ITEM 10.          ADDITIONAL INFORMATION

A.            Share Capital

Not applicable.

B.            Memorandum and Articles of Association

We are a corporation formed under the laws of the Republic of the Marshall Islands on June 24, 2016 and our affairs are governed by our amended and restated articles of incorporation, our amended and restated bylaws, which are filed as exhibit 1.1 and 1.2, respectively, to this annual report, and the laws of the Republic of the Marshall Islands.

Below is a summary of the description of our capital stock, including the rights, preferences and restrictions attaching to each class of stock. Because the following is a summary, it does not contain all information that you may find useful. For more complete information, you should read our amended and restated articles of incorporation and amended and restated bylaws, which are incorporated by reference herein.

Purpose

Our purpose, as stated in our amended and restated articles of incorporation, is to engage in any lawful act or activity for which corporations may be organized under the BCA, and we may exercise all the powers and privileges that are necessary or convenient to the conduct, promotion or attainment of our business or purposes, including, but not limited to, effecting a merger, capital stock exchange, asset acquisition, debt acquisition, stock purchase, reorganization or other similar business combination, involving us and one or more businesses or entities, which we refer to herein as our initial business combination.

Authorized Capitalization

Founder Shares

On July 11, 2016, we issued to our sponsor an aggregate of 4,312,500 founder shares (which are Class B common shares) in exchange for a capital contribution of $25,000, or $0.006 per share.

The founder shares are identical to the Class A common shares included in the units sold in the IPO, except that:

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only holders of the founder shares will vote on the election of directors prior to our initial business combination;

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the founder shares are subject to certain transfer restrictions, as described in more detail below;

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our sponsor has agreed to (i) waive its redemption rights with respect to its founder shares and public shares in connection with the completion of our initial business combination, (ii) waive its redemption rights with respect to its founder shares in connection with a shareholder vote to approve an amendment to our amended and restated articles of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 24 months from the closing of the IPO, and (iii) waive its rights to liquidating distributions from the trust account with respect to only its founder shares if we fail to complete our initial business combination within 24 months from the closing of the IPO (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). If we submit our initial business combination to our public shareholders for a vote, our sponsor has agreed to vote its founder shares and any public shares purchased during or after the IPO in favor of our initial business combination. As a result, in addition to our sponsor's founder shares, we would need at least 5,689,913, or 37.5%, of the outstanding 15,173,100 Class A common shares outstanding to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted). The members of our management team also have entered into agreements with us similar to the one entered into by our sponsor to (i) vote their shares in favor of our initial business combination if submitted to our shareholders for a vote, and (ii) waive their redemption rights in connection with the completion of our initial business combination, in each case, with respect to any public shares acquired by them in or after the IPO; and

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the founder shares are automatically convertible into Class A common shares at the time of our initial business combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described in more detail herein.

On December 16, 2016, the underwriters of the IPO exercised their overallotment option in part, for a total of an additional 173,100 units. As a result of the partial exercise of the overallotment option, our sponsor forfeited 519,225 Class B common shares on January 3, 2017 in order to maintain the ownership of our sponsor, on an as-converted basis, at 20% of our issued and outstanding common shares.

In the case that additional Class A common shares, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the IPO and related to the closing of the business combination, if applicable, the ratio at which Class B common shares shall convert into Class A common shares will be adjusted so that the number of Class A common shares issuable upon conversion of all Class B common shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of all common shares outstanding upon the completion of the IPO plus all Class A common shares and equity-linked securities issued or deemed issued in connection with the initial business combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial business combination or pursuant to warrants issued to our sponsor, after taking into account any Class A common shares redeemed in connection with the initial business combination.

Our sponsor has agreed not to transfer, assign or sell any of its founder shares until the earlier of (i) one year after the completion of our initial business combination and (ii) the date on which we complete a liquidation, merger, share exchange or other similar transaction after our initial business combination that results in all of our shareholders having the right to exchange their common shares for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of our sponsor with respect to any founder shares. We refer to such transfer restrictions throughout this annual report as the lock-up. Notwithstanding the foregoing, if the closing price of our Class A common shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the founder shares will be released from the lock-up.

Units

Each unit consists of one Class A common share and one-half warrant. Our units commenced trading on NASDAQ on November 18, 2016. The Class A common shares and warrants comprising the units began trading separately from our units on January 9, 2017, the 52nd day following the date of the IPO. Upon separate trading, holders have the option to continue to hold units or separate their units into the component securities. Holders must have their brokers contact our transfer agent in order to separate the units into Class A common shares and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade warrants.

Common Shares

Prior to our initial business combination, only holders of our founder shares will have the right to vote on the election of directors. Holders of our public shares will not be entitled to vote on the election of directors during such time. These provisions of our amended and restated articles of incorporation may only be amended with the approval of at least 90% of our common shares voting in a general meeting. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law, holders of our founder shares and holders of our public shares will vote together as a single class.

Our shareholders are entitled to one vote for each share held of record on all matters to be voted on by shareholders. In connection with any vote required for our initial business combination, our sponsor has agreed to vote all of the common shares owned by it prior to the completion of the IPO with respect to our initial business combination. Our executive officers, directors and sponsor also have agreed that if they acquire common shares (including Class A common shares included in units so acquired) in or following the completion of the IPO they will vote all such acquired shares in favor of our initial business combination.

Our amended and restated articles of incorporation provide that we have 24 months from the closing of the IPO to complete our initial business combination. If we are unable to complete our initial business combination within such period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including investment earnings (less up to $100,000 of investment earnings to pay dissolution expenses and net of taxes payable and any amounts released to us to fund working capital requirements), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders' rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii), to our obligations under Marshall Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the above-specified time period.

Our sponsor has entered into an agreement with us, pursuant to which they have agreed to waive its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to complete our initial business combination within 24 months from the closing of the IPO. However, if our sponsor or management team acquire public shares in or after the IPO, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted time frame.

The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination within 24 months from the closing of the IPO and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.

Our sponsor, executive officers and directors have agreed that they will not propose any amendment to our amended and restated articles of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the IPO unless we provide our public shareholders with the opportunity to redeem their Class A common shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including investment earnings (net of taxes payable and any amounts released to us to fund working capital requirements), divided by the number of then outstanding public shares, subject to the limitations described elsewhere herein. For example, our board of directors may propose such an amendment if it determines that additional time is necessary to complete our initial business combination. In such event, we may seek shareholder approval of such proposal and, in connection therewith, provide our public shareholders with the redemption rights described above upon shareholder approval of such amendment.

Our Class A common shares have no conversion, preemptive, or other subscription rights and there are no sinking fund or redemption provisions applicable to the common shares, except that public shareholders, other than our sponsor and members of our management team, have the right to have their common shares redeemed in connection with the initial business combination. Public shareholders who redeem their common shares in connection with the initial business combination will still have the right to exercise the warrants that they received as part of the units.

Our amended and restated articles of incorporation provides that before our initial business combination, we may not issue additional stock that participates in any manner in the proceeds of the trust account, or that votes as a class with the common shares sold in the IPO on a business combination.

Preferred Shares

Our amended and restated articles of incorporation authorize the issuance of up to 50,000,000 shares, par value $0.0001 per share, of blank check preferred stock with such designation, rights and preferences as may be determined from time to time by our board of directors. No shares of preferred stock have been or are being issued or registered in the IPO. Accordingly, our board of directors is empowered, without shareholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of common shares. We may issue some or all of the preferred stock to consummate a business combination. In addition, the preferred stock could be utilized as a method of discouraging, delaying or preventing a change in control of us. However, our amended and restated articles of incorporation prohibits us from issuing preferred stock that participates in any manner in the proceeds of the trust account or which votes as a class with the common shares on our initial business combination, but we may issue preferred stock in connection with the consummation of our initial business combination. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future.

Warrants

Public Warrants

Each full warrant entitles the holder to purchase one Class A common share at a price of $11.50 per share, subject to adjustment as discussed below, at any time, unless the warrants have previously expired, commencing on the later of:

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30 days after the consummation of the initial business combination; and

·

12 months from the closing of the IPO; provided that, during the period in which the warrants are exercisable, a registration statement under the Securities Act covering the Class A common shares issuable upon exercise of the warrants is effective and a current prospectus relating to the Class A common shares issuable upon the exercise of the warrants is available.

We have agreed to use our best efforts to have an effective registration statement covering our Class A common shares reserved for issuance upon exercise of the warrants from the date the warrants become exercisable and to maintain a current prospectus relating to those Class A common shares until the warrants expire or are redeemed by us.

The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or, if an effective registration statement covering the Class A common shares issuable upon exercise of the warrants is not then effective and a prospectus relating to such Class A common shares is not then available, upon such registration statement being effective and such prospectus being available for five consecutive business days, or in either case, earlier upon redemption or liquidation or, in either case, earlier upon redemption or liquidation by us. If we elect to redeem the warrants, we will have the option to require all holders who elect to exercise their warrants prior to redemption to do so on a cashless basis. We may redeem the warrants (except as described herein with respect to the private placement warrants) at any time after the warrants become exercisable:

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in whole and not in part;

·

at a price of $0.01 per warrant;

·

upon a minimum of 30 days' prior written notice of redemption to each warrant holder; and

·

only if (x) the closing price of our Class A common shares on NASDAQ, or any other national securities exchange on which our Class A common shares may be traded, equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period ending three business days before we send the notice of redemption to warrant holders, (y) a registration statement under the Securities Act covering Class A common shares issuable upon exercise of the warrants is effective and remains effective from the date on which we send a redemption notice to and including the redemption date and (z) a current prospectus relating to the Class A common shares issuable upon exercise of the warrants is available from the date on which we send a redemption notice to and including the redemption date.

We established this last criterion to provide warrant holders with the opportunity to realize a premium to the warrant exercise price prior to the redemption of their warrants, as well as to provide them with a degree of liquidity to cushion the market reaction, if any, to our election to redeem the warrants. If the foregoing conditions are satisfied and we call the warrants for redemption, each warrant holder will then be entitled to exercise his, her or its warrants prior to the scheduled redemption date. There can be no assurance that the price of our Class A common shares will not fall below the $18.00 per share trigger price or the $11.50 per share warrant exercise price after the redemption notice is delivered. We do not need the consent of the underwriters or our shareholders to redeem the outstanding warrants.

