gain of $12,667, which is separately      reflected in the accompanying 2006 consolidated statement of      operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | On      March 30, 2007, the Company entered into an agreement to sell the vessel      Errorless to an unrelated party for consideration of $52,500. The gain      from the sale of $1,961 was recognized upon the delivery of the vessel to      the buyer, on April 30, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Based      on the Memoranda of Agreement dated May 23, 2007, on May 31, 2007, the      Company re-acquired four Suezmax tankers that it sold in 2006 in a sale      and leaseback transaction and terminated the respective bareboat charters.      The four Suezmax tankers are Limitless (DWT 136,055      built 1993), Endless      (DWT 135,915 built 1992), Noiseless (DWT 149,554      built 1992) and Stainless (DWT 149,599      built 1992). The re-acquisition price was $208,000 and was partially      financed by the early redemption of the seller’s credit of $20,640,      associated with the 2006 sales and leaseback transactions. The then      unamortized deferred gain of the four vessels of $36,350 was applied      against the vessels’ purchase price (Note14). |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 9.     | Vessels,      net – (continued):                                                                                                                                                                                                                                                                                                                                              |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                |
|   | Based      on the Memorandum of Agreement dated July 5, 2007, on November 12, 2007,      the Company acquired the drybulk vessel Bertram, one 1995 built panamax      vessel of 73,506 dwt, built in South Korea. The vessel will be      time-chartered for a period of 24-26 months at a daily net rate of      approximately $29,700. The total acquisition cost was    $46,146. |
|   |                                                                                                                                                                                                                                                                                                                                                                                |
|   | Based      on the Memorandum of Agreement dated July 9, 2007, on December 28, 2007,      the Company acquired the drybulk vessel Amalfi, one 2000 built handymax      vessel of 45,526 dwt, built in Philippines. The vessel will be      time-chartered for a period of 14-16 months at a daily net rate of      approximately $22,000. The total acquisition cost was    $47,976. |
|   |                                                                                                                                                                                                                                                                                                                                                                                |
|   | Based      on the Memorandum of Agreement dated August 7, 2007, on December 19, 2007,      the Company acquired the drybulk vessel Cyclades, one 2000 built panamax      vessel of 75,681 dwt, built in Japan. The total acquisition cost was      $74,776.                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                |
|   | On      December 6, 2007, the Company entered into an agreement to sell the vessel      Noiseless to an unrelated party for a consideration of $48,000. The gain      from the sale of approximately $580 was recognized upon the delivery of      the vessel to the buyer, on January 30, 2008 (Note 23).                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                |
|   | All      Company’s vessels, having a total carrying value of $552,993 at December      31, 2007, have been provided as collateral to secure the loans discussed      in Note 11.                                                                                                                                                                                              |

| 10.    | Fair      Value Of Below Market Time Charter:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | On      November 12, and December 28, 2007, the Company acquired the drybulk      vessels M/V Bertram and M/V Amalfi respectively with an attached time      charter contract. As a result, the purchase price of the vessels was      allocated between vessel cost and the fair value of the time charter      contracts, totaling in aggregate $30,612, which is reflected in Fair Value      of Below Market Time Charter on the accompanying 2007 consolidated balance      sheet. The liability is amortized to revenues over the remaining period of      the time charter contracts on a straight-line basis. For the year ended      December 31, 2007, the amortization of the fair value of the time charter      contracts totaled $1,413 and is included in Revenues in the accompanying      2007 consolidated statement ofoperations. |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 11.    | Long-term      Debt:                                                                           |
|--------|------------------------------------------------------------------------------------------------|
|   |                                                                                           |
|   | The      amounts in the accompanying consolidated balance sheets are analyzed as      follows: |
|   |                                                                                           |

|   |                       |   | December      31, |
|--------|----------------------------|--------|-------------------|
|   | Borrower(s)                |   | 2006              |   | 2007 |
| (a)    | The      Company           |   | 218,052           |   | 194,367 |
| (b)    | Mytikas                    |   | -                 |   | 27,863 |
| (c)    | Litochoro                  |   | -                 |   | 27,863 |
| (d)    | Imitos                     |   | -                 |   | 27,863 |
| (e)    | Parnis                     |   | -                 |   | 27,863 |
| (f)    | Noir                       |   | -                 |   | 27,826 |
| (g)    | Amalfi                     |   | -                 |   | 57,490 |
| (h)    | Japan      III             |   | -                 |   | 47,749 |
|   | Total                      |   | 218,052           |   | 438,884 |
|   | Less-      current portion |   | (16,588)          |   | (107,488) |
|   | Long-term      portion     |   | 201,464           |   | 331,396 |

|   | (a)      The Company:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | At      December 31, 2007 and 2006, the Company had a revolving credit facility      outstanding of $93,000 and $83,000, respectively, maturing in October 2015      and a loan outstanding of $102,920 and $137,000, respectively, maturing in      December 2013, excluding unamortized financing fees of $1,553 and $1,948,      respectively.                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Revolving      Credit Facility: In January 2007, $10,000 was drawn down from the      revolving credit facility to partially finance the construction of two      vessels (Note 8). As of December 31, 2007, the undrawn amount amounted to      $65,000. Commitment fees of $232, related to the undrawn amount are      included in Interest and Finance Costs in the 2007 accompanying      consolidated statement of operations. The revolving credit facility bears      interest at LIBOR plus a margin (as of December 31, 2007 the margin was      0.85%). The applicable interest rate as of December 31, 2007 is      5.94%.                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Loan:      The loan of $102,920 was drawn down in 2005 and originally amounted to      $154,000. It was obtained to partially finance the acquisitions of the      vessels Stormless, Ellen P., Errorless and Edgeless. The loan consisted of      2 tranches of $130,000 (Tranche A) and $24,000 (Tranche B). The Company      paid a 1% fee of $1,540 upon signing the agreement. In April 2007,      following the sale of Errorless (Note 9), $22,000 was prepaid ($5,500      against Tranche A and $16,500 as a full prepayment of Tranche B). The loan      bears interest at LIBOR plus a margin (as of December 31, 2007 the margin      was 0.8%). The applicable interest rate as of December 31, 2007 is      5.77%. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | In      October 2007, the Company, through its wholly owned subsidiary Japan      I, entered into a $50,000 bank loan agreement, which will bear      interest at LIBOR plus a margin, in order to partially finance the      acquisition cost of the drybulk vessel Pepito. The loan is subject to a      fee of $175 payable on draw down, which was made in March 2008 and      coincided with the delivery of thevessel.                                                                                                                                                                                                                                                                                 |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 11.    | Long-term      Debt – (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | (b), (c),      (d), (e) Mytikas – Litochoro – Imitos – Parnis: At December 31,      2007, Mytikas, Litochoro, Imitos and Parnis had in total a loan      outstanding of $112,625, maturing in May 2012, excluding unamortized      financing fees of $1,173.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Loan:      The loan of $112,625 was drawn down on May 30, 2007 (originally amounted      to $147,500), to partially finance the re-acquisition of vessels      Limitless, Endless, Noiseless and Stainless. The credit facility was      subject to a 1% arrangement fee paid on the initial drawdown date. In      December 2007, from the proceeds of the offering (Note 15), $20,000 was      prepaid. In January 2008, $28,156 was prepaid due to sale of Noiseless      (Note 23). The credit facility bears interest at LIBOR plus a margin (as      of December 31, 2007 the margin was 1.25%). The applicable interest rate      as of December 31, 2007 is 6.16%.                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | (f)      Noir: At December 31,      2007, Noir had a loan outstanding of $28,110, maturing in November 2014,      excluding unamortized financing fees of $284.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Loan:      The loan of $28,110, (which is part of the $95,000 loan that was concluded      to partially finance the acquisition cost of the drybulk vessels Bertram,      Amalfi and Voc Gallant) was drawn down on November 9, 2007 (originally      amounted to $29,671), to partially finance the acquisition cost of the      drybulk vessel Bertram. In December 2007, from the proceeds of the      offering (Note 15), $1,561 was prepaid. The credit facility was subject to      a 1% arrangement fee paid in 2007. The credit facility bears interest      at LIBOR plus a margin (as of December 31, 2007 the margin was 1.00%). The      applicable interest rate as of December 31, 2007 is  5.87%.                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Loan: In      November 2007, Noir, Jeke and Amalfi concluded a bank loan (originally      amounted to $35,000) to partially finance the acquisition cost of three      drybulk vessels, Bertram, Voc Gallant and Amalfi respectively, to cover      the arrangement fees and for general corporate purposes. The loan was      subject to a fee of $1,000 which was paid on the first drawdown. On      November 9, 2007, the amount of $12,929, which was part of the $35,000      bank loan discussed above, was drawn to partially finance the acquisition      of Bertram, delivered on November 12, 2007, and to cover the arrangement      fees. On November 30, 2007, the amount of $7,500, which was part of the      $35,000 bank loan discussed above, was drawn to partially finance the loan      installment of Mytikas, Litochoro, Imitos and Parnis, discussed above and      to cover the arrangement fees of $225. In December 2007, from the proceeds      of the offering (Note 15), the drawn amount of $20,429 was fully      prepaid. |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 11.    | Long-term      Debt – (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | (g)      Amalfi: At December 31,      2007, Amalfi had in total loans outstanding of $59,658, maturing in      December 2014, less unamortized financing fees of  $2,168.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Loan: A      loan of $28,658, (which is part of the $95,000 loan that was      concluded to partially finance the acquisition cost of the drybulk vessels      Bertram, Amalfi and Voc Gallant) was drawn down on December 27, 2007      (originally amounted to $30,250), to partially finance the acquisition      cost of the drybulk vessel Amalfi. From the proceeds of the offering (Note      15), $1,592 was prepaid and the actual amount drawn was $28,658. The      credit facility was subject to a 1% arrangement fee paid in 2007. The      credit facility bears interest at LIBOR plus a margin (as of December 31,      2007 the margin was 1.00%). The applicable interest rate as of December      31, 2007 is 5.86%.                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Loan: A      loan of $31,000, (which relates to the $35,000 loan, discussed under      Noir above, as amended) to partially finance the acquisition cost of the      drybulk vessels Cyclades and Amalfi. The loan was subject to a fee of      $1,500, paid on the first drawdown. On December 21, 2007, the amount of      $19,000 was drawn to refinance part of the acquisition cost of the drybulk      vessel Cyclades. On December 27, 2007, the amount of $12,000 was drawn to      partially finance the acquisition cost of the drybulk vessel Amalfi. The      loan is payable in one installment latest by June 30, 2008. The credit      facility bears interest at LIBOR plus a margin (as of December 31, 2007      the margin was 3.00%). The applicable interest rate as of December 31,      2007 is 7.88%. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | (h) Japan      III: At December 31,      2007, Japan III had a loan outstanding of $48,000, maturing in December      2015, excluding unamortized financing fees of $251.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Loan: The      loan of $48,000 was drawn down on December 17, 2007 to partially finance      the acquisition cost of the drybulk vessel Cyclades. The loan is      subject to a fee of 0.50% on the loan amount, half of the fee was paid in      November 2007 and the other half was paid in January 2008. The credit      facility bears interest at LIBOR plus a margin (as of December 31, 2007      the margin was 1.30%). The applicable interest rate as of December 31,      2007 is 6.46%.                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Loans      Securities: The loans are secured as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | · First      priority mortgages over the Company’s vessels;· Second      priority mortgages over the Bertram and Amalfi;· Assignments      of insurance and earnings of the mortgaged vessels;· Corporate      guarantee of the TOP Ships Inc;· Pledge      over the earnings accounts of the vessels.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 11.    | Long-term      Debt – (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Debt      Covenants: The loans contain financial covenants, calculated on a      consolidated basis, requiring the Company to ensure that the aggregate      market value of the mortgaged vessels at all times exceed 130% of the      aggregate outstanding principal amounts under the loans, to ensure that      total assets minus total debt will not at any time be less than $250,000.      The net assets value of the Company’s vessels (owned and those covered by      bareboat charter agreements) at all times should exceed $125,000 and book      equity at all times should exceed $100,000. Furthermore, the Company must      maintain liquid funds which at any time be not less than the higher of      $10,000 or $500 per vessel. As a result, the minimum liquid funds required      under the loan covenants of $12,000 and $10,000 on a consolidated basis,      as of December 31, 2006 and 2007, respectively, are included in restricted      cash in the accompanying consolidated balance sheets. The Company should      maintain consolidated cash balances of at least $ 25,000, as amended in      September 2007, including the minimum liquid funds discussed above. In      addition, the $95,000 loan discussed above requires $750 per vessel to be      maintained throughout the tenor of the credit facility. Consequently, as      of December 31, 2007 the amount of $1,500 for vessels Bertram and Amalfi      are also included in restricted cash. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Restricted      cash represents an investment; accordingly, a balance on deposit in a      restricted cash account should be deemed the equivalent of an investment      whose return of principal requires the satisfaction of conditions rather      than a mere withdrawal demand. Therefore, deposits and withdrawals of      principal balances in restricted cash accounts represent the creation or      return of investment, which generally should be presented as investing      activities in the statement of cash flows. However, if restricted cash is      maintained as a condition of debt financing, it is appropriate to present      changes in such restricted cash as a financing activity in the statement      of cash flows. In connection with its debt financings in 2004 and 2005,      the lending banks required the Company to maintain liquid funds in an      amount equal to the higher of $10,000 or $500 per vessel, as discussed      above. The Company presented the gross proceeds from its bank loans as      cash inflow from financing activities. Because the requirement to maintain      liquid funds was a covenant under the 2004 and 2005 debt financings, the      cash outflow associated with maintenance of such liquid funds is presented      as a financing activity.                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The      Company is permitted to pay dividends under the loans so long as it is not      in default of a loan covenant or if such dividend payment would not result      in a default of a loan covenant. In addition, the loan agreement discussed      above under (b), (c), (d) and (e) prohibit the payment of dividends from      the borrowing subsidiaries to their equity holders. Furthermore, the loan      agreement of $95,000 under (f) and (g), discussed above, prohibit the      payment of dividends from the borrowing subsidiaries to the Company in      excess of 70% of their net income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | As      of December 31, 2007, the Company was not in compliance with one of its      financial covenants, (the Adjusted EBITDA covenant, as defined by each      bank) under the loans of $93,000, $102,920, $28,110 and $28,658, discussed      above, but has obtained waivers up to and including December 31, 2008, at      which point the Company expects to be in compliance with this same      financial covenant. No assurance can be given with respect to future      compliance with covenants. If the Company is not in compliance with      certain covenants under its debt or derivative agreements and acceptable      waivers are not obtained, the Company would be in default and the banks      could exercise their remedy rights including, but not limited to,      accelerating the outstanding indebtedness and taking possession of the      underlying collateral securing the indebtedness. In the event this was to      occur, there can be no assurance that the Company will be able to continue      as a going concern.                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Interest      Expense: Interest expense for the years ended December 31, 2005,      2006 and 2007, amounted to $19,700, $20,750 and $15,362 respectively and      is included in interest and finance costs in the accompanying consolidated      statements of operations (Note 20).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 11.    | Long-term      Debt – (continued):                                                                                                                             |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                 |
|   | The      weighted average interest rates, excluding swaps (iii), (iv), (v) and (vi)      mentioned below, for 2006 and 2007 were 5.32% and 6.12%,      respectively. |
|   |                                                                                                                                                                 |
|   | Scheduled      Principal Repayments: The annual principal payments required to be      made after December 31, 2007, are asfollows:                                  |

