UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 20-F

(Mark One)

[_]         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, 2006

                                       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

                        Commission file number 000-50859

                                TOP TANKERS INC.
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             (Exact name of Registrant as specified in its charter)

                        Republic of The Marshall Islands
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                 (Jurisdiction of incorporation or organization)

          1 Vas. Sofias and Meg. Alexandrou Str, 15124 Maroussi, Greece
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                    (Address of principal executive offices)

Securities registered or to be registered pursuant to section 12(b) of the Act.

                     Common Stock par value $0.01 per share
                         Preferred Stock Purchase Rights
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Securities registered or to be registered pursuant to section 12(g) of the Act.

                                      NONE
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Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.

                                      NONE
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Indicate the number of  outstanding  shares of each of the  issuer's  classes of
capital  or common  stock as of the close of the  period  covered  by the annual
report.

     32,429,105 shares of Common Stock, par value $0.01 per share.

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act

                                 Yes |_| No |X|

If this report is an annual or transition report,  indicate by check mark if the
registrant  is not required to file  reports  pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.

                                 Yes |_| No |X|

Note-  Checking the box above will not relieve any  registrant  required to file
reports  pursuant to Section 13 of 15(d) of the Securities  Exchange Act of 1934
for their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                 Yes |X| No |_|

Indicate by check mark  whether  registrant  is a large  accelerated  filer,  an
accelerated  filer, or a  non-accelerated  filer.  See definition of accelerated
filer and large  accelerated  filer in Rule 12b-2 of the  Exchange  Act.  (Check
one):

Large accelerated filer |_|   Accelerated filer |X|   Non-accelerated filer |_|

Indicate by check mark which financial statement item the registrant has elected
to follow.

                             Item 17 |_| Item 18 |X|

If this is an annual report,  indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act).

                                 Yes |_| No |X|
<PAGE>

                                TABLE OF CONTENTS

                                                                            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.........................................17

 ITEM 4A.  Unresolved Staff Comments .........................................35

 ITEM 5.   Operating And Financial Review And Prospects.......................36

 ITEM 6.   Directors, Senior Management And Employees........................ 53

 ITEM 7.   Major Shareholders And Related Party Transactions. ................59

 ITEM 8.   Financial Information. ............................................60

 ITEM 9.   The Offer And Listing..............................................60

 ITEM 10.  Additional Information.............................................61

 ITEM 11.  Quantitative And Qualitative Disclosures About Market Risk.........74

 ITEM 12.  Description Of Securities Other Than Equity Securities ............74

 ITEM 13.  Defaults, Dividend Arrearages And Delinquencies....................75

 ITEM 14.  Material Modifications To The Rights Of Security Holders And
           Use Of Proceeds....................................................75

 ITEM 15.  Controls And Procedures............................................75

 ITEM 16A. Audit Committee Financial Expert...................................76

 ITEM 16B. Code Of Ethics ....................................................76

 ITEM 16C. Principal Accountant Fees And Services ............................76

 ITEM 16D. Exemptions From The Listing Standards For Audit Committees.........77

 ITEM 16E. Purchases Of Equity Securities By The Issuer
           And Affiliated Purchases...........................................77

 ITEM 17.  Financial Statements...............................................78

 ITEM 18.  Financial Statements...............................................78

 ITEM 19.  Exhibits...........................................................

<PAGE>

            CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     This report includes assumptions, expectations, projections, intentions and
beliefs about future events.  These statements are intended as  "forward-looking
statements". We caution that assumptions, expectations,  projections, intentions
and beliefs  about future  events may and often do vary from actual  results and
the differences can be material.

     All statements in this document that are not statements of historical  fact
are forward-looking statements.  Forward-looking statements include, but are not
limited to, such matters as:

     o    future operating or financial results;

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

     o    statements  about  crude oil and  refined  petroleum  products  tanker
          shipping market trends,  including charter rates and factors affecting
          supply and demand;

     o    our ability to obtain additional financing;

     o    expectations regarding the availability of vessel acquisitions; and

     o    anticipated developments with respect to pending litigation.

     The  forward-looking  statements  in this  report  are based  upon  various
assumptions,  many of which  are  based,  in  turn,  upon  further  assumptions,
including without limitation,  management's  examination of historical operating
trends,  data  contained  in our  records  and other data  available  from third
parties.  Although  TOP  Tankers  Inc.  believes  that  these  assumptions  were
reasonable  when made,  because  these  assumptions  are  inherently  subject to
significant uncertainties and contingencies which are difficult or impossible to
predict and are beyond our control,  TOP Tankers Inc.  cannot assure you that it
will achieve or accomplish these expectations,  beliefs or projections described
in the forward looking statements contained in this report.

     Important  factors that, in our view,  could cause actual results to differ
materially from those discussed in the  forward-looking  statements  include the
strength of world economies and currencies, general market conditions, including
changes in charter rates and vessel  values,  failure of a seller to deliver one
or more vessels, failure of a buyer to accept delivery of a vessel, inability to
procure acquisition  financing,  default by one or more charterers of our ships,
changes in demand  for crude  oil,  refined  petroleum  products,  the effect of
changes in OPEC's petroleum  production levels,  worldwide crude oil consumption
and storage,  changes in demand that may affect  attitudes  of time  charterers,
scheduled and unscheduled  drydocking,  changes in TOP Tankers Inc.'s voyage and
operating  expenses,  including bunker prices,  dry-docking and insurance costs,
changes  in  governmental  rules  and  regulations  including  requirements  for
double-hull  tankers  or  actions  taken by  regulatory  authorities,  potential
liability  from  pending  or  future  litigation,   domestic  and  international
political conditions,  potential disruption of shipping routes due to accidents,
international hostilities and political events or acts by terrorists.

     When used in this document, the words "anticipate,"  "estimate," "project,"
"forecast," "plan,"  "potential,"  "will," "may," "should," and "expect" reflect
forward-looking statements.

<PAGE>

                                     PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

         Not Applicable.

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE

         Not Applicable.

ITEM 3.  KEY INFORMATION

     Unless the context otherwise  requires,  as used in this report,  the terms
"Company,"  "we,"  "us,"  and "our"  refer to TOP  Tankers  Inc.  and all of its
subsidiaries,  and "TOP Tankers Inc." refers only to TOP Tankers Inc. and not to
its subsidiaries.  We use the term deadweight, or dwt, in describing the size of
vessels.  Dwt,  expressed  in metric tons each of which is  equivalent  to 1,000
kilograms,  refers to the maximum weight of cargo and supplies that a vessel can
carry.

<PAGE>

A.   Selected Financial Data

     The  following  table  sets  forth  the  selected  historical  consolidated
financial  data and other  operating data of TOP Tankers Inc. as of December 31,
2002, 2003, 2004, 2005 and 2006 and for the years ended December 31, 2002, 2003,
2004,  2005 and 2006.  The following  information  should be read in conjunction
with Item 5 "Operating and Financial  Review and Prospects" and the consolidated
financial  statements and related notes included herein.  The following selected
historical  consolidated  financial  data of TOP  Tankers  Inc. in the table are
derived from our consolidated  financial statements and notes thereto which have
been prepared in accordance with U.S. generally accepted  accounting  principles
("US GAAP") and have been audited for the years ended  December 31, 2002,  2003,
2004 and 2005 by  Ernst & Young  (Hellas)  Certified  Auditors  Accountants  S.A
("Ernst  &  Young")  and for the  year  ended  December  31,  2006 by  Deloitte,
Hadjipavlou,  Sofianos &  Cambanis  S.A.,  both  independent  registered  public
accounting firms.

<TABLE>
<CAPTION>

                                                                                      Year Ended December 31,
Dollars in  thousands,  except per share data and                                     -----------------------
average daily results                                           2002           2003           2004           2005           2006
INCOME STATEMENT DATA                                           ----           ----           ----           ----           ----
<S>                                                        <C>            <C>           <C>            <C>            <C>
Voyage revenues..........................................    $11,426        $23,085        $93,829       $244,215       $310,043
Voyage expenses..........................................      3,311          5,937         16,898         36,889         55,351
Charter hire expense.....................................          -              -              -          7,206         96,302
Amortization of deferred gain on sale and
   leaseback of vessels..................................          -              -              -            837          8,110
Other vessel operating expenses..........................      4,553          8,420         16,859         47,315         66,082
General and administrative expenses(1)...................        816          1,815          8,579         23,818         23.016
Foreign currency (gains) losses, net.....................         62            105             75            (68)           255
Gain on sale of vessels..................................          -              -            638         10,115         12,667
Depreciation and amortization............................      2,390          4,203         14,622         53,054         48,453

Total operating expenses.................................     11,132         20,480         56,395        157,262        268,682
Operating income.........................................        294          2,605         37,434         86,953         41,361
Interest and finance costs...............................        993          1,336          5,201         20,177         29,175
Interest income..........................................          6              1            481          1,774          3,022
Other income (expense), net..............................        894            364             80            134            (67)

Net income...............................................       $201         $1,634        $32,794        $68,684        $15,141

Earnings per share, basic and diluted(2).................      $0.03          $0.27          $2.54          $2.46          $0.47
Weighted average common shares outstanding, basic(2).....  6,000,000      6,000,000     12,922,449     27,926,771     30,550,274
Weighted average common shares outstanding, diluted(2)...  6,000,000      6,000,000     12,922,449     27,932,012     30,603,868

Dividends declared per share(2)..........................      $0.14          $0.10          $0.60          $0.88          $7.71
</TABLE>

<TABLE>
<CAPTION>
Dollars in  thousands,  except per share data and              2002          2003           2004           2005           2006
average daily results                                          ----          ----           ----           ----           ----
BALANCE SHEET DATA, at end of period
<S>                                                          <C>           <C>             <C>           <C>             <C>
Current assets ..........................................       $845         $4,862       $141,051        $67,574        $72,799
Total assets.............................................     33,474         55,703        539,886        980,897        522,735
Current liabilities, including current portion of long         4,390          9,008         42,811         76,143         40,609
long-term debt
Total long-term debt, including current portion..........     22,875         34,403        194,806        564,103        218,052
Stockholders' equity.....................................      8,772         16,319        321,809        369,658        197,855

OTHER FINANCIAL DATA
Adjusted EBITDA(3).......................................     $3,578         $7,172        $52,136       $140,141        $90,075

FLEET DATA
Total number of vessels at end of period.................        3.0            5.0           15.0           27.0           24.0
Average number of vessels(4).............................        2.9            4.4            9.6           21.7           26.7
Total voyage days for fleet(5)...........................        961          1,517          3,215          7,436          8,634
Total time charter days for fleet........................        160            543          1,780          5,567          6,223
Total spot market days for fleet.........................        801            974          1,435          1,869          2,411
Total calendar days for fleet(6).........................      1,042          1,609          3,517          7,905          9,747
Fleet utilization(7).....................................       92.2%          94.3%          91.4%          94.1%          88.6%

AVERAGE DAILY RESULTS
Time charter equivalent(8)...............................     $8,444        $11,304        $23,929        $27,881        $29,499
Other vessel operating expenses(9).......................      4,369          5,233          4,794          5,985          6,780
General and administrative expenses(10)..................        783          1,128          2,439          3,013          2,361
</TABLE>

     (1)  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 years ended  December 31, 2002 and
          2003. During 2004, 2005 and 2006, we paid to the members of our senior
          management   and   to  our   directors   aggregate   compensation   of
          approximately   $4.4   million,   $8.1   million   and  $4.2   million
          respectively.

     (2)  All share and per share  amounts  have been  restated  to reflect  the
          retroactive effect of the stock dividend in May 2004.

     (3)  Adjusted EBITDA represents earnings before interest and finance costs,
          interest income,  taxes,  depreciation and amortization.  Interest and
          finance  costs,  net  includes  interest  expense,   interest  income,
          amortization of deferred  financing fees, other financial costs,  gain
          or loss  from  termination  of swaps  and  swap  fair  value  changes.
          Adjusted  EBITDA is  included  in this  report  because  we believe it
          provides investors with an understanding of operating performance over
          comparative  periods.  Adjusted  EBITDA  should not be considered as a
          substitute  for  operating  income or net income (all as determined in
          accordance  with generally  accepted  accounting  principles)  for the
          purpose of analyzing our operating performance,  as Adjusted EBITDA is
          not defined by generally accepted accounting principles.  We presented
          Adjusted  EBITDA,  however,  because  it is  commonly  used by certain
          investors  and analysts to analyze and compare  companies on the basis
          of  operating  performance  and to  determine a  company's  ability to
          service and/or incur debt.

          The  following  table  reconciles  net  income,  as  reflected  in the
     consolidated income statements to Adjusted EBITDA:

<TABLE>
<CAPTION>
                                                           2002         2003         2004        2005        2006
                                                           ----         ----         ----        ----        ----
<S>                                                      <C>          <C>         <C>        <C>          <C>
Dollars in thousands
Net Income..............................................   $201       $1,634      $32,794     $68,684     $15,141
Depreciation and amortization...........................  2,390        4,203       14,622      53,054      48,781*
Interest and finance costs, net.........................    987        1,335        4,720      18,403      26,153

Adjusted EBITDA......................................... $3,578       $7,172      $52,136    $140,141     $90,075

----------
*     Includes $328 of depreciation of other fixed assets, classified in 2006
      in general and administrative expenses.

</TABLE>

     (4)  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.

     (5)  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, drydockings or special or intermediate surveys.

     (6)  Calendar  days are the total days the vessels  were in our  possession
          for the relevant period  including off hire days associated with major
          repairs, drydockings or special or intermediate surveys.

     (7)  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 relevant period.

     (8)  Time  charter  equivalent,  or TCE, is a measure of the average  daily
          revenue  performance of a vessel on a per voyage basis.  Our method of
          calculating  TCE  is  consistent   with  industry   standards  and  is
          determined  by  dividing  net voyage  revenue  by voyage  days for the
          relevant time period.  Net voyage  revenues are voyage  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.  The following table reflects  calculation of the
          TCE (all amounts are  expressed in thousands of U.S.  dollars,  except
          for Average  Daily Time  Charter  Equivalent  amounts and Total Voyage
          Days):

<TABLE>
<CAPTION>
                                                                       2002       2003       2004       2005       2006
                                                                       ----       ----       ----       ----       ----
Dollars in thousands, except average daily results
<S>                                                                 <C>        <C>       <C>        <C>        <C>
Voyage revenues.................................................    $11,426    $23,085    $93,829   $244,215   $310,043
Less:
       Voyage expenses..........................................     (3,311)    (5,937)   (16,898)   (36,889)   (55,351)
                                                                    -------    -------   --------   --------   --------

       Time charter equivalent revenue..........................     $8,115    $17,148    $76,931   $207,326   $254,692
                                                                     ======    =======    =======   ========   ========

       Total voyage days........................................        961      1,517      3,215      7,436      8,634
       Average Daily Time Charter Equivalent....................     $8,444    $11,304    $23,929    $27,881    $29,499
</TABLE>

     (9)  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  time
          period.

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

     B.   Capitalization and Indebtedness

         Not Applicable.

     C.   Reasons for the Offer and Use of Proceeds

         Not Applicable.

     D.   Risk Factors

     The following risks relate  principally to the industry in which we operate
and our  business in  general.  Any of the risk  factors  could  materially  and
adversely affect our business,  financial condition or operating results and the
trading price of our common stock.

Risks Related to Our Industry

     The  international  tanker  industry is both cyclical and volatile and this
may lead to  reductions  and  volatility in our charter rates when we re-charter
our vessels, vessel values and our results of operation

     The international  tanker industry is cyclical with attendant volatility in
charter  hire rates and  industry  profitability.  The  degree of  charter  hire
volatility  within the tanker  industry  has varied  widely.  If we enter into a
charter when charter  rates are low, our revenues and earnings will be adversely
affected.  In  addition,  a decline in charter  hire rates likely will cause the
value of our vessels to decline.  The degree of charter  rate  volatility  among
different  types of tankers has varied  widely.  Although  our fleet  deployment
strategy may limit our exposure,  we are nonetheless  exposed to changes in spot
rates for tankers and such  changes may affect our earnings and the value of our
vessels at any given time.

     The factors affecting the supply and demand for our tankers are outside our
control and are  unpredictable.  The  nature,  timing,  direction  and degree of
changes in industry  conditions are also  unpredictable.  Factors that influence
demand for tanker capacity include:

     o    demand for refined petroleum products and crude oil;

     o    changes in crude oil production and refining capacity;

     o    the location of regional and global crude oil refining facilities that
          affect the distance that refined petroleum  products and crude oil are
          to be moved by sea;

     o    global and regional economic and political conditions;

     o    developments in international trade;

     o    changes  in  seaborne  and other  transportation  patterns,  including
          changes in the distances over which cargoes are transported;

     o    environmental and other regulatory developments;

     o    currency exchange rates; and

     o    weather.

     The  factors  that  influence  the  supply of  oceangoing  vessel  capacity
include:

     o    the number of newbuilding deliveries;

     o    the scrapping rate of older vessels;

     o    the price of steel;

     o    changes  in  environmental  and other  regulations  that may limit the
          useful lives of vessels;

     o    port or canal congestion;

     o    the number of vessels that are out of service; and

     o    changes in global crude oil production.

     The international tanker industry has experienced historically high charter
rates and vessel  values in the recent past and there can be no  assurance  that
these historically high charter rates and vessel values will be sustained

     Charter rates in the tanker industry  recently have been near  historically
high levels.  We anticipate that future demand for our vessels,  and in turn our
future charter rates,  will be dependent upon continued  economic  growth in the
world's  economy as well as seasonal and regional  changes in demand and changes
in the capacity of the world's  fleet.  We believe that these  charter rates are
the result of continued economic growth in the world economy that exceeds growth
in global vessel  capacity.  There can be no assurance that economic growth will
not  stagnate  or decline  leading to a decrease  in vessel  values and  charter
rates.  A decline in charter rates could have a material  adverse  effect on our
business,   financial  condition,  results  of  operation  and  ability  to  pay
dividends.

     Compliance with  environmental laws or regulations may adversely affect our
operations

     The shipping  industry in general,  our  business and the  operation of our
tankers in particular,  are affected by a variety of governmental regulations in
the form of numerous international  conventions,  national, state and local laws
and national and  international  regulations  in force in the  jurisdictions  in
which such tankers operate, as well as in the country or countries in which such
tankers are registered. These regulations include:

o    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 with double-hulls;

o    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;

o    the International Maritime Organization,  or IMO, International  Convention
     for the Prevention of Pollution from Ships with respect to strict technical
     and  operational   requirements  for  tankers;

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

o    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

o    the United States Marine Transportation Security Act of 2002.

     More  stringent  maritime  safety  rules are being  imposed  worldwide as a
result  of the oil  spill  in  November  2002  relating  to the loss of the m.t.
Prestige,  a 26-year old  single-hull  tanker owned by a company not  affiliated
with us.  Additional  laws and  regulations may also be adopted that could limit
our ability to do business or increase  the cost of our doing  business and that
could have a material  adverse  effect on our  operations.  In addition,  we are
required  by various  governmental  and  quasi-governmental  agencies  to obtain
certain permits,  licenses and certificates  with respect to our operations.  In
the  event  of war  or  national  emergency,  our  tankers  may  be  subject  to
requisition  by the  government  of the flag  flown by the  tanker  without  any
guarantee  of  compensation  for  lost  profits.  We  believe  our  tankers  are
maintained in good condition in compliance with present regulatory requirements,
are  operated  in  compliance  with  applicable  safety/environmental  laws  and
regulations  and are  insured  against  usual  risks  for  such  amounts  as our
management deems appropriate.  The tankers' operating  certificates and licenses
are renewed  periodically during each tanker's required annual survey.  However,
government  regulation  of  tankers,  particularly  in the areas of  safety  and
environmental  impact  may  change  in  the  future  and  require  us  to  incur
significant capital expenditures on our ships to keep them in compliance.

     Because the market value of our vessels may fluctuate significantly, we may
incur  losses  when we sell  vessels or we may be  required  to write down their
carrying value, which will adversely affect our earnings

     The fair market value of our vessels may increase and decrease depending on
the following factors:

     o    general  economic and market  conditions  affecting the  international
          tanker industry;

     o    competition from other shipping companies;

     o    types and sizes of vessels;

     o    other modes of transportation;

     o    cost of newbuildings;

     o    governmental or other regulations;

     o    prevailing level of charter rates; and

     o    technological advances.

     If we sell  vessels at a time when vessel  prices have fallen and before an
impairment  is  identified  the sale may be at less than the  vessel's  carrying
amount in our  financial  statements  or if vessel  prices have fallen below the
carrying amount in our financial statements we may be required to write down the
carrying  amount,  with the result that we shall incur a loss and a reduction in
earnings.

     An increase in the supply of vessel capacity  without an increase in demand
for vessel  capacity  would  likely  cause  charter  rates and vessel  values to
decline,  which  could  have a  material  adverse  effect  on our  revenues  and
profitability

     The supply of vessels  generally  increases with  deliveries of new vessels
and  decreases  with the  scrapping of older  vessels,  conversion of vessels to
other uses,  such as floating  production  and storage  facilities,  and loss of
tonnage as a result of casualties.  Currently  there is significant new building
activity  with  respect to  virtually  all sizes and classes of vessels.  If the
amount of tonnage delivered exceeds the number of vessels being scrapped, vessel
capacity  will  increase.  If the supply of vessel  capacity  increases  and the
demand for vessel  capacity  does not, the charter rates paid for our vessels as
well as the value of our vessels  could  materially  decline.  Such a decline in
charter rates and vessel values would likely have a material  adverse  effect on
our revenues and profitability.

     Our   operating   results   from  our   tankers  are  subject  to  seasonal
fluctuations,  which may adversely  affect our operating  results and ability to
pay dividends

     We operate our tankers in markets that have historically exhibited seasonal
variations in demand and, therefore,  charter rates. This seasonality may result
in quarter-to-quarter  volatility in our operating results. The tanker sector is
typically  stronger in the fall and winter months in  anticipation  of increased
oil  consumption  of oil and  petroleum  in the northern  hemisphere  during the
winter months.  Our Handymax tankers carry, in part,  refined petroleum products
such as gasoline, jet fuel, kerosene,  naphtha and heating oil. As a result, our
revenues from our tankers may be weaker during the fiscal quarters ended June 30
and September 30, and,  conversely,  revenues may be stronger in fiscal quarters
ended December 31 and March 31. This  seasonality  could  materially  affect our
operating results and cash available for dividends in the future.

     Compliance   with  safety  and  other   vessel   requirements   imposed  by
classification  societies  may be very  costly  and  may  adversely  affect  our
business

     The hull and  machinery  of every  commercial  vessel  must be classed by a
classification society authorized by its country of registry. The classification
society  certifies  that a vessel is safe and seaworthy in  accordance  with the
applicable  rules and  regulations  of the country of registry of the vessel and
the Safety of Life at Sea  Convention.  Our vessels are currently  enrolled with
the  American  Bureau of  Shipping,  Lloyd's  Register of Shipping or Det Norske
Veritas,  each  of  which  is a  member  of  the  International  Association  of
Classification Societies.

     A vessel must undergo annual surveys, intermediate surveys and special
surveys. In lieu of a special survey, a vessel's machinery may be placed on a
continuous survey cycle, under which the machinery would be surveyed
periodically over a five-year period. Our vessels are on special survey cycles
for hull inspection and continuous survey cycles for machinery inspection. Every
vessel is also required to be dry docked every two to three years for inspection
of the underwater parts of such vessel.

     If any vessel does not maintain  its class and/or fails any annual  survey,
intermediate survey or special survey, the vessel will be unable to
trade between ports and will be unemployable, which would negatively impact our
revenues.

     World events could adversely affect our results of operations and financial
condition

     Terrorist attacks such as the attacks on the United States on September 11,
2001,  the bombings in Spain on March 11, 2004 and in London on July 7, 2005 and
the continuing  response of the United States to these  attacks,  as well as the
threat of future terrorist  attacks in the United States or elsewhere,  continue
to cause uncertainty in the world financial markets and may affect our business,
operating results and financial  condition.  The continuing conflict in Iraq may
lead to additional acts of terrorism and armed conflict around the world,  which
may contribute to further economic  instability in the global financial markets.
These  uncertainties  could  also  adversely  affect  our  ability to obtain any
additional financing or, if we are able to obtain additional financing, to do so
on terms favorable to us. In the past, political conflicts have also resulted in
attacks  on  vessels,   mining  of  waterways   and  other  efforts  to  disrupt
international  shipping,  particularly  in the  Arabian  Gulf  region.  Acts  of
terrorism and piracy have also affected  vessels  trading in regions such as the
South China Sea. Any of these  occurrences  could have a material adverse impact
on our business,  financial condition,  results of operations and ability to pay
dividends.

     Increased  inspection  procedures  and tighter  import and export  controls
could increase costs and disrupt our business

     International   shipping  is  subject  to  various   security  and  customs
inspection  and  related  procedures  in  countries  of origin and  destination.
Inspection  procedures  can result in the seizure of  contents  of our  vessels,
delays in the loading, offloading or delivery and the levying of customs duties,
fines or other penalties against us.

     It  is  possible  that  changes  to  inspection   procedures  could  impose
additional  financial  and legal  obligations  on us.  Furthermore,  changes  to
inspection  procedures could also impose additional costs and obligations on our
customers  and may, in certain  cases,  render the shipment of certain  types of
cargo  uneconomical or impractical.  Any such changes or developments may have a
material  adverse  effect  on our  business,  financial  condition,  results  of
operations and ability to pay dividends.

     Risks Related to Our Business

     If we fail to manage our  planned  growth  properly,  we may not be able to
successfully expand our market share

     We intend to continue to grow our fleet. Our growth will depend on:

     o    locating and acquiring suitable vessels;

     o    identifying and consummating acquisitions or joint ventures;

     o    integrating  any  acquired  business  successfully  with our  existing
          operations;

     o    enhancing our customer base;

     o    managing expansion; and

     o    obtaining required financing.

     Growing  any  business  by  acquisition  presents  numerous  risks  such as
undisclosed  liabilities  and  obligations,  difficulty in obtaining  additional
qualified  personnel,  managing  relationships  with customers and suppliers and
integrating newly acquired operations into existing  infrastructures.  We cannot
give any  assurance  that we will be successful in executing our growth plans or
that we will not incur significant expenses and losses in connection therewith.

     A decline in the market value of our vessels  could lead to a default under
our loan agreements and the loss of our vessels

     The loan  agreements  under our credit  facilities  contain a covenant that
requires the  aggregate  market value of the  mortgaged  vessels to at all times
exceed 140% of the aggregate  outstanding  principal  amount of the loan. If the
market value of our fleet  declines,  we may be in default of this loan covenant
and we may not be able to  refinance  our debt or obtain  additional  financing.
Also,  declining  vessel  values could cause us to breach some of the  covenants
under the financing agreements relating to our indebtedness. If we are unable to
pledge  additional  collateral,  our  lenders  could  accelerate  our  debt  and
foreclose on our fleet.

     Servicing  future debt would limit funds  available for other purposes such
as the payment of dividends

     To finance our fleet expansion program,  we incurred secured  indebtedness.
We must dedicate a portion of our cash flow from operations to pay the principal
and interest on our indebtedness. These payments limit funds otherwise available
for working capital,  capital  expenditures and other purposes.  We will need to
take on additional indebtedness as we expand our fleet, which could increase our
ratio of debt to equity.  The need to service our debt may limit funds available
for other  purposes,  including the payment of  dividends,  and our inability to
service  debt  could lead to  acceleration  of our debt and  foreclosure  on our
fleet.

     Our loan  agreements  contain  restrictive  covenants  that may  limit  our
liquidity and corporate activities

     Our loan  agreements  impose  operating and financial  restrictions  on us.
These restrictions may limit our ability to:

     o    incur additional indebtedness;

     o    create liens on our assets;

     o    sell capital stock of our subsidiaries;

     o    make investments;

     o    engage in mergers or acquisitions;

     o    pay dividends;

     o    make capital expenditures;

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

     o    sell our vessels.

     Therefore,  we may need to seek  permission  from our  lenders  in order to
engage in some corporate  actions.  Our lenders' interests may be different from
ours,  and we  cannot  guarantee  that we will be able to  obtain  our  lenders'
permission when needed.  This may prevent us from taking actions that are in our
best interest.

     We depend on third party managers to manage our fleet

     As of December 31, 2006,  we have  subcontracted  the day to day  technical
management, crewing and certain purchasing functions of all vessels in our fleet
to third party managers,  with the exception of three vessels for which only the
crewing has been assigned to third party managers.  Further,  we may subcontract
the technical  management of vessels acquired in the future to other third party
technical management companies.  While our wholly-owned  subsidiary,  TOP Tanker
Management,  has direct oversight responsibility for these third party managers,
the loss of their services or their failure to perform their  obligations  could
materially and adversely  affect the results of our operations.  Although we may
have rights against these managers if they default on their obligations, we will
have no recourse against these parties.  Further, we expect that we will need to
seek approval from our lenders to change these third party managers.

     Our ability to obtain  additional  debt  financing  may be dependent on the
performance  of our  then  existing  charters  and the  creditworthiness  of our
charterers

     The actual or perceived credit quality of our charterers,  and any defaults
by them,  may  materially  affect our ability to obtain the  additional  capital
resources  that  we  will  require  to  purchase   additional   vessels  or  may
significantly  increase our costs of obtaining  such  capital.  Our inability to
obtain  additional  financing  at all or at a higher than  anticipated  cost may
materially  affect our results of  operation  and our ability to  implement  our
business strategy.

     As we expand our  business,  we will need to  improve  our  operations  and
financial  systems  and staff;  if we cannot  improve  these  systems or recruit
suitable employees, our performance may be adversely affected

     Our  current  operating  and  financial  systems  may not be adequate as we
implement our plan to expand the size of our fleet,  and our attempts to improve
those systems may be ineffective.  If we are unable to operate our financial and
operations systems effectively or to recruit suitable employees as we expand our
fleet, our performance may be adversely affected.

     Our earnings may be adversely affected if we do not successfully employ our
vessels

     We seek to deploy our vessels both on time  charters and in the spot market
in a manner that will optimize our earnings.  As of December 31, 2006, 15 of our
vessels were  contractually  committed  to time  charters.  Although  these time
charters  provide  relatively  steady streams of revenue as well as a portion of
the revenues generated by the charterer's  deployment of the vessels in the spot
market or otherwise, our tankers committed to time charters may not be available
for spot  voyages  during an  upturn in the  tanker  industry  cycle,  when spot
voyages might be more  profitable.  The spot market is highly  competitive,  and
spot market  charter  rates may fluctuate  dramatically  based on the supply and
demand  for the major  commodities  internationally  carried  by water and other
factors.  We cannot assure you that future spot market  voyage  charters will be
available at rates that will allow us to operate our vessels  profitably.  As of
December  31,  2006,  8 vessels were trading in the spot market and 1 vessel was
undergoing her special survey.  If we cannot continue to employ these vessels on
time  charters  or trade  them in the spot  market  profitably,  our  results of
operations and operating cash flow may suffer.

     In the highly competitive  international  tanker market, we may not be able
to compete for charters with new entrants or established  companies with greater
resources

     The operation of tanker vessels and  transportation  of crude and petroleum
products, as well as the shipping industry in general, is extremely competitive.
Competition  arises  primarily  from other vessel  owners,  including  major oil
companies  as  well  as  independent   tanker  companies,   some  of  whom  have
substantially  greater resources than we do.  Competition for the transportation
of oil and  refined  petroleum  products  can be intense  and  depends on price,
location,  size,  age,  condition  and the  acceptability  of the vessel and its
operators  to the  charterers.  Due in part  to the  highly  fragmented  market,
competitors with greater resources could enter and operate larger fleets through
consolidations  or  acquisitions  that may be able to offer  better  prices  and
fleets.

     We  depend  upon  a few  significant  customers  for a  large  part  of our
revenues.  The loss of one or more of these customers could adversely affect our
financial performance

     We have historically derived a significant part of our revenue from a small
number of charterers. In 2006, approximately 40% of our revenue was derived from
2  charterers;  in 2005,  approximately  52% of our revenue  was derived  from 2
charterers;  in  2004,  approximately  44% of our  revenue  was  derived  from 2
charterers;  in  2003,  approximately  47% of our  revenue  was  derived  from 2
charterers  and, in 2002,  approximately  65% of our revenue was derived  from 3
charterers.  During  2006,  under time  charter  contracts,  Glencore  and Vitol
provided  29% and  11% of our  revenues,  respectively.  The  occurrence  of any
problems with these charterers may adversely affect our revenues.

     We may be unable to attract and retain key  management  personnel and other
employees in the international tanker industry,  which may negatively affect the
effectiveness of our management and our results of operations

     Our success depends to a significant  extent upon the abilities and efforts
of our  management  team.  We have entered into  employment  contracts  with our
President, Chief Executive Officer and Director,  Evangelos Pistiolis, our Chief
Financial  Officer and Director,  Stamatios  Tsantanis  and our  Executive  Vice
President  and  Director,  Vangelis  Ikonomou.  Our success will depend upon our
ability to hire and retain key members of our  management  team. The loss of any
of these individuals could adversely affect our business prospects and financial
condition.  Difficulty in hiring and retaining  personnel could adversely affect
our results of operations. We do not intend to maintain "key man" life insurance
on any of our officers.

     Risks involved with operating ocean going vessels could affect our business
and reputation, which would adversely affect our revenues and stock price

     The operation of an ocean-going  vessel carries inherent risks. These risks
include the possibility of:

     o    marine disaster

     o    piracy;

     o    environmental accidents;

     o    cargo and property losses or damage; and

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

     Any of these  circumstances  or events  could  result in death or injury to
persons,  loss of revenues or property,  environmental  damage, higher insurance
rates,  damage to our  customer  relationships,  delay or  rerouting,  and could
increase our costs or lower our revenues.  The  involvement of our vessels in an
oil spill or other environmental  disaster may harm our reputation as a safe and
reliable  vessel  operator.  If one of our vessels were  involved in an accident
with the potential  risk of  environmental  contamination,  the resulting  media
coverage  could  have a  material  adverse  effect on our  business,  results of
operations, cash flows, financial condition and ability to pay dividends.

     Rising fuel prices may adversely affect our profits

     Fuel is a significant,  if not the largest,  operating  expense for many of
our shipping operations when our vessels are not under period charter. The price
and supply of fuel is  unpredictable  and fluctuates based on events outside our
control, including geopolitical developments, supply and demand for oil and gas,
actions by OPEC and other oil and gas producers, war and unrest in oil producing
countries and regions,  regional production patterns and environmental concerns.
As a  result,  an  increase  in the  price  of fuel  may  adversely  affect  our
profitability. Further, fuel may become much more expensive in future, which may
reduce the profitability and  competitiveness of our business versus other forms
of transportation, such as truck or rail.

