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Article by DailyStocks_admin    (09-10-08 03:49 AM)

Filed with the SEC from Aug 28 to Sep 03:

Seanergy Maritime (SRG)
VF Investments reported owning 2,063,300 SRG shares (7.2%), bought at $10 apiece on Aug. 20.

BUSINESS OVERVIEW

Overview

We are a Business Combination Company tm , or BCC tm incorporated in the Marshall Islands on August 15, 2006, originally under the name Seanergy Maritime Acquisition Corp. We were formed to acquire, through a merger, capital stock exchange, asset acquisition or other similar business combination, one or more businesses in the maritime shipping industry or related industries. The Company changed its name to Seanergy Maritime Corp. on February 20, 2007.

On September 28, 2007, we consummated our initial public offering of 23,100,000 units, which includes 1,100,000 units partially exercised as part of the underwriters’ over-allotment option with each unit consisting of one share of our common stock and one warrant. Each warrant entitles the holder to purchase one share of our common stock at an exercise price of $6.50 per share. The units sold in our initial public offering were sold at an offering price of $10.00 per unit, generating gross proceeds of $231,000,000, or 100% of the proceeds of offering, including $5,362,500 of contingent underwriting compensation which will be paid to Maxim if a business combination is consummated, but which will be forfeited in part if the public shareholders elect to have their shares redeemed for cash and in full if a business combination is not consummated, was placed in a trust account at Deutsche Bank Trust Company Americas maintained by Continental Stock Transfer & Trust Company, New York, New York, as trustee, and invested until the earlier of (i) the consummation of our first business combination or (ii) our liquidation. In the event that the over-allotment option was to have been exercised in full, the first quarterly interest distribution to the public shareholders following the closing of the over-allotment was to have been reduced by up to $742,500 to permit the Company to draw from the interest earned on the proceeds in the Trust Account up to an aggregate of $742,500 to replace up to $742,500 of the costs and expenses incurred and paid in connection with the exercise of the over-allotment option, in order to ensure that at all times there is a minimum of $10.00 per unit held in the Trust Account. As of September 28, 2007, one-third of the over-allotment option had been exercised; accordingly, as of September 28, 2007, the Company is only permitted to draw one-third of the $742,500, or $247,500, from the interest earned on the proceeds in the Trust Account. The Company withdrew $247,500 from the interest earned on the proceeds in the Trust Account on January 18, 2008. The expenses that the Company may incur prior to consummation of a business combination may only be paid from the net proceeds of the private placement and the offering not held in the Trust Account, which will initially be $3,000,000, subject to the Company’s ability to draw down an aggregate of up to an additional $495,000 of interest earned on the Trust Account as described above.

The maritime shipping industry provides a practical and cost-effective means of transporting large volumes of cargoes. This is accomplished predominantly by the dry bulk and tanker sectors, while other related sectors tend to be specialized. The dry bulk sector involves the transportation of dry bulk and general cargoes, including, among other products, coal, minerals, ore, steel products, forest products, agricultural products, construction materials and heavy equipment, machinery and spare parts via dry bulk cargo vessels. The tanker sector involves the transportation of wet products such as crude oil, refined petroleum cargoes and liquid chemicals via different types of tankers. Related sectors comprise, but are not limited to, the operation of vessels such as containerships, feeder vessels, liquefied gas carriers, offshore supply and anchor-handling vessels or other specialized carriers.

We may seek to acquire vessels, a company that has entered into agreements to purchase individual vessels that were not yet owned by such target company (in such a case, our shareholders would only vote on the proposed business combination with such target company, and not on the individual agreements the target company entered into), a company with a fleet of vessels, a number of such companies as a group, or an entity, which provides commercial management, operational and technical management or other services to one or more segments of the shipping industry, including port, storage and terminal operation.