If we call the warrants for redemption, our management will have the option to require all holders that elect to exercise such warrants to do so on a "cashless basis," provided that such cashless exercise is permitted under the laws of our corporate jurisdiction. In such event, each holder would pay the exercise price by surrendering the warrants and would receive on exercise that number of Class A common shares equal to the quotient obtained by dividing (x) the product of the number of common shares underlying the warrants being surrendered, multiplied by the difference between the exercise price of the warrants and the "fair market value" by (y) the fair market value and then would receive Class A common shares underlying the non-surrendered warrants. The "fair market value" shall mean the average reported closing price of our Class A common shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. Such warrants may not be settled on a cashless basis unless they have been called for redemption and we have required all such warrants to be settled on a cashless basis.

At or promptly following the completion of our initial business combination, we will use our best efforts to transfer our corporate domicile from the Marshall Islands to Belgium, which requires our shareholders' approval under Belgian law and compliance with other applicable legal requirements. We have been advised by our Belgian legal counsel that the cashless exercise of warrants is impermissible under Belgian law, and accordingly, should we effect such transfer of corporate domicile, warrant holders will be unable to exercise their warrants on a cashless basis and, therefore, absent an exemption from registration, will be unable to exercise their warrants without an effective registration statement.

The right to exercise the warrants will be forfeited unless they are exercised before the redemption date specified in the notice of redemption. From and after the redemption date, the record holder of a warrant will have no further rights except to receive, upon surrender of the warrants, the redemption price.

The warrants are issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us, which is attached to this annual report as Exhibit 4.2.

The exercise price and number of Class A common shares issuable on exercise of the warrants may be adjusted in certain circumstances, including in the event of a stock dividend or our recapitalization, reorganization, merger or consolidation.

If the number of outstanding Class A common shares is increased by a capitalization or share dividend payable in Class A common shares, or by a split-up of Class A common shares or other similar event, then, on the effective date of such share dividend, split-up or similar event, the number of Class A common shares issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding Class A common shares. A rights offering to holders of Class A common shares entitling holders to purchase Class A common shares at a price less than the fair market value will be deemed a capitalization of a number of Class A common shares equal to the product of (i) the number of Class A common shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Class A common shares) multiplied by (ii) one (1) minus the quotient of (x) the price per Class A ordinary share paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for Class A common shares, in determining the price payable for Class A common shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of Class A common shares as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the Class A common shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.

In addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to the holders of Class A common shares on account of such Class A common shares (or other shares of our capital stock into which the warrants are convertible), other than (a) as described above, (b) certain ordinary cash dividends, (c) to satisfy the redemption rights of the holders of Class A common shares in connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of Class A common shares in connection with a shareholder vote to amend our amended and restated articles of incorporation to modify the substance or timing of our obligation to redeem 100% of our Class A common shares if we do not complete our initial business combination within 24 months from the closing of the IPO, (e) as a result of the repurchase of Class A common shares by us if a proposed business combination is presented to our shareholders for approval or (f) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each Class A ordinary share in respect of such event.

If the number of outstanding Class A common shares is decreased by a consolidation, combination, reverse share split or redesignation of Class A common shares or other similar event, then, on the effective date of such consolidation, combination, reverse share split, redesignation or similar event, the number of Class A common shares issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding Class A common shares.

Whenever the number of Class A common shares purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of Class A common shares purchasable upon the exercise of the warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of Class A common shares so purchasable immediately thereafter.

In case of any redesignation or reorganization of the outstanding Class A common shares (other than those described above or that solely affects the par value of such Class A common shares), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that does not result in any redesignation or reorganization of our outstanding Class A common shares), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of our Class A common shares immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such redesignation, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if the holders of our Class A common shares were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by the holders of Class A common shares in such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such shareholders (other than a tender, exchange or redemption offer made by us in connection with redemption rights held by our shareholders as provided for in our amended and restated articles of incorporation or as a result of the redemption of Class A common shares by us if a proposed initial business combination is presented to our shareholders for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the outstanding Class A common shares, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a shareholder if such warrant holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Class A common shares held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustment (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the warrant agreement. Additionally, if less than 70% of the consideration receivable by the holders of Class A common shares in such a transaction is payable in the form of capital stock or shares in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following the public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the per share consideration minus Black-Scholes Warrant Value (as defined in the warrant agreement) of the warrant.

The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied (except in the event we have required cashless exercise of the warrants in connection with a redemption) by full payment of the exercise price, by certified check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of Class A common shares and any voting rights until they exercise their warrants and receive Class A common shares. After the issuance of Class A common shares upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders.

No warrants will be exercisable unless at the time of exercise a registration statement relating to Class A common shares issuable upon exercise of the warrants is effective and a prospectus relating to Class A common shares issuable upon exercise of the warrants is available and the Class A common shares have been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants. Holders of the warrants are not entitled to net cash settlement and the warrants may only be settled by delivery of shares of our Class A common shares and not cash. Under the terms of the warrant agreement, we have agreed to meet these conditions and use our commercially reasonable efforts to maintain an effective registration statement and to make available a current prospectus relating to Class A common shares issuable upon exercise of the warrants until the expiration or earlier redemption of the warrants. However, we cannot assure you that we will be able to do so. We have no obligation to settle the warrants or otherwise permit the warrants to be exercised in the absence of an effective registration statement or a currently available prospectus. The warrants may never become exercisable if we fail to comply with these registration requirements. The warrants may be deprived of any value and the market for the warrants may be limited if holders are prohibited from exercising warrants because an effective registration statement and the prospectus relating to the Class A common shares issuable upon the exercise of the warrants is not currently available or if the Class A common shares are not qualified or exempt from qualification in the jurisdictions in which the holders of the warrants reside and we will not be required to cash settle any such warrant exercise. Warrants included in the units sold in the IPO will not be exercisable at the option of the holder on a cashless basis, provided that in connection with a call for redemption of the warrants, we may require all holders who wish to exercise their warrants to do so on a cashless basis. The private placement warrants will not be exercisable at any time unless a registration statement is effective and a prospectus is available. We have not registered the Class A common shares issuable upon exercise of the warrants at this time. However, we have agreed that, as soon as practicable, but in no event later than 30 days after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement covering the Class A common shares issuable upon exercise of the warrants. After the filing of such registration statement, we will use our best efforts to cause the effectiveness thereof as soon as reasonably practicable and to maintain a current prospectus relating to those Class A common shares until the warrants expire or are redeemed, as specified in the warrant agreement. See "Risk Factors—Risks Associated with the Company and the Offering—We have not registered the Class A common shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants and causing such warrants to expire worthless."

Private Placement Warrants

Our sponsor purchased an aggregate of 3,333,333 private placement warrants at a price of $1.50 per warrant in private placement transactions that occurred in connection with our IPO. Pursuant to the underwriters' partial exercise of the overallotment option on December 16, 2016, we sold an additional 23,080 private placement warrants to the sponsor. Each private placement warrant entitles the holder to purchase one Class A common share at $11.50 per share.

The private placement warrants are identical to the warrants included in the units sold in the IPO, except that:

·

the private placement warrants will be exercisable at the option of the holder on a cashless basis so long as they are held by the original purchaser or its permitted transferees and such cashless exercise is permitted under the laws of our corporate jurisdiction;

·

the private placement warrants will not be redeemable by us; and

·

the private placement warrants (including the Class A common shares issuable upon exercise of the private placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the completion of our initial business combination.

If a holder of the private placement warrants elects to exercise them on a cashless basis, that holder would pay the exercise price by surrendering his, her or its warrants for that number of Class A common shares equal to the quotient obtained by dividing (x) the product of the number of Class A common shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the "fair market value" by (y) the fair market value. The "fair market value" shall mean the average reported closing price of the Class A common shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. The reason that we have agreed that the private placement warrants will be exercisable on a cashless basis so long as they are held by the original purchaser and its permitted transferees is because it is not known at this time whether they will be affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that prohibit insiders from selling our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public shareholders who could exercise their warrants and sell the Class A common shares received upon such exercise freely in the open market in order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result, we believe that allowing the holders to exercise the private placement warrants on a cashless basis is appropriate. We would not receive any proceeds to the extent the warrants are exercised on a cashless basis.

Directors

Our directors are elected by a plurality of the votes cast by shareholders entitled to vote.  There is no provision for cumulative voting.

Our amended and restated articles of incorporation require our board of directors to consist of at least one member.  Our board of directors currently consists of six members.  Our amended and restated bylaws may be amended by the vote of a majority of our entire board of directors. Directors are elected annually on a staggered basis, with the term of office of one or another of the three classes expiring each year. Each director elected holds office for a three-year term or until his successor is duly elected and qualified, except in the event of his death, resignation, removal or the earlier termination of his term of office. The term of our initial Class I directors will expire at our 2017 annual meeting of shareholders, our first annual meeting of shareholders following the effectiveness of our Amended and Restated Articles of Incorporation. The term of our Class II directors will expire at our 2018 annual meeting of shareholders. The term of our Class III directors will expire at our 2019 annual meeting of shareholders.

Shareholder meetings

Under our amended and restated bylaws, annual meetings of shareholders will be held at a time and place selected by our board of directors.  The meetings may be held in or outside of the Marshall Islands.  Special meetings may be called at any time by a majority of our board of directors or our Chief Executive Officer.  Our board of directors may set a record date between 15 and 60 days before the date of any meeting to determine the shareholders that will be eligible to receive notice and vote at the meeting.  One or more shareholders representing at least one-third of the total voting rights of our total issued and outstanding shares present in person or by proxy at a shareholder meeting shall constitute a quorum for the purposes of the meeting.

Dissenters' rights of appraisal and payment

Under the BCA, our shareholders have the right to dissent from various corporate actions, including any merger or consolidation and the sale of all or substantially all of our assets not made in the usual course of our business, and receive payment of the fair value of their shares.  In the event of any further amendment of our amended and restated articles of incorporation, a shareholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares.  The dissenting shareholder must follow the procedures set forth in the BCA to receive payment.  In the event that we and any dissenting shareholder fail to agree on a price for the common shares, the BCA procedures involve, among other things, the institution of proceedings in the high court of the Republic of the Marshall Islands or in any appropriate court in any jurisdiction in which our shares are primarily traded on a local or national securities exchange.

Shareholders' derivative actions

There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.