     Our vessels may suffer damage and we may face unexpected  drydocking costs,
which could affect our cash flow and financial condition

     If our vessels suffer damage,  they may need to be repaired at a drydocking
facility. The costs of drydock repairs are unpredictable and can be substantial.
We may have to pay  drydocking  costs that our  insurance  does not  cover.  The
inactivity of these vessels while they are being repaired and  repositioned,  as
well as the actual  cost of these  repairs,  would  decrease  our  earnings.  In
addition,  space at  drydocking  facilities  is  sometimes  limited  and not all
drydocking  facilities are conveniently  located. We may be unable to find space
at a suitable  drydocking  facility or we may be forced to move to a  drydocking
facility that is not conveniently located to our vessels' positions. The loss of
earnings  while our  vessels  are  forced to wait for  space or to  relocate  to
drydocking facilities that are farther away from the routes on which our vessels
trade would decrease our earnings.

     Purchasing  and operating  previously  owned,  or  secondhand,  vessels may
result in increased operating costs and vessels off-hire,  which could adversely
affect our earnings

     While  we  inspect  previously  owned,  or  secondhand,  vessels  prior  to
purchase,  this does not normally provide us with the same knowledge about their
condition and cost of any required (or  anticipated)  repairs that we would have
had if these vessels had been built for and operated exclusively by us. Also, we
do not receive the benefit of warranties from the builders if the vessels we buy
are older than one year.

     In  general,  the costs to  maintain a vessel in good  operating  condition
increase  with the age of the  vessel.  Older  vessels are  typically  less fuel
efficient and more costly to maintain than more recently constructed vessels due
to  improvements in engine  technology.  Cargo insurance rates increase with the
age of a vessel, making older vessels less desirable to charterers.

     Governmental  regulations,  safety or other equipment  standards related to
the age of vessels may require expenditures for alterations,  or the addition of
new  equipment,  to our vessels and may restrict the type of activities in which
the vessels may engage.  We cannot assure you that,  as our vessels age,  market
conditions  will justify those  expenditures or enable us to operate our vessels
profitably  during the remainder of their useful lives.  If we sell vessels,  we
are not certain  that the price for which we sell them will equal at least their
carrying amount at that time.

     We may not have adequate insurance to compensate us if we lose our vessels

     We procure  insurance for our fleet  against those types of risks  commonly
insured against by vessel owners and operators.  These  insurances  include hull
and machinery  insurance,  protection  and indemnity  insurance,  which includes
environmental  damage and pollution insurance  coverage,  war risk insurance and
insurance against loss of hire, which covers business  interruptions that result
in the loss of use of a vessel.  While we currently  have loss of hire insurance
that covers, subject to annual coverage limits, all of the vessels in our fleet,
we may not purchase loss of hire insurance to cover newly acquired  vessels.  We
can give no assurance that we are adequately  insured  against all risks. We may
not be able to obtain adequate  insurance  coverage at reasonable  rates for our
fleet in the future.  The insurers may not pay particular  claims. Our insurance
policies contain  deductibles for which we will be responsible,  limitations and
exclusions which may nevertheless increase our costs or lower our revenue.

     Maritime claimants could arrest our vessels, which could interrupt our cash
flow

     Crew  members,  suppliers  of goods and  services to a vessel,  shippers of
cargo and other  parties may be entitled to a maritime  lien against that vessel
for unsatisfied  debts,  claims or damages.  In many  jurisdictions,  a maritime
lienholder  may  enforce  its lien by  arresting  a vessel  through  foreclosure
proceedings.  The  arrest  or  attachment  of one or more of our  vessels  could
interrupt  our cash flow and  require  us to pay large sums of money to have the
arrest lifted.

     In addition, in some jurisdictions, such as South Africa, under the "sister
ship"  theory of  liability,  a  claimant  may arrest  both the vessel  which is
subject to the claimant's  maritime lien and any "associated"  vessel,  which is
any vessel owned or controlled by the same owner.  Claimants could try to assert
"sister ship"  liability  against one vessel in our fleet for claims relating to
another of our ships.

     Governments  could  requisition  our  vessels  during  a  period  of war or
emergency, resulting in loss of earnings

     A government could requisition for title or seize our vessels.  Requisition
for title  occurs when a  government  takes  control of a vessel and becomes her
owner.  Also, a government could  requisition our vessels for hire.  Requisition
for hire  occurs when a  government  takes  control of a vessel and  effectively
becomes her charterer at dictated charter rates.  Generally,  requisitions occur
during a period of war or emergency.  Government  requisition  of one or more of
our vessels would negatively impact our revenues.

     Certain existing  stockholders,  who hold approximately 12.6% of our common
stock, may have the power to exert control over us, which may limit your ability
to influence our actions

     Sovereign  Holdings Inc., or Sovereign  Holdings,  a company that is wholly
owned by our  President,  Chief  Executive  Officer and  Director,  Evangelos J.
Pistiolis,  and Kingdom  Holdings  Inc.,  or Kingdom  Holdings,  a company owned
primarily  by adult  relatives of our  President,  Chief  Executive  Officer and
Director,  Evangelos J. Pistiolis,  own,  directly or indirectly,  approximately
12.6% of the outstanding  shares of our common stock.  While these  shareholders
have no agreement,  arrangement or understanding relating to the voting of their
shares of common  stock,  due to the number of shares of our  common  stock they
own, they have the power to exert considerable influence over our actions.

     Investor  confidence  and the  market  price  of our  common  stock  may be
adversely  impacted  if we  are  unable  to  comply  with  Section  404  of  the
Sarbanes-Oxley Act of 2002.

     We are  subject to Section  404 of the  Sarbanes-Oxley  Act of 2002,  which
requires us to include in our annual report on Form 20-F our management's report
on, and assessment of the effectiveness of, our internal controls over financial
reporting.  These  requirements  have been applied to our annual  report for the
fiscal year ending  December 31, 2006.  In addition,  beginning  with the annual
report for the fiscal year ending December 31, 2007, our independent  registered
public  accounting firm will be required to attest to and report on management's
assessment  of  the  effectiveness  of  our  internal  controls  over  financial
reporting.  If we fail to achieve and  maintain  the  adequacy  of our  internal
controls over financial reporting,  we will not be in compliance with all of the
requirements  imposed by Section  404.  Any failure to comply  with  Section 404
could result in an adverse  reaction in the financial  marketplace due to a loss
of investor  confidence in the  reliability of our financial  statements,  which
ultimately could harm our business and could negatively  impact the market price
of our common stock.

     We may have to pay tax on United States source  income,  which would reduce
our earnings

     Under the United States Internal  Revenue Code of 1986, or the Code, 50% of
the gross shipping income of a vessel owning or chartering corporation,  such as
ourselves and our  subsidiaries,  that is  attributable to  transportation  that
begins  or ends,  but that  does not  begin  and end,  in the  United  States is
characterized as United States source shipping income and such income is subject
to a 4% United States federal income tax without allowance for deduction, unless
that corporation qualifies for exemption from tax under Section 883 of the Code.

     We  expect  that we and  each of our  subsidiaries  will  qualify  for this
statutory  tax  exemption  and we have taken  this  position  for United  States
federal  income  tax  return  reporting  purposes.  However,  there are  factual
circumstances beyond our control that could cause us to lose the benefit of this
tax exemption and thereby  become subject to United States federal income tax on
our United States  source  income.  Therefore,  we can give no assurances on our
tax-exempt status or that of any of our subsidiaries.

     If we or our  subsidiaries are not entitled to this exemption under Section
883 for any  taxable  year,  we or our  subsidiaries  would be subject for those
years to a 4% United  States  federal  income  tax on our U.S.  source  shipping
income.  The  imposition  of this taxation  could have a negative  effect on our
business.

     U.S.  tax  authorities  could  treat us as a  "passive  foreign  investment
company," which could have adverse U.S.  federal income tax consequences to U.S.
holders

     A foreign  corporation  will be treated as a  "passive  foreign  investment
company," or PFIC,  for U.S.  federal income tax purposes if either (1) at least
75% of its gross  income for any  taxable  year  consists  of  certain  types of
"passive  income" or (2) at least 50% of the average value of the  corporation's
assets  produce  or are  held for the  production  of  those  types of  "passive
income." For  purposes of these  tests,  "passive  income"  includes  dividends,
interest,  and gains from the sale or exchange of investment  property and rents
and royalties  other than rents and royalties  which are received from unrelated
parties in  connection  with the  active  conduct  of a trade or  business.  For
purposes of these tests,  income  derived from the  performance of services does
not constitute  "passive  income." U.S.  shareholders of a PFIC are subject to a
disadvantageous  U.S.  federal  income  tax  regime  with  respect to the income
derived by the PFIC, the distributions  they receive from the PFIC and the gain,
if any,  they derive from the sale or other  disposition  of their shares in the
PFIC.

     Based on our proposed  method of operation,  we do not believe that we will
be a PFIC with respect to any taxable year.  In this regard,  we intend to treat
the gross  income we derive  or are  deemed to derive  from our time  chartering
activities  as  services  income,  rather than rental  income.  Accordingly,  we
believe that our income from our time chartering  activities does not constitute
"passive  income," and the assets that we own and operate in connection with the
production of that income do not constitute passive assets.

     There  is,  however,  no  direct  legal  authority  under  the  PFIC  rules
addressing our proposed  method of operation.  Accordingly,  no assurance can be
given that the U.S.  Internal  Revenue  Service,  or IRS, or a court of law will
accept  our  position,  and there is a risk that the IRS or a court of law could
determine that we are a PFIC. Moreover,  no assurance can be given that we would
not constitute a PFIC for any future taxable year if there were to be changes in
the nature and extent of our operations.

     If the IRS were to find  that we are or have  been a PFIC  for any  taxable
year, our U.S.  shareholders will face adverse U.S. tax consequences.  Under the
PFIC rules,  unless those shareholders make an election available under the Code
(which election could itself have adverse consequences for such shareholders, as
discussed below under "Tax Considerations--U.S.  Federal Income Taxation of U.S.
Holders"),  such shareholders  would be liable to pay U.S. federal income tax at
the then  prevailing  income tax rates on  ordinary  income plus  interest  upon
excess distributions and upon any gain from the disposition of our common stock,
as if the  excess  distribution  or gain had been  recognized  ratably  over the
shareholder's holding period of our common stock. See "Tax  Considerations--U.S.
Federal Income Taxation of U.S. Holders" for a more comprehensive  discussion of
the U.S. federal income tax consequences to U.S.  shareholders if we are treated
as a PFIC.

     Because we generate all of our revenues in U.S. dollars but incur a portion
of our expenses in other currencies,  exchange rate fluctuations  could hurt our
results of operations

     We generate all of our revenues in U.S. dollars but incur  approximately 6%
of our  expenses in  currencies  other than U.S.  dollars,  mainly  Euros.  This
difference  could lead to fluctuations in net income due to changes in the value
of the U.S.  dollar  relative to the other  currencies,  in particular the Euro.
Should the Euro appreciate relatively to the U.S. Dollar, then our expenses will
increase in U.S Dollar terms,  thereby decreasing our net income.  Specifically,
in the 12 months ended December 31, 2006, the value of the U.S. dollar decreased
by 12.53% as compared to the Euro. We have not hedged these risks. Our operating
results could suffer as a result.

     We are incorporated in the Republic of the Marshall Islands, which does not
have a well-developed body of corporate law

     Our  corporate  affairs are governed by our Articles of  Incorporation  and
Bylaws and by the  Marshall  Islands  Business  Corporations  Act,  or BCA.  The
provisions of the BCA resemble provisions of the corporation laws of a number of
states in the United States.  However, there have been few judicial cases in the
Republic of the Marshall Islands  interpreting the BCA. The rights and fiduciary
responsibilities  of  directors  under the law of the  Republic of the  Marshall
Islands   are  not  as  clearly   established   as  the  rights  and   fiduciary
responsibilities  of directors under statutes or judicial precedent in existence
in certain  United States  jurisdictions.  Security  holder rights may differ as
well.  While the BCA does  specifically  incorporate the  non-statutory  law, or
judicial case law, of the State of Delaware and other states with  substantially
similar legislative provisions, our security holders may have more difficulty in
protecting  their interests in the face of actions by the management,  directors
or  controlling  shareholders  than  would  security  holders  of a  corporation
incorporated in a United States jurisdiction.

ITEM 4. INFORMATION ON THE COMPANY

A.   History and Development of the Company

     Our predecessor,  Ocean Holdings Inc. was formed in January 2000, under the
laws of Marshall  Islands and renamed to TOP Tankers  Inc. in May 2004.  On July
23, 2004, our common stock was listed on the Nasdaq National  Market,  under the
symbol "TOPT", in connection with our initial public offering.  The net proceeds
of our initial public  offering,  approximately  $124.6 million,  were primarily
used  to  finance  the  acquisition  of 10  vessels,  comprised  of 8  ice-class
double-hull  Handymax tankers and 2 double-hull Suezmax tankers.  The total cost
of the acquisition was approximately  $251.3 million. The current address of our
principal  executive  office is 1 Vas.  Sofias and Meg.  Alexandrou  Str,  15124
Maroussi,  Greece.  The telephone  number of our  registered  office is + 30 210
8128000.

     On November 5, 2004, we completed a follow-on offering of our common stock.
The net proceeds of our follow-on offering,  approximately $139.5 million,  were
used primarily to finance the acquisition of 5 double-hull Suezmax tankers.  The
total cost of the acquisition was approximately $249.3 million.

     During 2005, we acquired 5 double-hull  Handymax and 4 double-hull  Suezmax
tankers at a total cost of $453.4  million and sold 1  double-hull  Handymax and
our last  single-hull  Handysize  tanker.  We  finally  sold and  leased-back  5
double-hull Handymax tankers for a period of 7 years.

     From April till July 2006, we issued through a "controlled equity offering"
3,907,365 shares of common stock at par value of $0.01. The net proceeds totaled
$26.9 million.

     During 2006, we sold and leased-back 4 double-hull  Handymax, 4 double-hull
Suezmax and 5 double-hull Suezmax tankers for a period of 5 years, 5 years and 7
years, respectively. Additionally, we sold 3 double-hull Handymax tankers and we
entered into an agreement with SPP Shipbuilding Co, Ltd of the Republic of Korea
for the construction of 6 Product / Chemical tankers.

     As of  December  31,  2006,  our fleet  size  consisted  of 24 vessels - 13
Suezmax  Tankers and 11 Handymax  Tankers,  or 2.5  million  dwt  (including  18
vessels  sold and leased  back) as compared  to 27  vessels,  or 2.6 million dwt
(including 5 vessels sold and leased back) as of December 31, 2005.

     Based on the  Memorandum  of Agreement  dated March 30, 2007,  we agreed to
sell the vessel M/T Errorless to an unrelated party for a consideration of $52.5
million.  The vessel is expected to be delivered to her new owners in the second
quarter of 2007.

B.   Business Overview

Business Strategy

     Our  business  strategy is focused on  building  and  maintaining  enduring
relationships with participants in the international tanker industry,  including
leading   charterers,   oil   companies,   oil  traders,   brokers,   suppliers,
classification  societies,  insurers  and others.  We seek to continue to create
long-term value principally by acquiring and operating high quality double-hull,
refined petroleum products and crude oil tankers. We will consider  acquisitions
in other industry segments as appropriate.

     We believe we have  established  a reputation  in the  international  ocean
transport  industry for operating and  maintaining our fleet with high standards
of  performance,  reliability  and safety.  We have assembled a management  team
comprised  of  executives  who have  extensive  experience  operating  large and
diversified  fleets of tankers and who have strong ties to a number of national,
regional and international oil companies, charterers and traders.

Our Fleet

     We  are a  provider  of  international  seaborne  transportation  services,
carrying refined petroleum  products and crude oil. As of December 31, 2006, our
fleet  consisted  of 24 vessels  (including  18 vessels  sold and  leased-back),
comprised of 11 double-hull  Handymax product tankers and 13 double-hull Suezmax
tankers,  with a total cargo carrying capacity of approximately 2.5 million dwt.
We actively  manage the  deployment  of our fleet  between  spot  market  voyage
charters,  which  generally  last from several days to several  weeks,  and time
charters,  which can last up to  several  years.  88.2% of our fleet by dwt were
sister ships,  which enhances the revenue  generating  potential of our fleet by
providing us with  operational  and  scheduling  flexibility.  Sister ships also
increase our operating  efficiencies  because technical knowledge can be applied
to all vessels in a series and create cost  efficiencies  and economies of scale
when ordering spare parts, supplying and crewing these vessels.

     During 2006, we sold and leased-back 4 double-hull  Handymax, 4 double-hull
Suezmax and 5 double-hull Suezmax tankers for a period of 5 years, 5 years and 7
years, respectively. Additionally, we sold 3 double-hull Handymax tankers and we
entered into an agreement with SPP Shipbuilding Co, Ltd of the Republic of Korea
for the  construction  of 6 Product / Chemical  tankers for a  consideration  of
approximately $285.4 million, which will be funded with secured credit lines and
working  capital.  The  vessels  will be  delivered  during the first and second
quarters of 2009.

<TABLE>
<CAPTION>

                              Dwt          Year                                  Daily Base             Profit Sharing
                              ---          Built    Charter Type   Expiry         Rate            Above Base Rate (2007)
                                           -----
<S>                           <C>          <C>    <C>             <C>           <C>          <C>
13 Suezmax Tankers
TimelessC.................    154,970      1991       Spot
FlawlessC.................    154,970      1991       Spot
StoplessC.................    154,970      1991       Spot
PricelessC................    154,970      1991   Time Charter     Q3/2008       $35,000                        50% thereafter
FaultlessD................    154,970      1992       Spot
NoiselessD................    149,554      1992   Time Charter     Q2/2010       $37,000(1)                               None
StainlessD................    149,599      1992       Spot
EndlessD..................    135,915      1992   Time Charter     Q4/2008A      $36,500                                  None
LimitlessD................    136,055      1993       Spot
Stormless.................    150,038      1993   Time Charter     Q4/2009       $36,900                                  None
Ellen P...................    146,286      1996       Spot
Errorless.................    147,048      1993       Spot
Edgeless..................    147,048      1994       Spot

11 Handymax Tankers
VictoriousB...............     47,084      1991   Time Charter     Q3/2009       $14,000                        50% thereafter
SovereignB................     47,084      1992   Time Charter     Q3/2009       $14,000                        50% thereafter
InvincibleB...............     47,084      1992   Time Charter     Q3/2009       $14,000                        50% thereafter
RelentlessB...............     47,084      1992   Time Charter     Q3/2009       $14,000                        50% thereafter
VanguardC.................     47,084      1992   Time Charter     Q1/2010       $15,250                        50% thereafter
RestlessB.................     47,084      1991   Time Charter     Q4/2009       $15,250                        50% thereafter
SpotlessC.................     47,094      1991   Time Charter     Q1/2010       $15,250                        50% thereafter
DoubtlessC................     47,076      1991   Time Charter     Q1/2010       $15,250                        50% thereafter
FaithfulC.................     45,720      1992   Time Charter     Q2/2010       $14,500      100% first $500 + 50% thereafter
Dauntless................      46,168      1999   Time Charter     Q1/2010       $16,250               100% first $1,000 + 50%
                                                                                                                    thereafter
Ioannis P................      46,346      2003   Time Charter     Q4/2010       $18,000               100% first $1,000 + 50%
                                                                                                                    thereafter

Total Tanker DWT            2,451,301
</TABLE>

A.   Charterers  have  option to extend  contract  for an  additional  four-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.   Vessels sold and leased back in April 2006 for a period of 7 years

1.   Base rate will  change to $36,000  in Q2 2007 and  $35,000 in Q2 2008 until
     expiration.

Chartering of the Fleet

     As of December  31, 2006,  15 of the 24 tankers (11 Handymax  tankers and 4
Suezmax tankers)  operated under time charter  contracts with an average term of
over  three  years  with all but  three of the time  charters  including  profit
sharing arrangements.

     All 11 of our  Handymax  tankers  operated  under  time  charter  contracts
expiring in 2009 and 2010.

     Four of our Handymax  tankers were  deployed  under time charter  contracts
expiring  in Q3 of 2009 and have a base  rate of  $14,000  per day.  Should  the
vessels generate revenues,  on a quarterly basis, in excess of the base rate, we
will receive 50% of the excess of the base rate.

     One of our  Handymax  tankers  was  deployed  under time  charter  contract
expiring in Q4 of 2009 and has a base rate of $15,250 per day. Should the vessel
generate  revenues,  on a quarterly  basis,  in excess of the base rate, we will
receive 50% of the excess of the base rate.

     Three of our Handymax  tankers were deployed  under time charter  contracts
expiring  in Q1 of 2010 and had a base rate of  $13,250  per day.  Based on this
agreement,  should the vessels had generated revenues,  on a quarterly basis, in
excess of the base rate, we would have received 100% of the first $1,250 per day
above the base rate and 50% of the excess thereafter. However, in Q1 2007, these
vessels were redelivered and are currently deployed under time charter contracts
expiring in Q1 of 2010.  These contracts have a base rate of $15,250 per day and
should the vessels  generate  revenues,  on a quarterly  basis, in excess of the
base rate, we will receive 50% of the excess of the base rate.

     One of our  Handymax  tankers  was  deployed  under time  charter  contract
expiring  in Q2 of 2007 and had a base rate of  $13,250  per day.  Based on this
agreement,  should the vessel generate revenues, on a quarterly basis, in excess
of the base rate,  we will  receive  100% of the first  $1,250 per day above the
base rate and 50% of the excess thereafter. This contract is due to expire in Q2
2007 and  upon  expiration  the  vessel  will  enter  into a new a time  charter
contract  expiring  in Q2 of 2010 and will have a base rate of $14,500  per day.
Should the vessel generate revenues, on a quarterly basis, in excess of the base
rate, we will receive 100% of the first $500 per day above the base rate and 50%
of the excess thereafter.

     One of our  Handymax  tankers was deployed  under a time  charter  contract
expiring in Q1 of 2010 and has a base rate of $16,250 per day. Should the vessel
generate  revenues,  on a quarterly  basis,  in excess of the base rate, we will
receive  100% of the  first  $1,000  per day  above the base rate and 50% of the
excess thereafter.

     One of our  Handymax  tankers was deployed  under a time  charter  contract
expiring in Q4 of 2010 and has a base rate of $18,000 per day. Should the vessel
generate  revenues,  on a quarterly  basis,  in excess of the base rate, we will
receive  100% of the  first  $1,000  per day  above the base rate and 50% of the
excess thereafter.

     4 of our 13 Suezmax tankers operated under time charter contracts  expiring
from 2008 to 2010. One of our Suezmax  tankers was deployed under a time charter
contract  expiring in Q3 of 2008 and has a base rate of $35,000 per day.  Should
the vessel generate revenues,  on a quarterly basis, in excess of the base rate,
we will  receive  50% of the excess of the base rate.  The  remaining  3 Suezmax
tankers were deployed under time charter contracts expiring in Q4 of 2008, Q4 of
2009 and Q2 of 2010,  earning  a daily  rate of  $36,500,  $36,900  and  $37,000
respectively.

Management of the Fleet

     Since July 1, 2004, TOP Tanker Management, our wholly-owned subsidiary, has
been responsible for all of the chartering, operational and technical management
of our fleet,  including crewing,  maintenance,  repair,  capital  expenditures,
drydocking,  vessel  taxes,  maintaining  insurance  and other vessel  operating
expenses under management agreements with our vessel owning subsidiaries.  Prior
to July 1, 2004,  the  operations  of our fleet were  managed by Primal  Tankers
Inc., which was wholly-owned by the father of our Chief Executive Officer.

     As of December 31, 2006 TOP Tanker  Management has subcontracted the day to
day technical management and crewing of 5 Handymax tankers and 8 Suezmax tankers
to V.Ships Management Limited, a ship management company,  and has subcontracted
the day to day  technical  management  and  crewing of 5 Handymax  tankers and 3
Suezmax tankers to Hanseatic  Shipping  Company Ltd, a ship  management  company
operating in Cyprus.  Additionally,  TOP Tanker Management has subcontracted the
crewing of 1  Handymax  tanker  and 2 Suezmax  tankers  to V.  Ships  Management
Limited.  TOP Tanker  Management  pays a monthly  fee of $10,000  per vessel for
technical management and crewing of the 13 vessels and $3,100 per vessel for the
crewing of 3 vessels under its agreements with V. Ships Management and a monthly
fee of $7,083 per vessel for the 8 vessels under its  agreements  with Hanseatic
Shipping Company.

Crewing and Employees

     As of December 31, 2005 and 2006,  TOP TANKERS had 3  employees,  while our
wholly-owned  subsidiary,  TOP  Tanker  Management,  employed  approximately  58
employees  in 2005 and 68 employees in 2006,  all of whom are  shore-based.  TOP
Tanker Management  ensures that all seamen have the  qualifications and licenses
required to comply with international regulations and shipping conventions,  and
that our vessels employ experienced and competent personnel.

     V. Ships Management and Hanseatic  Shipping Company are responsible for the
crewing of the fleet. Such  responsibilities  include training,  transportation,
compensation and insurance of the crew.

     All of the  employees  of TOP Tanker  Management  are  subject to a general
collective bargaining agreement covering employees of shipping agents in Greece.
These agreements set industry-wide minimum standards.  We have not had any labor
problems  with our  employees  under this  collective  bargaining  agreement and
consider our workplace and labor union relations to be good.

Environmental Regulation

     Government regulation  significantly affects the ownership and operation of
our vessels. They are subject to international conventions,  national, state and
local laws and  regulations  in force in the  countries in which our vessels may
operate or are registered. We cannot predict the ultimate cost of complying with
these  requirements,  or the impact of these requirements on the resale value or
useful lives of our vessels.

     Various governmental and  quasi-governmental  agencies require us to obtain
permits, licenses and certificates for the operation of our vessels.

     We believe that the heightened level of environmental  and quality concerns
among  insurance  underwriters,  regulators and charterers is leading to greater
inspection  and  safety  requirements  on all  vessels  and may  accelerate  the
scrapping of older vessels  throughout  the industry.  Increasing  environmental
concerns  have  created  a demand  for  vessels  that  conform  to the  stricter
environmental  standards. We maintain operating standards for all of our vessels
that emphasize operational safety,  quality maintenance,  continuous training of
our officers and crews and compliance with U.S. and  international  regulations.
We believe that the operation of our vessels are in substantial  compliance with
applicable  environmental laws and regulations;  however,  because such laws and
regulations  are  frequently  changed  and  may  impose  increasingly   stricter
requirements,  we cannot  predict  the  ultimate  cost of  complying  with these
requirements,  or the impact of these requirements on the resale value or useful
lives of our vessels.

     Our vessels are subject to both scheduled and unscheduled  inspections by a
variety of  governmental  and  private  entities,  each of which may have unique
requirements.  These entities  include the local port  authorities  (U.S.  Coast
Guard,  harbor  master or  equivalent),  classification  societies,  flag  state
administration  (country of  registry)  and  charterers,  particularly  terminal
operators and oil companies.  Failure to maintain necessary permits or approvals
could require us to incur substantial costs or temporarily  suspend operation of
one or more of our vessels.

     International Maritime Organization (IMO)

     The International Maritime Organization,  or IMO (the United Nations agency
for  maritime  safety),  has  adopted  the  International   Convention  for  the
Prevention of Marine Pollution from Ships,  1973, as modified by the Protocol of
1978 relating thereto, which has been updated through various amendments, or the
"MARPOL  Convention".  The MARPOL Convention relates to environmental  standards
including oil leakage or spilling,  garbage management,  as well as the handling
and disposal of noxious liquids,  harmful  substances in packaged forms,  sewage
and air  emissions.  These  regulations,  which  have been  implemented  in many
jurisdictions in which our vessels operate, provide in part, that:

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

          (1) they  have wing  tanks or  double-bottom  spaces  not used for the
          carriage  of oil,  which cover at least 30% of the length of the cargo
          tank section of the hull or bottom; or

          (2) they are capable of hydrostatically balanced loading (loading less
          cargo  into a tanker  so that in the  event of a breach  of the  hull,
          water flows into the tanker,  displacing  oil upwards  instead of into
          the sea);

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

     o    all tankers will be subject to enhanced inspections.

     Also, under IMO regulations,  a tanker must be of double-hull  construction
or a mid-deck design with  double-sided  construction or be of another  approved
design  ensuring  the same level of  protection  against  oil  pollution  if the
tanker:

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

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

     o    completes a major conversion or is a newbuilding delivered on or after
          July 6, 1996.

     Our vessels  are also  subject to  regulatory  requirements  including  the
phase-out of single-hull tankers,  imposed by the IMO. Effective September 2002,
the IMO accelerated its existing  timetable for the phase-out of single-hull oil
tankers. At that time, these regulations  required the phase-out of most single-
hull oil  tankers  by 2015 or  earlier,  depending  on the age of the tanker and
whether it has segregated ballast tanks.

     Under the regulations,  the flag state may allow for some newer single hull
ships registered in its country that conform to certain technical specifications
to continue  operating until the 25th  anniversary of their  delivery.  Any port
state,  however, may deny entry of those single hull tankers that are allowed to
operate  until  their 25th  anniversary  to ports or offshore  terminals.  These
regulations  have  been  adopted  by over  150  nations,  including  many of the
jurisdictions in which our tankers operate.

     As result of the oil spill in November 2002 relating to the loss of the M/T
Prestige, which was owned by a company not affiliated with us, in December 2003,
the Marine  Environmental  Protection  Committee of the IMO, or MEPC, adopted an
amendment to the MARPOL  Convention,  which became  effective in April 2005. The
amendment  revised an existing  regulation  13G  accelerating  the  phase-out of
single hull oil tankers and adopted a new  regulation  13H on the  prevention of
oil pollution  from oil tankers when carrying heavy grade oil. Under the revised
regulation,  single hull oil  tankers  must be phased out no later than April 5,
2005 or the  anniversary  of the date of  delivery of the ship on the date or in
the year specified in the following table:

--------------------------------------------------------------------------------
        Category of Oil Tankers                       Date of Year

Category  1 oil  tankers of 20,000 dwt
and above  carrying  crude  oil,  fuel   April 5, 2005 for ships  delivered  on
oil,  heavy diesel oil or  lubricating   April 5, 1982 or earlier;  or 2005 for
oil as cargo,  and of  30,000  dwt and   ships delivered after April 5, 1982
above  carrying  other oils,  which do
not comply with the  requirements  for
protectively     located    segregated
ballast tanks

Category 2 - oil tankers of 20,000 dwt
and above  carrying  crude  oil,  fuel
oil,  heavy diesel oil or  lubricating   April 5, 2005 for ships  delivered  on
oil as cargo,  and of  30,000  dwt and   April  5,  1977 or  earlier  2005  for
above  carrying  other oils,  which do   ships  delivered  after  April 5, 1977
comply with the  protectively  located   but  before  January  1, 1978 2006 for
segregated ballast tank requirements     ships  delivered in 1978 and 1979 2007
                                         for ships  delivered  in 1980 and 1981
and                                      2008 for ships  delivered in 1982 2009
                                         for ships  delivered  in 1983 2010 for
Category 3 - oil  tankers of 5,000 dwt   ships delivered in 1984 or later
and above  but less  than the  tonnage
specified   for   Category   1  and  2
tankers.
--------------------------------------------------------------------------------

     Under the  revised  regulations,  the flag  state may allow for some  newer
single  hull oil  tankers  registered  in its  country  that  conform to certain
technical  specifications  to  continue  operating  until  the  earlier  of  the
anniversary  of the  date  of  delivery  of  the  vessel  in  2015  or the  25th
anniversary of their delivery.  Any port state, however, may deny entry of those
single hull oil tankers  that are allowed to operate  until the earlier of their
anniversary date of delivery in 2015 or the year in which the ship reaches to 25
years of age after the date of its delivery, whichever is earlier.

     The MEPC, in October 2004,  adopted a unified  interpretation to regulation
13G that  clarified  the date of delivery for tankers that have been  converted.
Under the  interpretation,  where an oil tanker has undergone a major conversion
that has resulted in the  replacement  of the  fore-body,  including  the entire
cargo carrying section,  the major conversion  completion date of the oil tanker
shall be deemed to be the date of delivery of the ship, provided that:

     o    the oil tanker conversion was completed before July 6, 1996;

     o    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

     o    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 the prevention
of oil pollution  from oil tankers when carrying  heavy grade oil, or HGO, which
includes most of the grades of marine fuel. The new regulation bans the carriage
of HGO in single  hull oil  tankers of 5,000 dwt and above  after April 5, 2005,
and in single  hull oil tankers of 600 dwt and above but less than 5,000 dwt, no
later than the anniversary of their delivery in 2008.

     Under regulation 13H, HGO means any of the following:

     o    crude oils having a density at 15(0)C higher than 900 kg/m3;

     o    fuel oils having  either a density at 15(0)C higher than 900 kg/ m3 or
          a kinematic viscosity at 50(0)C higher than 180 mm2/s;

     o    bitumen, tar and their emulsions.

     Under the regulation 13H, the flag state may allow  continued  operation of
oil tankers of 5,000 dwt and above,  carrying crude oil with a density at 15(0)C
higher  than 900  kg/m3  but lower  than 945  kg/m3,  that  conform  to  certain
technical specifications and, in the opinion of the such flag state, the ship is
fit to continue such operation, having regard to the size, age, operational area
and structural  conditions of the ship and provided that the continued operation
shall not go beyond the date on which the ship  reaches 25 years  after the date
of its delivery.  The flag state may also allow continued  operation of a single
hull oil tanker of 600 dwt and above but less than 5,000  dwt,  carrying  HGO as
cargo,  if, in the opinion of the such flag  state,  the ship is fit to continue
such operation,  having regard to the size, age, operational area and structural
conditions of the ship, provided that the operation shall not go beyond the date
on which the ship reaches 25 years after the date of its delivery.

     The flag state may also exempt an oil tanker of 600 dwt and above  carrying
HGO as cargo if the ship is either engaged in voyages exclusively within an area
under its  jurisdiction,  or is engaged in  voyages  exclusively  within an area
under the  jurisdiction  of  another  party,  provided  the party  within  whose
jurisdiction  the ship will be  operating  agrees.  The same  applies to vessels
operating as floating storage units of HGO.

     Any port state, however, can deny entry of single hull tankers carrying HGO
which have been allowed to continue  operation  under the  exemptions  mentioned
above,  into the ports or offshore  terminals  under its  jurisdiction,  or deny
ship-to-ship transfer of HGO in areas under its jurisdiction except when this is
necessary  for the  purpose of  securing  the safety of a ship or saving life at
sea.

     Revised  Annex I to the  MARPOL  Convention  entered  into force in January
2007.  Revised Annex I incorporates  various amendments adopted since the MARPOL
Convention  entered into force in 1983,  including the  amendments to regulation
13G  (regulation 20 in the revised  Annex) and Regulation 13H  (regulation 21 in
the revised Annex).  Revised Annex I also imposes construction  requirements for
oil  tankers  delivered  on or after  January 1, 2010.  A further  amendment  to
revised  Annex I includes an  amendment to the  definition  of "heavy grade oil"
that will broaden the scope of regulation 21.

     In September 1997, the IMO adopted Annex VI to the International Convention
for the  Prevention of Pollution from Ships to address air pollution from ships.
Annex VI was ratified in May 2004 and became  effective  May 19, 2005.  Annex VI
sets limits on sulfur oxide and nitrogen oxide  emissions from ship exhausts and
prohibits   deliberate  emissions  of  ozone  depleting   substances,   such  as
chlorofluorocarbons.  Annex VI also includes a global cap on the sulfur  content
of fuel oil and allows for special areas to be  established  with more stringent
controls on sulfur  emissions.  We believe  that all our  vessels are  currently
compliant in all material  respects  with these  regulations.  Additional or new
conventions, laws and regulations may be adopted that could adversely affect our
business, cash flows, results of operations and financial condition.

