Debt:

a. Long-term debt

ABN Facility

July 9, 2015,

the Company entered into a credit facility with ABN Amro Bank of Holland (“the ABN facility”) for the financing of the vessels M/T Eco Fleet and M/T Stenaweco Evolution.

The Company drew down

$21,000

under the ABN facility on

July 13, 2015

to finance the last shipyard installment of M/T Eco Fleet and another

$1,200

September 30,

2015.Furthermore,

the Company drew down

$22,200

under the ABN facility on

January 15, 2016

to finance the last shipyard installment of M/T Eco Revolution. Finally, the Company drew down

$20,000

under the ABN facility on

August 5, 2016

to finance the last shipyard installment of M/T Nord Valiant (“Tranche C” part of the facility).

April 21, 2017,

the Company was informed by ABN Amro that the Company was in breach of a loan covenant that requires that any member of the family of Mr. Evangelos Pistiolis maintain an ownership interest (either directly and/or indirectly through companies beneficially owned by any member of the Pistiolis family and/or trusts or foundations of which any member of the Pistiolis family are beneficiaries) of

30%

of the Company's outstanding common shares. ABN Amro requested that either the family of Mr. Evangelos Pistiolis maintain an ownership interest of at least

30%

of the outstanding common shares or maintain a voting rights interest of above

50%

in the Company. In order to regain compliance with the loan covenant, the Company issued the Series D preferred shares (see Note

). On

July 28, 2017

ABN Amro by way of a supplemental agreement removed the loan covenant that required that any member of the family of Mr. Evangelos Pistiolis maintains an ownership interest of

30%

of the Company’s issued and outstanding common shares and replaced it with a covenant that states that

other party other than a member of the family of Mr. Evangelos Pistiolis (either directly and/or indirectly through companies beneficially owned by any member of the Pistiolis family and/or trusts or foundations of which any member of the Pistiolis family are beneficiaries) acquires a voting interest of more than

50%

of the Company’s share capital, without ABN Amro’s prior written approval.

As at

June 30, 2017,

the outstanding balance of the ABN facility is

$56,700.

The ABN facility bears interest at LIBOR plus a margin of

3.90%,

except for the Tranche C part of the facility that bears interest at LIBOR plus a margin of

3.75%.

The applicable

three

-month LIBOR as of

June 30, 2017

was

1.30%.

NORD/LB Facility

May 11, 2016,

the Company entered into a credit facility with Norddeutsche Landesbank Girozentrale Bank of Germany for

$23,185

(“the NORD/LB facility”) for the financing of the vessel M/T Stenaweco Excellence.

The Company drew down

$23,185

under the NORD/LB facility on

May 13, 2016

to finance the last shipyard installment of the M/T Stenaweco Excellence.

May 16, 2017

NORD/LB by way of a supplemental agreement provided a waiver until

December 31, 2017

for the breach of the loan covenant that requires that any member of the family of Mr. Evangelos Pistiolis maintains an ownership interest (either directly and/or indirectly through companies beneficially owned by any member of the Pistiolis family and/or trusts or foundations of which any member of the Pistiolis family are beneficiaries) of

20%

of the Company’s issued and outstanding common shares. In addition NORD/LB agreed to reduce the abovementioned minimum percentage to

10%.

As at

June 30, 2017,

the outstanding balance of the NORD/LB facility is

$21,139.

The NORD/LB facility bears interest at LIBOR plus a margin of

3.43%.

The applicable

three

-month LIBOR as of

June 30, 2017

was

1.30%.

Alpha Bank Facility

July 20, 2016,

Eco Seven that was later acquired by the Company entered into a credit facility with Alpha Bank of Greece for

$23,350

(“the Alpha facility”) for the financing of the vessel M/T Stenaweco Elegance. The credit facility is repayable in

consecutive quarterly installments of

$400

and

consecutive quarterly installments of

$303,

commencing in

May 2017,

plus a balloon installment of

$12,500

payable together with the last installment in

February 2025.

The Company drew down

$23,350

under the Alpha facility on

February 24, 2017

to finance the last shipyard installment of the M/T Stenaweco Elegance.