Anti-takeover effect of certain provisions of our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws

Several provisions of our amended and restated articles of incorporation and amended and restated bylaws, which are summarized below, may have anti-takeover effects.  These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our board of directors to maximize shareholder value in connection with any unsolicited offer to acquire us.  However, these anti-takeover provisions, which are summarized below, could also discourage, delay or prevent (1) the merger or acquisition of us by means of a tender offer, a proxy contest or otherwise that a shareholder may consider in its best interest and (2) the removal of incumbent officers and directors.

Blank check preferred stock

Under the terms of our amended and restated articles of incorporation, our board of directors has authority, without any further vote or action by our shareholders, to issue up to 50,000,000 shares of blank check preferred stock.  Our board of directors may issue preferred shares on terms calculated to discourage, delay or prevent a change of control of us or the removal of our management and might harm the market price of our common shares.  We have no current plans to issue any preferred shares.

Election and removal of directors

Our amended and restated articles of incorporation prohibit cumulative voting in the election of directors.  Our amended and restated bylaws require parties other than the board of directors to give advance written notice of nominations for the election of directors.  Our amended and restated articles of incorporation also provide that our directors may be removed for cause upon the affirmative vote of not less than 70% of the outstanding shares of our capital stock entitled to vote for those directors.  These provisions may discourage, delay or prevent the removal of incumbent officers and directors.

Limited actions by shareholders

Our amended and restated articles of incorporation and our amended and restated bylaws provide that any action required or permitted to be taken by our shareholders must be effected at an annual or special meeting of shareholders or by the unanimous written consent of our shareholders.  Our amended and restated articles of incorporation and our amended and restated bylaws provide that, unless otherwise prescribed by law, only a majority of our board of directors or the Chief Executive Officer may call special meetings of our shareholders and the business transacted at the special meeting is limited to the purposes stated in the notice.  Accordingly, a shareholder will be prevented from calling a special meeting for shareholder consideration of a proposal unless scheduled by our board of directors and shareholder consideration of a proposal may be delayed until the next annual meeting.

Advance notice requirements for shareholder proposals and director nominations

Our amended and restated bylaws provide that shareholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of shareholders must provide timely notice of their proposal in writing to the corporate secretary.  Generally, to be timely, a shareholder's notice must be received at our principal executive offices not less than 150 days nor more than 180 days prior to the one year anniversary of the immediately preceding annual meeting of shareholders.  Our amended and restated bylaws also specify requirements as to the form and content of a shareholder's notice.  These provisions may impede shareholders' ability to bring matters before an annual meeting of shareholders or make nominations for directors at an annual meeting of shareholders.

Classified Board of Directors

As described above, our amended and restated articles of incorporation provide for the division of our board of directors into three classes of directors, with each class as nearly equal in number as possible, serving staggered three year terms beginning on the expiration of the initial term for each class.  Accordingly, approximately one-third of our board of directors will be elected each year.  This classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of us.  It could also delay shareholders who do not agree with the policies of our board of directors from removing a majority of our board of directors for two years.

                 Our units, Class A common shares and warrants are listing for trading on NASDAQ under the symbols "HUNTU", "HUNT" and "HUNTW", respectively.

Transfer Agent

The registrar and transfer agent for securities and the warrant agent for our warrants is Continental Stock Transfer & Trust Company.

C.            Material Contracts

Attached as exhibits to this annual report are the contracts we consider to be both material and outside the ordinary course of business during the period from our inception to the date of this annual report. Other than as set forth above, we have not entered into any material contracts outside the ordinary course of business since our inception other than those described in "Item 4. Information on the Company" and in "Item 7. Major Shareholders and Related Party Transactions" or elsewhere in this annual report, which are incorporated herein by reference.

D.            Exchange Controls

E.            Taxation

Marshall Islands Tax Considerations

In the opinion of Seward & Kissel LLP, our Marshall Islands counsel, the following are the material Marshall Islands tax consequences of our activities to us and our shareholders. Under current Marshall Islands law, we are not subject to tax on income or capital gains, and no Marshall Islands withholding tax will be imposed upon payments of dividends by us to our shareholders.

Belgium Tax Considerations

Transfer of corporate domicile to Belgium

In the opinion of Argo Law, our Belgian counsel, if we decide to transfer our corporate domicile to Belgium, such transfer should not give rise to any Belgian tax consequences for our shareholders since such immigration should take place with legal and accounting continuity. We have received a tax ruling from the Belgian Ruling Commission which confirms that the  transfer shall not give rise to any Belgian tax consequences for our shareholders.

Belgian tonnage tax regime

As a Belgian tax resident, we will be subject to the Belgian corporate income tax regime entailing that our accounting profit, as determined in accordance with Belgian GAAP and as adjusted for tax purposes, is taxed, in principle, at the ordinary rate of 33.99%.

Belgian tax law provides, however, for a tonnage tax regime which application should be requested for and which applies to the income resulting from the exploitation of vessels. We expect to request the application of the Belgian tonnage tax regime.

Such application entails that our taxable basis will be determined nominally on the basis of the tonnage of the vessels we operate. This tonnage tax regime therefore replaces all factors that are normally taken into account in traditional tax calculations such as accounting profit or losses, operating expenses, depreciation, gains and the offsetting of previous loss carry forwards.

If our application is declared eligible by the Federal Finance Department, the tonnage regime will apply for a ten-year period. After this ten-year period has elapsed, the tonnage tax regime may be renewed for an additional ten-year period.

We cannot assure you that the Belgian Federal Finance Department will approve our request. Changes to the tax regimes applicable to us, or the interpretation thereof, may impact our future operating results.

Other Belgian Tax Considerations

In the opinion of Argo Law, our Belgian counsel, the following is a summary of the material Belgian federal income tax consequences of the acquisition, ownership and disposal of our Class A common shares by an investor once we have transferred our corporate domicile to Belgium. This summary therefore does not discuss the tax implications for Belgian investors as long as our corporate domicile remains in the Marshall Islands.

The summary is based on laws, treaties and regulatory interpretations in effect in Belgium as of the date of this annual report, all of which are subject to change, including changes that could have retroactive effect. The Belgian federal government has announced possible corporate income tax reform (which may impact the taxation of Belgian resident companies and non-resident companies). As a result of changes in law or practice, the realized tax consequences may be different from what is stated below.

Furthermore, this summary does not purport to address all tax consequences of the ownership and disposal of shares, and does not take into account the specific circumstances of particular investors, some of which may be subject to special rules, or the tax laws of any country other than Belgium. This summary does not describe the tax treatment of investors that are subject to special rules, such as banks, insurance companies, collective investment undertakings, dealers in securities or currencies, persons that hold, or will hold, shares as a position in a straddle, share-repurchase transaction, conversion transactions, synthetic security or other integrated financial transactions. This summary does not address the tax regime applicable to Belgian tax residents who hold shares through a fixed basis or a permanent establishment situated outside Belgium.

A Belgian resident is (i) an individual subject to Belgian personal income tax (for example, an individual who has his domicile in Belgium or has the seat of his estate in Belgium, or a person assimilated to a Belgian resident); (ii) a company subject to Belgian corporate income tax (for example, a company that has its registered office, its main establishment or its place of management in Belgium); (iii) an organization for financing pensions, or an OFP, subject to Belgian corporate income tax (for example, a Belgian pension fund incorporated under the form of an OFP); or (iv) a legal entity subject to the Belgian tax on legal entities (for example, a legal entity other than a company subject to the corporate income tax that has its registered office, its main establishment or its place of management in Belgium). A Belgian non-resident is a person that is not a Belgian resident.

Investors are encouraged to consult their own advisers as to the tax consequences of the acquisition, ownership and disposal of Class A common shares in us.

Dividends

For Belgian income tax purposes, the gross amount of all distributions made by us to our shareholders is generally taxed as dividends, except for the repayment of statutory capital carried out in accordance with the Belgian Companies Code to the extent that the statutory capital qualifies as "fiscal" capital. The fiscal capital includes, in principle, the paid-up statutory capital and, subject to certain conditions, the paid issue premiums and the amounts subscribed to at the time of the issue of profit sharing certificates.

In general, a Belgian withholding tax of (currently) 30% is levied on dividends. In the case of a redemption of shares, the redemption price (after deduction of the part of the paid-up fiscal capital represented by the shares redeemed) will be treated as a dividend that is subject to a Belgian withholding tax of 30% unless this redemption is carried out on a stock exchange and meets certain conditions. In the event of liquidation of us, a withholding tax of 30% will be levied on any distributed amount exceeding the paid-up fiscal capital.

Belgian tax law provides for certain exemptions from Belgian withholding tax on Belgian source dividends. If there is no exemption applicable under Belgian domestic tax law, the Belgian withholding tax can potentially be reduced for investors who are non-residents pursuant to the treaties regarding the avoidance of double taxation concluded between the Kingdom of Belgium and the state of residence of the non-resident shareholder (see below).

Belgian resident individuals who hold Class A common shares as a private investment do not have to declare the dividend income in their personal income tax return since 30% Belgian withholding tax has been withheld which is the final tax due. If the dividend income would be declared in a shareholder's personal income tax return, it would be taxed at 30% or, if lower, at the progressive personal income tax rates applicable to the taxpayer's overall declared income.

If the dividends are declared in a shareholder's personal income tax return, the Belgian withholding tax paid can be credited against the final personal income tax liability of the shareholder and may also be refunded if it exceeds the final income tax liability with at least EUR 2.50, provided that the dividend distribution does not result in a reduction in value of, or capital loss on, the shares. This condition is not applicable if the Belgian individual can demonstrate that he has had full ownership of the shares during an uninterrupted period of 12 months prior to the attribution of the dividends.

Belgian resident individuals who acquire and hold the shares for professional purposes must always declare the dividend income in their personal income tax return and will be taxable at the individual's personal income tax rate increased with local surcharges. Withholding tax withheld at source may be credited against the personal income tax due and is reimbursable if it exceeds the income tax due with at least EUR 2.50, subject to two conditions: (i) the taxpayer must own the shares in full legal ownership at the time the dividends are paid or attributed; and (ii) the dividend distribution may not result in a reduction in the value of, or a capital loss on, the shares. The latter condition is not applicable if the individual can demonstrate that he has held the shares in full legal ownership for an uninterrupted period of 12 months prior to the payment or attribution of the dividends.

For Belgian resident companies, the gross dividend income, including the Belgian withholding tax and excluding the foreign withholding tax, if any, must be added to their taxable income, which is, in principle, taxed at the ordinary corporate income tax rate of 33.99%. In certain circumstances lower tax rates may apply.