     The IMO has also  adopted the  International  Convention  for the Safety of
Life at Sea,  or SOLAS  Convention,  which  imposes a variety  of  standards  to
regulate design and operational  features of ships.  SOLAS Convention  standards
are revised  periodically.  We believe  that all our vessels are in  substantial
compliance with SOLAS Convention standards.

     The requirements  contained in the International Safety Management Code, or
ISM Code,  promulgated  by the IMO,  also  affect our  operations.  The ISM Code
requires the party with operational  control of a vessel to develop an extensive
safety  management system that includes,  among other things,  the adoption of a
safety and  environmental  protection  policy  setting  forth  instructions  and
procedures  for  operating  its vessels  safely and  describing  procedures  for
responding to emergencies.  We intend to rely upon the safety  management system
that we and our third-party technical managers have developed.

     The ISM Code  requires  that vessel  operators  obtain a safety  management
certificate for each vessel they operate.  This certificate evidences compliance
by a vessel's  management with code requirements for a safety management system.
No vessel  can  obtain a  certificate  unless  its  manager  has been  awarded a
document of compliance,  issued by each flag state,  under the ISM Code. We have
obtained   documents  of  compliance  for  our  offices  and  safety  management
certificates  for all of our vessels for which the  certificates are required by
the IMO. We are  required  to renew these  documents  of  compliance  and safety
management certificates annually.

     Noncompliance  with the ISM Code and other IMO  regulations may subject the
shipowner or bareboat charterer to increased liability, may lead to decreases in
available  insurance  coverage for affected vessels and may result in the denial
of access to, or  detention  in, some ports.  The U.S.  Coast Guard and European
Union  authorities  have indicated  that vessels not in compliance  with the ISM
Code by the  applicable  deadlines  will be prohibited  from trading in U.S. and
European Union ports, as the case may be.

     The IMO has negotiated international  conventions that impose liability for
oil  pollution in  international  waters and a signatory's  territorial  waters.
Additional or new  conventions,  laws and regulations may be adopted which could
limit our ability to do business and which could have a material  adverse effect
on our business and results of operations.

     Although  the  United  States  is not a party  to these  conventions,  many
countries have ratified and follow the liability plan adopted by the IMO and set
out in the International  Convention on Civil Liability for Oil Pollution Damage
of 1969.  Under this  convention,  and depending on whether the country in which
the  damage  results  is a  party  to the  1992  Protocol  to the  International
Convention on Civil Liability for Oil Pollution  Damage,  a vessel's  registered
owner is strictly liable for pollution  damage caused in the territorial  waters
of a  contracting  state by  discharge  of  persistent  oil,  subject to certain
complete defenses. Under an amendment to the 1992 protocol that became effective
on  November  1, 2003 for  vessels  of 5,000 to  140,000  gross  tons (a unit of
measurement  for the total enclosed  spaces within a vessel),  liability will be
limited to approximately $6.75 million plus $944.7 for each additional gross ton
over 5,000. For vessels of over 140,000 gross tons, liability will be limited to
approximately $134.4 million. As the convention calculates liability in terms of
a basket of  currencies,  these figures are based on currency  exchange rates on
January  23,  2007.  The  right  to  limit  liability  is  forfeited  under  the
International  Convention on Civil Liability for Oil Pollution  Damage where the
spill is caused by the owner's actual fault; and under the 1992 Protocol,  where
the spill is caused by the  owner's  intentional  or reckless  conduct.  Vessels
trading to states that are parties to these conventions must provide evidence of
insurance  covering  the  liability  of the owner.  In  jurisdictions  where the
International  Convention on Civil  Liability  for Oil Pollution  Damage has not
been adopted, various legislative schemes or common law govern, and liability is
imposed either on the basis of fault or in a manner similar to that  convention.
We  believe  that our P&I  insurance  will  cover the  liability  under the plan
adopted by the IMO.

     U.S  Oil  Pollution  Act of  1990,  Comprehensive  Environmental  Response,
Compensation and Liability Act of the Clean Water Act

     OPA   established  an  extensive   regulatory  and  liability   regime  for
environmental  protection and cleanup of oil spills.  OPA affects all owners and
operators  whose vessels trade with the United  States,  or its  territories  or
possessions,  or whose  vessels  operate in the waters of United  States,  which
include the U.S  territorial  sea and the 200 nautical mile  exclusive  economic
zone  around  the  United  States.  The  Comprehensive  Environmental  Response,
Compensation and Liability Act, or CERCLA, applies to the discharge of hazardous
substances  (other  than oil)  whether  on land or at sea.  Both OPA and  CERCLA
impact our operations.

     Under  OPA,   vessel   owners,   operators  and  bareboat   charterers  are
"responsible parties" who are jointly, severally and strictly liable (unless the
spill results solely from the act or omission of a third party, an act of God or
an act of war) for all  containment and clean-up costs and other damages arising
from oil spills from their vessels.  These other damages are defined  broadly to
include:

     o    natural resource damages and related assessment costs;

     o    real and personal property damages;

     o    net loss of taxes, royalties, rents, profits or earnings capacity;

     o    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 to the greater
of $1,200 per gross ton or $10  million per tanker that is over 3,000 gross tons
(subject to possible  adjustment for  inflation).  Amendments to OPA signed into
law in July 2006 increased these limits on the liability of responsible  parties
to the  greater of $1,900 per gross ton or $16  million  per double  hull tanker
that is over 3,000 gross tons. The act specifically permits individual states to
impose  their own  liability  regimes  with  regard to oil  pollution  incidents
occurring  within their  boundaries,  and some states have  enacted  legislation
providing  for unlimited  liability  for  discharge of  pollutants  within their
waters.  In some cases,  states which have enacted this type of legislation have
not yet issued implementing regulations defining tanker owners' responsibilities
under these laws.  CERCLA,  which  applies to owners and  operators  of vessels,
contains a similar  liability  regime and  provides  for  cleanup,  removal  and
natural  resource  damages.  Liability under CERCLA is limited to the greater of
$300 per gross ton or $5 million.

     These  limits of  liability  do not apply,  however,  where the incident is
caused by violation of applicable U.S. federal safety, construction or operating
regulations,   or  by  the  responsible  party's  gross  negligence  or  willful
misconduct.  These limits do not apply if the responsible party fails or refuses
to report  the  incident  or to  cooperate  and  assist in  connection  with the
substance removal activities.  OPA and CERCLA each preserve the right to recover
damages under existing law,  including maritime tort law. We believe that we are
in substantial  compliance with OPA, CERCLA and all applicable state regulations
in the ports where our vessels call.

     OPA requires owners and operators of vessels to establish and maintain with
the U.S. Coast Guard evidence of financial responsibility sufficient to meet the
limit of their  potential  strict  liability under the act. The U.S. Coast Guard
has enacted  regulations  requiring evidence of financial  responsibility in the
amount of $1,500  per gross ton for  tankers,  coupling  the OPA  limitation  on
liability  of $1,200 per gross ton with the CERCLA  liability  limit of $300 per
gross  ton.  The  U.S.  Coast  Guard  has  indicated  that it  expects  to adopt
regulations  requiring  evidence of  financial  responsibility  in amounts  that
reflect the higher limits of liability imposed by the July amendments to OPA, as
described above. Under the regulations, evidence of financial responsibility may
be demonstrated by insurance, surety bond, self-insurance or guaranty. Under OPA
regulations,  an owner or  operator  of more  than one  tanker  is  required  to
demonstrate  evidence of  financial  responsibility  for the entire  fleet in an
amount  equal only to the  financial  responsibility  requirement  of the tanker
having the  greatest  maximum  strict  liability  under OPA and CERCLA.  We have
provided such  evidence and received  certificates  of financial  responsibility
from the U.S. Coast Guard for each of our vessels required to have one.

     We insure each of our vessels  with  pollution  liability  insurance in the
maximum  commercially  available  amount of $1.0 billion.  A catastrophic  spill
could exceed the insurance coverage  available,  in which event there could be a
material adverse effect on our business.

     Under OPA, with certain  limited  exceptions,  all newly-built or converted
vessels operating in U.S. waters must be built with  double-hulls,  and existing
vessels that do not comply with the double-hull  requirement  will be prohibited
from trading in U.S. waters over a 20-year period (1995-2015) based on size, age
and place of discharge,  unless retrofitted with  double-hulls.  Notwithstanding
the  prohibition  to  trade  schedule,   the  act  currently   permits  existing
single-hull  and  double-sided  tankers to operate  until the year 2015 if their
operations  within  U.S.  waters are  limited to  discharging  at the  Louisiana
Offshore Oil Port or  off-loading  by lightering  within  authorized  lightering
zones more than 60 miles  off-shore.  Lightering is the process by which vessels
at sea  off-load  their cargo to smaller  vessels for  ultimate  delivery to the
discharge port.

     Under OPA, with certain  limited  exceptions,  all newly built or converted
tankers  operating  in U.S.  waters  must be built with  double-hulls.  Existing
vessels that do not comply with the double-hull  requirement  must be phased out
over a  20-year  period,  from  1995 to 2015,  based on size,  age and  place of
discharge,  unless retrofitted with double-hulls.  Notwithstanding the phase-out
period, OPA currently permits existing  single-hull tankers to operate until the
year 2015 if their operations within U.S. waters are limited to:

     o    discharging  at the  Louisiana  Offshore  Oil Port,  also known as the
          LOOP; or

     o    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.

     Owners or operators of tankers operating in the waters of the United States
must file vessel response plans with the U.S. Coast Guard, and their tankers are
required to operate in compliance  with their U.S. Coast Guard  approved  plans.
These response plans must, among other things:

     o    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 case discharge";

     o    describe crew training and drills; and

     o    identify a  qualified  individual  with full  authority  to  implement
          removal actions.

     We have obtained vessel response plans approved by the U.S. Coast Guard for
our vessels operating in the waters of the United States. In addition,  the U.S.
Coast Guard has announced it intends to propose  similar  regulations  requiring
certain  vessels  to  prepare  response  plans  for  the  release  of  hazardous
substances.

     In addition,  the United  States Clean Water Act prohibits the discharge of
oil or hazardous substances in United States navigable waters and imposes strict
liability in the form of penalties for unauthorized discharges.  The Clean Water
Act also imposes substantial liability for the costs of removal, remediation and
damages and complements the remedies  available under OPA and CERCLA,  discussed
above. The United States  Environmental  Protection Agency, or EPA, has exempted
the  discharge of ballast  water and other  substances  incidental to the normal
operation of vessels in U.S. ports from Clean Water Act permitting requirements.
However,  on March 31, 2005, a U.S.  District  Court ruled that the EPA exceeded
its authority in creating an exemption for ballast water. On September 18, 2006,
the court issued an order  invalidating  the exemption in EPA's  regulations for
all  discharges  incidental to the normal  operation of a vessel as of September
30,  2008,  and  directing  the EPA to  develop  a  system  for  regulating  all
discharges  from vessels by that date.  Although the EPA has  indicated  that it
will appeal this  decision,  if the exemption is repealed,  we may be subject to
Clean Water Act permit  requirements  that could include ballast water treatment
obligations that could increase the cost of operating in the United States.  For
example,  this could  require the  installation  of  equipment on our vessels to
treat ballast water before it is discharged or the  implementation of other port
facility  disposal  arrangements or procedures at potentially  substantial cost,
and/or otherwise restrict our vessels from entering U.S. waters.

     The National Invasive Species Act, or NISA, was enacted in 1996 in response
to growing  reports of harmful  organisms being released into U.S. ports through
ballast  water taken on by ships in foreign  ports.  NISA  established a ballast
water management program for ships entering U.S. waters.  Under NISA,  mid-ocean
ballast  water  exchange  is  voluntary,  except for ships  heading to the Great
Lakes,  Hudson Bay, or vessels  engaged in the foreign  export of Alaskan  North
Slope crude oil. However,  NISA's exporting and record-keeping  requirements are
mandatory for vessels bound for any port in the United States.  Although ballast
water  exchange is the primary  means of compliance  with the act's  guidelines,
compliance  can also be achieved  through the retention of ballast water onboard
the  ship,  or the  use  of  environmentally  sound  alternative  ballast  water
management  methods  approved by the U.S. Coast Guard. If the mid-ocean  ballast
exchange is made mandatory  throughout the United States,  or if water treatment
requirements or options are instituted,  the costs of compliance  could increase
for ocean carriers.

     Our  operations  occasionally  generate  and  require  the  transportation,
treatment  and  disposal of both  hazardous  and  non-hazardous  wastes that are
subject to the requirements of the U.S. Resource  Conservation and Recovery Act,
or RCRA, or comparable state, local or foreign requirements.  In addition,  from
time to time we  arrange  for the  disposal  of  hazardous  waste  or  hazardous
substances at offsite  disposal  facilities.  If such  materials are  improperly
disposed of by third parties,  we might still be liable for clean up costs under
applicable laws.

     Several of our vessels currently carry cargoes to U.S. waters regularly and
we  believe  that all of our  vessels  are  suitable  to meet OPA and other U.S.
environmental  requirements  and that  they  would  also  qualify  for  trade if
chartered to serve U.S. ports.

     European Union Tanker Restrictions

     In July 2003, in response to M/T Prestige oil spill in November  2002,  the
European Union adopted  regulation  that  accelerates the IMO single hull tanker
phase-out  timetable.  Under the  regulation no oil tanker is allowed to operate
under the flag of a EU member state,  nor shall any oil tanker,  irrespective of
its flag,  be  allowed  to enter  into  ports or  offshore  terminals  under the
jurisdiction  of a EU member state after the anniversary of the date of delivery
of the ship in the year specified in the following table,  unless such tanker is
a double hull oil tanker:

--------------------------------------------------------------------------------
      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        2003 for ships delivered in 1980 or earlier
lubricating oil as cargo, and of     2004 for ships delivered in 1981
30,000 dwt and above carrying        2005 for ships delivered in 1982 or later
other oils, which do not comply
with the requirements for
protectively located segregated
ballast tanks
--------------------------------------------------------------------------------
Category 2 - oil tankers of 20,000
dwt and above carrying crude oil,
fuel oil, heavy diesel oil or        2003 for ships delivered in 1975 or earlier
lubricating oil as cargo, and of     2004 for ships delivered in 1976
30,000 dwt and above carrying        2005 for ships delivered in 1977
other oils, which do comply with     2006 for ships delivered in 1978 and 1979
the protectively located             2007 for ships delivered in 1980 and 1981
segregated ballast tank              2008 for ships delivered in 1982
requirements                         2009 for ships delivered in 1983
                                     2010 for ships delivered in 1984 or later

and

Category 3 - oil tankers of 5,000
dwt and above but less than the
tonnage specified for Category 1
and 2 tankers.

--------------------------------------------------------------------------------

     Furthermore,  under the  regulation,  all oil  tankers of 5,000 dwt or less
must comply with the double hull requirements no later than the anniversary date
of delivery of the ship in the year 2008. The regulation, however, provides that
oil tankers operated  exclusively in ports and inland navigation may be exempted
from the double hull  requirement  provided that they are duly  certified  under
inland water legislation.

     The European  Union,  following the lead of certain  European Union nations
such as Italy and Spain,  as of October  2003,  has also banned all single- hull
tankers of 600 dwt and above carrying HGO,  regardless of flag, from entering or
leaving  its  ports or  offshore  terminals  or  anchoring  in areas  under  its
jurisdiction. Commencing in 2005, certain single- hull tankers above 15 years of
age will also be  restricted  from entering or leaving  European  Union ports or
offshore terminals and anchoring in areas under European Union jurisdiction.

     The European  Union is also  considering  legislation  that would:  (1) ban
manifestly  sub-standard  vessels  (defined as those over 15 years old that have
been detained by port  authorities  at least twice in a six -month  period) from
European  waters  and create an  obligation  of port  states to inspect  vessels
posing a high risk to maritime safety or the marine environment; and (2) provide
the  European  Union with  greater  authority  and control  over  classification
societies,  including  the ability to seek to suspend or revoke the authority of
negligent societies.  It is impossible to predict what legislation or additional
regulations,  if any,  may be  promulgated  by the  European  Union or any other
country or authority.

     Vessel Security Regulations

     Since the  terrorist  attacks  of  September  11,  2001,  there have been a
variety of  initiatives  intended to enhance  vessel  security.  On November 25,
2002, the U.S Maritime  Transportation  Security Act of 2002, or MTSA, came into
effect.  To implement certain portions of the MTSA, in July 2003, the U.S. Coast
Guard  issued  regulations  requiring  the  implementation  of certain  security
requirements  aboard vessels  operating in waters subject to the jurisdiction of
the United States.  Similarly,  in December 2002,  amendments to SOLAS created a
new chapter of the convention dealing  specifically with maritime security.  The
new chapter became effective in July 2004 and imposes various detailed  security
obligations on vessels and port authorities,  most of which are contained in the
International Ship and Port Facilities Security Code, or the ISPS Code. The ISPS
Code is designed to protect ports and international  shipping against terrorism.
After  July  1,  2004,  to  trade  internationally,  a  vessel  must  obtain  an
International Ship Security Certificate from a recognized security  organization
approved by the vessel's flag state. Among the various requirements are:

     o    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;

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

     o    the development of vessel security plans;

     o    ship  identification  number to be  permanently  marked on a  vessel's
          hull;

     o    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

     o    compliance with flag state security certification requirements.

     The U.S.  Coast Guard  regulations,  intended  to align with  international
maritime security standards,  exempt from MTSA vessel security measures non-U.S.
vessels that have on board,  as of July 1, 2004,  a valid ISSC  attesting to the
vessel's compliance with SOLAS security  requirements and the ISPS Code. We have
implemented the various security measures  addressed by MTSA, SOLAS and the ISPS
Code, and our fleet is in compliance with applicable security requirements.

Inspection by Classification Societies

     Every seagoing vessel must be "classed" by a  classification  society.  The
classification  society certifies that the vessel is "in class," signifying that
the vessel has been built and  maintained  in  accordance  with the rules of the
classification society and complies with applicable rules and regulations of the
vessel's  country of registry and the  international  conventions  of which that
country is a member.  In addition,  where surveys are required by  international
conventions  and  corresponding  laws  and  ordinances  of  a  flag  state,  the
classification  society will undertake them on application or by official order,
acting on behalf of the authorities concerned.

     The  classification  society also  undertakes  on request other surveys and
checks that are  required by  regulations  and  requirements  of the flag state.
These surveys are subject to agreements  made in each  individual case and/or to
the regulations of the country concerned.

     For maintenance of the class,  regular and  extraordinary  surveys of hull,
machinery, including the electrical plant, and any special equipment classed are
required to be performed as follows:

     Annual Surveys:  For seagoing  ships,  annual surveys are conducted for the
hull and the machinery, including the electrical plant, and where applicable for
special  equipment  classed,  at  intervals  of  12  months  from  the  date  of
commencement of the class period indicated in the certificate.

     Intermediate   Surveys:   Extended   annual  surveys  are  referred  to  as
intermediate  surveys and typically  are conducted two and one-half  years after
commissioning and each class renewal. Intermediate surveys may be carried out on
the occasion of the second or third annual survey.

     Class  Renewal  Surveys:  Class  renewal  surveys,  also  known as  special
surveys,  are  carried  out  for  the  ship's  hull,  machinery,  including  the
electrical  plant,  and for any  special  equipment  classed,  at the  intervals
indicated  by the  character  of  classification  for the hull.  At the  special
survey, the vessel is thoroughly examined,  including audio-gauging to determine
the thickness of the steel structures.  Should the thickness be found to be less
than class  requirements,  the  classification  society  would  prescribe  steel
renewals.  The  classification  society  may grant a one-year  grace  period for
completion of the special  survey.  Substantial  amounts of money may have to be
spent for steel  renewals  to pass a special  survey if the  vessel  experiences
excessive wear and tear. In lieu of the special survey every four or five years,
depending on whether a grace period was granted,  a shipowner  has the option of
arranging with the classification  society for the vessel's hull or machinery to
be on a  continuous  survey  cycle,  in which every part of the vessel  would be
surveyed within a five-year cycle.

     At an owner's  application,  the surveys  required for class renewal may be
split according to an agreed schedule to extend over the entire period of class.
This process is referred to as continuous class renewal.

     All areas  subject to survey as defined by the  classification  society are
required to be surveyed at least once per class period, unless shorter intervals
between  surveys are  prescribed  elsewhere.  The period  between two subsequent
surveys of each area must not exceed five years.

     Most vessels are also  dry-docked  every 30 to 36 months for  inspection of
the underwater parts and for repairs related to inspections.  If any defects are
found, the classification  surveyor will issue a "recommendation"  which must be
rectified by the ship owner within prescribed time limits.

     Most insurance underwriters make it a condition for insurance coverage that
a vessel be  certified  as "in  class" by a  classification  society  which is a
member of the  International  Association of Classification  Societies.  All our
vessels are  certified as being "in class" by the  American  Bureau of Shipping,
Lloyd's  Register  of  Shipping or Det Norske  Veritas.  All new and  secondhand
vessels that we purchase  must be certified  prior to their  delivery  under our
standard  contracts and memorandum of agreement.  If the vessel is not certified
on the date of closing, we have no obligation to take delivery of the vessel.

Risk of Loss and Liability Insurance General

     The  operation  of any  cargo  vessel  includes  risks  such as  mechanical
failure,   collision,   property  loss,   cargo  loss  or  damage  and  business
interruption due to political  circumstances in foreign  countries,  hostilities
and labor  strikes.  In  addition,  there is always an inherent  possibility  of
marine disaster,  including oil spills and other environmental  mishaps, and the
liabilities  arising from owning and operating  vessels in international  trade.
OPA, which imposes  virtually  unlimited  liability  upon owners,  operators and
demise charterers of any vessel trading in the United States exclusive  economic
zone  for  certain  oil  pollution  accidents  in the  United  States,  has made
liability  insurance more expensive for ship owners and operators trading in the
United States market. While we carry loss of hire insurance to cover 100% of our
fleet, we may not be able to maintain this level of coverage. Furthermore, while
we believe that our present insurance coverage is adequate, not all risks can be
insured,  and there can be no guarantee that any specific claim will be paid, or
that we will always be able to obtain adequate  insurance coverage at reasonable
rates.

Hull and Machinery Insurance

     We have obtained  marine hull and machinery and war risk  insurance,  which
includes  the risk of  actual  or  constructive  total  loss,  general  average,
particular average,  salvage, salvage charges, sue and labor, damage received in
collision  or contact  with fixed or floating  objects for all of the vessels in
our fleet.  The vessels in our fleet are each covered up to at least fair market
value, with deductibles of $100,000 per vessel per incident, for the 11 Handymax
tankers and $200,000 per vessel per  incident,  for the 13 Suezmax  tankers.  We
also have  arranged  increased  value  coverage  for some  vessels.  Under  this
increased  value  coverage,  in the  event of total  loss of a  vessel,  we will
recover for  amounts  not  recoverable  under the hull and  machinery  policy by
reason of any under-insurance.

Loss of Hire Insurance

     We have obtained  also Loss of Hire  Insurance to cover the loss of hire of
each  vessel  for 90 days in excess of 30 days in case of an  incident  which is
coverable, by Hull and Machinery policy.

Protection and Indemnity Insurance

     Protection  and indemnity  insurance is provided by mutual  protection  and
indemnity  associations,  or P&I  Associations,  which  covers  our third  party
liabilities  in connection  with our shipping  activities.  This includes  third
party  liability  and  other  related  expenses  of  injury  or  death  of crew,
passengers and other third parties, loss or damage to cargo, claims arising from
collisions with other vessels,  damage to other third party property,  pollution
arising from oil or other  substances,  including wreck removal.  Protection and
indemnity  insurance  is a form  of  mutual  indemnity  insurance,  extended  by
protection  and  indemnity  mutual  associations,  or  "clubs."  Subject  to the
"capping" discussed below, our coverage, except for pollution, is unlimited.

     Our current protection and indemnity insurance coverage for pollution is $1
billion per vessel per incident. The fourteen P&I Associations that comprise the
International  Group insure  approximately 90% of the world's commercial tonnage
and have  entered  into a  pooling  agreement  to  reinsure  each  association's
liabilities.  Each P&I  Association  has capped  its  exposure  to this  pooling
agreement at $4.25 billion. As a member of a P&I Association,  which is a member
of the International  Group, we are subject to calls payable to the associations
based on its claim  records as well as the claim records of all other members of
the  individual  associations,  and  members  of the  pool  of P&I  Associations
comprising the International Group.

Competition

     We operate in markets that are highly  competitive  and based  primarily on
supply  and  demand.  We  compete  for  charters  on the basis of price,  vessel
location, size, age and condition of the vessel, as well as on our reputation as
an operator. We arrange our time charters and voyage charters in the spot market
through the use of brokers,  who  negotiate  the terms of the charters  based on
market  conditions.  We compete  primarily with owners of tankers in the Suezmax
and Handymax  class  sizes.  Ownership  of tankers is highly  fragmented  and is
divided among major oil companies and independent vessel owners.

Seasonality

     We operate our tankers in markets that have historically exhibited seasonal
variations in demand and, therefore,  charter rates. This seasonality may result
in quarter-to-quarter  volatility in our operating results. The tanker sector is
typically  stronger in the fall and winter months in  anticipation  of increased
oil  consumption  of oil and  petroleum  in the northern  hemisphere  during the
winter months.  Our Handymax tankers carry, in part,  refined petroleum products
such as gasoline, jet fuel, kerosene,  naphtha and heating oil. As a result, our
revenues from our tankers may be weaker during the fiscal quarters ended June 30
and September 30, and,  conversely,  revenues may be stronger in fiscal quarters
ended December 31 and March 31.

Legal Proceedings Against Us

     The Company and certain of its executive  officers and directors were named
as  defendants  in a putative  class action  securities  law suit brought in the
United States District Court, Southern District of New York, alleging violations
of the  Securities  Exchange  Act of 1934 (the  "Exchange  Act") and Rule  10b-5
promulgated  thereunder.  As of the  date of  this  annual  report,  none of the
defendants has been served in this action, which has been consolidated with nine
additional putative class action law suits. The Court is currently considering a
motion for the appointment of a lead plaintiff.

     The  Company  along  with some of its  directors  has also been  named as a
nominal  defendant in a derivative suit seeking damages from certain  individual
officers and  directors of the  Company,  on behalf of the Company,  for alleged
breaches of fiduciary duties and violations of the Exchange Act. The Company has
not been served in this action as of the date of this annual report. The Company
intends to defend these suits vigorously.

     Further, we are party, as plaintiff or defendant,  to a variety of lawsuits
for damages  arising  principally  from  personal  injury and property  casualty
claims. Most claims are covered by insurance,  subject to customary deductibles.
We believe that these claims will not, either  individually or in the aggregate,
have a material  adverse  effect on us, our  financial  condition  or results of
operations.  From  time  to  time  in the  future  we may be  subject  to  legal
proceedings and claims in the ordinary course of business,  principally personal
injury and property casualty claims.  Those claims, even if lacking merit, could
result in the expenditure of significant financial and managerial resources.  We
have not been  involved in any legal  proceedings  which may have, or have had a
significant  effect  on  our  financial  position,  nor  are  we  aware  of  any
proceedings that are pending or threatened  which may have a significant  effect
on our financial position.

C.    Organizational Structure

     TOP Tankers Inc. is the sole owner of all outstanding  shares of the wholly
owned  subsidiaries  as of December 31, 2006. Top Tankers Inc. is the sole owner
of all outstanding shares of the following subsidiaries:

    (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 (Marshall Islands),
    (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,

D.   Properties, Plants and Equipment

     For a list of our fleet see "Business Overview - Our Fleet" above.

     In January  2006,  we 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  rental is Euro  120,000
adjusted annually for inflation increase plus 1%.

     In addition,  our subsidiary TOP TANKERS (U.K.) LIMITED,  a  representative
office in London, leases office space in London, from an unrelated third party.

ITEM 4A. Unresolved Staff Comments

         None

ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

     The  following is a discussion  of our  financial  condition and results of
operations for the years ended December 31, 2006, 2005 and 2004. You should read
this section together with the consolidated  financial  statements including the
notes to those financial statements for the periods mentioned above.

     We  are a  provider  of  international  seaborne  transportation  services,
carrying refined petroleum  products and crude oil. As of December 31, 2006, our
fleet  consisted of 24 vessels,  comprised of 11 Product  tankers and 13 Suezmax
tankers,  with a total  cargo  carrying  capacity of  approximately  2.5 million
deadweight tons, or dwt.

     We actively  manage the  deployment of our fleet between spot market voyage
charters,  which  generally  last from several days to several  weeks,  and time
charters,  which can last up to several  years.  A spot market voyage charter is
generally a contract  to carry a specific  cargo from a load port to a discharge
port for an agreed upon total amount. Under spot market voyage charters,  we pay
voyage expenses such as port,  canal and fuel costs. A time charter is generally
a contract to charter a vessel for a fixed  period of time at a specified  daily
rate.  Under time  charters,  the charterer  pays voyage  expenses such as port,
canal and fuel costs. Under both types of charters,  we pay for vessel operating
expenses,  which  include  crew  costs,  provisions,  deck  and  engine  stores,
lubricating oil, insurance,  maintenance and repairs, as well as for commissions
on gross charter rates. We are also  responsible  for the vessel's  intermediate
and special survey costs.

     Vessels operating on time charters provide more predictable cash flows, but
can yield lower profit margins than vessels  operating in the spot market during
periods  characterized by favorable market conditions.  Vessels operating in the
spot market  generate  revenues that are less  predictable  but may enable us to
capture  increased profit margins during periods of improvements in vessel rates
although we are exposed to the risk of declining vessel rates,  which may have a
materially  adverse  impact  on our  financial  performance.  We are  constantly
evaluating  opportunities to increase the number of our vessels deployed on time
charters,  but only  expect to enter into  additional  time  charters  if we can
obtain contract terms that satisfy our criteria.

A.   Operating Results

     For discussion and analysis  purposes only, we evaluate  performance  using
time charter  equivalent,  or TCE,  revenues.  TCE revenues are voyage  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 a
charterer  under a time  charter,  as  well  as  commissions.  We  believe  that
presenting  voyage revenues net of voyage  expenses  neutralizes the variability
created by unique costs associated with particular  voyages or the deployment of
vessels on the spot market and presents a more  accurate  representation  of the
revenues generated by our vessels.

     We  calculate  daily TCE rates by dividing  TCE revenues by voyage days for
the  relevant  time  period.  TCE  revenues  include  demurrage  revenue,  which
represents  fees charged to charterers  associated  with our spot market voyages
when the charterer  exceeds the agreed upon time required to load or discharge a
cargo. We calculate daily direct vessel operating expenses and daily general and
administrative  expenses for the relevant  period by dividing the total expenses
by the  aggregate  number of  calendar  days that we owned  each  tanker for the
period.

     We depreciate  our tankers on a  straight-line  basis over their  estimated
useful lives  determined to be 25 years from the date of their initial  delivery
from the shipyard.  Depreciation  is based on cost less the  estimated  residual
value. We capitalize the total costs  associated with a drydocking,  as deferred
charges,  and amortize these costs on a straight-line basis over the period when
the next  drydocking  becomes due,  which is  typically  30 months.  Regulations
and/or incidents may change the estimated dates of next drydockings.

     In August and September 2005, we sold the M/T Restless, M/T Sovereign,  M/T
Relentless, M/T Invincible and M/T Victorious, and entered into bareboat charter
agreements to leaseback the vessels, for a period of seven years.

     In March 2006, we sold the M/T Faithful,  M/T Spotless,  M/T Vanguard,  M/T
Doubtless,  M/T  Flawless,  M/T  Timeless,  M/T  Priceless  and M/T Stopless and
entered into bareboat charter agreements to leaseback the vessels,  for a period
of five years.

     In April 2006, we sold the M/T Limitless,  M/T Endless, M/T Stainless,  M/T
Faultless and M/T  Noiseless,  and entered into bareboat  charter  agreements to
leaseback the 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 lease
period;  lease  payments  relating to the  bareboat  charters of the vessels are
separately reflected in the consolidated statements of income.  According to the
terms of the 2006 sale and leaseback  transactions,  10% of the gross  aggregate
sales price, $55.0 million,  has been withheld by the purchaser and will be paid
to us not later than three  months after the end of bareboat  charter  period or
upon the resale of the vessels by the purchaser,  if earlier.  Consequently,  we
recognized this  receivable  from the purchaser at a discounted  amount upon the
sale of the vessels,  classified  as a non-current  asset,  and will accrete the
balance of the  receivable to the full $55.0 million,  through  deferred gain on
sale and  leaseback of vessels  over the period of the bareboat  charter or upon
the resale of the  vessels by the  purchaser,  if  earlier.  The  purpose of the
hold-back  is to serve as  security  for the due and  punctual  performance  and
observance of all the terms and conditions from our behalf under the agreements.

     The purpose of the sale and leaseback  transactions  that were completed in
2006 was to take advantage of the high asset price environment prevailing in the
market at the time and to  maintain  commercial  and  operations  control of the
vessels for a period of five to seven years. The majority of the net proceeds of
the transaction, after debt repayment, were distributed as a special dividend to
the Company's shareholders.

     Adjusted EBITDA, as defined in Footnote 3 to the "Selected  Financial Data"
in Item 3 above, decreased by $50.0 million, or 35.7%, to $90.1 million for 2006
compared  to $140.1  million  for the prior  year.  This  decrease is due to the
increase in charter hire  expense to $96.3  million in 2006 from $7.2 million in
2005, as a result of the 13 sale and leaseback transactions concluded in 2006.

Year ended December 31, 2006 compared to the year ended December 31, 2005

     VOYAGE  REVENUES--Voyage  revenues increased by $65.8 million, or 26.9%, to
$310.0  million  for 2006  compared to $244.2  million for the prior year.  This
increase is due to the increase of our total voyage days for fleet to 8,634 days
in 2006 from  7,436 days in 2005,  as a result of the  increase  of our  average
number of vessels to 26.7 in 2006 from 21.7 in 2005,  and to the increase of the
average daily TCE rate achieved by our fleet by $1,618,  or 5.8%, to $29,499 for
2006 compared to $27,881 for the prior year.

     VOYAGE  EXPENSES--Voyage   expenses  primarily  consist  of  port  charges,
including canal dues,  bunkers (fuel costs) and commissions that are unique to a
particular voyage. These expenses,  which are paid by the charterer under a time
charter contract, as well as commissions,  increased $18.5 million, or 50.1%, to
$55.4  million  for 2006  compared to $36.9  million  for the prior  year.  This
increase is primarily  due to the  increase of our average  number of vessels to
26.7 in 2006 from 21.7 in 2005, as well as the increase of our total spot market
days for fleet to 2,411 days in 2006 from 1,869 days in 2005.  Furthermore,  the
average market price for bunkers increased in 2006 approximately by 17.0%.

