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The information in this preliminary prospectus supplement is not complete and may be changed. This preliminary prospectus supplement and the accompanying prospectus are not an offer to sell these securities and are not soliciting an offer to buy or sell these securities in any jurisdiction where the offer or sale is not permitted.

Filed Pursuant to Rule 424(b)(1)
Registration Number 333-219381

Subject to completion, dated June 26, 2018

PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus dated September 6, 2017)

5,000,000 Common Shares


The information included or incorporated by reference in this prospectus relates solely to the resale of up to an aggregate of 5,000,000 of our common shares by Oaktree Dry Bulk Holdings LLC, or the selling shareholder, which is an investment fund managed by Oaktree Capital Management, L.P.

Our common shares are listed on the Nasdaq Global Select Market under the symbol “SBLK.” The last reported sale price of our common shares on the Nasdaq Global Select Market on June 25, 2018 was $13.90 per share.

We will not receive any of the proceeds from the sale of the common shares by the selling shareholder. We have agreed to pay all expenses relating to registering the securities. The selling shareholder will pay any underwriting discounts and commissions and/or similar charges incurred for the sale of these common shares.

An investment in the common shares involves risks. See the section titled “Risk Factors” on page S-16 of this prospectus supplement and also the “Risk Factors” section of our annual report on Form 20-F for the year ended December 31, 2017 to read about factors you should consider before buying the common shares.

The underwriter has agreed to purchase the common shares at a price of $       per share, which will result in approximately $       of total proceeds to the selling shareholder. The underwriter may offer the common shares from time to time for sale in one or more transactions on the Nasdaq Global Select Market, in the over-the-counter market, through negotiated transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices, subject to its right to reject any order in whole or in part. See “Underwriting”.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

We anticipate that the shares will be ready for delivery on or about          , 2018



Morgan Stanley

The date of this prospectus is         , 2018

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Prospectus Supplement

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Prospectus

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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ABOUT THIS PROSPECTUS SUPPLEMENT

This document is in two parts. The first part is this prospectus supplement, which contains specific information about the terms on which the selling shareholder is offering and selling common shares. The second part is the accompanying prospectus dated September 6, 2017, which contains and incorporates by reference important business and financial information about us and other information about the offering. If the information set forth in this prospectus supplement differs in any way from the information set forth in the accompanying prospectus or the information contained in any document incorporated by reference herein or therein, the information contained in the most recently dated document shall control. All references in this prospectus supplement to this “prospectus” refer to this prospectus supplement together with the accompanying prospectus.

As permitted under the rules of the Securities and Exchange Commission, or the Commission, this prospectus incorporates important business information about us that is contained in documents that we have previously filed with the Commission but that are not included in or delivered with this prospectus. You may obtain copies of these documents, without charge, from the website maintained by the Commission at www.sec.gov, as well as other sources. You may also obtain copies of the incorporated documents, without charge, upon written or oral request to Star Bulk Carriers Corp., c/o Star Bulk Management Inc., 40 Agiou Konstantinou Str., Maroussi, 15124, Athens, Greece. See “Where You Can Find Additional Information.”

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN RECOMMENDED BY ANY UNITED STATES FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

We do not authorize any person to provide information other than that provided in this prospectus and the documents incorporated by reference. The selling shareholder is not making an offer to sell common shares in any state or other jurisdiction where the offer or sale is not permitted. You should assume that the information contained in this prospectus and the documents incorporated by reference is accurate only as of their respective dates, and you should not consider any information in this prospectus or in the documents incorporated by reference herein to be investment, legal or tax advice. We encourage you to consult your own counsel, accountant and other advisors for legal, tax, business, financial and related advice regarding an investment in our securities.

Unless otherwise indicated or unless the context requires otherwise, all references in this prospectus supplement to “Star Bulk,” the “Company,” “we,” “us,” “our,” or similar references, mean Star Bulk Carriers Corp. and, where applicable, its consolidated subsidiaries. All references to “Oaktree” mean Oaktree Capital Management, L.P., together with its affiliates, which is our largest shareholder. Additionally, all references to the “selling shareholder” mean Oaktree Dry Bulk Holdings LLC, which is an investment fund managed by Oaktree. In addition, 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.

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INFORMATION INCORPORATED BY REFERENCE

The Commission allows us to “incorporate by reference” information that we file with it. This means that we can disclose important information to you by referring you to those filed documents. The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the Commission prior to the termination of this offering will also be considered to be part of this prospectus and will automatically update and supersede previously filed information, including information contained in this document.

We incorporate by reference the documents listed below and any future filings made with the Commission under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”):

Annual Report on Form 20-F (the “2017 20-F”) for the year ended December 31, 2017, filed with the Commission on March 22, 2018, containing our audited consolidated financial statements for the most recent fiscal year for which those statements have been filed. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (230): Restricted Cash”. The amendments in this ASU require that a statement of cash flows explains the change during the period in the total amount of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Restricted cash represents minimum cash deposits or cash collateral deposits required to be maintained with certain banks under our borrowing arrangements or derivative contracts, which are legally restricted as to withdrawal or use. In the event that the obligation to maintain such deposits is expected to be terminated within the next twelve months, these deposits are classified as current assets. Otherwise, they are classified as non-current assets. We adopted this accounting standard on January 1, 2018 and therefore applied its provisions retrospectively for all periods presented. As a result net cash provided by/(used in) operating activities and net cash provided by/(used in) investing activities for the five years ended December 31, 2017, 2016, 2015, 2014 and 2013 have been revised compared to that reported in our 2017 20-F in order to remove the effect of increases or decreases in restricted cash during the corresponding periods as shown in the table contained in Annex 1 hereto. The adoption of these amendments does not impact net income/(loss) as previously reported or any prior amounts reported on the consolidated statements of comprehensive income/(loss), or the consolidated balance sheets.
Report on Form 6-K (the “Q1 2018 6-K”), filed with the Commission on June 13, 2018, including the exhibits thereto, which contain our unaudited interim condensed consolidated financial statements as of and for the three months ended March 31, 2018 and 2017 and the associated Management’s Discussion and Analysis of Financial Condition and Results of Operations (Exhibit 99.1). As a result of the adoption of ASU 2016-18 discussed above, net cash provided by/(used in) operating activities and net cash provided by/(used in) investing activities for the three month period ended March 31, 2017 have also been revised in order to remove the effect of increases or decreases in restricted cash during the corresponding period as shown in the table contained in Annex 1 hereto. These changes, however, have already been reflected in the statement of cash flows for the three month period ended March 31, 2017 included in the Q1 2018 6-K.

We are also incorporating by reference all subsequent Annual Reports on Form 20-F that we file with the Commission and certain reports on Form 6-K that we furnish to the Commission after the date of this prospectus that state that they are incorporated by reference into this prospectus until this offering is terminated. In all cases, you should rely on the later information over different information included in this prospectus.

You should rely only on the information contained or incorporated by reference in this prospectus. We have not, and the underwriter has not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The selling shareholder is not, and the underwriter is not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus as well as the information we previously filed with the Commission and incorporated by reference, is accurate as of the dates on the front cover of those documents only. Our business, financial condition and results of operations and prospects may have changed since those dates.

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You may request a free copy of the above mentioned filings or any subsequent filing we incorporate by reference to this prospectus by writing or telephoning us at the following address:

Star Bulk Carriers Corp.
c/o Star Bulk Management Inc.
40 Agiou Konstantinou Str.
Maroussi 15124, Athens, Greece
011-30-210-617-8400 (telephone number)

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WHERE YOU CAN FIND ADDITIONAL INFORMATION

As required by the Securities Act of 1933, as amended (the “Securities Act”), we filed a registration statement relating to the securities offered by this prospectus with the Commission. This prospectus supplement is a part of that registration statement, which includes additional information.

We file annual and special reports with the Commission. You may read and copy any document that we file and obtain copies at prescribed rates from the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling 1 (800) SEC-0330. The Commission maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission. Our filings are also available on our website at http://www.starbulk.com. The information on our website, however, is not, and should not be deemed to be, a part of this prospectus.

This prospectus supplement is part of the registration statement and does not contain all of the information in the registration statement. The full registration statement may be obtained from the Commission or us, as indicated above. Documents establishing the terms of the offered securities are filed as exhibits to the registration statement. Statements in this prospectus supplement about these documents are summaries and each statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. You may inspect a copy of the registration statement at the Commission’s Public Reference Room in Washington, D.C., as well as through the Commission’s website.

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CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING STATEMENTS

This prospectus includes “forward-looking statements,” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act, with respect to our financial condition, results of operations and business and our expectations or beliefs concerning future events. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “projects,” “likely,” “would,” “could” and similar expressions or phrases may identify forward-looking statements.

All forward-looking statements involve risks and uncertainties. The occurrence of the events described, and the achievement of the expected results, depend on many events, some or all of which are not predictable or within our control. Actual results may differ materially from expected results.

