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<TITLE>QUINTANA MARITIME LTD.</TITLE>
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>As filed with the Securities and Exchange Commission on
May&nbsp;3, 2005</B>
</DIV>

<DIV align="right" style="font-size: 10pt;">
<B>Registration Statement
No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>
</DIV>

<DIV align="center" style="font-size: 6pt;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 3pt;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 4pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt;">
<B>Washington,&nbsp;D.C. 20549</B>
</DIV>

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<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Form S-1</B>
</DIV>

<DIV align="center" style="font-size: 12pt;">
<B>REGISTRATION STATEMENT</B>
</DIV>

<DIV align="center" style="font-size: 12pt;">
<B>UNDER</B>
</DIV>

<DIV align="center" style="font-size: 12pt;">
<B>THE SECURITIES ACT OF 1933</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Quintana Maritime Limited</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<I>(Exact name of registrant as specified in its charter)</I>
</DIV>

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<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B>Republic of the Marshall Islands<BR>
     </B><I>(State or other jurisdiction of<BR>
    incorporation or organization)<BR>
    <BR>
     </I><B>Quintana Maritime Limited<BR>
    Attention: Stamatis Molaris<BR>
    Pandoras 13&nbsp;&#38; Kyprou Street<BR>
    166 74 Glyfada<BR>
    Greece<BR>
    Telephone: 011-30-210-898-5056<BR>
     </B><I>(Address and telephone number of<BR>
    Registrant&#146;s principal executive offices)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>4412<BR>
     </B><I>(Primary Standard Industrial<BR>
    Classification Code Number)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>98-0454094<BR>
     </B><I>(I.R.S. Employer<BR>
    Identification No.)<BR>
    <BR>
     </I><B>Seward&nbsp;&#38; Kissel LLP<BR>
    Attention: Gary J. Wolfe,&nbsp;Esq.<BR>
    One Battery Park Plaza<BR>
    New York, New York 10004<BR>
    (212) 574-1200<BR>
     </B><I>(Name, address and telephone number<BR>
    of agent for service)</I></TD>
</TR>

</TABLE>
</CENTER>

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<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>Copies to:</I></B>
</DIV>

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<TR style="font-size: 1pt;">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B>Allan D. Reiss<BR>
    Vinson&nbsp;&#38; Elkins L.L.P.<BR>
    666 Fifth Avenue<BR>
    26th Floor<BR>
    New York, New York 10103<BR>
    (212)&nbsp;237-0000<BR>
     </B><I>(telephone number)<BR>
     </I><B>(212)&nbsp;237-0100<BR>
     </B><I>(facsimile number)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>Dan A. Fleckman<BR>
    Vinson&nbsp;&#38; Elkins L.L.P.<BR>
    1001 Fannin Street, Suite&nbsp;2300<BR>
    Houston, Texas 77002<BR>
    (713)&nbsp;758-2222<BR>
     </B><I>(telephone number)<BR>
     </I><B>(713)&nbsp;758-2346<BR>
     </B><I>(facsimile number)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>Andrew J. Pitts<BR>
    Cravath, Swaine&nbsp;&#38; Moore LLP<BR>
    Worldwide Plaza<BR>
    825 Eighth Avenue<BR>
    New York, New York 10019<BR>
    (212) 474-1000<BR>
     </B><I>(telephone number)<BR>
     </I><B>(212) 474-3700<BR>
     </B><I>(facsimile number)</I></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B> Approximate date of commencement of proposed sale to the
public:</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
As soon as practicable after the effective date of this
Registration Statement.
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If any of the securities being registered on this Form are being
offered on a delayed or continuous basis pursuant to
Rule&nbsp;415 under the Securities Act of 1933, check the
following
box.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If this Form is filed to register additional securities for an
offering pursuant to Rule&nbsp;462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If this Form is a post-effective amendment filed pursuant to
Rule&nbsp;462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If this Form is a post-effective amendment filed pursuant to
Rule&nbsp;462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If delivery of the prospectus is expected to be made pursuant to
Rule&nbsp;434, please check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>CALCULATION OF REGISTRATION FEE</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 3pt; ">

