Mail Stop 3561
September 1, 2005
George D. Gourdomichalis, President
FreeSeas, Inc.
93 Akti Miaouli
Piraeus, Greece
011-30-210-4528-770
RE: FreeSeas, Inc.
Registration Statement on Form F-1
Amendment Filed: July 22, 2005
File No. 333-124825
Dear Mr. Gourdomichalis:
We have reviewed your amended filing and have the following
comments. Where indicated, we think you should revise your
document
in response to these comments. If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary. Please be as detailed as necessary in your
explanation. In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure. After reviewing this information, we may or may not
raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
General
1. We reissue our prior comment 1. Please update all disclosures
to
the latest practical date to include your most recent financial
information and fill in all blank spaces. Use brackets to
indicate
information that is subject to change prior to effectiveness.
2. We note the significant number of shares being registered for
resale on behalf of Messrs. Varouxakis, G. Gourdomichalis, E.
Gourdamichals, Burstein, Scibelli, Buckel, and Kesten.
Collectively,
the amount of shares that you seek to register on behalf of these
officers, directors, and/or affiliates represents approximately
26%
of the company`s shares that will be outstanding immediately after
the Merger. Given the significant level of resales by these
individuals, we are of the view that the offering by these
individuals is an offering by or on behalf of the registrant.
Rule
415(c) of Regulation C requires that offerings by or on behalf of
the
company may only be conducted at the market if they meet the
requirements of Rule 415(a)(4) of Regulation C. Since your
offering
does not appear to satisfy those provisions, an "at the market"
offering by affiliates is not permissible. Please revise the
terms
of your offering to provide that all offer and sales will be made
at
a disclosed fixed price for the duration of the offering and that
the
selling shareholders will be identified as underwriters.
3. We note your revisions and response to our prior comment 3.
Expand the disclosure relating to the relationship of V Capital
and G
Bros to the proposed merger. Since these entities are parties to
the
merger agreement, please discuss their roles in the transaction
and
provide the background that is necessary to gain a complete
understanding of the terms of the merger. In this regard, we are
not
seeking disclosure relating to the merger consideration but,
rather,
a more complete discussion of the purpose of the involvement, both
historical and current, of V Capital, G Bros, The Mida`s Touch,
Alastor Investments, and N.Y. Holdings.
4. We note your revisions in response to our prior comment 4.
Clarify whether or not FreeSeas conducted any operations as
Adventure
Holdings. Also, disclose the dates that V Capital and G Bros were
established, the purposes for their establishment, and the nature
of
the operations, if any, of these entities. Please provide as much
background as is necessary in order to gain a complete
understanding
of the historical nature of these entities and, specifically,
their
involvement in the establishment of FreeSeas. Please discuss how
it
was determined that FreeSeas would be established to serve as the
parent holding company of the two previously established
subsidiaries. Finally, expand your disclosure, in locations as
appropriate, to more fully describe the relationships, financial
and
otherwise, between you, your subsidiaries, V Capital, G Bros,
FreeBulkers, The Mida`s Touch, Alastor Investments, and N.Y.
Holdings.
5. We cannot locate your revisions in response to our prior
comment
6. Please advise.
6. We note your response to our prior comment 9 yet we also note
that, pursuant to section 262 of the DGCL, dissenters` rights, if
any, will not be perfected until after the closing of the merger
transaction. Further, while we note your analysis as to the
valuation of appraisal rights, the DGCL gives the courts broad
discretion in determining what valuation to place on shares for
appraisal purposes. Therefore, we continue to question how the $7
million requirement for consummation of the merger can be
determined
prior to the resolution of appraisal rights. Please revise or
advise.
7. We note your revisions in response to our prior comment 10.
Remove the reference to your expectation regarding the listing of
your common stock.
Selected Historical Financial Information, page 9
8. We note your response to prior comment 19. However, it appears
that the statement of operations data for Freeseas for the quarter
ended March 31, 2005 is inconsistent with the disclosures on page
F-
41 of the financial statements. Please revise your disclosure
accordingly.
Risk Factors, page 13
Trinity may waive one or more of the conditions . . . ," page 15
9. We note your revisions in response to our prior comment 23.
Expand the disclosure relating to the waiver of conditions which
might allow Trinity to complete the merger without resoliciting
Class
B stockholder approval. Currently, disclosure merely references
the
listing of FreeSeas`s securities on the Nasdaq or the American
Stock
Exchange.
