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

                                    FORM 20-F

(Mark One)

[_]                REPORT 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, 2004

                                       OR

[_]          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
                               -------------------------------------------------

Commission file number                   000-50859
                      ----------------------------------------------------------


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


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                 (Translation of Registrant's name into English)

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


          109-111 Messogion Avenue, Politia Centre, Athens 11526 Greece
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                    (Address of principal executive offices)

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


                                      NONE
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Securities registered or to be registered pursuant to section 12(g) of the Act.

                                                          Name of each exchange
           Title of each class                           on which registered

Common Stock, par value of $0.01 per share                Nasdaq National Market
--------------------------------------------------------------------------------
                                (Title of class)


Securities for which there is a reporting  obligation  pursuant to Section 15(d)
of the Act.

                                      NONE
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                                (Title of class)

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.

27,830,990 shares of Common Stock, par value $0.01 per share.

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 which financial statement item the registrant has elected
to follow.

                            Item 17  [_]    Item 18 [X]

<PAGE>
<TABLE>
<CAPTION>
                                         TABLE OF CONTENTS

                                                                                                      Page
     <S>           <C>                                                                                 <C>
     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 5.       Operating and financial review and prospects........................................28

     Item 6.       Directors, senior management and employees..........................................42

     Item 7.       Major shareholders and related party transactions...................................46

     Item 8.       Financial information...............................................................47

     Item 9.       The offer and listing...............................................................47

     Item 10.      Additional information..............................................................48

     Item 11.      Quantitative and qualitative disclosures about market risk..........................59

     Item 12.      Description of securities other than equity securities..............................59

     Item 13.      Defaults, dividend arrearages and delinquencies.....................................60

     Item 14.      Material modifications to the rights of security holders and use of proceeds........60

     Item 15.      Controls and procedures.............................................................60

     Item 16a.     Audit committee financial expert....................................................60

     Item 16b      Code of ethics......................................................................60

     Item 16c.     Principal accountant fees and services..............................................61

     Item 16d.     Exemptions from the listing standards for audit committees..........................61

     Item 16e.     Purchases of equity securities by the issuer and affiliated purchases...............61

     Item 17       Financial statements................................................................62

     Item 18.      Financial statements................................................................62

     Item 19.      Exhibits..............................................................................
</TABLE>
<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.

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,
2001,  2002,  2003 and 2004 and for the four years ended  December 31, 2004. 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  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, 2001,  2002,  2003 and 2004 by Ernst &
Young (Hellas) Certified Auditors Accountants S.A ("Ernst & Young"), independent
registered  public  accounting  firm.  We have not included  selected  financial
information  as of  and  for  the  year  ended  December  31,  2000,  due to the
unreasonable effort and expense of preparing such information.

<TABLE>
<CAPTION>
                                                                                       Year Ended December 31,
Dollars in  thousands,  except per share  data and                         2001          2002         2003        2004
average  daily results                                                     ----          ----         ----        ----
<S>                                                                     <C>           <C>          <C>         <C>
INCOME STATEMENT DATA
Voyage revenues..................................                       $13,344       $11,426      $23,085     $93,829
Voyage expenses..................................                         4,413         3,311        5,937      16,898
Vessel operating expenses........................                         3,345         4,553        8,420      16,859
General and administrative expenses(1)...........                           455           816        1,815       8,579
Foreign currency (gains) losses, net.............                           (3)            62          105          75
Gain on sale of vessels..........................                             -             -            -         638
Depreciation and amortization....................                         1,337         2,390        4,203      14,622

Total operating expenses.........................                         9,547        11,132       20,480      56,395
Operating income.................................                         3,797           294        2,605      37,434
Net interest expense.............................                           749           987        1,335       4,720
Other income (expense), net......................                       (1,271)           894          364          80


Net income.......................................                        $1,777          $201       $1,634     $32,794


Basic and diluted earnings per share(2)..........                         $0.30         $0.03        $0.27       $2.54
Weighted average basic and diluted shares outstanding(2)              6,000,000     6,000,000    6,000,000  12,922,449
Dividends paid per share(2)......................                         $0.08         $0.14        $0.10       $0.39

BALANCE SHEET DATA, at end of period
Current assets, including cash and cash equivalents.....                 $2,778          $845       $4,862    $141,051
Total assets.....................................                        18,573        33,474       55,703     539,886
Current liabilities, including current portion of long-term debt          3,387         4,390        9,008      42,811
Total long-term debt, including current portion..                         9,914        22,875       34,403     194,806
Stockholders' equity.............................                         7,136         8,772       16,319     321,809

OTHER FINANCIAL DATA
EBITDA(3)........................................                        $3,863        $3,578       $7,172     $52,136

FLEET DATA
Total number of vessels at end of period.........                           2.0           3.0          5.0        15.0
Average number of vessels(4).....................                           2.0           2.9          4.4         9.6
Total voyage days for fleet(5)...................                           730           961        1,517       3,215
Total time charter days for fleet................                             -           160          543       1,780
Total spot market days for fleet.................                           730           801          974       1,435
Total calendar days for fleet(6).................                           730         1,042        1,609       3,517
Fleet utilization(7).............................                         100.0%         92.2%        94.3%       91.4%

AVERAGE DAILY RESULTS
Time charter equivalent(8).......................                       $12,234        $8,444      $11,304     $23,929
Vessel operating expenses(9).....................                         4,582         4,369        5,233       4,794
General and administrative expenses(10)..........                           623           783        1,128       2,439
Total vessel operating expenses(11)..............                         5,205         5,152        6,361       7,233
</TABLE>

(1)  We did not pay any compensation to members of our senior  management or our
     directors  in the years ended  December  31, 2002 and  December  31,  2003.
     During  2004,  we paid to the members of our senior  management  and to our
     directors aggregate compensation of approximately $4.4 million.

(2)  After  giving  effect  to a stock  dividend  effected  in May  2004 and our
     initial public  offering in July 2004. All share and per share amounts have
     been restated to reflect the retroactive effect of the stock dividend.

(3)  EBITDA  represents  earnings  before  interest,   taxes,  depreciation  and
     amortization.  EBITDA does not represent and should not be considered as an
     alternative  to net income or cash flow from  operations,  as determined by
     GAAP, and our  calculation of EBITDA may not be comparable to that reported
     by other companies. EBITDA is included in this report because it is a basis
     upon which we assess our liquidity  position and because we believe that it
     presents useful  information to investors  regarding our ability to service
     and/or incur indebtedness.


         The following table reconciles net cash from operating  activities,  as
     reflected in the consolidated statements of cash flows, to EBITDA:
<TABLE>

                                                                                        Year Ended December 31,
                                                                                        -----------------------
                                                                                  2001      2002       2003       2004
                                                                                  ----      ----       ----       ----
  <S>                                                                           <C>       <C>        <C>       <C>
  Dollars in thousands
   Net Cash from Operating Activities.............................              $5,201    $2,409     $4,930    $28,601
   Net increase (decrease) in current assets......................                (569)      214      1,768     23,764
   Net increase in current  liabilities,  excluding
   current  portion of long-term debt.............................                (199)     (381)    (3,154)   (12,197)
   Gain on sale of vessels........................................                   -         -          -        638
   Payments for drydocking costs..................................                   -       510      2,414      7,365
   Write-off of a related party receivable........................              (1,288)        -          -          -
   Net interest expense...........................................                 749       987      1,335      4,720
   Amortization and write-off of deferred financing costs.........                 (31)     (161)      (121)      (755)
                                                                                  ----     -----      -----      -----

   EBITDA.........................................................              $3,863    $3,578     $7,172    $52,136
                                                                                ======    ======     ======    =======
</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>
                                                                            Year Ended December 31,
                                                                            -----------------------
                                                                          2001       2002       2003       2004
                                                                          ----       ----       ----       ----
<S>                                                                    <C>        <C>        <C>        <C>
Dollars in thousands, except average daily results
Voyage revenues.................................................       $13,344    $11,426    $23,085    $93,829
Less:
       Voyage expenses..........................................        (4,413)    (3,311)    (5,937)   (16,898)
                                                                       -------    -------    -------   --------
       Time charter equivalent revenue..........................        $8,931     $8,115    $17,148    $76,931
                                                                        ======     ======    =======    =======
       Total voyage days........................................           730        961      1,517      3,215
       Average Daily Time Charter Equivalent....................       $12,234     $8,444    $11,304    $23,929
</TABLE>

(9)   Daily vessel operating  expenses,  which includes crew costs,  provisions,
      deck and  engine  stores,  lubricating  oil,  insurance,  maintenance  and
      repairs is  calculated  by  dividing  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.

(11)  Total vessel  operating  expenses,  or TVOE, is a measurement of our total
      expenses associated with operating our vessels.  TVOE is the sum of vessel
      operating expenses and general and administrative  expenses. Daily TVOE is
      calculated by dividing  TVOE by fleet  calendar days for the relevant time
      period.

Capitalization and Indebtedness

         Not Applicable.

Reasons for the Offer and Use of Proceeds

         Not Applicable.

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.

         Additional risks and uncertainties  that we are not aware of or that we
currently  believe  are  immaterial  may also  adversely  affect  our  business,
financial condition, liquidity or results of operation.

Risks Related to Our Industry

         The volatile nature of the international tanker industry, which reached
historic high levels over the past two years, may lead to significant changes in
charter rates and vessel values that may adversely affect our earnings

         The international  tanker industry is volatile with significant changes
in profitability, charter rates and vessel values. Recent fluctuations attest to
this  volatility  in this  industry.  Over  the past two  years,  charter  rates
fluctuated  while  reaching an all-time  high.  Because  many  factors  that may
influence the supply of, and demand for, vessel capacity are unpredictable,  the
timing,  direction and degree of changes in the international tanker industry is
also not predictable.

         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  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

         During the past two years,  charter rates and vessel values for tankers
reached all-time highs.  There can be no assurance that these high charter rates
and vessel values will be sustained.

         The factors affecting the supply and demand for tankers,  charter rates
and vessel values are outside of our control, and the nature,  timing and degree
of changes in the  conditions  of the industry are  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.

         If  we  violate  environmental  laws  or  regulations,   the  resulting
liability may adversely affect our earnings and financial condition

         Our operations are subject to extensive  regulation designed to promote
tanker safety, prevent oil spills and generally protect the environment.  Local,
national and foreign laws, as well as  international  treaties and  conventions,
can subject us to material  liabilities  in the event that there is a release of
petroleum or other hazardous substances from our vessels.

         For  example,  the United  States Oil  Pollution  Act of 1990,  or OPA,
provides that owners,  operators and bareboat charterers are strictly liable for
the  discharge of oil in U.S.  waters,  including the 200 nautical mile zone off
the U.S.  coasts.  OPA provides for unlimited  liability in some  circumstances,
such as a vessel operator's gross negligence or willful misconduct.  However, in
most cases OPA limits  liability  to the  greater of $1,200 per gross ton or $10
million per vessel.  OPA also  permits  states to set their own penalty  limits.
Most  states  bordering  navigable  waterways  impose  unlimited  liability  for
discharges of oil in their waters.

         The International Maritime Organization,  or IMO, has adopted a similar
liability scheme that imposes strict liability for oil spills, subject to limits
that do not apply if the release is caused by the vessel owner's  intentional or
reckless conduct.

         U.S.  law,  the law in many of the  nations  in which we  operate,  and
international treaties and conventions that impact our operations also establish
strict rules  governing  vessel  safety and  structure,  training,  inspections,
financial  assurance for potential  cleanup  liability and other matters.  These
requirements can limit our ability to operate,  and  substantially  increase our
operating  costs.  The U.S. has  established  strict  deadlines for  phasing-out
single-hull  oil tankers,  and both the IMO and the European Union have proposed
similar  phase-out  periods.  Under OPA, all oil tankers that do not have double
hulls  will be phased  out by 2015 and will not be  permitted  to come to United
States ports or trade in United States waters.

         In  December  2003,  the  IMO  adopted  a  proposed  amendment  to  the
International   Convention  for  the  Prevention  of  Pollution  from  Ships  to
accelerate  the phase out of  single-hull  tankers  from 2015 to 2010 unless the
relevant  flag states  extend the date to 2015.  This  proposed  amendment  took
effect in April 2005.  Moreover,  the IMO or other  regulatory  bodies may adopt
further  regulations in the future that could adversely  affect the useful lives
of our tankers as well as our inability to generate income from them.

         These  requirements  can affect the resale value or useful lives of our
vessels.  As a result of accidents  such as the recent oil spill relating to the
loss of the M/T  Prestige,  a 26-year old  single-hull  tanker,  we believe that
regulation of the tanker  industry  will  continue to become more  stringent and
more expensive for us and our competitors.  Substantial violations of applicable
requirements  or a  catastrophic  release  from one of our vessels  could have a
material adverse impact on our financial  condition and results of operations as
well as our reputation in the crude oil and refined petroleum products sectors.

         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 adjustment is made to our financial statements, 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,  spot rates.  Tanker markets are
typically stronger in the winter months as a result of increased oil consumption
in the northern  hemisphere,  unpredictable  weather patterns and other seasonal
factors affecting supply which tend to disrupt vessel scheduling.  The oil price
volatility  resulting from these factors has  historically  led to increased oil
trading   activities.   As  a  result,   our  revenues  and  profitability  have
historically  been weakest during the second quarter and early part of our third
quarter. This seasonality could materially affect our operating results and cash
available for dividends in the future.

         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.

         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.

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 130% 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, 2004, we have subcontracted the day to day technical
management, crewing and certain purchasing functions of all vessels in our fleet
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,  you 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.  While we have not experienced any difficulty
in recruiting to date, we cannot  guarantee  that we will be able to continue to
hire suitable  employees as we expand our fleet. 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, 2004, 10
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,  2004,  the  remainders  of our vessels  were  trading in the spot
market.  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

         We employ our  vessels in a highly  competitive  market that is capital
intensive and highly fragmented.  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 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 2004, under time charter contracts, Vitol and Glencore
provided  29% and  15% 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,  although  we believe are
standard in the shipping industry,  may nevertheless increase our costs or lower
our revenue.

         Our operations outside the United States expose us to global risks that
may interfere with the operation of our vessels

         We are an  international  company and primarily  conduct our operations
outside  the  United  States.  Changing  economic,  political  and  governmental
conditions  in the  countries  where we are  engaged  in  business  or where our
vessels are registered affect us. In the past, political conflicts, particularly
in the Arabian  Gulf,  resulted in attacks on tankers,  mining of waterways  and
other  efforts to disrupt  shipping in the area.  Terrorist  attacks such as the
attacks on the  United  States on  September  11,  2001 and the  United  States'
continuing  response to these attacks, as well as the threat of future terrorist
attacks,  continues  to  cause  uncertainty  in the  world  commercial  markets,
including the energy markets. The recent conflict in Iraq may lead to additional
acts of terrorism,  armed conflict and civil disturbance around the world, which
may contribute to further, instability,  including in the oil markets. Terrorist
attacks,  such as the  attack  on the M/T  Limburg  in  October  2002,  may also
negatively  affect  our  operations  and  directly  impact  our  vessels  or our
customers.  Future terrorist attacks could result in increased volatility of the
financial  markets in the  United  States and  globally  and could  result in an
economic  recession in the United States or the world. Any of these  occurrences
could have a material  adverse  impact on our  operating  results,  revenue  and
costs.