<TR style="font-size: 1pt;">
    <TD width="56%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Proposed Maximum</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Title of Each Class of</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Aggregate</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Amount of</B></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Securities to be Registered</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Offering Price(1)</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Registration Fee</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common Stock, no par value</DIV>
    </TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $300,000,000</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $35,310</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Estimated solely for the purpose of calculating the registration
    fee pursuant to Rule&nbsp;457 under the Securities Act of 1933.</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 3pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section&nbsp;8(a)
of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section&nbsp;8(a), may determine.</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 8pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 4pt;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" cellpadding="5" style="border: 3pt double #000000; margin-bottom: 6pt; font-size: 10pt"><TR><TD>
<B><FONT style="font-size: 8pt" color="#E8112D" face="helvetica,arial">The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.</FONT></B><FONT style="font-size: 8pt"> <BR>


</FONT>
</TD></TR></TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 1pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><FONT color="#E8112D">SUBJECT TO COMPLETION,
DATED &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005</FONT></B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<B>PROSPECTUS</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822718.gif" alt="Quintana Maritime Limited Logo">
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Common Stock
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 22%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are
selling &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our common stock. We intend to use approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of the net proceeds from the sale of the shares offered hereby
to repay all of our outstanding indebtedness and to fund a
portion of the purchase price of our vessels. We intend to use
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of the net proceeds to pay a dividend to our sole shareholder
existing immediately prior to this offering, which is owned by
affiliates of each of Corbin J. Robertson,&nbsp;Jr., First
Reserve Corporation and American Metals&nbsp;&#38; Coal
International, Inc. We have granted the underwriters an option
to purchase up
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
shares of common stock to cover over-allotments. The net
proceeds from any exercise of the underwriters&#146;
over-allotment option will be used to pay an additional dividend
to our sole shareholder existing immediately prior to this
offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This is the initial public offering of our common stock. We
currently expect the initial public offering price to be between
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share. We intend to apply to have the common stock included for
quotation on the Nasdaq National Market under the symbol
&#147;QMAR.&#148; Prior to this offering, there has been no
public market for our common stock.
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 22%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Investing in our common stock involves risks. Please read
&#147;Risk Factors&#148; beginning on page&nbsp;8.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 22%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="60%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Per Share</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Initial Public Offering Price</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Underwriting Discount</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds to Quintana Maritime Limited (before expenses)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The underwriters expect to deliver the shares to purchasers on
or
about &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005.
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 22%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Joint Book-Running Managers
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 24pt;">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD align="left"><B>Citigroup</B></TD>
    <TD align="right"><B>Morgan Stanley</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV align="left" style="font-size: 10pt;">

</DIV>

<DIV align="left" style="font-size: 10pt;">
<!-- TOC -->
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name="tocpage"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>You should rely only on the information contained in this
prospectus. We have not authorized anyone to provide you with
different information. We are not making an offer of these
securities in any state where the offer is not permitted. You
should not assume that the information contained in this
prospectus is accurate as of any date other than the date on the
front cover of this prospectus.</B>
</DIV>

<DIV align="left" style="font-size: 10pt;">
<!-- TOC -->
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>TABLE OF CONTENTS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="84%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#101'>Prospectus Summary</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#102'>Risk Factors</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#103'>Use of Proceeds</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#104'>Dividend Policy</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#106'>Capitalization</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#107'>Dilution</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#108'>Selected Consolidated Financial Data</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#109'>Management&#146;s Discussion and Analysis
    of Financial Condition and Results of Operations</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#110'>The International Drybulk Shipping
    Industry</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#111'>Business</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#112'>Management</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#113'>Principal Shareholders</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#114'>Related Party Transactions</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#115'>Description of Capital Stock</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#116'>Shares Eligible For Future Sale</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#117'>Certain Marshall Islands Company
    Considerations</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>83</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#118'>Tax Considerations</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>86</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#119'>Underwriting</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#120'>Validity of the Shares</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#121'>Experts</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#122'>Where You Can Find Additional
    Information</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#123'>Forward-Looking Statements</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#124'>Glossary of Shipping Terms</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#125'>Index to Consolidated Financial
    Statements</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y08227exv21w1.htm">EX-21.1: SUBSIDIARIES OF THE COMPANY</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y08227exv23w2.htm">EX-23.2: CONSENT OF DELOITTE, HADJIPAVLOU, SOFIANOS & CAMBANIS S.A.</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y08227exv23w3.htm">EX-23.3: CONSENT OF DREWRY SHIPPING CONSULTANTS LIMITED</A></FONT></TD></TR>
</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;">
<!-- /TOC -->
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Until &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005 (25&nbsp;days after the date of this prospectus), all
dealers that buy, sell or trade our common stock, whether or not
participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers&#146; obligation
to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
</DIV>