The facility contains various covenants, including an asset cover ratio of

125%

as well as restrictions on the shipowning company incurring further indebtedness or guarantees. It also restricts the shipowning company from paying dividends if such a payment would result in an event of default or in a breach of covenants under the loan agreement.

The facility is secured as follows:

•	First priority mortgage over M/T Stenaweco Elegance;
•	Assignment of insurance and earnings of the mortgaged vessel;
•	Specific assignment of any time charters with duration of more than 12 months;
•	Corporate guarantee of Top Ships Inc.;
•	Pledge of the shares of the shipowning subsidiary;
•	Pledge over the earnings account of the vessel.

As at

June 30, 2017,

the outstanding balance of the Alpha facility is

$22,950.

The Alpha facility bears interest at LIBOR plus a margin of

3.50%.

The applicable

three

-month LIBOR as of

June 30, 2017

was

1.30%.

b. Short-term debt

Series C preferred convertible shares

February 17, 2017,

the Company completed a private placement of

7,500

Series C convertible preferred shares (the “Series C shares”) for an aggregate principal amount of

$7,500

with Xanthe Holdings Ltd (“Xanthe”) a non-U.S. institutional investor, non-affiliated with the Company but affiliated with Kalani (see Note

). The Company has accounted for the sale of the Series C shares as a debt issuance since its characteristics are more akin to debt rather than equity and dividends of the Series C shares were accounted as interest. Pursuant to the issuance of the Series C Shares, the Company recognized the beneficial conversion feature (“BCF”) by allocating the intrinsic value of the conversion option, which is the number of shares of common stock available upon conversion multiplied by the difference between the effective conversion price per share and the fair value of the Company's common stock per share on the commitment date, to additional paid-in capital. Since the intrinsic value of the BCF at the commitment date was greater than the proceeds allocated to the convertible instrument, the amount of the discount assigned to the BCF was limited to the amount of the proceeds allocated to the convertible instrument. The Company has initially recognized

$7,500

of debt discount and has amortized

$2,907

in the

six

months ended

June 30, 2017,

included in Interest and finance costs in the accompanying Statement of comprehensive income/(loss). As of

June 30, 2017

the remaining debt discount related to the issuance of Series C shares is

$4,593.

In the

six

months ended

June 30, 2017

the Company has made the following repayments (conversions of Series C Shares into common stock):

Series C shares conversions into common stock (accounted for as repayments)	Amounts
June 27, 2017		550
June 29, 2017		1,517
June 30, 2017		748
Amount outstanding under the Series C shares		4,685

As of

June 30, 2017

the Series C outstanding balance amounts to

$4,685,

excluding deferred finance fees of

$92

and debt discounts of

$4,593,

and is included in Short-term debt.

Unsecured Notes

From

February 6

June 26, 2017

the Company entered into a series of unsecured short term notes (the “Notes”) with Kalani and Xanthe as follows:

Agreement date	Amount drawn		Fees		Interest		Amount settled			Amounts forgiven			Outstanding Amount		Maturity	Counterparty
February 6, 2017		3,500		210		22		(3,500	)		-			-	May 15, 2017	Kalani
March 22, 2017		5,000		200		7		(5,000	)		-			-	October 7, 2017	Kalani
March 28, 2017		10,000		-		24		(10,000	)		-			-	August 25, 2017	Kalani
April 5, 2017		7,700		-		42		(7,700	)		-			-	September 4, 2017	Kalani
May 15, 2017		5,000		-		28		(3,106	)		(1,118	)		776	August 23, 2017	Xanthe
June 26, 2017		3,000		-		2		-			-			3,000	October 24, 2017	Kalani
		34,200		410		125		(29,306	)		(1,118	)		3,776

As of

June 30, 2017

the Notes outstanding balance amounts to

$3,776

and is included in Short-term debt.