In addition, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include:

general dry bulk shipping market conditions, including fluctuations in charter hire rates and vessel values;
the strength of world economies;
the stability of Europe and the Euro;
fluctuations in interest rates and foreign exchange rates;
changes in demand in the dry bulk shipping industry, including the market for our vessels;
changes in our operating expenses, including bunker prices, dry docking and insurance costs;
changes in governmental rules and regulations or actions taken by regulatory authorities;
potential liability from pending or future litigation;
general domestic and international political conditions;
potential disruption of shipping routes due to accidents or political events;
the availability of financing and refinancing;
our ability to meet requirements for additional capital and financing to complete our newbuilding program and grow our business;
the impact of our indebtedness and the restrictions in our debt agreements;
vessel breakdowns and instances of off-hire;
risks associated with vessel construction;
potential exposure or loss from investment in derivative instruments;
potential conflicts of interest involving our Chief Executive Officer, his family and other members of our senior management;
our ability to complete acquisition transactions as planned (including the Augustea Vessel Acquisition, the OCC Vessel Acquisition and the Songa Vessel Acquisition, each as defined herein); and
other important factors described in the sections titled “Risk Factors” in this prospectus.

We have based these statements on assumptions and analyses formed by applying our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We undertake no obligation, and specifically decline any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus might not occur.

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See the sections titled “Risk Factors” of the accompanying prospectus and in this prospectus supplement and “Item 3. Key Information—D. Risk Factors” in the 2017 20-F, which is incorporated herein by reference, for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. These factors and the other risk factors described in this prospectus are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.

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SUMMARY

This summary highlights information contained or incorporated by reference in this prospectus and is qualified in its entirety by the more detailed information and financial statements included or incorporated by reference elsewhere in this prospectus. This summary does not contain all of the information that may be important to you. Where we state that a measurement is “on an As Adjusted Basis,” it means that measurement is computed after giving effect to all of the transactions set forth in the bullets in the first paragraph under the caption, “—Capitalization.” Where we state that a measurement is “on a transaction-adjusted basis,” it means that the measurement is computed after giving effect to the various vessel acquisition transactions (including the delivery of the various newbuilding vessels under contracts being acquired) that are described under the caption “—Recent Developments—Vessel Acquisition Transactions” as if they had been completed on June 11, 2018. As an investor or prospective investor, you should carefully review this entire prospectus and the documents incorporated by reference herein, including the section of this prospectus supplement titled “Risk Factors,” the section of the accompanying prospectus titled “Risk Factors,” “Item 3. Key Information—D. Risk Factors” in our 2017 20-F and the more detailed information that appears later in this prospectus before making an investment in the shares.

OUR BUSINESS

We are an international shipping company with extensive operational experience that owns and operates a fleet of dry bulk carrier vessels. As of June 11, 2018, we have a fleet of 74 vessels, consisting primarily of Newcastlemax, Capesize as well as Kamsarmax, Ultramax and Supramax vessels with a carrying capacity between 209,537 dwt and 52,055 dwt, with an aggregate carrying capacity of 8.2 million dwt and an average age of 8.3 years. Our vessels transport a broad range of major and minor bulk commodities, including ores, coal, grains and fertilizers, along worldwide shipping routes. Our highly experienced executive management team, with over 120 years of combined shipping industry experience, is led by Mr. Petros Pappas, who has approximately 40 years of shipping industry experience and has managed over 350 vessel acquisitions and dispositions.

Recently, we have entered into agreements to acquire 31 additional vessels and newbuilding contracts for three additional Newcastlemax vessels, which, taken together have a carrying capacity of approximately 4.0 million dwt. See “—Recent Developments—Vessel Acquisition Transactions.” On a transaction-adjusted basis, as of June 11, 2018, our fleet would consist of 108 vessels, with an aggregate carrying capacity of 12.3 million dwt and an average of 7.3 years. Based on publicly available information, on a transaction-adjusted basis, we believe our fleet will make us one of the largest U.S. publicly traded dry bulk shipping companies by deadweight tonnage.

As of June 11, 2018, on a transaction-adjusted basis, the total aggregate remaining payments related to the construction of our remaining three newbuilding vessels were expected to be $103.8 million, payable from time to time until the delivery of each vessel. The three newbuilding vessels are being constructed at Shanghai Waigaoqiao Shipbuilding Co. (“SWS”), with expected delivery dates from the fourth quarter of 2018 to the second quarter 2019. CSSC (Hong Kong) Shipping Company Limited has agreed to finance all of the remaining newbuilding payments under a ten-year capital lease per vessel.

We are focused on taking advantage of economies of scale in commercial, technical and procurement management. Our fleet is diversified across the various dry bulk segments (from Newcastlemaxes of approximately 210,000 dwt to Supramaxes of approximately 52,000 dwt) allowing us to serve our customer needs in a variety of dry bulk cargoes over multiple routes across the globe on a continuous basis. For our on the water fleet and our newbuildings, we have focused on vessels built at leading Japanese and Chinese shipyards, which, in our experience, are more reliable and less expensive to operate and are accordingly preferred by charterers. Currently, because of prevailing market conditions, we primarily employ our vessels in the spot market, under short term time charters or voyage charters. We believe that our chartering strategy, the scale and scope of our fleet and our commercial and technical management capabilities position us to take advantage of the ongoing recovery in the dry bulk market.

We deploy a variety of commercial tools in order to improve the commercial performance of our fleet, such as participation in specialized pools, voyage charters, as well as our recently established logistics subsidiary, Star Logistics Management S.A. (“Star Logistics”). We are one of the founding members of the CCL Pool, as further described below, a commercial platform that specializes in chartering of Capesize vessels and operates approximately 76 Capesize vessels from five prominent dry bulk owners. In addition, we expect that the establishment of Star Logistics will further expand our commercial capability through additional commercial expertise and advanced tools

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on the Kamsarmax and geared bulk carriers. On a transaction-adjusted basis, we will have a large, modern, diverse and high-quality fleet, built at leading shipyards. As a result of customer preferences for our ships, nimble commercial management and economies of scale, we believe we will have an opportunity to capitalize on rising market demand during a period of reduced fleet growth.

OUR FOUNDER AND HIS TRACK RECORD

Our founder and Chief Executive Officer, Mr. Pappas, has an established track record in the dry bulk industry, with approximately 40 years of experience and involvement in over 350 vessel acquisitions and dispositions. Entities under his management and control owned up to 30 vessels in 2001, most of which were acquired during the first quarter of 1997, the second quarter of 1998 and the second quarter of 2001, periods corresponding to low asset values and freight rates. Substantially all of these vessels were sold by the end of 2005, during a period of record high vessel values and levels of the Baltic Dry Index (“BDI”) (a daily average of charter rates for key dry bulk routes).

As further described in “—Our competitive strengths,” Mr. Pappas has extensive experience in operating and investing in shipping, including through his principal shipping operations and investment vehicle, Oceanbulk Maritime S.A. (“Oceanbulk Maritime”).

OUR FLEET

As of June 11, 2018, our owned fleet consisted of 74 vessels with an aggregate carrying capacity of approximately 8.2 million dwt and an average age of 8.3 years.

The following tables present summary information relating to our existing fleet as of June 11, 2018. For more information regarding the vessels we are acquiring, see “—Recent Developments—Vessel Acquisition Transactions.”

Existing On the Water Fleet (As of June 11, 2018)

 
Vessel Name
Vessel Type
Capacity
(dwt.)
Year Built
Date Delivered
to Star Bulk
1
Goliath
Newcastlemax
 
209,537
 
2015
July-15
2
Gargantua
Newcastlemax
 
209,529
 
2015
April-15
3
Star Poseidon
Newcastlemax
 
209,475
 
2016
February-16
4
Maharaj
Newcastlemax
 
209,472
 
2015
July-15
5
Star Leo(1)
Newcastlemax
 
207,939
 
2018
May-18
6
Star Ariadne(1)
Newcastlemax
 
207,812
 
2017
March-17
7
Star Eleni(1)
Newcastlemax
 
207,810
 
2018
January-18
8
Star Virgo(1)
Newcastlemax
 
207,810
 
2017
March-17
9
Star Libra(1)
Newcastlemax
 
207,765
 
2016
June-16
10
Star Marisa(1)
Newcastlemax
 
207,709
 
2016
March-16
11
Star Magnanimus(1)
Newcastlemax
 
207,465
 
2018
March-18
12
Leviathan
Capesize
 
182,511
 
2014
September-14
13
Peloreus
Capesize
 
182,496
 
2014
July-14
14
Star Martha
Capesize
 
180,274
 
2010
October-14
15
Star Pauline
Capesize
 
180,274
 
2008
December-14
16
Pantagruel
Capesize
 
180,181
 
2004
July-14
17
Star Borealis
Capesize
 
179,678
 
2011
September-11
18
Star Polaris
Capesize
 
179,600
 
2011
November-11
19
Star Angie
Capesize
 
177,931
 
2007
October-14
20
Big Fish
Capesize
 
177,662
 
2004
July-14
21
Kymopolia
Capesize
 
176,990
 
2006
July-14
22
Star Triumph
Capesize
 
176,343
 
2004
December-17
23
Big Bang
Capesize
 
174,109
 
2007
July-14
24
Star Aurora
Capesize
 
171,199
 
2000
September-10
25
Amami
Post Panamax
 
98,681
 
2011
July-14
26
Madredeus
Post Panamax
 
98,681
 
2011
July-14
27
Star Sirius
Post Panamax
 
98,681
 
2011
March-14

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Vessel Name
Vessel Type
Capacity
(dwt.)
Year Built
Date Delivered
to Star Bulk
28
Star Vega
Post Panamax
 