|   | Year      ending December 31,             |   | Amount  |
|--------|-------------------------------------------|--------|---------|
|   | 2008                                      |   | 107,488 |
|   | 2009                                      |   | 41,888  |
|   | 2010                                      |   | 34,367  |
|   | 2011                                      |   | 43,768  |
|   | 2012                                      |   | 57,545  |
|   | 2013      and thereafter                  |   | 159,257 |
|   |                                      |   | 444,313 |
|   | Excluding      unamortized financing fees |   | (5,429) |
|   |                                      |   | 438,884 |

|   | Interest      Rate Swaps: The fair value of the interest rate swaps in the      accompanying consolidated balance sheets are analyzed as      follows: |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| SWAP   | Notional Amount | Period       | Effective Date          | Interest Rate Payable | Fair Value - Asset    (Liability) |
|--------|-----------------|--------------|-------------------------|-----------------------|-----------------------------------|
|   |            |         |                    |                  | December 31,                      |
|   |            |         |                    |                  | 2006                              | 2007 |
| (i)    | $28,555         | 4      years | June      30, 2005      | 4.66%                 | $283                              | ($240) |
| (ii)   | $37,385         | 5      years | January      30, 2006   | 4.80%                 | $273                              | ($779) |
| (iii)  | $10,000         | 7      years | September      30, 2006 | 4.23%                 | ($569)                            | ($514) |
| (iv)   | $10,000         | 7      years | September      30, 2006 | 4.11%                 | ($514)                            | ($461) |
| (v)    | $50,000         | 6      years | September      28, 2007 | 4.45%                 | ($2,383)                          | ($3,530) |
| (vi)   | $10,000         | 7      years | July      3, 2006       | 4.76%                 | ($474)                            | ($588) |
|   |            |         |                    |                  | ($3,384)                          | ($6,112) |

|   | In      October 2007, the Company entered into the following interest rate swap      restructuring. Under this agreement, the Company entered into an overlay      swap effectively reversing the existing swap and entered into a new swap      (swap (v)), in direct continuation. Under the terms of the new swap, the      Company paid on December 31, 2007 a fixed interest rate of 4.45% and      received a fixed interest rate of 5.25% for a notional amount of $50,000.      The interest rate that the Company will pay for the remaining six-years      period is subject to the difference between the 10-year swap rate and the      2-year swap rate, as well as the level of the six-months USD LIBOR. The      interest rate that the Company will pay is capped at  9.00%. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Interest      Rate Derivative Product: In November 2007, the Company entered into      an interest rate derivative product. Under this agreement, the Company      received an upfront payment of $8,500 and will pay five annual interest      payments on a notional amount of $85,000. Based on the cumulative      performance of a portfolio of systematic foreign exchange trading      strategies, the interest payments will have a minimum floor at 0.00% and a      cap at 7.50%. As of December 31, 2007, the fair value of this product was      a liability of $10,676.                                                                                                                                                                                                          |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 11.    | Long-term      Debt – (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | As      of December 31, 2006 and 2007, the financial instruments’ fair values are      liabilities of $3,384 and $16,788, respectively, of which $0 and      $6,105 and $3,384 and $10,683 represent their current and long-term      portion, respectively. As of December 31, 2007, the Company was not in      compliance with one of its financial covenants (the Adjusted EBITDA      covenant as defined by the bank), under one of its swap agreements (swap      (v)) but has obtained a waiver up to and including December 31, 2008.      In April 2008, the Company mutually agreed with the bank for the      termination of this swap. The Company is in the      process of restructuring all or part of the then outstanding liability of      approximately $7,500, which was initially scheduled to be repaid up      to September 30, 2008. Consequently its fair value is included in      current portion of financial instruments. The 2006 and 2007 fair value      change on these agreements was separately reflected in the accompanying      consolidated statements of operations. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 12.    | Accrued      Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | The      amounts in the accompanying consolidated balance sheets are analyzed as      follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