<P align="center" style="font-size: 10pt;">i
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="left" style="font-size: 10pt;">
<A name='101'></A>
</DIV>

<!-- link1 "PROSPECTUS SUMMARY" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PROSPECTUS SUMMARY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>This prospectus summary highlights information and
consolidated financial data that appear later in this prospectus
and is qualified in its entirety by the more detailed
information and financial statements that appear later. This
summary may not contain all of the information that may be
important to you. As an investor or prospective investor, you
should review carefully the entire prospectus, including the
risk factors and the more detailed information and consolidated
financial statements that appear later. We refer you to
&#147;Glossary of Shipping Terms&#148; beginning on page&nbsp;99
for definitions of certain shipping industry terms that we use
in this prospectus. Unless the context otherwise indicates, the
information presented in this prospectus assumes that the
underwriters do not exercise their option to purchase additional
shares of common stock.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Unless otherwise indicated, all references in this prospectus
to our fleet refer to the fleet of eight drybulk carriers that
we have purchased or entered in contracts to purchase. Unless
otherwise indicated, references in this prospectus to
&#147;Quintana Maritime Limited,&#148; &#147;we,&#148;
&#147;us,&#148; &#147;our&#148; and the &#147;Company&#148;
refer to Quintana Maritime Limited and our subsidiaries. All
references in this prospectus to &#147;$,&#148;
&#147;U.S.$&#148; and &#147;Dollars&#148; refer to United States
dollars.</I>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Company</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are an international provider of drybulk marine
transportation services that was incorporated in the Marshall
Islands on January&nbsp;13, 2005 and began operations in April
2005. We were formed by affiliates of each of Corbin J.
Robertson,&nbsp;Jr., First Reserve Corporation (&#147;First
Reserve&#148;), and American Metals&nbsp;&#38; Coal
International, Inc. (&#147;AMCI&#148;). We expect to own and
operate a total fleet of eight Panamax drybulk carriers by the
end of the third quarter of 2005, the majority of which we
expect to be employed under time charters. We intend to continue
to increase the size of our fleet following this offering, and
we believe that the extensive experience of our management team
in locating and acquiring suitable vessels and fleets will
assist us in this process.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our management team will provide the commercial management of
our fleet, which includes entering into charters and managing
relationships with charterers. We initially will outsource the
technical management, which includes day-to-day operations, of
five of our vessels to Blossom Maritime Corporation, (our
&#147;Manager&#148;), an unaffiliated third-party ship
management company. However, we expect to perform the technical
management of our entire fleet by the end of the first quarter
of 2006.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Fleet</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We took delivery of our first three vessels in April 2005. We
expect to take delivery of two additional vessels under purchase
agreements in May 2005 and of the remaining three vessels under
purchase agreements in July, August and September, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our drybulk carriers transport a variety of cargoes including
coal, iron ore and grain. Our initial fleet will have a combined
carrying capacity of approximately 585,000 dwt and an average
age of approximately 8&nbsp;years. We financed the purchase of
the first three vessels through capital contributions by
affiliates of each of Mr.&nbsp;Robertson, First Reserve and AMCI
(&#147;our Sponsors&#148;) and debt. We have paid a 10% deposit
on each of the five other vessels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Initially, most of our vessels will be employed under time
charters of varying durations to well-established and reputable
charterers. None of these vessels were or will be purchased
subject to any existing time charter, but rather will be subject
to new time charters we have or will put in place. When a
charter expires, we will assess market conditions and determine
whether to seek to re-employ the vessel under a long-term time
charter, a short-term time charter or in the spot voyage market.
Please read &#147;Business&nbsp;&#151; Time Charters.&#148;
</DIV>
</DIV>