Belgian resident companies can generally deduct up to 95% of the gross dividend received from the taxable income, or the dividend received deduction, provided that at the time of a dividend payment or attribution: (i) the Belgian resident company held shares representing at least 10% of the share capital of the company or a participation in the company with an acquisition value of at least EUR 2,500,000; (ii) the shares have been held or will be held in full legal ownership for an uninterrupted period of at least one year; and (iii) the conditions relating to the taxation of the underlying distributed income, as described in Article 203 of the Belgian Income Tax Code, or the ITC, are met (together the "Conditions for the application of the dividend received deduction regime").

For qualifying investment companies and for financial institutions and insurance companies, certain of the aforementioned conditions with respect to the dividend received deduction do not apply.

The Conditions for the application of the dividend received deduction regime depend on a factual analysis and for this reason the availability of this regime should be verified upon each dividend distribution.

The Belgian withholding tax may, in principle, be credited against the corporate income tax and is reimbursable if it exceeds the corporate income tax payable with at least EUR 2.50, subject to the two following conditions: (i) the taxpayer must own the shares in full legal ownership at the time of payment or attribution of the dividends and (ii) the dividend distribution may not give rise to a reduction in the value of, or a capital loss on, the shares. The latter condition is not applicable if the company can demonstrate that it has held the shares in full legal ownership during an uninterrupted period of 12 months prior to the attribution of the dividends or if, during that period, the shares never belonged to a taxpayer who was not a resident company or who was not a non-resident company that held the shares through a permanent establishment in Belgium.

No Belgian withholding tax will be due on dividends paid by us to a resident company provided the resident company owns, at the time of the distribution of the dividend, at least 10% of our share capital for an uninterrupted period of at least one year and, provided further, that the resident company provides us or our paying agent with a certificate as to its status as a resident company and as to the fact that it has owned a 10% shareholding in us for an uninterrupted period of one year. For those companies owning a share participation of at least 10% of our share capital for less than one year, we will levy the withholding tax but, provided the company certifies its resident status and the date on which it acquired the shareholding, we will not transfer it to the Belgian Treasury. The Belgian resident company must also inform us or our paying agent if the one-year period has expired or if its shareholding will drop below 10% of our share capital before the end of the one-year holding period. As soon as the investor owns the share participation of at least 10% of our share capital for one year, it will receive the amount of this temporarily levied withholding tax.

For Belgian pension funds incorporated under the form of an Organization for Financing Pensions, the dividend income is generally tax-exempt. Subject to certain limitations, any Belgian dividend withholding tax levied at source may be credited against the corporate income tax due and is reimbursable to the extent that it exceeds the corporate income tax due.

Belgian legal entities will be subject to the Belgian withholding tax on the dividends distributed by us. Under the current Belgian tax rules, the Belgian withholding tax will represent the final tax liability and the dividends should, therefore, not be included in the tax returns of such Belgian legal entities.

For non-resident individuals and companies, the dividend withholding tax will be the only tax on dividends in Belgium, unless the non-resident holds the shares in connection with a business conducted in Belgium through a fixed base in Belgium or a Belgian permanent establishment.

If the shares are acquired by a non-resident in connection with a business in Belgium, the investor must report any dividends received, which will be taxable at the applicable non-resident individual or corporate income tax rate, as appropriate. Belgian withholding tax levied at source may be credited against non-resident individual or corporate income tax and is reimbursable if it exceeds the income tax due with at least EUR 2.50 and subject to two conditions: (i) the taxpayer must own the shares in full legal ownership at the time the dividends are paid or attributed; and (ii) the dividend distribution may not result in a reduction in value of, or a capital loss on, the shares. The latter condition is not applicable if (a) the non-resident individual or the non-resident company can demonstrate that the shares were held in full legal ownership for an uninterrupted period of 12 months prior to the payment or attribution of the dividends or (b) with regard to non-resident companies only, if, during the relevant period, the shares have not belonged to a taxpayer other than a resident company or a non-resident company which has, in an uninterrupted manner, invested the shares in a Belgian establishment.

For non-resident companies whose shares are invested in a fixed base in Belgium or Belgian establishment, the dividend received deduction will apply on the same conditions as for Belgian resident companies. The application of the dividend received deduction regime depends, however, on a factual analysis to be made upon each distribution and its availability should be verified upon each distribution.

Belgian tax law provides for certain exemptions from withholding tax on Belgian source dividends distributed to non-resident investors. No Belgian withholding tax is due on dividends paid by us to a non-resident pension fund: (i) is a legal entity with fiscal residence outside of Belgium; (ii) has corporate purpose that is solely managing and investing funds collected in order to serve legal or complementary pension schemes; (iii) is not engaged in any business or other profit making activity; (iv) is exempt from income taxes in its country of residence; and (v) is not contractually obligated to redistribute dividends to any beneficial owner of such dividends for whom it would manage the shares. The exemption will only apply if the organization signs a certificate confirming that it is the full legal owner or usufruct holder of shares, that it is a non-resident that is not engaged in any business or other profit making activity and is exempt from income taxes in its country of residence and that it has no contractual redistribution obligation. The organization must then forward that certificate to us or the paying agent.

Additionally, dividends distributed to non-resident companies that (i) are either established in a Member State of the EU or in a country with which Belgium has concluded a double tax treaty, where that treaty or any other treaty concluded between Belgium and that jurisdiction includes a qualifying exchange of information clause; and (ii) qualify as a parent company, will be exempt from Belgian withholding tax provided that the shares held by the non-resident company, upon payment or attribution of the dividends, amount to at least 10% of our share capital and are held or will be held during an uninterrupted period of at least one year. A company qualifies as a parent company if: (i) for companies established in a Member State of the EU, it has a legal form as listed in the annex to the EU Parent-Subsidiary Directive of July 23, 1990 (90/435/EC), as amended, or, for companies established in a country with which Belgium has concluded a double tax treaty and where that treaty or any other treaty concluded between Belgium and that country includes a qualifying exchange of information clause, it has a legal form similar to the ones listed in such annex; (ii) it is considered to be a tax resident according to the tax laws of the country where it is established and the double tax treaties concluded between such country and third countries; and (iii) it is subject to corporate income tax or a similar tax without benefiting from a tax regime that derogates from the ordinary tax regime.

In order to benefit from this exemption, the investor must provide us or our paying agent with a certificate confirming its qualifying status and the fact that it satisfies the required conditions. If the investor holds the shares for less than one year, at the time the dividends are paid on or attributed to the shares, we must deduct the withholding tax but does not need to transfer it to the Belgian Treasury provided that the investor certifies its qualifying status, the date from which the investor has held the shares, and the investor's commitment to hold the shares for an uninterrupted period of at least one year. The investor must also inform us or our paying agent when the one-year period has expired or if its shareholding drops below 10% of our share capital before the end of the one-year holding period. Upon satisfying the one-year shareholding requirement, the deducted dividend withholding tax will be paid to the investor.

Dividends paid or attributable to non-resident companies by Belgian companies that do not fall within the scope of Article 203 of the ITC will under certain conditions be subject to a reduced 1.6995% withholding tax (5% of 33.99%), provided that the non-resident company (i) is either established in another Member State of the EEA or in a country with which Belgium has concluded a double tax treaty, where that treaty, or any other treaty concluded between Belgium and that jurisdiction, includes a qualifying exchange of information clause; and (ii) has a legal form as listed in Annex I, Part A to Council Directive 2011/96/EU of November 30, 2011 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States, as amended by the Council Directive of July 8, 2014 (2014/86/EU), or a legal form similar to the legal forms listed in the aforementioned annex and which is governed by the laws of another Member State of the EEA or a similar legal form in a country with which Belgium has concluded a double tax treaty; and (iii) holds a share participation in the Belgian dividend distributing company, upon payment or attribution of the dividends, of less than 10% of our share capital but with an acquisition value of at least EUR 2,500,000; (iv) has held or will hold this share participation in full legal ownership during an uninterrupted period of at least one year; and (v) is subject to the corporate income tax or a tax regime similar to the corporate income tax without benefiting from a tax regime which deviates from the ordinary tax regime.

The reduced 1.6995% withholding tax is only applied to the extent that the Belgian withholding tax cannot be credited nor reimbursed at the level of the qualifying, dividend receiving, company. The non-resident company must provide us or our paying agent with a certificate confirming its qualifying status and the fact that it meets the conditions mentioned under (ii) to (v) in the immediately preceding paragraph, and indicating to which extent the withholding tax is, in principle, creditable or reimbursable on the basis of the relevant laws as applicable on December 31 of the year preceding the year during which the dividend is paid or attributed. The certificate must also contain the full name, legal form, address and, if applicable, the fiscal identification number of the non-resident company.

If there is no exemption applicable under Belgian domestic tax law, the Belgian dividend withholding tax can potentially be reduced for investors who are non-residents pursuant to the treaties regarding the avoidance of double taxation concluded between the Kingdom of Belgium and the state of residence of the non-resident shareholder. Belgium has concluded tax treaties with more than 95 countries, reducing the dividend withholding tax rate to 15%, 10%, 5% or 0% for residents of those countries, depending on conditions related to the size of the shareholding and certain identification formalities.

Belgium and the United States have concluded a double tax treaty concerning the avoidance of double taxation, or the U.S.—Belgium Treaty. The U.S.—Belgium Treaty generally reduces the applicability of Belgian withholding tax on dividends to 15%, 5% or 0% of the gross amount of the dividends paid to U.S. taxpayers, provided that the U.S. taxpayer meets certain limitation of benefits conditions imposed by the U.S.—Belgium Treaty. The 5% withholding tax applies in case where the U.S. shareholder is a company which owns directly at least 10% of our voting stock. A 0% Belgian withholding tax applies when the shareholder is a company which has owned directly at least 10% of our share capital for a 12-month period ending on the date the dividend is declared, or is, subject to certain conditions, a U.S. pension fund. A 15% Belgian withholding tax generally applies in all other cases. All U.S. holders are urged to consult their tax advisers to determine whether they can invoke the benefits and meet the limitation of benefits conditions imposed by the U.S.—Belgium Treaty.

Prospective holders are encouraged to consult their own tax advisers to determine whether they qualify for an exemption or a reduction of the withholding tax rate upon payment of dividends and, if so, the procedural requirements for obtaining such an exemption or a reduction upon the payment of dividends or making claims for reimbursement.