"FreeSeas and its principal officers have affiliations . . . ,"
page
20
10. We reissue our prior comment 24. Please elaborate on the
conflicts of interest that could arise between Free Bulkers and
FreeSeas in light of management`s affiliation with both companies.
Background and Reasons for the Merger, page 31
Background of the Merger, page 31
11. Advise us about the prior dealings that Messrs. Scibelli and
Burstein have had with counsel for FreeSeas, Mr. A Jeffry
Robinson.
12. Disclose whether or not FreeSeas was established with the
intention of combining with a publicly-reporting blank check
company.
13. Describe the circumstances under which counsel for FreeSeas
contacted Messrs. Burstein and Scibelli. This disclosure should
include a background discussion of how FreeSeas, or its counsel,
became aware of Trinity and the fact that Trinity was actively
seeking acquisition candidates.
14. Disclosure on page 31 references "exploratory discussions"
with
three prospective acquisition candidates. Expand the disclosure
relating to these "exploratory discussions." This disclosure
should
include the dates of the contacts and/or communications, the
parties
who participated, and a discussion of the substance of the
"exploratory discussions."
Recommendations of the Board of Directors and Reasons for the
Merger,
page 33
15. Disclose the date that FreeSeas entered the agreement with
Poseidon.
Competition, page 62
16. We reissue our prior comment 41. Please expand the disclosure
relating to the company`s competitive position in the industry.
Selling Shareholders, page 98
17. Explain why footnote (3) pertains to the holdings of
Efstathios
Gourdomichalis.
Financial Statements
Note 7 - Commitments and Contingencies, page F-11
18. We note your response to prior comment 59. Please tell us
whether you will have any material commitments to the investment
advisor in the event that the proposed business combination is not
consummated. If so, please revise your disclosure accordingly.
Statement of Operations, page F-26
19. We note your response to prior comment 61. Please revise the
description of the management fees on the statement of operations
in
accordance with Rule 4-08(k) of Regulation S-X.
Comparative Per Share Information, page 11
20. Contrary to your response to prior comment 62, there does not
appear to be any disclosure of pro forma basic and diluted
earnings
per share on page 11. Please revise accordingly.
Note 9 - Related Party Transactions, page F-34
21. We note your response to prior comment 70. Please tell us why
you believe that the application of SAB Topics 1.B.1 and 5.T would
not result in additional expenses being recorded in the financial
statements. As the executive officers have incurred a substantial
amount of time on company business without receiving compensation,
we
believe that they have effectively contributed their services to
the
company. Accordingly, we believe that the statement of operations
should be revised to include the value of the contributed
services,
with an offsetting credit recorded as a capital contribution from
the
officers, and appropriate footnote disclosures regarding the
contributed services. We note that the aggregate base salaries of
the officers will be $450,000 per year, plus performance bonuses
and
applicable employee benefits. In addition, we note that you have
generated significant net income since inception, which presumably
could not have been accomplished without significant efforts from
your executive officers. Without including the value of the
contributed services, the historical financial statements would
not
be comparable to future results of operations. Accordingly,
please
revise the financial statements for all relevant periods, or tell
us,
in as much detail as necessary, why you believe that no revisions
are
required.
Note 15 - Subsequent Events, page F-37
22. We note your response to prior comment 71. Please tell us
whether you will have any material commitments to the financial
advisor in the event that the proposed business combination is not
consummated. If so, please revise your disclosure accordingly.
Part II - Information Not Required in Prospectus
Undertakings
23. We reissue our prior comment 75. Please provide the
undertakings
required by Item 22(b)-(c) of Form F-4 or tell us supplementally
why
you do not believe such undertakings are required.
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Carlton Tartar at (202) 551-3387 if you have
questions regarding comments on the financial statements and
related
matters. Questions on other disclosure issues may be directed to
Jay
Ingram at (202) 551-3397, or to Mike Karney, who supervised the
review of your filing, at (202) 551-3847.
Sincerely,
John Reynolds
Assistant Director
Office of Emerging Growth Companies
cc. Jeffry Robinson,. Esq.
305-995-6402 by facsimile
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Mr. George D. Gourdomichalis
FreaSeas, Inc.
September 1, 2005
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