     NET VOYAGE REVENUES--Net  voyage revenues,  which are voyage revenues minus
voyage  expenses,  increased by $47.4 million,  or 22.9%,  to $254.7 million for
2006 compared to $207.3 million for the prior year.  This increase is the result
of the  increase  of our total  voyage days for fleet to 8,634 days in 2006 from
7,436 days in 2005, due to the increase of our average number of vessels to 26.7
in 2006 from 21.7 in 2005.

                                                          2005           2006
                                                          ----           -----
Dollars in thousands
Voyage revenues.................................      $244,215        $310,043
Less Voyage expenses............................       (36,889)        (55,351)

Net voyage revenues.............................      $207,326        $254,692
                                                      ========        ========

     The following  describes  our charter  revenues for 2006 as compared to the
prior year:

     Freight revenues:

     o    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.

     o    The average  daily spot rate was $45,328 for 2006  compared to average
          daily spot rate of $43,713 for the prior year.

     o    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 net voyage revenue in 2006,  compared to 39.4%, of net
          voyage revenue generated in the spot market during the prior year.

     Hire revenues:

     o    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 prior year.

     o    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.

     o    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 net voyage  revenue in 2006,  compared to 60.6% during
          the prior year.

     CHARTER HIRE EXPENSE--Charter hire expense,  which refers to lease payments
for the 18 vessels sold and leased back, which are treated as operating  leases,
increased by $89.1 million,  or 1,237.5%,  to $96.3 million for 2006 compared to
$7.2  million  for the  prior  year.  This  increase  is due to the 13 sale  and
leaseback deals which were concluded in 2006.

     OTHER VESSEL OPERATING  EXPENSES--Other  vessel operating  expenses,  which
include  crew costs,  insurance,  repairs and  maintenance,  spares,  consumable
stores and taxes increased by $18.8 million, or 39.7%, to $66.1 million for 2006
compared to $47.3 million for the prior year.  This increase is primarily due to
the  increase  of our total  calendar  days for fleet to 9,747 days in 2006 from
7,905 days in 2005, due to the increase of our average number of vessels to 26.7
in 2006 from 21.7 in 2005, and due to the increase of daily average other vessel
operating  expenses by $795, or 13.3%, to $6,780 for 2006 compared to $5,985 for
the prior  year.  The  increase  of the daily  average  other  vessel  operating
expenses is attributed  mainly to the increase of our average  number of suezmax
tankers  in  2006  from  8.3 in  2005 to  13.0  in  2006,  and to the  increased
maintenance expense per vessel due to extensive repairs conducted in 2006.

     SUB-MANAGER FEES--Sub-Manager fees which relate to the fees paid to V.Ships
Management  Limited and  Hanseatic  Shipping  Company  Ltd.,  decreased  by $0.4
million,  or 12.9%,  to $2.7  million for 2006  compared to $3.1 million for the
prior year. This decrease is mainly due to the transfer of technical  management
and crewing of 10 vessels from Unicom Management to V.Ships  Management  Limited
and Hanseatic  Shipping  Company Ltd.  effectuated in the third quarter of 2005.
Unicom  Management  charged a monthly  fee of $14,000  per vessel for  technical
management  and  crewing,  whereas  V.Ships  Management  Limited  and  Hanseatic
Shipping Company Ltd., charge for technical management and crewing a monthly fee
per vessel of $10,000  and $7,083  respectively  for  technical  management  and
crewing.

     OTHER GENERAL AND ADMINISTRATIVE EXPENSES--Other general and administrative
expenses, which include all of our onshore expenses,  decreased by $0.4 million,
or 1.9%, to $20.3 million for 2006 compared to $20.7 million for the prior year.
This decrease is mainly due to decreased  compensation of our senior  management
and  directors,  which was in the aggregate  amount of $4.2 million during 2006,
compared  to $8.1  million  paid last year.  Daily  general  and  administrative
expenses per tanker  decreased by $652, or 21.6%, to $2,361 for 2006 compared to
$3,013 for the prior year.

     FOREIGN  CURRENCY GAINS OR LOSSES--We  incurred a $255,000 foreign currency
loss for 2006 compared to a gain of $68,000 for the prior year.

     GAIN ON SALE OF  VESSELS--During  2006, we sold the vessels M/T  Taintless,
M/T Soundless and M/T Topless for a total consideration of $127.5 million, which
resulted in a total book gain of $12.7 million. During 2005, we sold the vessels
M/T  Fearless and M/T Yapi for a total  consideration  of $38.3  million,  which
resulted in a total book gain of $10.1 million.

     DEPRECIATION AND AMORTIZATION--Depreciation and amortization, which include
depreciation  of tankers and  amortization  of  drydockings,  decreased  by $4.6
million,  or 8.7%,  to $48.5  million for 2006 compared to $53.1 million for the
prior year.

                                                                 2005      2006
                                                                 ----      ----
Dollars in thousands
Vessels depreciation expense...............................    $47,055   $35,266
Amortization of drydockings................................      5,999    13,187
                                                               -------   -------
                                                               $53,054   $48,453

     This decrease was due to the 13 sale and leaseback deals  concluded  during
2006 which resulted in a decrease in depreciation  expense of $11.8 million. The
sale and  leasebacks  were treated as operating  leases for financial  reporting
purposes. As a result the vessels are not recorded as assets and therefore there
is no depreciation  expense.  The decrease was partially balanced by an increase
of $7.2 million in the  amortization of drydockings,  due to the fact that 8 out
of 9 vessels drydocked during 2006, underwent their special surveys.

     AMORTIZATION    OF    DEFERRED    GAIN   ON   SALE   AND    LEASEBACK    OF
VESSELS--Amortization  of  deferred  gain  on  sale  and  leaseback  of  vessels
increased by $7.3 million,  or 912.5%, to $8.1 million for 2006 compared to $0.8
million for the prior year.  This  increase is due to the 13 sale and  leaseback
transactions  concluded in 2006 and due to the 5 sale and leaseback transactions
concluded in the third quarter of 2005.

     OPERATING INCOME--Operating income decreased by $45.5 million, or 52.4%, to
$41.4 million for 2006 compared to $86.9 million for the prior year. Despite the
increase of net voyage  revenues by $47.4 million,  or 22.9%,  to $254.7 million
for 2006 compared to $207.3 million for the prior year,  this decrease is mainly
due to:

     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 13 sale  and  leaseback  transactions  concluded  in  2006,  which
          resulted in:

          o    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,

          o    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

          o    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 prior year.

     INTEREST AND FINANCE  COSTS--Interest  and finance costs  increased by $9.0
million,  or 44.5%,  to $29.2 million for 2006 compared to $20.2 million for the
prior year. This increase is mainly due to the fair market value of the interest
rate swaps decreasing by $4.2 million and the write-off of the financing fees of
$3.8 million  associated with the prepayment of the loans due to the 13 sale and
leaseback transactions concluded in 2006.

     INTEREST  INCOME--Interest  income increased by $1.2 million,  or 66.7%, to
$3.0 million for 2006 compared to $1.8 million for the prior year. This increase
is due to the increase in cash and cash equivalents,  associated mainly with the
increase in proceeds from the sale of vessels in 2006.

     OTHER NET--We  recognized an expense of $0.1 million  during 2006 versus an
income of $0.1 million during 2005.

     NET INCOME--Net income was $15.1 million for 2006 compared to net income of
$68.7 million for the prior year.

Year ended December 31, 2005 compared to the year ended December 31, 2004

     VOYAGE REVENUES--Voyage revenues increased by $150.4 million, or 160.3%, to
$244.2  million  for 2005  compared to $93.8  million  for the prior year.  This
increase is due to the acquisition of 3 tankers,  6 tankers and 5 tankers during
the first, second and fourth quarters of 2005,  respectively,  which contributed
$96.1 million in voyage revenues and is due to the overall increase in operating
days which increased the voyage revenues  generated by the remaining  vessels to
$148.1 million in 2005 from $93.8 million in 2004.

     VOYAGE  EXPENSES--Voyage   expenses  primarily  consist  of  port  charges,
including  canal dues and bunkers  (fuel  costs) that are unique to a particular
voyage.  These  expenses,  which are paid by the charterer  under a time charter
contract,  as well as commissions,  increased $20.0 million, or 118.3%, to $36.9
million for 2005 compared to $16.9 million for the prior year.  This increase is
primarily  due to the  increase  in the  average  number of tankers in our fleet
during 2005  compared to the prior year,  as well as the increase in the cost of
fuel to operate the tankers.

     NET VOYAGE REVENUES--Net  voyage revenues,  which are voyage revenues minus
voyage expenses,  increased by $130.4 million,  or 169.6%, to $207.3 million for
2005 compared to $76.9  million for the prior year.  This increase is the result
of the  increase in the  average  number of tankers in our fleet and the overall
increase in operating  days during 2005 compared to the prior year.  The average
number of tankers in our fleet  increased  126.0% to 21.7  tankers  during  2005
compared to 9.6 tankers during the prior year.

                                                           2004           2005
                                                           ----           ----
Dollars in thousands
Voyage revenues...................................      $93,829        $244,215
Less Voyage expenses..............................      (16,898)        (36,889)

Net voyage revenues...............................      $76,931        $207,326
                                                       ========        ========

     The following  describes  our charter  revenues for 2005 as compared to the
prior year:

     Freight revenues:

     o    Our tankers operated an aggregate of 1,869 days, or 25.1%, in the spot
          market  during  2005,  compared to 1,435 days,  or 44.6%,  in the spot
          market during the prior year.

     o    $81,700,000, or 39.4%, of net voyage revenue was generated in the spot
          market during 2005,  compared to $44,793,000,  or 58.3%, of net voyage
          revenue generated in the spot market during the prior year.

     o    The average  daily spot rate was $43,713 for 2005  compared to average
          daily spot rate of $31,215 for the prior year.

     Hire revenues:

     o    Our tankers  operated an  aggregate of 5,567 days,  or 74.9%,  on time
          charter  contracts  during 2005,  compared to 1,780 days, or 55.4%, on
          time charter contracts during the prior year.

     o    $125,626,000,  or 60.6%,  of net voyage  revenue was generated by time
          charter contracts during 2005,  compared to $32,138,000,  or 41.7%, of
          net voyage  revenue  generated  by time charter  contracts  during the
          prior year.

     o    The average  daily time charter rate was $22,566 for 2005  compared to
          average daily time charter rate of $18,055 for the prior year.

     CHARTER HIRE EXPENSE--Charter hire expense refers to lease payments for the
5 vessels sold and leased back in 2005,  which are treated as operating  leases,
and amounted to $7.2 million.

     OTHER VESSEL OPERATING  EXPENSES--Other  vessel operating  expenses,  which
include  crew costs,  insurance,  repairs and  maintenance,  spares,  consumable
stores and taxes  increased by $30.4  million,  or 179.9%,  to $47.3 million for
2005  compared to $16.9  million for the prior year.  This increase is primarily
due to the  increase  in the  average  number of  tankers  in our  fleet,  which
increased 126.0% between the periods.  Daily Other vessel operating expenses per
tanker increased by $1,191,  or 24.8%, to $5,985 for 2005 compared to $4,794 for
the prior year.  This  increase is a result of the  significant  increase of our
Suezmax vessels,  which generally require higher operating  expenses as compared
to the Handymax vessels.

     MANAGEMENT  FEES,  SUB-MANAGER  FEES AND OTHER  GENERAL AND  ADMINISTRATIVE
EXPENSES--General and administrative  expenses, which include all of our onshore
expenses and the fees paid to V.Ships Management Limited,  Unicom Management and
Hanseatic Shipping Company Ltd., increased by $15.2 million, or 176.7%, to $23.8
million for 2005  compared to $8.6 million for the prior year.  This increase is
due to increased  staff and additional  administrative  costs in connection with
the  operation of our larger fleet,  and the duties  typically  associated  with
public companies and to the compensation of our senior management and directors,
which was in the  aggregate  amount of $8.1  million in 2005,  compared  to $4.4
million  paid in 2004.  Daily  general and  administrative  expenses  per tanker
increased  $574,  or 23.5%,  to $3,013 for 2005 compared to $2,439 for the prior
year.

     FOREIGN  CURRENCY GAINS OR LOSSES--We  incurred a $68,000 foreign  currency
gain for 2005 compared to a loss of $75,000 for the prior year.

     GAIN ON SALE OF  VESSELS--During  the  third  quarter  of 2005 we sold  the
vessels M/T Fearless and M/T Yapi and we realized a total gain of $10.1 million.
During  2004 we sold  the  vessels  M/T  Tireless  and M/T Med  Prologue  and we
realized a total gain of $0.6 million.

     DEPRECIATION AND AMORTIZATION--Depreciation and amortization, which include
depreciation  of tankers and  amortization  of  drydockings,  increased by $38.5
million,  or 263.7%, to $53.1 million for 2005 compared to $14.6 million for the
prior year. This increase is primarily due to the increase in the average number
of tankers in our fleet, the increase in the book value of our fleet as a result
of our  acquisitions of tankers during 2005, and the amortization of capitalized
expenses associated with drydockings that occurred for the first time to vessels
that are part of our fleet.

                                                               2004      2005
                                                               ----      ----
Dollars in thousands
Vessels depreciation expense..............................   $13,108   $47,055
Amortization of drydockings...............................     1,514     5,999
                                                             -------   -------
                                                             $14,622   $53,054

     Depreciation  of vessels  increased by $34.0 million,  or 259.5%,  to $47.1
million for 2005 compared to $13.1  million for the prior period.  This increase
is due to the  increase  in the  book  value of our  fleet  as a  result  of our
acquisitions of tankers during 2005 compared to the prior year.

     Amortization of drydockings  increased by $4.5 million,  or 300.0%, to $6.0
million for 2005  compared to $1.5  million  for the prior year.  This  increase
includes amortization associated with $10.5 million of capitalized  expenditures
relating to our  tankers  during 2005  compared to $7.4  million of  capitalized
expenditures  during  the  prior  year.  This  increase  is  the  result  of the
amortization of capitalized  expenses  associated  mainly with drydockings which
took  place in 2005,  most of which  relate to tankers  which  have  capitalized
drydocking expenditures for the first time since we acquired them. We anticipate
that the  amortization  associated with drydockings will continue to increase in
2006 due to the  increase  in the  average  number of tankers in our fleet,  the
increase  in  costs  associated  with  drydockings,  and  that we are  currently
drydocking  vessels  for the first time since these  vessels  became part of our
fleet.

     AMORTIZATION    OF    DEFERRED    GAIN   ON   SALE   AND    LEASEBACK    OF
VESSELS--Amortization of deferred gain on sale and leaseback of vessels amounted
$0.8  million  and  is  associated  to  the 5 sale  and  leaseback  transactions
completed in 2005.

     OPERATING  INCOME--Operating  income increased by $49.5 million, or 132.3%,
to $86.9  million for 2005  compared to $37.4  million for the prior year.  This
increase is mainly due to the acquisition of 3 tankers,  6 tankers and 5 tankers
during  the  first,  second and fourth  quarters  of 2005,  respectively,  which
contributed  $96.1  million in voyage  revenues  and to the overall  increase in
operating days which  increased the voyage  revenues  generated by the remaining
vessels to $148.1 million in 2005 from $93.8 million in 2004.

     INTEREST AND FINANCE  COSTS--Interest  and finance costs increased by $15.0
million,  or 288.5%,  to $20.2 million for 2005 compared to $5.2 million for the
prior year. This increase is the result of the increase in our weighted  average
outstanding debt as a result of our acquisitions of tankers. Interest expense is
anticipated to decrease in 2006 as a result of the debt prepayment in connection
with the sale and leaseback of 5 tankers in 2005.

     INTEREST  INCOME--Interest  income increased by $1.3 million, or 260.0%, to
$1.8 million for 2005 compared to $0.5 million for the prior year.

     OTHER NET--We recognized an income of $0.1 million during 2005 and 2004.

     NET INCOME--Net income was $68.7 million for 2005 compared to net income of
$32.8 million for the prior year.

B.   Liquidity and capital resources

Liquidity and capital resources

     Since our formation,  our sources of funds have been equity provided by our
shareholders,  long-term  borrowings and operating cash flows. Our principal use
of funds has been capital expenditures to establish and grow our fleet, maintain
the quality of our vessels,  comply with  international  shipping  standards and
environmental  laws and  regulations,  fund working capital  requirements,  make
principal  repayments on outstanding  loan  facilities,  and pay  dividends.  We
expect to rely upon  operating  cash  flows,  long-term  borrowings  and  equity
financings  to  implement  our growth  plan.  We believe  that our current  cash
balance as well as operating cash flows will be sufficient to meet our liquidity
needs for the next year.

     Our  practice  has been to acquire  vessels  using a  combination  of funds
received  from  equity  investors  and bank debt  secured  by  mortgages  on our
vessels. Our business is capital intensive and its future success will depend on
our ability to maintain a  high-quality  fleet through the  acquisition of newer
vessels and the selective  sale of older  vessels.  These  acquisitions  will be
principally  subject to management's  expectation of future market conditions as
well as our ability to acquire vessels on favorable terms.

     According to the terms of the 2006 sale and leaseback transactions,  10% of
the gross  aggregate  sales  price,  $55.0  million,  has been  withheld  by the
purchaser  and will be paid to us not later than three  months  after the end of
bareboat  charter period or upon the resale of the vessels by the purchaser,  if
earlier.  Consequently,  we recognized  this  receivable from the purchaser at a
discounted  amount upon the sale of the  vessels,  classified  as a  non-current
asset, and will accrete the balance of the receivable to the full $55.0 million,
through  deferred  gain on sale and  leaseback of vessels over the period of the
bareboat charter or upon the resale of the vessels by the purchaser, if earlier.
The purpose of the  hold-back  is to serve as security  for the due and punctual
performance and observance of all the terms and conditions from our behalf under
the agreements.

     As of December 31, 2006,  we had total  indebtedness  under senior  secured
credit facilities of $220.0 million with our lenders, the Royal Bank of Scotland
("RBS") and HSH Nordbank ("HSH"), maturing in 2015 and 2013 respectively.  As of
April 19, 2007, and after giving effect to the payment of first installment paid
in January 2007 for the two remaining newbuildings, our total indebtedness under
the senior  secured  credit  facilities  is $225.7  million  with $65.0  million
undrawn under the RBS revolving credit facility.

     Cash and cash  equivalents  increased  $12.5 million to $30.0 million as of
December  31, 2006  compared  to $17.5  million as of December  31,  2005.  That
increase results  primarily from the increase of our total voyage days for fleet
to 8,634  days in 2006  from  7,436  days in 2005,  due to the  increase  of our
average number of vessels to 26.7 in 2006 from 21.7 in 2005.  Working capital is
current  assets minus  current  liabilities,  including  the current  portion of
long-term  debt.  Working  capital  surplus was $22.5 million as of December 31,
2006,  compared to a working capital deficit of $11.0 million as of December 31,
2005.  The  current  portion of  long-term  debt,  net of  unamortized  deferred
financing costs, included in our current liabilities was $16.6 million and $45.3
million as of December 31, 2006 and December 31, 2005, respectively.

     NET CASH FROM OPERATING ACTIVITIES--decreased 77.7% to $21.1 million during
2006,  compared  to $94.7  million  during  the prior  year.  This  decrease  is
primarily  attributable to the decrease in net income by $53.6 million, to $15.1
million in 2006 from $68.7  million in 2005 and to the  increase in payments for
drydockings  by $24.0  million,  to $34.5  million in 2006 from $10.5 million in
2005.

     NET CASH FROM  (USED) IN  INVESTING  ACTIVITIES--2006  ended  with net cash
inflows of $531.6 million compared to net cash outflows of $524.9 million during
the prior year.  During 2006 we completed 13 sale and leaseback deals and sold 3
vessels  resulting  in net  proceeds  of $599.2  million,  whereas  in 2005,  we
completed  5 sale and  leaseback  deals  and  sold 2  vessels  resulting  in net
proceeds of $153.1  million and we acquired 14 tankers at a total cost of $677.1
million.

     NET CASH FROM  (USED IN)  FINANCING  ACTIVITIES--2006  ended  with net cash
outflows of $540.1 million compared to net cash inflows of $332.9 million during
the prior year. The change in cash from (used in) financing  activities  relates
to the following:

     o    Net proceeds from  borrowing  under  long-term debt were $20.0 million
          during  2006  compared  to  $472.5  million,  in  connection  with the
          acquisition of 9 Suezmax tankers and 5 product tankers, during 2005.

     o    Principal repayments of long-term debt were $369.5 million during 2006
          compared to $100.0 million during the prior year.

     o    Net issuance of common stock of $26.9 million during 2006.

     o    Dividends of $217.5 million paid during 2006 compared to $30.5 million
          paid during the prior year.

C.   Research and Development, patents and licenses, etc.

     Not applicable.

D.   Trend Information

     Discussed under ITEM 5.

E.   Off Balance Sheet Arrangements

     We did not have any  off-balance  sheet  arrangements,  as of December  31,
2006.

F.   Tabular Disclosure of Contractual Obligations

     The  following  table  sets  forth our  contractual  obligations  and their
maturity dates as of December 31, 2006.

<TABLE>
<CAPTION>
                                                                            Payments due by period
                                                                            ----------------------

                                                                                      2-3          4-5      More than
                                                                                      ---          ---      ---------
Contractual Obligations:                                 Total         1 year        years        years      5 years
-----------------------                                  -----         ------        -----        -----      -------
                                                                              (in thousands of $)
<S>                                                    <C>            <C>           <C>         <C>         <C>
(1) Long term debt                                       280,667        29,421        53,052      49,058     149,136
-------------------                                      -------        ------        ------      ------     -------
(2) Newbuildings                                         256,742        14,169       242,573           -           -
------------------                                       -------        ------       -------           -           -
(3) Operating leases                                      21,487         1,896         3,792       3,792      12,007
--------------------                                      ------         -----         -----       -----      ------
(4) Lease payments under sale and leasebacks             618,529       118,865       237,847     194,029      67,788
--------------------------------------------             -------       -------       -------     -------      ------
Total                                                  1,177,425       164,351       537,264     246,879     228,931
-----                                                  ---------       -------       -------     -------     -------
</TABLE>

     (1) Long Term Debt:

     As of December 31, 2006, the  outstanding  balance of our long-term debt of
$220.0 million consisted of two credit facilities,  with Royal Bank of Scotland,
which we refer to as the RBS revolving  credit facility and HSH Nordbank,  which
we refer to as the HSH credit facility.  The above table also includes  interest
payments  calculated  using the Company's  weighted  average interest rate as of
December 31, 2006, of 6.00%.

     RBS Revolving Credit Facility:

     As of December  31, 2006 the  outstanding  amount  under the RBS  revolving
credit  facility was $83.0 million,  payable in 10 semi-annual  installments  of
approximately  $5.4 million  starting April 30, 2011,  plus a balloon payment of
$29.0 million payable together with the last installment,  if no further amounts
are drawn.  As of December 31, 2006,  the undrawn amount under the RBS revolving
credit  facility  amounted to $75.0  million.  As of the date of this report and
after giving effect to the payment of first  installment in January 2007, of the
two remaining  newbuildings,  the  outstanding  amount  totaled  $93.0  million,
payable in 10 semi-annual  installments of  approximately  $6.0 million starting
April 30, 2011, plus a balloon  payment of $33.0 million  payable  together with
the last  installment,  if no further  amounts are drawn. As of the date of this
report the undrawn amount under the RBS revolving  credit  facility  amounted to
$65.0 million.

     Additional terms and conditions of the RBS credit facility are as follows:

     The initial  interest  rate on the RBS credit  facility is 85 basis  points
over LIBOR.  The  interest  rate will be adjusted  quarterly to 100 basis points
over LIBOR if the aggregate  amount drawn to aggregate value of ships is greater
than 60%. The RBS credit facility is collateralized by a first priority mortgage
on each of the 2 out of 6 vessels we owned as of December 31, 2006 and by virtue
of a deed of assignment in respect of each of the newbuildings contracts.

     The RBS credit facility contains,  among other things,  financial covenants
requiring  us to:  ensure that the  aggregate  market  value of our fleet at all
times  exceeds  130% of the  aggregate  outstanding  principal  amount under the
credit facility;  maintain minimum liquid funds with the lender of not less than
the greater of $10.0  million or $0.5  million  per vessel in our fleet;  ensure
that our total  assets  minus our debt will not at any time be less than  $250.0
million and at all times exceed 35% of our total assets;  ensure that EBITDA (as
defined  in the RBS  credit  facility)  will  at all  times  exceed  120% of the
aggregate of interest expenses and debt due during a particular period; and meet
minimum liquid funds requirements. The RBS credit facility also contains general
covenants that require us to maintain adequate insurance coverage and obtain the
bank's consent before we incur new  indebtedness  that is secured by the vessels
mortgaged thereunder. In addition, the RBS credit facility prohibits us, without
the lender's  consent,  from  appointing a chief  executive  officer  other than
Evangelos  Pistiolis  and  requires  that the vessels  mortgaged  thereunder  be
managed  by  TOP  Tanker  Management,   which  will  subcontract  the  technical
management of the mortgaged  vessels to V.Ships  Management  Limited,  Hanseatic
Shipping Company Ltd., and any other company  acceptable to the lender.  We will
be permitted to pay  dividends  under the RBS credit  facility so long as we are
not in default of a loan covenant.

     A  commitment  fee of 0.35% per annum  accrues on the amount of the undrawn
balance  under the  revolving  credit  facility,  which is payable  quarterly in
arrears.

     As of  December  31,  2006,  we had three  interest  rate  swaps  with RBS,
summarized as follows:

     (i)   for an initial notional amount of $36.5 million,  with effective date
           of  November  3,  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
           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
           interest  rate of 4.11%,  in order to hedge  portion of the  variable
           interest rate exposure.

     For the swaps (ii) and (iii) we will pay an initial fixed interest rate, as
designated  above,  and will  receive a  floating  interest  rate,  which is the
3-month LIBOR,  as is determined on the reset dates. In the first period (fourth
quarter of 2006),  the  difference  between the 10-year swap rate and the 2-year
swap rate was greater to minus 5 basis  points,  and we paid the  initial  fixed
rate and received the floating interest rate. In the next three periods,  if the
difference  between the 10-year swap rate and the 2-year swap rate is greater or
equal to 0 basis points, then we will continue to pay the initial fixed rate and
continue to receive the respective  floating rate. If the difference between the
10-year swap rate and the 2-year swap rate is less than 0 basis points,  then we
will pay the initial fixed rate, plus three times the difference between 0 basis
points and the  difference  between  the  10-year  swap rate and the 2-year swap
rate. In all subsequent periods, if the difference between the 10-year swap rate
and the 2-year  swap rate is greater  or equal to 8 basis  points,  then we will
continue  to pay the  previous  rate and  continue  to  receive  the  respective
floating  rate. If the  difference  between the 10-year swap rate and the 2-year
swap rate is less than 8 basis points,  then we will pay the previous rate, plus
three times the difference between 8 basis points and the difference between the
10-year swap rate and the 2-year swap rate.  The interest  rate that we will pay
for those swaps is capped at 10.25%.

     DVB Credit Facility:

     In March 2005, we entered into a credit facility with DVB Bank, for a total
of $56.5 million, to finance the purchase of 2 Suezmax tankers, the M/T Stopless
and the M/T Stainless. The loan was payable in 28 varying quarterly installments
beginning  on July 29,  2005 and a balloon  payment  of $10.2  million,  payable
together with the last installment. The interest rate on the DVB credit facility
was 125 basis points over LIBOR.  Beginning  on the date of the credit  facility
and ending on the final drawdown date, we paid the lender a quarterly commitment
fee of 0.25% of the average  undrawn amount of the loan. The DVB credit facility
was  collateralized by a first priority mortgage on the M/T Stopless and the M/T
Stainless. A fee of 1% was paid upon drawdown of the loan.

     In March and April 2006,  following  the sale and leaseback of M/T Stopless
and M/T  Stainless  we repaid in full  $50.1  million  for the then  outstanding
amount of the loan.

     HSH Credit Facility:

     In November  2005, we concluded a bank loan of $154.0  million to partially
finance  the  acquisition  cost of  vessels  M/T  Stormless,  M/T Ellen P.,  M/T
Errorless  and M/T  Edgeless.  The loan is  divided  into 2  tranches  of $130.0
million and $24.0 million  respectively.  Tranche A is payable in 32 consecutive
quarterly  installments  of $2.7 million each,  starting March 13, 2006,  plus a
balloon  payment of $42.0 million  payable  together with the last  installment.
Tranche B is payable in 16 consecutive  quarterly  installments  of $1.5 million
each, starting March 13, 2006. The initial interest rate in respect of Tranche A
is 80 basis points over LIBOR.  The  interest  rate will be adjusted to 90 basis
points over LIBOR if the aggregate  amount drawn to aggregate  value of ships is
greater than 60% but equal or below 70% and will be adjusted to 110 basis points
over LIBOR if the aggregate  amount drawn to aggregate value of ships is greater
than 70%. The initial  interest rate in respect of Tranche B is 110 basis points
over LIBOR. The interest rate will be adjusted to 135 basis points over LIBOR if
the aggregate  amount drawn to aggregate  value of ships is greater than 65% but
equal or below 75% and will be  adjusted  to 160 basis  points over LIBOR if the
aggregate  amount drawn to aggregate value of ships is greater than 75%.The loan
was subject to a fee of 1% paid upon signing of the agreement.

     The HSH credit facility contains,  among other things,  financial covenants
requiring us to: ensure that the aggregate market value of the mortgaged vessels
is equal to at least 140% of the  outstanding  principal  amount under the loan,
until the Tranche B repayment and 130% thereafter,  ensure that our total assets
minus our debt will not at any time be less than  $250.0  million  or 35% of our
total assets,  to ensure that our EBITDA (as defined in the HSH credit  facility
agreement)  will not at any time be less than 120% of the  aggregate of interest
expenses  and debt due at a particular  period,  and  maintain  certain  minimum
liquid  funds of not less than the greater of $10.0  million or $0.5 million per
vessel in our fleet,  including the sold and leased-back  vessels.  In addition,
the HSH credit  facility  prohibits  us,  without  the  lender's  consent,  from
appointing a chief executive officer other than Evangelos Pistiolis and requires
that the  mortgaged  vessels  are  managed by TOP Tanker  Management,  which may
subcontract  the  technical  management  of the  mortgaged  vessels  to  V.Ships
Management  Limited,  Hanseatic  Shipping  Company  Ltd.,  or any other  company
acceptable to the lender.

     In connection with the loan of $154.0 million  discussed  above, we entered
into an interest rate swap agreement with declining  notional  balances in order
to hedge its variable  interest rate  exposure,  with effective date January 30,
2006, for an initial  notional  amount of $45.0 million and for a period of five
years, with a fixed interest rate of 4.8% plus the applicable bank margin.

     Other Interest Rate Swaps:

     In July 2006,  we entered  with  Deutsche  Bank and  Egnatia  Bank into the
following interest rate swap agreements.  Under those agreements, we will pay an
initial fixed  interest rate, as designated  below,  and will receive a floating
interest rate,  which is the 3-month LIBOR, as is determined on the reset dates.
If the  difference  between  the  10-year  swap rate and the 2-year swap rate is
greater or equal to 5 basis  points,  then we will  continue  to pay the initial
fixed  rate and  continue  to  receive  the  respective  floating  rate.  If the
difference between the 10-year swap rate and the 2-year swap rate is less than 5
basis  points,  then we will pay the  initial  fixed  rate,  plus two  times the
difference  between 5 basis points and the  difference  between the 10-year swap
rate and the 2-year swap rate.  The interest  rate that we will pay is capped at
8.80%.

     (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.

     During the fourth  quarter of 2006,  the swap (i) was  restructured  and we
will pay an initial fixed interest rate, as designated below, and will receive a
floating  interest  rate,  which is the 3-month  LIBOR,  as is determined on the
reset  dates.  In the first  period  (fourth  quarter of 2006),  the  difference
between  the  10-year  swap rate and the 2-year swap rate was greater to minus 5
basis  points,  and we paid the initial  fixed rate and  received  the  floating
interest rate. In the next three periods,  if the difference between the 10-year
swap rate and the 2-year swap rate is greater or equal to 0 basis  points,  then
we will  continue  to pay the  initial  fixed rate and  continue  to receive the
respective  floating rate. If the  difference  between the 10-year swap rate and
the 2-year swap rate is less than 0 basis  points,  then we will pay the initial
fixed  rate,  plus three  times the  difference  between 0 basis  points and the
difference  between  the  10-year  swap rate and the 2-year  swap  rate.  In all
subsequent  periods,  if the  difference  between the 10-year  swap rate and the
2-year swap rate is greater or equal to 8 basis points, then we will continue to
pay the previous rate and continue to receive the  respective  floating rate. If
the  difference  between the 10-year  swap rate and the 2-year swap rate is less
than 8 basis points,  then we will pay the previous  rate,  plus three times the
difference  between 8 basis points and the  difference  between the 10-year swap
rate and the  2-year  swap  rate.  The  interest  rate  that we will pay for the
restructured swap is capped at 10.25%.

     (i)  for a  notional  amount  of  $50.0  million,  with  effective  date of
          September  29, 2006 and for a period of seven  years,  with an initial
          interest  rate of 4.45%,  in order to hedge  portion  of the  variable
          interest rate exposure.

     (2)  Newbuildings:

     In October 2006, we entered into an agreement for the  construction  of six
handymax Product / Chemical tankers. The total contract price amounted to $285.4
million  and is payable in five  instalments  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  will be  partially
financed from long-term bank financing. The first instalment for four of the six
vessels of $28.7 million was paid in December  2006. The vessels are expected to
be delivered during the first six months of 2009.

     In  January  2007,  we paid the  first  installment  of $14.2  million,  in
relation  to the  two  remaining  newbuildings.  Part of  this  installment  was
financed through the RBS revolving credit facility and amounted $10.0 million.

     (3) Operating Leases:

     In January  2006,  we 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  rental is Euro  120,000
adjusted annually for inflation increase plus 1%.

     (4) Lease payments under sale and leasebacks:

     In August and September 2005, we sold the M/T Restless, M/T Sovereign,  M/T
Relentless, M/T Invincible and M/T Victorious, and entered into bareboat charter
agreements to leaseback the vessels,  for a period of seven years.  During 2005,
lease  payments  relating to the  bareboat  charters of these  vessels were $7.2
million. The total minimum lease payments required to be made after December 31,
2006, related to the bareboat charters of these vessels are $119.1 million.

     In March 2006, we sold the M/T Faithful,  M/T Spotless,  M/T Vanguard,  M/T
Doubtless,  M/T  Flawless,  M/T Timeless,  M/T  Priceless and M/T Stopless,  and
entered into bareboat charter agreements to leaseback the vessels,  for a period
of five  years.  The total  minimum  lease  payments  required  to be made after
December 31, 2006,  related to the bareboat charters of these vessels are $231.3
million.

     In April 2006, we sold the M/T Limitless,  M/T Endless, M/T Stainless,  M/T
Faultless and M/T  Noiseless,  and entered into bareboat  charter  agreements to
leaseback  the vessels,  for a period of seven years.  The total  minimum  lease
payments  required to be made after  December 31, 2006,  related to the bareboat
charters of these vessels are $268.1 million.