|   |                                              | December      31, |
|--------|---------------------------------------------------|-------------------|
|   |                                              | 2006              | 2007 |
|   | Interest      on long-term debt                   | 630               | 2,261 |
|   | Vessels’      operating and voyage expenses | 10,262            | 6,935 |
|   | General      and administrative expenses          | 1,269             | 2,710 |
|   | Total                                             | 12,161            | 11,906 |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 13.    | Commitments      and Contingencies:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | As      at December 31, 2007 the Company had under construction six handymax      Product / Chemical tankers scheduled for delivery between January and June      2009, at a total cost of $285,380. The remaining expected payments as of      December 31, 2007 are $128,421 in 2008 and $114,152 in    2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | In      March and April 2006, the Company entered into Sale and Leaseback      agreements for 13 vessels for a period of five to seven years. According      to the terms of the transactions, 10% of the gross aggregate sales price,      $55,000, has been withheld by the purchaser to serve as security for the      due and punctual performance and observance of all the terms and      conditions of the Company under the agreements. Following the      re-acquisition of the four vessels (Note 9), 10% of the unpaid sales price      of $20,640, was used to partially finance the re-acquisition. Consequently      the amount that is currently withheld by the purchaser is $34,360. Not      later than three months after the end of the bareboat charter period or      upon the resale of the vessels by the purchaser, if earlier, $26,360 out      of the $34,360 will become payable to the Company. According to the      agreement with one of the owners-lessors for four vessels, the      owner-lessor may forfeit a payment of up to $8,000, or may be required to      pay up to $16,000, based on the residual value of these four      vessels.                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | In      December 2006, the Company and certain of its executive officers and      directors were named as defendants in various class action securities      complaints brought in the United States District Court, Southern District      of New York ("the Court"), alleging violations of the Securities Exchange      Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder,      which have since been consolidated under the caption "In Re: Top Tankers,      Inc. Securities Litigation," case no. 06-cv-13761 ("Putative Class Action      Suits"). On or about January 11, 2007, the Company was also named as a      nominal defendant in a derivative suit (the "Derivative Suit") in an      action captioned Schwartz v. Jackson, et al., 07-cv-00246 (JSR). On or      about June 19, 2007, the plaintiff in the Derivative Suit submitted a      Notice of Voluntary Discontinuance Without Prejudice (the "Notice of      Discontinuance") in which the plaintiff voluntarily discontinued the      Derivative Suit against all defendants without prejudice. In that Notice      of Discontinuance, the plaintiff remarked that (1) no defendant has been      served in the action and (2) that neither plaintiff nor her counsel      received any consideration for the discontinuance.                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | On      December 18, 2007, the Court denied the motion to dismiss brought by the      Company in connection with the Putative Class Action. The Court's decision      also directed that the parties engage in limited discovery on certain      specific issues, which discovery was to be completed by January 31, 2008.      On January 3, 2008, the Company and the Individual Defendants filed their      Answer and Affirmative Defenses to Plaintiff's Corrected and Amended      Consolidated Class Action Complaint. On or about January 18, 2008, the      parties reached a settlement agreement in principle whereby the plaintiff,      on behalf of members of the Class who do not opt out, would dismiss all      claims against the Company with prejudice in exchange for a settlement      payment of $1,200. After being notified of the settlement agreement in      principle, the Court held a conference with the parties on February 14,      2008 during which the basic terms of the settlement were disclosed to the      Court. On April 25, 2008, plaintiff filed the motion for preliminary      approval of the proposed settlement with the Court. On April 28, 2008, the      Court entered an order preliminarily approving the proposed settlement and      directing that notice be given to all potential members of the Class of      the proposed settlement. The Court has ordered a hearing on July 31, 2008      to determine whether the settlement should be approved.  The      settlement will be funded by the Directors and Officers' insurance      carriers. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Various      claims, suits, and complaints, including those involving government      regulations and product liability, arise in the ordinary course of the      shipping business. In addition, losses may arise from disputes with      charterers, agents, insurance and other claims with suppliers relating to      the operations of the Company’s vessels. Currently, management is not      aware of any such claims or contingent liabilities, which should be      disclosed, or for which a provision should be established in the      accompanying consolidated financial statements.                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The      Company accrues for the cost of environmental liabilities when management      becomes aware that a liability is probable and is able to reasonably      estimate the probable exposure. Currently, management is not aware of any      such claims or contingent liabilities, which should be disclosed, or for      which a provision should be established in the accompanying consolidated      financial statements. A minimum of up to $1 billion of the      liabilities associated with the individual vessels actions, mainly for sea      pollution, are covered by the Protection and Indemnity (P&I) Club      insurance. |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 14.    | Sale      and Leaseback of Vessels:                                                              |
|--------|--------------------------------------------------------------------------------------------------|
|   |                                                                                             |   |
|   | The      Company entered into sales and leaseback transactions in 2005 and 2006 as      follows: |
|   |                                                                                             |   |
|   | (a)                                                                                              | In      2005, the Company sold the vessels Restless, Sovereign, Relentless,      Invincible and Victorious and realized a total gain of $17,159. The      Company entered into bareboat charter agreements to leaseback the same      five vessels for a period of seven years. The charter back agreements are      accounted for as operating leases and the gain on the sale was deferred      and is being amortized to income over the seven-year lease period. Based      on the Memoranda of Agreement dated April 24, 2007 and July 19, 2007, the      owner and lessor of the Invincible, Victorious and Restless agreed to sell      the vessels to a third party. The Company and the lessor mutually agreed      to terminate the bareboat charters. The termination of the bareboat      charters became effective upon the vessels’ delivery to their new owners,      on July 11, 2007, August 27, 2007 and September 17, 2007, respectively.      The unamortized deferred gain as of that date of $8,021 was recorded in      full and is included in the 2007 Amortization of deferred gain on sale and      leaseback of vessels; |
|   |                                                                                             |   |
|   | (b)                                                                                              | In      2006, the Company sold the vessels Flawless, Timeless, Priceless,      Stopless, Doubtless, Vanguard, Faithful, Spotless, Limitless, Endless,      Stainless, Faultless and Noiseless to three unrelated parties      (buyers/lessors) for $550,000; of which 90% or $495,000 was received upon      closing of the sale. Simultaneous with the sale of the vessels, the      Company entered into bareboat charter agreements to leaseback the same      vessels for a period of five to seven years with no lease renewal option.      Another unrelated party assumed in June 2006 the rights and obligations of      one of the buyers/lessors through a novation agreement with no other      changes to the terms and conditions of the agreements. |
|   |                                                                                             |   |
|   |                                                                                             | The      obligations of the Company under the respective bareboat charter      agreements were secured by the unpaid sales price representing 10% of the      total sales price or $55,000. The unpaid sales price is payable to the      Company within three months after the expiration of the individual      bareboat charter agreements or termination of the agreements, if earlier.      The collection of the unpaid sales price is secured by a second priority      mortgage on the corresponding vessels with the Company having no recourse      to the owners or investors of the buyers/lessors. |
|   |                                                                                             |   |
|   |                                                                                             | In      addition, the agreements allow the buyers/lessors to sell the vessels      covered by the bareboat charter agreements.  In respect of the      agreements with one of the buyers/lessors, in the event of the sale of the      vessels prior to the termination of the bareboat charter agreements      corresponding to four vessels, the corresponding unpaid sales price, up to      a maximum amount of $2,000 for each vessel, shall be used to cover any      shortfall between the net sales proceeds and the sum of the: (i)      outstanding amount under financing obtained by the buyer in connection      with the acquisition of the vessel, and (ii) the principal amount of the      investment made by the investors of the buyer/lessor. |
|   |                                                                                             |   |
|   |                                                                                             | The      bareboat charter agreements are accounted for as operating leases and the      gain on the sale of $41,420 was deferred and is being amortized to income      over the lease period. The deferred gain was calculated by deducting from      the sales price the carrying amount of the vessels, the expenses related      to the sale and the unpaid sales price (which is treated as a residual      value guarantee and will be recognized in income upon      collection). |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 14.    | Sale      and Leaseback of Vessels – (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Following      the re-acquisition of vessels Limitless, Endless, Noiseless and Stainless,      on May 31, 2007, as discussed in Note 9, the 10% unpaid sales price of      $20,640 was used to partially finance the re-acquisition. The related      bareboat charter agreements were terminated and the then unamortized      deferred gain of $36,350 was recorded contra to the purchase price of the      vessels. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|   | The      amortization of the deferred gain on sale and leaseback of vessels of      $837, $8,110 and $15,610 for the years ended December 31, 2005, 2006 and      2007, respectively, is separately reflected in the accompanying      consolidated statements of operations. During the years ended December 31,      2005, 2006 and 2007, lease payments relating to the bareboat charters of      the vessels were $7,206, $96,302 and $94,118, respectively and are      separately reflected as Charter hire expense in the accompanying      consolidated statements of operations. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|   | The      Company’s future minimum lease payments required to be made after December      31, 2007, related to the foregoing bareboat charter agreements, are as      follows:                                                                                                                                                                                                                                                                                                                                                                                                       |

|   | Year      ending December 31, |   | Amount  |
|--------|-------------------------------|--------|---------|
|   | 2008                          |   | 72,022  |
|   | 2009                          |   | 71,999  |
|   | 2010                          |   | 71,999  |
|   | 2011                          |   | 28,298  |
|   | 2012                          |   | 14,032  |
|   | 2013                          |   | 2,205   |
|   |                          |   | 260,555 |

|   | The      sale and leaseback transactions entered into in 2006 contain financial      covenants, calculated on a consolidated basis, requiring the Company to      ensure that the net assets value of the Company’s vessels (owned and those      covered by bareboat charter agreements) at all times exceed $125,000 and      book equity at all times exceed $75,000. Furthermore, a minimum amount of      $20,000 through December 15, 2006 and $25,000 thereafter and until the      final date of the bareboat charters, shall be maintained on deposit by the      Company. During the bareboat charter period, the Company will maintain      consolidated cash balances of at least $25,000, as amended in September      2007, including the $20,000 / $25,000, mentioned above. The $25,000      required to be maintained is included in restricted cash in the      consolidated balance sheet at December 31, 2007. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | As      disclosed above, a portion of the sales price (representing 10% of the      gross aggregate sales price) in the amount of $34,360, following the      re-acquisition of the four vessels discussed above and the related      settlement of the 10% unpaid sales price of $20,640, has been withheld by      the buyers/lessors and will be paid to the Company not later than three      months after the end of bareboat charter period or upon the resale of the      vessels, if earlier. Consequently, such unpaid sales price was recorded as      a receivable at its discounted value. The discount will be accreted      through deferred gain on sale and leaseback of vessels over the period of      the bareboat charter agreements or through the date of the resale of the      vessels, if earlier. As of December 31, 2007 the present value of the      unpaid sales price was $22,628.                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Furthermore,      the Company has agreed with the lessors through a separate performance      guarantee deeds that it irrevocably and unconditionally guarantees the      prompt and punctual payment of all sums payable by the Company to the      lessors under or pursuant to the agreements. The term of the performance      guarantees covers the period of theleases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 15.    | Common      Stock and Additional Paid-In Capital:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | On      May 10, May 27, 2004, July 22, 2005, December 17, 2007 and March 20, 2008,      the Company’s Articles of Incorporation were amended. Under the amended      articles of incorporation the Company was renamed to TOP Ships Inc. and      currently, its authorized capital stock consists of 100,000,000 shares of      common stock, par value $0.01 per share and 20,000,000 preferred shares      with par value of $0.01. The Board of Directors shall have the authority      to establish such series of preferred stock and with such designations,      preferences and relative, participating, optional or special rights and      qualifications, limitations or restrictions as shall be stated in the      resolutions providing for the issue of such preferred    stock. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | From      April until July 2006 and from June until July 2007, the Company conducted      at-the market sales of shares. A total of 1,302,454 and 1,435,874 shares      of common stock, respectively, at par value of $0.01 were issued and sold      at the market. The net proceeds to the Company totaled $26,916 and $29,370      in 2006 and 2007 respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | On      December 5, 2007, the Company completed a follow on public offering in the      United States under the United States Securities Act of 1933, as amended.      In this respect, 8,050,000 shares of common stock at par value of $0.01      were issued for $9.00 per share. The net proceeds to the Company totaled      $68,971.                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Reverse      Stock Split: On March 20, 2008, the Company effected a 1-for-3      reverse stock split of its common stock. There was no change in the number      of authorized common shares of the Company. All share and per share      amounts in these financial statements have been retroactively restated to      reflect this stock split. As a result of the reverse stock split, the      number of outstanding shares as of March 20, 2008 was decreased to      20,705,380, while the par value of the Company’s common shares remained      unchanged at $0.01 per share.                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | As      a result of the change in number of common shares assumed to be      outstanding through March 20, 2008 and the change in accounting principle      for dry-docking costs, earnings per common share for the years ended      December 31, 2005, 2006 are restated asfollows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