98,681
 
2011
February-14
29
Star Angelina
Kamsarmax
 
82,981
 
2006
December-14
30
Star Gwyneth
Kamsarmax
 
82,790
 
2006
December-14
31
Star Kamila
Kamsarmax
 
82,769
 
2005
September-14
32
Pendulum
Kamsarmax
 
82,619
 
2006
July-14
33
Star Maria
Kamsarmax
 
82,598
 
2007
November-14
34
Star Markella
Kamsarmax
 
82,594
 
2007
September-14
35
Star Danai
Kamsarmax
 
82,574
 
2006
October-14
36
Star Georgia
Kamsarmax
 
82,298
 
2006
October-14
37
Star Sophia
Kamsarmax
 
82,269
 
2007
October-14
38
Star Mariella
Kamsarmax
 
82,266
 
2006
September-14
39
Star Moira
Kamsarmax
 
82,257
 
2006
November-14
40
Star Nina
Kamsarmax
 
82,224
 
2006
January-15
41
Star Renee
Kamsarmax
 
82,221
 
2006
December-14
42
Star Nasia
Kamsarmax
 
82,220
 
2006
August-14
43
Star Laura
Kamsarmax
 
82,209
 
2006
December-14
44
Star Jennifer
Kamsarmax
 
82,209
 
2006
April-15
45
Star Helena
Kamsarmax
 
82,187
 
2006
December-14
46
Star Charis
Kamsarmax
 
81,711
 
2013
March-17
47
Star Suzanna
Kamsarmax
 
81,711
 
2013
May-17
48
Mercurial Virgo
Kamsarmax
 
81,545
 
2013
July-14
49
Star Iris
Panamax
 
76,466
 
2004
September-14
50
Star Emily
Panamax
 
76,417
 
2004
September-14
51
Idee Fixe(1)
Ultramax
 
63,458
 
2015
March-15
52
Roberta(1)
Ultramax
 
63,426
 
2015
March-15
53
Laura(1)
Ultramax
 
63,399
 
2015
April-15
54
Kaley(1)
Ultramax
 
63,283
 
2015
June-15
55
Kennadi
Ultramax
 
63,262
 
2016
January-16
56
Mackenzie
Ultramax
 
63,226
 
2016
March-16
57
Star Challenger
Ultramax
 
61,462
 
2012
December-13
58
Star Fighter
Ultramax
 
61,455
 
2013
December-13
59
Star Lutas
Ultramax
 
61,347
 
2016
January-16
60
Honey Badger
Ultramax
 
61,320
 
2015
February-15
61
Wolverine
Ultramax
 
61,292
 
2015
February-15
62
Star Antares
Ultramax
 
61,258
 
2015
October-15
63
Star Acquarius
Ultramax
 
60,916
 
2015
July-15
64
Star Pisces
Ultramax
 
60,916
 
2015
August-15
65
Diva
Supramax
 
56,582
 
2011
July-17
66
Strange Attractor
Supramax
 
55,742
 
2006
July-14
67
Star Omicron
Supramax
 
53,489
 
2005
April-08
68
Star Gamma
Supramax
 
53,098
 
2002
January-08
69
Star Zeta
Supramax
 
52,994
 
2003
January-08
70
Star Delta
Supramax
 
52,434
 
2000
January-08
71
Star Theta
Supramax
 
52,425
 
2003
December-07
72
Star Epsilon
Supramax
 
52,402
 
2001
December-07
73
Star Cosmo
Supramax
 
52,247
 
2005
July-08
74
Star Kappa
Supramax
 
52,055
 
2001
December-07
 
 
Total dwt:
 
8,208,918
 
 
 
(1) Subject to a bareboat charter with purchase obligation at the expiration of the bareboat term.

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Augustea fleet being acquired

 
Vessel Name
Vessel Type
Capacity
(dwt.)
Shipyard
Year Built
1
ABOY Sienna (1)
Newcastlemax
 
208,000
 
SWS
 
2017
 
2
ABOY Laetitia(1)
Newcastlemax
 
208,000
 
SWS
 
2017
 
3
ABOY Karlie(1)
Newcastlemax
 
208,000
 
SWS
 
2016
 
4
ABY Scarlett
Capesize
 
178,000
 
Jinhai
 
2014
 
5
ABYO Audrey
Capesize
 
175,125
 
New Times
 
2011
 
6
Paola
Mini-Capesize
 
115,259
 
NTS
 
2011
 
7
ABML Eva
Mini-Capesize
 
106,659
 
STX Dalian
 
2011
 
8
Piera
Post-Panamax
 
91,951
 
Sungdong
 
2010
 
9
Maria Laura Prima
Post Panamax
 
91,945
 
Sungdong
 
2010
 
10
Aphrodite
Post Panamax
 
91,827
 
Sungdong
 
2011
 
11
ABY Jeannette
Kamsarmax
 
83,000
 
STX
 
2014
 
12
ABY Asia(1)
Kamsarmax
 
82,000
 
Sanoyas
 
2017
 
13
Lydia Cafiero
Kamsarmax
 
81,187
 
JMU
 
2013
 
14
Nicole
Kamsarmax
 
81,120
 
JMU
 
2013
 
15
ABY Virginia
Kamsarmax
 
81,000
 
JMU
 
2015
 
16
ABY Monica
Ultramax
 
60,000
 
JMU
 
2015
 
 
 
Total dwt:
 
1,943,073
 
 
 
 
 
(1) Subject to a bareboat charter with purchase obligation at the expiration of the bareboat term.

Songa fleet being acquired

 
Vessel Name
Vessel Type
Capacity
(dwt.)
Shipyard
Year Built
1
Songa Claudine
Capesize
 
181,258
 
STX SB (Jinhae)
 
2011
 
2
Songa Opus
Capesize
 
180,706
 
STX SB (Jinhae)
 
2010
 
3
Songa Mountain
Capesize
 
179,150
 
Hyundai HI (Ulsan)
 
2009
 
4
Songa Hirose
Kamsarmax
 
83,494
 
Sanoyas
 
2011
 
5
Songa Maru
Kamsarmax
 
82,687
 
Tsuneishi Zhoushan
 
2008
 
6
Songa Grain
Kamsarmax
 
82,672
 
Tsuneishi Zosen
 
2008
 
7
Songa Moon
Kamsarmax
 
82,158
 
Tsuneishi Zosen
 
2012
 
8
Songa Hadong
Kamsarmax
 
82,158
 
Tsuneishi Zosen
 
2012
 
9
Songa Devi
Kamsarmax
 
81,918
 
Tsuneishi Zosen
 
2014
 
10
Songa Delmar
Kamsarmax
 
81,501
 
Hyundai Samho HI
 
2011
 
11
Songa Sky
Kamsarmax
 
81,466
 
Sumitomo
 
2010
 
12
Songa Genesis
Kamsarmax
 
82,705
 
STX SB (Jinhae)
 
2010
 
13
Songa Flama
Kamsarmax
 
80,448
 
STX SB (Jinhae)
 
2011
 
14
Songa Wave
Ultramax
 
61,491
 
Dalian COSCO KHI
 
2017
 
15
Songa Glory
Supramax
 
58,680
 
Nantong COSCO KHI
 
2012
 
 
 
 
 
1,482,492
 
 
 
 
 

Newbuilding Vessels being acquired from Oceanbulk Container Carriers

 
Vessel Name
Vessel Type
Capacity
(dwt.)
Shipyard
Expected
delivery date
1
HN 1388(1)
Newcastlemax
 
208,000
 
 
SWS
 
Dec-18
2
HN 1389(1)
Newcastlemax
 
208,000
 
 
SWS
 
Feb-19
3
HN 1390(1)
Newcastlemax
 
208,000
 
 
SWS
 
Apr-19
 
 
 
 
624,000
 
 
 
 
 
(1) Subject to a bareboat charter with purchase obligation at the expiration of the bareboat term.

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OUR COMPETITIVE STRENGTHS

We believe that we possess a number of competitive strengths in our industry, including:

We manage a high quality modern fleet and are well-positioned to take advantage of the ongoing recovery in the dry bulk market

We own a modern, diverse, high quality fleet of dry bulk carrier vessels. As of June 11, 2018, our fleet consists of 74 vessels currently in the water, and we have agreed to acquire a further 31 vessels on the water and an additional three Newcastlemax newbuilding vessels to be delivered from SWS from the last quarter of 2018 until the second quarter of 2019. On a transaction-adjusted basis, as of June 11, 2018, our fleet would consist of 108 vessels, with an aggregate carrying capacity of 12.3 million dwt and an average age of 7.3 years. We believe that owning a modern, high quality fleet reduces operating costs, improves safety and provides us with a competitive advantage in securing favorable time charters. We maintain the quality of our vessels by carrying out regular inspections, both while in port and at sea, and adopting a comprehensive maintenance program for each vessel. Furthermore, we take a proactive approach to safety and environmental protection through comprehensively planned maintenance systems, preventive maintenance programs and by retaining and training qualified crews.

Based on the scale, scope and quality of our fleet and our commercial and technical management capabilities and because much of our fleet is currently chartered on the spot market, we believe we are well-positioned to take advantage of the ongoing recovery in the dry bulk market.