We believe that acquisition or investment in more than one sector of the shipping industry may provide a hedge against cyclical risks associated with a company that only owns vessels. A target company might be a holding company, the sole assets of which are one or more agreements to acquire individual vessels or other assets. If a company we acquire is a holding company, rather than an operating company, we will need to retain current management, seek to retain new management or outsource the commercial and technical management of the vessels by contracting with a shipping company engaged in this business. Prices for individual vessels vary widely depending on the type, quality, age and discounted future earnings.

While we intend to focus on potential acquisition targets in the maritime shipping industry, we may also pursue opportunities in other industries. If an attractive acquisition opportunity is identified in another industry prior to the time we identify an acquisition opportunity in the maritime shipping industry, we may pursue such other opportunity. There is no time or date certain or monetary milestone associated with when we may begin looking for acquisition opportunities outside of the maritime shipping industry.

On January 4, 2008, we formed a new subsidiary under the laws of the Marshall Islands named Seanergy Merger Corp.

Dry Bulk Sector Overview

Dry bulk vessels are used to transport commodities such as iron ore, minerals, grains, forest products, fertilizers, coking and steam coal. The dry bulk sector can be divided into four major vessel categories with reference to size. We may explore acquisitions of either one or more vessels and/or operating companies that are focused on these segments of the dry bulk sector, including:


• Capesize and Post Panamax. The largest of the dry bulk carrier vessels, with typical cargo capacity over 80,000 dead weight tons, or dwt. Capesize vessels are used primarily for one-way voyages with cargoes consisting of iron ore and coal. Due to the size of the vessels, there are only a few ports around the world that have the infrastructure to accommodate them. Capesize vessels cannot traverse through the Panama Canal due to their size.

• Panamax. The second largest of the dry bulk vessels, with cargo capacity typically between 60,000 and 80,000 dwt. Panamax vessels are used for various long distance trade routes, including those that traverse through the Panama Canal. These vessels typically carry cargoes consisting of coal, grains, fertilizers, steel and forest products.

• Handymax. Versatile vessels that are dispersed in various geographic locations throughout the world. Handymax vessels typically have cargo capacity of 35,000 to 60,000 dwt, and are primarily used to transport grains, forest products and fertilizers. These vessels are equipped with onboard cranes which allow for the loading and unloading of cargo.

• Handysize. The smallest of the dry bulk carrier vessels with cargo capacity up to 35,000 dwt. These vessels are used mainly for regional voyages, are extremely versatile and can be used in smaller ports that lack infrastructure. Like Handymax vessels, Handysize vessels are also equipped with onboard cranes.

Prices for individual vessels vary widely depending on the type, quality, age and discounted future earnings.

Tanker Sector Overview

The world tanker fleet is divided into two primary categories, crude oil and product tankers. Tanker charterers of wet cargoes will typically charter the appropriate sized tanker based on the length of journey, cargo size and port and canal restrictions. Crude oil tankers are typically larger than product tankers. The four major tanker categories with reference to size are:


• Very Large Crude Carriers, or VLCCs. Tanker vessels that are used to transport crude oil with cargo capacity typically 200,000 to 320,000 dwt that are more than 300 meters in length. VLCCs are highly automated and their advanced computer systems allow for a minimal crew. The majority of the world’s crude oil is transported via VLCCs.

• Suezmax. Tanker vessels with cargo capacity typically 120,000 to 200,000 dwt. These vessels are used in some of the fastest growing oil producing regions of the world, including oil emanating from the Caspian Sea and West Africa. Suezmax tankers are the largest ships able to transit the Suez Canal with a full payload and are capable of both long and short haul voyages.

• Aframax. Tanker vessels with cargo capacity typically 80,000 to 120,000 dwt. These tankers carry crude oil and serve various trade routes from short to medium distances mainly in the North Sea and Venezuela. These vessels are able to enter a larger number of ports throughout the world as compare to the larger crude oil tankers.