|                                                                                              |   | Year ended December      31, |   |
|---------------------------------------------------------------------------------------------------|--------|------------------------------|--------|
| Earnings      (loss) per share, basic and diluted                                                 |   | 2005                         |   |   | 2006 |   |   | 2007 |   |
|                                                                                              |   |                         |   |   |   |   |   |   |   |
| Earnings      (loss) per share before reverse stock split and change in accounting      principle |   | $                            | 2.46   |   |   | $ | 0.47 |   |   | $ | (1.36 | ) |
| Change      in accounting principle impact                                                        |   | $                            | (0.41  | ) |   | $ | (2.57 | ) |   |   | - |   |
| Earnings      (loss) per share, as adjusted for 2005 and 2006                                     |   | $                            | 2.05   |   |   | $ | (2.10 | ) |   | $ | (1.36 | ) |
| Reverse      stock split impact                                                                   |   | $                            | 4.92   |   |   | $ | 0.94 |   |   | $ | (2.73 | ) |
| Earnings      (loss) per share, as restated for 2005 and 2006                                     |   | $                            | 6.97   |   |   | $ | (1.16 | ) |   | $ | (4.09 | ) |
|                                                                                              |   |                         |   |   |   |   |   |   |   |   |   |   |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 16.    | Stock      Incentive Plan:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | On      July 1, 2005, January 3, 2006 and July 6, 2006 (the “grant dates”) the      Company granted restricted shares pursuant to the Company’s 2005 Stock      Incentive Plan (“the Plan”), which was adopted in April 2005 to provide      certain key persons (the “Participants”), on whose initiatives and efforts      the successful conduct of the Company’s business depends, and who are      responsible for the management, growth and protection of the Company’s      business, with incentives to: (a) enter into and remain in the service of      the Company, a Company’s subsidiary, or Company’s joint venture, (b)      acquire a proprietary interest in the success of the Company, (c) maximize      their performance, and (d) enhance the long-term performance of the      Company (whether directly or indirectly) through enhancing the long-term      performance of a Company subsidiary or Company joint venture. A total of      2,000,000 shares of common stock were reserved for issuance under the      Plan, which is administered by the Company’s Board of Directors. The      granted shares have no exercise price and constitute a bonus in      nature. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The      Company’s Board of Directors administers the Plan and, on July 1, 2005,      identified 45 key persons (including the Company’s CEO and other 8      officers and independent members of the Board) to whom shares of      restricted common stock of the Company (the “Shares”) were granted. For      this purpose 83,283 new shares were granted, out of which 63,333 shares      were granted to the Company’s CEO, 16,100 shares to 8 officers and      independent members of the Board and the remaining 3,850 shares were      granted to 36 employees. From the total of 19,950 shares granted to      officers, independent members of the Board and employees, 416 shares were      forfeited prior to the vesting date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | On      January 3, 2006, the Company’s Board of Directors identified 29 key      persons (including the Company’s CEO and other 8 officers and independent      members of the Board) to whom shares of restricted common stock of the      Company (the “Shares”) were granted. For this purpose 41,666 new shares      were granted, out of which 26,666 shares were granted to the Company’s      CEO, 12,666 shares to 8 officers and independent members of the      Board and the remaining 2,334 shares were granted to 20 employees.      From the total of 15,000 shares granted to officers, independent members      of the Board and employees, 366 shares were forfeited prior to the vesting      date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | On      July 6, 2006, the Company’s Board of Directors identified 60 key persons      (including the Company’s CEO and other 8 officers and independent members      of the Board) to whom shares of restricted common stock of the Company      (the “Shares”) were granted. For this purpose 106,666 new shares were      granted, out of which 73,750 shares were granted to the Company’s CEO,      22,666 shares to 8 officers and independent members of the Board and      the remaining 10,250 shares were granted to 51 employees. From the total      of 32,916 shares granted to officers, independent members of the Board and      employees, 916 shares were forfeited prior to the vesting      date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The      “Restricted Stock Agreements” were signed between the Company and the      Participants on the respective grant dates. Under these agreements, the      Participants have the right to receive dividends and the right to vote the      Shares, subject to the followingrestrictions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

|   | i. | Grants      to Company’s CEO. The Company’s CEO shall not sell, assign, exchange,      transfer, pledge, hypothecate or otherwise dispose of or encumber any of      the Shares other than to a company, which is wholly owned by the Company’s      CEO. The restrictions lapse on the earlier of (i) one year from the grant      date or (ii) termination of the Company’s CEO employment with the Company      for any reason. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 16. | Stock      Incentive Plan – (continued): |
|-----|------------------------------------------------|

|   | ii. | Grants      to Other Participants. The Participants (officers, independent members of      the Board and Company’s employees) shall not sell, assign, exchange,      transfer, pledge, hypothecate or otherwise dispose of or encumber any of      the Shares. The restrictions lapse on one year from the grant date      conditioned upon the Participant’s continued employment with the Company      from the date of the agreement (i.e. July 1, 2005, January 3, 2006, or      July 6, 2006) until the date the restrictions lapse (the “restricted      period”). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | As      the shares granted to the Company’s CEO do not contain any future service      vesting conditions, all such shares are considered vested shares on the      grant date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | On      the other hand, in the event another Participant’s employment with the      Company terminates for any reason before the end of the restricted period,      that Participant shall forfeit all rights to all Shares that have not yet      vested as of such date of termination. Dividends earned during the      restricted period will not be returned to the Company, even if the      unvested shares are ultimately forfeited. As these Shares granted to other      Participants contain a time-based service vesting condition, such shares      are considered non-vested shares on the grant date.                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | On      July 11, 2007, the Company granted 213,333 restricted shares pursuant to      the Plan. Of the 213,333 new shares granted, 113,333 shares were granted      to 6 Directors and the remaining 100,000 shares were granted to 2 officers      and employees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The      shares will vest proportionally over a period of 4 years in equal      installments. The following provisions apply for the following categories:      i) Executive Directors: In case of      change of control or termination of employment contract shares will      immediately vest, with the exception of voluntary resignation or      termination of employment for cause, where the shares will be forfeited;      ii) Non-executive Directors: In case      of change of control or cease to be a director shares will immediately      vest, with the exception of voluntary resignation or cease to be a      director for cause, where the shares will be forfeited; iii) Officers and employees: In case of change      of control or termination of employment shares will immediately vest, with      the exception of voluntary resignation or termination of employment for      cause, where the shares will be forfeited. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The      fair value of each share on the grant date was $23.97. The fair value of      the non-vested shares granted amounted to $5,114 and will be recognized as      compensation in the consolidated income statements over the four-year      vesting period quarterly in sixteen equal  installments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 16.    | Stock      Incentive Plan – (continued):                                                                                                                                                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                         |
|   | A      summary of the status of the Company’s vested and non-vested shares as of      December 31, 2007 and movement during the years ended December 31, 2005,      2006 and 2007, is presented below: |

|                         |   | Number      of non-vested shares |    |   | Weighted      average grant date fair value per non-vested share |   |
|------------------------------|--------|----------------------------------|---------|--------|------------------------------------------------------------------|--------|
| As      at January 1, 2005   |   |                             | --      |   |                                                             |   | -- |   |
| Granted                      |   |                             | 19,950  |   |                                                             | $      | 47.46 |   |
| Forfeited                    |   |                             | (66     | )      |                                                             | $      | 47.46 |   |
| As      at December 31, 2005 |   |                             | 19,884  |   |                                                             | $      | 47.46 |   |
| Granted                      |   |                             | 47,916  |   |                                                             | $      | 24.78 |   |
| Vested                       |   |                             | (19,534 | )      |                                                             | $      | 38.13 |   |
| Forfeited                    |   |                             | (1,300  | )      |                                                             | $      | 31.92 |   |
| As      at December 31, 2006 |   |                             | 46,966  |   |                                                             | $      | 28.62 |   |
| Granted                      |   |                             | 213,333 |   |                                                             | $      | 23.97 |   |
| Vested                       |   |                             | (46,634 | )      |                                                             | $      | 24.78 |   |
| Forfeited                    |   |                             | (332    | )      |                                                             | $      | 18.69 |   |
| As      at December 31, 2007 |   |                             | 213,333 |   |                                                             | $      | 23.97 |   |

|                                                       |   | Number      of vested shares |    |
|------------------------------------------------------------|--------|------------------------------|---------|
| As      at January 1, 2005                                 |   |                         | --      |   |
| Granted                                                    |   |                         | 63,333  |   |
| As      at December 31, 2005                               |   |                         | 63,333  |   |
| Granted                                                    |   |                         | 100,416 |   |
| Non-vested      shares granted in 2005, vested during 2006 |   |                         | 19,534  |   |
| As      at December 31, 2006                               |   |                         | 183,283 |   |
| Non-vested      shares granted in 2006, vested during 2007 |   |                         | 46,634  |   |
| As      at December 31, 2007                               |   |                         | 229,917 |   |