         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  18.8% 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  another  adult  member of the  Pistiolis  family and to a limited
extent by a third party, own, directly or indirectly, approximately 18.8% 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.

         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 will take 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
14% of our expenses in currencies other than U.S. dollars. 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.  Expenses
incurred in foreign  currencies against which the U.S. dollar falls in value can
increase,  decreasing our revenues. For example, in the 12 months ended December
31,  2004,  the value of the U.S.  dollar  declined  by 9.95% 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

History and Development of the Company

         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  $124.4 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.

         On November 5, 2004,  we  completed a follow-on  offering of our common
stock. The net proceeds of our follow-on offering, approximately $139.4 million,
were used primarily to finance the acquisition of 5 double-hull Suezmax tankers.
The total cost of the acquisition was approximately $257.0 million.

         We are a provider of international  seaborne  transportation  services,
carrying refined petroleum  products and crude oil. As of December 31, 2004, our
fleet  consisted of 15 vessels,  comprised of 10  double-hull  Handymax  product
tankers,  one  single-hull  Handysize  product tanker and 4 double-hull  Suezmax
tankers,  with a total  cargo  carrying  capacity of  approximately  1.1 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.

         Following the agreement to sell our final remaining single-hull vessel,
we currently own and operate a fleet of 23 vessels, consisting of 14 double-hull
Handymax tankers and 9 double-hull Suezmax tankers. Four of our Handymax tankers
were  delivered  in March  and  April  2005 and 5 of our  Suezmax  tankers  were
purchased in connection  with the proceeds of the  following-on  offering of our
common stock in November 2004.

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 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.

Fleet Characteristics

         As of December  31,  2004,  the vessels in our fleet have a total cargo
capacity of  approximately  1.1 million  dwt.  Over 88% 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 creates cost  efficiencies and economies of scale
when ordering spare parts, supplying and crewing these vessels.

Chartering of the Fleet

         As of December 31, 2004 all 10 of our Handymax  tankers  operated under
time charter  contracts  expiring in 2006 or 2007. Four of our Handymax  tankers
were  deployed  under 24 month time charter  contracts  that have a base rate of
$14,500 per day. Should the vessels generate revenues in excess of the base rate
over the duration of the time charter contact, we will receive 100% of the first
$500 per day in excess of the base rate.  Thereafter  we will receive 50% of the
excess.  Six of our Handymax  tankers were deployed  under 30 month time charter
contracts  that have a base rate of $14,250 per day until  December 31, 2005 and
$13,250 per day until  expiration of the contract.  Should the vessels  generate
revenues  in  excess  of the base rate  over the  duration  of the time  charter
contact,  we will  receive  100% of the first $250 per day in excess of the base
rate  until  December  31,  2005 and  $1,250  per day  until  expiration  of the
contract.  Thereafter we will receive 50% of the excess. Our Suezmax tankers and
our Handysize tanker operated on the spot market.

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, 2004, TOP Tanker  Management has  subcontracted  the
day to day technical management, crewing and certain purchasing functions of the
8 Handymax  tankers and the 2 Suezmax tankers  acquired since our initial public
offering to Unicom  Management,  a ship management  company operating in Cyprus,
and has  subcontracted  the day to day technical  management  and crewing of the
remaining vessels in our fleet to V.Ships Management  Limited, a ship management
company operating in Glasgow, Scotland. TOP Tanker Management pays a monthly fee
of $14,000 per vessel under its agreements with Unicom  Management and a monthly
fee of $10,000 per vessel under its agreements with V.Ships Management.

Crewing and Employees

         As of December 31, 2004,  we had 3  employees,  while our  wholly-owned
subsidiary,  TOP Tanker Management,  employed approximately 35 employees, all of
whom are shore-based.  As of December 31, 2003, we had no employees.  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.

         Unicom  Management  and  V.Ships  Management  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.  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 and Other Regulation

         Government regulation significantly affects the ownership and operation
of our tankers. 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.

         A variety of governmental  and private  entities subject our vessels to
both scheduled and  unscheduled  inspections.  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.  Certain of these entities
require us to obtain permits, licenses and certificates for the operation of our
tankers.  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.

         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 are required to maintain operating standards for all
of our vessels that will  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 is in
substantial  compliance  with  applicable  environmental  laws and  regulations;
however, because such laws and regulations are frequently changed and may impose
increasingly  stricter  requirements,  such  future  requirements  may limit our
ability to do business, increase our operating costs, force the early retirement
of our vessels,  and/or  affect their  resale  value,  all of which could have a
material adverse effect on our financial condition and results of operations.

Environmental Regulation--IMO

         In 1992, the International  Maritime  Organization,  or IMO (the United
Nations  agency for maritime  safety and the  prevention of marine  pollution by
ships),  adopted  regulations that set forth pollution  prevention  requirements
applicable to tankers.  These regulations,  which have been adopted by more than
150 nations,  including many of the  jurisdictions in which our tankers operate,
provide, in part, that:

        o   tankers  between  25  and  30  years  old  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   tankers 30 years old or older must be of double-hull construction or
            mid-deck design with double sided construction; and

        o   all tankers are 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.

         Effective  September 2002, the IMO  accelerated its existing  timetable
for the phase-out of  single-hull  oil tankers.  These  regulations  require 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.  After 2007, the
maximum  permissible  age for single-hull  tankers will be 26 years.  Compliance
with the new regulations  regarding inspections of all tankers,  however,  could
adversely affect our operations.  Under current  regulations,  retrofitting will
enable  a  tanker  to  operate  until  the  earlier  of 25  years of age and the
anniversary date of its delivery in 2017.  However, as a 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  adopted  a  proposed   amendment  to  the
International   Convention  for  the  Prevention  of  Pollution  from  Ships  to
accelerate  the phase out of  single-hull  tankers  from 2015 to 2010 unless the
relevant  flag state,  in a  particular  case,  extends  the date to 2015.  This
amendment came into effect in April 2005.

         The IMO has  also  negotiated  international  conventions  that  impose
liability  for  oil  pollution  in   international   waters  and  a  signatory's
territorial  waters.  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
in May 2005.  Annex VI sets limits on sulfur oxide and nitrogen oxide  emissions
from  ship  exhausts  and  prohibit  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 are formulating a plan to
comply with the Annex VI regulations once they come into effect. Compliance with
these regulations  could require the installation of expensive  emission control
systems  and could  have an adverse  financial  impact on the  operation  of our
vessels. Additional or new conventions, laws and regulations may be adopted that
could adversely affect our ability to manage our ships.

         Under  the   International   Safety   Management  Code,  or  ISM  Code,
promulgated  by the IMO,  the  party  with  operational  control  of a vessel is
required 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 will 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
the  requisite  documents of  compliance  for our offices and safety  management
certificates  for all of our tankers 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.  For  example,  the U.S.
Coast Guard and European  Union  authorities  have indicated that vessels not in
compliance  with  the ISM Code  will be  prohibited  from  trading  in U.S.  and
European Union ports.

         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,  if 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 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 is limited to approximately $6.5 million plus
$909 for each additional gross ton over 5,000. For vessels of over 140,000 gross
tons,  liability is limited to approximately  $129.3 million.  As the convention
calculates liability in terms of a basket of currencies, these figures are based
on currency  exchange  rates on May 10,  2004.  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  and  Comprehensive   Environmental
Response, Compensation and Liability Act

         The United  States  regulates  the tanker  industry  with an  extensive
regulatory and liability regime for environmental  protection and cleanup of oil
spills,  consisting primarily of the U.S. Oil Pollution Act of 1990, or OPA, and
the  Comprehensive  Environmental  Response,  Compensation and Liability Act, or
CERCLA. 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 the  United  States,  which  include  the  U.S.  territorial  sea and the 200
nautical mile exclusive  economic zone around the United States.  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

        o   loss of subsistence use of natural resources.

         OPA limits  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).  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 that 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 tankers,  contains a similar  liability  regime and  provides  for
cleanup and removal of hazardous  substances and for 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.

         OPA also  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.  Under these  regulations,  an owner or operator of
more than one tanker is required to obtain a certificate of  responsibility  for
each vessel in the 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 evidence of financial responsibility in the form of
guarantees  issued by a guarantor  approved by the U.S. Coast Guard and received
certificates of financial  responsibility  from the U.S. Coast Guard for each of
our vessels that calls in U.S. waters.

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

         OPA also  amended the Federal  Water  Pollution  Control Act to require
owners or operators of tankers  operating in the waters of the United  States to
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.

         Vessel  response  plans for our tankers  operating in the waters of the
United States have been approved by the U.S. Coast Guard. 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.  We are  responsible  for  ensuring  our  vessels  comply  with  any
additional regulations.

         OPA  does  not  prevent  individual  states  from  imposing  their  own
liability regimes with respect to oil pollution incidents occurring within their
boundaries.  In fact,  most U.S.  states that border a navigable  waterway  have
enacted  environmental  pollution laws that impose strict  liability on a person
for removal costs and damages  resulting from a discharge of oil or a release of
a hazardous substance. These laws may be more stringent than U.S. federal law.

European Union Tanker Restrictions

         In July 2003,  in  response to the M/T  Prestige  oil spill in November
2002, the European  Union adopted  legislation  that  prohibits all  single-hull
tankers from entering into its ports or offshore terminals by 2010. The European
Union has also banned all single-hull  tankers carrying heavy grades of oil 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  more than 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.  The sinking of the M/T Prestige and  resulting oil spill in November
2002 has led to the  adoption  of other  environmental  regulations  by  certain
European Union nations,  which could adversely affect the remaining useful lives
of all of our tankers and our ability to generate income from them. For example,
Italy announced a ban of single-hull  crude oil tankers over 5,000 dwt from most
Italian ports,  effective April 2001. Spain has announced a similar prohibition.
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 Maritime  Transportation Security Act of 2002 (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 the International Convention
for the Safety of Life at Sea (SOLAS)  created a new  chapter of the  convention
dealing specifically with maritime security. The new chapter went into effect in
July 2004 and imposes various detailed security  obligations on vessels and port
authorities, most of which are contained in the newly created International Ship
and Port  Facilities  Security  (ISPS) Code. We are in compliance  with the ISPS
Code. Among the various requirements are:

        o   on-board  installation of automatic  information systems, or AIS, to
            enhance vessel-to-vessel and vessel-to-shore communications;

        o   on-board installation of ship security alert systems;

        o   the development of vessel security plans; and

        o   compliance with flag state security certification requirements.

         The U.S. Coast Guard regulations,  intended to align with international
maritime security standards,  exempt non-U.S.  tankers from MTSA vessel security
measures  provided  such  vessels  have  on  board,  by July  1,  2004,  a valid
International  Ship  Security  Certificate  (ISSC) that  attests to the vessel's
compliance with SOLAS security requirements and the ISPS Code. We will implement
the various security measures addressed by the MTSA, SOLAS and the ISPS Code and
ensure  that  our  tankers  attain  compliance  with  all  applicable   security
requirements  within  the  prescribed  time  periods.  We do not  believe  these
additional requirements will have a material financial impact on our operations.

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,  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,  except
for 4 of our Suezmax tankers,  which have deductibles of $200,000 per vessel per
incident.  We also arranged increased value coverage for each vessel. Under this
increased  value  coverage,  in the event of total loss of a vessel,  we will be
able recover for amounts not recoverable  under the hull and machinery policy by
reason of any under-insurance.

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,  and salvage,  towing and other  related
costs, 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.

Legal Proceedings Against Us

         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.

Organizational Structure

         Top  Tankers  Inc. is the sole owner of all  outstanding  shares of the
subsidiaries listed in Notes 1 and 18 of our Consolidated  Financial  Statements
under Item 18. See also Exhibit 8.1.

Properties

         We have no freehold or  leasehold  interest  in any real  property.  We
lease office space in Athens,  Greece,  from Pyramis  Technical Co., SA which is
wholly-owned by John Pistiolis,  the father of our Chief Executive  Officer.  In
addition, our newly established subsidiary TOP TANKERS (UK) LIMITED,  engaged in
chartering  activities  involving the Company's vessels,  leases office space in
London, from an unrelated third party.

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, 2004, 2003 and 2002. 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, 2004, our
fleet  consisted of 15 vessels,  comprised  of 11 Product  tankers and 4 Suezmax
tankers,  with a total  cargo  carrying  capacity of  approximately  1.1 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.

         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  $124.4 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.  TOP Tanker
Management,  our  wholly-owned  subsidiary,  has  subcontracted  the  day to day
technical  management,  crewing and  certain  purchasing  functions  of these 10
tankers to Unicom Management,  an unaffiliated ship management company operating
in Cyprus.

         On  November 5, 2004 we  completed  a follow-on  offering of our common
stock. The net proceeds of our follow-on offering, approximately $139.4 million,
were used primarily to finance the acquisition of 5 double-hull Suezmax tankers.
The total cost of the acquisition was approximately  $257.0 million.  TOP Tanker
Management,  our  wholly-owned  subsidiary,  has  subcontracted  the  day to day
technical  management  and  crewing  of four of these  vessels  to  V.Ships,  an
unaffiliated ship management company operating in Glasgow,  Scotland and the day
to day technical  management,  crewing and certain  purchasing  functions of the
remaining vessel to Unicom  Management,  an unaffiliated ship management company
operating in Cyprus.

Results of Operations

         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 time charter or 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.  We also  generate  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 and amortize
these costs on a  straight-line  basis over the period when the next  drydocking
becomes due, which is typically 30 to 60 months.  Regulations  and/or  incidents
may change the estimated dates of next drydockings.

Year ended December 31, 2004 compared to the year ended December 31, 2003

         VOYAGE REVENUES--Voyage revenues increased by $70.7 million, or 306.1%,
to $93.8  million for 2004  compared to $23.1  million for the prior year.  This
increase is due to the  acquisition of 2 tankers and 10 tankers during the first
and third  quarter of 2004,  respectively,  which  contributed  $66.7 million in
voyage revenues and the overall stronger spot market during 2004 which increased
the voyage revenues  generated by the remaining vessels to $27.1 million in 2004
from $23.1 million in 2003.