Capital gains and losses

Belgian resident individuals acquiring the shares as a private investment should in general not be subject to Belgian capital gains tax on the disposal of the shares and capital losses are not tax deductible.

Capital gains realized by a private individual are taxable at 33% (plus local surcharges) if the capital gain is deemed to be realized outside the scope of the normal management of the individual's private estate. Capital losses incurred in such transactions are generally not tax deductible.

Capital gains realized by Belgian resident individuals on the disposal of the shares for consideration, outside the exercise of a professional activity, to a non-resident company (or a body constituted in a similar legal form), to a foreign state (or one of its political subdivisions or local authorities) or to a non-resident legal entity, are in principle taxable at a rate of 16.5% (plus local surcharges) if, at any time during the five years preceding the sale, the Belgian resident individual has owned directly or indirectly, alone or with his/her spouse or with certain relatives, a substantial shareholding in us (generally, a shareholding of more than 25%). This capital gains tax does, in principal, not apply if the shares are transferred to the above-mentioned persons provided that they are established in the European Economic Area or, EEA.

Belgian resident individuals who hold shares for professional purposes are taxed at the ordinary progressive income tax rates increased by the applicable local surcharges on any capital gains realized upon the disposal of the shares. If the shares were held for at least five years prior to such disposal, the capital gains tax would, however, be levied at a reduced rate of 16.5% (plus local surcharges). Losses on shares incurred by such an investor are tax deductible.

Belgian resident companies are normally not subject to Belgian capital gains taxation on gains realized upon the disposal of the shares provided that (i) the conditions relating to the taxation of the underlying distributed income in the framework of the dividend received deduction, as described in Article 203 of the ITC, are satisfied, and (ii) the shares have been held in full legal ownership for an uninterrupted period of at least one year, except for companies which do not qualify as a small-and-medium sized company as any realized capital gain will be taxed at 0.412%.

If the holding condition mentioned under (ii) is not met (but the condition relating to the taxation of the underlying distributed income mentioned under (i) is met, then the capital gain will be taxable at a separate corporate income tax rate of 25.75%. If the condition mentioned under (i) would not be met, the capital gains realized will be taxable at the ordinary corporate income tax rate of principally 33.99%.

Capital losses on shares are, in principle, not tax deductible. However, shares held in the trading portfolios of qualifying credit institutions, investment enterprises and management companies of collective investment undertakings are subject to a different regime. In general, the capital gains on such shares are taxable at the corporate income tax rate of 33.99% and capital losses on such shares are tax deductible. Internal transfers to and from the trading portfolio are assimilated to a realization.

Belgian pension funds incorporated under the form of an OFP are, in principle, not subject to Belgian capital gains taxation on the disposal of the shares, and capital losses are not tax deductible.

Belgian resident legal entities subject to the legal entities income tax are, in principle, not subject to Belgian capital gains taxation on the disposal of the shares, except in the case of the transfer of a substantial shareholding to an entity established outside the EEA (see regarding Belgian resident individuals above).

Capital losses on shares incurred by Belgian resident legal entities are not tax deductible.

Capital gains realized on the shares by a Belgian non-resident individual that has not acquired the shares in connection with a business conducted in Belgium through a fixed base in Belgium or a Belgian permanent establishment are generally not subject to taxation, unless the gain is deemed to be realized outside the scope of the normal management of the individual's private estate and the capital gain is obtained or received in Belgium. However, Belgium has concluded tax treaties with more than 95 countries which generally provide for a full exemption from Belgian capital gain taxation on capital gains realized by residents of those countries. Capital losses are principally not tax deductible.

Capital gains will be taxable at the ordinary progressive income tax rates and capital losses will be tax deductible, if those gains or losses are realized on shares by a non-resident individual that holds shares in connection with a business conducted in Belgium through a fixed base in Belgium.

Capital gains realized by non-resident individuals on the transfer of a substantial shareholding to an entity established outside the EEA are generally subject to the same regime as Belgian resident individuals. However, Belgium has concluded tax treaties with more than 95 countries which generally provide for a full exemption from Belgian capital gain taxation on such gains realized by residents of those countries. Capital losses are generally not tax deductible.

Capital gains realized on the shares by non-resident companies or non-resident entities that have not acquired the shares in connection with a business conducted in Belgium through a Belgian permanent establishment are generally not subject to taxation and losses are not tax deductible.

Capital gains realized by non-resident companies or other non-resident entities that hold the shares in connection with a business conducted in Belgium through a Belgian permanent establishment are generally subject to the same regime as Belgian resident companies.

Belgian Tax on Stock Exchange Transactions

A stock market tax is normally levied on the purchase and the sale and on any other acquisition and transfer for consideration in Belgium of existing shares through a professional intermediary established in Belgium on the secondary market, or "secondary market transactions." The tax is due by both the transferor and the transferee separately. The applicable rate amounts to 0.27% of the consideration paid but with a cap of currently EUR 1,600 per transaction and per party. Such tax is also due for transactions for which the order is directly or indirectly given by an individual with habitual abode in Belgium, or by a legal entity on account of its Belgian seat or establishment, to an intermediary established outside Belgium. In such case, this individual or legal entity should declare and pay the tax on stock exchange transactions due, unless it can be proven that it was already paid.

Belgian non-residents who purchase or otherwise acquire or transfer, for consideration, shares in Belgium for their own account through a professional intermediary may be exempt from the stock market tax if they deliver a sworn affidavit to the intermediary in Belgium confirming their non-resident status, except in case they have their habitual abode in Belgium (individual) or their seat or establishment in Belgium (legal entity).

In addition to the above, no stock market tax is payable by: (i) professional intermediaries described in Article 2, 9° and 10° of the Law of August 2, 2002 acting for their own account, (ii) insurance companies described in Article 2, §1 of the Law of July 9, 1975 acting for their own account, (iii) professional retirement institutions referred to in Article 2, 1° of the Law of October 27, 2006 relating to the control professional retirement institutions acting for their own account, (iv) collective investment institutions acting for their own account. (v) non-residents acting for their own account (upon delivery of a certificate of non-residency in Belgium), except in case they have their habitual abode or seat or establishment in Belgium or (vi) regulated real estate companies acting for their own account.

Financial Transaction Tax

On February 14, 2013 the EU Commission adopted a Draft Directive on a common Financial Transaction Tax, or the FTT. Earlier negotiations for a common transaction tax among all 28 EU Member States had failed. The current negotiations between Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia, and Spain (together, the "Participating Member States") are seeking a compromise under "enhanced cooperation" rules, which require consensus from at least nine EU Member States.

The Draft Directive currently stipulates that once the FTT becomes effective, the Participating Member States shall not maintain or introduce taxes on financial transactions other than the FTT (or VAT as provided in the Council Directive 2006/112/EC of November 28, 2006 on the common system of value added tax). For Belgium, the tax on stock exchange transactions should thus be abolished once the FTT becomes effective.

However, the Draft Directive on the FTT remains subject to negotiations between the Participating Member States. It may therefore be altered prior to any implementation, of which the eventual timing and outcome remains unclear. Additional EU Member States may decide to participate or drop out of the negotiations. If the number of Participating Member States would fall below nine, it would put an end to the project. In June 2016, the Participating Member States declared that they would continue their efforts in the second half of the year.

Prospective investors should consult their own professional advisors in relation to the FTT.

United States Federal Income Tax Considerations

In the opinion of Seward & Kissel LLP, the following are the material United States federal income tax consequences to us based on our proposed activities and to our U.S. holders and non-U.S. holders, each as defined below, of the ownership and disposition of our common shares and units and of certain aspects of the ownership, exercise or disposition of our warrants. The discussion of our common shares applies to both the Class A common shares and the Class B common shares, except to the extent that we limit certain portions of the discussion to just the Class A common shares. The following discussion of United States federal income tax matters is based on the United States Internal Revenue Code of 1986, as amended, which we refer to as the Code, judicial decisions, administrative pronouncements, and existing and proposed regulations issued by the United States Department of the Treasury, which we refer to as the Treasury Regulations, all of which are subject to change, possibly with retroactive effect. The discussion below is based, in part, on the description of our proposed business as described herein and assumes that we conduct our proposed business as described herein. Unless otherwise noted, references in the following discussion to the "Company," "we" and "us" are to Hunter Maritime Acquisition Corp. and its subsidiaries on a consolidated basis (and, with respect to the taxation of our Company following an initial business combination, the entity resulting from the initial business combination and its subsidiaries).

U.S. Federal Income Taxation of Our Company

The following are the U.S. federal income tax consequences to us of our proposed activities. The discussion below is based, in part, on the description of our business as described in Item 4. Information on the Company—B. Business Overview—Business Strategy" beginning on page 27 and assumes that our initial business combination and the conduct of our business following the initial business combination will be as described in that section. Except as otherwise noted, this discussion is based on the assumption that we will not maintain an office or other fixed place of business within the United States. We have not made, and do not intend to make, an election to be classified as a partnership for U.S. federal income tax purposes, and as a result, will be treated as a foreign corporation for U.S. federal income tax purposes. In addition, we may complete our initial business combination with another foreign corporation.

If our business is not limited to the acquisition of vessels or companies owning or operating vessels, or if we maintain an office or fixed place of business in the United States or have other contacts with the United States, we may be subject to U.S. federal income taxes on a net basis if we are considered to be engaged in a trade or business in the United States. In such event, we would be subject to U.S. corporate income tax and branch profits tax on our income which is effectively connected with our United States trade or business, or effectively connected income.

The following discussion addresses the U.S. federal income taxation of our operating income if, following our initial business combination, we are treated as a foreign corporation engaged in the international operation of vessels for U.S. federal income tax purposes.

Taxation of Shipping Income: General

Unless exempt from U.S. federal income taxation under the rules discussed below, a foreign corporation is subject to U.S. federal income taxation in respect of any income that is derived from the use of vessels, from the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis, from the participation in a pool, partnership, strategic alliance, joint operating agreement, code sharing arrangements or other joint venture it directly or indirectly owns or participates in that generates such income, or from the performance of services directly related to those uses, which we refer to as Shipping Income, to the extent that the Shipping Income is derived from sources within the United States. For these purposes, 50% of Shipping Income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States constitutes income from sources within the United States, which we refer to as U.S.-source Shipping Income.

Shipping Income attributable to transportation that both begins and ends in the United States is considered to be entirely from sources within the United States. We do not expect to engage in transportation that produces income which is considered to be entirely from sources within the United States and the following discussion assumes that we will not be so engaged.

