Top Ships Inc.
Kurta Law is investigating broker recommendations of Top Ships Inc. (NASDAQ: TOPS). These investments were high-risk and may have been unsuitable for many investors. Unsuitable investments violate FINRA Rule 2111, which requires brokers to consider their investor’s risk tolerance. Regulation Best Interest also requires brokers to exercise reasonable care and skill when they make recommendations.
If a broker recommended unsuitable investments to you, you may have a case for a securities lawyer. Call (877) 600-0098 or email info@kurtalawfir.com for a free case evaluation.
About Top Ships
According to the prospectus, Top Ships Inc. provides international seaborne transportation services, carrying petroleum products for the oil industry.
The Offering
The prospectus dated June 6, 2014, announced that Top Ships Inc. would be offering 10,000,000 common shares and warrants to purchase 5,000,000 common shares.
Risks Associated with Top Ships Inc.
The following risks are identified in the prospectus. These are only the risks that Kurta Law has chosen to highlight. Please see the prospectus for the complete list.
No Revenue
The prospectus states, “We will not generate any revenues until we take delivery of our new building vessels under construction or identify and acquire other vessels.” However, the prospectus states that Top Ships Inc. would continue to make payments related to it vessels, thus incurring losses.
New Building Projects Subject to Delays
Top Ships Inc. was the subject of ship-building contracts at the time of the prospectus. Construction projects are subject to risks, including equipment shortages, equipment failures, and financial or operating difficulties, among other uncertainties.
Market Conditions
Market conditions may force Top Ships Inc. to sell their vessels at a loss. According to the prospectus, “Since the summer of 2008, vessel values in the tanker industry have been very volatile.”
Future Debt
The prospectus disclosed that Top Ships Inc. intended to incur secured indebtedness. This would increase Top Ships Inc.’s vulnerability to general economic downturns, among other risks.
Limited Number of Customers
Tops Ships Inc. expected to be dependent on a limited number of customers for a large part of their revenue. Failure of those parties to meet their obligations could negatively impact the business’s cash flow.
Greenhouse Gas Regulatory Restrictions
Concerns over climate change have led certain countries to adopt regulatory frameworks designed to reduce greenhouse gas emissions. Growing public concern about the environmental impact of climate change could reduce the demand for Top Ships Inc.’s services.
Aegis Capital Corp. Underwriting
Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.
Kurta Law Can Help
Contact Kurta Law today for a free case evaluation – keep in mind that you have a limited time to file a claim. Our attorneys do not collect a fee unless we win your case. If you have any questions, call (877) 600-0098 or email info@kurtalawfirm.com.