         VOYAGE  EXPENSES--Voyage  expenses primarily consist of port, canal and
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 $11.0 million,  or 186.4%,  to $16.9 million for 2004 compared to $5.9
million for the prior year.  This  increase is primarily  due to the increase in
the average  number of tankers in our fleet  during  2004  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 $59.8 million,  or 349.7%, to $76.9 million
for 2004  compared to $17.1  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 stronger spot market during 2004 compared to the prior year. The average
number of tankers  in our fleet  increased  118.2% to 9.6  tankers  during  2004
compared to 4.4 tankers during the prior year.

                                                      2003           2004
                                                      ----           ----
Dollars in thousands
Voyage revenues...................................  $23,085         $93,829
Less Voyage expenses..............................   (5,937)        (16,898)

Net voyage revenues...............................  $17,148         $76,931
                                                    ========        =======

         The following  describes  our charter  revenues for 2004 as compared to
the prior year:

        o   Average daily TCE rate increased by $12,625,  or 111.7%,  to $23,929
            for 2004 compared to $11,304 for the prior year.

        o   $32,138,000,  or 41.7%,  of net voyage revenue was generated by time
            charter  contracts and $44,793,000,  or 58.3%, of net voyage revenue
            was  generated  in  the  spot  market   during  2004,   compared  to
            $7,506,000,  or  43.9%,  of net  voyage  revenue  generated  by time
            charter contracts,  and $9,642,000,  or 56.1%, of net voyage revenue
            generated in the spot market during the prior year.

        o   Tankers  operated  an  aggregate  of 1,780 days,  or 55.4%,  on time
            charter  contracts  and 1,435  days,  or 44.6%,  in the spot  market
            during  2004,  compared  to 543  days,  or  35.8%,  on time  charter
            contracts  and 974 days,  or 64.2%,  in the spot  market  during the
            prior year.

        o   Average  daily time  charter  rate was $18,055 for 2004  compared to
            average daily time charter rate of $13,824 for the prior year.

        o   Average  daily spot rate was  $31,215  for 2004  compared to average
            daily spot rate of $9,899 for the prior year.

         VESSEL OPERATING EXPENSES -- Vessel operating  expenses,  which include
crew costs,  provisions,  deck and engine stores,  lubricating  oil,  insurance,
maintenance and repairs,  increased by $8.5 million, or 101.2%, to $16.9 million
for 2004 compared to $8.4 million for the prior year. This increase is primarily
due to the  increase  in the  average  number of  tankers  in our  fleet,  which
increased 118.2% between the periods. Daily vessel operating expenses per tanker
decreased by $439,  or 8.4%, to $4,794 for 2004 compared to $5,233 for the prior
year.  This  decrease  is the result of lower  crewing  and  insurance  expenses
associated  with the  economies  of scale of operating a larger fleet during the
year,  compared to the previous  year and the  subcontracting  of the day to day
technical management, crewing and certain purchasing functions of our vessels to
V.Ships  Management  Limited and Unicom  Management  during the third quarter of
2004.  Our vessel  operating  expenses  depend on a variety of factors,  many of
which are beyond our control and affect the entire shipping industry.

         MANAGEMENT  FEES,  SUB-MANAGER  FEES  AND  GENERAL  AND  ADMINISTRATIVE
EXPENSES--General and administrative  expenses, which include all of our onshore
expenses,  the fees that Primal  Tankers Inc.,  our former  management  company,
charged to manage our vessels,  and the fees paid to V.Ships  Management Limited
and Unicom Management, increased by $6.8 million, or 377.8%, to $8.6 million for
2004  compared  to $1.8  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 $4.4 million.  Daily general and  administrative
expenses per tanker increased  $1,311, or 116.2%, to $2,439 for 2004 compared to
$1,128 for the prior year.

         FOREIGN  CURRENCY  GAINS  OR  LOSSES--We  incurred  a  $75,000  foreign
currency loss for 2004 compared to a loss of $105,000 for the prior year.

         GAIN ON SALE OF  VESSELS--During  the last  quarter of 2004 we sold the
vessels  M/T  Tireless  and M/T Med  Prologue  and we  realized  a total gain of
$638,000.

         DEPRECIATION AND  AMORTIZATION--Depreciation  and  amortization,  which
include  depreciation  of tankers,  office  furniture  and  equipment as well as
amortization of  drydockings,  increased by $10.4 million,  or 247.6%,  to $14.6
million for 2004  compared to $4.2 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 2004, and the  amortization  of capitalized  expenses  associated
with  drydockings  that  occurred for the first time to vessels that are part of
our fleet.

                                                             2003      2004
                                                             ----      ----
Dollars in thousands
Vessels depreciation expense............................... $3,604   $13,073
Office furniture and equipment depreciation expense........      0        35
Amortization of drydockings................................   $599     1,514
                                                           -------   -------
                                                            $4,203   $14,622

         Depreciation of vessels increased by $9.5 million,  or 263.9%, to $13.1
million for 2004 compared to $3.6 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 2004 compared to the prior year.

         Amortization of drydockings  increased by $0.9 million,  or 150.0%,  to
$1.5 million for 2004 compared to $0.6 million for the prior year. This increase
includes amortization  associated with $7.4 million of capitalized  expenditures
relating to our  tankers  during 2004  compared to $2.4  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 after  September 30, 2004,  all 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 2005 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.

         NET INTEREST  EXPENSE--Net  interest expense increased by $3.4 million,
or 261.5%, to $4.7 million for 2004 compared to $1.3 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.  Net  interest  expense  is
anticipated  to  continue  to  increase  in 2005 as a result of the debt that we
incurred in connection with our acquisition of additional tankers.

         OTHER NET--We recognized a gain of $0.1 million during 2004 compared to
a gain of $0.4  million  during  the prior  year.  The amount  relating  to 2003
relates to the excess amount the Company received in connection with a claim for
damages to its vessels compared to the actual costs associated with the repairs.

         NET  INCOME--Net  income was $32.8  million  for 2004  compared  to net
income of $1.6 million for the prior year.

Year ended December 31, 2003 compared to the year ended December 31, 2002

         VOYAGE REVENUES--Voyage revenues increased by $11.7 million, or 102.6%,
to $23.1  million for 2003  compared to $11.4  million for the prior year.  This
increase is due to the  acquisition of M/T Fearless and M/T Tireless in February
and June 2003,  respectively,  which contributed $7.6 million in voyage revenues
and the overall  stronger  spot market  during 2003 which  increased  the voyage
revenues  generated by the remaining vessels to $15.5 million in 2003 from $11.4
million in 2002.

         VOYAGE  EXPENSES--Voyage  expenses primarily consist of port, canal and
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  $2.6  million,  or 78.8%,  to $5.9 million for 2003  compared to $3.3
million for the prior year.  This  increase is primarily  due to the increase in
the average  number of tankers in our fleet  during  2003  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 $9.0 million,  or 111.1%,  to $17.1 million
for 2003  compared  to $8.1  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 stronger spot market during 2003 compared to the prior year. The average
number of tankers in our fleet increased  51.7%, to 4.4 tankers  compared to 2.9
tankers for 2003 compared the prior year.

                                                       2002            2003
                                                       ----            ----
Dollars in thousands
Voyage revenues...................................    $11,426         $23,085
Less Voyage expenses..............................     (3,311)         (5,937)
                                                      --------        -------

Net voyage revenues...............................     $8,115         $17,148
                                                     ========         =======

         The following  describes  our charter  revenues for 2003 as compared to
the prior year:

        o   Average daily TCE rate increased by $2,860, or 33.9%, to $11,304 for
            2003 compared to $8,444 for the prior year.

        o   $7,506,000,  or 43.9%,  of net voyage  revenue was generated by time
            charter  contracts and  $9,642,000,  or 56.1%, of net voyage revenue
            was  generated  in  the  spot  market   during  2003,   compared  to
            $1,977,000,  or  24.7%,  of net  voyage  revenue  generated  by time
            charter contracts,  and $6,137,000,  or 75.3%, of net voyage revenue
            generated in the spot market during the prior year.

        o   Tankers operated an aggregate of 543 days, or 35.8%, on time charter
            contracts  and 974 days,  or 64.2%,  in the spot market during 2003,
            compared to 160 days,  or 16.6%,  on time charter  contracts and 801
            days, or 83.4%, in the spot market during the prior year.

        o   Average  daily time  charter  rate was $13,824 for 2003  compared to
            average daily time charter rate of $12,359 for the prior year.

        o   Average  daily  spot rate was $9,899  for 2003  compared  to average
            daily spot rate of $7,662 for the prior year.

         VESSEL OPERATING EXPENSES -- Vessel operating  expenses,  which include
crew costs,  provisions,  deck and engine stores,  lubricating  oil,  insurance,
maintenance  and repairs,  increased by $3.9 million,  or 86.7%, to $8.4 million
for 2003 compared to $4.5 million for the prior year. This increase is primarily
due to the  increase  in the  average  number of  tankers  in our  fleet,  which
increased  51.7%  between  the  periods.  The lower rate of  increase  in vessel
operating  expenses relative to the increase in the average number of tankers in
our fleet and the growth in the average size of the tankers that  comprised  our
fleet during 2003 compared to 2002 is primarily due to the lower maintenance and
repair  expenses  during  2002.  Daily  vessel  operating  expenses  per  tanker
increased by $864, or 19.8%, to $5,233 for 2003 compared to $4,369 for the prior
year.  This  increase  is the  result of the growth in the  average  size of the
tankers in our  fleet,  as larger  tankers  are  inherently  more  expensive  to
operate,  and as a result of the low vessel operating  expenses  incurred during
2002 described above.  The increase in daily vessel  operating  expenses was the
result of the  growth in the  average  size of the  tankers in our fleet and the
percentage  of Suezmax  tankers  that  comprise our fleet.  Suezmax  tankers are
larger and inherently more expensive to operate than product tankers. Our vessel
operating expenses depend on a variety of factors,  many of which are beyond our
control and affect the entire shipping industry.

         GENERAL  AND   ADMINISTRATIVE   EXPENSES--General   and  administrative
expenses, which is primarily the fees that Primal Tankers Inc. charged to manage
our vessels,  increased  by $1.0  million,  or 125.0%,  to $1.8 million for 2003
compared to $0.8 million for the prior year. This increase is due to an increase
in the management fee charged by Primal Tankers Inc. as a result of the increase
in the payroll  expenses  including  the increase in the number of its personnel
arising from the increase in the average  number of tankers in our fleet,  which
increased  51.7%,  during 2003  compared to the prior  year.  Daily  general and
administrative  expenses per tanker increased $345, or 44.1%, to $1,128 for 2003
compared to $783 for the prior year,  this increase is due to an increase in the
management fee charged by Primal Tankers Inc. as a result of the increase in the
payroll expenses  including the increase in the number of personnel arising from
the  increase in the  average  number of tankers in our fleet,  which  increased
51.7%,  during 2003 compared to the prior year. We did not pay any  compensation
to the members of our senior  management or our directors  during the year ended
December 31, 2003.

         FOREIGN  CURRENCY  GAINS OR  LOSSES--We  incurred  a  $105,000  foreign
currency loss for 2003 compared to a loss of $62,000 for the prior year.

         DEPRECIATION AND  AMORTIZATION--Depreciation  and  amortization,  which
include  depreciation  of  tankers  as  well  as  amortization  of  drydockings,
increased by $1.8 million,  or 75.0%,  to $4.2 million for 2003 compared to $2.4
million for the prior year.  This  increase is primarily  due to the increase in
the average book value of our fleet as a result of our  acquisitions  of tankers
during 2003,  and the  amortization  of  capitalized  expenses  associated  with
drydockings  that  occurred  for the first time to vessels  that are part of our
fleet.

                                                          2002      2003
                                                          ----      ----
Dollars in thousands
Vessels depreciation expense............................   $2,213    $3,604
Amortization of drydockings.............................     $177      $599
                                                             ----      ----
                                                           $2,390    $4,203

         Depreciation  of vessels  increased by $1.4 million,  or 63.6%, to $3.6
million for 2003 compared to $2.2 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 2003 compared to the prior year.

         Amortization of drydockings  increased by $0.4 million,  or 200.0%,  to
$0.6 million for 2003 compared to $0.2 million for the prior year. This increase
includes amortization  associated with $2.4 million of capitalized  expenditures
relating to our  tankers  during 2003  compared to $0.5  million of  capitalized
expenditures during the prior year.

         NET INTEREST  EXPENSE--Net  interest expense increased by $0.3 million,
or 30.0%,  to $1.3 million for 2003 compared to $1.0 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  during 2003. The magnitude of
the  increase in net interest  expense  relative to the increase in our weighted
average  outstanding  debt was  mitigated  by the overall  lower  interest  rate
environment during 2003 compared to the prior year.

         OTHER NET--We recognized a gain of $0.4 million during 2003 compared to
a gain of $0.9 million  during the prior year.  These gains relate to the excess
amount  the  Company  received  in  connection  with a claim for  damages to its
vessels compared to the actual costs associated with the repairs.

         NET INCOME--Net income was $1.6 million for 2003 compared to net income
of $0.2 million for the prior year.

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.

         On July 23, 2004, the Company  completed its initial public offering on
the Nasdaq National Market.  In this respect,  12,258,570 shares of common stock
were issued at $11.00 per share. The net proceeds of the initial public offering
totaled  $124.4  million  of which  approximately  $112.1  million  were used to
acquire 10 double-hull  tankers,  consisting of 8 Handymax and 2 Suezmax product
tankers,  and  approximately  $12.3 million for general corporate  purposes.  In
addition,  20,000 shares of common stock were sold in a private  transaction  to
Sovereign Holdings,  a company owned by our Chief Executive Officer, at the same
price as those sold to the public.

         On November 5, 2004, the Company completed a follow-on  offering of its
common stock on the Nasdaq National Market. In this respect, 9,552,420 shares of
common  stock were  issued at $15.50 per share.  822,581 of these  shares of our
common stock were issued to Kingdom Holdings.  The net proceeds of the follow-on
offering totaled $139.4 million of which approximately  $116.7 million were used
for the acquisition of 5 double-hull  Suezmax tankers,  and approximately  $22.7
million were used to repay a portion of our debt.

         Cash and cash equivalents increased $112.5 million to $114.8 million as
of December 31, 2004  compared to $2.3  million as of December  31,  2003.  That
increase  includes  a portion  of the  proceeds  of our  follow-on  offering  on
November 5, 2004,  which have been used,  prior and  subsequent  to December 31,
2004,  to finance  the  acquisition  of 5 Suezmax  tankers.  Working  capital is
current  assets minus  current  liabilities,  including  the current  portion of
long-term  debt.  Working  capital  surplus was $98.2 million as of December 31,
2004,  compared to a working  capital deficit of $4.1 million as of December 31,
2003.  The  current  portion of  long-term  debt,  net of  unamortized  deferred
financing costs,  included in our current liabilities was $19.5 million and $4.0
million as of December 31, 2004 and December 31, 2003, respectively.