In-house commercial and technical management of our fleet enable us to have competitive operating expenses and high vessel maintenance standards

We conduct a significant portion of the commercial and technical management of our vessels in-house through our wholly owned subsidiaries, Star Bulk Management Inc., Star Bulk Shipmanagement Company (Cyprus) Limited and Starbulk S.A. We believe having control over the commercial and technical management provides us with a competitive advantage over many of our competitors by allowing us to more closely monitor our operations and to offer higher quality performance, reliability and efficiency in arranging charters and the maintenance of our vessels. We also believe that these management capabilities contribute significantly in maintaining a lower level of vessel operating and maintenance costs, without sacrificing the quality of our operations. Reflecting the continued quality of our vessels, as of June 11, 2018, we are considered as a top quality service provider and we are rated among the top five operators among approximately 70 shipowners by Rightship, a ratings agency that evaluates the condition of dry bulk vessels.

Focus on fuel efficiency and new technology to improve vessel operations

As of June 11, 2018, on a transaction-adjusted basis, 40 of our on the water vessels will be Eco-type vessels, which enable us to take advantage of available fuel cost savings and operational efficiencies and give us the opportunity to generate advantageous daily time charter equivalent (“TCE”) rates. In addition to our Eco-type vessels, on a transaction-adjusted basis, 69 of our operating vessels have been or are in the process of being equipped with sliding engine valves and 61 of our vessels have been or are in the process of being equipped with alpha lubricators, which provide increased fuel efficiency and decreased lubricant consumption, and over 40% of our operating fleet has been equipped with a sophisticated vessel remote monitoring system. The vessel remote monitoring system allows us to collect real-time information on the performance of critical on-board equipment, with a particular focus on fuel consumption and engine performance. Using this information, we are able to be proactive in identifying potential problems and to evaluate optimum operating parameters during various sea passage conditions. We also are able to compare actual vessel performance to reported vessel performance and provide feedback to crews in real time, thereby reducing the likelihood of errors or omissions by our crews. The vessel remote monitoring system is designed to enhance our ability to manage the operations of our vessels, thereby increasing operational efficiency and reducing maintenance costs and off-hire time. Finally, because of the similarities between certain of our vessels, we can take advantage of efficiencies in crewing, training and spare parts inventory management and can apply technical and operational knowledge of one ship to its sister ships.

Experienced management team with a strong track record in the shipping industry

Our company’s leadership has considerable shipping industry expertise. Our founder and Chief Executive Officer, Mr. Pappas, has an established track record in the dry bulk industry, with approximately 40 years of experience and more than 350 vessel acquisitions and dispositions. Mr. Pappas has extensive experience in operating

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and investing in shipping, including through his family’s principal shipping operations and investment vehicle, Oceanbulk Maritime. Mr. Pappas also has extensive relationships in the shipping industry, and he has leveraged his deep relationships with shipbuilders to formulate our newbuilding program.

Mr. Hamish Norton, our President, is an executive of Oceanbulk Maritime and the Chief Financial Officer and Head of Corporate Development of Oceanbulk’s joint ventures with Oaktree since 2012 with an extensive experience in the shipping industry. Prior to joining Oceanbulk Maritime, from 2007 through 2012, Mr. Norton was a Managing Director and the Global Head of the Maritime Group at Jefferies LLC, and from 2000 to 2007, he was head of the shipping practice at Bear Stearns. Mr. Norton has advised in numerous capital markets and mergers and acquisitions transactions by shipping companies.

Mr. Christos Begleris, our Co-Chief Financial Officer, is an executive of Oceanbulk Maritime since 2013 and the Deputy Chief Financial Officer of Oceanbulk’s joint ventures with Oaktree. He has been involved in the shipping industry since 2008 and has considerable banking and capital markets experience.

Mr. Simos Spyrou, our Co-Chief Financial Officer, has served as Chief Financial Officer of Star Bulk since September 2011. Mr. Spyrou also has approximately 14 years of experience in the Greek equity and derivative markets at the Hellenic Exchanges Group.

Mr. Nicos Rescos, our Chief Operating Officer, has served as the Chief Operating Officer of Oceanbulk Maritime since April 2010 and the Commercial Director of Goldenport Holdings Inc. since 2000. He has been involved in the shipping industry in key commercial positions since 1993 and has strong expertise in the dry bulk, container and product tanker markets.

Extensive relationships with customers, lenders, shipyards and other shipping industry participants

Through Mr. Pappas and our senior management team, we have strong global relationships with shipping companies, charterers, shipyards, brokers and commercial shipping lenders. Our senior management and chartering teams have a long track record in the voyage and time chartering of dry bulk ships, which we expect will have great benefit to us in increasing the profitability of our fleet. We believe that these relationships with these counterparties and our strong sale and purchase track record and reputation as a creditworthy counterparty should provide us with access to attractive asset acquisitions, chartering and ship financing opportunities. Mr. Pappas has also leveraged his deep relationships with various shipyards to enable us to implement our newbuilding program with vessels of high specification.

OUR BUSINESS STRATEGIES

Our primary objectives are to operate our business profitably and to continue to grow as a successful owner and operator of dry bulk vessels. The key elements of our strategy are:

Capitalize on potential increases in charter hire rates for dry bulk shipping

The dry bulk shipping industry is cyclical in nature. The supply of dry bulk carriers is dependent on the delivery of new vessels and the removal of vessels from the global fleet, either through scrapping or loss, and the demand for dry bulk shipping is often dependent on economic conditions, and international trade. The recent historically low dry bulk charter hire rates seen in 2016 acted as a catalyst for ship owners, who scrapped a significant number of vessels, until equilibrium between demand and supply of vessels was achieved. Based on our analysis of industry dynamics, we believe that dry bulk charter hire rates will rise in the medium term due to historically low vessel deliveries. As of June 2018, the global dry bulk carrier order book amounted to approximately 9.7% of the existing fleet at that time. During 2017, a total of 14.6 million dwt was scrapped, representing significant scrapping activity but lower than the third-highest figure on record during 2016 (29.3 million dwt), as the dry bulk market improved. As of the end of May 2018, the year to date 2018 demolition rate is 2.1 million dwt, which represents a 71.1% decrease over the demolition rate for the corresponding period in 2017. Historically, from 2006 to 2015, vessel annual demolition rate averaged 15.2 million dwt per year, with a high of 33.41 million dwt scrapped in 2012. Given the reduced vessel supply, and the continued strength in demand for dry bulk commodities globally, we believe there will be an increasingly positive effect on freight rates in the future. While the charter market remains at current levels, we intend to operate our vessels in the spot market under short-term time charter market or voyage charters in order to benefit from any future increases in charter rates.

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Charter our vessels in an active and sophisticated manner

Our business strategy is centered on arranging voyage and short-term time charters for our vessels given the current market levels. This approach is also tailored specifically to the fuel efficiency of our younger vessels. While this process is more difficult and labor intensive than placing our vessels on longer-term time charters, it can lead to greater profitability, particularly for vessels that have lower fuel consumption than typical vessels. When operating a vessel on a voyage charter, we (as owner of the vessel) will incur fuel costs, and therefore, we are in a position to benefit from fuel savings (particularly for our Eco-type vessels). If charter market levels rise, we may employ part of our fleet in the long-term time charter market, while we may be able to more advantageously employ our younger Eco-type vessels in the voyage charter market and/or short-term time charters in order to capture the benefit of available fuel cost savings. Our large, diverse and high quality fleet provides scale to major charterers, such as iron ore miners, utility companies and commodity trading houses. On December 17, 2014, we announced the formation of a long-term strategic partnership with a significant iron ore mining company for the chartering of three Newcastlemax vessels, under an index-linked voyage charter for a five-year period. This arrangement will allow us to take the full benefit of the vessels’ increased cargo carrying capacity as well as potential savings arising from their fuel efficiency, as we will be compensated on a $/ton basis, while being responsible for the voyage expenses of the vessels. We seek similar arrangements with other charterers, providing the scale required for the transportation of large commodity volumes over a multitude of trading routes around the world.

On January 25, 2016, we entered into a Capesize vessel pooling agreement (“CCL”) with Bocimar International NV, Golden Ocean Group Limited and C Transport Holding Ltd. During 2017, we operated seven of our Capesize dry bulk vessels as part of one combined CCL fleet. The CCL fleet (which now includes additional vessels from Songa Bulk AS) consists of approximately 76 modern Capesize vessels and is being managed out of Singapore and Antwerp. Each vessel owner will continue to be responsible for the operating, accounting and technical management of its respective vessels. The objective of this pool is to provide improved scheduling ability through the joint marketing opportunity that CCL represents for our Capesize vessels, with the overall aim of enhancing economic efficiencies.

On October 3, 2017, we formed Star Logistics as a new subsidiary, which focuses on servicing the end user by connecting origination and destination of dry bulk commodities. Star Logistics charters-in our and third party vessels to service specific cargo and charter hire agreements. The creation of Star Logistics is expected to further expand our commercial capability through additional commercial expertise on the Kamsarmax and geared bulk carriers (i.e. Ultramax and Supramax vessels). Moreover, Star Logistics will provide us with access to considerable cargo flow and market information as it is staffed by an experienced team of shipping logistics professionals and is based in Geneva, Switzerland, giving us a significant presence in a main center of the dry bulk commodities market.