     During  2006,  lease  payments  relating  to the  bareboat  charters of the
aforementioned vessels were $96.3 million.

     Other contractual obligations:

     TOP Tanker Management,  our wholly-owned subsidiary, is responsible for the
chartering,  operational and technical management of our tanker fleet, including
crewing,  maintenance,  repair, capital expenditures,  drydocking, vessel taxes,
maintaining  insurance  and other vessel  operating  expenses  under  management
agreements with our vessel owning subsidiaries.

     As of December 31, 2006 TOP Tanker  Management has subcontracted the day to
day technical management and crewing of 5 Handymax tankers and 8 Suezmax tankers
to V.Ships  Management  Limited, a ship management company and has subcontracted
the day to day  technical  management  and  crewing of 5 Handymax  tankers and 3
Suezmax tankers to Hanseatic  Shipping  Company Ltd, a ship  management  company
operating in Cyprus.  Additionally,  TOP Tanker Management has subcontracted the
crewing of 1  Handymax  tanker  and 2 Suezmax  tankers  to V.  Ships  Management
Limited.  TOP Tanker  Management  pays a monthly  fee of $10,000  per vessel for
technical management and crewing of the 13 vessels and $3,100 per vessel for the
crewing of 3 vessels under its agreements with V. Ships Management and a monthly
fee of $7,083 per vessel for the 8 vessels under its  agreements  with Hanseatic
Shipping  Company.  The  agreements  between Top Tanker  Management  and V.Ships
Management Limited and Hanseatic  Shipping Company Ltd.,  continue until written
notice of  termination  is given by either party.  In such case,  they terminate
after a period of two or three  months  from the date upon which such notice was
given.  Accordingly,   they  are  not  included  in  the  table  of  contractual
obligations presented above.

     Other major capital expenditures include funding our maintenance program of
regularly scheduled  intermediate survey or special survey drydocking  necessary
to preserve  the quality of our vessels as well as to comply with  international
shipping standards and environmental laws and regulations. Although we have some
flexibility  regarding the timing of this maintenance,  the costs are relatively
predictable. Management anticipates that these vessels which are younger than 15
years are required to undergo  in-water  intermediate  surveys 2.5 years after a
special survey drydocking and that vessels are to be drydocked every five years,
while vessels 15 years or older are to be drydocked for an  intermediate  survey
every 2.5 years in which case the  additional  intermediate  survey  drydockings
take the place of in-water surveys.

     During 2006, we had 740 off-hire days associated with 9 drydockings and 170
off-hire days associated with 1 drydocking which as of the year-end was still in
progress.  During 2005, we had 270 off hire days  associated with 8 drydockings.
During 2004, we had 250 off hire days associated with 5 drydockings. During 2003
we had 83 off hire days associated with 2 drydockings.  Each intermediate survey
drydocking is estimated to require approximately 25 days and each special survey
drydocking  is estimated to require  approximately  35 days.  In addition to the
costs described above,  drydockings result in off hire time for a vessel, during
which the  vessel is unable to  generate  revenue.  Off hire time  includes  the
actual  time  the  vessel  is in the  shipyard  as well as  ballast  time to the
shipyard from the port of last discharge.  The ability to meet this  maintenance
schedule  will  depend on our  ability to  generate  sufficient  cash flows from
operations or to secure additional financing.

     Critical Accounting Policies:

     The  discussion  and  analysis of our  financial  condition  and results of
operations is based upon our consolidated financial statements,  which have been
prepared in accordance with U.S. generally accepted  accounting  principles,  or
U.S. GAAP. The  preparation of those  financial  statements  requires us to make
estimates  and  judgments  that  affect  the  reported   amount  of  assets  and
liabilities,  revenues and expenses and related  disclosure of contingent assets
and  liabilities  at the date of our financial  statements.  Actual  results may
differ from these estimates under different assumptions or conditions.

     Critical accounting  policies are those that reflect significant  judgments
or uncertainties,  and potentially result in materially  different results under
different  assumptions and  conditions.  We have described below what we believe
are our most  critical  accounting  policies  that  involve  a higher  degree of
judgment and the methods of their  application.  For a description of all of our
significant  accounting  policies,  see  Note  2 to our  consolidated  financial
statements included herein.

     Depreciation.  We record  the value of our  vessels  at their  cost  (which
includes the contract price, pre-delivery costs incurred during the construction
of newbuildings,  capitalized  interest and any material  expenses incurred upon
acquisition  such as initial  repairs,  improvements  and  delivery  expenses to
prepare the vessel for its initial  voyage) less  accumulated  depreciation.  We
depreciate  our vessels on a  straight-line  basis over their  estimated  useful
lives,  estimated  to be 25 years  from the date of  initial  delivery  from the
shipyard.  Depreciation  is based on cost of the vessel less its residual  value
which is  estimated  to be $160 per  light-weight  ton. A decrease in the useful
life of the vessel or in the residual  value would have the effect of increasing
the annual  depreciation  charge.  When regulations  place  limitations over the
ability of a vessel to trade on a worldwide  basis,  the vessel's useful life is
adjusted at the date such regulations become effective.

     Deferred  drydock  costs.  We follow the deferral  method of accounting for
dry-docking  costs whereby  actual costs incurred are deferred and are amortized
on a straight-line  basis over the period through the date the next  dry-docking
becomes due. Management anticipates that these vessels which are younger than 15
years will be required to undergo in-water  intermediate surveys 2.5 years after
a special survey  drydocking and that such vessels will be drydocked  every five
years,  while  vessels 15 years or older will be drydocked  for an  intermediate
survey  every  2.5  years  in  which  case the  additional  intermediate  survey
drydockings take the place of in-water  surveys.  Dry-docking  costs for vessels
sold and leased  back are  amortized  on a  straight  line basis over the period
through  the next  dry-docking  becomes due or through  the  termination  of the
lease, whichever comes first.

     Costs  capitalized as part of the drydock include all works required by the
vessels'  Classification  Societies and for the  maintenance  of the vessels CAP
rating,  which may  consist  of actual  costs  incurred  at the  dry-dock  yard,
including dry-dock dues and general services for vessel preparation,  coating of
WBT/COT,  steelworks,  piping works and valves,  machinery  works and electrical
works.

     All those  works which are  carried  out during  dry-dock  time for routine
maintenance  according to the Company's  Planned  Maintenance  System as well as
modifications, improvements required by third parties (i.e Port Authorities, Oil
Majors,  standards  set by the Company  etc.) and not  required by the  vessels'
Classification   Societies  are  not   capitalized  but  expensed  as  incurred.
Unamortized  dry-docking  costs of  vessels  that are sold are  written  off and
included in the  calculation  of the  resulting  gain or loss in the year of the
vessel's sale.

     Impairment  of  long-lived   assets.   We  evaluate  the  carrying  amounts
(primarily  for  vessels  and  related  drydock  costs) and  periods  over which
long-lived  assets are  depreciated  to determine if events have occurred  which
would  require  modification  to their  carrying  values  or  useful  lives.  In
evaluating  useful lives and carrying  values of  long-lived  assets,  we review
certain  indicators  of potential  impairment,  such as  undiscounted  projected
operating  cash flows,  vessel sales and  purchases,  business plans and overall
market conditions.  We determine undiscounted projected net operating cash flows
for  each  vessel  and  compare  them to the  vessel  carrying  value  including
unamortized drydock costs. If our estimate of undiscounted future cash flows for
any  vessel is lower  than the  vessel's  carrying  value  plus any  unamortized
drydock  costs,  the carrying  value is written  down,  by recording a charge to
operations,  to the fair market value if the fair market value is lower than the
vessel's  carrying  value.  We obtain  fair  market  valuations  from  reputable
international sale and purchase brokers performed on an individual vessel basis.
As vessel  values are  volatile,  the actual fair  market  value of a vessel may
differ  significantly from estimated fair market values within a short period of
time.

     Allowance for doubtful accounts.  Revenue is based on contracted voyage and
time charter parties and, although our business is with customers who we believe
to be of the  highest  standard,  there is always the  possibility  of  dispute,
mainly over terms, calculation and payment of demurrages. In such circumstances,
we assess the recoverability of amounts  outstanding and we estimate a provision
if there is a possibility of  non-recoverability,  combined with the application
of  a  historical   recoverability   ratio,  for  purposes  of  determining  the
appropriate provision for doubtful accounts.  Although we believe our provisions
to be based on fair judgment at the time of their creation,  it is possible that
an amount  under  dispute  is not  recovered  and the  estimated  provision  for
doubtful recoverability is inadequate.

G.   Safe Harbor

     Matters  discussed  in  this  Item  5  include  assumptions,  expectations,
projections,  intentions and beliefs about future events.  These  statements are
intended  as   "forward-looking   statements".   We  caution  that  assumptions,
expectations,  projections,  intentions  and beliefs about future events may and
often do vary from actual results and the  differences  can be material.  Please
see "Cautionary Statement Regarding Forward-Looking Statements" in this Report.

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.   Directors and Senior Management

     Set  forth  below  are the  names,  ages and  positions  of our  directors,
executive officers and key employees. Our board of directors is elected annually
on a staggered  basis,  and each director  elected holds office for a three-year
term.  Officers  are elected from time to time by vote of our board of directors
and hold office until a successor is elected.

Name                                Age  Position
----                                ---  --------
Thomas F. Jackson ...................59  Director and Chairman of the Board
Evangelos J. Pistiolis ..............34  Director, President and Chief Executive
                                         Officer
Stamatios N. Tsantanis ..............35  Director and Chief Financial Officer
Vangelis G. Ikonomou ................42  Director and Executive Vice President
Michael G. Docherty .................47  Director
Christopher J. Thomas ...............47  Director
Roy Gibbs ...........................57  Director
Stavros Emmanuel.....................64  Chief Operating Officer of TOP Tanker
                                         Management
George Goumopoulos...................57  Chief Technical Officer of TOP Tanker
                                         Management
Eirini Alexandropoulou ..............35  Secretary

Biographical information with respect to each of our directors and executives is
set forth below.

     Thomas F.  Jackson is the  Chairman  of our Board of  Directors  since July
2004, and has over 27 years experience in the shipping industry.  Mr. Jackson is
also a Director of Paralos Finance Corporation,  which he established in 2000 as
a provider of  financial  advisory  and  consultancy  services  to select  Greek
shipping  companies.  Mr.  Jackson  commenced  his banking  career with National
Westminster  Bank in 1967, and moved to the Piraeus  Branch,  Greece in 1977. In
1986 he headed the Bank's  Operations  Department  in Athens,  and  returned  to
Piraeus in 1989 where he assumed the role of Corporate  and  Shipping  Marketing
Manager.  In 1994 he was appointed Head of Shipping for the Bank in Greece.  Mr.
Jackson is an Associate of the  Institute of Financial  Services  (formerly  the
Chartered  Institute of  Bankers),  and is a past  lecturer  for the  Institutes
examinations.

     Evangelos J.  Pistiolis  founded our Company in 2000,  is our President and
Chief  Executive  Officer and serves on our board of directors  since July 2004.
Mr. Pistiolis  graduated from Southampton  Institute of Higher Education in 1999
where he studied shipping operations and from Technical  University of Munich in
1994 with a bachelor's degree in mechanical engineering.  His career in shipping
started in 1992 when he was involved  with the day to day  operations of a small
fleet of drybulk  carriers.  From 1994 through 1995 he worked at Howe Robinson &
Co. Ltd., a London shipbroker  specializing in container vessels. While studying
at the Southampton  Institute of Higher  Education,  Mr.  Pistiolis  oversaw the
daily operations of Compass United Maritime Container Vessels, a ship management
company located in Greece.

     Stamatios  N.  Tsantanis is our Chief  Financial  Officer and serves on our
board of directors  since July 2004. Mr.  Tsantanis was  previously  employed by
Alpha  Finance,  a member of the Alpha Bank  group,  a leading  Greek  financial
institution, from 1999 to 2004. In his capacity as a senior investment banker he
participated in a number of equity, debt and convertible securities offerings in
Europe and the  United  States in the  transportation  sector  and  shipping  in
particular.  Prior to that, Mr. Tsantanis worked in the operations department of
Athlomar Shipping and Trading.  Mr. Tsantanis holds a Masters degree in Shipping
Trade and Finance  from the City  University  Business  School in London,  and a
Bachelors degree in Shipping Economics from the University of Piraeus.

     Vangelis G.  Ikonomou is our  Executive  Vice  President  and serves on our
board of directors since July 2004.  Prior to joining the Company,  Mr. Ikonomou
was the  Commercial  Director  of Primal  Tankers  Inc.  From 2000 to 2002,  Mr.
Ikonomou  worked with George  Moundreas & Company S.A. where he was  responsible
for the purchase and sale of  second-hand  vessels and initiated and developed a
shipping industry research  department.  Mr. Ikonomou worked, from 1993 to 2000,
for Eastern Mediterranean Maritime Ltd., a ship management company in Greece, in
the commercial as well as the safety and quality departments. Mr. Ikonomou holds
a Masters degree in Shipping Trade and Finance from the City University Business
School in  London,  a  Bachelors  degree  in  Business  Administration  from the
University of Athens in Greece and a Navigation  Officer  Degree from the Higher
State Merchant Marine Academy in Greece.

     Michael G. Docherty  serves on our board of directors  since July 2004. Mr.
Docherty  is a founding  partner  of  Independent  Average  Adjusters  Ltd.,  an
insurance claims adjusting firm located in Athens,  Greece,  which he co-founded
in 1997. Mr. Docherty has 24 years of international experience handling maritime
insurance claims.

     Christopher J. Thomas serves on our board of directors since July 2004. Mr.
Thomas is also the Chief Financial Officer of Paragon Shipping Inc. From 2004 to
2006, Mr. Thomas was the Chief  Financial  Officer of DryShips Inc.,  which is a
publicly traded company with securities registered under the Securities Exchange
Act of 1934. From 1999 to 2004, Mr. Thomas was the Chief Financial Officer and a
director  of Excel  Maritime  Carriers  Ltd.,  which is also a  publicly  traded
company with securities  registered  under the Securities  Exchange Act of 1934.
Prior to joining Excel,  Mr. Thomas was the Chief  Financial  Officer of Cardiff
Marine Inc. Mr.  Thomas holds a degree in Business  Administration  from Crawley
University, England.

     Roy Gibbs serves on our board of directors  since July 2004.  Mr. Gibbs has
been the chief executive officer of Standard  Chartered  Grindlays Bank, Greece,
formerly ANZ Grindlays,  since 1992.  From 1988 to 1992, Mr. Gibbs was the chief
manager of  domestic  banking  at ANZ  Grindlays,  London.  Prior to that he was
assistant  director for property,  construction and shipping at ANZ London.  Mr.
Gibbs joined National and Grindlays Bank in 1965.

     Captain  Stavros  Emmanuel  is the Chief  Operating  Officer  of TOP Tanker
Management since July 2004. He has 32 years experience in the shipping  industry
and expertise in operation and  chartering  issues.  Prior to joining TOP Tanker
Management,  Captain  Emmanuel served as General Manager of Primal Tankers Inc.,
where his responsibilities included chartering and operations management.  Prior
to joining Primal Tankers in 2000, Captain Emmanuel worked in various management
capacities  for  Compass  United  Maritime.  Captain  Emmanuel  obtained a Naval
Officers degree from ASDEN Nautical Academy of Aspropyrgos,  Greece and earned a
Master Mariners degree in 1971.

     George  Goumopoulos is the Chief Technical Officer of TOP Tanker Management
since July 2004. Prior to joining TOP Tanker Management,  Mr. Goumopoulos served
as Technical  Manager of Primal Tankers Inc. From 1981 to 2003. Mr.  Goumopoulos
worked for Athenian Sea Carriers as Fleet Manager,  Deputy Technical Manager and
finally as Technical Director.  Mr. Goumopoulos holds a Bachelor degree from the
University of Michigan, USA in Marine Engineering and Naval Architecture,  where
he also  completed  his  postgraduate  studies  in the same  fields.  He holds a
Diploma from NTUA (EMP Athens) in Marine Engineering and Naval Architecture.

     Eirini   Alexandropoulou   is  our  Secretary   since  August  2004.   Mrs.
Alexandropoulou's  principal  occupation  for  the  past 8  years  is as a legal
advisor  providing legal services to ship  management  companies with respect to
corporate  and  commercial as well as shipping and finance law issues in Greece.
From  2001  to  2004,  Mrs.   Alexandropoulou  served  as  a  legal  advisor  to
Eurocarriers  SA,  a ship  manager.  Most  recently,  from  2000 to  2001,  Mrs.
Alexandropoulou  served as a legal advisor to Belize's  ship registry  office in
Piraeus.  Mrs.  Alexandropoulou  has been a member of the Athens Bar Association
since  1997 and has a law  degree  from the Law  Faculty  of the  University  of
Athens.

Committees of the Board of Directors

     We have  established an audit committee  comprised of three members,  which
pursuant to a written audit committee charter,  is responsible for reviewing our
accounting controls and recommending to the board of directors the engagement of
our outside auditors. Each member is an independent director under the corporate
governance  rules of the  Nasdaq  National  Market.  The  members  of the  audit
committee are Messrs.  Docherty,  Gibbs and Thomas.  While the Company is exempt
from the  requirement  to have an audit  committee  financial  expert,  both Mr.
Thomas and Mr. Gibbs meet the  qualifications  of an audit  committee  financial
expert.

B.   Compensation

     We did not pay any  compensation  to  members of senior  management  or our
directors  for the fiscal  year ended  December  31, 2002 or for the fiscal year
ended December 31, 2003. We did not pay any benefits in 2002 or 2003. During the
fiscal year ended  December 31, 2004,  2005 and 2006,  we paid to the members of
our  senior  management  and to our  directors  aggregate  compensation  of $4.4
million, $8.1 million and $4.2 million respectively. We do not have a retirement
plan for our officers or directors.

Equity Incentive Plan

     In April 2005 our board of directors  has adopted the TOP Tankers Inc. 2005
Stock Incentive Plan, or the Plan,  under which our officers,  key employees and
directors may be granted  options to acquire  common stock. A total of 1,000,000
shares of common  stock were  reserved  for  issuance  under the Plan,  which is
administered by our board of directors.  The Plan also provides for the issuance
of stock appreciation  rights,  dividend  equivalent  rights,  restricted stock,
unrestricted  stock,  restricted  stock  units,  and  performance  shares at the
discretion  of our board of  directors.  The Plan will  expire 10 years from the
date of its adoption.

     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 1,000,000  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  249,850 new shares
were  granted,  out of which 190,000  shares were granted to the Company's  CEO,
48,300  shares  to 8  officers  and  independent  members  of the  Board and the
remaining 11,550 shares were granted to 36 employees.

     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  125,000 new shares were granted,
out of which 80,000 shares were granted to the Company's CEO, 38,000 shares to 8
officers and  independent  members of the Board and the  remaining  7,000 shares
were granted to 20 employees.

     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  320,000 new shares were  granted,  out of which
221,250  shares were granted to the Company's  CEO,  68,000 shares to 8 officers
and  independent  members  of the Board and the  remaining  30,750  shares  were
granted to 51 employees.

     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 following restrictions:

Company's CEO

         The Participant 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 Participant. The restrictions lapse on
the earlier of (i) one year from the grant date or (ii) termination of the
Participant's employment with the Company for any reason.

Other Participants

     The  Participants  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. However, it is the intention of the Company's Board
of Directors not to seek repayment of the dividends earned during the restricted
period,  even if the unvested shares  ultimately are 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.

     A summary of the status of the Company's non-vested and vested shares as of
December  31, 2006 and  movement  during the years ended  December  31, 2005 and
2006, is presented below:

                                           Number of non-vested shares

       As at January 1, 2005                            --

       Granted                                        59,850

       Forfeited                                        (200)
                                          -------------------------------

       As at December 31, 2005                        59,650
                                          -------------------------------

       Granted                                       143,750

       Vested                                        (58,600)

       Forfeited                                      (3,900)
                                          -------------------------------

       As at December 31, 2006                       140,900
                                          ===============================

                                             Number of vested shares

       As at January 1, 2005                              --

       Granted                                       190,000

       As at December 31, 2005                       190,000
                                          -------------------------------

       Granted                                       301,250

       Non-vested shares granted
       in 2005, vested during 2006                    58,600
                                          -------------------------------

       As at December 31, 2006                       549,850
                                          ===============================

     During 2005, the employment of one of the other Participants was terminated
and 200  restricted  shares  that  were  granted  to him  under  the  Plan  were
forfeited.  During 2006,  the  employment of six of the other  Participants  was
terminated and 3,900 restricted  shares that were granted to them under the Plan
were forfeited.

C.   Board practices and exemptions from Nasdaq corporate governance rules

     The Company has certified to Nasdaq that its corporate governance practices
are in compliance  with,  and are not prohibited by, the laws of the Republic of
the  Marshall  Islands.  Therefore,  the  Company is exempt from all of Nasdaq's
corporate  governance  practices  other  than  the  requirements  regarding  the
disclosure  of  a  going  concern  audit  opinion,   notification   of  material
non-compliance with Nasdaq corporate governance practices, and the establishment
and  composition  of an audit  committee that complies with SEC Rule 10A-3 and a
formal written audit committee charter. The practices followed by the Company in
lieu of Nasdaq's corporate governance rules are described below.

     o    In  lieu  of  a  compensation   committee   comprised  of  independent
          directors, the full Board of Directors determines compensation.

     o    In lieu of a nomination  committee comprised of independent  directors
          and a formal written charter addressing the nominations  process,  the
          full  Board  of  Directors,  as set  forth in the  Company's  by-laws,
          regulates nominations.

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

     o    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.

     o    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 share issuances.

     o    The  Company's  Board does not hold  regularly  scheduled  meetings at
          which only independent directors are present.

     The Company  complies  with the Nasdaq  corporate  governance  requirements
pertaining to the board of directors,  a majority of which must be  independent,
the disclosure of a going concern audit opinion,  the distribution of annual and
interim  reports;   shareholder  meetings,   quorum,  peer  review,  and  direct
registration   program  and  the  disclosure  of  a  notification   of  material
non-compliance.

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.   Major shareholders

     The following table sets forth information regarding (i) the owners of more
than five  percent of our  common  stock that we are aware of and (ii) the total
amount of capital  stock owned by our officers and  directors as of February 14,
2007. All of the shareholders,  including the shareholders listed in this table,
are entitled to one vote for each share of common stock held.

                                                          Amount      Percent
Title of Class       Identity of Person or Group          Owned       of Class
--------------       ---------------------------          -----       --------
Common Stock,        QVT Financial LP*                    3,089,806    9.5%
par value            Kingdom Holdings Inc.**              2,361,181    7.3%
$.01 per             Evangelos Pistiolis***               1,727,379    5.3%
share                Officers and directors other
                       than Evangelos Pistiolis             200,000    0.6%
                     All officers and directors           1,927,379    5.9%
                       as a group

----------
*     As at March 9, 2007.
**    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 Evangelos Pistiolis.

B.   Related party transactions

     Up to June 30, 2004, the ship-owning  companies had a management  agreement
with Primal Tankers Inc.,  which was wholly owned by the father of the Company's
Chief  Executive  Officer,  under which  management  services  were  provided in
exchange for a fixed  monthly fee per vessel,  which was renewed  annually.  The
fees charged by Primal Tankers Inc.  during 2002, 2003 and 2004 amounted to $0.7
million,  $1.7 million and $1.1 million,  respectively.  During 2004, Top Tanker
Management  Inc.  acquired  from Primal  Tankers  Inc.  other fixed assets for a
consideration of $0.1 million.

     In July 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.  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 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
1,593,250.

     All  transactions  with Primal  Tankers Inc. and Pyramis  Techical Co. S.A.
were performed at arm's length, on normal commercial terms.

C.   Interests of experts and counsel.

     Not applicable.

D.   Employees

     As of  December  31,  2006,  we had 3  employees,  while  our  wholly-owned
subsidiary,  TOP  Tanker  Management,  employed  68  employees,  all of whom are
shore-based.  As of December 31, 2006 we employed also 589 sea going  employees,
indirectly through our sub-managers.

E.   Share ownership

     The common shares  beneficially  owned by our directors and senior managers
and/or  companies  affiliated  with these  individuals are disclosed in "Item 7.
Major Shareholders and Related Party Transactions" below.

ITEM 8.  FINANCIAL INFORMATION.

A.   Consolidated Statements and Other Financial Information.

     See Item 18.

DIVIDEND POLICY

     The Company paid  special  dividends of $5.00 per share and $2.50 per share
on March 27, 2006 and April 25, 2006,  respectively.  On April 6, 2006 our Board
of Directors  decided to  discontinue  the  Company's  policy of paying  regular
quarterly dividends. The declaration and payment of any future special dividends
shall remain  subject to the  discretion  of the Board of Directors and shall be
based on general market and other conditions  including the Company's  earnings,
financial strength and cash requirements and availability.

     We are permitted to pay dividends  under the loans so long as we are not in
default of a loan  covenant and if such  dividend  payment would not result in a
default of a loan covenant.

B.   Significant Changes.

      Not Applicable.

ITEM 9.  THE OFFER AND LISTING.

Price Range of Common Stock

     The trading market for our common stock is the Nasdaq Global Select Market,
on which the shares are listed under the symbol "TOPT." The following table sets
forth the high and low  closing  prices for our common  stock  since our initial
public  offering  of common  stock at  $11.00  per  share on July 23,  2004,  as
reported by the Nasdaq Global Select Market. The high and low closing prices for
our common stock for the periods indicated were as follows:

                                                                HIGH       LOW
                                                                ----       ---
For the Fiscal Year Ended December 31, 2006 .................. $18.22     $4.65
For the Fiscal Year Ended December 31, 2005 .................. $22.00    $12.27
For the Fiscal Year Ended December 31, 2004
(beginning July 23, 2004)..................................... $24.14    $10.51

For the Quarter Ended
March 31, 2005................................................ $22.00    $14.25
June 30, 2005................................................. $19.38    $14.21
September 30, 2005............................................ $16.90    $13.75
December 31, 2005............................................. $15.01    $12.27
March 31, 2006................................................ $18.22    $11.90
June 30, 2006................................................. $12.62     $6.09
September 30, 2006............................................  $6.72     $5.50
December 31, 2006.............................................  $6.35     $4.65

For the Month:                                                  HIGH       LOW
March 2007 (Only for the period of March 1-15) ...............  $5.02     $4.66
February 2007 ................................................  $5.18     $4.79
January 2007 .................................................  $5.04     $4.65
December 2006.................................................  $5.53     $4.65
November 2006.................................................  $6.35     $5.04
October 2006 .................................................  $6.23     $5.60

ITEM 10. ADDITIONAL INFORMATION

A.   Share Capital

     Not applicable.

B.   Memorandum and Articles of Association

     Our purpose, as stated in Section B of our Articles of Incorporation, is to
engage in any lawful act or activity for which corporations may now or hereafter
be organized under the Marshall Islands Business  Corporations Act. Our articles
of  incorporation  and  bylaws do not impose any  limitations  on the  ownership
rights of our shareholders.

     Under our bylaws,  annual  shareholder  meetings will be held at a time and
place selected by our board of directors. The meetings may be held in or outside
of the Marshall Islands. Special meetings of the shareholders,  unless otherwise
prescribed  by law, may be called for any purpose or purposes at any time by the
board of directors.  Notice of every annual and special  meeting of shareholders
shall be given at least 15 but not later  than 60 days  before  such  meeting to
each shareholder of record entitled to vote thereat.

     Directors.  Our  directors  are elected by a plurality of the votes cast by
shareholders entitled to vote. There is no provision for cumulative voting.

     The board of directors  must  consist of at least one member.  The board of
directors  may change the number of directors  only by the vote of not less than
66 2/3% of the entire board.  Each director  shall be elected to serve until the
third  succeeding  annual meeting of shareholders  and until his successor shall
have  been  duly  elected  and  qualified,  except  in the  event of his  death,
resignation,  removal,  or the earlier  termination  of his term of office.  The
board of directors  has the  authority to fix the amounts which shall be payable
to the members of our board of directors  for  attendance  at any meeting or for
services rendered to us.

     Dissenters' Rights of Appraisal and Payment. Under the Business Corporation
Act of the Republic of the Marshall  Islands,  or BCA, our shareholders have the
right to dissent from various corporate actions, including any merger or sale of
all or  substantially  all of our  assets  not made in the  usual  course of our
business, and receive payment of the fair value of their shares. In the event of
any further  amendment  of the  articles,  a  shareholder  also has the right to
dissent  and  receive  payment  for his or her  shares if the  amendment  alters
certain  rights in respect of those  shares.  The  dissenting  shareholder  must
follow  the  procedures  set forth in the BCA to receive  payment.  In the event
that, among other things, the institution of proceedings in the circuit court in
the  judicial  circuit in the  Marshall  Islands in which our  Marshall  Islands
office  is  situated.  The  value of the  shares  of the  dissenting  we and any
dissenting  shareholder  fail to  agree  on a  price  for  the  shares,  the BCA
procedures  involve  shareholder is fixed by the court after  reference,  if the
court so elects, to the recommendations of a court-appointed appraiser.

     Shareholders'  Derivative  Actions.  Under the BCA, any of our shareholders
may bring an action in our name to procure a judgment  in our favor,  also known
as a derivative action,  provided that the shareholder  bringing the action is a
holder of common stock both at the time the  derivative  action is commenced and
at the time of the transaction to which the action relate.

     Anti-takeover  Provisions of our Charter  Documents.  Several provisions of
our articles of incorporation and by-laws may have anti-takeover  effects. These
provisions  are  intended  to  avoid  costly   takeover   battles,   lessen  our
vulnerability  to a hostile  change of control  and  enhance  the ability of our
board  of  directors  to  maximize  shareholder  value  in  connection  with any
unsolicited offer to acquire us. However, these anti-takeover provisions,  which
are summarized below, could also discourage,  delay or prevent (1) the merger or
acquisition  of our  company  by means of a tender  offer,  a proxy  contest  or
otherwise,  that a  shareholder  may  consider in its best  interest and (2) the
removal of incumbent officers and directors.

     Business Combinations

     The  Company's  Amended  and  Restated  Articles of  Incorporation  include
provision  which  prohibit the Company from  engaging in a business  combination
with an interested shareholder for a period of three years after the date of the
transaction in which the person became an interested shareholder, unless:

     o    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;

     o    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;

     o    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

     o    the  shareholder  became  an  interested   shareholder  prior  to  the
          consummation of the initial public offering.

Blank Check Preferred Stock

     Under the terms of our  articles of  incorporation,  our board of directors
has authority, without any further vote or action by our shareholders,  to issue
up to 20,000,000  shares of blank check preferred  stock. Our board of directors
may issue shares of preferred stock on terms calculated to discourage,  delay or
prevent a change of control of our company or the removal of our management.

Classified Board of Directors

     Our  articles of  incorporation  provide  for the  division of our board of
directors  into three classes of  directors,  with each class as nearly equal in
number as possible, serving staggered, three-year terms. Approximately one-third
of our board of  directors  will be elected  each year.  This  classified  board
provision  could  discourage  a third party from  making a tender  offer for our
shares or  attempting  to obtain  control  of our  company.  It could also delay
shareholders  who do not agree with the policies of the board of directors  from
removing a majority of the board of directors for two years.

Election and Removal of Directors

     Our articles of incorporation prohibit cumulative voting in the election of
directors. Our by-laws require parties other than the board of directors to give
advance  written  notice of  nominations  for the  election  of  directors.  Our
articles of  incorporation  also provide that our  directors may be removed only
for cause and only upon the  affirmative  vote of the holders of at least 80% of
the  outstanding  shares  of our  capital  stock  entitled  to  vote  for  those
directors.  These  provisions  may  discourage,  delay or prevent the removal of
incumbent officers and directors.

Limited Actions by Shareholders

     Our  articles  of  incorporation  and our by-laws  provide  that any action
required or  permitted  to be taken by our  shareholders  must be effected at an
annual or special meeting of shareholders or by the unanimous written consent of
our  shareholders.  Our articles of incorporation  and our by-laws provide that,
subject to certain  exceptions,  only our board of  directors  may call  special
meetings of our shareholders and the business  transacted at the special meeting
is limited to the purposes stated in the notice.  Accordingly, a shareholder may
be prevented from calling a special meeting for shareholder  consideration  of a
proposal  over  the  opposition  of  our  board  of  directors  and  shareholder
consideration of a proposal may be delayed until the next annual meeting.

Super-majority Required for Certain Amendments to Our By-Laws

     On February 28, 2007 we amended our by-laws to require that  amendments  to
certain  provisions  of our by laws may be made when  approved by 66 2/3% of the
entire Board of  Directors.  These  provisions  that require 66 2/3% vote of the
Board of  Directors  to be  amended  are  provisions  governing:  the  nature of
business to be transacted at our annual meetings of shareholders, the calling of
special  meetings by our Board of Directors,  any amendment to change the number
of directors constituting our Board of Directors,  the method by which our Board
of Directors is elected,  the  nomination  procedures of our board of directors,
removal of our board of  directors  and the filling of vacancies on our Board of
Directors.

C.   Material Contracts

     Long Term Debt

     As of December 31, 2006 we had long term debt obligations  under two credit
facilities,  the RBS credit facility and the HSH Nordbank credit facility. For a
full description of our credit facilities see "Tabular Disclosure of Contractual
Obligations - Long Term Debt" above.

     Newbuildings

     As of December 31, 2006 we had commitments  under 6 shipbuilding  contracts
for the  construction  of 6 Handymax  Product / Chemical  tankers  scheduled for
delivery  during the first six  months of 2009.  For a full  description  of our
newbuildings see "Tabular Disclosure of Contractual  Obligations - Newbuildings"
above.

     Office space lease

     In January  2006,  we entered  into an  agreement  to lease office space in
Athens, Greece, with an unrelated party. The agreement is for duration of twelve
years  beginning May 2006 with a lessee's  option for an extension of ten years.
For a full  description  of the office  space lease see "Tabular  Disclosure  of
Contractual Obligations - Operating leases" above.

     Sale and leaseback

     As of  December  31,  2006 we had  commitments  under  sale  and  leaseback
agreements  for 18 out of the 24 of our vessels under  management.  In March and
April of 2006, the subsidiaries of the Company sold and subsequently  leasedback
13 vessels for a period of five to seven years.  The Company  guaranteed  to the
buyers of the vessels the payment of all sums owed by its subsidiaries under the
sale and  leaseback  charters  and agreed to accept  liability  on behalf of its
subsidiaries  for the  obligations  of its  subsidiaries  to the  buyers  of its
vessels.   Financial   undertakings   of  the  Company  are   contained  in  the
quadripartite deeds and the guarantees of these transactions.  The quadripartite
deeds and  guarantees  which are  included as  exhibits  to this  annual  report
contain restrictive  covenants which state, among other things, that the Company
agrees,  as charter  guarantor that it will at all times throughout the security
period (as defined in the quadripartite deed) maintain a minimum amount of $20.0
million in its account with Fortis Bank  commencing  on the first  drawdown date
(as  described in the  quadripartite  deeds) and December 15, 2006 and a minimum
amount of $25.0  million in its account with Fortis Bank for the period  between
December 15, 2006 and the expiration of the guarantee. As guarantor, the Company
is to further ensure that there are no encumbrances existing over the amounts it
is to maintain in its account.  Further,  as guarantor the Company undertakes to
maintain cash balances of at least $50.0 million in bank accounts in its name or
in the name of its  subsidiaries  (including the $25.0 million  maintained  with
Forties).  The Company also undertakes to ensure that its net asset value at all
time exceeds  $125.0  million and that its book equity at all time exceeds $75.0
million,  to endeavor that any excess cash flow from vessel  operations  will be
paid into the Company's account with Fortis and to provide details regarding the
operating  expenses  and  earnings  of its  vessels  to  Fortis  at three  month
intervals.