• Product. Tanker vessels with cargo capacity typically less than 60,000 dwt. Product tankers are capable of carrying refined petroleum products, such as fuel oils, gasoline and jet fuel, as well as various edible oils, such as vegetable and palm oil. Chemicals, including ethanol and biofuels are carried in the smaller sizes of these vessels.

Prices for individual vessels vary widely depending on the type, quality, age and discounted future earnings.

Container Sector Overview

Container vessels transport finished goods that are shipped in large containers and sized according to the number of containers that they can carry and whether the vessels can traverse the Panama Canal. We may explore acquisitions of vessels and/or operating companies that operate container vessels that can ship products regionally and/or globally. We intend to seek opportunities in feeder vessels, which are ships that cater to the needs of larger container vessels and liner services’ main hubs and service smaller ports and volumes where larger container vessels cannot enter due to port restrictions, as well as economical reasons and/or the absence of infrastructure.

There is a general increase in the number and capacity of the larger container vessels. However, there is not a corresponding increase in the number of feeder vessels (smaller container ships) that service the larger Container Vessel and Liner Services. Because of this, we believe the demand for feeder vessels will increase, if only to service the larger container vessels now on order by the large operators.

Between January 2000 and January 2006, the TEU capacity deployed by the liner trades has increased by 77.4% according to the BRS Alpha Liner Service, which is attributed to Liner Companies increasing capacity with larger vessels. We believe the demand for feeders will rise since the operators will require more feeders to support the larger vessels and to service destinations with limited port infrastructure and small volumes.

Furthermore, the availability of ships for charter indicate that a shortage of ships of 800-1200 TEU, noticeably the ones with heavy gear, is projected. Demand is high for this size and range of vessels and several regional services have been launched, and are now being launched in Asia and the West Coast of the Americas for such type of ships. We believe such new services will continue to increase the demand for feeders in the traditionally strong Mediterranean and South-East Asia routes, including the Inter-China feeder business, which already absorbs a large number of feeder vessels. This assessment is further supported by the fact that a considerable number of multi-purpose vessels of the same size, which usually service non-containerized cargo, are now deployed in the container sector.

Specialized Carriers

We might seek a business combination with a company with agreements to purchase timber carriers or a fleet of timber carriers with the highest ice class features for trading with forest products. Certain forest products can be processed to produce biofuels, which are becoming extremely popular in Northern Europe as an alternative to gas and oil produced energy sources.

Climate change is potentially the greatest and most important environmental challenge of our time. There is a growing consensus among climate researchers that the emissions of greenhouse gases need to be reduced in an effort to protect the earth’s climate system.

Biofuel is any fuel that derives from biomass, recently living organisms, or their metabolic by-products. It is a renewable source of energy which unlike fossil fuels, limits the amount of carbon dioxide released into the atmosphere. Governments are therefore eager to use Biofuel to replace non-renewable sources of energy. For example, according to an E.U. Energy Tax Directive, biofuels should amount to 5.75 percent of petrol and diesel by the year 2010, and Sweden has set its target even higher by adopting a policy by which Sweden is to be the first country which will be 100 percent non-dependant on fuel oil by the year 2020.

Agricultural products are also specifically grown for use as biofuels. Waste from industry, agriculture, forestry, including straw, lumber, manure, sewage and garbage can all be used for the production of bioenergy. Furthermore, research into more efficient methods of converting biofuels and other fuels into electricity utilizing fuel cells is now a field of high activity.

The demand for biofuel has in turn developed an upsurge in the requirement for transportation of woodchips and residues from the forest product plants to energy producing plants. This is further emphasized by the increased need for transportation of residues from forest industry plants world-wide and the need of sophisticated, ice classed tonnage able to meet the needs of the growing industry.

We may also consider supply vessels, service vessels and anchor handlers that perform various functions related to the supply and maintenance of offshore oil rigs. Additionally, we will also be looking at multipurpose vessels with heavy gear capacity to service containers and specialty cargoes such as for shipyards, oil refineries, modification requirements and the full range of steel products.