Expand and renew our fleet through opportunistic acquisitions of high-quality vessels at attractive prices

Recently, we have entered into agreements to acquire 31 additional vessels and three additional Newcastlemax newbuilding contracts, which, taken together have a carrying capacity of approximately 4.0 million dwt. See “—Recent Developments—Vessel Acquisition Transactions.” On a transaction-adjusted basis, as of June 11, 2018, our fleet would consist of 108 vessels, with an aggregate carrying capacity of 12.3 million dwt and an average of 7.3 years.

As market conditions continue to improve, we may opportunistically acquire high-quality vessels at attractive prices that are accretive to our cash flow. We also look to opportunistically renew our fleet by replacing older vessels that have higher maintenance and survey costs and lower operating efficiency with newer vessels that have lower operating costs, fewer maintenance and survey requirements, lower fuel consumption and overall enhanced commercial attractiveness to our charterers. When evaluating acquisitions, we will consider and analyze, among other things, our expectations of fundamental developments in the dry bulk shipping industry sector, the level of liquidity in the resale and charter market, the cash flow earned by the vessel in relation to its value, its condition and technical specifications with particular regard to fuel consumption, expected remaining useful life, the credit quality of the charterer and duration and terms of charter contracts for vessels acquired with charters attached, as well as the overall diversification of our fleet and customers. We believe that these circumstances combined with our management’s knowledge of the shipping industry may present an opportunity for us to continue to grow our fleet at favorable prices.

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Maintain a strong balance sheet through moderate use of leverage

We finance our fleet, including future vessel acquisitions, with a mix of debt (subject to certain restrictions in our debt agreements) and equity, and we intend to maintain moderate levels of leverage over time, even though we may have the capacity to obtain additional financing. As of March 31, 2018, our debt to total capitalization ratio was approximately 49%. Charterers have increasingly favored financially solid vessel owners, and we believe that our balance sheet strength will enable us to access more favorable chartering opportunities, as well as give us a competitive advantage in pursuing vessel acquisitions from commercial banks and shipyards, which in our experience have recently displayed a preference for contracting with well-capitalized counterparties.

OAKTREE

Oaktree is our largest shareholder. Oaktree Capital Management, L.P., together with its affiliates, is a leader among global investment managers specializing in alternative investments, with $121 billion in assets under management as of March 31, 2018. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities. The firm has over 900 employees and offices in 18 cities worldwide.

CORPORATE AND OTHER INFORMATION

We are a Marshall Islands corporation with principal executive offices at 40 Agiou Konstantinou Street, 15124, Athens Greece. Our telephone number at that address is 011-30-210-617-8400. We maintain a website on the Internet at http://www.starbulk.com. The information on our website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus. We were incorporated in the Marshall Islands on December 13, 2006, as a wholly-owned subsidiary of Star Maritime Acquisition Corp., or Star Maritime, which was a special purpose acquisition corporation. We merged with Star Maritime on November 30, 2007 and commenced operations on December 3, 2007, which was the date we took delivery of our first vessel.

RECENT DEVELOPMENTS

Vessel Acquisition Transactions

Augustea Vessel Acquisition

On April 20, 2018, we entered into a definitive agreement to acquire 16 vessels (the “Augustea Vessels”), with an aggregate capacity of 1.94 million dwt., from entities affiliated with Augustea Atlantica SpA (“Augustea”) and York Capital Management (“York”) in an all-share transaction (the “Augustea Vessel Acquisition”). As consideration for the Augustea Vessel Acquisition, we have agreed to issue approximately 10.5 million common shares to the sellers of the Augustea Vessels. We have agreed to grant certain equity holders of the Augustea Vessels customary registration rights over their common shares. Under the terms of the agreement governing the Augustea Vessel Acquisition, the consideration was determined based on the average vessel valuations by independent vessel appraisers and is subject to adjustments for cash, debt and capital expenditures on the closing date. As part of the transaction, we will assume debt of $310.0 million. An entity affiliated with family members of our CEO, Mr. Petros Pappas, is a passive minority investor in three of the Augustea Vessels. The Augustea Vessel Acquisition was approved by the disinterested members of our Board of Directors. The Augustea Vessel Acquisition, which is expected to be completed in the third quarter of 2018, remains subject to the execution of definitive financing agreements and customary closing conditions. Upon completion of the Augustea Vessel Acquisition, Mr. Raffaele Zagari will be appointed to our Board of Directors.

OCC Vessel Acquisition

On May 14, 2018, we entered into a definitive agreement with Oceanbulk Container Carriers LLC (“OCC”), an entity affiliated with Oaktree Capital Management L.P. and with family members of our CEO, Mr. Petros Pappas, (the “OCC Vessel Acquisition”), pursuant to which we will acquire three newbuilding Newcastlemax vessels, to be delivered from the fourth quarter of 2018 to the second quarter of 2019, with an aggregate capacity of 0.62 million dwt. (the “OCC Vessels”), for an aggregate of 3.39 million of our common shares subject to adjustments for cash, debt and capital expenditures on the closing date. We have agreed to grant to the equity holders of OCC customary registration rights over their common shares. CSSC (Hong Kong) Shipping Company Limited has agreed to provide

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a ten-year capital lease of $104.4 million to finance the remaining $103.8 million capital expenditures on the OCC Vessels. The OCC Vessel Acquisition was approved by the disinterested members of our Board of Directors. The OCC Vessel Acquisition is expected to be completed in the second quarter of 2018.

Songa Vessel Acquisition

On May 14, 2018, we entered into a definitive agreement with Songa Bulk ASA (“Songa”) pursuant to which we will acquire 15 operating vessels, with an aggregate capacity of 1.48 million dwt. (the “Songa Vessels”), for an aggregate of our 13.725 million common shares and $145.0 million in cash (the “Songa Vessel Acquisition” and together with the OCC Vessel Acquisition and the Augustea Vessel Acquisition, the “Vessel Acquisition Transactions”). The cash portion of the consideration will be financed through proceeds of a new five-year capital lease of $180.0 million with China Merchants Bank Leasing with a margin of 280 basis points, thus offering approximately $35.0 million of additional liquidity. On June 5, 2018 the shareholders of Songa approved the transaction. The Songa Vessel Acquisition remains subject to customary closing conditions, including the approval by the stock exchange Oslo Børs of the secondary listing for our common shares, and is expected to be completed in the third quarter of 2018. Companies controlled by Messrs. Arne Blystad, Magnus Roth and Herman Billung represent approximately 30% of the outstanding shares of Songa. Upon completion of the Songa Vessel Acquisition, Mr. Arne Blystad will be appointed to our Board of Directors and Mr. Herman Billung will join our management team.

Financing Activities

On April 19, 2018, we entered into a loan agreement with the National Bank of Greece for the refinancing of the Commerzbank $120.0 million Facility (as defined in our annual report on Form 20-F, filed with the Commission on March 22, 2018 (the “2017 20-F“)). On May 3, 2018, we drew $30.0 million under the new facility (the “NBG $30,000 Facility”), which we used with cash on hand to fully repay the $34.7 million outstanding under the Commerzbank $120.0 million Facility. The NBG $30,000 Facility is secured by a first priority mortgage on the vessels previously pledged under the Commerzbank $120.0 million Facility. The NBG $30,000 Facility matures on December 31, 2022 and is repayable in 19 equal quarterly installments of $0.9 million, commencing in August 2018, and a final balloon payment of $12.0 million, payable together with the last installment.

In April 2018, we entered into a committed term-sheet with DNB Bank ASA, or the “DNB $310,000 Facility,” for a loan of $310.0 million, a tranche of $240.0 million of which, will refinance all amounts outstanding under the ABN $87,458 Facility, the DNB-SEB-CEXIM $227,500 Facility, the DNB $120,000 Facility, the Deutsche Bank AG $39,000 Facility and the ABN AMRO Bank N.V. $30,844 Facility (each as defined in the 2017 20-F). The loan will be secured by a first priority mortgage on the vessels previously pledged under the refinanced facilities. The drawdown of the tranche of $240.0 million is expected to be consummated in the third quarter of 2018 and will be repayable in 20 equal quarterly installments of $8.7 million and a balloon payment along with the last installment in an amount of $66.1 million. The tranche of $70.0 million will be repayable in 12 quarterly installments, each being equal to 5.55% of that tranche and the remaining balance will be repaid in the form of a balloon installment at the final repayment date. The completion of the transaction is subject to the execution of customary definitive documentation.

In April 2018, we entered into a committed term sheet with ING Bank N.V., London Branch, or the “ING $45,000 Facility,” for a loan of $45.0 million to refinance all amounts outstanding under the Deutsche Bank $85,000 Facility (as defined in the 2017 20-F). The drawdown of the facility is expected to be consummated in the third quarter of 2018 and will be repayable in 28 equal quarterly installments of $0.9 million and a balloon payment along with the last installment in an amount of $18.8 million. The facility will be secured by a first priority mortgage on the vessels previously pledged under the refinanced Deutsche Bank $85,000 Facility. The completion of the transaction is subject to the execution of customary definitive documentation.