     For a full  description of the sale and leaseback  commitments see "Tabular
Disclosure  of   Contractual   Obligations  -  Lease  payments  under  sale  and
leasebacks" above.

     Stockholders Rights Agreement

     We entered into a Stockholders Rights Agreement with Computershare Investor
Services,  LLC, as Rights Agent, as of August 19, 2005. Under this Agreement, we
declared a dividend  payable of one preferred share purchase right, or Right, to
purchase one  one-thousandth of the Company's Series A Participating  Cumulative
Preferred  Stock for each  outstanding  share of TOP Tankers  common stock,  par
value $0.01 per share.  The Right will separate from the common stock and become
exercisable after (1) a person or group acquires ownership of 15% or more of the
company's  common  stock or (2) the 10th  business  day (or such  later  date as
determined  by the  company's  board  of  directors)  after a  person  or  group
announces a tender or exchange  offer which would result in that person or group
holding 15% or more of the company's  common stock.  On the  distribution  date,
each  holder of a right will be  entitled  to  purchase  for $25 (the  "Exercise
Price") a fraction  (1/1000th)  of one share of the  company's  preferred  stock
which has similar  economic terms as one share of common stock.  If an acquiring
person (an "Acquiring  Person")  acquires more than 15% of the company's  common
stock  then each  holder  of a right  (except  that  acquiring  person)  will be
entitled  to buy at the  exercise  price,  a number of  shares of the  company's
common  stock which has a market  value of twice the  exercise  price.  Any time
after the date an Acquiring Person obtains more than 15% of the company's common
stock and before that Acquiring  Person  acquires more than 50% of the company's
outstanding common stock, the company may exchange each right owned by all other
rights  holders,  in whole or in part,  for one  share of the  company's  common
stock.  The rights  expire on the  earliest  of (1)  August 31,  2015 or (2) the
exchange or redemption of the rights as described  above. The company can redeem
the rights at any time prior to a public announcement that a person has acquired
ownership of 15% or more of the company's  common stock. The terms of the rights
and the Stockholder Rights Plan may be amended without the consent of the rights
holders at any time on or prior to the Distribution Date. After the distribution
date, the terms of the rights and the Stockholder  Rights Plan may be amended to
make  changes,  which do not adversely  affect the rights of the rights  holders
(other than the Acquiring  Person).  The rights will not have any voting rights.
The rights will have the benefit of certain customary anti-dilution protections

     Sales Agreement with Cantor Fitzgerald & Co.

     We entered into a Sales Agreement with Cantor Fitzgerald & Co. on April 13,
2006,  pursuant to which we agreed that from time to time we will issue and sell
and agreed upon number of our shares of common stock through Cantor Fitzgerald &
Co. who will act as agent and/or  principal  for us in the sale of these shares.
The agreement expired in October 2006.

D.   Exchange controls

     The  Marshall   Islands  imposes  no  exchange   controls  on  non-resident
corporations.

E.   Tax Considerations

     The following is a discussion of the material  Marshall  Islands and United
States federal income tax considerations relevant to an investment decision by a
U.S. Holder and a non U.S.  Holder,  each as defined below,  with respect to the
common stock. This discussion does not purport to deal with the tax consequences
of owning common stock to all  categories of investors,  some of which,  such as
dealers in securities and investors whose functional  currency is not the United
States dollar,  may be subject to special  rules.  You are encourages to consult
your own tax advisors  concerning the overall tax  consequences  arising in your
own particular  situation under United States federal,  state,  local or foreign
law of the ownership of common stock.

Marshall Islands Tax Considerations

     In the  opinion of Seward & Kissel  LLP,  the  following  are the  material
Marshall  Islands tax  consequences of our activities to us and  shareholders of
our common stock.  We are  incorporated in the Marshall  Islands.  Under current
Marshall  Islands law, we are not subject to tax on income or capital gains, and
no Marshall  Islands  withholding tax will be imposed upon payments of dividends
by us to our shareholders.

United States Federal Income Tax Considerations

     In the  opinion of Seward & Kissel  LLP,  our United  States  counsel,  the
following are the material  United States federal income tax  consequences to us
of our  activities  and to U.S.  Holders and non U.S.  Holders,  each as defined
below,  of our common stock.  The following  discussion of United States federal
income tax matters is based on the Internal  Revenue Code of 1986,  or the Code,
judicial  decisions,  administrative  pronouncements,  and existing and proposed
regulations issued by the United States Department of the Treasury, all of which
are subject to change,  possibly with retroactive effect.  Treasury  Regulations
promulgated in August of 2003 interpreting Code Section 883, became effective on
January  1,  2005  for  calendar  year  taxpayers  such  as  ourselves  and  our
subsidiaries.  The discussion below is based, in part, on the description of our
business  as  described  in  "Business"  above and  assumes  that we conduct our
business  as  described  in  that  section.  Except  as  otherwise  noted,  this
discussion  is based on the  assumption  that we will not  maintain an office or
other  fixed  place of  business  within the United  States.  References  in the
following  discussion  to  "we"  and  "us"  are  to TOP  Tankers  Inc.  and  its
subsidiaries on a consolidated basis.

United States Federal Income Taxation of Our Company

Taxation of Operating Income: In General

     Unless exempt from United States  federal  income  taxation under the rules
discussed  below,  a foreign  corporation  is subject to United  States  federal
income  taxation  in  respect  of any  income  that is  derived  from the use of
vessels,  from the hiring or leasing  of  vessels  for use on a time,  voyage or
bareboat charter basis, from the participation in a pool, partnership, strategic
alliance,  joint operating  agreement,  code sharing arrangements or other joint
venture it directly or indirectly  owns or  participates  in that generates such
income,  or from the  performance  of services  directly  related to those uses,
which we refer to as "shipping  income," to the extent that the shipping  income
is derived from sources within the United  States.  For these  purposes,  50% of
shipping income that is attributable to transportation  that begins or ends, but
that does not both begin and end, in the United States  constitutes  income from
sources within the United  States,  which we refer to as  "U.S.-source  shipping
income."

     Shipping income attributable to transportation that both begins and ends in
the  United  States is  considered  to be 100% from  sources  within  the United
States.  We are not permitted by law to engage in  transportation  that produces
income which is considered to be 100% from sources within the United States.

     Shipping income attributable to transportation exclusively between non-U.S.
ports will be  considered  to be 100% derived  from  sources  outside the United
States.  Shipping income derived from sources outside the United States will not
be subject to any United States Federal income tax.

     In the absence of  exemption  from tax under  Section  883,  our gross U.S.
source shipping  income would be subject to a 4% tax imposed  without  allowance
for deductions as described below.

Exemption of Operating Income from United States Federal Income Taxation

     Under Section 883 of the Code and the  regulations  thereunder,  we will be
exempt from United States federal income  taxation on our  U.S.-source  shipping
income if:

(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".

     The Marshall  Islands,  Cyprus and  Liberia,  the  jurisdictions  where our
ship-owning subsidiaries are incorporated,  each grant an "equivalent exemption"
to United States corporations.  Therefore,  we will be exempt from United States
federal  income  taxation  with respect to our  U.S.-source  shipping  income if
either the 50% Ownership Test or the Publicly-Traded Test is met.

     The  regulations  provide,  in  pertinent  part,  that  stock of a  foreign
corporation  will be  considered  to be  "primarily  traded"  on an  established
securities market if the number of shares of each class of stock that are traded
during any taxable year on all  established  securities  markets in that country
exceeds the number of shares in each such class that are traded during that year
on established securities markets in any other single country. Our common stock,
which is our sole class of issued and  outstanding  stock,  is and we anticipate
will continue to be "primarily traded" on the Nasdaq National Market.

     Under the regulations, our common stock will be considered to be "regularly
traded" on an established  securities market if one or more classes of our stock
representing  50% or more of our  outstanding  shares,  by total combined voting
power of all classes of stock entitled to vote and total value, is listed on the
market which we refer to as the listing  threshold.  Since our common stock, our
sole class of stock,  is listed on the Nasdaq National  Market,  we will satisfy
the listing requirement.

     It is further required that with respect to each class of stock relied upon
to meet the listing threshold,  (i) such class of stock be traded on the market,
other than in minimal quantities, on at least 60 days during the taxable year or
one-sixth of the days in a short taxable year; and (ii) the aggregate  number of
shares  of such  class of stock  traded  on such  market  is at least 10% of the
average number of shares of such class of stock outstanding  during such year or
as  appropriately  adjusted in the case of a short  taxable  year. We believe we
will satisfy the trading  frequency and trading volume tests.  Even if this were
not the case,  the  regulations  provide that the trading  frequency and trading
volume tests will be deemed  satisfied if, as is the case with our common stock,
such class of stock is traded on an established  market in the United States and
such stock is regularly quoted by dealers making a market in such stock.

     Notwithstanding the foregoing,  the regulations provide, in pertinent part,
that each class of our stock will not be considered to be "regularly  traded" on
an  established  securities  market for any taxable year in which 50% or more of
each  class of our  outstanding  shares  of the  stock are  owned,  actually  or
constructively  under specified stock  attribution  rules, on more than half the
days during the taxable  year by persons who each own 5% or more of the value of
each  class of our  outstanding  stock,  which  we  refer  to as the "5  Percent
Override Rule."

     For purposes of being able to  determine  the persons who own 5% or more of
our stock,  or "5%  Shareholders,"  the  regulations  permit us to rely on those
persons  that are  identified  on Schedule 13G and Schedule 13D filings with the
United States Securities and Exchange  Commission,  or the "SEC," as having a 5%
or more beneficial interest in our common stock. The regulations further provide
that an  investment  company  identified  on a SEC  Schedule 13G or Schedule 13D
filing which is registered under the Investment Company Act of 1940, as amended,
will not be treated as a 5% shareholder for such purposes.

     In the event the 5 Percent  Override  Rule is  triggered,  the  regulations
provide that the 5 Percent Override Rule will not apply if we can establish that
among  the  closely-held  group of 5%  Shareholders,  there  are  sufficient  5%
Shareholders  that are considered to be qualified  shareholders  for purposes of
Section 883 to preclude  non-qualified 5% Shareholders in the closely-held group
from owning 50% or more of each class of our stock for more than half the number
of days during such year.

     We believe that we currently satisfy the Publicly--Traded  Test and are not
subject to the 5 percent  override  Rule and we will take this position for U.S.
federal income tax reporting purposes.  However, there are factual circumstances
beyond our control which could cause us to lose the benefit of this exemption.

Taxation in the Absence of Code Section 883 Exemption

     To the extent the  benefits of Code Section 883 are  unavailable,  our U.S.
source  shipping  income,  to  the  extent  not  considered  to be  "effectively
connected"  with the conduct of a U.S.  trade or business,  as described  below,
would be  subject  to a 4% tax  imposed  by  Section  887 of the Code on a gross
basis,  without  the  benefit of  deductions.  Since  under the  sourcing  rules
described  above,  no more than 50% of our  shipping  income would be treated as
being derived from U.S.  sources,  the maximum  effective  rate of U.S.  federal
income tax on our shipping income would never exceed 2% under the 4% gross basis
tax regime.

     To  the  extent  the  benefits  of  the  Code  Section  883  exemption  are
unavailable and our U.S. source shipping income is considered to be "effectively
connected" with the conduct of a U.S. trade or business, as described below, any
such  "effectively  connected" U.S. source  shipping  income,  net of applicable
deductions,  would be subject to the U.S. federal corporate income tax currently
imposed at rates of up to 35%. In addition, we may be subject to the 30% "branch
profits" taxes on earnings effectively  connected with the conduct of such trade
or business,  as  determined  after  allowance for certain  adjustments,  and on
certain  interest  paid or deemed paid  attributable  to the conduct of its U.S.
trade or business.

     Our U.S. source shipping income would be considered "effectively connected"
with the conduct of a U.S. trade or business only if:

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

     o    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.

     We do not have  currently or intend to have, or permit  circumstances  that
would result in having any vessel  operating to the United States on a regularly
scheduled basis. Based on the foregoing and on the expected mode of our shipping
operations  and  other  activities,  we  believe  that  none of our U.S.  source
shipping income will be "effectively connected" with the conduct of a U.S. trade
or business.

United States Taxation of Gain on Sale of Vessels

     Regardless of whether we qualify for  exemption  under Code Section 883, we
will not be subject to United  States  federal  income  taxation with respect to
gain  realized on a sale of a vessel,  provided the sale is  considered to occur
outside of the United States under United States federal income tax  principles.
In general, a sale of a vessel will be considered to occur outside of the United
States for this purpose if title to the vessel, and risk of loss with respect to
the vessel,  pass to the buyer outside of the United States. It is expected that
any sale of a vessel by us will be  considered  to occur  outside  of the United
States.

United States Federal Income Taxation of U.S. Holders

As used herein,  the term "U.S. Holder" means a beneficial owner of common stock
that

     o    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,

     o    owns the common stock as a capital  asset,  generally,  for investment
          purposes, and

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

     If a  partnership  holds our common  stock,  the tax treatment of a partner
will generally  depend upon the status of the partner and upon the activities of
the partnership. If you are a partner in a partnership holding our common stock,
you should consult your tax advisor.

Distributions

     Subject to the discussion of passive foreign  investment  companies  below,
any  distributions  made by us with respect to our common stock to a U.S. Holder
will generally constitute dividends,  which may be taxable as ordinary income or
"qualified  dividend income" as described in more detail below, to the extent of
our current or  accumulated  earnings and profits,  as  determined  under United
States federal income tax  principles.  Distributions  in excess of our earnings
and  profits  will be  treated  first as a  nontaxable  return of capital to the
extent of the U.S. Holder's tax basis in his common stock on a dollar for dollar
basis  and  thereafter  as  capital  gain.  Because  we are not a United  States
corporation,  U.S. Holders that are corporations will not be entitled to claim a
dividends received deduction with respect to any distributions they receive from
us. Dividends paid with respect to our common stock will generally be treated as
"passive  category  income"  or, in the case of certain  types of U.S.  Holders,
"general  category  income" for  purposes  of  computing  allowable  foreign tax
credits for United States foreign tax credit purposes.

     Dividends  paid on our common stock to a U.S.  Holder who is an individual,
trust or estate (a "U.S.  Individual  Holder")  should be treated as  "qualified
dividend income" that is taxable to such U.S. Individual Holders at preferential
tax rates (through 2010) provided that (1) the common stock is readily  tradable
on an  established  securities  market in the United  States (such as the Nasdaq
National  Market  on which  our  stock is  currently  traded);  (2) we are not a
passive  foreign  investment  company  for the  taxable  year  during  which the
dividend  is paid or the  immediately  preceding  taxable  year (which we do not
believe we are,  have been or will be); and (3) the U.S.  Individual  Holder has
owned the common stock for more than 60 days in the 121-day period  beginning 60
days before the date on which the common stock becomes  ex-dividend.  Therefore,
there is no  assurance  that any  dividends  paid on our  common  stock  will be
eligible for these preferential rates in the hands of a U.S.  Individual Holder.
Any dividends paid by the Company which are not eligible for these  preferential
rates will be taxed as ordinary income to a U.S. Individual Holder.

     Special  rules  may  apply to any  "extraordinary  dividend"  generally,  a
dividend  in an  amount  which is  equal to or in  excess  of ten  percent  of a
shareholder's adjusted basis (or, at the election of the U.S. Individual Holder,
the stock's then fair market value) in a share of common stock paid by us. If we
pay  an  "extraordinary  dividend"  on our  common  stock  that  is  treated  as
"qualified  dividend income," then any loss derived by a U.S.  Individual Holder
from the sale or  exchange  of such  common  stock will be treated as  long-term
capital loss to the extent of such dividend.

Sale, Exchange or other Disposition of Common Stock

     Assuming we do not constitute a passive foreign  investment company for any
taxable year, a U.S. Holder generally will recognize taxable gain or loss upon a
sale,  exchange or other  disposition  of our common stock in an amount equal to
the difference  between the amount  realized by the U.S.  Holder from such sale,
exchange or other  disposition  and the U.S.  Holder's  tax basis in such stock.
Such gain or loss will be treated as long-term  capital gain or loss if the U.S.
Holder's  holding  period  is  greater  than one  year at the time of the  sale,
exchange or other  disposition.  Such  capital  gain or loss will  generally  be
treated as  U.S.-source  income or loss,  as  applicable,  for U.S.  foreign tax
credit purposes.  A U.S. Holder's ability to deduct capital losses is subject to
certain limitations.

Passive Foreign Investment Company Status and Significant Tax Consequences

     Special United States federal income tax rules apply to a U.S.  Holder that
holds stock in a foreign corporation  classified as a passive foreign investment
company for United States  federal income tax purposes.  In general,  we will be
treated as a passive  foreign  investment  company with respect to a U.S. Holder
if, for any taxable year in which such holder held our common stock, either

     o    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

     o    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.

     For purposes of  determining  whether we are a passive  foreign  investment
company, we will be treated as earning and owning our proportionate share of the
income and assets, respectively,  of any of our subsidiary corporations in which
we own at least  25  percent  of the  value of the  subsidiary's  stock.  Income
earned,  or deemed earned,  by us in connection with the performance of services
would not constitute passive income. By contrast,  rental income would generally
constitute  "passive  income"  unless we were treated  under  specific  rules as
deriving our rental income in the active conduct of a trade or business.

     Based on our current operations and future  projections,  we do not believe
that we are, nor do we expect to become,  a passive foreign  investment  company
with respect to any taxable year.  Although there is no legal authority directly
on point,  and we are not relying upon an opinion of counsel on this issue,  our
belief is based  principally  on the position  that, for purposes of determining
whether we are a passive foreign investment company,  the gross income we derive
or are  deemed  to  derive  from  the  time  chartering  and  voyage  chartering
activities of our wholly-owned  subsidiaries  should constitute services income,
rather than rental  income.  Correspondingly,  such income should not constitute
passive income, and the assets that we or our wholly-owned  subsidiaries own and
operate in connection  with the production of such income,  in  particular,  the
vessels,  should not  constitute  passive  assets for  purposes  of  determining
whether  we were a passive  foreign  investment  company.  We  believe  there is
substantial legal authority  supporting our position  consisting of case law and
Internal  Revenue  Service  pronouncements  concerning the  characterization  of
income  derived from time  charters and voyage  charters as services  income for
other tax purposes.  However, in the absence of any legal authority specifically
relating  to the  statutory  provisions  governing  passive  foreign  investment
companies,  the  Internal  Revenue  Service or a court could  disagree  with our
position. In addition,  although we intend to conduct our affairs in a manner to
avoid being classified as a passive foreign  investment  company with respect to
any taxable year, we cannot  assure you that the nature of our  operations  will
not change in the future.

     As  discussed  more  fully  below,  if we were to be  treated  as a passive
foreign  investment company for any taxable year, a U.S. Holder would be subject
to  different  taxation  rules  depending  on whether the U.S.  Holder  makes an
election to treat us as a "Qualified  Electing Fund," which election we refer to
as a "QEF  election." As an alternative to making a QEF election,  a U.S. Holder
should be able to make a  "mark-to-market"  election  with respect to our common
stock, as discussed below.

Taxation of U.S. Holders Making a Timely QEF Election

     If a U.S. Holder makes a timely QEF election, which U.S. Holder we refer to
as an "Electing  Holder,"  the Electing  Holder must report each year for United
States federal  income tax purposes his pro rata share of our ordinary  earnings
and our net capital  gain, if any, for our taxable year that ends with or within
the  taxable  year  of  the  Electing  Holder,  regardless  of  whether  or  not
distributions  were  received  from  us by the  Electing  Holder.  The  Electing
Holder's  adjusted  tax basis in the common  stock will be  increased to reflect
taxed but  undistributed  earnings  and profits.  Distributions  of earnings and
profits that had been previously taxed will result in a corresponding  reduction
in the  adjusted  tax basis in the common stock and will not be taxed again once
distributed.  An Electing Holder would generally  recognize capital gain or loss
on the sale,  exchange or other  disposition of our common stock. A U.S.  Holder
would make a QEF election with respect to any year that our company is a passive
foreign  investment  company by filing one copy of IRS Form 8621 with his United
States  federal  income  tax  return and a second  copy in  accordance  with the
instructions  to such  form.  If we  were to be  treated  as a  passive  foreign
investment  company for any taxable year, we would provide each U.S. Holder with
all necessary  information in order to make the qualified electing fund election
described below.

Taxation of U.S. Holders Making a "Mark-to-Market" Election

     Alternatively,  if we were to be  treated as a passive  foreign  investment
company for any  taxable  year and,  as we  anticipate,  our stock is treated as
"marketable  stock," a U.S.  Holder would be allowed to make a  "mark-to-market"
election with respect to our common stock,  provided the U.S.  Holder  completes
and files IRS Form 8621 in accordance with the relevant instructions and related
Treasury Regulations.  If that election is made, the U.S. Holder generally would
include as ordinary income in each taxable year the excess,  if any, of the fair
market  value of the  common  stock at the end of the  taxable  year  over  such
holder's  adjusted tax basis in the common stock.  The U.S. Holder would also be
permitted  an  ordinary  loss in  respect  of the  excess,  if any,  of the U.S.
Holder's  adjusted  tax basis in the common  stock over its fair market value at
the end of the taxable year, but only to the extent of the net amount previously
included in income as a result of the mark-to-market  election.  A U.S. Holder's
tax basis in his common  stock  would be  adjusted to reflect any such income or
loss amount.  Gain realized on the sale,  exchange or other  disposition  of our
common stock would be treated as ordinary  income,  and any loss realized on the
sale,  exchange  or other  disposition  of the common  stock would be treated as
ordinary   loss  to  the  extent   that  such  loss  does  not  exceed  the  net
mark-to-market gains previously included by the U.S. Holder.

Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election

     Finally,  if we were to be treated as a passive foreign  investment company
for any taxable year, a U.S. Holder who does not make either a QEF election or a
"mark-to-market"  election  for that year,  whom we refer to as a  "Non-Electing
Holder,"  would be  subject  to  special  rules  with  respect to (1) any excess
distribution   (i.e.,  the  portion  of  any   distributions   received  by  the
Non-Electing  Holder  on our  common  stock in a  taxable  year in excess of 125
percent of the average annual distributions  received by the Non-Electing Holder
in the three preceding taxable years, or, if shorter, the Non-Electing  Holder's
holding  period for the common  stock),  and (2) any gain  realized on the sale,
exchange or other disposition of our common stock. Under these special rules:

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

     o    the amount  allocated  to the current  taxable  year would be taxed as
          ordinary income; and

     o    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.

     These penalties would not apply to a qualified  pension,  profit sharing or
other  retirement  trust or other  tax-exempt  organization  that did not borrow
money or otherwise  utilize  leverage in connection  with its acquisition of our
common stock.  If a Non-Electing  Holder who is an individual  dies while owning
our common stock, such holders  successor  generally would not receive a step-up
in tax basis with respect to such stock.

United States Federal Income Taxation of "Non-U.S. Holders"

     A beneficial owner of common stock that is not a U.S. Holder is referred to
herein as a "Non-U.S. Holder."

Dividends on Common Stock

     Non-U.S.  Holders  generally  will not be subject to United States  federal
income tax or withholding tax on dividends  received from us with respect to our
common  stock,  unless that income 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 a United  States  income tax treaty with
respect to those dividends, that income is taxable only if it is attributable to
a  permanent  establishment  maintained  by the  Non-U.S.  Holder in the  United
States.

Sale, Exchange or Other Disposition of Common Stock

     Non-U.S.  Holders  generally  will not be subject to United States  federal
income tax or  withholding  tax on any gain realized upon the sale,  exchange or
other disposition of our common stock, unless:

     o    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

     o    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.

     If the Non-U.S.  Holder is engaged in a United States trade or business for
United States  federal  income tax  purposes,  the income from the common stock,
including dividends and the gain from the sale, exchange or other disposition of
the stock  that is  effectively  connected  with the  conduct  of that  trade or
business will  generally be subject to regular  United States federal income tax
in the same manner as discussed in the previous section relating to the taxation
of U.S.  Holders.  In addition,  if you are a corporate  Non-U.S.  Holder,  your
earnings and profits that are attributable to the effectively  connected income,
which are subject to certain adjustments, may be subject to an additional branch
profits  tax at a rate of  30%,  or at a lower  rate as may be  specified  by an
applicable income tax treaty.

Backup Withholding and Information Reporting

     In general, dividend payments, or other taxable distributions,  made within
the United States to you will be subject to information reporting  requirements.
In addition,  such payments will be subject to backup withholding tax if you are
a non-corporate U.S. Holder and you:

     o    fail to provide an accurate taxpayer identification number;

     o    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

     o    in certain circumstances, fail to comply with applicable certification
          requirements.

         Non-U.S. Holders may be required to establish their exemption from
information reporting and backup withholding by certifying their status on IRS
Form W-8BEN, W-8ECI or W-8IMY, as applicable.

If you sell your common stock to or through a United States office or broker,
the payment of the proceeds is subject to both United States backup withholding
and information reporting unless you certify that you are a non-U.S. person,
under penalties of perjury, or you otherwise establish an exemption. If you sell
your common stock through a non-United States office of a non-United States
broker and the sales proceeds are paid to you outside the United States then
information reporting and backup withholding generally will not apply to that
payment. However, United States information reporting requirements, but not
backup withholding, will apply to a payment of sales proceeds, even if that
payment is made to you outside the United States, if you sell your common stock
through a non-United States office of a broker that is a United States person or
has some other contacts with the United States.

F.   Dividends and paying agents

     Not applicable

G.   Statement by experts

     Not applicable

H.   Documents on display.

     We file annual reports and other information with the SEC. You may read and
copy any  document  we file with the SEC at its public  reference  room at 100 F
Street, N.E., Room 1580,  Washington,  D.C. 20549. You may also obtain copies of
this  information  by mail from the public  reference  section of the SEC, 100 F
Street,  N.E., Room 1580,  Washington,  D.C. 20549, at prescribed rates.  Please
call the SEC at 1-800-SEC-0330  for further  information on the operation of the
public  reference  room. Our SEC filings are also available to the public at the
web site maintained by the SEC at http://www.sec.gov,  as well as on our website
at http://www.toptankers.com.

I.   Subsidiary Information

     Not Applicable

Incorporation by Reference

     This Form 20-F is hereby  incorporated  by  reference  to the  registration
statement on Form F-3 filed on August 1, 2005 (Registration No. 333-127086).

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A.   Quantitative information about market risk

     Interest Rate Fluctuation.  The  international  tanker shipping industry is
capital intensive,  requiring  significant  amounts of investment.  Much of this
investment is provided in the form of long-term debt. Our debt usually  contains
interest  rates that  fluctuate  with  LIBOR.  Increasing  interest  rates could
adversely impact future earnings.

     Our  interest  expense  is  affected  by changes  in the  general  level of
interest  rates.  As an indication of the extent of our  sensitivity to interest
rate  changes,  the  following  table sets forth the  sensitivity  of all credit
facilities in U.S.  dollars to a 100 basis points  increase in LIBOR on December
31 of each  repayment  year up to December 31, 2012.  The following  table takes
into account the interest rate swap agreements.

     Interest Expense Sensitivity to 100 Basis Point Change in LIBOR

     December 31, 2007..............................................     670,602
     December 31, 2008..............................................   1,469,617
     December 31, 2009..............................................   2,390,318
     December 31, 2010..............................................   2,587,540
     December 31, 2011..............................................   2,126,378
     December 31, 2012..............................................   1,674,736

     Foreign Exchange Rate Risk. We generate all of our revenues in U.S. dollars
but  incur  approximately  6% of our  expenses  in  currencies  other  than U.S.
dollars.  For accounting  purposes,  expenses  incurred in other  currencies are
translated into U.S. dollars at the exchange rate prevailing on the date of each
transaction.  We constantly  monitor the U.S Dollar  exchange rate and we try to
achieve more favorable  exchange rates from the financial  institutions  we work
with.

     Inflation.  Although  inflation  has had a moderate  impact on our  trading
fleet's  operating  and voyage  expenses in recent  years,  management  does not
consider  inflation to be a significant risk to operating or voyage costs in the
current economic  environment.  However,  in the event that inflation  becomes a
significant factor in the global economy, inflationary pressures would result in
increased operating, voyage and financing costs.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not Applicable.

                                     PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     Neither  we nor any of our  subsidiaries  have been  subject  to a material
default in the payment of principal,  interest,  a sinking fund or purchase fund
installment or any other material  default that was not cured within 30 days. In
addition,  the payment of our dividends are not, and have not been in arrears or
have not been  subject to a material  delinquency  that was not cured  within 30
days.

ITEM 14.  MATERIAL  MODIFICATIONS  TO THE RIGHTS OF SECURITY  HOLDERS AND USE OF
PROCEEDS

     Not Applicable.

ITEM 15. CONTROLS AND PROCEDURES

a) Disclosure of Controls and procedures.

     Management  assessed the  effectiveness  of the design and operation of the
Company's  disclosure  controls and procedures pursuant to Rule 13a-15(e) of the
Securities  Exchange  Act of 1934,  as of the end of the period  covered by this
annual report (as of December 31, 2006).  Based upon that evaluation,  the Chief
Executive  Officer and Chief  Financial  Officer  concluded  that the  Company's
disclosure controls and procedures are effective as of the evaluation date.

b) Management's annual report on internal controls over financing reporting.

     Our management is responsible for  establishing  and  maintaining  adequate
internal  control  over  financial  reporting  as  defined  in  Rules  13a-15(f)
promulgated under the Securities Exchange Act of 1934.

     Internal  control over financial  reporting is defined in Rule 13a-15(f) or
15d-15(f)  promulgated  under the  Securities  Exchange Act of 1934 as a process
designed by, or under the supervision of, the Company's  principal executive and
principal  financial  officers and effected by the Company's board of directors,
management and other personnel,  to provide reasonable  assurance  regarding the
reliability of financial  reporting and the preparation of financial  statements
for  external  purposes  in  accordance  with  generally   accepted   accounting
principles and includes those policies and procedures that:

   o   Pertain  to the  maintenance  of  records  that,  in  reasonable  detail,
accurately and fairly reflect the transactions and dispositions of the assets of
the Company;

     o Provide reasonable  assurance that transactions are recorded as necessary
to permit  preparation  of financial  statements  in accordance  with  generally
accepted accounting principles, and that our receipts and expenditures are being
made  only  in  accordance  with  authorizations  of  Company's  management  and
directors; and

   o   Provide reasonable  assurance regarding prevention or timely detection of
unauthorized  acquisition,  use or  disposition  of our assets that could have a
material effect on the financial statements.

     Because  of its  inherent  limitations,  internal  control  over  financial
reporting  may not prevent or detect  misstatements.  Also,  projections  of any
evaluation  of  effectiveness  to future  periods  are  subject to the risk that
controls may become  inadequate  because of changes in  conditions,  or that the
degree or compliance with the policies or procedures may deteriorate.

     Management  conducted the evaulation of the  effectiveness  of the internal
controls over financial reporting using the control criteria framework issued by
the  Committee of Sponsoring  Organizations  of the Treadway  Commission  (COSO)
published in its report entitled Internal Control-Integrated Framework.

     Our management with the  participation  of our Chief Executive  Officer and
Chief Financial  Officer assessed the  effectiveness of the design and operation
of the Company's  internal  controls over financial  reporting  pursuant to Rule
13a-15(f) of the Securities Exchange Act of 1934, as of December 31, 2006. Based
upon that evaluation,  the Chief Executive  Officer and Chief Financial  Officer
concluded  that the Company's  internal  controls over  financial  reporting are
effective as of December 31, 2006.

     This annual report does not include an attestation  report of the Company's
current  registered  public  accounting  firm  regarding  internal  control over
financial  reporting.  Management's report was not subject to attestation by the
Company's current  registered public accounting firm pursuant to temporary rules
of the  Securities  and Exchange  Commission  that permit the Company to provide
only management's report in this annual report.

c)   Changes in internal controls over financial reporting

     There were no changes in our internal  controls  over  financial  reporting
that  occurred  during  the  period  covered  by this  annual  report  that have
materially effected or are reasonably likely to materially affect, the Company's
internal control over financial reporting.


ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

     We have established an audit committee  comprised of three members which is
responsible for reviewing our accounting  controls and recommending to the board
of  directors  the  engagement  of  our  outside  auditors.  Each  member  is an
independent director under the corporate governance rules of the Nasdaq National
Market.  The  members of the audit  committee  are Messrs.  Docherty,  Gibbs and
Thomas.  While the  Company  is  exempt  from the  requirement  to have an audit
committee   financial   expert,   both  Mr.   Thomas  and  Mr.  Gibbs  meet  the
qualifications of an audit committee financial expert.

ITEM 16B. CODE OF ETHICS

     The Company's  Board of Directors has adopted a Corporate  Code of Business
Ethics and Conduct that applies to all employees,  directors and officers,  that
complies with  applicable  guidelines  issued by the SEC. The finalized  Code of
Ethics has been  approved by the Board of Directors and was  distributed  to all
employees,  directors and officers.  We will also provide any person a hard copy
of our code of ethics  free of charge upon  written  request.  Shareholders  may
direct  their  requests to the  attention of Mrs Eirini  Alexandropoulou  at the
Company's registered address and phone numbers.

ITEM 16C. PRINCIPAL AUDITOR FEES AND SERVICES

         In November 2006, we announced the resignation of our former principal
auditors, Ernst and Young (Hellas), Certified Auditors Accountants S.A., and in
December 2006 we announced the appointment of Deloitte, Hadjipavlou, Sofianos &
Cambanis S.A. (Deloitte) as our principal auditors for the year ended December
31, 2006. For the 2006 audit, Ernst and Young (Hellas) and Deloitte billed us
audit fees of Euro 365,800 and Euro 400,000 respectively. Additionally, in 2006,
Ernst and Young (Hellas) billed us audit related fees of Euro 84,726.

     Our principal  auditors for the year ended December 31, 2005 were Ernst and
Young (Hellas),  Certified  Auditors  Accountants  S.A.. For the 2005 audit they
billed us audit fees of Euro  220,000.  Additionally,  in 2005,  they  billed us
audit related fees of Euro 117,000.

     Our audit committee  pre-approves  all audit,  audit-related  and non-audit
services not prohibited by law to be performed by our  independent  auditors and
associated fees prior to the engagement of the independent  auditor with respect
to such services.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

     See Item 16A above.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES

     None.

                                    PART III

ITEM 17. FINANCIAL STATEMENTS

     Not Applicable.