|   | Effective      January 1, 2005, the Company adopted FASB Statement 123(R), Accounting for Stock Based      Compensation (“Statement 123(R)”) to account for share-based      payments. As the Company did not have share-based compensation      arrangements prior to the date of adoption, all share-based compensation      provided to employees (and those provided to non-employee directors for      their services as directors) is recognized in accordance with the      provisions of Statement 123(R) and classified as Other general and      administrative expenses in the consolidated income    statement. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 16.    | Stock      Incentive Plan – (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      fair value of each share granted on July 1, 2005, January 3, 2006, July 6,      2006 and July 11, 2007 were $47.46, $38.13, $18.69 and $23.97,      respectively, which are equal to the market value of the Company’s common      stock on those dates. The grant date fair values of the vested shares      granted to the CEO amounted to $3,006, $1,017, $1,378 and $0, respectively      and were recognized in full as compensation in the third quarter of 2005,      in the first quarter of 2006 and in the third quarter of 2006,      respectively, on the grant dates. The grant date fair values of the      non-vested shares granted to the remaining Participants, net of      forfeitures, amounted to $927, $558, $598 and $5,114, respectively and      were recognized ratably as compensation in the consolidated income      statements over the vesting period, of which $472, $1,315 and $935 was      recognized in the years ended December 31, 2005, 2006 and 2007,      respectively. As of December 31, 2007, the total unrecognized compensation      cost related to non-vested share awards is $4,475, which is expected to be      recognized by June 30, 2011. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      dividends declared on shares granted under the Plan are recognized in the      consolidated financial statements as a charge to retained earnings, except      for the dividends declared on non-vested shares that are forfeited or      expected to be forfeited before the end of the vesting period. In that      case, dividends declared on such shares are recognized as additional      compensation in the consolidated income statement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Due      to the low historical employee turnover, the Company’s management assumes      that none of the non-vested shares will be forfeited before the end of the      vesting period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      amount of dividends on the granted shares, recognized as a charge to      retained earnings, is presented in the following  table:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

|  Type      of Shares granted         |  Quarterly      Dividend per share |  Special       Dividend per share | Total      Dividends |
|-------------------------------------------|-----------------------------------------|---------------------------------------------|----------------------|
| Paid      in year ended December 31, 2005 |
| Vested                                    | 0.63                                    | 0.75                                        | 127                  |
| Non-vested                                | 0.63                                    | 0.75                                        | 40                   |

|  Type      of Shares granted         |  Quarterly      Dividend per share |  Special       Dividend per share | Total      Dividends |
|-------------------------------------------|-----------------------------------------|---------------------------------------------|----------------------|
| Paid      in year ended December 31, 2006 |
| Vested                                    | 0.63                                    | 22.50                                       | 2,082                |
| Non-vested                                | 0.63                                    | 22.50                                       | 807                  |

|   | No      dividends were paid in the year ended December 31,  2007. |
|--------|-------------------------------------------------------------------|

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 17.    | Earnings      Per Common Share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | All      shares issued (including non-vested shares issued under the Company's      Incentive Plan) are the Company's common stock and have equal rights to      vote and participate in dividends. However, for the purposes of      calculating basic earnings per share, such non-vested shares are not      considered outstanding until the time-based vesting restriction has      lapsed. Furthermore, dividends declared during the year for non-vested      shares are deducted from net income as reported for purposes of      calculating net income available to common shareholders for the      computation of basic earnings per share. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | For      purposes of calculating diluted earnings per share, dividends declared      during the year for non-vested shares are not deducted from net income as      reported since such calculation assumes non-vested shares were fully      vested from the grant date. However, the denominator of the diluted      earnings per share calculation includes the incremental shares assumed      issued under the treasury stock method weighted for the period the      non-vested shares were outstanding.                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The      components of the calculation of basic and diluted earnings per share for      the years ended December 31, 2005, 2006 and 2007 are as      follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

|                                                                |   | Year Ended December      31, |      |
|---------------------------------------------------------------------|--------|------------------------------|-----------|
|                                                                |   | 2005                         |      |   | 2006 |   |   | 2007 |   |
|                                                                |   |                         |      |   |   |   |   |   |   |
| Net      Income (loss) as reported:                                 |   | $                            | 64,921    |   |   | $ | (11,005 | ) |   | $ | (49,076 | ) |
|                                                                |   |                         |      |   |   |   |   |   |   |   |   |   |
| Less:      Dividends declared during the year for non-vested shares |   |                         | (40       | ) |   |   | (807 | ) |   |   | - |   |
|                                                                |   |                         |      |   |   |   |   |   |   |   |   |   |
| Net      income (loss) available to common shareholders             |   | $                            | 64,881    |   |   | $ | (11,812 | ) |   | $ | (49,076 | ) |
|                                                                |   |                         |      |   |   |   |   |   |   |   |   |   |
|                                                                |   |                         |      |   |   |   |   |   |   |   |   |   |
| Weighted      average common shares outstanding, basic              |   |                         | 9,308,923 |   |   |   | 10,183,424 |   |   |   | 11,986,857 |   |
|                                                                |   |                         |      |   |   |   |   |   |   |   |   |   |
| Add:      Dilutive effect of non-vested shares                      |   |                         | 1,747     |   |   |   | - |   |   |   | - |   |
|                                                                |   |                         |      |   |   |   |   |   |   |   |   |   |
| Weighted      average common shares outstanding, diluted            |   |                         | 9,310,670 |   |   |   | 10,183,424 |   |   |   | 11,986,857 |   |
|                                                                |   |                         |      |   |   |   |   |   |   |   |   |   |
| Earnings      (loss) per share, basic and diluted                   |   | $                            | 6.97      |   |   | $ | (1.16 | ) |   | $ | (4.09 | ) |
|                                                                |   |                         |      |   |   |   |   |   |   |   |   |   |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 18.    | Voyage      and Other Vessel Operating Expenses:                                                         |
|--------|----------------------------------------------------------------------------------------------------------|
|   |                                                                                                     |
|   | The      amounts in the accompanying consolidated statements of operations are      analyzed as follows: |

|   | Voyage      Expenses |   | Year      Ended December 31, |
|--------|----------------------|--------|------------------------------|
|   |                 |   | 2005                         | 2006 | 2007 |
|   | Port      charges    | 9,271  | 11,265                       | 15,473 |
|   | Bunkers              | 19,893 | 33,937                       | 36,867 |
|   | Commissions          | 7,725  | 10,149                       | 7,074 |
|   | Total                | 36,889 | 55,351                       | 59,414 |

|   | Other      Vessel Operating Expenses |   | Year      Ended December 31, |
|--------|--------------------------------------|--------|------------------------------|
|   |                                 |   | 2005                         | 2006 | 2007 |
|   | Crew      wages and related costs    | 18,119 | 26,919                       | 27,721 |
|   | Insurance                            | 6,561  | 7,000                        | 6,191 |
|   | Repairs      and maintenance         | 11,449 | 16,330                       | 18,758 |
|   | Spares      and consumable stores    | 10,992 | 15,668                       | 15,177 |
|   | Taxes      (Note 21)                 | 194    | 165                          | 67 |
|   | Total                                | 47,315 | 66,082                       | 67,914 |

|   | In      February 2007, a ballast tanks cleaning process was performed on the      Faultless. The vessel resumed operations in March 2007. The Company      incurred $2,505 in expenses associated with the cleaning process, which      are included in Other vessel operating and voyage expenses for the year      ended December 31, 2007. These expenses have been partially offset by      $1,852 of insurance recoveries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | In      December 2007, the main engine of M/T Faultless was reported to have      broken down and the vessel was blacked out. Consequently, salvage      operations have been performed to the vessel, cost of which approximates      $3,000. As of December 31, 2007, $1,288 relating to the salvage services      is included in Other vessel operating expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 19.    | Leases:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | In      January 2006, the Manager entered into an agreement to lease office space      in Athens, Greece, with an unrelated party. The office is located at 1,      Vasilisis Sofias & Megalou Alexandrou Street, 151 24 Maroussi, Athens,      Greece. The agreement is for duration of twelve years beginning May 2006      with a lessee’s option for an extension of ten years. The monthly rent is      Euro 120,000 adjusted annually for inflation increase plus 1%. Other      general and administrative expenses for the years ended December 31, 2006      and 2007 include $1,272 and $2,097, respectively, of office rentals. In      November 2007, the agreement was amended and the new monthly rent starting      February 2008 will be Euro 116,010, with all other terms remaining      unchanged. The minimum rentals payable under non-cancelable operating      leases for each of the years ending December 31, 2008 through May 1, 2018      before any adjustment for inflation (approximately 3% annually) and annual      increase (1%), translated using the exchange rate of $/Euro at December      31, 2007 are: |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 19. | Leases      – (continued): |
|-----|----------------------------------|

| Year                     |   | Amount |
|--------------------------|--------|--------|
| 2008                     |   | 2,140  |
| 2009                     |   | 2,127  |
| 2010                     |   | 2,127  |
| 2011                     |   | 2,127  |
| 2012                     |   | 2,127  |
| 2013      and thereafter |   | 11,344 |
|                     |   | 21,992 |

|   | In      February 2007, Top Tankers (U.K) Limited entered into a lease agreement      for office space in London. The agreement was for duration of 9 months      ending November 2007. The monthly lease was Great Britain Pounds (“GBP”)      5,300, payable monthly in advance. In May 2007, Top Tankers (U.K) Limited      entered into a new lease agreement for office space in London. The      previous lease agreement was early terminated and therefore the lease was      payable up to August 2007. The new lease agreement is valid from June 2007      and shall continue until either party shall give to the other one calendar      month written notice. The new annual lease is Great Britain Pounds (“GBP”)      20,000, payable quarterly in advance. Other general and      administrative expenses for the years ended December 31, 2005, 2006 and      2007 include $173, $175 and $129, respectively, of office      rentals. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 20.    | Interest      and Finance Costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | The      amounts in the accompanying consolidated statements of operations are      analyzed as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

|                                              |   | Year      Ended December 31, |   |
|---------------------------------------------------|--------|------------------------------|--------|
|                                              |   | 2005                         |   |   | 2006 |   |   | 2007 |   |
| Interest      on long-term debt (Note 11)         |   |                         | 19,700 |   |   |   | 20,784 |   |   |   | 18,023 |   |
| Less:      Capitalized interest (Note 8)          |   |                         | -      |   |   |   | (34 | ) |   |   | (2,661 | ) |
| Bank      charges                                 |   |                         | 568    |   |   |   | 1,158 |   |   |   | 875 |   |
| Amortization      and write-off of financing fees |   |                         | 1,407  |   |   |   | 4,534 |   |   |   | 2,081 |   |
| Total                                             |   |                         | 21,675 |   |   |   | 26,442 |   |   |   | 18,318 |   |