Shipping Income attributable to transportation exclusively between non-U.S. ports is considered to be entirely derived from sources outside the United States. Shipping Income derived from sources outside the United States by a foreign corporation that is not subject to U.S. federal income tax will not be subject to any U.S. federal income tax.

In the absence of exemption from tax under Section 883 of the Code or the U.S.-Belgium Treaty, we anticipate that our gross U.S.-source Shipping Income would be subject to a 4% tax imposed without allowance for deductions as described below.

Exemption of Shipping Income from U.S. Federal Income Taxation

Following our initial business combination and following the completion of the intended transfer of our corporate domicile from the Marshall Islands to Belgium we expect that our proposed business should be exempt from U.S. federal income taxation on U.S.-source Shipping Income under either the U.S.-Belgium Treaty or Section 883 of the Code.

Under the U.S.-Belgium Treaty, our proposed business will be exempt from U.S. federal income tax on U.S.-source Shipping Income if (1) we are resident in Belgium for Belgian income tax purposes and (2) we satisfy one of the tests under the Limitation on Benefits provision of the U.S.-Belgium Treaty. We expect to satisfy the requirements for exemption under the U.S.-Belgium Treaty. After the initial business combination and completion of the transfer of our corporate domicile to Belgium, we expect to be a Belgian resident for Belgian income tax purposes and we expect to satisfy the publicly traded test of the Limitation on Benefits article of the U.S.-Belgium Treaty.  Our qualification to claim benefits under the U.S.-Belgium Treaty will be determined on an annual basis and there is no assurance that we will be able to so qualify.

Under Section 883 of the Code, we will be exempt from U.S. federal income taxation on our U.S.-source shipping income if:

1.

we are organized in a foreign country (our "country of organization") that grants an "equivalent exemption" to corporations organized in the United States; and

2.

either:

(A)

more than 50% of the value of our stock is owned, directly or indirectly, by individuals who are "residents" of our country of organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States, which we refer to as the 50% Ownership Test, or

(B)

our stock is "primarily and regularly traded on an established securities market" in our country of organization, in another country that grants an "equivalent exemption" to United States corporations, or in the United States, which we refer to as the Publicly-Traded Test.

The Marshall Islands, the jurisdiction in which we will be incorporated at the time of the offering and prior to the initial business combination, grants an "equivalent exemption" to United States corporations. Belgium, the jurisdiction in which we intend to be resident for Belgium income tax purposes at the time of the initial business combination or promptly thereafter also grants an "equivalent exemption" to United States corporations. We anticipate that our shipholding subsidiaries will be incorporated in a jurisdiction that provides an "equivalent exemption" to United States corporations. Therefore, we anticipate that we will be exempt from U.S. federal income taxation with respect to our U.S.-source shipping income if the 50% Ownership Test or the Publicly-Traded Test is met. It may be difficult to satisfy the 50% Ownership Test due to the widely-held ownership of our stock. Our ability to satisfy the Publicly-Traded Test is discussed below.

The Treasury Regulations provide, in pertinent part, that stock of a foreign corporation will be considered to be "primarily traded" on an established securities market if the number of shares of each class of stock that are traded during any taxable year on all established securities markets in that country exceeds the number of shares in each such class that are traded during that year on established securities markets in any other single country. Our Class A common shares are "primarily traded" on NASDAQ.

Under the Treasury Regulations, stock of a corporation will be considered to be "regularly traded" on an established securities market if one or more classes of stock of the corporation representing more than 50% of the total combined voting power of all classes of stock entitled to vote and of the total value of the stock of the corporation are listed on such market during the taxable year. Since our Class A common shares, which will constitute more than 50% of the total combined voting power and total value of all classes of our stock, will be listed on NASDAQ, we will satisfy the listing requirement.

It is further required that, with respect to each class of stock relied upon to meet the listing threshold, (i) such class of stock is traded on the market, other than in de minimus quantities, on at least 60 days during the taxable year or 1/6 of the days in a short taxable year; and (ii) the aggregate number of shares of such class of stock traded on such market is at least 10% of the average number of shares of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxable year. We believe we will satisfy the foregoing trading frequency and trading volume tests. Even if this were not the case, the Treasury Regulations provide that the foregoing trading frequency and trading volume tests will be deemed satisfied if, as we expect to be the case with our common shares, such class of stock is traded on an established securities market in the United States and such stock is regularly quoted by dealers making a market in such stock.

Notwithstanding the foregoing, the Treasury Regulations provide, in pertinent part, that a class of our stock will not be considered to be "regularly traded" on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class of stock are owned, actually or constructively, under specified stock attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the vote and value of the outstanding shares of such class of stock, which we refer to as the 5 Percent Override Rule.

For purposes of determining the persons that own 5% or more of our common shares, or "5% Shareholders," the Treasury Regulations permit us to rely on those persons that are identified on Schedule 13G and Schedule 13D filings with the SEC, as having a 5% or more beneficial interest in our common shares. The Treasury Regulations further provide that an investment company identified on an SEC Schedule 13G or Schedule 13D filing that is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Shareholder for such purposes.

It is possible that our 5% Shareholders may own 50% or more of our common shares. In such a case, we would be subject to the 5% Override Rule unless we can establish that among the closely-held group of 5% Shareholders, there are sufficient 5% Shareholders that are qualified shareholders (as defined by applicable Treasury Regulations) for purposes of Section 883 of the Code to preclude non-qualified 5% Shareholders in the closely-held group from owning 50% or more of the total value of the class of stock for more than half the number of days during the taxable year. These requirements are onerous, and it is uncertain whether we will be able to satisfy them.

For the taxable year ended December 31, 2016, we believe that more than 50% of our common shares were held by 5% Shareholders that were not qualified shareholders. However, we did not have U.S.-source Shipping Income for the 2016 taxable year and therefore we were not subject to U.S. federal income tax for the 2016 taxable year.  It is unclear whether we will be able to satisfy the Publicly-Traded Test for our 2017 taxable year and future taxable years, and we may be subject to U.S. federal income tax if we cannot satisfy either the Publicly-Traded Test under Section 883 or the requirement of the U.S.-Belgium Treaty.

Taxation of Shipping Income in the Absence of Exemption

To the extent the benefits of Section 883 of the Code and the U.S.-Belgium Treaty are unavailable to us following our initial business combination, our U.S.-source Shipping Income, to the extent not considered to be "effectively connected" with the conduct of a U.S. trade or business, as described below, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions. Since under the sourcing rules described above, no more than 50% of our shipping income would be treated as being derived from U.S. sources, the maximum effective rate of U.S. federal income tax on our shipping income would never exceed 2% under the 4% gross basis tax regime.

To the extent the benefits of Section 883 of the Code and the U.S.-Belgium Treaty are unavailable and our U.S.-source Shipping Income is considered to be "effectively connected" with the conduct of a U.S. trade or business, as described below, any such "effectively connected" U.S.-source Shipping Income, net of applicable deductions, would be subject to the U.S. federal income tax at the same regular U.S. federal income tax rates applicable to a comparable U.S. corporation. In addition, we may be subject to an additional 30% "branch profits" tax (subject to reduction under the U.S.-Belgium Treaty) on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of our U.S. trade or business.

Our U.S. source shipping income would be considered "effectively connected" with the conduct of a U.S. trade or business only if:

·

we have, or are considered to have, a fixed place of business in the United States involved in the earning of U.S.-source Shipping Income; and

·

substantially all of our U.S.-source Shipping Income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.

We do not anticipate that our proposed business will have any vessel operating to the United States on a regularly scheduled basis. Based on the foregoing and on the expected conduct of our proposed business, we do not anticipate that any of our U.S.-source Shipping Income will be treated as "effectively connected" with the conduct of a U.S. trade or business.

United States Taxation of Gain on Sale of Vessels

Regardless of whether we qualify for exemption under Section 883 of the Code or the U.S.-Belgium Treaty, we will not be subject to U.S. federal income taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under U.S. federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel by us will be considered to occur outside of the United States.

U.S. Federal Income Taxation of U.S. Holders

For purposes of this discussion, a "U.S. holder" is a beneficial owner of our units, Class A common shares or warrants that is, for U.S. federal income tax purposes:

·

an individual who is a citizen or resident of the United States;

·

a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any State thereof or the District of Columbia;

·

an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or

·

a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more "United States persons" (within the meaning of the Code) have the authority to control all substantial decisions of the trust, or (ii) it has a valid election in effect under applicable Treasury Regulations to be treated as a "United States person" within the meaning of the Code.

Distributions on our Common Shares

Subject to the discussion of the passive foreign investment company, or PFIC, rules below, a U.S. holder generally will be required to include in gross income as dividends the amount of any cash distribution paid on our common shares to the extent the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Distributions in excess of our current and accumulated earnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. holder's tax basis in his common shares on a dollar-for-dollar basis and thereafter as capital gain. Because we are not a United States corporation, U.S. holders that are corporations will not be entitled to claim a dividends-received deduction with respect to any distributions they receive from us.

With respect to non-corporate U.S. holders, dividends generally will be taxed at preferential rates only if (i) either (A) our common shares are readily tradable on an established securities market in the United States or (B) we qualify for the benefits of a comprehensive U.S. tax treaty (such as the U.S.-Belgian Treaty); (ii) we are not a PFIC for the taxable year during which the dividend is paid or the immediately preceding taxable year (as discussed below); (iii) the U.S. non-corporate holder has held the common shares for more than 60 days in the 121-day period beginning 60 days before the date on which the common shares become ex-dividend, (iv) the U.S. non-corporate holder is not under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property, and (v) the U.S. non-corporate holder does not elect to treat such dividend income as "investment income" for purposes of the investment interest expense limitations of Section 163(d)(4)(B) of the Code. There is uncertainty, however, as to whether the conversion rights with respect to the common shares, described above under "Item 4. Information on the Company—B. Business Overview—Effecting our Initial Business Combination—Redemption Rights for Public Shareholders upon Completion of Our Initial Business Combination", may prevent a U.S. non-corporate holder from satisfying the applicable holding period requirements with respect to the application of the preferential tax rate to qualified dividend income, since such U.S. non-corporate holder's holding period for such purposes with respect to the common shares may be reduced for any period in which such conversion rights remain in effect. U.S. holders are encouraged to consult their tax advisors regarding the availability of such lower rate for any dividends paid with respect to our common shares. Any dividends paid by us which are not eligible for these preferential rates will be taxed as ordinary  income to a U.S. holder.