         EBITDA,  as defined in Footnote 3 to the "Selected  Financial  Data" in
Item 3 above,  increased by $44.9 million,  or 623.6%, to $52.1 million for 2004
compared to $7.2 million for the prior year.  This increase is due to the growth
of our fleet and the overall  stronger tanker market during 2004 compared to the
prior year.

         EBITDA,  increased by $3.6 million, or 100.0%, to $7.2 million for 2003
compared to $3.6 million for the prior year.  This increase is due to the growth
of our fleet and the overall  stronger tanker market during 2003 compared to the
prior year.

         NET CASH FROM OPERATING  ACTIVITIES--increased  483.7% to $28.6 million
during 2004,  compared to $4.9 million  during the prior year.  This increase is
primarily  attributable  to net income of $32.8  million  and  depreciation  and
amortization,  which includes depreciation for vessels,  depreciation for office
furniture  and  equipment,   amortization  of  deferred   drydocking  costs  and
amortization of deferred financing fees, of $15.4 million for 2004,  compared to
net income of $1.6 million and  depreciation  and  amortization  of $4.3 million
during the prior year.

         NET CASH USED IN INVESTING  ACTIVITIES--was  $344.9 million during 2004
compared to net cash used in investing  activities of $19.7  million  during the
prior year.  During 2004, we expended  $327.6 million for the  acquisition of 12
tankers,  compared to expending  $19.6 million for the  acquisition of 2 tankers
during the prior year.

         NET CASH FROM  FINANCING  ACTIVITIES--was  $428.7  million  during 2004
compared to net cash from financing activities of $17.0 million during the prior
year.  The  change in cash  provided  by  financing  activities  relates  to the
following:

        o   Net proceeds from borrowing under long-term debt were $281.9 million
            in  connection  with the  acquisition  of 4  Suezmax  tankers  and 8
            product  tankers during 2004 compared to $25.9 million in connection
            with our acquisition of 2 product tankers during the prior year.

        o   Principal  repayments of long-term  debt were $119.5  million during
            2004 compared to $14.3 million during the prior year.

        o   Net issuance of common stock and capital contributions to additional
            paid in capital  were $281.1  million  during 2004  compared to $6.5
            million  during  the prior  year as a result of our  initial  public
            offering on July 23, 2004 and our follow-on  offering on November 5,
            2004.

        o   Dividends of $2.3 million paid during 2004  compared to $0.6 million
            paid during the prior year.

         NET CASH FROM  OPERATING  ACTIVITIES--increased  104.2% to $4.9 million
during 2003,  compared to $2.4 million  during the prior year.  This increase is
primarily  attributable  to net  income of $1.6  million  and  depreciation  and
amortization of $4.3 million for 2003 compared to net income of $0.2 million and
depreciation and amortization of $2.5 million during the prior year.

         NET CASH USED IN INVESTING  ACTIVITIES--was  $19.7 million  during 2003
compared to net cash used in investing  activities of $18.3  million  during the
prior year.  During 2003, we expended  $19.6 million for the  acquisition of two
tankers,  compared to expending  $18.5 million for the acquisition of one tanker
during the prior year.

         NET CASH FROM  FINANCING  ACTIVITIES--was  $17.0  million  during  2003
compared to net cash from financing activities of $14.2 million during the prior
year.  The  change in cash  provided  by  financing  activities  relates  to the
following:

        o   Net proceeds from borrowing  under long-term debt were $25.9 million
            in connection  with the acquisition of 2 product tankers during 2003
            compared to $15.6 million in connection  with our  acquisition  of 1
            product tanker during the prior year.

        o   Principal  repayments of long-term  debt were $14.3  million  during
            2003 compared to $2.6 million during the prior year.

        o   Capital contributions to additional paid in capital was $6.5 million
            during 2003 compared to $2.3 million during the prior year.

Summary of Contractual Obligations

         The following  table sets forth our  contractual  obligations and their
maturity dates as of December 31, 2004.
<TABLE>
                                                           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>
Long term debt                           197,000      20,000       40,000      40,000       97,000
Operating leases                           3,438         622        1,244       1,244          328
Vessel Acquisitions                      230,850     230,850            -           -            -
Total                                    431,288     251,472       41,244      41,244       97,328
-----                                    -------     -------       ------      ------       ------
</TABLE>

         As of December 31, 2004, the outstanding balance of our credit facility
with the  Royal  Bank of  Scotland,  which we  refer  to as the  initial  credit
facility, was $197.0 million,  maturing in 2012. The interest rate for the first
$98.5 million is LIBOR,  whereas with respect to the remaining $98.5 million, we
have entered into a four year swap agreement with the Royal Bank of Scotland for
a fixed  interest  rate of 3.61%.  In  addition  to these  interest  rates,  the
outstanding amount is subject to a bank spread, which will be adjusted quarterly
to 100  basis  points  if the  ratio  of the  outstanding  loan  balance  to the
aggregate market value of our vessels securing the loan is less than or equal to
60%;  112.5 basis points if this ratio is greater than 60% but less than 70%; or
125 basis points if this ratio is greater than 70%. The initial credit  facility
is collateralized by mortgages on 15 of the vessels in our fleet.

         The initial credit  facility  contains,  among other things,  financial
covenants  requiring  us to  ensure  that  the  aggregate  market  value  of the
mortgaged  vessels  at all  times  exceeds  130%  of the  aggregate  outstanding
principal  amount under the loan and to 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. We are permitted to pay dividends under the loan so long as we are
not in default of a loan covenant.

         We are  obligated  to repay  the  principal  amount  in 16  consecutive
semi-annual  installments  of $10.0 million,  each commencing on March 31, 2005,
together  with a  balloon  payment  of $37.0  million  payable  with  the  final
installment.   Our  initial  credit  facility  allows  us,  subject  to  certain
conditions,  to  defer  up to two  non-consecutive  payments  of the  first  ten
scheduled  principal  payments of $10.0 million each,  provided that a fee of 1%
shall be payable on any deferred  installment and a maximum of $20.0 million may
be deferred at any time.

         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,
2004,  TOP  Tanker  Management  has  subcontracted  the  day  to  day  technical
management, crewing and certain purchasing functions of 10 of the vessels in our
tanker  fleet to Unicom  Management,  a ship  management  company  operating  in
Cyprus, and has subcontracted the day to day technical management and crewing of
5 of the  vessels in our  tanker  fleet to V.Ships  Management  Limited,  a ship
management company operating in Glasgow,  Scotland. TOP Tanker Management pays a
monthly fee of $14,000 per vessel under its  agreements  with Unicom  Management
and a monthly  fee of  $10,000  per vessel  under its  agreements  with  V.Ships
Management.  Under the terms of these agreements,  Unicom Management and V.Ships
Management agreements may be terminated at any time upon 3 months notice.

         In July 2004,  we entered  into an  agreement  to lease office space in
Athens,  Greece from  Pyramis  Technical  Co. SA,  which is wholly  owned by the
father of our Chief  Executive  Officer.  The agreement is for a duration of six
years  initially,  with an option for an  extension  of four years.  The monthly
rental is Euro 39,000 adjusted annually for inflation effective January 1, 2006.
The total  minimum  rental  payable  under this  lease for the six years  ending
December 31, 2010,  before any adjustment for inflation and translated using the
exchange rate of US$/Euro on December 31, 2004, is approximately $3.4 million.

         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 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.

Recent developments

         New Credit Facilities:

         Royal Bank of Scotland Facility:

         In February 2005, we entered into a financing  agreement with the Royal
Bank of  Scotland,  to which we refer as the new credit  facility,  to partially
finance the  acquisition of 3 of the 5 additional  Suezmax  tankers  acquired in
connection with the follow-on  offering of our common shares (the M/T Priceless,
the M/T Noiseless and the M/T Faultless), 4 Handymax tankers (the M/T Taintless,
the M/T  Dauntless,  the M/T Soundless and the M/T Topless) and to refinance the
then outstanding balance of our initial credit facility. The new credit facility
was for the  amount of $424.8  million  divided  into three  tranches  of $197.0
million,  $83.8 million and $144.0 million (Tranches A, B and C,  respectively).
The  $197.0  million  tranche is  payable  in 16 equal  consecutive  semi-annual
installments of $10.0 million each, beginning on March 31, 2005, together with a
balloon payment of $37.0 million payable with the final  installment.  The $83.8
million tranche is payable in 14 varying semi-annual  installments  beginning on
July 31, 2005, together with a balloon payment of $17.0 million payable with the
final  installment.  The $144.0  million  tranche  is payable in 17  semi-annual
installments  of $6.3 million,  beginning on November 30, 2005,  together with a
balloon payment of $36.9 million payable with the final installment.  Additional
terms and conditions of the new credit facility are as follows:

         The  initial  interest  rate on the new  credit  facility  is 100 basis
points over LIBOR.  The interest rate will be adjusted  quarterly to 112.5 basis
points over LIBOR if the Security Value (as defined in the new credit  facility)
is less than 167% of the loan but greater than or equal to 143% of the loan;  or
125 basis points over LIBOR if the Security  Value (as defined in the new credit
facility)  is  less  than  143%  of  the  loan.  The  new  credit   facility  is
collateralized  by a first priority  mortgage on each of the 15 vessels we owned
as of December  31,  2004,  and on each of the 4 Handymax  tankers and 3 Suezmax
tankers mentioned above.

         The  new  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 new 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
$200.0  million  and at all times  exceed 35% of our total  assets;  ensure that
EBITDA (as defined in the new credit  facility) will at all times exceed 120% of
the aggregate of interest expenses and debt due at a particular period; and meet
minimum  working  capital  requirements.  The new 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 new 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,
Unicom  Management  and any other company  acceptable to the lender.  We will be
permitted to pay dividends  under the new credit  facility so long as we are not
in default of a loan covenant.

         We paid a fee of 1.0%, 1.0% and 0.75% of the amount of Tranche A, B and
C, respectively of the loan on the date that we signed the loan agreement, and a
commitment  fee of 0.25% per annum  shall  accrue on the  amount of the  undrawn
balance from the date that we signed the offer letter which shall be payable one
month in arrears and on the date of the drawdown.

         DVB Facility:

         In March 2005,  we entered  into a credit  facility  with DVB Bank,  to
which we refer as the DVB  credit  facility,  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 is 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 is 125 basis
points over LIBOR.  Beginning  on the date of the credit  facility and ending on
the final  drawdown date, we will pay the lender a quarterly fee of 0.25% of the
average  undrawn amount of the loan for the quarter.  The DVB credit facility is
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.

         The  DVB  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 130% of the outstanding  principal amount
under the loan, ensure that our total assets minus our debt will not at any time
be less than  $200.0  million  or 35% of our total  assets,  to ensure  that our
EBITDA (as defined in the DVB 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.  In
addition,  the DVB 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,  Unicom  Management or any other company  acceptable to the
lender.

         Interest Rate Swaps

         In connection with the new credit facility  discussed above, we entered
into interest  rate swap  agreements,  effective on March 31, 2005:  (i) for the
initial  amount of $93.5  million and for a period of five  years,  with a fixed
interest  rate of 4.72% plus the  applicable  bank margin;  (ii) for the initial
amount of $27.9  million and for a period of four years,  with a fixed  interest
rate of 4.58% plus the applicable bank margin;  and (iii) for the initial amount
of $36.5 million and for a period of four years,  with a fixed  interest rate of
4.66% plus the applicable bank margin.

         Vessels'Acquisitions and Vessel's Sale

         On February 23, 2005, we entered into an agreement for the  acquisition
of the M/T Topless for $39.0 million, a 47,262 Dwt, double-hull Handymax tanker,
built in 1998 by Onomichi  Dockyard Co., Ltd., of Japan.  TOP Tanker  Management
has  undertaken  the technical  management  of this vessel.  The M/T Topless was
delivered on April 26, 2005.

         On March 4, 2005 we entered into an agreement for the  acquisition of 3
double-hull Handymax tankers,  the 46,217 dwt M/T Taintless,  the 46,168 dwt M/T
Dauntless  and the  46,185  dwt M/T  Soundless  for the  total  amount of $124.5
million. The vessels are sisterships, built in 1999, by Hyundai Heavy Industries
Co.,  Ltd., of the Republic of Korea.  TOP Tanker  Management has undertaken the
management of the M/T Soundless and has  subcontracted  the day to day technical
management  and  crewing  of the  remaining  two  vessels  to  V.Ships.  The M/T
Taintless,  the M/T Dauntless and the M/T Soundless  were delivered on March 21,
March 24 and and April 19, 2005, respectively.

         On March 16, 2005,  we agreed to sell our final  remaining  single-hull
vessel,  the M/T Yapi, for $8.6 million.  On March 29, 2005, we also entered the
vessel into a bareboat  charter with the  purchasers  until August 31, 2005, the
vessel's  delivery date  (originally  scheduled  July 31, 2005).  We received an
advance  payment of $1.0  million  from the  purchasers  as a security  of their
obligation to purchase the vessel and we will also be paid a daily bareboat hire
of $6,000 under the charter.

         Following the agreement to sell our final remaining single-hull vessel,
we currently own and operate a fleet of 23 vessels, consisting of 14 double-hull
Handymax tankers and 9 double-hull Suezmax tankers. Four of our Handymax tankers
were  delivered  in March  and  April  2005 and 5 of our  Suezmax  tankers  were
purchased in connection  with the proceeds of the  following-on  offering of our
common stock in November 2004.

         Fleet Management

         TOP Tanker  Management is responsible for the  chartering,  operational
and technical  management of our tanker fleet under  management  agreements with
us. TOP Tanker  Management has  undertaken the technical  management of 2 of the
vessels in our  current  fleet and has  subcontracted  the day to day  technical
management, crewing and certain purchasing functions of 11 of the vessels in our
tanker fleet to Unicom  Management,  an  unaffiliated  ship  management  company
operating in Cyprus,  and has subcontracted the day to day technical  management
and  crewing of 10 of the  vessels in our  current  fleet to V.Ships  Management
Limited, an unaffiliated ship management company operating in Glasgow, Scotland.
TOP Tanker  Management  may  subcontract  the  technical  management  of vessels
acquired in the future to other third party technical management companies.

         London Office

         On February 2, 2005,  TOP TANKERS  (UK)  LIMITED,  a newly  established
wholly-owned subsidiary to be engaged in the chartering of our vessels,  entered
into a lease for office  space in London for Pounds  Sterling  10,000 per month,
from an unrelated third party. The lease will end on December 31, 2005.

         Dividends

         On January 12, 2005, we paid the first dividend on our common shares of
$0.21 per share to  shareholders of record as of December 22, 2004. On March 16,
2005,  we declared a dividend  on our common  shares of $0.21 per share that was
paid on April 12, 2005,  to  shareholders  of record of our common  shares as of
March 31, 2005. On June 22, 2005, we declared a dividend on our common shares of
$0.21 per share that will be paid on July 20, 2005, to shareholders of record of
our common shares as of July 7, 2005.