| 21.    | Income      Taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | Marshall      Islands, Cyprus and Liberia do not impose a tax on international shipping      income. Under the laws of Marshall Islands, Cyprus and Liberia, the      countries of the companies’ incorporation and vessels’ registration, the      companies are subject to registration and tonnage taxes, which have been      included in vessels’ operating expenses in the accompanying consolidated      statements of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | Pursuant      to the United States Internal Revenue Code of 1986, as amended (the      “Code”), U.S. source income from the international operations of ships is      generally exempt from U.S. tax if the company operating the ships meets      both of the following requirements, (a) the Company is organized in a      foreign country that grants an equivalent exception to corporations      organized in the United States and (b) either (i) more than 50% of the      value of the Company’s stock is owned, directly or indirectly, by      individuals who are “residents” of the Company’s country of organization      or of another foreign country that grants an “equivalent exemption” to      corporations organized in the United States (50% Ownership Test) or (ii)      the Company’s stock is “primarily and regularly traded on an established      securities market” in its country of organization, in another country that      grants an “equivalent exemption” to United States corporations, or in the      United States (Publicly-TradedTest). |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 21.    | Income      Taxes – (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | Under      the regulations, a Company’s stock will be considered to be “regularly      traded” on an established securities market if (i) one or more classes of      its stock representing more than 50 percent of its outstanding shares, by      voting power and value, is listed on the market and is traded on the      market, other than in minimal quantities, on at least 60 days during the      taxable year; and (ii) the aggregate number of shares of stock traded      during the taxable year is at least 10% of the average number of shares of      the stock outstanding during the taxable year.                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The      Marshall Islands, Cyprus and Liberia, the jurisdictions where the Company      and its ship-owning subsidiaries are incorporated, grant an "equivalent      exemption" to United States corporations. Therefore, the Company is exempt      from United States federal income taxation with respect to U.S.-source      shipping income if either the 50% Ownership Test or the Publicly-Traded      Test is met. The Company believes that for periods prior to its initial      public offering in July 2004, it satisfied the 50% Ownership Test. The      Company also believes that for periods subsequent to its initial public      offering, it satisfies the Publicly-Traded Test on the basis that more      than 50% of the value of its stock is primarily and regularly traded on      the Nasdaq National Market and, therefore, the Company and its      subsidiaries are entitled to exemption from U.S. federal income tax, in      respect of their U.S. source shipping income. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 22.    | Financial      Instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The      principal financial assets of the Company consist of cash on hand and at      banks and accounts receivable due from charterers. The principal financial      liabilities of the Company consist of long-term bank loans, accounts      payable due to suppliers, interest rate swap agreements and an interest      rate derivative product.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

|   | (a)    | Interest      rate risk: The Company’s interest rates and long-term loan      repayment terms are described in Note 11.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (b)    | Concentration      of Credit risk: Financial instruments, which potentially subject      the Company to significant concentrations of credit risk, consist      principally of cash and trade accounts receivable. The Company places its      temporary cash investments, consisting mostly of deposits, with high      credit qualified financial institutions. The Company performs periodic      evaluations of the relative credit standing of those financial      institutions with which it places its temporary cash investments. The      Company limits its credit risk with accounts receivable by performing      ongoing credit evaluations of its customers’ financial condition and      generally does not require collateral for its accounts      receivable. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (c)    | Fair      value: The      carrying values of cash and cash equivalents, accounts receivable and      accounts payable are reasonable estimates of their fair value due to the      short-term nature of these financial instruments. The fair value of      long-term bank loans discussed in Note 11 bearing interest at variable      interest rates approximates the recorded value. The carrying value of the      interest rate swap agreements and the interest rate derivative product      represents their fair value as the fair value estimates the amount the      Company would have paid, had the interest rate swap agreements and the      interest rate derivative product been terminated on the balance sheet      date.                                            |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 23.    | Subsequent      Events: |
|--------|-------------------------|
|   |                    |   |
|   | (a)                     | Sale of      Vessels: i) on December 6, 2007,      the Company entered into an agreement to sell the vessel M/T Noiseless to      an unrelated party for a consideration of $48,000, resulting in a gain of      approximately $580, which was recognized upon the delivery of the vessel      to the buyer, on January 30, 2008. Following the sale of the vessel the      then outstanding loan amount of $28,156 was fully repaid, ii) based on the      Memorandum of Agreement dated January 31, 2008, the Company agreed to sell      the vessel M/T Stainless to an unrelated party for a consideration of      $46,000. On January 31, 2008 the vessel entered into a bareboat      charter with the buyer until July 31, 2008 (the vessel’s delivery date),      at a daily bareboat hire of $20. All bareboat hire payments made up to the      vessel’s delivery date will be deducted from the purchase price. According      to the terms of the bareboat charter the Company collected in advance an      amount of $2,500 from the buyers as a security of their obligation to      purchase the vessel, ii) on April 1,      2008, the Company entered into an agreement to sell the vessel M/V Bertram      to an unrelated party for a consideration of $46,500. The vessel was      delivered to its new onwers, on April 16, 2008. Following the sale of the      vessel the then outstanding loan amount of $26,535 was fully      repaid. |
|   |                    |   |
|   | (b)                     | Vessels      acquisitions: i)      on February 1, 2008, the Company took delivery of the drybulk      vessel Voc Gallant. The acquisition cost of $54,500 was partially financed      through long-term bank loan of $33,232, maturing in February 2015. The      loan which was originally amounted $35,078 and was part of the $95,000      loan discussed in Note 11(f) and (g), was partially prepaid by $1,846. The      credit facility was subject to a 1% arrangement fee paid in 2007. The      credit facility bears interest at LIBOR plus a margin. The vessel will be      chartered back to sellers for a period of eighteen months at a daily net      rate of $25,650 on bareboat basis, ii) on March 7, 2008,      the Company took delivery of the drybulk vessel Pepito. The acquisition      cost of $74,000 was partially financed through long-term bank loan of      $50,000, maturing in March 2015 (Note 11 (a)), iii) on May 1, 2008, the      Company took delivery of the drybulk vessel Astrale. The acquisition cost      of $74,000 was partially financed through long-term bank loan of $48,000,      maturing in April 2013, for which the Company paid an arrangement fee of      $600. |
|   |                    |   |
|   | (c)                     | Restricted      shares: On January 22, 2008, the Company granted 197,560 restricted      shares pursuant to the Company’s Incentive Plan (“the Plan”), discussed in      Note 16. All the 197,560 new shares were granted to 2 officers and      employees. The shares will vest proportionally over a period of 4 years in      equal installments with the following provisions: In case of change of      control or termination of employment shares will immediately vest, with      the exception of voluntary resignation or termination of employment for      cause, where the shares will be forfeited. The fair value of each share on      the grant date was $6.69. The fair value of the non-vested shares granted      amounted to $1,322 and will be recognized as compensation in the      consolidated income statements over the four-year vesting      period. |
|   |                    |   |
|   | (d)                     | Advances      for vessels under construction: In March and May 2008, the Company      paid the second installment of $28,488, for the construction of four      vessels, of which $20,000 was drawn down from the revolving credit      facility discussed in Note 11(a). Following the first drawdown in March      2008, the Company restructured the revolving credit facility by amending      the revolver limit from $65,000 to $30,000. The amended revolving credit      facility is currently payable in twenty equal quarterly installments,      starting on November 30, 2008, plus a balloon installment payable together      with the last installment. |
|   |                    |   |
|   | (e)                     | Bareboat      charter termination: Based on the Memorandum of Agreement      dated March 6, 2008, the owner and lessor of M/T Faultless agreed to sell      the vessel to a third party. The Company and the lessor mutually agreed to      terminate the bareboat charter. The Company had sold the vessel in 2006 in      a sale and lease-back transaction. The termination of the bareboat charter      became effective upon the vessel’s delivery to its new owners, on March      31, 2008. |

----

|   | TOP      SHIPS INC. |
|--------|---------------------|

|   | NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-------------------------------------------------|

|   | DECEMBER      31, 2006 AND 2007 |
|--------|---------------------------------|

|   | (Expressed      in thousands of United States Dollars – except share and per share data,      unless otherwise stated) |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| 23.    | Subsequent      Events – (continued): |
|--------|---------------------------------------------|
|   |                                        |   |
|   | (f)                                         | Short-term      loan: In March 2008, the Company entered into an agreement with a      finance firm to borrow the amount of Euros 3,280,000 for a period      of three months for working capital purposes. The loan bears interest      at Euribor plus 700 basis points and was repayable in either cash or stock      of the Company.  In April 2008, this loan was repaid by the issuance      of unregistered common shares, as part of the private placement discussed      in Note 23(g). |
|   |                                        |   |
|   | (g)                                         | Private      placement: In April 2008, the Company privately placed 7.3 million      common unregistered shares for aggregate proceeds of approximately $51,000      with various investors. The 7.3 million shares were sold for $7.00 per      share, which represents a discount of 15.5 percent based on the closing      share price of $8.28 on April 23, 2008. The facility under (f) above was      repaid with unregistered shares of the Company, and is included in this      private placement. Following the private placement, the Company prepaid in      May 2008, $15,500 from the bridge loan discussed below. |
|   |                                        |   |
|   | (h)                                         | Bridge loan      maturity extension: In April 2008, the Company agreed to extend the      maturity of its $31,000 bridge loan until September 30, 2008, for which      the Company paid a fee of $450. |
|   |                                        |   |
|   | (i)                                         | Interest      rate swap: In March 2008, the Company entered into an interest rate      swap agreement for a notional amortizing amount of $26,239 for a five year      period. Based on this agreement, the Company will pay a fixed rate of the      three-month U.S. Dollar Libor multiplied with the factor 0.95 per annum if      the three month U.S. Dollar Libor is between 1.50% and 4.84%. In case the      U.S. Dollar Libor is lower than 1.50% or higher 4.84%, the Company will      pay a fixed rate of 4.60% per annum for that  period. |