ITEM 18. FINANCIAL STATEMENTS

     The following financial statements,  together with the reports of Deloitte,
Hadjipavlou,  Sofianos & Cambanis S.A. and Ernst and Young  (Hellas),  Certified
Auditors Accountants S.A., thereon, are filed as part of this report:

<PAGE>

                                TOP TANKERS INC.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                      Page
                                                                   ------------
Reports of Independent Registered Public Accounting Firms           F-1 / F-2

Consolidated Balance Sheets as of December 31, 2005 and 2006           F-3

Consolidated Statements of Income for the years ended
December 31, 2004, 2005 and 2006                                       F-4

Consolidated  Statements of  Stockholders'  Equity for the
years ended December 31, 2004, 2005 and 2006                           F-5

Consolidated Statements of Cash Flows for the years ended
December 31, 2004, 2005 and 2006                                       F-6

Notes to Consolidated Financial Statements                             F-7

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Top Tankers Inc.

We have audited the accompanying  consolidated balance sheet of Top Tankers Inc.
and  subsidiaries  (the  "Company")  as of December  31,  2006,  and the related
statements  of income,  stockholders'  equity,  and cash flows for the year then
ended.  These  financial  statements  are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.  The financial  statements of the Company for the
years ended  December  31, 2005 and 2004 were  audited by other  auditors  whose
report,  dated  February 24, 2006,  expressed  an  unqualified  opinion on those
statements.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements  are free of material  misstatement.  The Company is not required to,
nor have we been  engaged  to perform an audit of their  internal  control  over
financial reporting.  Our audit included  consideration of internal control over
financial   reporting  as  a  basis  of  designing  audit  procedures  that  are
appropriate  in the  circumstances,  but not for the  purpose of  expressing  an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion, such 2006 consolidated financial statements present fairly, in
all material respects, the financial position of Top Tankers Inc and
subsidiaries as of December 31, 2006, and the results of its operations and its
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.


/s/ Deloitte.,
Hadjipavlou, Sofianos & Cambanis S.A.
Athens, Greece
April 12, 2007
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders of
TOP Tankers Inc.

We have audited the accompanying consolidated balance sheets of TOP Tankers Inc.
as of December 31, 2004 and 2005,  and the related  consolidated  statements  of
income,  stockholders' equity, and cash flows for each of the three years in the
period  ended   December  31,  2005.   These   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  We were not engaged to perform an
audit of the Company's  internal  control over  financial  reporting.  Our audit
included  consideration of internal control over financial  reporting as a basis
for designing audit  procedures that are appropriate in the  circumstances,  but
not for the  purpose  of  expressing  an  opinion  on the  effectiveness  of the
Company's internal control over financial reporting.  Accordingly, we express no
such  opinion.  An audit also  includes  examining,  on a test  basis,  evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated  financial position of TOP Tankers Inc.
at December 31, 2004 and 2005,  and the  consolidated  results of its operations
and its cash flows for each of the three years in the period ended  December 31,
2005, in conformity with U.S. generally accepted accounting principles.

                                /s/ Ernst & Young (Hellas) Certified Auditors
                                Accountants S.A.

Athens, Greece
February 24, 2006
<PAGE>

TOP TANKERS INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2005 AND 2006
(Expressed in thousands of U.S. Dollars - except share and per share data)
ASSETS
                                                                2005      2006
                                                             --------- ---------
CURRENT ASSETS:
    Cash and cash equivalents                                  17,462    29,992
    Accounts receivable trade, net                             39,527    27,187
    Insurance claims                                              258       247
    Inventories (Note 4)                                        6,308     6,460
    Advances to various creditors                               3,083     3,707
    Prepayments and other                                         936     5,206
                                                             --------- ---------
          Total current assets                                 67,574    72,799
                                                             --------- ---------

INTEREST RATE SWAPS (Note 8)                                      425         -
                                                             --------- ---------

FIXED ASSETS:
    Advances for vessels under construction (Note 5)                -    28,683
    Vessels, net  (Notes 6 and 8)                             886,754   306,418
    Other fixed assets, net (Note 3)                            1,128     3,195
                                                             --------- ---------
          Total fixed assets                                  887,882   338,296
                                                             --------- ---------

OTHER NON CURRENT ASSETS:
    Deferred charges, net (Note 7)                             11,516    31,850
    Long-term receivables (Note 11)                                 -    29,790
    Restricted cash (Notes 8 and 11)                           13,500    50,000
                                                             --------- ---------
          Total assets                                        980,897   522,735
                                                             ========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
    Current portion of long-term debt (Note 8)                 45,329    16,588
    Accounts payable                                           12,405    14,991
    Accrued liabilities (Note 9)                               13,297     7,354
    Unearned revenue                                            5,112     1,676
                                                             --------- ---------
          Total current liabilities                            76,143    40,609
                                                             --------- ---------

INTEREST RATE SWAPS (Note 8)                                        -     3,384
                                                             --------- ---------

LONG-TERM DEBT, net of current portion (Note 8)               518,774   201,464
                                                             --------- ---------

DEFERRED GAIN ON SALE AND LEASEBACK OF VESSELS (Note 11)
                                                               16,322    79,423
                                                             --------- ---------

COMMITMENTS AND CONTINGENCIES (Note 10)
                                                             --------- ---------

STOCKHOLDERS' EQUITY:
    Preferred stock, $0.01 par value;
    20,000,000 shares authorized;
    none issued (Note  12)                                          -         -

    Common stock,  $0.01 par value;
    100,000,000  shares authorized;
    28,080,640  and  32,429,105  shares
    issued and  outstanding  at December
    31, 2005 and 2006, respectively (Note 12)                     280       324
    Additional paid-in capital (Note 12)                      297,716   116,755
    Accumulated other comprehensive income
    (loss) (Notes 8 and 13)                                        98        (6)
    Retained earnings                                          71,564    80,782
                                                             --------- ---------
          Total stockholders' equity                          369,658   197,855
                                                             --------- ---------
          Total liabilities and stockholders' equity          980,897   522,735
                                                             ========= =========

The accompanying notes are an integral part of these consolidated statements.
<PAGE>

TOP TANKERS INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2004, 2005 AND 2006
(Expressed in thousands of U.S. Dollars - except share and per share data)

<TABLE>
<CAPTION>
                                                                      2004             2005            2006
                                                              -------------  ----------------  ---------------
<S>                                                             <C>               <C>              <C>
REVENUES:
Voyage revenues (Note 1)                                            93,829           244,215          310,043
                                                              -------------  ----------------  ---------------

EXPENSES:
   Voyage expenses (Note 15)                                        16,898            36,889           55,351
   Charter hire expense (Note 11)                                        -             7,206           96,302
   Amortization of deferred gain on sale
    and leaseback of vessels (Note 11)                                   -              (837)          (8,110)
   Other vessel operating expenses (Note 15)                        16,859            47,315           66,082
   Depreciation (Note 6)                                            13,108            47,055           35,266
   Amortization of dry-docking costs (Note 7)                        1,514             5,999           13,187
   Management fees charged by a related party                        1,120                 -                -
   (Note 3)
   Sub-Manager fees (Note 1)                                           803             3,159            2,755
   Other general and administrative expenses                         6,656            20,659           20,261

   Foreign currency (gains) / losses, net                               75               (68)             255
   Gain on sale of vessels (Note 6)                                   (638)          (10,115)         (12,667)
                                                              -------------  ----------------  ---------------
   Operating income                                                 37,434            86,953           41,361
                                                              -------------  ----------------  ---------------

OTHER INCOME (EXPENSES):
   Interest and finance costs (Notes 8 and 17)                      (5,201)          (20,177)         (29,175)

   Interest income                                                     481             1,774            3,022

   Other, net                                                           80               134             (67)
                                                              -------------  ----------------  ---------------
   Total other income (expenses), net                               (4,640)          (18,269)         (26,220)
                                                              -------------  ----------------  ---------------

Net Income                                                          32,794            68,684           15,141
                                                              =============  ================  ===============

Earnings per share, basic and diluted (Note 14)                       2.54              2.46             0.47
                                                              =============  ================  ===============

Weighted average common shares outstanding, basic               12,922,449        27,926,771       30,550,274
                                                              =============  ================  ===============

Weighted average common shares outstanding, diluted             12,922,449        27,932,012       30,603,868
                                                              =============  ================  ===============
</TABLE>

The accompanying notes are an integral part of these consolidated statements.
<PAGE>

TOP TANKERS INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2004, 2005 AND 2006
(Expressed in thousands of U.S. Dollars - except share and per share data)

<TABLE>
<CAPTION>

                                                                                            Accumulated
                                                                                            Other
                                                         Common Stock           Additional  Comprehensive
                                      Comprehensive  -----------------------    Paid-in     Income         Retained
                                          Income      # of Shares Par Value     Capital     (loss)         Earnings        Total
                                          ---------  ----------- -----------   ----------   ----------   ------------    ----------
<S>                                         <C>       <C>               <C>     <C>           <C>           <C>           <C>

BALANCE, December 31, 2003                             6,000,000         60       13,351            -          2,908         16,319
                                                     ===========   =========   ==========   ==========   ============    ==========

     Net income                              32,794            -          -            -            -         32,794         32,794

     Dividends paid ($0.39 per share)             -            -          -            -            -         (2,318)        (2,318)
     Contributions to additional
     paid-in capital                              -            -          -       17,077            -              -         17,077

     Issuance of common stock                     -   21,830,990        218      263,812            -              -        264,030
     Dividends declared ($0.21 per
     share)                                       -            -          -            -            -         (5,845)        (5,845)
     Other comprehensive income-
      -  Unrealized loss on cash
         flow hedges                           (248)           -          -            -         (248)              -          (248)
                                          ---------
     Comprehensive income                    32,546            -          -            -            -              -              -
                                          =========  -----------   ---------   ----------   ----------   ------------    ----------

BALANCE, December 31, 2004                            27,830,990        278      294,240         (248)        27,539        321,809
                                                     ===========   =========   ==========   ==========   ============    ==========

     Net income                              68,684            -          -            -            -         68,684         68,684

     Dividends paid ($0.21 per share)             -            -          -            -            -         (5,844)        (5,844)

     Dividends paid ($0.21 per share)             -            -          -            -            -         (5,897)        (5,897)

     Dividends paid ($0.25 per share)             -            -          -            -            -         (7,020)        (7,020)

     Dividends paid ($0.21 per share)             -            -          -            -            -         (5,898)        (5,898)
     Issuance  of  restricted shares,
     net of forfeitures                           -      249,650          2        3,476            -              -          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                    69,030            -          -            -            -              -              -
                                          =========  -----------   ---------   ----------   ----------   ------------    ----------

BALANCE, December 31, 2005                            28,080,640        280      297,716           98         71,564        369,658
                                                     ===========   =========   ==========   ==========   ============    ==========

     Net income                              15,141            -          -            -            -         15,141         15,141
     Dividends paid ($0.21 per share)             -            -          -            -            -         (5,923)        (5,923)
     Dividends paid ($5.00 per share)             -            -          -    (141,028)            -                      (141,028)
     Dividends paid ($2.50 per share)             -            -          -     (70,515)            -                       (70,515)
     Issuance  of  restricted  shares,
     net of forfeitures                           -      441,100          5        3,705            -              -          3,710
     Issuance of common stock                     -    3,907,365         39       26,877            -              -         26,916
     Other comprehensive income
     -     Accumulated  unrecognized
     actuarial losses                             -            -          -            -           (6)              -            (6)
     - Reclassification of gains to
     earnings due to                            (98)           -          -            -          (98)              -           (98)
       discontinuance of cash flow
     hedges
                                          ---------
     Comprehensive income                    15,043            -          -            -            -              -              -
                                          =========  -----------   ---------   ----------   ----------   ------------    ----------

BALANCE, December 31, 2006                            32,429,105        324      116,755           (6)        80,782        197,855
                                                     ===========   =========   ==========   ==========   ============    ==========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.
<PAGE>

TOP TANKERS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2004, 2005 AND 2006
(Expressed in thousands of U.S. Dollars)

<TABLE>
<CAPTION>

                                                                  2004            2005           2006
                                                              --------------  -------------  -------------
<S>                                                               <C>             <C>           <C>
Cash Flows from Operating Activities:
   Net income                                                        32,794         68,684         15,141
   Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation                                                    13,108         47,055         35,594
     Amortization of dry-docking costs                                1,514          5,999         13,187
     Amortization and write off of deferred financing costs             755          1,407          4,534
     Stock-based compensation expense                                     -          3,478          3,710
     Change in fair value of financial instruments                        -           (327)         3,711
     Amortization  of deferred  gain on sale and  leaseback
     of vessels                                                           -           (837)        (8,110)
     Gain on sale of other fixed assets                                   -              -            (10)
     Gain on sale of vessels                                           (638)       (10,115)       (12,667)
   (Increase) Decrease in:
     Accounts receivable                                            (19,153)       (19,556)        12,340
     Insurance claims                                                   967           (160)            11
     Inventories                                                     (2,712)        (3,087)          (152)
     Due from related parties                                          (219)           219              -
     Advances to creditors                                                -         (1,230)          (624)
     Prepayments and other                                           (2,647)           (15)        (4,270)
   Increase (Decrease) in:
     Accounts payable                                                 7,331          2,047          2,586
     Due to related parties                                            (105)             -              -
     Accrued liabilities                                              3,072          9,531         (5,949)
     Unearned revenue                                                 1,899          2,058         (3,436)
   Payments for dry-docking                                          (7,365)       (10,478)       (34,526)
                                                              --------------  -------------  -------------
Net Cash from Operating Activities                                   28,601         94,673         21,070
                                                              --------------  -------------  -------------

Cash Flows from (used in) Investing Activities:
     Advances for vessel acquisitions / under construction          (25,650)             -        (28,683)
     Vessel acquisitions and improvements                          (327,629)      (677,111)           (18)
     Advances to related parties                                        319              -              -
     Increase in restricted cash                                          -              -       ( 36,500)
     Net proceeds from sale of vessels                                8,536        153,085        599,176
     Net proceeds from sale of fixed assets                               -              -            255
     Acquisition of other fixed assets                                 (475)          (833)        (2,639)
                                                              --------------  -------------  -------------
Net Cash from (used in) Investing Activities                       (344,899)      (524,859)       531,591
                                                              --------------  -------------  -------------

Cash Flows from (used in) Financing Activities:
     Proceeds from long-term debt                                   281,900        472,549         20,000
     Principal payments of long-term debt                            (4,251)       (31,180)       (19,119)
     Repayment of long-term debt                                   (115,260)       (68,853)      (350,399)
     Increase in restricted cash                                     (9,700)        (3,500)             -
     Contributions to additional paid-in capital                     17,077              -              -
     Issuance of common stock                                       264,030              -         26,916
     Payment of financing costs                                      (2,755)        (5,632)           (63)
     Dividends paid                                                  (2,318)       (30,504)      (217,466)
                                                              --------------  -------------  -------------
Net Cash from (used in) Financing Activities                        428,723        332,880       (540,131)
                                                              --------------  -------------  -------------
Net increase (decrease) in cash and cash equivalents                112,425        (97,306)        12,530
Cash and cash equivalents at beginning of year                        2,343        114,768         17,462
                                                              --------------  -------------  -------------
Cash and cash equivalents at end of year                            114,768         17,462         29,992
                                                              ==============  =============  =============
SUPPLEMENTAL CASH FLOW INFORMATION
       Interest paid                                                  3,157         18,683         22,307
                                                              ==============  =============  =============
</TABLE>

The accompanying notes are an integral part of these consolidated statements.
<PAGE>

TOP TANKERS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2005 AND 2006
(Expressed  in thousands of United  States  Dollars - except share and per share
data, unless otherwise stated F-9

1. Basis of Presentation and General Information:

     The accompanying  consolidated financial statements include the accounts of
     Top  Tankers  Inc.   (formerly  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.  in May 2004  and is the  sole  owner of all
     outstanding shares of the following subsidiaries:

     (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.  Up to June 30, 2004 the operations of the vessels were managed
          by Primal  Tankers  Inc.,  a related  Liberian  corporation  which was
          wholly owned by the father of the Company's  Chief  Executive  Officer
          (Note 3). Since July 1, 2004 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 and Hanseatic
          Shipping   Company  Ltd   (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,  2004,  2005 and 2006  totaled $ 803, $
          3,159 and $ 2,755  respectively  and are  separately  reflected in the
          accompanying  consolidated  statements of income. At December 31, 2005
          and 2006 the  amount  due to the  Sub-Managers  totaled  $ 2,714 and $
          1,739  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 the management
          of a fleet of bulk carriers which have not been acquired to date.

     (c)  Top  Tankers  (U.K.)  Limited,  incorporated  in England  and Wales on
          January 12, 2005, as a  representative  office in London.  Top Tankers
          (U.K)  Limited  entered  into a lease  agreement  for office  space in
          London. The original agreement had a one year duration ending December
          31, 2005 and in early  January  2006 was  extended  for one year.  The
          annual  rental  was Great  Britain  Pounds  ("GBP")  123,600,  payable
          quarterly in advance.

     (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 and
          sold and leased back in April 2006.

     (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 and
          sold and leased back in April 2006.

     (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.

     (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 and sold and leased
          back in September 2005.

     (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 and sold and
          leased back in September 2005.

     (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 and sold and leased back
          in August 2005.

     (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.

     (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 and
          sold and leased back in April 2006.

     (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 and
          sold and leased back in April 2006.

     (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.

     (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.

          The  Company is engaged in the ocean  transportation  of crude oil and
          refined  petroleum   products  worldwide  through  the  ownership  and
          operation of the tanker vessels mentioned above.

          On December  31,  2006,  eight  vessels  were  operating  under voyage
          charters,  fifteen  vessels under  long-term  time  charters,  with an
          estimated  average duration of 36 months and one vessel was undergoing
          her special survey. Twelve out of fifteen time charters include profit
          sharing  agreements,  which are settled on a calendar  quarter  basis.
          During 2006, 40% of the Company's  voyage revenues  derived from these
          time charter  agreements.  During 2004,  2005 and 2006 two  charterers
          individually  accounted  for  more  than 10% of the  Company's  voyage
          revenues as follows:

           Charterer                                2004    2005     2006
           ---------                                ----    ----     ----
                 A                                   29%     20%      11%
                 B                                   15%     32%      29%

          The Voyage  revenues in the  accompanying  consolidated  statements of
          income are analyzed as follows:

            Voyage Revenues                      2004         2005       2006
            ---------------                      ----         ----       ----
            Freight revenues                    47,259      115,079     158,558
            Hire revenues                       46,570      129,136     151,485
                  Total                         93,829      244,215     310,043

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  Tankers  Inc.  and  its  wholly-owned
          subsidiaries  referred  to in Note  1.  All  significant  intercompany
          balances and transactions have been eliminated in consolidation.

     (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
          income.

     (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.  In
          relation to the sale and leaseback  transactions,  the Company  should
          maintain during the bareboat charter period consolidated cash balances
          of at least $ 50,000, which will be presented separately as restricted
          cash.

     (f)  Accounts    Receivable--Trade:    The   amount   shown   as   Accounts
          Receivable--Trade  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, 2005 and
          2006 totalled $ 316 and $ 283, 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
                                                             -----------------

     (g)  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.

     (h)  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.

     (i)  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.
          Otherwise these amounts are charged to expense as incurred.

     (j)  Impairment  of Long-Lived  Assets:  The Company  applies  Statement of
          Financial  Accounting  Standards  ("SFAS  144")  "Accounting  for  the
          Impairment  or  Disposal  of  Long-lived   Assets",   which  addresses
          financial  accounting  and reporting for the impairment or disposal of
          long-lived  assets.  The standard  requires that long-lived assets and
          certain  identifiable  intangibles  held  and  used  by an  entity  be
          reviewed for impairment  whenever  events or changes in  circumstances
          indicate that the carrying amount of the assets, including unamortized
          drydock  costs,   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  should  evaluate  the  asset  for  an  impairment  loss.
          Measurement of the  impairment  loss is based on the fair value of the
          asset  as  provided  by third  parties.  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, 2004,  2005 and 2006,  did not result in an indication
          that the carrying  amounts are not  recoverable.  Furthermore,  in the
          period a long-lived  asset meets the "held for sale"  criteria of SFAS
          No.  144,  a loss is  recognized  for any  initial  adjustment  of the
          long-lived  asset's  carrying  amount to fair value less cost to sell.
          For the  years  ended  December  31,  2004,  2005  and  2006,  no such
          adjustments were identified.

     (k)  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 are adopted.

     (l)  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, as
          presented below:

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

     (m)  Accounting for  Dry-Docking  Costs:  The Company  follows the deferral
          method of  accounting  for  dry-docking  costs  whereby  actual  costs
          incurred are deferred and are amortized on a straight-line  basis over
          the period through the date the next dry-docking becomes due.

          Costs capitalized as part of the drydock include all works required by
          the vessels'  Classification  Societies and for the maintenance of the
          vessels Condition Assessment Program ("CAP") rating, which may consist
          of actual  costs  incurred at the  dry-dock  yard,  including  but not
          limited to, dry-dock dues and general services for vessel preparation,
          coating  of  Water   Ballast   Tanks/Cargo   Oil  Tanks   ("WBT/COT"),
          steelworks,  piping works and valves,  machinery  works and electrical
          works.

          All those works which are carried out during dry-dock time for routine
          maintenance  according to the Company's Planned  Maintenance System as
          well as  modifications,  improvements  required by third  parties (i.e
          Port Authorities,  Oil Majors,  standards set by the Company etc.) and
          not  required  by  the  vessels'  Classification   Societies  are  not
          capitalized but expensed as incurred. Unamortized dry-docking costs of
          vessels that are sold are written off and included in the  calculation
          of the resulting gain or loss in the year of the vessel's sale.

     (n)  Sale and Leaseback Transactions:  The gains on sale on vessel sale and
          leaseback  transactions  are deferred and amortized to income over the
          lease period.  Dry-docking  costs for vessels sold and leased back are
          amortized  on a straight  line basis over the period  through the next
          dry-docking  becomes  due or  through  the  termination  of the lease,
          whichever comes first.

     (o)  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.

     (p)  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.

     (q)  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, 2005 and 2006 amounted to $ 116 and $ 190, respectively.

     (r)  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  completion of discharge of the
          vessel's  previous  cargo and is deemed to end upon the  completion of
          discharge of the current cargo.  Demurrage income represents  payments
          by the charterer to the vessel owner 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.

     (s)  Repairs  and  Maintenance:  All repair and  maintenance  expenses  are
          expensed in the year incurred. Such costs are included in Other vessel
          operating  expenses in the  accompanying  consolidated  statements  of
          income.

     (t)  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.

     (u)  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.

     (v)  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 and thus the  Company has
          determined that it operates under one reportable segment. 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.

     (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 by the  Company;  trusts for the
          benefit of employees,  such as pension and profit-sharing trusts, that
          are  managed  by or under the  trusteeship  of  management;  principal
          owners  of the  Company;  its  management;  members  of the  immediate
          families of principal  owners of the Company and its  management;  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.

     (x)  Derivatives:  Statement of Financial  Accounting  Standards ("SFAS No.
          133"),  "Accounting for Derivative Instruments and Hedging Activities"
          (as amended) establishes  accounting and reporting standards requiring
          that  every  derivative   instrument   (including  certain  derivative
          instruments  embedded in other  contracts)  be 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 2004,  2005 and 2006, 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 8). 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 as a component of interest and finance costs. If the
          hedged item is a forecasted  transaction  that becomes probable of not
          occuring, 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  as a component  of interest  and finance
          costs. 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 off-balance sheet risk in outstanding  option agreements  involves
          the risk of a  counter  party  not  performing  under the terms of the
          contract.  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 such arrangements.

     (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)   FASB  Statement  No.  154:  In May  2005,  the FASB  issued  FASB
               Statement  No. 154,  "Accounting  Changes and Error  Corrections"
               (SFAS No. 154).  SFAS No. 154 is a replacement of APB Opinion No.
               20,  "Accounting  Changes"  (APB 20) and FASB  Statement  No.  3,
               "Reporting  Accounting  Changes in Interim Financial  Statements"
               (SFAS No. 3). SFAS No. 154  provides  guidance on the  accounting
               for and reporting of accounting changes and error corrections. It
               establishes  retrospective application as the required method for
               reporting  a voluntary  change in  accounting  principle.  APB 20
               previously  required  that most  voluntary  changes in accounting
               principle be  recognized by including in net income of the period
               of the  change  the  cumulative  effect  of  changing  to the new
               accounting   principle.   SFAS  No.  154  provides  guidance  for
               determining  whether  retrospective  application  of a change  in
               accounting  principle is impracticable and for reporting a change
               when  retrospective  application is  impracticable.  SFAS No. 154
               also   requires   that  a  change  in  method  of   depreciation,
               amortization, or depletion for long-lived, nonfinancial assets be
               accounted for as a change in accounting estimate that is effected
               by a change in accounting  principle.  APB 20 previously required
               that  such  a  change  be  reported  as a  change  in  accounting
               principle. SFAS No. 154 carries forward many provisions of APB 20
               without change, including the provisions related to the reporting
               of a change in  accounting  estimate,  a change in the  reporting
               entity, and the correction of an error. SFAS No. 154 also carries
               forward  the  provisions  of SFAS  No.  3 that  govern  reporting
               accounting changes in interim financial statements.  SFAS No. 154
               is effective for  accounting  changes and  corrections  of errors
               made in fiscal years  beginning  after  December  31,  2005.  The
               Company has adopted this pronouncement effective January 1, 2006.

          ii)  FASB  Interpretation  No.  48:  In June  2006,  the  FASB  issued
               Interpretation  No. 48,  "Accounting  for  Uncertainty  in Income
               Taxes" (FIN 48), which supplements SFAS No. 109,  "Accounting for
               Income  Taxes",  by  defining  the  confidence  level  that a tax
               position  must meet in order to be  recognized  in the  financial
               statements. The Interpretation requires that the tax effects of a
               position be recognized only if it is "more-likely-than-not" to be
               sustained  based  solely  on  its  technical  merits  as  of  the
               reporting date. The  more-likely-than-not  threshold represents a
               positive  assertion by  management  that a company is entitled to
               the economic benefits of a tax position. If a tax position is not
               considered  more-likely-than-not  to be sustained based solely on
               its  technical  merits,  no  benefits of the  position  are to be
               recognized.  Moreover,  the  more-likely-than-not  threshold must
               continue to be met in each reporting period to support  continued
               recognition  of a benefit.  At  adoption,  companies  must adjust
               their  financial  statements  to reflect only those tax positions
               that are  more-likely-than-not to be sustained as of the adoption
               date.  Any  necessary  adjustment  would be recorded  directly to
               retained  earnings  in the period of adoption  and  reported as a
               change in accounting principle.  This Interpretation is effective
               as of the  beginning  of the first  fiscal year  beginning  after
               December 15, 2006. The Company estimates that this statement will
               not have a significant impact on its financial position.

          iii) 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 is currently
               evaluating  the  impact,  if any,  of SFAS  157 on its  financial
               position, results of operations and cash flows.

          iv)  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.  The
               adoption of FSP No. AUG AIR-1 will not have a material  impact on
               the  financial  position,  results of operations or cash flows of
               the Company.

          v)   SAB 108: On September 13, 2006, the SEC released staff accounting
               bulleting   ("SAB")  No.   108,   which   provides   guidance  on
               materiality.  SAB No. 108 states that registrants should use both
               a balance sheet  approach and an income  statement  approach when
               quantifying  and  evaluating the  materiality of a  misstatement,
               contains  guidance on correcting  errors under the dual approach,
               and provides  transition  guidance for correcting errors existing
               in prior years.  If  prior-year  errors that had been  previously
               considered  immaterial  (based  on  the  appropriate  use  of the
               registrant's prior approach) now are considered material based on
               the approach in the SAB, the  registrant  need not restate  prior
               period financial statements.  SAB No. 108 is effective for annual
               financial  statements covering the first fiscal year ending after
               November 15, 2006.  This  statement is effective  for the Company
               for the  fiscal  year  ended  December  31,  2006.  The effect of
               implementing   SAB  No.  108  amounted  $  226,  is  included  in
               Amortization of dry-docking costs and related to the write-off of
               unamortized  balance of bunkers consumed that previously deferred
               as part of the dry-docking costs.

          vi)  FASB  Statement No. 158: In September  2006, the FASB issued FASB
               Statement No. 158,  "Employer's  Accounting  for Defined  Benefit
               Pension and Other Postretirement  Plans" (SFAS No. 158). SFAS No.
               158 is an  amendment  of  FASB  Statements  No.  87,  "Employers'
               Accounting  for  Pensions"  (SFAS No.  87),  No. 88,  "Employers'
               Accounting for  Settlements  and  Curtailments of Defined Benefit
               Pension Plans and for  Termination  Benefits"  (SFAS No. 88), No.
               106 "Employers' Accounting for Postretirement Benefits Other Than
               Pensions" (SFAS No. 106) and No. 132(R)  "Employers'  Disclosures
               about Pensions and Other Postretirement Benefits--an amendment of
               FASB Statements No. 87, 88, and 106" (SFAS No. 132(R)).  SFAS No.
               158  requires  an  employer  to  recognize   the   overfunded  or
               underfunded  status  of a  defined  benefit  postretirement  plan
               (other than a multiemployer plan) as an asset or liability in its
               statement of financial  position and to recognize changes in that
               funded  status in the year in which  the  changes  occur  through
               comprehensive   income  of  a  business   entity  or  changes  in
               unrestricted  net assets of a not-for-profit  organization.  This
               Statement  also requires an employer to measure the funded status
               of a plan as of the date of its  year-end  statement of financial
               position, with limited exceptions.

               This Statement requires an employer that is a business entity and
               sponsors one or more single-employer defined benefit plans to: a)
               recognize  the funded status of a benefit  plan--measured  as the
               difference  between  plan  assets  at fair  value  (with  limited
               exceptions)  and the  benefit  obligation--in  its  statement  of
               financial position. For a pension plan, the benefit obligation is
               the projected benefit  obligation;  for any other  postretirement
               benefit  plan,  such as a retiree  health care plan,  the benefit
               obligation is the accumulated  postretirement benefit obligation,
               b) recognize as a component of other comprehensive income, net of
               tax, the gains or losses and prior  service costs or credits that
               arise during the period but are not  recognized  as components of
               net periodic  benefit  cost  pursuant to FASB  Statement  No. 87,
               Employers'  Accounting  for  Pensions,  or  No.  106,  Employers'
               Accounting  for  Postretirement  Benefits  Other  Than  Pensions.
               Amounts  recognized in accumulated  other  comprehensive  income,
               including  the gains or losses,  prior  service costs or credits,
               and the transition asset or obligation remaining from the initial
               application  of  Statements  87 and 106, are adjusted as they are
               subsequently  recognized as  components  of net periodic  benefit
               cost pursuant to the recognition and  amortization  provisions of
               those  Statements,  c) measure  defined  benefit  plan assets and
               obligations  as of the  date of the  employer's  fiscal  year-end
               statement of financial position (with limited  exceptions) and d)
               disclose  in  the  notes  to  financial   statements   additional
               information  about certain  effects on net periodic  benefit cost
               for the next fiscal year that arise from delayed  recognition  of
               the  gains  or  losses,  prior  service  costs  or  credits,  and
               transition asset or obligation.  An employer with publicly traded
               equity  securities is required to initially  recognize the funded
               status of a defined  benefit  postretirement  plan and to provide
               the required  disclosures as of the end of the fiscal year ending
               after   December   15,   2006.   The  Company  has  adopted  this
               pronouncement  effective  December 31, 2006. The adoption of FASB
               158 did not have a material impact on its financial  consolidated
               position, results of operations or cash flows.

         viii) 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 is  currently
               evaluating  the  impact  of SFAS  159,  but does not  expect  the
               adoption of SFAS 159 to have a material  impact on its  financial
               consolidated position, results of operations or cash flows.

          (aa) Reclassification  of Prior Year Balances:  Certain amounts in the
               2005  and  2004  consolidated   financial  statements  have  been
               reclassified   to   conform   to  the  2006   presentation.   The
               reclassifications  had no impact on the results of  operations of
               the Company. Charter Hire Expense for the year ended December 31,
               2005 has been  presented on a separate  line in the  consolidated
               income  statements  to conform to the current year  presentation.
               Charter  Hire  Expense  was  previously  reported  within  Vessel
               Operating  Expenses.  Advances to various  creditors for the year
               ended  December 31, 2005 has been presented on a separate line in
               the  consolidated  balance  sheets to conform to the current year
               presentation.   Advances  to  various  creditors  was  previously
               reported within Prepayments and other.  Deferred gain on sale and
               leaseback of vessels, current portion for the year ended December
               31, 2005 has been included in Deferred gain on sale and leaseback
               of vessels in the  consolidated  balance sheets to conform to the
               current year presentation. Deferred gain on sale and leaseback of
               vessels,  current  portion was previously  reported on a separate
               line in current liabilities.

3.   Transactions with Related Parties:

     (a)  Primal Tankers Inc.: As discussed in Note 1, up to June 30, 2004, the
          Company's ship-owning subsidiaries had management agreements with
          Primal Tankers Inc., under which management services were provided in
          exchange for a fixed monthly fee per vessel, which was renewed
          annually. The fees charged by Primal Tankers Inc. during 2004 amounted
          to $ 1,120 and they are separately reflected in the 2004 accompanying
          consolidated statement of income. During 2004, the Manager acquired
          from Primal Tankers Inc. other fixed assets for a consideration of $
          150.

     (b)  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, 2004, 2005
          and 2006 include $ 281, $ 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 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
          1,593,250, of which Euro 1,187,169.24 ($ 1,514) were paid during 2006.
          The amount of $ 1,799 related to renovation works, discussed above, is
          included in Other fixed assets, net, in the accompanying 2006
          consolidated balance sheet and is depreciated over the lease period,
          which is 12 years.

4.   Inventories:

     The amounts shown in the accompanying consolidated balance sheets are
     analyzed as follows:

                                           2005             2006
                                          -----            -----
     Bunkers                              3,976            4,624
     Lubricants                           1,501            1,319
     Consumable stores                      831              517
                                          -----            -----
                                          6,308            6,460
                                          =====            =====

5.   Advances for Vessels under Construction:

     In October 2006, the Company entered into an agreement for the construction
     of six  handymax  Product /  Chemical  tankers.  The total  contract  price
     amounted to $ 285,380 and is payable in five instalments 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  will be partially  financed  from  long-term  bank  financing
     discussed in Note 8. The first  instalment for four of the six vessels of $
     28,638 was paid in December  2006 and is  included in Advances  for Vessels
     under Construction,  in the 2006 accompanying  consolidated  balance sheet.
     The  Advances  for Vessels  under  Construction  also include $ 34 and $ 11
     relating to capitalized interest and costs respectively, in accordance with
     the accounting policy discussed in Note 2(i) above.

     The vessels are  expected  to be  delivered  during the first six months of
     2009.