         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 acquisition costs directly  attributable to the vessel and expenditures
made  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.  We  believe  that a 25-year  depreciable  life is
consistent with that of other  shipowners.  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.  Our vessels are required to be drydocked for
major  repairs and  maintenance  that cannot be performed  while the vessels are
operating  approximately  every  30  to  60  months.  We  capitalize  the  costs
associated  with the  drydocks  as they  occur  and  amortize  these  costs on a
straight line basis over the period between drydocks.  Costs capitalized as part
of the drydock  include actual costs incurred at the drydock yard;  cost of fuel
consumed  between the vessel's last  discharge port prior to the drydock and the
time the vessel leaves the drydock  yard;  cost of hiring riding crews to effect
repairs on a ship and parts used in making such repairs that are reasonably made
in anticipation of reducing the duration or cost of the drydock; cost of travel,
lodging and  subsistence of our personnel sent to the drydock site to supervise;
and the cost of hiring a third party to oversee a drydock. We believe that these
criteria  are  consistent  with  industry  practice,  and  that  our  policy  of
capitalization reflects the economics and market values of the vessels.

         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  it  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 estimate fair market value primarily through the use
of third party  valuations  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.  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.

Off Balance Sheet Arrangements

         We did not have any off-balance sheet arrangements,  as of December 31,
2004.

ITEM 6.  Directors, senior management and employees

Directors and Executive Officers

         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 .............56  Director and Chairman of the Board
Evangelos J. Pistiolis ........32  Director, President and Chief Executive
                                   Officer
Stamatios N. Tsantanis ........33  Director and Chief Financial Officer
Vangelis G. Ikonomou ..........40  Director and Executive Vice President
Michael G. Docherty ...........46  Director
Christopher J. Thomas .........44  Director
Roy Gibbs .....................56  Director
Stavros Emmanuel...............63  Chief Operating Officer of TOP Tanker
                                   Management
George Goumopoulos.............56  Chief Technical Officer of TOP Tanker
                                   Management
Eirini Alexandropoulou ........33  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.  In 2000,
Mr. Jackson  established  Paralos Finance Corporation as a provider of financial
consultancy  services  to select  shipping  companies.  From  1967 to 1999,  Mr.
Jackson  served  in a number  of  capacities  with  National  Westminster  Bank,
including  head of  shipping  in  Greece.  Mr.  Jackson is an  Associate  of the
Chartered Institute of Bankers (ACIB).

         Evangelos J.  Pistiolis  founded our company in 2000,  is our President
and Chief Executive Officer and serves on our board of directors.  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. Mr. Tsantanis was 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.  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. 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 23 years of international  experience  handling maritime  insurance
claims.

         Christopher J. Thomas serves on our board of directors.  Since November
2001,  Mr.  Thomas has been an  independent  financial  consultant  to  numerous
international  shipowning and operating companies.  Mr. Thomas is also the Chief
Financial  Officer of  Dryships  Inc.  and serves on the board of  directors  of
Omninet  International  Limited, each of which is a publicly traded company with
shares  registered under the Securities  Exchange Act of 1934, as amended.  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.  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.  Prior to joining TOP Tanker Management,  Captain Emmanuel served as
General  Manager of Primal  Tankers Inc.,  where his  responsibilities  included
chartering, operations and technical management. Prior to joining Primal Tankers
in 2000,  Captain Emmanuel worked in various  management  capacities for Compass
United Maritime  Container  Vessels.  Captain Emmanuel obtained a Naval Officers
degree from ASDEN Nautical  Academy of  Aspropirgos,  Greece and earned a Master
Mariners degree in 1971.

         George  Goumopoulos  is the  Chief  Technical  Officer  of  TOP  Tanker
Management.  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  Manager.  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 (EMA Athens) in Marine Engineering and Electrical Engineering.

         Eirini   Alexandropoulou  is  our  Secretary.   Ms.   Alexandropoulou's
principal  occupation for the past 5 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,  Ms.
Alexandropoulou  served as a legal advisor to  Eurocarriers  SA, a ship manager.
Most recently,  from 2000 to 2001, Ms. Alexandropoulou served as a legal advisor
to Belize's  ship registry  office in Piraeus.  Ms.  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.

Compensation of Directors and Senior Management

         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,  we paid to the  members of our senior
management and to our directors  aggregate  compensation of $4.4 million.  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.

Employees

         As of December 31, 2004,  we had 3  employees,  while our  wholly-owned
subsidiary,  TOP Tanker Management,  employed approximately 35 employees, all of
whom are  shore-based.  As of December  31, 2004 we employed  also 357 sea going
employees, indirectly through our sub-managers.

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.

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   In lieu of  holding  regularly  scheduled  meetings  at  which  only
            independent directors are present, 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.

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 March
31, 2005. All of the  shareholders,  including the  shareholders  listed in this
table, are entitled to one vote for each share of common stock held.

<TABLE>
                                                                                           Amount          Percent
Title of Class                                Identity of Person or Group                  Owned           of Class
--------------                                ---------------------------                  -----           --------
<S>                                           <C>                                          <C>              <C>
Common Stock, par value $.01 per share        Kingdom Holdings Inc.*                       4,007,357       14.4%
                                              FMR Corp.                                    3,297,400       11.8%
                                              Evangelos Pistiolis**                        1,236,130        4.4%
                                              Officers and directors other than
                                              25,000 0.0009%                                  25,000        0.1%
                                                  Evangelos Pistiolis
                                              All officers and directors as a group        1,261,130        4.5%
</TABLE>

* 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.

Related party transactions.

         In July 2004,  we entered  into an  agreement  to lease office space in
Athens,  Greece,  from  Pyramis  Technical  Co. SA, which is wholly owned by the
father of our Chief  Executive  Officer.  The agreement is for a duration of six
years  initially,  with an option for an  extension  of four years.  The monthly
rental is Euro 39,000 adjusted annually for inflation effective January 1, 2006.
The total  minimum  rental  payable  under this  lease for the six years  ending
December 31, 2010,  before any adjustment for inflation and translated using the
exchange rate of US$/Euro on December 31, 2004, are approximately $3.4 million.

         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. office furniture and equipment
for a consideration of $0.5 million.

         Interests of experts and counsel.

         Not applicable.

ITEM 8.  Financial Information.

Consolidated Statements and Other Financial Information.

         See Item 18.

Dividend Policy

         While we cannot  assure you that we will continue to do so, and subject
to the  limitations  discussed  below,  we currently  intend to pay regular cash
dividends on a quarterly basis.

         Declaration and payment of any dividend is subject to the discretion of
our Board of  Directors.  The  timing and amount of  dividend  payments  will be
dependent  upon  our  earnings,   financial  condition,  cash  requirements  and
availability,  restrictions in our loan agreements, the provisions of applicable
law affecting the payment of  distributions  to shareholders  and other factors.
Because we are a holding company with no material assets other than the stock of
our  subsidiaries,  our ability to pay dividends will depend on the earnings and
cash flow of our subsidiaries and their ability to pay dividends to us. The laws
governing us and our  subsidiaries  generally  prohibit the payment of dividends
other than from  surplus or while a company is  insolvent  or would be  rendered
insolvent.

         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 National  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 National Market.  The high and low closing prices for our
common stock for the periods indicated were as follows:

For the Fiscal Year Ended December 31, 2004
(beginning July 23, 2004)
                                                            HIGH        LOW
                                                            ----        ---
                                                           $24.14      $10.51

For the Quarter Ended
September 30, 2004 (beginning July 23, 2004) .........      16.55       10.51
December 31, 2004.....................................      24.14       14.70

For the Month:                                              HIGH        LOW
                                                            ----        ---
October 2004..........................................     $19.40      $14.70
November 2004.........................................      24.14       15.29
December 2004.........................................      22.88       15.60
January 2005..........................................      17.15       14.25
February 2005.........................................      22.00       16.95
March 2005............................................      21.67       17.10
April 2005............................................      19.38       14.86

ITEM 10. Additional Information

         Articles of Incorporation and Bylaws. 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 may be called by shareholders
holding not less than one-tenth of all the  outstanding  shares entitled to vote
at such meeting.  Our board of directors may set a record date between 15 and 60
days before the date of any meeting to determine the  shareholders  that will be
eligible to receive notice and vote at the meeting.

         Directors. Our directors are elected by a majority 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.
Shareholders  may change the number of directors only by the affirmative vote of
holders of a majority of the  outstanding  common stock.  The board of directors
may change the number of directors  only by a majority vote of the entire board.
Each  director  shall be  elected  to serve  until the next  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 relates.

         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.

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.

Material Contracts

         There were no  material  contracts  that we entered  into  outside  the
ordinary course of business during the two year period immediately preceding the
date of this annual report.

Exchange controls

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

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,  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  should  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,  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.  The  discussion  below treats the
Treasury  Regulations  promulgated in August of 2003  interpreting  Code Section
883,  which we refer to as the  regulations,  as being  currently in effect even
though the  American  Jobs  Creation  Act signed into law by  President  Bush in
October 2004,  postpones  the  effective  date thereof until January 1, 2005 for
calendar  year  taxpayers  such as ourselves and our  subsidiaries.  The Company
believes that notwithstanding such postponement, the discussion below accurately
reflects  our tax  treatment  for the  current  tax year  since the  regulations
represent the IRS position on how Section 883 should be interpreted and applied.
In addition,  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 do not expect 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,  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
will be the sole class of stock 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 we expect to be 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.

         Under the regulations,  if we do not satisfy the  Publicly-Traded  Test
and  therefore  are subject to the 5 Percent  Override Rule or the 50% Ownership
Test, we would have to satisfy certain substantiation requirements regarding the
identity  of our  shareholders  in order to  qualify  for the Code  Section  883
exemption.  These  requirements  are onerous and there is no  assurance  that we
would be able to satisfy them.

         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  income" or, in the case of certain types of U.S.  Holders,  "financial
services  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  2008)  provided  that (1) the common stock is
readily tradable on an established  securities market in the United States (such
as the Nasdaq  National  Market);  (2) we are not a passive  foreign  investment
company,  a foreign personal holding company or a 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 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.  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.  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.

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 and 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.

         Backup  withholding tax is not an additional tax. Rather, you generally
may obtain a refund of any amounts withheld under backup  withholding rules that
exceed  your income tax  liability  by filing a refund  claim with the  Internal
Revenue Service.

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 450
Fifth Street, N.W.,  Washington,  D.C. 20549. You may also obtain copies of this
information  by mail from the public  reference  section  of the SEC,  450 Fifth
Street,  N.W., Room 1024,  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.

ITEM 11. Quantitative and qualitative Disclosures 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 the initial
credit  facility  in U.S.  dollars to a 100 basis  points  increase  in LIBOR on
December 31 of each repayment  year. The following  table takes into account the
four year interest rate swap agreement under the initial credit facility.

         Interest Expense Sensitivity to 100 Basis Point Change in LIBOR

         December 31, 2004.........................                   985,000
         December 31, 2005.........................                 2,066,847
         December 31, 2006.........................                 1,804,289
         December 31, 2007.........................                 1,558,584
         December 31, 2008.........................                 1,927,598
         December 31, 2009.........................                 1,968,619
         December 31, 2010.........................                 1,992,217
         December 31, 2011.........................                 1,530,815
         December 31, 2012.........................                   495,000

         Foreign  Exchange  Rate Risk.  We generate  all of our revenues in U.S.
dollars but incur  approximately  14% of our expenses in  currencies  other than
U.S. dollars. For accounting purposes, expenses incurred in Euros 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.

         None.

ITEM 15. Controls and procedures

Evaluation of disclosure controls and procedures.

         On the date of this  report,  the Company  carried  out an  evaluation,
under the supervision and with the  participation  of the Company's  management,
including the Company's Chief Executive Officer and Chief Financial Officer,  of
the  effectiveness  of the  design and  operation  of the  Company's  disclosure
controls and procedures  pursuant to Rule 13a-14 of the Securities  Exchange Act
of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and
Chief Financial  Officer  concluded that the Company's  disclosure  controls and
procedures  are  effective  in  alerting  them  timely to  material  information
relating to the  Company  required  to be  included  in the  Company's  periodic
Securities and Exchange Commission filings.

Changes in internal controls.

         There have been no significant  changes in our internal  controls or in
other factors that could have significantly  affected those controls  subsequent
to the date of the  Company's  most  recent  evaluation  of  internal  controls,
including any  corrective  actions with regard to significant  deficiencies  and
material weaknesses.

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

         As a foreign private issuer, we are exempt from the rules of the Nasdaq
National Market that require the adoption of a code of ethics.  However, we have
voluntarily  adopted a code of ethics that  applies to our  principal  executive
officer,  principal financial officer,  principal accounting officer and persons
performing  similar  functions.  We will also provide a hard copy of our code of
ethics free of charge upon written  request of a shareholder.  Shareholders  may
direct their requests to the attention of Mr. Evangelos Pistiolis.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         Our  principal  accountants  for the years ended  December 31, 2003 and
2004 were Ernst and Young (Hellas),  Certified Auditors Accountants S.A. For the
2004 year audit they billed us Euro 168,000. There were no tax and audit related
fees  billed in 2004.  The audit  for the year  ended  December  31,  2003,  was
conducted in  conjunction  with the audits for the years ended December 31, 2001
and 2002, as part of our initial public  offering and our follow-on  offering in
July 2004 and November 2004, respectively and their billing consists part of our
offering  expenses.  For their  services in connection  with our initial  public
offering and follow-on  offering Ernst and Young  (Hellas),  Certified  Auditors
Accountants S.A. billed us Euro 489,501.

         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

         Not Applicable.

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

         None.


<PAGE>


                                    Part III

ITEM 17. FINANCIAL STATEMENTS

         Not Applicable.

ITEM 18. FINANCIAL STATEMENTS

         The following financial statements, together with the report of Ernst &
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
                                                                    --------
Report of Ernst & Young, Independent Registered
Public Accounting Firm                                                F-1

Consolidated Balance Sheets as of December 31, 2003 and 2004          F-2

Consolidated Statements of Income for the years
ended December 31, 2002, 2003 and 2004                                F-3

Consolidated  Statements of  Stockholders'  Equity
for the years ended December 31, 2002,  2003 and 2004                 F-4

Consolidated Statements of Cash Flows for the years
ended December 31, 2002, 2003 and 2004                                F-5

Notes to Consolidated Financial Statements                            F-6

<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, 2003 and 2004 and the related  consolidated  statements  of
income,  stockholders'  equity and cash flows for each of the three years in the
period  ended   December  31,  2004.   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, 2003 and 2004 and the consolidated results of its operations and
its cash flows for each of the three  years in the  period  ended  December  31,
2004, in conformity with U.S. generally accepted accounting principles.