----

| Number | Description of Exhibits                                                                                                                                                                                                  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.1    | Amended      and Restated Articles of Incorporation of TOP SHIPS INC. (1)                                                                                                                                                |
| 1.2    | Amendment      to Amended and Restated Articles of Incorporation of TOP SHIPS INC.      (2)                                                                                                                              |
| 1.3    | Amended      and Restated By-Laws of the Company, as adopted on February 28, 2007      (3)                                                                                                                               |
| 4.1    | TOP      SHIPS INC. 2005 Stock Option Plan (4)                                                                                                                                                                           |
| 4.2    | Loan      Agreement between the Company and the Royal Bank of Scotland plc dated      August 10, 2004 and supplemented September 30, 2004      (5)                                                             |
| 4.3    | Loan      Agreement between the Company and DVB Bank dated March 10,      2005(6).                                                                                                                                       |
| 4.4    | Credit      Facility between the Company and the Royal Bank of Scotland dated November      1, 2005 (7)                                                                                                                  |
| 4.4.1  | Supplement      to credit facility between the Company and the Royal Bank of Scotland      dated December 21, 2006 (8)                                                                                                   |
| 4.5    | Credit      Facility between the Company and HSH NORDBANK, AG, dated November 7,      2005(9)                                                                                                                            |
| 4.6    | Sales      Agreement between the Company and Cantor Fitzgerald & Co. dated April      13, 2006(10)                                                                                                                   |
| 4.7    | Shareholder      Rights Agreement with Computershare Investor Services, LLC, as Rights      Agent as of August 19, 2005 (11)                                                                                             |
| 4.8    | Memorandum      of Agreement by and between Kisavos Shipping Company Limited and Komarf      Hope 27 Shipping Company dated March 9, 2006 relating to the purchase and      sale of the M/T Priceless (12)               |
| 4.9    | Charter      party by and between Kisavos Shipping Company Limited and Komarf Hope      27  Shipping Company in relation to the M/T Priceless, dated      March 9, 2006 (13)                                   |
| 4.10   | Quadripartite      Agreement by and among the Company, Kisavos Shipping Company Limited,      Komarf Hope 27 Shipping Co. and Fortis Bank (Nederland) N.V. dated March      15, 2006 relating to the M/T Priceless (14)  |
| 4.11   | Guarantee      given by the Company to Komarf Hope 27 Shipping Co. dated March 15, 2006      in connection with the charter party relating to the M/T Priceless      (15)                                                |
| 4.12   | Memorandum      of Agreement by and between Taygetus Shipping Company Limited and Komarf      Hope 28 Shipping Co. dated March 9, 2006 relating to the purchase and sale      of the M/T Timeless (16)                   |

----

| 4.13 | Charter      party by and between Taygetus Shipping Company Limited and Komarf Hope 28      Shipping Co. in relation to the Timeless, dated March 9, 2006      (17)                                                              |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.14 | Quadripartite      Agreement by and among the Company, Taygetus Shipping Company Limited,      Komarf Hope 28 Shipping Co. and Fortis Bank (Nederland) N.V. dated March      15, 2006 relating to the M/T Timeless (18)          |
| 4.15 | Guarantee      given by the Company to Komarf Hope 28 Shipping Co., dated March 15, 2006      in connection with the charter party relating to the M/T Timeless      (19)                                                        |
| 4.16 | Memorandum      of Agreement by and between Pylio Shipping Company Limited and Komarf Hope      29. Shipping Co. dated March 9, 2006 relating to the purchase and sale of      the M/T Flawless (20)                             |
| 4.17 | Charter      party by and between Pylio Shipping Company Limited and Komarf Hope 29      Shipping Co. in relation to the M/T Flawless, dated March 9, 2006      (21)                                                             |
| 4.18 | Quadripartite      Agreement by and among the Company, Pylio Shipping Company Limited, Komarf      Hope 29 Shipping Co. and Fortis Bank (Nederland) N.V. dated March 15, 2006      relating to the M/T Flawless  (22)  |
| 4.19 | Guarantee      given by the Company to Komarf Hope 29 Shipping Co., dated March 15, 2006      in connection with the charter party relating to the M/T Flawless      (23)                                                        |
| 4.20 | Memorandum      of Agreement by and between Vitsi Shipping Company Limited and Komarf Hope      30 Shipping Co. dated March 9, 2006 relating to the purchase and sale of      the M/T Stopless (24)                              |
| 4.21 | Charter      party by and between Vitsi Shipping Company Limited and Komarf Hope 30      Shipping Co. in relation to the Stopless, dated March 9, 2006      (25)                                                                 |
| 4.22 | Quadripartite      Agreement by and among the Company, Vitsi Shipping Company Limited, Komarf      Hope 30 Shipping Co. and Fortis Bank (Nederland) N.V. dated March 15, 2006      relating to the M/T Stopless (26)             |
| 4.23 | Guarantee      given by the Company to Komarf Hope 30 Shipping Co., dated March 15, 2006      in connection with the charter party relating to the M/T Stopless      (27)                                                        |
| 4.24 | Memorandum      of Agreement by and between Parnasos Shipping Company Limited Partankers      III AS, dated March 4, 2006 relating to the purchase and sale of the M/T      Faultless (28)                                       |
| 4.25 | Charter      party by and between Parnasos Shipping Company Limited and Partankers III      AS, in relation to the M/T Faultless, dated April 4, 2006(29)                                                                        |
| 4.26 | Memorandum      of Agreement by and between Imitos Shipping Company Limited Partankers III      AS, dated March 4, 2006 relating to the purchase and sale of the M/T      Noiseless (30)                                         |
| 4.27 | Charter      party by and between Imitos Shipping Company Limited and Partankers III      AS, in relation to the M/T Noiseless, dated April 4, 2006    (31)                                                                           |

----

| 4.28 | Memorandum      of Agreement by and between Parnis Shipping Company Limited Partankers III      AS, dated March 4, 2006 relating to the purchase and sale of the M/T      Stainless (32)                                    |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.29 | Charter      party by and between Parnis Shipping Company Limited and Partankers III      AS, in relation to the M/T Stainless, dated April 4, 2006(33)                                                                     |
| 4.30 | Memorandum      of Agreement by and between Mytikas Shipping Company Limited and      Partankers III AS dated April 4, 2006 relating to the purchase and sale of      the M/T Limitless (34)                                |
| 4.31 | Charter      party by and between Mytkas Shipping Company Limited and Partankers III      AS  in relation to the M/T Limitless, dated April 4, 2006      (35)                                                     |
| 4.32 | Memorandum      of Agreement by and between Litochoro Shipping Company Limited and      Partankers III AS dated April 4, 2006 relating to the purchase and sale of      the M/T Endless (36)                                |
| 4.33 | Charter      party by and between Litochoro Shipping Company Limited and Partankers III      AS in relation to the M/T Endless, dated April 4, 2006 (37)                                                                    |
| 4.34 | Guarantee      given by the Company to Partankers III AS in connection with the charter      parties relating to the M/T Faultless, M/T Stainless, M/T Noiseless, M/V      Limitless, M/V Endless dated April 4, 2006 (38)  |
| 4.35 | Memorandum      of Agreement by and between Idi Shipping Company Limited and Kemp Maritime      S.A. dated March 14, 2006 relating to the purchase and sale of the M/T      Spotless (39)                                   |
| 4.36 | Charter      party by and between Idi Shipping Company Limited and Kemp Maritime S.A.      in relation to the M/T Spotless, dated March 14, 2006 (40)                                                                       |
| 4.37 | Quadripartite      Agreement by and among the Company, Idi Shipping Company Limited, Kemp      Maritime S.A. and Fortis Bank (Nederland) N.V. dated March 15, 2006      relating to the M/T Spotless (41)                   |
| 4.38 | Second      Priority Quadripartite Agreement by and among the Company, Idi Shipping      Company Limited, Kemp Maritime S.A. and Mass Capital Investments B.V.      dated March 15, 2006 relating to the M/T Spotless (42)  |
| 4.39 | Guarantee      given by the Company to Kemp Maritime S.A. dated March 14, 2006 in      connection with the charter party relating to the M/T Spotless      (43)                                                             |
| 4.40 | Memorandum      of Agreement by and between Falarko Shipping Company Limited and Tucker      Navigation Co. dated March 14, 2006 relating to the purchase and sale of      the M/T Doubtless (44)                           |
| 4.41 | Charter      party by and between Falarko Shipping Company Limited and Tucker      Navigation Co. in relation to the M/T Doubtless, dated March 14, 2006      (45)                                                               |

----

| 4.42 | Quadripartite      Agreement by and among the Company, Falarko Shipping Company Limited,      Tucker Navigation Co. and Fortis Bank (Nederland) N.V. dated March 15,      2006 relating to the M/T Doubtless (46)                                 |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.43 | Second      Priority Quadripartite Agreement by and among the Company, Falarko      Shipping Company Limited, Tucker Navigation Co. and Mass Capital      Investments B.V. dated March 15, 2006 relating to the M/T Doubtless      (47)           |
| 4.44 | Guarantee      given by the Company to Tucker Navigation Co. dated March 14, 2006 in      connection with the charter party relating to the M/T Doubtless      (48)                                                                               |
| 4.45 | Memorandum      of Agreement by and between Pageon Shipping Company Limited and Comoros      Shipping Limited dated March 14, 2006 relating to the purchase and sale of      the M/T Vanguard (49)                                                |
| 4.46 | Charter      party by and between Pageon Shipping Company Limited and Comoros Shipping      Limited. in relation to the M/T Vanguard, dated March 14, 2006      (50)                                                                              |
| 4.47 | Quadripartite      Agreement by and among the Company, Pageaon Shipping Company Limited,      Comoros Shipping Limited and Fortis Bank (Nederland) N.V. dated March 15,      2006 relating to the M/T Vanguard (51)                               |
| 4.48 | Second      Priority Quadripartite Agreement by and among the Company, Pageon Shipping      Company Limited, Comoros Shipping Limited and Mass Capital Investments      B.V. dated March 15, 2006 relating to the M/V Vanguard      (52)     |
| 4.49 | Guarantee      given by the Company to Comoros Shipping Limited. dated March 14, 2006 in      connection with the charter party relating to the M/V Vanguard      (53)                                                                            |
| 4.50 | Memorandum      of Agreement by and between Gramos Shipping Company Limited and Starcraft      Marine Co. dated March 14, 2006 relating to the purchase and sale of the      M/T Faithful (54)                                                    |
| 4.51 | Charter      party by and between Gramos Shipping Company Limited and Starcraft Marine      Co. in relation to the M/T Faithful, dated March 14, 2006(55)                                                                                         |
| 4.52 | Quadripartite      Agreement by and among the Company, Gramos Shipping Company Limited,      Starcraft Marine Co. and Fortis Bank (Nederland) N.V. dated March 15, 2006      relating to the M/T Faithful (56)                                    |
| 4.53 | Second      Priority Quadripartite Agreement by and among the Company, Gramos Shipping      Company Limited Starcraft Marine Co. and Mass Capital Investments B.V.      dated March 15, 2006 relating to the M/T Faithful (57)                    |
| 4.54 | Guarantee      given by the Company to Starcraft Marine Co. dated March 14, 2006 in      connection with the charter party relating to the M/T Faithful      (58)                                                                                 |
| 4.55 | Supplemental      Agreement relating to the Memorandum of Agreement dated March 14, 2006      relating to the M/V Spotless made by and among Idi Shipping Company      Limited, Kemp Maritime S.A. and ICON Spotless LLC dated June 16, 2006      (59) |