As discussed above under the caption "Belgian Tax Considerations," following the transfer of our corporate domicile to Belgium, our dividends may be subject to Belgian withholding tax. A U.S. holder generally may elect to either deduct his share of any foreign taxes (including any Belgian withholding taxes) paid with respect to our dividends in computing his taxable income for U.S. federal income tax purposes or treat such foreign taxes paid with respect to our dividends as a credit against U.S. federal income taxes, subject to certain limitations. No deduction for foreign taxes may be claimed by an individual U.S. holder who does not itemize deductions. Dividends paid with respect to our common shares will generally be treated as foreign source "passive category income" or, in the case of certain types of U.S. holders, foreign source "general category income" for purposes of computing allowable foreign tax credits for U.S. foreign tax credit purposes. The rules governing foreign tax credits are complex and each U.S. holder is encouraged to consult its tax advisor regarding the applicability of these rules to the U.S. holder's specific situation.

Sale, Exchange or other Disposition of our Common Shares

Subject to the discussion of the PFIC rules below, a U.S. holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares (which would include a liquidation in the event we do not consummate a business combination within the required timeframe) in an amount equal to the difference between the amount realized by the U.S. holder from such sale, exchange or other and the U.S. holder's tax basis in such shares. A U.S. holder's tax basis in the common shares generally will equal the U.S. holder's acquisition cost  less any prior return of capital. Such gain or loss will be treated as long-term capital gain or loss if the U.S. holder's holding period is greater than one year at the time of the sale, exchange or other disposition and will generally be treated as U.S.-source income or loss, as applicable, for U.S. foreign tax credit purposes. There is uncertainty, however, as to whether the conversion rights with respect to the common shares may prevent a U.S. holder from satisfying the applicable holding period requirements, since such U.S. holder's holding period with respect to the common shares may be treated as not beginning until after such conversion rights are no longer in effect. A U.S. holder's ability to deduct capital losses is subject to certain limitations.

Conversion of Class A Common Shares

Subject to the discussion of the PFIC rules below, in the event that a U.S. holder converts Class A common shares into cash pursuant to the exercise of a conversion right, the transaction will be treated for U.S. federal income tax purposes as a redemption of the Class A common shares. If the conversion qualifies as a sale of Class A common shares by a U.S. holder under Section 302 of the Code, the U.S. holder will be treated as described under "—Sale, Exchange or other Disposition of Class A common shares" above. If the conversion does not qualify as a sale of Class A common shares under the Code, a U.S. holder will be treated as receiving a corporate distribution with the tax consequences described below. Whether the conversion qualifies for sale treatment will depend largely on the total number of Class A common shares treated as held by the U.S holder before and after such conversion (including any Class A common shares constructively owned by the U.S. holder as a result of, among other things, owning warrants). The conversion of Class A common shares generally will be treated as a sale or exchange of the Class A common shares (rather than as a corporate distribution) if the receipt of cash upon the conversion (1) is "substantially disproportionate" with respect to the U.S. holder, (2) results in a "complete termination" of the U.S. holder's interest in us or (3) is "not essentially equivalent to a dividend" with respect to the U.S. holder. These tests are further explained below.

In determining whether any of the foregoing tests is satisfied, a U.S. holder takes into account not only stock actually owned by the U.S. holder, but also shares of our stock that are constructively owned by it. A U.S. holder may constructively own, in addition to stock owned directly, stock owned by certain related individuals and entities in which the U.S. holder has an interest or that have an interest in such holder, as well as any stock the holder has a right to acquire by exercise of an option, which would generally include Class A common shares which could be acquired pursuant to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage of our outstanding voting stock actually and constructively owned by the U.S. holder immediately following the conversion of Class A common shares must, among other requirements, be less than 80% of the percentage of our outstanding voting stock actually and constructively owned by the U.S. holder immediately before the conversion and, immediately after the conversion, the U.S. holder must own (actually and/or constructively) less than 50% of the total combined voting power of all classes of stock entitled to vote. In general, there will be a complete termination of a U.S. holder's interest if either (1) all of the shares of our stock actually and constructively owned by the U.S. holder are converted or (2) all of the shares of our stock actually owned by the U.S. holder are converted and the U.S. holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the U.S. holder does not constructively own any other stock. The conversion of the Class A common shares will not be essentially equivalent to a dividend if a U.S. holder's conversion results in a "meaningful reduction" of the U.S. holder's proportionate interest in us. Whether the conversion will result in a meaningful reduction in a U.S. holder's proportionate interest will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority shareholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a "meaningful reduction."

If none of the foregoing tests are satisfied, then the conversion generally will be treated as a corporate distribution and the tax effects will be as described above under "—Distributions on our Common Shares." After the application of those rules, any remaining tax basis of the U.S. holder in the converted Class A common shares will be added to the U.S. holder's adjusted tax basis in its remaining Class A common shares, or, if it has none, possibly to the holder's adjusted tax basis in its warrants or in other Class A common shares constructively owned by it.

Persons who actually or constructively own 5% (or, if our stock is not then publicly traded, 1%) or more of our stock (by vote or value) may be subject to special reporting requirements with respect to a conversion of Class A common shares.

Subject to the discussion of the PFIC rules below, if we redeem a U.S. holder's warrants or if we purchase a U.S. holder's warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. holder, taxed as described below under "—Sale, Disposition, Exercise or Expiration of Warrants."

Tax Considerations of Holding our Warrants

Subject to the discussion of the PFIC rules below, a U.S. holder generally will recognize capital gain or loss equal to the difference between the amount realized on the sale, exchange (other than by exercise), redemption or other disposition (or, if the warrant is held as part of a unit at the time of the disposition of the unit, the portion of the amount realized on the disposition of the unit that is allocated to the warrant based on the then fair market value of the warrant) and the U.S. holder's tax basis in the warrant (that is, an amount equal to the portion of the purchase price of each unit allocated to the warrant as described above under the section titled "—Allocation of Purchase Price and Classification of Units"). Such capital gain or loss generally will be long-term capital gain or loss if, at the time of the sale or other disposition, the U.S. holder has held the warrant for more than one year. Such capital gain or loss will generally be treated as U.S.-source income or loss, as applicable, for U.S. foreign tax credit purposes. The deductibility of capital losses recognized by a U.S. holder in a sale of warrants will be subject to certain limitations.

Subject to the discussion of the PFIC rules below, and except with respect to a cashless exercise of warrants (as discussed below), a U.S. holder generally will not recognize gain or loss upon the exercise of a warrant. Class A common shares acquired pursuant to the exercise of a warrant will have a tax basis equal to the U.S. holder's tax basis in the warrant, increased by the exercise price paid to exercise the warrant. The U.S. holder's holding period of such Class A common shares would begin on the date following the date of exercise (or possibly the date of exercise) of the warrant and will not include the period during which the U.S. holder held the warrant.

If the conversion of our warrants is adjusted, U.S. holders may be treated as having received a constructive dividend from us.

Warrant holders cannot make a QEF election if we are PFIC, as discussed below.

Passive Foreign Investment Company Rules

Special U.S. federal income tax rules apply to a U.S. holder that holds stock (which, for this purpose, includes options to acquire stock, and, as a result, would also include our warrants) in a foreign corporation classified as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes. In general, we will be treated as a PFIC with respect to a U.S. holder if, for any taxable year in which such U.S. holder held our Class A common shares or warrants, either:

·

at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business), which we refer to as the "income test"; or

·

at least 50% of the average value of the assets held by the corporation during such taxable year (ordinarily determined based on fair market value and averaged quarterly over the year) produce, or are held for the production of, passive income, which we refer to as the "asset test".

For purposes of determining whether we are a PFIC, cash will be treated as an asset which is held for the production of passive income. In addition, following an initial business combination, we will be treated as earning and owning our proportionate share of the income and assets, respectively, of any of our subsidiary corporations in which we own at least 25% of the value of the subsidiary's stock. Income earned, or deemed earned, by us in connection with the performance of services would not constitute passive income. By contrast, rental income would generally constitute "passive income" unless we were treated under specific rules as deriving our rental income in the active conduct of a trade or business from unrelated persons.

Because we have no current active business, we believe that we satisfied the asset test and the income test for our initial taxable year. However, the PFIC rules contain an exception pursuant to which a foreign corporation will not be treated as a PFIC during its "start-up year." Under this exception, a foreign corporation will not be treated as a PFIC for the first taxable year the corporation has gross income, which we refer to as the "start-up year," if (1) no predecessor of the corporation was a PFIC; (2) the corporation satisfies the IRS that it will not be a PFIC for either of the first two taxable years following the start-up year; and (3) the corporation is not in fact a PFIC for either of those years. The applicability of the start-up exception to us is uncertain and cannot be known until after the close of our 2017 taxable year. In addition, any acquired business (which may be a predecessor corporation of us for purposes of the start-up exception) may be treated as, or may have previously been, a PFIC. Even if we acquire a company with an active trade or business, we may still meet one of the PFIC tests in any taxable year, depending upon the timing of the acquisition and the passive income and assets of the acquired company. Moreover, PFIC status is determined annually and it cannot be determined until the close of the taxable years in question. Based upon the foregoing, because we will not be able to determine whether we have been, are or will be classified as a PFIC until an acquisition (if any) is made and the timing of such acquisition is known, we cannot make any representations regarding our PFIC status. Therefore, no assurances can be given that we will not be a PFIC for either our 2016 taxable year or for any subsequent taxable year and U.S. holders are encouraged to consult their tax advisors in this regard.

In making the determination as to whether we are a PFIC, we currently intend to treat the gross income we derive or are deemed to derive from the time chartering and voyage chartering activities of us or any of our wholly owned subsidiaries as services income, rather than rental income. Based on such treatment, such income should not constitute passive income, and the assets that we or our wholly owned subsidiaries own and operate in connection with the production of such income, should not constitute assets that produce, or are held for the production of, passive income for purposes of determining whether we are a PFIC. We believe there is substantial legal authority supporting our position consisting of case law and IRS pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, in the absence of any legal authority specifically relating to the statutory provisions governing PFICs, the IRS or a court could disagree with our position. On the other hand, any income we derive from bareboat chartering vessels will generally be treated as passive income for purposes of the income test. Likewise, any assets used to bareboat charter vessels will generally be treated as generating passive income for purposes of the asset test.