6.   Vessels, net:

     The amounts in the accompanying consolidated balance sheets are analyzed as
     follows:

                                       Vessel       Accumulated       Net Book
                                        Cost        Depreciation       Value
                                      --------      ------------      --------
     Balance, December 31, 2004        373,551           (17,554)      355,997
     --Acquisitions                    702,761                --       702,761
     --Disposals                      (139,921)           14,828      (125,093)
     --Depreciation                         --           (46,911)      (46,911)
                                      ---------         ---------     ---------
     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
                                      =========         =========     =========

     Acquisitions  during the year ended  December  31, 2005  represent  (a) the
     acquisition  cost of the five  vessels  discussed in Note 1(u) through Note
     1(y) for a total amount of $ 249,340,  (b) the acquisition cost of the four
     vessels  discussed  in Note 1(z) through Note 1(cc) for a total amount of $
     163,629 and (c) the acquisition cost of the five vessels  discussed in Note
     1(dd) through Note 1(hh) for a total amount of $ 289,792.

     In  September  and  December  2004  vessels   Tireless  and  Med  Prologue,
     respectively,  were sold for an  aggregate  price of $ 8,900.  These sales,
     after the related sales expenses of $ 364 and the  unamortized  dry-docking
     costs  written  off of $  1,265,  resulted  in a gain  of $ 638,  which  is
     separately  reflected in the accompanying  2004  consolidated  statement of
     income.

     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  and  the  unamortized  dry-docking  costs  written-off  of $ 716,
     resulted  in a gain of $  10,115,  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 11).

     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 11). 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
     income.

     All  Company's  vessels,  having a total  carrying  value of $  306,418  at
     December 31, 2006,  have been  provided as  collateral  to secure the loans
     discussed in Note 8.

7.   Deferred Charges:

     The unamortized amounts included in the accompanying  consolidated  balance
     sheets  represent  dry-docking  costs and  financing  fees for the  undrawn
     portion of the  revolving  credit  facility  (Note 8) and are  analyzed  as
     follows:

                                                   Dry-      Financing
                                                   Docking     Fees      Total
                                                   -------   ---------  -------
     Balance, December 31, 2004                      6,748         --     6,748
     --Additions                                    10,478      1,022    11,500
     --Write-off due to sale of vessels (Note 6)      (716)        --      (716)
     --Amortization                                 (5,999)       (17)   (6,016)
                                                   --------   --------  --------
     Balance, December 31, 2005                     10,511      1,005    11,516
     --Fees prior presented contra to debt              --        249       249
     --Additions                                    34,526         --    34,526
     --Amortization                                (13,187)    (1,254)  (14,441)
                                                   --------   --------  --------
     Balance, December 31, 2006                     31,850         --    31,850
                                                   ========   ========  ========

     Write-off of deferred  dry-docking costs due to sale of vessels is included
     in gain on sale of vessels in the accompanying  consolidated  statements of
     income.

8.   Long-term Debt:

     The amounts in the accompanying consolidated balance sheets are analyzed as
     follows:

         Borrower(s)                               2005             2006
         -----------------------------------     --------         --------
     (a) The Company                              512,315          218,052
     (b) Vitsi                                     25,894               --
     (c) Parnis                                    25,894               --
                                                 --------         --------
         Total                                    564,103          218,052
         Less- current portion                    (45,329)         (16,588)
                                                 --------         --------
         Long-term portion                        518,774          201,464
                                                 ========         ========

     (a) The Company:

     At  December  31,  2006,  the  Company  had  a  revolving  credit  facility
     outstanding of $ 83,000 and a loan outstanding of $ 137,000.

     The outstanding  amount under the revolving  credit facility of $ 83,000 is
     payable in 10 semi-annual  instalments of approximately $ 5,395 starting on
     April 30, 2011 plus a balloon payment of $ 29,050 payable together with the
     final instalment,  if no further amounts are drawn. The applicable interest
     rate as of December 31, 2006 is 5.97%. As of December 31, 2006, the undrawn
     amount amounted to $ 75,000.

     The loan of $ 137,000 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  (Note 6). The loan
     consists of 2 tranches of $ 130,000  (Tranche A) and $ 24,000  (Tranche B).
     Tranche A is payable in 32  consecutive  quarterly  instalments  of $ 2,750
     each, starting on March 13, 2006 plus a balloon payment of $ 42,000 payable
     together with the final instalment.  Tranche B is payable in 16 consecutive
     quarterly  instalments  of $ 1,500 each,  starting on March 13,  2006.  The
     Company paid a fee of 1% upon  signing of the  agreement,  or $ 1,540.  The
     loan bears  interest at LIBOR plus a margin and as of December  31, 2006 is
     6.15%.

     At  December  31,  2005,  the  Company  had  a  revolving  credit  facility
     outstanding of $ 178,255 and loans outstanding of $ 339,000.

     At  December  31,  2005,  the  outstanding  balance  under one loan and the
     revolving credit facility  together wsa $ 363,255.  In August and September
     2005,  following the sale of Fearless and Yapi  discussed in Note 6 and the
     sale and  leaseback  of Restless,  Sovereign,  Relentless,  Invincible  and
     Victorious discussed in Notes 6 and 11, the Company prepaid $ 68,853 of the
     then  outstanding  amount  of the  loan.  In  November  2005,  the loan was
     restructured  and the Company  simultaneously  entered into an additional $
     206,000  revolving  credit facility with the same lender.  The restructured
     loan of $ 195,657  was to  refinance  the then  outstanding  amount and was
     payable in 15 semi-annual instalments. The first instalment of $ 10,657 was
     paid on November 30, 2005 to be followed by 14 semi-annual instalments of $
     10,500 each,  from May 31, 2006 to November 2012, plus a balloon payment of
     $ 38,000 payable together with the last instalment.

     The revolving  credit facility was concluded in order to refinance the then
     outstanding  amount  of $  144,000  and  to  partially  finance  up  to  an
     additional  amount of $ 206,000 the acquisition of tankers meeting specific
     criteria. The $ 206,000 was subject to a fee of 0.5% paid on signing of the
     agreement.  On  November  8, 2005,  $ 34,255  was drawn  down to  partially
     finance the acquisition cost of vessel Ioannis P (Note 6). The restructured
     loan and the  revolving  credit  facility  bear  interest  at LIBOR  plus a
     margin.

     In March and April 2006,  following  the sale and  leaseback  of  Flawless,
     Timeless,  Priceless,  Doubtless,  Vanguard, Faithful, Spotless, Limitless,
     Endless,  Faultless and Noiseless  discussed in Notes 6 and 11, the Company
     prepaid in full $ 185,000 of the loan outstanding  amount of the loan and $
     20,255 of the then  outstanding  amount of the revolving  credit  facility.
     Following the prepayment of $ 20,255 of the revolving credit facility,  the
     undrawn amount of $ 192,000 was cancelled in August 2006.

     In November and December 2006,  following the sale of Taintless,  Soundless
     and Topless  discussed in Note 6, the Company  prepaid $ 95,000 of the then
     outstanding amount of the revolving credit facility.  On December 21, 2006,
     $ 20,000 was drawn  down to  partially  finance  the  construction  of four
     vessels (Note 5).

     (b),  (c) Vitsi - Parnis:  Loan for an amount of $ 56,500  divided into two
     tranches, obtained in March 2005, to partially finance the acquisition cost
     of vessels  Stainless  and  Stopless  (Note 6). The loan was  payable in 28
     varying  quarterly  instalments  starting  July 29,  2005,  plus a  balloon
     payment of $ 10,170 payable together with the last instalment. The loan was
     subject  to a fee of 1%  paid  on draw  down.  In  March  and  April  2006,
     following  the sale and leaseback of Stopless and  Stainless,  discussed in
     Notes  6 and  11,  the  Company  repaid  in  full $  50,144  for  the  then
     outstanding amount of the loan.

     The loans are secured as follows:

     o First priority mortgages over the Company's vessels;

     o Assignments of insurance and earnings of the mortgaged vessels;

     o Corporate guarantee of the TOP Tankers Inc;

     o Pledge over the earnings accounts of the vessels.

     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  140% 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
     and to 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 on a consolidated  basis,  as
     of December 31, 2006, are included in restricted  cash in the  accompanying
     consolidated  balance  sheets.  The Company is permitted  to pay  dividends
     under the loans so long as they are not in default of a loan covenant or if
     such dividend payment would not result in a default of a loan covenant. The
     Company's  management believes that as of December 31, 2006, the Company is
     in compliance with loan covenants.

     Interest  Expense:  Interest expense for the years ended December 31, 2004,
     2005 and 2006,  amounted to $ 4,161, $ 19,700 and $ 20,750 respectively and
     is included in interest and finance costs in the accompanying  consolidated
     statements of income (Note 17).

     The weighted average interest rates,  including swaps and the relevant bank
     margins, for 2005 and 2006 were 4.65% and 5.21%, respectively.

     Scheduled Principal  Repayments:  The annual principal payments required to
     be made after December 31, 2006, are as follows:

     Year ending December 31,                Amount
     ------------------------               --------
     2007                                     17,000
     2008                                     17,000
     2009                                     17,000
     2010                                     11,000
     2011 and thereafter                     158,000
                                            --------
                                             220,000
     Less unamortized financing fees          (1,948)
                                            --------
                                             218,052
                                            ========

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

<TABLE>
<CAPTION>
                                                        Interest
             Notional                                     Rate             Fair
     SWAP     Amount     Period    Effective Date       Payable    Value - Asset (Liability)
     ----     ------     ------    --------------         ----     -------------------------

                                                                   December      December
                                                                   31, 2005      31, 2006
                                                                   --------      --------
     <S>     <C>         <C>       <C>                    <C>         <C>        <C>
       (i)   $ 100,500   5 years   November 3, 2005       4.63%       $ 327            --

      (ii)   $  36,550   4 years   November 3, 2005       4.66%       $  98         $ 283

     (iii)   $  45,000   5 years   January 30, 2006       4.80%          --         $ 273

      (iv)   $  10,000   7 years   September 30, 2006     4.23%          --        ($ 569)

       (v)   $  10,000   7 years   September 30, 2006     4.11%          --        ($ 514)

      (vi)   $  50,000   7 years   September 29, 2006     4.45%          --      ($ 2,383)

     (vii)   $  10,000   7 years   July 3, 2006           4.70%          --        ($ 474)
                                                                      -----      ---------
                                                                      $ 425      ($ 3,384)
                                                                      =====      =========
</TABLE>

     During  August and  September  2005, as a result of the sale of vessels and
     prepayment  of the loan of $ 68,853  mentioned  in (a) above,  the  Company
     terminated the then existing swap of $ 98,500,  which at that time was in a
     gain  position.  The  swap's  termination  resulted  in a  reclassification
     adjustment from other comprehensive  income to earnings for the accumulated
     swap gain of $ 1,171, which is included in interest and finance costs (Note
     17).

     In November 2005,  upon the loan  restructuring  discussed under (a) above,
     the then existing  swaps were  restructured  into a new swap with declining
     notional  balances in order to hedge the variable  interest rate  exposure,
     with effective date November 3, 2005; for an initial  notional  amount of $
     100,500 and for a period of five years, with a fixed interest rate of 4.63%
     plus the  applicable  bank margin (SWAP (i)).  The then  existing swap of $
     36,550 was also amended to a new swap with declining  notional  balances in
     order to hedge the variable  interest rate  exposure,  with  effective date
     November  3,  2005;  for an initial  notional  amount of $ 36,550 and for a
     period  of  four  years,  with a fixed  interest  rate of  4.66%  plus  the
     applicable bank margin (SWAP (ii)).

     As a result of the sale and leaseback of vessels and full prepayment of the
     loans of $  185,000,  discussed  above,  the  Company  on March  31,  2006,
     terminated the  non-qualifying  swap with an initial  notional  amount of $
     100,500 (SWAP (i)), which at that time was in a gain position.

     In  connection  with the loan of $ 154,000  discussed  above,  the  Company
     entered  into an  interest  rate swap  agreement  with  declining  notional
     balances  in order to hedge  its  variable  interest  rate  exposure,  with
     effective date January 30, 2006, for an initial notional amount of $ 45,000
     and for a period of five years, with a fixed interest rate of 4.8% plus the
     applicable bank margin (SWAP (iii)).

     In July 2006,  the Company  entered into the  following  interest rate swap
     agreements.  Under those agreements,  the Company will pay an initial fixed
     interest  rate, as indicated  below,  and will receive a floating  interest
     rate,  which is the 3-month LIBOR,  as is determined on the reset dates. If
     the  difference  between the 10-year  swap rate and the 2-year swap rate is
     greater or equal to 5 basis  points,  then the Company will continue to pay
     the initial  fixed rate and  continue to receive  the  respective  floating
     rate. If the  difference  between the 10-year swap rate and the 2-year swap
     rate is less than 5 basis  points,  then the  Company  will pay the initial
     fixed rate,  plus two times the  difference  between 5 basis points and the
     difference  between  the 10-year  swap rate and the 2-year  swap rate.  The
     interest rate that the Company will pay is capped at 8.80%.

          (a)  for a notional amount of $ 10,000, with effective date of July 5,
               2006 and for a period of seven  years,  with an initial  interest
               rate of 4.52%.

          (b)  for a notional  amount of $ 10,000,  with  effective date of July
               24,  2006  and for a  period  of  seven  years,  with an  initial
               interest rate of 4.40%.

          (c)  for a notional amount of $ 50,000, with effective date of July 3,
               2006 and for a period of seven  years,  with an initial  interest
               rate of 4.63%.

          (d)  for a notional amount of $ 10,000, with effective date of July 3,
               2006 and for a period of seven  years,  with an initial  interest
               rate of 4.70% (SWAP (vii)).

     During  the  fourth  quarter  of  2006,  the  swaps  (a),  (b) and (c) were
     restructured  and the Company will pay an initial fixed  interest  rate, as
     indicated in the table above (SWAPS (iv), (v) and (vi)  respectively),  and
     will receive a floating  interest rate,  which is the 3-month LIBOR,  as is
     determined  on the reset  dates.  In the first  period  (fourth  quarter of
     2006),  the  difference  between the 10-year  swap rate and the 2-year swap
     rate was greater to minus 5 basis points,  and the Company paid the initial
     fixed rate and  received  the  floating  interest  rate.  In the next three
     periods,  if the  difference  between the 10-year  swap rate and the 2-year
     swap rate is  greater or equal to 0 basis  points,  then the  Company  will
     continue  to pay the  initial  fixed  rate  and  continue  to  receive  the
     respective  floating rate. If the difference  between the 10-year swap rate
     and the 2-year swap rate is less than 0 basis points, then the Company will
     pay the initial fixed rate, plus three times the difference between 0 basis
     points and the difference between the 10-year swap rate and the 2-year swap
     rate. In all subsequent periods, if the difference between the 10-year swap
     rate and the 2-year swap rate is greater or equal to 8 basis  points,  then
     the Company will  continue to pay the previous rate and continue to receive
     the respective  floating  rate. If the difference  between the 10-year swap
     rate and the 2-year swap rate is less than 8 basis points, then the Company
     will pay the previous rate, plus three times the difference between 8 basis
     points and the difference between the 10-year swap rate and the 2-year swap
     rate.  The  interest  rate that the Company  will pay for the  restructured
     swaps is capped at 10.25%.

     As of December 31, 2005 and 2006,  the swaps' fair  values,  based on third
     party  valuations,  are assets of $ 425 and a net  liability  of ($ 3,384),
     respectively. The 2005 change in fair value of $ 327 on the swap agreements
     with  initial  notional  balances  of $ 98,500,  $ 93,500  and $ 27,931 was
     recorded in interest and finance costs, as the Company  considered that the
     future cash outflows  hedged by these swaps were probable of not occurring.
     The  change  in fair  value  of $ 98 of the  swap  agreement  with  initial
     notional   balance  of  $  36,550   (SWAP  (ii))  was   recorded  in  other
     comprehensive  income  (loss) as the  Company  considered  that the related
     future cash outflows being hedged were probable of occurring. The 2006 fair
     value  change on the swap  agreements  was recorded in interest and finance
     costs (Note 17), as the Company  considered  that the future cash  outflows
     hedged by these swaps were probable of not occurring.

     The total impact in the consolidated  income statements for the years ended
     December 31, 2005 and 2006, arising from the swaps termination and year-end
     swap valuations,  is a gain of $ 1,498 and a loss of ($ 2,733) respectively
     and is included in interest and finance costs (Note 17).

9.   Accrued Liabilities:

     The amounts in the accompanying consolidated balance sheets are analyzed as
     follows:

                                                         2005         2006
                                                        ------       ------
     Interest on long-term debt                          2,187          630
     Vessels' operating and voyage expenses              4,222        5,455
     General and administrative expenses                 6,888        1,269
                                                        ------       ------
         Total                                          13,297        7,354
                                                        ======       ======

10.  Commitments and Contingencies:

     As at December  31, 2006 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, 2006 are $ 14,169 in 2007, $ 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. Not later than three months after the end
     of  bareboat  charter  period  or upon the  resale  of the  vessels  by the
     purchaser,  if earlier, $ 47,000 out of the $ 55,000 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.

     During December 2006, the Company was named  defendant on various  putative
     class action  securities  law suits brought in the United  States  District
     Court, Southern District of New York. The Company maintains a Directors and
     Officers liability insurance which covers the Company and its directors for
     up to $  20,000.  The  Company  has  retained  a law firm  specializing  in
     relevant litigation,  that has estimated the cost of the first year's legal
     expenses as approximately  matching the deductible of this policy of $ 250.
     Therefore,  this  amount is included  in Other  general and  administrative
     expenses  in the 2006  consolidated  statement  of  income.  The  Company's
     management has assessed that at this stage, it is premature for any further
     provision in the financial statements.

     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.

11.  Sale and Leaseback of Vessels:

     The Company entered into sales and leaseback  transactions in 2005 and 2006
     as follows:

     (a)  In August and September  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 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;  the  amortization  of $ 837 and $ 2,451 is included in
          Amortization of deferred gain on sale and leaseback of vessels, in the
          accompanying  2005  and  2006   consolidated   statements  of  income,
          respectively. During the years ended December 31, 2005 and 2006, lease
          payments relating to the bareboat charters of the vessels were $ 7,206
          and $ 21,061, respectively and are included in Charter hire expense in
          the 2005 and 2006 accompanying consolidated statements of income.

     (b)  In March  2006,  the  Company  sold the  vessels  Flawless,  Timeless,
          Priceless, Stopless, Doubtless, Vanguard, Faithful and Spotless to two
          unrelated parties  (buyers/lessors)  for $ 292,000;  of which 90% or $
          262,800 was paid upon closing of the sale.  Simultaneous with the sale
          of the eight  vessels,  the  Company  entered  into  bareboat  charter
          agreements  to leaseback  the same eight  vessels for a period of five
          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 $ 29,200.  The unpaid  sales price is payable
          to the Company  within three months after the expiry of the individual
          bareboat charter  agreements or termination of the leases, 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 sale of the
          vessels prior to the termination of the bareboat  charter  agreements,
          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 $  23,840  was  deferred  and is  being
          amortized to income over the five-year 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).  The  amortization  of  the
          deferred gain amounted to $ 3,775 for the year ended December 31, 2006
          is included in  Amortization of deferred gain on sale and leaseback of
          vessels in the  accompanying  consolidated  statements of income.  The
          total lease  payments for the year ended  December 31, 2006 related to
          the  foregoing  leases were $ 43,701 and are  included in Charter Hire
          Expense in the accompanying consolidated statements of income.

     (c)  In April  2006,  the  Company  sold the  vessels  Limitless,  Endless,
          Stainless,   Faultless   and   Noiseless   to   an   unrelated   party
          (buyer/lessor) for $ 258,000;  of which 90% or $ 232,200 was paid upon
          closing of the sale.  Simultaneous  with the sale of the five vessels,
          the Company entered into bareboat charter  agreements to leaseback the
          five vessels for a period of seven years with no lease renewal option.

          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 $ 25,800.  The unpaid  sales price is payable
          to the Company  within three months after the expiry of the individual
          bareboat  charter  agreements or upon  termination  of the leases,  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 shareholders (owners) of the buyer/lessor.

          The bareboat charter  agreements are accounted for as operating leases
          and the  gain on the  sale  of $  17,580  was  deferred  and is  being
          amortized to income over the  seven-year  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).  The  amortization  of the
          deferred gain amounted to $ 1,884 for the year ended December 31, 2006
          and is included in Amortization of deferred gain on sale and leaseback
          of vessels in the accompanying  consolidated statements of income. The
          total lease  payments for the year ended  December 31, 2006 related to
          the  foregoing  leases were $ 31,540 and are  included in Charter Hire
          Expense in the accompanying consolidated statements of income.

     The  Company's  future  minimum  lease  payments  required to be made after
     December 31, 2006,  related to the foregoing  bareboat charter  agreements,
     are as follows:

     Year ending December 31,                           Amount
     ------------------------                          -------
     2007                                              118,865
     2008                                              118,982
     2009                                              118,865
     2010                                              118,865
     2011 and thereafter                               142,952
                                                       -------
                                                       618,529
                                                       =======

     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.  The Company  during the  bareboat  charter  period will  maintain
     consolidated cash balances of at least $ 50,000, including the $ 20,000 / $
     25,000,  mentioned  above.  The  $  50,000  required  to be  maintained  is
     presented  separately as restricted  cash. The amount of $ 13,500 discussed
     in Note 8 will also be included in the $ 50,000 minimum  consolidated  cash
     balances.

     As disclosed above, a portion of the sales price  (representing  10% of the
     gross aggregate sales price) in the amount of $ 55,000 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
     asset at its  discounted  amount.  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,  2006 the present  value of the
     unpaid sales price was $29,790.

     Furthermore,  the Company  has agreed  with the lessors  through a separate
     performance   guarantee  deeds  that  it  irrevocably  and  unconditionally
     guarantees the due 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 the leases.

12.  Common Stock and Additional Paid-In Capital:

     On May 10,  May 27,  2004 and  July 22,  2005  the  Company's  Articles  of
     Incorporation were amended. Under the amended articles of incorporation the
     Company was renamed to TOP  Tankers  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.

     On July 23, 2004 the Company  completed its initial public  offering in the
     United States under the United States  Securities  Act of 1933, as amended.
     In this  respect  12,278,570  shares of common stock at par value of $ 0.01
     were issued for $ 11.00 per share.  The net proceeds to the Company totaled
     $ 124,563 of which  approximately  $ 109,000  were used to acquire  the ten
     vessels discussed in Note 1(i) through Note 1(r).

     On November 5, 2004 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 9,552,420 shares of common stock at par value of $
     0.01 were  issued for $ 15.50 per share.  The net  proceeds  to the Company
     totaled $ 139,467.

     From April till July 2006,  the Company  conduced  at-the  market  sales of
     shares through a "controlled equity offering".  A total of 3,907,365 shares
     of common  stock at par value of $ 0.01 were issued and sold in the market.
     The net proceeds to the Company totaled $ 26,916.

13.  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
     1,000,000 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 249,850
     new shares were granted,  out of which  190,000  shares were granted to the
     Company's CEO, 48,300 shares to 8 officers and  independent  members of the
     Board and the remaining 11,550 shares were granted to 36 employees.

     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  125,000 new shares
     were granted, out of which 80,000 shares were granted to the Company's CEO,
     38,000  shares to 8 officers and  independent  members of the Board and the
     remaining 7,000 shares were granted to 20 employees.

     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  320,000 new shares were granted,
     out of which  221,250  shares were  granted to the  Company's  CEO,  68,000
     shares to 8 officers and independent members of the Board and the remaining
     30,750 shares were granted to 51 employees.

     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 following restrictions:

     Company's CEO
     -------------

     The  Participant  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  Participant.  The
     restrictions  lapse on the  earlier  of (i) one year from the grant date or
     (ii) termination of the  Participant's  employment with the Company for any
     reason.

     Other Participants
     ------------------

     The  Participants  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.

     A summary of the status of the Company's vested and non-vested shares as of
     December 31, 2006 and movement during the years ended December 31, 2005 and
     2006, is presented below:

                                                       Weighted average grant
                                     Number of          date fair value per
                                 non-vested shares       non-vested share
                                 --------------------------------------------

     As at January 1, 2005                 --                      --
                                 --------------------------------------------

     Granted                           59,850                  $15.82

     Forfeited                           (200)                 $15.82
                                 --------------------------------------------

     As at December 31, 2005           59,650                  $15.82
                                 --------------------------------------------

     Granted                          143,750                   $8.26

     Vested                           (58,600)                 $12.71

     Forfeited                         (3,900)                 $10.64
                                 --------------------------------------------

     As at December 31, 2006          140,900                   $9.54
                                 ============================================

                                     Number of
                                 non-vested shares
                                 -----------------

     As at January 1, 2005                 --
                                  -----------------

     Granted                          190,000

     As at December 31, 2005          190,000
                                  -----------------

     Granted                          301,250

     Non-vested shares granted
     in 2005, vested during 2006       58,600
                                  -----------------

     As at December 31, 2006          549,850
                                  =================

     During 2005, the employment of one of the other Participants was terminated
     and 200  restricted  shares  that were  granted  to him under the Plan were
     forfeited. During 2006, the employment of six of the other Participants was
     terminated and 3,900 restricted  shares that were granted to them under the
     Plan were forfeited.

     Effective  January 1, 2005, the Company  adopted FASB Statement  123(R) for
     purposes of accounting  for  share-based  payments.  As the Company did not
     engage  in  share-based  compensation  arrangements  prior  to the  date of
     adoption, all share-based  compensation provided to employees (and 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.

     The fair value of each share  granted on July 1, 2005,  January 3, 2006 and
     July 6, 2006  were $ 15.82,  $ 12.71  and $ 6.23,  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 and $ 1,378,  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  and $ 604,
     respectively  and are  being  recognized  ratably  as  compensation  in the
     consolidated income statements over the one-year vesting period, of which $
     472 and $ 1,315 was  recognized  in the years ended  December  31, 2005 and
     2006, respectively.

     In  total $ 3,478  and $ 3,710  of  share-based  compensation  expense  was
     recognized  in  the  accompanying   2005  and  2006   consolidated   income
     statements,  respectively,  classified as Other general and  administrative
     expenses. As of December 31, 2006, the total unrecognized compensation cost
     related  to  non-vested  share  awards is $ 302,  which is  expected  to be
     recognized by June 30, 2007.

     The dividends  declared on shares  granted under the Plan are recognized in
     the 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 compensation in the  consolidated
     income statement.

     Due to the low  historical  employee  turnover,  the  Company's  management
     assumes  no  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    Quarterly    Special        Total Dividends
       Shares     Dividend    Dividend    -----------------------
       granted    per share   per share   Paid in Q3   Paid in Q4
                                             2005         2005

     ------------------------------------------------------------
       Vested        0.21        0.25         87           40

     Non-vested      0.21        0.25         27           13

     ------------------------------------------------------------

     ----------------------------------------------------
                                          Total Dividends
                                          ---------------
       Type of    Quarterly    Special     Paid in year
       Shares     Dividend    Dividend    ended December
       granted    per share   per share      31, 2006

     ----------------------------------------------------
       Vested        0.21        7.50         2,082

     Non-vested      0.21        7.50           807

     ----------------------------------------------------

14.  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.

     We have excluded the dilutive  impact of all 59,650 and 140,900  non-vested
     shares  outstanding  as of December  31, 2005 and 2006,  respectively,  for
     purposes of calculating  diluted earnings per share for those years because
     the  effect  of the  application  of the  treasury  stock  method  to  such
     securities would be antidilutive to basic earnings per share.

     The components of the  calculation of basic and diluted  earnings per share
     for the years ended December 31, 2004, 2005 and 2006 are as follows:

     ---------------------------------------------------------------------------
                                       2004           2005            2006
                                       ----           ----            ----

     Net Income as reported:            $32,794        $68,684         $15,141

     Less: Dividends declared
     during the year for
     non-vested shares                       --            (40)           (807)
                                   ============   ============    ============
     Net income available to
     common shareholders                 32,794         68,644          14,334
                                   ============   ============    ============

     Weighted average common
     shares outstanding, basic       12,922,449     27,926,771      30,550,274

     Add: Dilutive effect of
     non-vested shares                       --          5,241          53,594

     Weighted average common
     shares outstanding, diluted     12,922,449     27,932,012      30,603,868

     Earnings per share, basic
     and diluted                           2.54           2.46            0.47

     ===========================================================================

15.  Voyage and Other Vessel Operating Expenses:

     The  amounts  in the  accompanying  consolidated  statements  of income are
     analyzed as follows:

     Voyage Expenses                            2004       2005       2006
     ---------------                           ------     ------     ------
     Port charges                               5,181      9,271     11,265
     Bunkers                                    8,588     19,893     33,937
     Commissions                                3,129      7,725     10,149
                                               ------     ------     ------
           Total                               16,898     36,889     55,351
                                               ======     ======     ======

     Other vessel operating expenses            2004       2005       2006
     -------------------------------           ------     ------     ------
     Crew wages and related costs               7,285     18,119     26,919
     Insurance                                  2,873      6,561      7,000
     Repairs and maintenance                    2,842     11,449     16,330
     Spares and consumable stores               3,804     10,992     15,668
     Taxes (Note 18)                               55        194        165
                                               ------     ------     ------
           Total                               16,859     47,315     66,082
                                               ======     ======     ======

16.  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 rental is
     Euro  120,000  adjusted  annually  for  inflation  increase  plus 1%. Other
     general and  administrative  expenses for the year ended December 31, 2006,
     include  $ 1,272 of office  rentals.  The  minimum  rentals  payable  under
     non-cancelable  operating  leases for each of the years ending December 31,
     2007 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, 2006 are:

          Year                         Amount
          -------------------          ------
          2007                          1,896
          2008                          1,896
          2009                          1,896
          2010                          1,896
          2011 and thereafter          13,903
                                       ------
                                       21,487
                                       ======

17.  Interest and Finance Costs:

     The  amounts  in the  accompanying  consolidated  statements  of income are
     analyzed as follows:

                                                      2004      2005      2006
                                                    -------   -------   -------
     Interest on long-term debt (Note 8)              4,161    19,700    20,784
     Less: Capitalized interest (Note 5)                 --        --       (34)
     Bank charges                                       285       568     1,158
     Non-qualifying  swaps' fair value change/
       reclassification gain from swap termination       --    (1,498)    2,733
     Amortization and write-off of financing fees       755     1,407     4,534
                                                    -------   -------   -------
           Total                                      5,201    20,177    29,175
                                                    =======   =======   =======

     In 2005 and 2006, the Company  following the loan prepayments  discussed in
     Note  8(a)  terminated  the  related  interest  rate swap  agreements.  The
     termination  resulted  in a  reclassification  gain  of $  1,171  and $ 98,
     respectively,  from  other  comprehensive  income,  which  is  included  in
     non-qualifying  swaps' fair value change / reclassification  gain from swap
     termination in the table above.

18.  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 income.

     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-Traded  Test). 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.

19.  Financial Instruments:

     The principal  financial  assets of the Company consist of cash on hand and
     at banks,  accounts  receivable due from  charterers and interest rate swap
     agreements.  The principal financial  liabilities of the Company consist of
     long-term bank loans and accounts payable due to suppliers.

     (a)  Interest rate risk:  The Company's  interest  rates and long-term loan
          repayment terms are described in Note 8.

     (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 loan discussed in Note 8 bearing interest
          at variable  interest  rates  approximates  the  recorded  value.  The
          carrying value of the interest rate swap agreements approximates their
          fair value as the fair value  estimates  the amount the Company  would
          have received,  had the interest rate swap  agreements been terminated
          on the balance sheet date.

20.  Subsequent Events:

     (a)  Advances for vessels under construction:  In January 2007, the Company
          paid  the  first  installment  of $  14,169,  in  relation  to the two
          remaining  vessels.  The construction cost will be partially  financed
          through long-term bank financing.

     (b)  Putative class action law suits:  As of February 22, 2007, the Company
          has not been served with any of the shareholders' actions. The Company
          has obtained  information  relating to the substance of the plaintiffs
          allegations  based on its  monitoring  of  publicly  available  docket
          sheets. In addition, the Company has appointed a law firm specializing
          in securities litigation.

     (c)  London Office:  In February 2007, Top Tankers (U.K.) Limited,  entered
          into a new lease  agreement for office space in London.  The agreement
          is for duration of 9 months ending November 2007. The monthly lease is
          GBP 5,300, payable monthly in advance.

     (d)  Sale of Vessel:  Based on the Memorandum of Agreement  dated March 30,
          2007, the Company agreed to sell the vessel  Errorless to an unrelated
          party  for  a  consideration  of $  52,500,  resulting  in a  gain  of
          approximately  $ 1,100,  which is  expected  to be  recognised  in the
          second quarter of 2007.  Following the sale of the vessel an amount of
          approximately  $ 22,500 will be used to partly  repay the  outstanding
          indebtness.  The vessel is expected to be  delivered to her new owners
          in the second quarter of 2007.

ITEM 19. EXHIBITS

     Number                         Description of Exhibits
     ------                         -----------------------

      1.1      Amended and  Restated  Articles of  Incorporation  of TOP Tankers
               Inc.(1)

      1.2      Amendment to Amended and Restated  Articles of  Incorporation  of
               Top Tankers Inc.

      1.3      Amended and Restated By-Laws of the Company as adopted on
               February 28, 2007.(2)

      4.1      TOP Tankers Inc. 2005 Stock Option Plan.(3)

      4.2      Loan Agreement between the Company and the Royal Bank of Scotland
               plc dated August 10, 2004 and supplemented September 30, 2004.(4)

      4.3      Loan  Agreement  between the Company and DVB Bank dated March 10,
               2005.(5)

      4.4      Credit  Facility  between  the  Company  and  the  Royal  Bank of
               Scotland dated November 1, 2005.(6)

     4.4.1     Supplement  to credit facility  between the Company and the Royal
               Bank of Scotland dated December 21, 2006.

      4.5      Credit Facility  between the Company and HSH NORDBANK,  AG, dated
               November 7, 2005.(7)

      4.6      Sales Agreement  between the Company and Cantor  Fitzgerald & Co.
               dated April 13, 2006.(8)

      4.7      Shareholder   Rights   Agreement  with   Computershare   Investor
               Services, LLC, as Rights Agent as of August 19, 2005.(9)

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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

      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

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      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.

      4.61     Quadripartite  Agreement  by  and  among  the  Company,   Falarko
               Shipping  Company ICON Doubtless LLC and Fortis Bank  (Nederland)
               N.V. dated June 16, 2006 relating to the M/T Doubtless.

      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.

      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.

      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.

      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

      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

      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.

      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.

      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.

      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.

      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 our 6-K filed on March 9, 2007.

(3)  Incorporated  by reference from Exhibit 4.1 to the Company's  Annual Report
     on Form 20-F, filed on April 13, 2006.

(4)  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).

(5)  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).

(6)  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).

(7)  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).

(8)  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).

(9)  Incorporated  by  reference  to Exhibit 4.1 to the  Company's  Registration
     Statement on Form 8A (File No. 000-50859).
<PAGE>

                                   SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing
on Form 20-F and that it has duly caused and authorized the  undersigned to sign
this registration statement on its behalf.

                                        TOP Tankers Inc.

                                        By: /s/ Evangelos Pistiolis
                                            ------------------------------------
                                            Name:  Evangelos Pistiolis
                                            Title: Chief Executive Officer

April 20, 2006

SK 23116 0001 756596 v8