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


Athens, Greece
March 30, 2005


<PAGE>


<TABLE>

TOP TANKERS INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND 2004
(Expressed in thousands of U.S. Dollars - except share and per share data)
<CAPTION>


ASSETS
                                                                         2003             2004
                                                                        ------           ------
<S>                                                                         <C>            <C>
CURRENT ASSETS:
   Cash and cash equivalents                                                2,343          114,768
   Accounts receivable trade, net                                             818           19,971
   Insurance claims                                                         1,065               98
   Inventories (Note 4)                                                       509            3,221
   Due from related parties (Note 3)                                            -              219
   Prepayments and other                                                      127            2,774
                                                                 ----------------- ----------------
         Total current assets                                               4,862          141,051
                                                                 ----------------- ----------------

FIXED ASSETS:
   Advances for vessel acquisitions (Notes 5 and 18)                            -           25,650
   Vessels, net  (Notes 6 and 8)                                           48,074          355,997
   Office furniture and equipment, net (Note 3)                                 -              440
                                                                 ----------------- ----------------
         Total fixed assets                                                48,074          382,087
                                                                 ----------------- ----------------

OTHER NON CURRENT ASSETS:
   Deferred charges, net (Note 7)                                           2,148            6,748
   Due from related parties (Note 3)                                          319                -
   Restricted cash (Note 8)                                                   300           10,000
                                                                 ----------------- ----------------
         Total assets                                                      55,703          539,886
                                                                 ================= ================

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Current portion of long-term debt (Note 8)                               4,027           19,540
   Dividends payable                                                            -            5,845
   Accounts payable                                                         3,027           10,358
   Due to related parties (Note 3)                                            105                -
   Accrued liabilities (Note 9)                                               694            3,766
   Unearned revenue                                                         1,155            3,054
   Financial instruments (Note 8)                                               -              248
                                                                 ----------------- ----------------
         Total current liabilities                                          9,008           42,811
                                                                 ----------------- ----------------

LONG-TERM DEBT, net of current portion (Note 8)                            30,376          175,266
                                                                 ----------------- ----------------

STOCKHOLDERS' EQUITY:
   Preferred  stock,  $0.01  par  value;  20,000,000  shares
   authorized; none issued (Note  11)                                           -                -
   Common stock, $0.01 par value;  50,000,000 shares authorized;
   6,000,000 and  27,830,990  shares issued and  outstanding  at
   December 31, 2003 and 2004, respectively (Note 11)
                                                                               60              278
   Additional paid-in capital (Note 11)                                    13,351          294,240
   Accumulated other comprehensive loss (Note 8)                                -            (248)
   Retained earnings                                                        2,908           27,539
                                                                 ----------------- ----------------
         Total stockholders' equity                                        16,319          321,809
                                                                 ----------------- ----------------
         Total liabilities and stockholders' equity                        55,703          539,886
                                                                 ================= ================

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


<PAGE>


<TABLE>

TOP TANKERS INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2002, 2003 AND 2004
(Expressed in thousands of U.S. Dollars - except share and per share data)
<CAPTION>

                                                                            2002             2003              2004
                                                                       ---------------  ----------------  ---------------
<S>                                                                          <C>               <C>              <C>
REVENUES:
Voyage revenues (Note 1)                                                       11,426            23,085           93,829
                                                                       ---------------  ----------------  ---------------

EXPENSES:
    Voyage expenses (Note 13)                                                   3,311             5,937           16,898
    Vessel operating expenses (Note 13)                                         4,553             8,420           16,859
    Depreciation (Note 6)                                                       2,213             3,604           13,108
    Amortization of deferred charges (Note 7)                                     177               599            1,514
    Management fees charged by a related party (Note 3)                           673             1,686            1,120
    Sub-Manager fees (Note 1)                                                       -                 -              803
    General and administrative expenses                                           143               129            6,656

    Foreign currency losses, net                                                   62               105               75
   Gain on sale of vessels (Note 6)                                                 -                 -             (638)
                                                                       ---------------  ----------------  ---------------
   Operating income                                                               294             2,605           37,434
                                                                       ---------------  ----------------  ---------------

OTHER INCOME (EXPENSES):
   Interest and finance costs (Notes 8 and 14)                                   (993)           (1,336)          (5,201)
   Interest income                                                                  6                 1              481
   Other, net (Note 15)                                                           894               364               80
                                                                       ---------------  ----------------  ---------------
   Total other income (expenses), net                                             (93)             (971)          (4,640)
                                                                       ---------------  ----------------  ---------------
Net Income                                                                        201             1,634           32,794
                                                                       ===============  ================  ===============
Earnings per share, basic and diluted (Notes 11 and 12)                          0.03              0.27             2.54
                                                                       ===============  ================  ===============
Weighted average number of shares, basic and diluted                        6,000,000         6,000,000       12,922,449
                                                                       ===============  ================  ===============

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



<PAGE>


<TABLE>

TOP TANKERS INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2002, 2003 AND 2004
(Expressed in thousands of U.S. Dollars - except share and per share data)
<CAPTION>

                                                                                                  Accumulated
                                                                Capital Stock       Additional      Other
                                             Comprehensive  --------------------     Paid-in     Comprehensive   Retained
                                                Income      # of Shares   Par Value   Capital        Loss         Earnings   Total
                                                ------      -----------   ---------   -------        ----         --------   -----
<S>                                          <C>            <C>           <C>        <C>          <C>            <C>         <C>
BALANCE, December 31, 2001                                   6,000,000         60       4,588         -           2,488      7,136

  Net income                                    201                  -          -           -         -             201        201
  Contributions  to  additional
  paid-in capital                                 -                  -          -       2,279         -               -      2,279
  Dividends paid ($0.14 per share)                -                  -          -           -         -           (844)       (844)
                                           -----------
  Comprehensive income                          201
                                           ===========      -----------  ---------  -----------   ----------    ---------  ---------

BALANCE, December 31, 2002                                   6,000,000         60       6,867         -           1,845      8,772

  Net income                                  1,634                  -          -           -         -           1,634      1,634
  Contributions to additional
  paid-in capital                                 -                  -          -       6,484         -               -      6,484
  Dividends paid ($0.10 per share)                -                  -          -           -         -           (571)      (571)
                                           -----------
  Comprehensive income                        1,634
                                           ===========      -----------  ---------  -----------   ----------    ---------  ---------

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

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


<PAGE>
<TABLE>

TOP TANKERS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2002, 2003 AND 2004
(Expressed in thousands of U.S. Dollars)
                                                                  2002            2003           2004
                                                              --------------  -------------  -------------
<S>                                                                   <C>            <C>           <C>
Cash Flows from Operating Activities:
   Net income                                                           201          1,634         32,794
   Adjustments  to  reconcile  net  income  to net
   cash  provided  by  operating activities:
     Depreciation                                                     2,213          3,604         13,108
     Amortization of dry-docking costs                                  177            599          1,514
     Amortization  and  write  off  of
     deferred  financing costs                                          161            121            755
     Gain on sale of vessels                                              -              -           (638)
   (Increase) Decrease in:
     Accounts receivable                                                 87           (689)       (19,153)
     Insurance claims                                                  (278)          (787)           967
     Inventories                                                        (48)          (220)        (2,712)
     Due from related parties                                             -              -          (219)
     Prepayments and other                                               25            (72)        (2,647)
   Increase (Decrease) in:
     Accounts payable                                                   497          1,883          7,331
     Due to related parties                                             385           (204)          (105)
     Accrued liabilities                                                228            320          3,072
     Unearned revenue                                                  (729)         1,155          1,899
   Payments for dry-docking                                            (510)        (2,414)        (7,365)
                                                              --------------  -------------  -------------
Net Cash from Operating Activities
                                                                      2,409          4,930         28,601
                                                              --------------  -------------  -------------

Cash Flows from (used in) Investing Activities:
     Advances for vessel acquisitions                                     -              -        (25,650)
     Vessel acquisitions and improvements                          (18,547)        (19,550)      (327,629)
     Advances to related parties                                        251           (151)           319
     Net proceeds from sale of vessels                                    -              -          8,536
     Expenditures for property and equipment                              -              -           (475)
                                                              --------------  -------------  -------------
Net Cash used in Investing Activities                               (18,296)       (19,701)      (344,899)
                                                              --------------  -------------  -------------

Cash Flows from (used in) Financing Activities:
     Proceeds from long-term debt                                    15,550         25,850        281,900
     Principal payments of long-term debt                            (2,550)        (3,059)        (4,251)
     Repayment of long-term debt                                          -        (11,230)      (115,260)
     Increase in restricted cash                                          -           (300)        (9,700)
     Contributions to additional paid-in capital                      2,279          6,484         17,077
     Issuance of common stock                                             -              -        264,030
     Payment of financing costs                                        (200)          (154)        (2,755)
     Dividends paid                                                    (844)          (571)        (2,318)
                                                              --------------  -------------  -------------
Net Cash from Financing Activities                                   14,235         17,020        428,723
                                                              --------------  -------------  -------------
Net increase (decrease) in cash and cash equivalents                 (1,652)          2,249        112,425
Cash and cash equivalents at beginning of year                        1,746             94          2,343
                                                              --------------  -------------  -------------
Cash and cash equivalents at end of year                                 94          2,343        114,768
                                                              ==============  =============  =============
SUPPLEMENTAL CASH FLOW INFORMATION
     Interest paid                                                      727          1,045          3,157
                                                              ==============  =============  =============

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

</TABLE>

<PAGE>

TOP TANKERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2004
(Expressed  in thousands of United  States  Dollars - except share and per share
data, unless otherwise stated)

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 is wholly owned by
        the father of the Company's Chief Executive Officer (Note 3). Since July
        1, 2004 the ship-owning  companies 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 an  office in Greece
        located at 109-111,  Messogion Avenue 115 26 Athens Greece.  The Manager
        subcontracted   the   technical   management   of  the  vessels  to  two
        unaffiliated ship management  companies,  Unicom Management Services Ltd
        and VShips  Management  Limited  (collectively the  "Sub-Manager").  The
        Sub-Manager  provides  operational  and technical  services to Company's
        vessels at a fixed monthly fee per vessel.  Such fees for the year ended
        December  31, 2004  totaled $ 803 and are  separately  reflected  in the
        accompanying 2004 consolidated statement of income. At December 31, 2004
        the amount due to the  Sub-Manager  totaled $ 2,139 and is  included  in
        Accounts Payable in the accompanying 2004 consolidated balance sheet.

    (b) 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" and Helidona Shipping Company Limited, incorporated
        in British Cayman Islands in August 2000, former owner of vessel "Yapi",
        which was acquired in August 2000.

    (c) 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 and Vermio Shipping
        Company Limited,  incorporated in the Marshall Islands in December 2001,
        owner of vessel  "Faithful"  for the period from  February  2002 to July
        2003.

    (d) 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 acquired in February 2003.

    (e) 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.

    (f) 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.

    (g) 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.

    (h) 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.

    (i) 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.

    (j) 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.

    (k) 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.

    (l) 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.

    (m) 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.

    (n) Pylio Shipping Company Ltd. ("Pylio"),  incorporated in Liberia in 2004,
        owner of the 154,970 DWT (built in 1991) tanker vessel "Flawless", which
        was acquired in September 2004.

    (o) 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.

    (p) 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.

    (q) 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.

    (r) 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 on  December 6, 2004 and
        Olympos Shipping Company Limited, incorporated in British Cayman Islands
        in December 1999, former owner of the vessel.

    (s) Kisavos  Shipping  Company  Limited  ("Kisavos"),  incorporated  in  the
        Marshall  Islands in November  2004,  to be the owner of the 154,970 DWT
        (built in 1991) tanker vessel "Priceless" (Notes 5 and 18).

    (t) Imitos Shipping Company Limited ("Imitos"), incorporated in the Marshall
        Islands in November  2004,  to be the owner of the 149,554 DWT (built in
        1992) tanker vessel "Noiseless" (Notes 5 and 18).

    (u) Parnis Shipping Company Limited ("Parnis"), incorporated in the Marshall
        Islands in November  2004,  to be the owner of the 149,599 DWT (built in
        1992) tanker vessel "Stainless" (Notes 5 and 18).

    (v) Parnasos Shipping Company Limited ("Parnasos"),  incorporated in Liberia
        in  November  2004,  to be the owner of the  154,970 DWT (built in 1992)
        tanker vessel "Faultless" (Notes 5 and 18).

    (w) Vitsi Shipping  Company  Limited  ("Vitsi"),  incorporated in Liberia in
        November 2004, to be the owner of the 154,970 DWT (built in 1991) tanker
        vessel "Stopless" (Notes 5 and 18).

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

    At December 31, 2004,  five vessels were operating under voyage charters and
    ten vessels under long-term time charters,  with an estimated duration of 24
    months, including a profit sharing agreement, which is settled on a calendar
    quarter  basis.  During 2004,  44% of the  Company's  voyage  revenues  were
    derived from these time charter agreements.  During 2002, 2003 and 2004 four
    charterers  individually accounted for more than 10% of the Company's voyage
    revenues as follows:

                  Charterer             2002         2003         2004
                  ---------             ----         ----         ----
                     A                    -           31%           29%
                     B                   20%          16%            -
                     C                   21%           -             -
                     D                   24%           -           15%

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 functional currency of the Company is
        the U.S. Dollar because the Company's  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.

    (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  for
        purposes of determining the appropriate provision for doubtful accounts.
        Provision for doubtful accounts at December 31, 2003 and 2004 totaled to
        $0 and $132, respectively.

    (g) Insurance Claims: Insurance claims are recorded on the accrual basis and
        represent the claimable expenses,  net of deductibles,  incurred through
        December  31 of each  year,  which are  expected  to be  recovered  from
        insurance companies.

    (h) Inventories:  Inventories consist of bunkers,  lubricants and consumable
        stores  which  are  stated  at the  lower  of  cost or  market.  Cost is
        determined by the first in, first out method.

    (i) Vessel Cost:  Vessels are stated at cost, which consists of the contract
        price and any  material  expenses  incurred  upon  acquisition  (initial
        repairs,  improvements and delivery expenses).  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  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 or disposed of
        by an entity be reviewed for  impairment  whenever  events or changes in
        circumstances indicate that the carrying amount of the assets may not be
        recoverable.  When the estimate of  undiscounted  cash flows,  excluding
        interest  charges,  expected to be  generated by the use of the asset is
        less than its carrying amount, the Company 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,  2002,  2003 and 2004,  did not result in an
        indication of an impairment loss.

    (k) Vessel  Depreciation:  Depreciation is computed using the  straight-line
        method over the estimated useful life of the vessels,  after considering
        the estimated salvage value. Each vessel's salvage value is equal to the
        product of its  lightweight  tonnage and estimated  scrap rate. With the
        exception of the vessel Tireless,  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.
        The useful life of the vessel Tireless was estimated to 28 years,  which
        coincided with the validity of the class  certificate.  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  become
        effective.