----

| 4.56 | Addendum      No. 1 to charter party by and between Idi Shipping Company Limited and      Kemp Maritime S.A. in relation to the M.V. Spotless, dated March 14, 2006      dated June 16, 2006 (60)                                                                            |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.57 | Quadripartite      Agreement by and among the Company, Idi Shipping Company ICON Spotless LLC      and Fortis Bank (Nederland) N.V. dated June 16, 2006 relating to the M/T      Spotless (61)                                                                               |
| 4.58 | Guarantee      given by the Company to ICON Spotless LLC dated June 13, 2006 in      connection with the charter party relating to the M/T Spotless      (62)                                                                                                                |
| 4.59 | Supplemental      Agreement relating to the Memorandum of Agreement dated March 14, 2006      relating to the M/V Doubtless made by and among Falarko Shipping Company      Limited, Tucker Navigation Co. and ICON Spotless LLC dated June 16, 2006      (63)               |
| 4.60 | Addendum      No. 1 to charter party by and between Falarko Shipping Company Limited and      Tucker Navigation Co. in relation to the M.V. Doubtless, dated March 14,      2006 dated June 16, 2006 (64)                                                                    |
| 4.61 | Quadripartite      Agreement by and among the Company, Falarko Shipping Company ICON Spotless      LLC and Fortis Bank (Nederland) N.V. dated June 16, 2006 relating to the      M/T Doubtless (65)                                                                          |
| 4.62 | Guarantee      given by the Company to ICON Spotless LLC dated June 13, 2006 in      connection with the charter party relating to the M/T Doubtless      (66)                                                                                                               |
| 4.63 | Supplemental      Agreement relating to the Memorandum of Agreement dated March 14, 2006      relating to the M/V Vanguard made by and among Pageon Shipping Company      Limited, Comoros Shipping Limited and Isomar Marine Company Limited dated      June 16, 2006 (67)  |
| 4.64 | Addendum      No. 1 to charter party by and between Pageon Shipping Company Limited and      Comoros Shipping Limited in relation to the M.V. Vanguard, dated March 14,      2006 dated June 16, 2006 (68)                                                                   |
| 4.65 | Quadripartite      Agreement by and among the Company, Pageon Shipping Company Isomar Marine      Company Limited and Fortis Bank (Nederland) N.V. dated June 16, 2006      relating to the M/T Doubtless (69)                                                               |
| 4.66 | Guarantee      given by the Company to Isomar Shipping Company Limited dated June 13,      2006 in connection with the charter party relating to the M/T Vanguard      (70)                                                                                                  |
| 4.67 | Supplemental      Agreement relating to the Memorandum of Agreement dated March 14, 2006      relating to the M/V Faithful made by and among Gramos Shipping Company      Limited, Starcraft Marine Co. and ICON Faithful LLC dated June 16, 2006      (71)                  |
| 4.68 | Addendum      No. 1 to charter party by and between Gramos Shipping Company Limited and      Starcraft Marine Co. in relation to the M.V. Faithful, dated March 14,      2006 dated June 16, 2006 (72)                                                                       |
| 4.69 | Quadripartite      Agreement by and among the Company, Gramos Shipping Company ICON Faithful      LLC and Fortis Bank (Nederland) N.V. dated June 16, 2006 relating to the      M/T Faithful (73)                                                                                 |

----

| 4.70 | Guarantee      given by the Company to ICON Faithful LLC dated June 13, 2006 in      connection with the charter party relating to the M/T Faithful      (74)                          |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.71 | Sales      Agreement with Deutsche Bank Securities relating to issuing and selling an      agreed upon number of shares of common stock through Deutsch Bank      Securities. (75)     |
| 8.1  | List      of subsidiaries of the Company                                                                                                                                               |
| 12.1 | Rule      13a-14(a)/15d-14(a) Certification of the Company’s Chief Executive      Officer                                                                                        |
| 12.2 | Rule      13a-14(a)/15d-14(a) Certification of the Company’s Chief Financial      Officer                                                                                        |
| 13.1 | Certification      of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of      2002   |
| 13.2 | Certification      of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of      2002.  |
| 15.1 | Consent      of Independent Registered Public Accounting Firm                                                                                                                          |
| 15.2 | Consent      of Independent Registered Public Accounting Firm                                                                                                                          |

| (1)   | Incorporated      by reference from Exhibit 3.1 to the company’s Registration Statement on      Form F-1, filed on October 18, 2004 (File No.  333-119806). |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Incorporated      by reference from Exhibit 1.2 to the company’s Annual Report on Form 20-F,      filed on April 20, 2007 (File No.000-50859) |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Incorporated      by reference from our 6-K filed on March 9,2007 |
|-----------------|-------------------------------------------------------------------|

| (4)   | Incorporated      by reference from Exhibit 4.1 to the Company’s Annual Report on Form 20-F,      filed on April 13, 2006 (File No.000-50859) |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Incorporated      by reference from Exhibit 10.1 to the Company's Registration Statement on      Form F-1, filed on November 12, 2004 (File No.  333-119806). |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)   | Incorporated      by reference from Exhibit 4.3 to the Company’s Annual Report on Form 20-F,      filed on April 13, 2006 (File No.000-50859) |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| (7)   | Incorporated      by reference from Exhibit 4.4 to the Company’s Annual Report on Form 20-F,      filed on April 13, 2006 (File No.000-50859) |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| (8)   | Incorporated      by reference from Exhibit 4.4.1 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9)   | Incorporated      by reference from Exhibit 4.5 to the Company’s Annual Report on Form 20-F,      filed on April 13, 2006 (File No.000-50859) |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| (10)   | Incorporated      by reference from Exhibit 4.6 to the Company’s Annual Report on Form 20-F,      filed on April 13, 2006 (File No.000-50859) |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (11)   | Incorporated      by reference to Exhibit 4.1 to the Company’s Registration Statement on      Form 8A (File No. 000-50859). |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------|

| (12)   | Incorporated      by reference from Exhibit 4.8 to the Company’s Annual Report on Form 20-F,      filed on April 20, 2007 (File No.000-50859) |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| (13)   | Incorporated      by reference from Exhibit 4.9 to the Company’s Annual Report on Form 20-F,      filed on April 20, 2007 (File No.000-50859) |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| (14)   | Incorporated      by reference from Exhibit 4.10 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (15)   | Incorporated      by reference from Exhibit 4.11 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (16)   | Incorporated      by reference from Exhibit 4.12 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (17)   | Incorporated      by reference from Exhibit 4.13 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (18)   | Incorporated      by reference from Exhibit 4.14 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (19)   | Incorporated      by reference from Exhibit 4.15 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (20)   | Incorporated      by reference from Exhibit 4.16 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (21)   | Incorporated      by reference from Exhibit 4.17 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (22)   | Incorporated      by reference from Exhibit 4.18 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (23)   | Incorporated      by reference from Exhibit 4.19 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (24)   | Incorporated      by reference from Exhibit 4.20 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (25)   | Incorporated      by reference from Exhibit 4.21 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (26)   | Incorporated      by reference from Exhibit 4.22 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (27)   | Incorporated      by reference from Exhibit 4.23 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (28)   | Incorporated      by reference from Exhibit 4.24 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (29)   | Incorporated      by reference from Exhibit 4.25 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (30)   | Incorporated      by reference from Exhibit 4.26 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (31)   | Incorporated      by reference from Exhibit 4.27 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (32)   | Incorporated      by reference from Exhibit 4.28 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (33)   | Incorporated      by reference from Exhibit 4.29 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (34)   | Incorporated      by reference from Exhibit 4.30 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (35)   | Incorporated      by reference from Exhibit 4.31 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (36)   | Incorporated      by reference from Exhibit 4.32 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (37)   | Incorporated      by reference from Exhibit 4.33 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (38)   | Incorporated      by reference from Exhibit 4.34 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (39)   | Incorporated      by reference from Exhibit 4.35 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (40)   | Incorporated      by reference from Exhibit 4.36 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (41)   | Incorporated      by reference from Exhibit 4.37 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (42)   | Incorporated      by reference from Exhibit 4.38 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (43)   | Incorporated      by reference from Exhibit 4.39 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (44)   | Incorporated      by reference from Exhibit 4.40 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (45)   | Incorporated      by reference from Exhibit 4.41 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (46)   | Incorporated      by reference from Exhibit 4.42 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (47)   | Incorporated      by reference from Exhibit 4.43 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (48)   | Incorporated      by reference from Exhibit 4.44 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (49)   | Incorporated      by reference from Exhibit 4.45 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (50)   | Incorporated      by reference from Exhibit 4.46 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (51)   | Incorporated      by reference from Exhibit 4.47 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (52)   | Incorporated      by reference from Exhibit 4.48 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (53)   | Incorporated      by reference from Exhibit 4.49 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (54)   | Incorporated      by reference from Exhibit 4.50 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (55)   | Incorporated      by reference from Exhibit 4.51 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (56)   | Incorporated      by reference from Exhibit 4.52 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (57)   | Incorporated      by reference from Exhibit 4.53 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (58)   | Incorporated      by reference from Exhibit 4.54 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (59)   | Incorporated      by reference from Exhibit 4.55 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (60)   | Incorporated      by reference from Exhibit 4.56 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (61)   | Incorporated      by reference from Exhibit 4.57 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (62)   | Incorporated      by reference from Exhibit 4.58 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (63)   | Incorporated      by reference from Exhibit 4.59 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (64)   | Incorporated      by reference from Exhibit 4.60 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (65)   | Incorporated      by reference from Exhibit 4.61 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (66)   | Incorporated      by reference from Exhibit 4.62 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (67)   | Incorporated      by reference from Exhibit 4.63 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (68)   | Incorporated      by reference from Exhibit 4.64 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (69)   | Incorporated      by reference from Exhibit 4.65 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (70)   | Incorporated      by reference from Exhibit 4.66 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (71)   | Incorporated      by reference from Exhibit 4.67 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (72)   | Incorporated      by reference from Exhibit 4.68 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (73)   | Incorporated      by reference from Exhibit 4.69 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (74)   | Incorporated      by reference from Exhibit 4.70 to the Company’s Annual Report on Form      20-F, filed on April 20, 2007 (File No.  000-50859) |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (75)   | Incorporated      by reference from our 6-K filed on June 13,2007 |
|------------------|-------------------------------------------------------------------|

----

|                   |   | TOP      SHIPS INC. |
|------------------------|--------|---------------------|
|                   |   |                |   |
|                   |   |                |   |
|                   |   |                |   |
|                   |   | By:                 | /s/  Evangelos      Pistiolis |
|                   |   |                | Name:      Evangelos PistiolisTitle:   Chief      Executive Officer |
| May 21,      2008 |   |                |   |   |
|                   |   |                |   |   |