The proceeds from the sales of the Notes were used for vessel acquisitions. The Notes bear interest at a rate of

and carry customary covenants and restrictions, including the covenant that all net proceeds that the Company receives from the sale of any equity securities of the Company shall be utilized exclusively to repay any outstanding amounts under the Notes until the Notes are repaid in full. The Notes also restrict the Company from redeeming, repurchasing or declaring any cash dividend or distribution on any of its capital stock (other than any obligations to do so outstanding as of the issuance dates of the Notes), as long as there are outstanding amounts under the Notes.

c. Long-term debt from related parties

Amended Family Trading Credit Facility

December 23, 2015,

the Company entered into an unsecured revolving credit facility with Family Trading ("the Family Trading facility"), a related party owned by the Lax Trust, for up to

$15,000

to be used to fund the Company's newbuilding program and working capital relating to the Company's operating vessels. This facility was repayable in cash

later than

December 31, 2016,

but the Company had the option to extend the facility's repayment up to

December 31, 2017.

December 28, 2016

the maturity of the Family Trading facility was extended to

January 31, 2017

and on

January 27, 2017

the maturity of the Family Trading loan was extended to

February 28, 2017

with all terms remaining the same.

February 21, 2017,

the Company amended and restated the Family Trading Credit Facility (the "Amended Family Trading Credit Facility") in order to, among other things, remove any limitation in the use of funds drawn down under the facility, reduce the mandatory cash payment due under the facility when the Company raises capital through the issuance of certain securities, remove the revolving feature of the facility, and extend the facility for up to

three

years. Additionally, the interest rate of the facility increased to

10%

(from

) and the commitment fee decreased to

2.5%

(from

). Further, under the terms of the Amended Family Trading Credit Facility, if the Company raises capital via the issuance of warrants, debt or equity, it is obliged to repay any amounts due under the Amended Family Trading Credit Facility and any accrued interest and fees up to the time of the issuance in cash or in Common Shares at Family Trading's option. Family Trading retains the right to delay this mandatory repayment at its absolute discretion. For the

first

six

months after the execution of the facility,

more than

$3,500

can be mandatorily prepaid in cash. Subject to certain adjustments pursuant to the terms of the Amended Family Trading Credit Facility, the number of common shares to be issued as repayment of the amounts outstanding under the facility will be calculated by dividing the amount redeemed by

80%

of the lowest daily Volume-Weighted Average Price (“VWAP”) of the Company’s common shares on the Nasdaq Capital Market during the

twenty

consecutive trading days ending on the trading day prior to the payment date (the "Applicable Price"), provided, however, that at

time shall the Applicable Price be lower than

$0.60

per common share (the "Floor Price").

Further, in the case where the Company raises capital (whether publicly or privately) and the Applicable Price is higher than the lowest of (henceforth the "Issuance Price"):

the price per share issued upon an equity offering of the Company;

the exercise price of warrants or options for common shares;

the conversion price of any convertible security into common shares; or

the implied exchange price of the common shares pursuant to an asset to equity or liability to equity swap,

, then the Applicable Price will be reduced to the Issuance Price. Finally, in case the Applicable Price is higher than the exercise price of the Company’s warrants, the Applicable Price will be reduced to the exercise price of such outstanding warrants.

As of

June 30, 2017,

the outstanding amount under the Amended Family Trading Credit Facility is

$2,958,

excluding deferred finance fees of

$511,

and is included in Non-current portion of debt from related parties. The commitment fees payable and interest payable are

$40

and

$23

respectively. Upon conversion of the principal, interest and fees outstanding as of

June 30, 2017

at the Floor Price, Family Trading would receive

5,034,161

common shares.

During the

six

months ended

June 30, 2017

the Company drew down and repaid the following amounts:

Date	Amount drawn / (repaid)
January 2017		(995	)
February 2017		(3,036	)
May 2017		(54	)
June 2017		2,958
Total		(1,127	)

The Company during the

six

months ended

June 30, 2017

issued

2,590

common shares as payment for

$1,198

of accrued fees and interest under the Amended Family Trading Credit Facility, that resulted in additional non-cash debt conversion expenses amounting to

$842,

included in Interest and finance costs in the accompanying Statement of comprehensive income/(loss).