    (l) 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.   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.

    (m) Financing  Costs:  Fees incurred for obtaining new loans or  refinancing
        existing ones are recorded as a contra to debt.  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 in the period the repayment or  refinancing  is
        made.

    (n) 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.

    (o) 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,  2003 and 2004
        amounted to $0 and $77, respectively.

    (p) 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.  Under a voyage  charter the
        revenues and associated  voyage costs are recognized on a pro-rata basis
        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.

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

    (r) 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,  reflects the
        potential  dilution that could occur if securities or other contracts to
        issue  common  stock  were  exercised.   The  Company  had  no  dilutive
        securities  outstanding  during the three year period ended December 31,
        2004.

    (s) 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.

    (t) Derivatives:  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,  the Company  engaged in an interest rate swap agreement 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). This swap agreement is designated and qualifies as
        a cash flow hedge.  Its fair value is included in financial  instruments
        in the accompanying 2004 consolidated  balance sheet with changes in the
        effective portion of the instrument's fair value recorded in accumulated
        other  comprehensive loss. The ineffective portion of the change in fair
        value of the derivative financial  instrument is immediately  recognized
        in the income  statement as a component of interest and finance cost. If
        the hedged item is a forecasted  transaction  that later is not expected
        to or will not occur, then the derivative financial instrument no longer
        qualifies  as a cash flow hedge.  As a result,  fair value  changes that
        were previously  recorded in accumulated  other  comprehensive  loss are
        immediately   recognized   in  earnings  as  a  component  of  financial
        income/expense.  In all other  instances,  when a  derivative  financial
        instrument  ceases to be  designated or to qualify as a cash flow hedge,
        the  previously  recorded  changes in fair value  remain in  accumulated
        other comprehensive income until the hedged item affects earnings. It is
        the Company's intention to hold this swap agreement to maturity.

        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 arrangements.

    (u) Recent Accounting Pronouncements:

        FASB   Interpretation  No.  46R:  In  December  2003,  the  FASB  issued
        Interpretation No. 46R,  Consolidation of Variable Interest Entities, an
        Interpretation  of ARB No.  51  (the  "Interpretation"),  which  revised
        Interpretation  No.  46,  issued in  January  2003.  The  Interpretation
        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's entity in its financial
        statements.  The Company was required to adopt the provisions of FIN 46R
        for entities  created prior to February  2003, in 2004.  The adoption of
        FIN 46R in 2004 did not have any  impact on the  Company's  consolidated
        financial position, results of operations or cash flows.

    (v) Reclassifications  of Prior Year Balances:  A reclassification  has been
        made to the 2003  consolidated  financial  statements  to conform to the
        presentation in the 2004 consolidated financial statements. An amount of
        $208,  concerning  unamortized  deferred  financing  fees,  which is now
        presented as a contra to current  portion of long-term debt ($57) and as
        a contra to long-term  debt,  net of current  portion ($151) at December
        31, 2003, was previously classified in deferred charges, net.

3.  Transactions with Related Parties:

    (a) Primal  Tankers Inc.:  As discussed in Note 1, up to June 30, 2004,  the
        ship-owning  companies had a management  agreement  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 2002,  2003 and 2004 amounted to
        $673, $1,686 and $1,120, respectively, and they are separately reflected
        in the accompanying  consolidated  statements of income. At December 31,
        2003 and 2004 the amounts due to and from Primal  Tankers Inc.  totalled
        $105  and  $219,  respectively  and  are  separately  reflected  in  the
        accompanying  consolidated  balance sheets. As of December 31, 2003, the
        Company  had  advanced  to Primal  Tankers  Inc.  $319 of  deposits as a
        security  for the  performance  by the  ship-owning  companies  of their
        obligations under the management  agreements.  Such deposits,  following
        the  termination  of the  management  agreements,  were  refunded to the
        Company free of  interest.  The amount of $319 is  separately  reflected
        under Other  Non-Current  Assets in the accompanying  2003  consolidated
        balance sheet. During 2004 the Manager acquired from Primal Tankers Inc.
        office furniture and equipment for a consideration of $475. Depreciation
        expense for 2004 amounted to $35 and is included in  depreciation in the
        accompanying 2004 consolidated statement of income.

    (b) Pyramis  Technical  Co. S.A.:  On July 9, 2004 the Company  concluded 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 is for duration of six years beginning
        July 2004 with an option for an  extension  of four  years.  The monthly
        rental is Euro 39,000 adjusted annually for inflation increase effective
        January 1, 2006. General and administrative  expenses for the year ended
        December 31, 2004 include $281 of rentals paid to Pyramis  Technical Co.
        S.A. The minimum rentals payable under operating  leases for each of the
        years  ending  December  31, 2005  through  December 31, 2010 before any
        adjustment  for  inflation  and  translated  using the exchange  rate of
        $/Euro at December 31, 2004 are:

              Year                                    Amount
              ----                                    ------
              2005                                      622
              2006                                      622
              2007                                      622
              2008                                      622
              2009 and thereafter                       950
                                                 -----------
                                                      3,438
                                                 ===========

4.  Inventories:

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

                                                  2003       2004
                                                  ----       ----
       Bunkers                                     242       2,096
       Lubricants                                  147         805
       Consumable stores                           120         320
                                               --------   ---------
                                                   509       3,221
                                               ========   =========

5.  Advances for Vessel Acquisitions:

    In November 2004, Kisavos,  Imitos, Parnis,  Parnasos and Vitsi entered into
    memoranda  of  agreement  to  acquire  the  vessels  Priceless,   Noiseless,
    Stainless,  Faultless  and Stopless,  respectively,  for a total amount of $
    256,500. Under the terms of the agreements,  the Company, as of December 31,
    2004, paid $25,650  representing a 10% deposit on the purchase price of each
    vessel. The acquisitions will be financed from the proceeds of the Company's
    follow-on  public  offering  discussed  in Note 11 and from  long-term  bank
    financing.  As of December  31,  2004,  remaining  contracted  payments  for
    vessels  acquisitions,  all due in 2005, amounted to $230,850.  The expected
    delivery date of the Priceless is February 2005. The expected  delivery date
    of the Noiseless, Stainless, Faultless and Stopless is April 2005.

6.  Vessels, net:

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

                                                     Accumulated       Net
                                       Vessel Cost   Depreciation    Book Value
                                       -----------   ------------    ----------

    Balance, December 31, 2002            36,396         (4,268)       32,128
    -  Acquisitions                       19,550               -       19,550
    -  Depreciation                            -         (3,604)      (3,604)
                                        --------       --------      ---------
    Balance, December 31, 2003            55,946         (7,872)       48,074
    -  Acquisitions                      327,629              -       327,629
    -  Disposals (Tireless and
       Med Prologue)                     (10,024)         3,391        (6,633)
    -  Depreciation                            -        (13,073)      (13,073)
                                        --------       --------      ---------
    Balance, December 31, 2004           373,551        (17,554)      355,997

    Acquisitions  during the year ended  December  31,  2004  represent  (a) the
    acquisition cost of the vessels  Limitless and Endless for a total amount of
    $75,846,  (b) the acquisition cost of the ten vessels discussed in Note 1(g)
    through  Note 1(p) for a total amount of $251,257  and (c)  improvements  of
    $526 on the vessel Yapi.

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

    All Company's vessels, having a total carrying value of $355,997 at December
    31, 2004,  have been provided as collateral to secure the loans discussed in
    Note 8.

7.  Deferred Charges, net:

    The unamortized  amounts included in the accompanying  consolidated  balance
    sheets represent dry-docking costs and are analyzed as follows:

    Balance, December 31, 2002                                            333
    - Additions                                                         2,414
    - Amortization                                                       (599)
                                                                 --------------
    Balance, December 31, 2003                                          2,148
    - Additions                                                         7,365
    - Write-off due to sale of vessels (Note 6)                        (1,251)
    - Amortization                                                     (1,514)
                                                                 --------------
    Balance, December 31, 2004                                          6,748
                                                                 ==============

    Write-off  of deferred  charges due to vessels sale is included in gain from
    vessels sale in the accompanying 2004 consolidated statement of income.

8.  Long-term Debt:

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

    Borrower(s)                                         2003           2004
    -----------                                         ----           ----
    (a) The Company                                          -        194,806
    (b) Mytikas                                              -              -
    (c) Litochoro                                            -              -
    (d) Helidona and Olympos                            10,148              -
    (e) Gramos                                          11,403              -
    (f) Kalidromo                                        1,800              -
    (g) Rupel                                           11,052              -

        Total                                           34,403        194,806
        Less - current portion                          (4,027)       (19,540)
                                                      ----------     ----------
        Long - term portion                             30,376        175,266

    (a) The  Company:  In late July 2004 the  Company  concluded  a bank loan to
        partially  finance  the  acquisition  cost  of the  ten  tanker  vessels
        discussed in Note 6 and to refinance the Company's  existing loans, with
        the exception of the  Kalidromo  loan  discussed in (f) below.  The bank
        loan was for the amount of $222,000  divided into 2 tranches of $197,000
        and  $25,000,  respectively.  The  $197,000  tranche  is  payable  in 16
        consecutive  semi-annual  installments  of $10,000 each,  from March 31,
        2005 to  September  2012,  plus a balloon  payment  of $ 37,000  payable
        together  with the last  installment.  The  $25,000  tranche,  which was
        partially repaid ($2,310) from the sale proceeds of the vessel Tireless,
        was repaid in full,  on  November  15,  2004,  from the  proceeds of the
        Company's follow-on offering (Note 11). The loan bears interest at LIBOR
        plus a margin.  At December 31, 2004 the interest  rate  (including  the
        margin) was 4.60%.

    (b) Mytikas:  Loan for an amount of  $30,400,  obtained  in March  2004,  to
        partially  finance the acquisition cost of vessel  Limitless.  On August
        17,  2004,  the  outstanding  balance  of the  loan as of that  date was
        refinanced from the proceeds of the loan discussed in (a) above.

    (c) Litochoro:  Loan for an amount of $29,500,  obtained  in March 2004,  to
        partially finance the acquisition cost of vessel Endless.  On August 17,
        2004, the outstanding balance of the loan as of that date was refinanced
        from the proceeds of the loan discussed in (a) above.

    (d) Helidona  and  Olympos:  Loan for an  amount  of  $10,520,  obtained  in
        September 2003, to refinance their then  outstanding  loan balances.  On
        August 12, 2004, the outstanding balance of the loan as of that date was
        refinanced from the proceeds of the loan discussed in (a) above.

    (e) Gramos: Loan for an amount of $11,750,  obtained in July 2003, to assist
        Gramos in financing the acquisition cost of vessel Faithful from Vermio.
        On October 15, 2004, the outstanding balance of the loan as of that date
        was refinanced from the proceeds of the loan discussed in (a) above.

    (f) Kalidromo:  Loan for an amount of  $2,100,  obtained  in June  2003,  to
        partially finance the acquisition cost of the vessel Tireless.  Upon the
        sale of the vessel  Tireless on  September  24,  2004,  the  outstanding
        balance of the loan ($1,413) was fully repaid.

    (g) Rupel:  Loan for an amount of $12,000,  obtained in  February  2003,  to
        partially  finance  the  acquisition  cost of the  vessel  Fearless.  On
        October 15, 2004,  the  outstanding  balance of the loan as of that date
        was refinanced from the proceeds of the loan discussed in (a) above.

    The loan is 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.

    The loan, among others,  contains financial  covenants requiring the Company
    to ensure that the aggregate  market value of the  mortgaged  vessels at all
    times exceed 130% of the aggregate  outstanding  principal  amount under the
    loan,  to ensure that total  assets minus total debt will not at any time be
    less than  $150,000  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  $10,000  have  been
    classified  as  restricted  cash.  The Company is permitted to pay dividends
    under the loan so long as it is not in default of a loan covenant or if such
    dividend payment would not result in a default of a loan covenant.

    Interest  expense  for the years ended  December  31,  2002,  2003 and 2004,
    amounted to $797, $1,128 and $4,161 respectively and is included in interest
    and finance  costs in the  accompanying  consolidated  statements  of income
    (Note 14). The weighted  average interest rate of the above loans during the
    years 2002, 2003 and 2004, was 3.11%, 3.28% and 3.19%, respectively.

    The annual principal  payments  required to be made after December 31, 2004,
    are as follows:

    Year                                               Amount
    ----                                               ------
    2005                                               20,000
    2006                                               20,000
    2007                                               20,000
    2008                                               20,000
    2009                                               20,000
    2010 and thereafter                                97,000
                                                    ----------
                                                      197,000
    Less unamortized financing fees                     (2,194)
                                                    ----------
                                                      194,806
                                                    ==========

    In connection  with the loan discussed  under (a) above, on August 26, 2004,
    the Company  entered into an interest rate swap  agreement in order to hedge
    the Company's variable interest rate exposure.  As of December 31, 2004, the
    swap  agreement had a notional  amount of $98,500 and its fair value is in a
    loss position of ($248). The 2004 change in fair value on the swap agreement
    is recorded entirely as a component of other  comprehensive loss as there is
    no hedge ineffectiveness. The swap agreement will expire in September 2008.

    9.  Accrued Liabilities:

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

                                                        2003       2004
                                                      ---------  ----------
Interest on long-term debt                                 165       1,170
Vessels' operating and voyage expenses                     524       2,019
General and administrative expenses                          5         577
                                                      ---------  ----------
    Total                                                  694       3,766
                                                      =========  ==========

10. Contingencies:

    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. Common Stock and Additional Paid-In Capital:

    The Company's common stock since inception and prior to the amendment of its
    articles of  incorporation  in May 2004 consisted of 500 shares  authorized,
    issued  and  outstanding,  of no par  value.  The  holders of the shares are
    entitled to one vote on all matters  submitted to a vote of stockholders and
    to receive all dividends, if any.

    On May 10 and May 27,  2004 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
    50,000,000  registered and/or bearer shares of common stock, par value $0.01
    per share  and  20,000,000  registered  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.  In addition the Company within the
    context of its initial public  offering  discussed  below,  on May 21, 2004,
    cancelled the 500 shares of Ocean and issued  6,000,000  shares at par value
    of $0.01 each.  The share and per share data  included  in the  accompanying
    consolidated financial statements have been restated to reflect the issuance
    of the 6,000,000 shares outstanding for all periods presented.

    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
    $124,440.

    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
    $139,372.