<P align="center" style="font-size: 10pt;">1
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The table below provides additional, summary information about
our fleet as of April&nbsp;30, 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Charter</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Daily Time</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Charter Hire</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Vessel</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Type</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dwt</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Built</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Charterer</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rate(1)</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>King Coal</I>(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,873</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" valign="bottom">Energy Shipping S.p.A.(5)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    April 2008</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>24,985</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Fearless I</I>(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" valign="bottom">Deiulemar Compagnia di Navigazione S.p.A.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    April 2008</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Coal Glory</I>(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Spot</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Coal Age</I>(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Iron Man</I>(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Linda Leah</I>(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,390</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" valign="bottom">Fratelli D&#146;Amato S.p.A.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    August 2008</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,750</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Barbara</I>(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,390</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Coal Pride</I>(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    This column shows the charter hire rates net of any commissions.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Delivered in April 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Subject to a memorandum of agreement and expected to be
    delivered in May 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Subject to a memorandum of agreement and expected to be
    delivered in the third quarter of 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    The obligations of Energy Shipping S.p.A. are guaranteed by
    Deiulemar Compagnia di Navigazione, S.p.A.</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Drybulk Shipping Industry Trends</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The drybulk shipping industry is fundamental to international
trade as it is the only practical and cost effective means of
transporting large volumes of many essential commodities.
Between 1999 and 2004, trade in all drybulk commodities
experienced an aggregate increase of 25%. According to Drewry,
in 2003 and 2004, charter rates for all sizes of drybulk
carriers were at historically high levels, with rates in 2005
remaining relatively high. This increase in charter hire rates
is attributable to the favorable imbalance between the supply of
and demand for drybulk shipping capacity, which is currently a
function of:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Supply:</I>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Shipyards where new ships are constructed are fully booked until
    2008, providing visibility into the number and type of new
    vessels that will enter the market in coming years;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Port congestion worldwide has lengthened voyage durations,
    effectively reducing the supply of vessels that are available
    for hire at any particular time.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Demand:</I>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    In general, increasing global production and consumption and
    international trade have driven the strong demand for drybulk
    capacity;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    In particular, China and India continue to drive demand for
    drybulk carriers.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We cannot predict or offer assurances that the current favorable
imbalance between supply and demand described above will
continue.
</DIV>
</DIV>