In April 2018, we entered into a committed term sheet with Citibank N.A., London Branch, or the “Citi $130,000 Facility,” for a loan of approximately $130.0 million to refinance in full the approximately $65.2 million outstanding under the Citi Facility (as defined in the 2017 20-F) and provide $64.8 million to refinance the existing indebtedness of five of the Augustea Vessels. The total loan amount is expected to be drawn in the third quarter of 2018 and will be repayable in 20 equal quarterly installments of $3.65 million each, and a balloon payment along with the last installment in an amount of $57.0 million. The facility will be secured by a first priority mortgage on the vessels previously pledged under the refinanced Citi Facility and five of the Augustea Vessels. The completion of the transaction is subject to the execution of customary definitive documentation.

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In May 2018, we paid an aggregate amount of $30.0 million in total to all parties under our Supplemental Agreements (as defined in the 2017 20-F), which consisted of (i) an amount of $25.9 million representing the excess cash for the quarter ended March 31, 2018, pursuant to the cash sweep mechanism in the Supplemental Agreements, and (ii) an additional amount of $4.1 million paid to the parties under our Supplemental Agreements due to the improved market conditions.

In June 2018, we entered into a committed term sheet with Credit Agricole Corporate and Investment Bank, or the “Credit Agricole $43,000 Facility,” for a loan of $43.0 million to refinance all outstanding amounts under the Credit Agricole $70,000 Facility (as defined in the 2017 20-F) that is expected to be drawn in the third quarter of 2018. The facility will be secured by the two vessels previously securing the Credit Agricole $70,000 Facility and will be available in two tranches, each being repayable in 20 equal quarterly installments of $0.6 million and a balloon payment along with the last installment in an amount of $9.0 million. The completion of the transaction is subject to the execution of customary definitive documentation.

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THE OFFERING

Common shares offered for resale by the selling shareholder in this offering
5,000,000 common shares
Common shares to be outstanding upon completion of this offering
64,160,004 common shares

The above number of our common shares outstanding excludes approximately (a) 596,500 common shares granted but not yet vested, (b) 104,250 options to acquire common shares granted but not yet exercised and (c) 303,500 common shares reserved for issuance under our equity incentive plans.

Recently, we have entered into a number of agreements to acquire additional vessels for our fleet for consideration that includes newly issued common shares. See “—Recent Developments—Vessel Acquisition Transactions.”

On a transaction-adjusted basis:

We would have 91,798,507 common shares outstanding; and
Based on publicly available information, our largest five shareholders would be Oaktree, York, Impala Asset Management, Augustea and affiliates of Mr. Pappas, each of which would respectively own approximately 38.8%, 6.2%, 4.5%, 4.3% and 4.3% of our outstanding common shares.

On a transaction-adjusted basis, and after completion of this offering (assuming our largest shareholders do not acquire any common shares in this offering):

We would have 91,798,507 common shares outstanding; and
Based on publicly available information, our largest five shareholders would be Oaktree, York, Impala Asset Management, Augustea and affiliates of Mr. Pappas, each of which would own approximately 33.4%, 6.2%, 4.5%, 4.3% and 4.3% of our outstanding common shares.
Lock-Up Agreements
Oaktree and each of our executive officers and directors have entered into customary lock-up agreements with the representatives of the underwriters with a duration of 45 days from the date of the underwriting agreement we will enter into in connection with this offering, subject to certain exceptions, including, but not limited to, being permitted to pledge their common shares as collateral or security for foreign exchange swaps and custody agreements and to make transfers of pledged common shares as a result of foreclosure thereupon.
Voting rights
Holders of our common shares are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders.

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Dividend policy
We have not paid dividends in the last five years, and we have no current intention to pay dividends. Additionally, we are restricted from paying dividends under our loan agreements until the Deferred Amounts (as defined in the 2017 20-F) under our credit facilities are repaid in full. Following the repayment of all Deferred Amounts and the termination of those restrictions, we will review our dividend policy from time to time taking into account market conditions.
Use of Proceeds
All of the common shares being offered hereby are being sold by the selling shareholder identified in this prospectus. We will not receive any proceeds from the sale of the common shares pursuant to this prospectus.
Listing
Our common shares are listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “SBLK”.
Risk Factors
An investment in our common shares involves risks. See the section under the caption, “Risk Factors,” on page S-16 of this prospectus supplement as well as the “Risk Factors” section of our 2017 Form 20-F to read about factors you should consider before buying our common shares. You should also consider the risk factors described in the documents incorporated by reference in this prospectus.

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SUMMARY HISTORICAL FINANCIAL AND OPERATING INFORMATION

Set forth below are the summary historical consolidated financial and other data of Star Bulk and its consolidated subsidiaries for the periods and as of the dates indicated.

The summary historical consolidated financial data as of and for the years ended December 31, 2015, 2016 and 2017 have been derived from our consolidated financial statements as of such dates and for such years, which have been audited by Ernst & Young (Hellas) Certified Auditors Accountants S.A., as indicated in the 2017 20-F, except for net cash provided by/(used in) operating activities and net cash provided by/(used in) investing activities, which have been revised compared to the items reported in our 2017 20-F following the retrospective application of ASU 2016-18, as adopted on January 1, 2018, as further described in the section titled “Information Incorporated by Reference”.

The summary historical consolidated financial data as of and for the three months ended March 31, 2018 and 2017 have been derived from our consolidated financial statements as of such dates and for such periods included in our unaudited interim condensed consolidated financial statements for the three months ended March 31, 2018 and 2017 (contained in Exhibit 99.1 to the Q1 2018 6-K), which are unaudited but which have been prepared on the same basis as our audited consolidated financial statements and, in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the information set forth therein. As further described in the section titled “Information Incorporated by Reference”, the effects of the adoption of ASU 2016-18 on net cash provided by/(used in) operating activities and net cash provided by/(used in) investing activities for the period ended March 31, 2017 have already been reflected in the statement of cash flows for such period included in the Q1 2018 6-K.

The summary historical consolidated financial data below should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and related notes included in the 2017 20-F, as well as the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our unaudited interim condensed consolidated financial statements and related notes included in Exhibit 99.1 to the Q1 2018 6-K.

 
Year ended December 31,
Three months ended March 31,
 
2015(1)
2016(1)
2017(1)
2017(1)
2018
Income Statement Data (In thousands of U.S. Dollars, except per share and share data):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Voyage revenues
$
   234,035
 
$
   221,987
 
$
   331,976
 
$
   64,866
 
$
   121,057
 
Management fee income
 
251
 
 
119
 
 
 
 
 
 
 
 
 
234,286
 
 
222,106
 
 
331,976
 
 
64,866
 
 
121,057
 
Voyage expenses
 
72,877
 
 
65,821
 
 
64,682
 
 
14,999
 
 
22,695
 
Charter-in hire expenses
 
1,025
 
 
3,550
 
 
5,325
 
 
855
 
 
16,470
 
Vessel operating expenses
 
112,796
 
 
98,830
 
 
101,428
 
 
24,415
 
 
26,273
 
Dry docking expenses
 
14,950
 
 
6,023
 
 
4,262
 
 
1,392
 
 
1,120
 
Depreciation
 
82,070
 
 
81,935
 
 
82,623
 
 
19,645
 
 
21,168
 
Management fees
 
8,436
 
 
7,604
 
 
7,543
 
 
1,814
 
 
1,930
 
General and administrative expenses
 
23,621
 
 
24,602
 
 
30,955
 
 
8,032
 
 
7,319
 
(Gain)/loss on forward freight agreements and bunker swaps
 
 
 
(411
)
 
841
 
 
797
 
 
812
 
Impairment loss
 
321,978
 
 
29,221
 
 
 
 
 
 
 
Loss on time charter agreement termination
 
2,114
 
 
 
 
 
 
 
 
 
Other operational loss
 
 
 
503
 
 
989
 
 
 
 
 
Other operational gain
 
(592
)
 
(1,565
)
 
(2,918
)
 
(2,166
)
 
(5
)
(Gain)/Loss on sale of vessels
 
20,585
 
 
15,248
 
 
(2,598
)
 
369
 
 
 
 
 
659,860
 
 
331,361
 
 
293,132
 
 
70,152
 
 
97,782
 
Operating income/(loss)
 
(425,574
)
 
(109,255
)
 
38,844
 
 
(5,286
)
 
23,275
 
Interest and finance costs
 
(29,661
)
 
(41,217
)
 
(50,458
)
 
(11,141
)
 
(14,273
)
Interest and other income
 
1,090
 
 
876
 
 
2,997
 
 
620
 
 
893
 
Gain/(Loss) on derivative financial instruments, net
 
(3,268
)
 
(2,116
)
 
246
 
 
247
 
 
(1
)
Loss on debt extinguishment
 
(974
)
 
(2,375
)
 
(1,257
)
 
(358
)
 
 

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Year ended December 31,
Three months ended March 31,
 
2015(1)
2016(1)
2017(1)
2017(1)
2018
Total other expenses, net
 
(32,813
)
 
(44,832
)
 
(48,472
)
 
(10,632
)
 
(13,381
)
Income/(loss) before equity in income of investee
 
(458,387
)
 
(154,087
)
 
(9,628
)
 
(15,918
)
 
9,894
 
Equity in income of investee
 
210
 
 
126
 
 
93
 
 
33
 
 
6
 
Income/(loss) before taxes
 
(458,177
)
 
(153,961
)
 
(9,535
)
 
(15,885
)
 
9,900
 
Income taxes
 
 
 
(267
)
 
(236
)
 
(65
)
 