    The  amounts   shown  in  the   accompanying   consolidated   statements  of
    stockholders'  equity,  as  contributions  to  additional  paid-in  capital,
    represent (a) payments made by the stockholders ($2,279,  $6,484 and $17,077
    in 2002, 2003 and 2004, respectively), prior to the Company's initial public
    offering discussed above, at various dates to finance vessel acquisitions in
    excess of the  amounts of bank  loans  obtained  and  advances  for  working
    capital purposes and (b) the consideration  received for the issuance of the
    shares in July and November 2004,  discussed  above,  in excess of their par
    value.

    The Company paid  dividends of $844,  $571 and $2,318 during the years ended
    December  31,  2002,  2003 and 2004,  respectively.  In December  2004,  the
    Company  declared  dividends of $0.21 per share,  amounted to $5,845,  which
    were paid in January 2005.

12. Earnings Per Common Share:

    The  components of the  calculation  of basic earnings per share and diluted
    earnings per share are as follows:
<TABLE>
                                                                 2002            2003         2004
                                                                ----            ----          ----
    <S>                                                        <C>              <C>           <C>
    Net Income:
      Income available to common shareholders                       $ 201         $ 1,634       $ 32,794
    Basic earnings per share:
      Weighted average common shares outstanding                6,000,000       6,000,000     12,922,449
    Diluted earnings per share:
      Weighted average common shares--diluted                   6,000,000       6,000,000     12,922,449
      Basic earnings per common share                              $ 0.03          $ 0.27         $ 2.54
      Diluted earnings per common share                            $ 0.03          $ 0.27         $ 2.54
</TABLE>

13. Voyage and Vessel Operating Expenses:

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

    Voyage Expenses                          2002       2003        2004
    ---------------                          ----       ----        ----
    Port charges                              1,197      1,824        5,181
    Bunkers                                   1,667      3,367        8,588
    Commissions                                 447        746        3,129
                                           ---------  ---------  -----------
          Total                               3,311      5,937       16,898
                                           =========  =========  ===========

    Vessel Operating Expenses
    -------------------------
    Crew wages and related costs              2,145      3,638        7,285
    Insurance                                   695      1,323        2,873
    Repairs and maintenance                     883      1,874        2,842
    Spares and consumable stores                818      1,559        3,804
    Taxes (Note 16)                              12         26           55
                                           ---------  ---------  -----------
          Total                               4,553      8,420       16,859
                                           =========  =========  ===========

14. Interest and Finance Costs:

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

                                               2002       2003        2004
                                               ----       ----        ----
    Interest on long-term debt (Note 8)         797      1,128      4,161
    Bank charges                                 35         87        285
    Amortization and write-off of
    financing fees                              161        121         755
                                            --------  ---------   ---------
          Total                                 993      1,336       5,201
                                            ========  =========   =========

15. Other, net:

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

                                              2002      2003      2004
                                             -------   --------  -------
   Insurance claims recoveries                  886        364        -
   Miscellaneous                                  8          -       80
                                             -------   --------  -------
          Total                                 894        364       80
                                             =======   ========  =======

    Insurance claim recoveries  represent the excess amount the Company received
    in  connection  with claims for  damages to its  vessels  compared to actual
    costs associated with the repairs.

16. 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  Internal  Revenue Code of the United  States (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 the its
    stock  representing 50 percent or more 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.

    Treasury regulations under the Code were promulgated in final form in August
    2003. These regulations apply to taxable years beginning after September 24,
    2004.  As a result,  such  regulations  will be effective  for calendar year
    taxpayers,  like the Company,  beginning  with the calendar  year 2005.  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 our  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, the 50% Ownership Test is satisfied. The Company also
    believes that for periods  subsequent  to its initial  public  offering,  it
    satisfies the publicly traded  requirements of the statute 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.

17. Financial Instruments:

    The principal financial assets of the Company consist of cash on hand and at
    banks and accounts  receivable due from charterers.  The principal financial
    liabilities  of the Company  consist of  long-term  bank loans 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 the  long-term  bank  loan  discussed  in Note 8  bearing
        interest at variable interest rates approximates the recorded value. The
        carrying  value of the liability  for the interest  rate swap  agreement
        approximates  its fair value as the fair value  estimates the amount the
        Company  would  have  paid had the  interest  rate swap  agreement  been
        terminated on the balance sheet date.

18. Subsequent Events:

    (a) New Credit Facilities: In February and March 2005, the Company concluded
        three bank loans bearing interest at LIBOR plus a margin as follows: (i)
        in February 2005, a bank loan to partially  finance the acquisition cost
        of vessels Priceless,  Noiseless and Faultless (Note 1) and to refinance
        the loan  discussed in Note 8(a). The loan is for the amount of $280,794
        divided into two tranches of $197,000  and  $83,794,  respectively.  The
        $197,000  tranche  is  payable  in  16  equal  consecutive   semi-annual
        instalments of $10,000 each, from March 31, 2005 to September 2012, plus
        a balloon payment of $37,000 payable  together with the last instalment.
        The  $83,794  tranche is subject to a fee of 1% payable on draw down and
        the tranche is payable in 14 varying  semi-annual  instalments  starting
        July 31, 2005, plus a balloon  payment of $17,041 payable  together with
        the  last  instalment;  (ii) in March  2005,  a bank  loan to  partially
        finance the acquisition cost of vessels Stainless and Stopless (Note 1).
        The loan is for the amount of $56,500  divided  into two tranches and is
        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 is subject  to a fee of 1%  payable on draw down.  On March 30,
        2005 Parnis and Vitsi drew down  $56,500 of the bank loan;  and (iii) in
        March 2005, a bank loan to partially finance the acquisition cost of the
        vessels Topless,  Dauntless,  Soundless and Taintless,  discussed in (c)
        below.  The  loan,  which  is for the  amount  of  $144,000  and will be
        provided as Tranche C of the loan discussed  under (i) above, is subject
        to fee of  0.75%  payable  on  draw  down  and is  payable  in 17  equal
        consecutive  semi-annual  instalments of $6,300 each,  starting November
        30, 2005, plus a balloon  payment of $36,900  payable  together with the
        last  instalment.  The total loan discussed under (i) and (iii) above is
        $424,794.

    (b) Vessel's  Delivery:  On February 3, 2005,  Kisavos took  delivery of the
        154,970 DWT (built in 1991),  tanker vessel "Priceless" for $49,450.  On
        February  2, 2005,  Kisavos  drew down  $27,931 as a portion of the bank
        loan discussed in (a)(i) above and the then  outstanding  balance of the
        vessel's purchase price of $44,505 ($49,450 less the 10% advance payment
        made in November 2004) was paid to the seller.

    (c) Newly Established Wholly Owned Subsidiaries and Vessels Acquisitions: In
        February  and March 2005 the  Company  established  Agion Oros  Shipping
        Company  Limited  ("Agion   Oros"),   Lefka  Shipping   Company  Limited
        ("Lefka"), Agrafa Shipping Company Limited ("Agrafa") and Giona Shipping
        Company Limited ("Giona"),  all incorporated in the Marshall Islands. In
        late February and early March 2005, Agion Oros, Lefka,  Agrafa and Giona
        entered into  memoranda  of  agreement  to acquire the vessels  Topless,
        Dauntless,  Soundless and  Taintless,  respectively,  at a total cost of
        $163,500.  Vessels Taintless and Dauntless were delivered to the Company
        on March 21 and March 24,  2005,  respectively.  Vessels  Soundless  and
        Topless are  expected to be delivered on or about April 18 and April 25,
        2005,  respectively.  On March 21 and  March  24,  2005  Giona and Lefka
        collectively  drew down  $73,100 of the bank loan  discussed in (a)(iii)
        above and the vessels' purchase price of $83,000 was paid to the seller.

    (d) Dividends:  On March 16, 2005, the Company  declared  dividends of $0.21
        per share to be paid in April 2005.

    (e) London Office:  On February 2, 2005,  TOP TANKERS (UK) LIMITED,  a newly
        established  subsidiary to be engaged in chartering activities involving
        the Company's vessels, entered into a rent agreement for office space in
        London.  The  agreement is for duration of one year ending  December 31,
        2005.

    (f) Sale of Vessel:  Based on the  Memorandum  of Agreement  dated March 16,
        2005,  the Company  agreed to sell vessel  Yapi for a  consideration  of
        $8,550.  On March 29, 2005 the vessel  entered  into a bareboat  charter
        with the buyers until July 31, 2005 (the vessel's  delivery  date), at a
        daily  bareboat  hire of $6.  According  to the  terms  of the  bareboat
        charter  the Company  collected  in advance an amount of $1,000 from the
        buyers as a security of their obligation to purchase the vessel.

    (g) Interest Rate Swaps: In connection with the loans discussed under (a)(i)
        and (a)(iii) above, the Company entered into the following interest rate
        swap agreements with declining  notional  balances in order to hedge its
        variable interest rate exposure, with effective date March 31, 2005; (i)
        for an  initial  notional  amount  of  $93,500  and for a period of five
        years,  with a fixed  interest  rate of 4.72% plus the  applicable  bank
        margin;  (ii) for an initial notional amount of $27,931 and for a period
        of four years, with a fixed interest rate of 4.5775% plus the applicable
        bank margin; and (iii) 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. TOP TANKERS INC. NOTES TO CONSOLIDATED FINANCIAL
        STATEMENTS  DECEMBER 31, 2003 AND 2004 (Expressed in thousands of United
        States  Dollars  - except  share and per share  data,  unless  otherwise
        stated)

    (h) Vessels' Delivery  (Unaudited):  On April 1, 2005, Parnis and Vitsi took
        delivery of the vessels Stainless and Stopless. On March 30, 2005 Parnis
        and Vitsi drew down $56,500 of the bank loan  discussed in (a)(ii) above
        and the then  outstanding  balance  of the  vessels'  purchase  price of
        $92,677  ($102,975  less the 10% advance  payment made in November 2004)
        was paid to the sellers on March 31, 2005.  On April 11, 2005,  Parnasos
        took delivery of the vessel Faultless.  On April 8, 2005,  Parnasos drew
        down $27,931 of the $83,794 tranche of the bank loan discussed in (a)(i)
        and the then  outstanding  balance  of the  vessel's  purchase  price of
        $46,485 ( $51,650 less the 10% advance  payment  made in November  2004)
        was paid to the seller.


<PAGE>


ITEM 19. EXHIBITS.
<TABLE>
    Number           Description of Exhibits
    ------           -----------------------
    <S>              <C>
     1.1    ____     Amended and Restated Articles of Incorporation of TOP Tankers Inc. (1)
     1.2    ____     By-Laws of the Company (2)
     4.1    ____     TOP Tankers Inc. 2005 Stock Option Plan
     4.2    ____     Loan Agreement between the Company and the Royal Bank of Scotland plc dated August 10,  2004
                     and supplemented September 30, 2004 (3)
     4.3    ____     Loan Agreement between the Company and DVB Bank dated March 10, 2005.
     4.4    ____     Form of Memorandum of Agreement relating to Timeless (4)
     4.5    ____     Form of Memorandum of Agreement relating to Flawless (5)
     4.6    ____     Form of Memorandum of Agreement relating to Restless (6)
     4.7    ____     Form of Memorandum of Agreement relating to Spotless (7)
     4.8    ____     Form of Memorandum of Agreement relating to Doubtless (8)
     4.9    ____     Form of Memorandum of Agreement relating to Victorious (9)
    4.10    ____     Form of Memorandum of Agreement relating to Relentless (10)
    4.11    ____     Form of Memorandum of Agreement relating to Sovereign (11)
    4.12    ____     Form of Memorandum of Agreement relating to Invincible (12)
    4.13    ____     Form of Memorandum of Agreement relating to Vanguard (13)
    4.14    ____     Memorandum of Agreement relating to Priceless (14)
    4.15    ____     Memorandum of Agreement relating to Stopless (15)
    4.16    ____     Memorandum of Agreement relating to Faultless (16)
    4.17    ____     Memorandum of Agreement relating to Noiseless (17)
    4.18    ____     Memorandum of Agreement relating to Stainless (18)
     8.1    ____     List of the Company's subsidiaries
    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.
</TABLE>

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

    (2) Incorporated by reference from Exhibit 3.4 to the Company's Registration
        Statement on Form F-1, filed on July 7, 2004 (Filed No. 333-117213).

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

    (4) Incorporated   by  reference   from   Exhibit  10.1  to  the   Company's
        Registration  Statement  on Form F-1,  filed on July 15, 2004 (Filed No.
        333-117213).

    (5) Incorporated   by  reference   from   Exhibit  10.2  to  the   Company's
        Registration  Statement  on Form F-1,  filed on July 15, 2004 (Filed No.
        333-117213).

    (6) Incorporated   by  reference   from   Exhibit  10.3  to  the   Company's
        Registration  Statement  on Form F-1,  filed on July 15, 2004 (Filed No.
        333-117213).

    (7) Incorporated   by  reference   from   Exhibit  10.4  to  the   Company's
        Registration  Statement  on Form F-1,  filed on July 15, 2004 (Filed No.
        333-117213).

    (8) Incorporated   by  reference   from   Exhibit  10.5  to  the   Company's
        Registration  Statement  on Form F-1,  filed on July 15, 2004 (Filed No.
        333-117213).

    (9) Incorporated   by  reference   from   Exhibit  10.6  to  the   Company's
        Registration  Statement  on Form F-1,  filed on July 15, 2004 (Filed No.
        333-117213).

    (10)Incorporated   by  reference   from   Exhibit  10.7  to  the   Company's
        Registration  Statement  on Form F-1,  filed on July 15, 2004 (Filed No.
        333-117213).

    (11)Incorporated   by  reference   from   Exhibit  10.8  to  the   Company's
        Registration  Statement  on Form F-1,  filed on July 15, 2004 (Filed No.
        333-117213).

    (12)Incorporated   by  reference   from   Exhibit  10.9  to  the   Company's
        Registration  Statement  on Form F-1,  filed on July 15, 2004 (Filed No.
        333-117213).

    (13)Incorporated   by  reference   from  Exhibit   10.10  to  the  Company's
        Registration  Statement  on Form F-1,  filed on July 15, 2004 (Filed No.
        333-117213).

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

    (15)Incorporated   by  reference   from   Exhibit  10.2  to  the   Company's
        Registration  Statement  on Form F-1,  filed on November 12, 2004 (Filed
        No. 333-119806).

    (16)Incorporated   by  reference   from   Exhibit  10.3  to  the   Company's
        Registration  Statement  on Form F-1,  filed on November 12, 2004 (Filed
        No. 333-119806).

    (17)Incorporated   by  reference   from   Exhibit  10.4  to  the   Company's
        Registration  Statement  on Form F-1,  filed on November 12, 2004 (Filed
        No. 333-119806).

    (18)Incorporated   by  reference   from   Exhibit  10.5  to  the   Company's
        Registration  Statement  on Form F-1,  filed on November 12, 2004 (Filed
        No. 333-119806).


<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

Date: June 28, 2005

23116.0001 #582823