As discussed more fully below, if we are treated as a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. holder of our common shares or warrants and, in the case of our Class A common shares, the U.S. holder did not make either a timely qualified electing fund, or QEF, election for our first taxable year as a PFIC in which the U.S. holder held (or was deemed to hold) common shares, as described below, such U.S. holder generally will be subject to special rules with respect to (i) any gain recognized by the U.S. holder on the sale or other disposition of its common shares or warrants, and (ii) any "excess distribution" made to the U.S. holder (generally, any distributions to such U.S. holder during a taxable year of the U.S. holder that are greater than 125% of the average annual distributions received by such U.S. holder in respect of the common shares during the three preceding taxable years of such U.S. holder or, if shorter, such U.S. holder's holding period for the common shares).

Under these rules:

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the U.S. holder's gain or excess distribution will be allocated ratably over the U.S. holder's holding period for the common shares or warrants;

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the amount allocated to the U.S. holder's taxable year in which the U.S. holder recognized the gain or received the excess distribution, or to the period in the U.S. holder's holding period before the first day of our first taxable year in which we are a PFIC, will be taxed as ordinary income;

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the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and

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an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. holder with respect to the tax attributable to each such other taxable year of the U.S. holder.

In general, if we are determined to be a PFIC, a U.S. holder can avoid the PFIC tax consequences described above in respect to our common shares by making a timely and valid QEF election to include in income its pro rata share of our net capital gains (as long-term capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. holder in which or with which our taxable year ends. A U.S. holder generally may make a separate election to defer the payment of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest charge.

A U.S. holder may not make a QEF election with respect to its warrants to acquire our common shares. As a result, if a U.S. holder sells or otherwise disposes of such warrants (other than upon exercise of such warrants) and we were a PFIC at any time during the U.S. holder's holding period of such warrants, any gain recognized generally will be treated as an excess distribution, taxed as described above. If a U.S. holder that exercises such warrants properly makes a QEF election with respect to the newly acquired common shares (or has previously made a QEF election with respect to our common shares), the QEF election will apply to the newly acquired common shares. Notwithstanding, the adverse tax consequences relating to PFIC shares, adjusted to take into account the current income inclusions resulting from the QEF election, will continue to apply with respect to such newly acquired common shares (which generally will be deemed to have a holding period for purposes of the PFIC rules that includes the period the U.S. holder held the warrants), unless the U.S. holder makes a purging election under the PFIC rules. Under the purging election, the U.S. holder will be deemed to have sold such shares at their fair market value and any gain recognized on such deemed sale will be treated as an excess distribution, as described above. As a result of the purging election, the U.S. holder will have a new basis and holding period in the common shares acquired upon the exercise of the warrants for purposes of the PFIC rules.

The QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S. holder generally makes a QEF election by attaching a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including the information provided in a PFIC annual information statement, to a timely filed United States federal income tax return for the tax year to which the election relates. Retroactive QEF elections generally may be made only by filing a protective statement with such return and if certain other conditions are met or with the consent of the IRS. U.S. holders are encouraged to consult their tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances.

In order to comply with the requirements of a QEF election, a U.S. holder must receive a PFIC annual information statement from us. If we determine we are a PFIC for any taxable year, we will endeavor to provide to a U.S. holder such information as the IRS may require, including a PFIC annual information statement, in order to enable the U.S. holder to make and maintain a QEF election, but there is no assurance that we will timely provide such required information. There is also no assurance that we will have timely knowledge of our status as a PFIC in the future or of the required information to be provided.

If a U.S. holder has made a QEF election with respect to our common shares, and the excess distribution rules discussed above do not apply to such shares (because of a timely QEF election for our first taxable year as a PFIC in which the U.S. holder holds (or is deemed to hold) such shares or a purge of the PFIC taint pursuant to a purging election, as described above), any gain recognized on the sale of our common shares generally will be taxable as capital gain and no additional tax charge will be imposed under the PFIC rules. As discussed above, if we are a PFIC for any taxable year, a U.S. holder of our common shares that has made a QEF election will be currently taxed on its pro rata share of our earnings and profits, whether or not distributed for such year. A subsequent distribution of such earnings and profits that were previously included in income generally should not be taxable when distributed to such U.S. holder. The tax basis of a U.S. holder's shares in a QEF will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the above rules. In addition, if we are not a PFIC for any taxable year, such U.S. holder will not be subject to the QEF inclusion regime with respect to our common shares for such taxable year.

If we are a PFIC and our common shares constitute "marketable stock," (which we anticipate will be the case), a U.S. holder may avoid the adverse PFIC tax consequences discussed above if such U.S. holder, at the close of the first taxable year in which it holds (or is deemed to hold) our common shares, makes a mark-to-market election with respect to such shares for such taxable year. Such U.S. holder generally will include for each of its taxable years as ordinary income the excess, if any, of the fair market value of its common shares at the end of such year over its adjusted basis in its Class A common shares. The U.S. holder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted basis of its Class A common shares over the fair market value of its common shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). The U.S. holder's basis in our common shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of its common shares will be treated as ordinary income. Currently, a mark-to-market election may not be made with respect to warrants.

The mark-to-market election is available only for "marketable stock," generally, stock that is regularly traded on a national securities exchange that is registered with the SEC, including NASDAQ (on which our common shares are listed), or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. U.S. holders are encouraged to consult their tax advisors regarding the availability and tax consequences of a mark-to-market election in respect to our common shares under their particular circumstances.

If we are a PFIC and, at any time, have a foreign subsidiary that is classified as a PFIC, U.S. holders generally would be deemed to own a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described above if we receive a distribution from, or dispose of all or part of our interest in, the lower-tier PFIC. We will endeavor to cause any lower-tier PFIC to provide to a U.S. Holder the information that may be required to make or maintain a QEF election with respect to the lower-tier PFIC. There can be no assurance that we will have timely knowledge of the status of any such lower-tier PFIC. In addition, we may not hold a controlling interest in any such lower-tier PFIC and thus there can be no assurance we will be able to cause the lower-tier PFIC to provide such required information. U.S. holders are encouraged to consult their tax advisors regarding the tax issues raised by lower-tier PFICs.

A U.S. holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. holder, may have to file an IRS Form 8621(whether or not a QEF or market-to-market election is made) and such other information as may be required by the U.S. Treasury Department. Failure to do so, if required, will extend the statute of limitations until such required information is furnished to the IRS.

The rules dealing with PFICs and with the QEF and mark-to-market elections are very complex and are affected by various factors in addition to those described above. Accordingly, U.S. holders of our common shares and warrants are encouraged to consult their tax advisors concerning the application of the PFIC rules to our common shares and warrants under their particular circumstances.

U.S. Federal Income Taxation of Non-U.S. Holders

A beneficial owner of our common shares that is not a U.S. holder is referred to herein as a "non-U.S. holder."

Distributions on Common Shares

Dividends (including constructive dividends) paid or deemed paid to a non-U.S. holder in respect of our common shares generally will not be subject to United States federal income tax, unless the dividends are effectively connected with the non-U.S. holder's conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains in the United States). In addition, a non-U.S. holder generally will not be subject to United States federal income tax on any gain attributable to a sale or other disposition of our Class A common shares or warrants unless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains in the United States).

Dividends and gains that are effectively connected with the non-U.S. holder's conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to United States federal income tax at the same regular United States federal income tax rates applicable to a comparable U.S. holder and, in the case of a non-U.S. holder that is a corporation for United States federal income tax purposes, also may be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.

Conversion of Class A Common Shares

The U.S. federal income tax treatment of the redemption of a non-U.S. holder's Class A common shares pursuant to the exercise of a conversion right will generally correspond to the U.S. federal income tax treatment of such redemption by a U.S. holder, as described under "U.S. Federal Income Taxation of U.S. Holders—Conversion of Class A common shares" above. Therefore, if the redemption qualifies as a sale of Class A common shares by the non-U.S. holder, the tax effects to the non-U.S. holder will be as described under "—Sale, Exchange or Other Disposition of common shares" below. If on the other hand, the redemption is properly treated as a distribution to the non-U.S. holder, the tax effects to the non-U.S. holder will be as described under "—Dividends on common shares" above.

Sale, Exchange or Other Disposition of Common Shares

Non-U.S. holders generally will not be subject to U.S. federal income tax on any gain recognized upon the sale, exchange or other disposition of our common shares, unless:

·

the gain is effectively connected with the non-U.S. holder's conduct of a trade or business in the United States. In general, if the non-U.S. holder is entitled to the benefits of certain income tax treaties with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the non-U.S. holder in the United States; or

·

the non-U.S. holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and certain other conditions are met.

If the non-U.S. holder is engaged in a United States trade or business for U.S. federal income tax purposes, the income from the common shares or warrants, including dividends and the gain from the sale, exchange or other disposition of the stock or the warrants that is effectively connected with the conduct of that trade or business will generally be subject to regular U.S. federal income tax in the same manner as discussed in the previous section relating to the taxation of U.S. holders. In addition, if you are a corporate non-U.S. holder, your earnings and profits that are attributable to the effectively connected income, which are subject to certain adjustments, may be subject to an additional branch profits tax at a rate of 30%, or at a lower rate as may be specified by an applicable income tax treaty.

Backup Withholding and Information Reporting

Dividend payments with respect to our common shares and proceeds from the sale, exchange or redemption of our common shares may be subject to information reporting to the IRS and possible United States backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes other required certifications, or who is otherwise exempt from backup withholding and establishes such exempt status. A non-U.S. holder generally can eliminate the requirement for information reporting and backup withholding by providing certification of its foreign status, under penalties of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.

Backup withholding is not an additional tax. Rather, a taxpayer generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed its U.S. federal income tax liability by timely filing a refund claim with the IRS.

F.            Dividends and Paying Agents

Not applicable.

G.            Statement by Experts

Not applicable.

H.            Documents on Display

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended.  In accordance with these requirements we file reports and other information with the SEC. These materials, including this annual report and the accompanying exhibits may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, NE, Room 1580, Washington, D.C. 20549.  The SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information that we and other registrants have filed electronically with the SEC.

Shareholders may also request a copy of our filings at no cost, by writing or telephoning us at the following address:

Hunter Maritime Acquisition Corp.

c/o MI Management Company

Trust Company Complex, Suite 206

Ajeltake Road, P.O. Box 3055

Majuro, Marshall Islands MH96960

Tel.: 011-323-247-59-11

I.            Subsidiary Information

Not applicable.