 
Net income/(loss)
$
(458,177
)
$
(154,228
)
$
(9,771
)
$
(15,950
)
$
9,900
 
Earnings/(loss) per share, basic
$
(11.71
)
$
(3.24
)
$
(0.16
)
$
(0.26
)
$
0.15
 
Earnings/(loss) per share, diluted
$
(11.71
)
$
(3.24
)
$
(0.16
)
$
(0.26
)
$
0.15
 
Weighted average number of shares outstanding, basic
 
39,124,673
 
 
47,574,454
 
 
63,034,394
 
 
61,027,878
 
 
64,107,324
 
Weighted average number of shares outstanding, diluted
 
39,124,673
 
 
47,574,454
 
 
63,034,394
 
 
61,027,878
 
 
64,303,356
 
Other Financial Data (In thousands of U.S. Dollars):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by/(used in) operating activities
$
(14,578
)
$
(33,232
)
$
82,804
 
$
6,329
 
$
31,582
 
Net cash provided by/(used in) investing activities
$
(397,508
)
$
(13,425
)
$
(127,101
)
$
(95,216
)
$
(71,266
)
Net cash provided by/(used in) financing activities
$
534,167
 
$
20,366
 
$
122,035
 
$
127,442
 
$
30,500
 
Fleet Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average number of vessels(1)
 
69.06
 
 
69.77
 
 
69.55
 
 
67.3
 
 
72
 
Total ownership days for fleet(2)
 
25,206
 
 
25,534
 
 
25,387
 
 
6,058
 
 
6,483
 
Total available days for fleet(3)
 
24,096
 
 
24,623
 
 
25,272
 
 
6,009
 
 
6,483
 
Charter-in days for fleet(4)
 
108
 
 
366
 
 
428
 
 
90
 
 
928
 
Fleet Utilization(5)
 
96
%
 
96
%
 
100
%
 
99
%
 
100
%
Average daily results (In U.S. Dollars):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Time charter equivalent(6)
 
7,042
 
 
6,208
 
 
10,393
 
 
8,156
 
 
12,586
 
Vessel operating expenses(7)
 
4,475
 
 
3,871
 
 
3,995
 
 
4,030
 
 
4,052
 
(1) We adopted the provisions of ASC 606 on January 1, 2018 using the modified retrospective approach. As a result, comparative periods have not been restated.
 
Year ended December 31,
Three months
ended March 31,
 
2015
2016
2017
2018
Balance Sheet Data at period end (In thousands of U.S. Dollars):
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
   208,056
 
$
   181,758
 
$
   257,911
 
$
   248,158
 
Advances for vessels under construction and vessel acquisition
 
127,910
 
 
64,570
 
 
48,574
 
 
17,028
 
Vessels and other fixed assets, net
 
1,757,552
 
 
1,707,209
 
 
1,775,081
 
 
1,858,347
 
Total assets
 
2,148,846
 
 
2,011,702
 
 
2,145,764
 
 
2,196,083
 
Current portion of long-term debt and short-term lease commitments
 
131,631
 
 
6,235
 
 
189,306
 
 
147,525
 
Total long-term debt, including long term lease commitments, excluding current portion, net of deferred finance fees
 
795,267
 
 
896,332
 
 
789,878
 
 
862,733
 
8.00% Senior Notes due 2019 and 8.30% Senior Notes due 2022, net of unamortized deferred finance fees(8)
 
48,323
 
 
48,757
 
 
48,000
 
 
48,101
 
Common Stock
 
438
 
 
566
 
 
642
 
 
642
 
Total Stockholders’ equity
 
1,135,358
 
 
1,037,230
 
 
1,088,052
 
 
1,097,389
 
Total liabilities and stockholders’ equity
$
2,148,846
 
$
2,011,702
 
$
2,145,764
 
$
2,196,083
 
(1) Average number of vessels is the number of vessels that constituted our operating fleet for the relevant period, as measured by the sum of the number of days each operating vessel was a part of our operating fleet during the period divided by the number of calendar days in that period.

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(2) Ownership days are the total number of calendar days each vessel in the fleet was owned by us for the relevant period.
(3) Available days for the fleet are the Ownership days after subtracting off-hire days for major repairs, dry docking or special or intermediate surveys and lay-up days, if any.
(4) Charter-in days are the total days that we charter-in third-party vessels
(5) Fleet utilization is calculated by dividing (x) Available days plus Charter-in days by (y) Ownership days plus Charter-in days for the relevant period.
(6) Time charter equivalent rate (the “TCE rate”) represents the weighted average daily TCE rate of our operating fleet (including owned fleet and fleet under charter-in arrangements). TCE rate is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE rate is determined by dividing voyage revenues (net of voyage expenses, charter-in hire expenses and amortization of fair value of above/below market acquired time charter agreements, if any) by Available days for the relevant time period. 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. Charter-in hire expenses related to hire paid to charter-in third party vessels either under time charters or voyage charters. TCE rate is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance despite changes in the mix of charter types (i.e., voyage charters, time charters and bareboat charters and pool arrangements) under its vessels may be employed between the periods. We included TCE revenues, a non-GAAP measure, as it provides additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure, and it assists our management in making decisions regarding the deployment and use of our operating vessels and in evaluating our financial performance. The above reported TCE rate for the year ended December 31, 2017 and the three months ended March 31, 2018, calculated excluding Star Logistics that was recently formed as further discussed elsewhere herein. Our calculation of TCE rate may not be comparable to that reported by other companies. For further information concerning our calculation of TCE rate and of reconciliation of TCE rate to voyage revenue, please see “Item 5. Operating and Financial Review and Prospects – A. Operating Results” in our 2017 20-F and “Operating Results – Factors Affecting Our Results of Operations” in our Q1 2018 6-K. The following table reflects the calculation of our TCE rates. The table presents the reconciliation of the TCE revenue to voyage revenue as reflected in the consolidated statements of operations, excluding voyage revenue earned from Star Logistics as further discussed above:
 
Year ended December 31,
Three months ended March 31,
(In thousands of U.S. Dollars, except as otherwise stated)
2015
2016
2017
2017
2018
Voyage revenues
$
234,035
 
$
221,987
 
$
327,892
(a) 
$
64,866
 
$
97,955
(b) 
Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Voyage expenses
 
(72,877
)
 
(65,821
)
 
(63,034
)(c)
 
(14,999
)
 
(16,358
)(d)
Charter-in hire expenses
 
(1,025
)
 
(3,550
)
 
(2,197
)(e)
 
(855
)
 
(f) 
Plus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of fair value of below/above market acquired time charter agreements
 
9,540
 
 
254
 
 
 
 
 
 
 
Time charter equivalent revenues
$
169,673
 
$
152,870
 
$
262,661
 
$
49,012
 
$
81,597
 
Fleet available days
 
24,096
 
 
24,623
 
 
25,272
 
 
6,009
 
 
6,483
 
Daily time charter equivalent (TCE) rate (in U.S. Dollars)
$
7,042
 
$
6,208
 
$
10,393
 
$
8,156
 
$
12,586
 
(a) Voyage revenues used to calculate TCE rate for the year ended December 31, 2017 consist of (1) reported voyage revenues of $332.0 million minus (2) voyage revenues of $4.1 million attributable to Star Logistics.
(b) Voyage revenues used to calculate TCE rate for the three months ended March 31, 2018 consist of (1) reported voyage revenues of $121.1 million minus (2) voyage revenues of $23.1 million attributable to Star Logistics.
(c) Voyage expenses used to calculate TCE rate for the year ended December 31, 2017 consist of (1) reported voyage expenses of $64.7 million minus (2) voyage expenses of $1.6 million attributable to Star Logistics.
(d) Voyage expenses used to calculate TCE rate for the three months ended March 31, 2018 consist of (1) reported voyage expenses of $22.7 million minus (2) voyage expenses of $6.3 million attributable to Star Logistics.
(e) Charter-in hire expenses used to calculate TCE rate for the year ended December 31, 2017 consist of (1) reported charter-in hire expenses of $5.3 million minus (2) charter-in hire expenses of $3.1 million attributable to Star Logistics.
(f) Charter-in hire expenses used to calculate TCE rate for the three months ended March 31, 2018 consist of (1) reported charter-in hire expenses of $16.5 million minus (2) charter-in hire expenses of $16.5 million attributable to Star Logistics.
(7) Average daily operating expenses per vessel are calculated by dividing vessel operating expenses by Ownership days.
(8) On November 6, 2014, we issued $50.0 million aggregate principal amount of 8.00% Senior Notes due 2019 (the “2019 Notes”). The net proceeds were $48.4 million. On November 9, 2017, we issued $50.0 million aggregate principal amount of 8.30% Senior Notes due 2022 (the “2022 Notes”). The proceeds were $50.0 million and were applied, to redeem the 2019 Notes on December 11, 2017 at an aggregate redemption price of 100% of the outstanding principal amount, plus accrued and unpaid interest to, but not including, the date of redemption.

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RISK FACTORS

An investment in the common shares involves risks. Before deciding whether to purchase common shares, you should consider the risks discussed in the accompanying prospectus, including the sections of the accompanying prospectus titled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors,” and those set forth under the heading “Item 3. Key Information—D. Risk Factors” in the 2017 20-F, that we have incorporated by reference into this prospectus. While we believe that these risks are the most important for you to consider, you should read this section in conjunction with our financial statements, the notes to those financial statements and our management’s discussion and analysis of financial condition and results of operations included in our periodic reports and incorporated into this prospectus by reference. The occurrence of one or more of those risk factors could adversely impact our business, financial condition or results of operations. In such a case, you may lose all or part of your original investment.