Port, Storage and Terminal Operation

We may also seek to acquire service businesses engaged in, among other activities, the development of the infrastructure of ports and specialized private berths, ware-housing and logistic services and regulatory matters, including compliance with customs formalities.

We believe that the rapidly growing markets in China and other countries in the Far East and Asia, such as Vietnam, the Philippines, Indonesia, Cambodia and India require investment in ports’ and facilities’ infrastructure with a high degree of specialization and sophistication. New ports and terminals are being developed in an effort to keep pace with the ongoing trade growth and in this respect local governmental agencies and municipal authorities are seeking foreign investments and fresh injection of capital and know-how.

The Management Sector

Other related sectors include operational management, brokerage, maintenance and technical support. A service business we may seek to acquire would typically be engaged in:


• Commercial management services, such as finding employment for vessels, vessel acquisition and disposition, freight and charter hire collection, accounts control, appointment of agents, bunkering and cargo claims handling and settlements;

• Technical management services, such as crew retention and training, maintenance, repair, capital expenditures, drydocking, payment of vessel tonnage tax, maintaining insurance and other vessel operating activities; or

• Port, storage and terminal operation management services.

Experience of Management

Certain of our officers and directors have significant experience in the maritime shipping industry, including management, financing, acquisition, and operation of multi-purpose and tanker vessels and bulk carriers. Panagiotis Zafet, our Chief Executive Officer and Co-Chairman of the Board and Simon Zafet, our Chief Operating Officer and a director, are owners and officers of Balthellas Chartering S.A., Hellasco Shipping Ltd., and Hellasco Transport Ltd., each of which is involved in the shipping or related industries. Each of Panagiotis Zafet and Simon Zafet has significant experience in the purchase, sale and chartering of vessels and in management and operations of maritime shipping companies. Additionally, Roland Beberniss, one of our directors, is the founder and managing director of RBB Shipping GmbH, a private shipping company. Mr. Beberniss has extensive experience in maritime shipping acquisitions and operations.

While we intend to focus on potential acquisition targets in the maritime shipping industry, we may also pursue opportunities in other industries. In addition to their experience in the maritime shipping industry, certain of our executive officers and directors have considerable experience in other sectors, such as general transportation, consumer goods and retail and commercial real estate. Set forth below are descriptions of types of business transactions and activities that certain of our officers and directors have been involved in within the general transportation, consumer goods and commercial real estate industries that we believe reflects their business experience in areas other than the maritime shipping industry.


• Mr. Koutsolioutsos is the Vice President and an executive member of the Board of Directors of Folli Follie S.A., a retail company with over 280 points of sale in over 20 countries with a market capitalization on the Athens Stock Exchange of over €1 billion. Mr. Koutsolioutsos is involved in all aspects of Folli Follie’s real estate interests, including assisting in the determination of where to open retail locations and the negotiation of its leases for its retail locations.

• Messrs. Koutsolioutsos, Tsigkounakis and Culucundis are each directors of Hellenic Duty Free Shops S.A., one of the top 15 duty-free operators worldwide with market capitalization of approximately $1 billion, which operates 82 retail stores in Greece.

• Mr. Beberniss was the manager of Enso Nord, a subsidiary of Stora Enso, a company listed on the New York Stock Exchange with a market capitalization of $14 billion. Enso Nord provided for the world-wide transportation of raw materials for paper mills.

Certain of our officers and directors have also engaged in a number of transactions that provided them with the necessary experience to locate a suitable target business, negotiate the terms of the transaction and consummate the business combination and are transactions that, although may not in certain cases be within the intended industry of a business combination target, do represent the size and complexity of a potential business combination transaction.

Also, descriptions set forth below are intended to reflect types of transactions requiring business skills and experience that we believe would be applicable in the context of a business combination in any industry.


