1390707--3/31/2008--SEANERGY_MARITIME

related topics

{interest, director, officer}

{tax, income, asset}

{stock, price, share}

{operation, international, foreign}

{investment, property, distribution}

{acquisition, growth, future}

{stock, price, operating}

{condition, economic, financial}

{cost, regulation, environmental}

{gas, price, oil}

We will dissolve and liquidate if we do not consummate a business combination and our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them. We may choose to redeem our outstanding warrants at a time that is disadvantageous to our warrant holders. Although we are required to use our best efforts to have an effective registration statement covering the issuance of the shares underlying the warrants at the time that our warrant holders exercise their warrants, we cannot guarantee that a registration statement will be effective, in which case our warrant holders may not be able to exercise our warrants, rendering them practically worthless. We may issue shares of our capital stock or debt securities to complete a business combination, which would reduce the equity interest of our stockholders and likely cause a change in control of our ownership. Our officers and directors control a substantial interest in us and thus may influence certain actions requiring stockholder vote. Our ability to effect a business combination and to be successful afterward will be totally dependent upon the efforts of our key personnel, some of whom may join us following a business combination and whom we would have only a limited ability to evaluate. It is also possible that our current officers and directors will resign upon the consummation of a business combination. None of our officers or directors has ever been associated with a blank check company which could adversely affect our ability to consummate a business combination. Our officers and directors may allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This could have a negative impact on our ability to consummate a business combination. Our officers and directors may in the future become affiliated with entities engaged in business activities similar to those intended to be conducted by us and accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented. Certain of our stockholders, including our officers and directors, beneficially own shares of our common stock that will not participate in liquidation distributions and therefore they may have a conflict of interest in determining whether a particular target business is appropriate for a business combination. Certain of our stockholders will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount outside of the trust account unless the business combination is consummated and therefore they may have a conflict of interest in determining whether a particular target business is appropriate for a business combination and in the public stockholders best interest. Since certain of our existing shareholders, including our officers and directors, will lose their entire investment in us if a business combination is not consummated and may be required to pay costs associated with our liquidation, certain our existing shareholders may purchase shares of our common stock from shareholders who would otherwise choose to vote against a proposed business combination or exercise their redemption rights in connection with such business combination. Because all our directors and officers reside outside of the United States and, after the consummation of a business combination, substantially all of our assets may be located outside of the United States, it may be difficult for investors to enforce their legal rights against such individuals. It is probable that our initial business combination will be with a single target business, which may cause us to be solely dependent on a single business and a limited number of services. Because of our limited resources and the significant competition for business combination opportunities, we may not be able to consummate an attractive business combination. We may be unable to obtain additional financing, if required, to complete a business combination or to fund the operations and growth of the target business, which could compel us to restructure the transaction or abandon a particular business combination. Risks Associated With Our Acquisition of a Target Business in the Maritime Shipping Industry If charter rates fluctuate and the maritime shipping industry continues to undergo cyclical turns, it may have a negative impact on our profitability and operations. Changes in the maritime shipping industry may reduce the demand for the types of vessels we seek to acquire or the services we may ultimately provide and thereby reduce our profitability. If we were to acquire vessels or a company with agreements to purchase individual vessels, it is highly unlikely that proxy materials provided to our shareholders would include historical financial statements and, accordingly, investors will not have historical financial statements on which to rely in making their decision whether to vote for the acquisition. If a business combination involves the ownership of vessels, such vessels could be arrested by maritime claimants, which could result in the interruption of business and have an adverse effect on revenue and profitability. The ownership and operation of vessels in international trade is susceptible to world events, which could be detrimental to our financial condition and operating performance. Inherent in our operations are hazards which require continual oversight and control. Political instability could harm our business. Our business is subject to foreign currency risks. If we acquire a business that charters vessels on the spot market, it may increase our risk of doing business following the business combination. Management services relating to a target company s vessels may be performed by management companies that are affiliates of our officers and directors which could result in potential conflicts of interest. Because certain financial information will be required to be provided to our shareholders in connection with a proposed business combination, prospective target businesses may be limited. Risks associated with our securities Our outstanding warrants may have an adverse effect on the market price of common stock and make it more difficult to effect a business combination. If certain of our stockholders exercise their registration rights, it may have an adverse effect on the market price of our common stock and the existence of these rights may make it more difficult to effect a business combination. The American Stock Exchange may delist our securities from quotation on its exchange which could limit investors ability to make transactions in our securities and subject us to additional trading restrictions. U.S. tax authorities could treat the Foreign Subsidiary as a passive foreign investment company, which could have adverse U.S. federal income tax consequences to U.S. investors. A U.S. Holder of a warrant may have adverse U.S. federal income tax consequences if its warrant becomes exercisable into shares of the Foreign Subsidiary and the Foreign Subsidiary were to be classified as a PFIC. An investment in our securities may involve adverse U.S. federal income tax consequences because the redemption or liquidation price per share is greater than an investor s initial tax basis in our common stock. As we have made an election to be classified as a partnership for U.S. federal income tax purposes, U.S. investors may have taxable income in advance of their receipt of cash. U.S. investors may be subject to adverse tax consequences if we fail to be treated as a partnership for U.S. federal income tax purposes U.S. investors may recognize gain for U.S. federal income tax purposes on the actual or deemed transfer of our assets to a foreign corporation. A U.S. Holder of a warrant may have adverse U.S. federal income tax consequences if we were to liquidate pursuant to a shareholder vote following the formation of and the transfer of our assets to the Foreign Subsidiary. An investor may be subject to adverse U.S. federal income tax consequences in the event the Internal Revenue Service ( IRS ) were to disagree with the U.S. federal income tax consequences described herein. If we are deemed to be an investment company, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete a business combination. Our directors may not be considered independent under the policies of the North American Securities Administrators Association, Inc. Because we may acquire a company located outside of the United States, we may be subject to various risks of the foreign jurisdiction in which we ultimately operate. We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law, causing our public shareholders to have more difficulty in protecting their interests. If our common stock becomes subject to the SEC s penny stock rules, broker-dealers may experience difficulty in completing customer transactions and trading activity in our securities may be adversely affected.

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1390707--3/31/2008--SEANERGY_MARITIME_CORP.