Risks Related to this Offering and Ownership of our Common Shares

A significant number of additional shares are available for future sale, and we are issuing a significant number of additional common shares in connection with various vessel acquisition transactions. As a result, the trading price of common shares could be volatile and investors may experience significant dilution.

After this offering, the sale of our common shares in the public market, or the perception that such sales could occur, could harm the prevailing market price of our common shares. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Recently, we have entered into agreements to acquire 31 additional vessels and newbuilding contracts for three additional Newcastlemax vessels. In connection with these Vessel Acquisitions Transactions, we have agreed to issue a total of approximately 27.6 million common shares to the sellers, which is equal to approximately 43% of our issued and outstanding common shares as of June 11, 2018. Approximately 13.7 million common shares are being issued pursuant to Regulation S under the Securities Act to shareholders of Songa in the Songa Vessel Acquisition and will be listed for trading on the stock exchange Oslo Børs, and trading activity in our common shares on the Oslo Børs may have an impact on the trading price of our common shares on Nasdaq. Approximately 10.5 million and 3.4 million common shares will be issued to other vessel sellers in the Augustea Vessel Acquisition and the OCC Vessel Acquisition, respectively, and will be subject to registration rights agreements and may be sold immediately following their issuance. See “Prospectus Summary – Recent Developments – Vessel Acquisition Transactions.” You may experience significant dilution as a result of the issuance of these common shares.

In connection with this offering we have agreed that we will not, subject to certain exceptions, during the period from the date of the underwriting agreement through the date that is 45 days subsequent to the date thereof, offer, sell, contract or otherwise dispose of, or file any registration statement under the Securities Act in respect of, securities convertible into or exercisable or exchangeable for our common shares. Each of Oaktree, our directors and executive officers has entered into a similar agreement with the underwriter, subject to certain exceptions, including, but not limited to, being permitted to pledge their common shares as collateral or security for foreign exchange swaps and custody agreements and to make transfers of pledged common shares as a result of foreclosure thereupon.

As of June 11, 2018, we had granted 596,500 common shares to certain of our directors, officers and employees under our Equity Incentive Plans, which have not yet vested. We may file one or more registration statements on Form S-8 under the Securities Act to register the common shares subject to issuance under our Equity Incentive Plans. Any such Form S-8 registration statements will automatically become effective upon filing. Once these shares are registered, they can be sold in the public market upon issuance, subject to restrictions under the securities laws applicable to resales by affiliates.

The market price of our common shares could drop significantly if the holders of our shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our common shares or other securities. In the future, we may also issue our securities in connection with investments or acquisitions. The amount of our common shares issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding common shares. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you. In addition, we may offer additional common shares in the future, whether or not in connection with investments or acquisitions, which may result in additional significant dilution.

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Because of the secondary listing of our common shares on the Oslo Børs, we are subject to additional disclosure and compliance requirements that may conflict with those imposed by the SEC and Nasdaq, and we may experience trade fluctuations based on arbitrage activities.

If the Songa Vessel Acquisition is completed, we expect to establish a secondary listing of our common shares on the Oslo Børs. Pursuant to the rules of the Oslo Børs, we must comply with certain disclosure and other obligations that may differ in timing and substance from those imposed by the SEC and Nasdaq. In addition, the secondary listing may create opportunities for trading arbitrage, particularly in connection with currency fluctuations between the trading in U.S. dollars on Nasdaq and in Norwegian kroner on the Oslo Børs, which could impact the trading price of our common shares.

The market price of our common shares has fluctuated widely and may fluctuate widely in the future, or there may be no continuing public market for you to resell our common shares.

The market price of our common shares has fluctuated widely since our common shares began trading on Nasdaq in December 2007 and may continue to do so as a result of many factors such as actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry, mergers and strategic alliances in the shipping industry, market conditions in the shipping industry, changes in government regulation, shortfalls in our operating results from levels forecast by securities analysts, announcements concerning us or our competitors and the general state of the securities market. Further, there may be no continuing active or liquid public market for our common shares.

If the market price of our common shares drops below $5.00 per share, under stock exchange rules, our shareholders will not be able to use such shares as collateral for borrowing in margin accounts. This inability to continue to use our common shares as collateral may lead to sales of such shares creating downward pressure on and increased volatility in the market price of our common shares.

The shipping industry has been highly unpredictable and volatile. The market for common shares in this industry may be equally volatile. Therefore, we cannot assure you that you will be able to sell any of our common shares you may have purchased at a price greater than or equal to its original purchase price, or that you will be able to sell them at all.

The Internal Revenue Service may seek to treat us as a “passive foreign investment company,” which could have adverse U.S. federal income tax consequences to U.S. Holders.

As described more fully herein, we believe that we currently are not a “passive foreign investment company” (a “PFIC”) for U.S. federal income tax purposes, and we do not expect to become a PFIC in the future. It is possible that the Internal Revenue Service may seek to treat us as a PFIC, in which case, if, contrary to our expectation, the Internal Revenue Service were successful and we were classified as a PFIC for any taxable year during which a U.S. Holder (as defined in the 2017 20-F) owns common shares (regardless of whether we continue to be a PFIC), the U.S. Holder would be subject to special adverse rules, including taxation at maximum ordinary income rates plus an interest charge on both gains on sale and certain dividends, unless the U.S. Holder makes an election to be taxed under an alternative regime. Certain elections may be available to U.S Holders if we were classified as a PFIC. Please refer to the discussion of these matters in the 2017 20-F, “Item 10. Additional Information—Taxation—Material United States Federal Income Tax Considerations—U.S. Federal Income Taxation of U.S. Holders—Passive Foreign Investment Company Considerations.” U.S. Holders are urged to consult their tax advisors concerning the U.S. federal income tax consequences of holding common shares if we are considered a PFIC in any taxable year.

Risks Related to Our Company

Certain benefits we expect from the Vessel Acquisition Transactions are based on projections and assumptions, which are uncertain and subject to change.

We have made certain estimates and assumptions with respect to benefits that we expect from the Vessel Acquisition Transactions and the eventual operations and chartering of the vessels as we acquire them. These estimates and assumptions may prove to be inaccurate or may change in the future, and actual results could differ materially from those estimates or assumptions. There can be no assurance that we will realize these benefits as a result of the Vessel Acquisition Transactions. The market price of our common shares may decline if our costs are

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greater than we expect, the estimates are not realized or we do not achieve the perceived benefits of the Vessel Acquisition Transactions, including perceived benefits to our voyage revenues, TCE rate, cash flows and EBITDA, earnings and earnings per share, as rapidly or to the extent anticipated.

We have made and in the future may make acquisitions and significant strategic investments and acquisitions, which may involve a number of risks. If we are unable to address these risks successfully, such acquisitions and investments could have a materially adverse impact on our business, financial condition and results of operations.

In addition to the Vessel Acquisition Transactions, all of which we expect to be consummated in 2018, we have undertaken a number of acquisitions and investments in the past, including the Vessel Acquisition Transactions, and may do so from time to time in the future. The risks involved with these acquisitions and investments include:

the possibility that we may not receive a favorable return on our investment or incur losses from our investment, or the original investment may become impaired;
failure to satisfy or set effective strategic objectives;
our assumption of known or unknown liabilities or other unanticipated events or circumstances;
the diversion of management’s attention from normal daily operations of the business;
difficulties or delays in the transfer of vessels, equipment or personnel;
failure to retain key personnel;
unexpected capital equipment outlays and related expenses;
insufficient revenues to offset increased expenses associated with acquisitions;
under-performance problems with acquired assets;
issuance of common stock that could dilute our current shareholders;
the opportunity cost associated with committing capital in such investments;
undisclosed defects, damage, maintenance requirements or similar matters relating to acquired vessels; and
becoming subject to litigation.

We may not be able to address these risks successfully without substantial expense, delay or other operational or financial problems. Any delays or other such operations or financial problems could adversely impact our business, financial condition and results of operations.

We cannot assure you that we will be successful in finding employment for all of our vessels.

As of June 11, 2018, our existing fleet of 74 vessels had an aggregate capacity of approximately 8.2 million dwt, which will be increased to approximately 12.3 million dwt with the addition of the 31 additional vessels and three newbuilding vessels, on a transaction-adjusted basis. We intend to employ our vessels primarily in the spot market, under short term time charters or voyage charters. We will own a large number of vessels that will enter these markets in a relatively short period of time without having previously secured employment. We cannot assure you that we will be successful in finding employment for these vessels in the volatile spot market immediately upon their deliveries to us or whether any such employment will be at profitable rates, nor can we assure you continued timely employment of our existing vessels.

We may be unable to attract and retain qualified, skilled employees or crew necessary to operate our business.

Our success depends in large part on the ability of us to attract and retain highly skilled and qualified personnel, both shoreside personnel and crew. In crewing our vessels, we require technically skilled employees with specialized training who can perform physically demanding work. In connection with the Vessel Acquisition Transactions, there is a possibility some of the existing crews aboard the acquir