• Mr. Koutsolioutsos led the team that identified, negotiated, performed due diligence and eventually acquired Hellenic Duty Free S.A. in 1999. The total transaction cost was $540 million.

• Mr. Koutsolioutsos led the team that identified, negotiated, performed due diligence and eventually acquired Links of London in 2006. The total transaction cost was $81 million.

• Mr. Panagiotis Zafet located, performed due diligence and acquired eighteen vessels between 1996 and 2006 for Balthellas Chartering S.A., with an approximate average value for each vessel of $13 million. Mr. Zafet was more specifically involved with the acquisition of a fleet of three vessels in 2000 with a purchase price of $16 million and has also been involved in a series of transactions consisting of the purchase of two vessels with the purchase price ranging at the time of purchase between $7 and $10 million. Taking into account the appreciation of the market value of vessels since such acquisitions, management believes that such fleets would have a current market value of $40 million for the fleet of 3 vessels and be in the range of $10 million and $25 million for each of the purchases of two vessels. Balthellas Chartering S.A. currently owns a fleet of vessels having a market value of $82 million. Although Mr. Zafet has had experience identifying, negotiating and purchasing more than one vessel at one time, he has not had direct experience in purchasing a fleet of the size contemplated by the initial public offering.

• Mr. Culucundis, in positions from Technical Director to Chief Executive Officer located, performed due diligence and acquired 40 vessels between 1981 and 1995 for Kassos Maritime Enterprises Ltd., with an approximate average value for each vessel of €6 million. Specifically, Mr. Culucundis has been involved with transactions involving the acquisition of fleets of vessels. In 1988 in two such transactions, a fleet of 4 and a fleet of 3 bulk carriers were acquired with total acquisition costs of $60 million and $45 million, respectively. Taking into account the appreciation of the market value of vessels since such acquisitions, management believes that based on today’s market, such fleets would have a current market value of $152 million and $90 million, respectively. In addition, in 1999, Mr. Culucundis was involved in the acquisition of a fleet of four vessels with an acquisition cost $60 million. Based on today’s market, management believes that such fleet would have a market value of $160 million.

• Mr. Tsigkounakis was co-leading counsel in the negotiation and structuring of the $140 million controlling interest in Proton Bank of Greece by IRF European Finance Investments Ltd. in May 2006. Mr. Tsigkounakis was also lead counsel in the negotiation and structuring of a $280 million bond loan to Folli Follie S.A. in June 2006.

The above-described experience of our officers and directors is not a full and complete list of all transactions that they have been involved with. They also have been involved in other transactions of lesser size and complexity, and, therefore there can be no assurance that management’s previous involvement in such representative large and complex transaction will be indicative of the consummation of a business combination or our future success of the company.

MANAGEMENT DISCUSSION FROM LATEST 10K

and accounting fees relating to our SEC reporting obligations; $700,000 for due diligence, identification and research of prospective target business and reimbursement of out of pocket due diligence expenses to management; $150,000 for director and officer liability insurance premiums; and $630,000 for expenses incurred in connection with quarterly interest distributions to our public stockholders and related administrative and professional costs in connection with election to be classified as a partnership for United States Federal income tax purposes.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Contractual Obligations.

We do not have any long term debt, capital lease obligations, operating lease obligations, purchase obligations or other long term liabilities.

Forward Looking Statements.

This Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission filings. The following discussion should be read in conjunction with our Financial Statements and related Notes thereto included elsewhere in this report.

MANAGEMENT DISCUSSION FOR LATEST QUARTER

Results of Operations
Three Months ended March 31, 2008
We had a net income of $1,095,219 for the three-month period ended March 31, 2008. The net income consisted of interest income of $1,554,982, which was offset by $459,763 of operating expenses.
Until we enter into a business combination, we will not generate operating revenues.
For the three months ended March 31, 2008, we incurred operating expenses of $459,763, which consisted of consulting and professional fees of $395,950, rent and office services expense of $22,500, insurance expense of $22,500, investor relations expense of $13,018, and other operating costs of $8,971, which is offset by a foreign exchange adjustment of $3,176.

Liquidity and Capital Resources
On September 28, 2007, and prior to the consummation of the Public Offering described above, all of the Company’s executive officers purchased from the Company an aggregate of 16,016,667 warrants at $0.90 per warrant in a Private Placement. On September 28, 2007, we consummated our initial public offering of 23,100,000 units, which included 1,100,000 units exercised as part of the underwriters’ over-allotment option. Each unit in the private placement and the public offering consists of one share of common stock and one redeemable common stock purchase warrant. Each warrant entitles the holder to purchase from us one share of our common stock at an exercise price of $6.50.
On September 28, 2007, the closing date of our public offering, $231,000,000, or 100% of the proceeds of the Public Offering, including $5,362,500 of contingent underwriting compensation which will be paid to Maxim if a business combination is consummated, but which will be forfeited in part if the public shareholders elect to have their shares redeemed for cash and in full if a business combination is not consummated, was placed in the Trust Account at Deutsche Bank Trust Company maintained by Continental Stock Transfer & Trust Company, New York, New York, as trustee. The funds in the Trust Account will be invested until the earlier of (i) the consummation of the Company’s first business combination or (ii) the liquidation of the Trust Account as part of a plan of dissolution and liquidation approved by the Company’s stockholders.
The Company will use substantially all of the net proceeds of this offering to acquire a target business, including identifying and evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating the business combination. To the extent that our capital stock is used in whole or in part as consideration to effect a business combination, the proceeds held in the Trust Account, as well as any other net proceeds not expended, will be used to finance the operations of the target business. In the event that the over-allotment option was to have been exercised in full, the first quarterly interest distribution to the public shareholders following the closing of the over-allotment was to have been reduced by up to $742,500 to permit the Company to draw from the interest earned on the proceeds in the Trust Account up to an aggregate of $742,500 to replace up to $742,500 of the costs and expenses incurred and paid in connection with the exercise of the over-allotment option, in order to ensure that at all times there is a minimum of $10.00 per unit held in the Trust Account. As of September 28, 2007, one-third of the over-allotment option had been exercised; accordingly, as of September 28, 2007, the Company is only permitted to draw one-third of the $742,500, or $247,500, from the interest earned on the proceeds in the Trust Account. The Company withdrew $247,500 from the interest earned on the proceeds in the Trust Account on January 18, 2008. The expenses that the Company may incur prior to consummation of a business combination may only be paid from the net proceeds of the Public Offering and the Private Placement not held in the Trust Account, which will initially be $3,000,000, subject to the Company’s ability to draw down an aggregate of up to an additional $495,000 of interest earned on the Trust Account as described above. We believe that the working capital available to us, in addition to the funds available to us outside of the trust account will be sufficient to allow us to operate for at least the next 24 months, assuming that a business combination is not consummated during that time. Over this time, we have estimated that the $3,000,000 shall be allocated approximately as follows: $670,000 for working capital and reserves (including finders’ fees, consulting fees or other similar compensation, potential deposits, down payments, franchise taxes or funding of a “no-shop” provision with respect to a particular business combination and the costs of dissolution, if any); $7,500 per month in connection with a consulting agreement we entered into on September 28, 2007; $600,000 for legal, accounting and other expenses attendant to the structuring and negotiation of a business combination; $70,000 with respect to legal and accounting fees relating to our SEC reporting obligations; $700,000 for due diligence, identification and research of prospective target business and reimbursement of out of pocket due diligence expenses to management; $150,000 for director and officer liability insurance premiums; and $630,000 for expenses incurred in connection with quarterly interest distributions to our public stockholders and related administrative and professional costs in connection with election to be classified as a partnership for United States Federal income tax purposes.

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