<P align="center" style="font-size: 10pt;">2

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Competitive Strengths</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that the following competitive strengths distinguish
us in the drybulk shipping industry:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>High Quality and Young Fleet.</I> All of our drybulk carriers
    are modern Panamax vessels with an average age of approximately
    8.0&nbsp;years. According to Drewry, the average age of the
    world&#146;s Panamax drybulk fleet as of April&nbsp;5, 2005 is
    12.2&nbsp;years. We believe that owning a modern fleet of
    well-maintained vessels will enable us to operate our vessels
    with low operating costs and secure employment for our vessels
    with high quality charterers. We also believe that secondhand
    vessels of our fleet&#146;s vintage will provide an attractive
    return on capital, given the favorable charter hire rates we
    expect they will command as compared to their purchase price.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Stable Cash Flow from Well-established and Reputable
    Charterers.</I> We expect that the majority of our vessels will
    be initially employed on time charters to well-established and
    reputable charterers. We believe these time charters will
    provide us with steady cash flow and high vessel utilization
    rates while limiting our exposure to freight rate volatility.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Internal Management of Vessel Operations.</I> We believe that
    providing our own technical management will favorably
    distinguish us from many of our competitors by allowing us to
    more closely monitor our operations and offer a high quality of
    performance, reliability and efficiency. We also expect that
    providing our own internal technical management will enable us
    to further limit operating costs by eliminating management fees
    to third parties.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Experienced Management Team and Strong Affiliation with Our
    Sponsors.</I> Our executives have considerable experience in the
    management of the commercial and financial aspects of
    international shipping businesses. We also have a strong
    relationship with our Sponsors, which collectively have
    considerable experience and relationships in the energy, iron
    ore, and coal industries.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Focus on Panamax or Larger Drybulk Vessels.</I> Initially our
    fleet will consist entirely of Panamax vessels, which we believe
    are the most flexible category of drybulk vessels, with the
    ability to access all major ports and to travel through the
    Panama Canal. Unlike smaller drybulk vessels, Panamax vessels
    are able to efficiently transport the major drybulk commodities
    to Asian markets from outside the region, and are less
    vulnerable to market changes in the demand for any single
    commodity.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Increased Flexibility through Use of Sister Ships.</I> Our
    fleet will include two groups of sister ships. The ability to
    substitute ships with identical specifications enhances our
    fleet&#146;s revenue potential by providing increased
    flexibility to meet charterers&#146; schedules. Sister ships
    also increase our operating efficiencies because technical
    knowledge can be shared across vessels in a series and economies
    of scale can be created when ordering spare parts and supplying
    and crewing vessels.</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Business Strategy</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our business strategy is to provide reliable seaborne
transportation services for drybulk cargoes at a competitive
cost. The principal elements of our business strategy consist of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Optimize Charter Planning.</I> We intend to employ a
    significant portion of our fleet under time charters to achieve
    predictable and visible cash flows and increase utilization
    rates. Our commercial management team will seek to balance the
    mix of short-, medium- and long-term time charters and spot
    market charters in order to permit us to opportunistically
    pursue market conditions while allowing us to maintain
    predictable cash flows.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Focus on High Quality Panamax or Larger Drybulk Vessels.</I>
    We intend to maintain a high quality, cost efficient fleet of
    Panamax or larger drybulk carriers that meet rigorous industry
    standards and our charterers&#146; requirements. Our fleet will
    enable us to efficiently transport major drybulk commodities
    such as coal, iron ore and grain to China and other expanding
    markets.</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt;">3
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Maintain Low Cost, Highly Efficient Operations.</I> We intend
    to perform internally the commercial management of our entire
    fleet and, by the end of the first quarter of 2006, the
    technical management of our fleet. We believe that utilizing our
    own commercial and technical management will enable us to reduce
    our operating expenses by eliminating external management fees
    and commissions. In addition, we believe that our policy of
    staffing each of our vessels with qualified officers and crews
    who share a common nationality will enable us to increase the
    efficiency of our vessel operations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Strategically Expand the Size of Our Fleet.</I> The size of
    our initial fleet places us within the top twenty owners of
    Panamax drybulk vessels worldwide, and our goal is to further
    expand our worldwide presence in the drybulk carrier market. We
    believe that our worldwide presence will enable us to capitalize
    on economies of scale in the management of our fleet, maximize
    our fleet&#146;s utilization, and minimize positioning days.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Flexible Financial Strategy.</I> In order to fund future
    acquisitions we intend to pursue a financial strategy that
    maximizes our flexibility. The proceeds from this offering will
    allow us to repay our outstanding indebtedness. We believe our
    low debt level will provide us with the flexibility to take
    advantage of acquisition opportunities as they arise.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Leveraging our Sponsors&#146; Strategic Relationships.</I>
    Our Sponsors and their affiliates have extensive experience and
    relationships in the coal, steel and iron ore industries. We
    plan to use these relationships to identify chartering
    opportunities, make contacts, and gain market intelligence in
    these core commodities industries.</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Relationship with Our Sponsors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Quintana Maritime Investors LLC, our parent, is beneficially
owned by affiliates of each of Mr.&nbsp;Robertson, First
Reserve, and AMCI. We have a strong relationship with our
Sponsors and certain of their affiliates. Following the
consummation of this offering, we expect that Quintana Maritime
Investors LLC will be liquidated and its ownership interest in
us will be distributed to its members, affiliates of our
Sponsors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Robertson is chairman of our board of directors and is
the beneficial owner of the controlling interest in the general
partner of Natural Resource Partners L.P. (&#147;NRP&#148;). NRP
is a publicly traded limited partnership engaged principally in
the business of owning and managing coal properties in the
United States. First Reserve is the largest and oldest private
equity firm specializing in the energy industry, with
$4.7&nbsp;billion under management across four active funds,
including significant interests in the coal industry. AMCI is
one of the largest privately owned international coal companies,
and is engaged in the production, handling and marketing of
coal, iron ore and steel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that we will be able to leverage the collective
experience of our Sponsors in the energy, coal, steel and iron
ore industries to obtain chartering opportunities, contacts, and
market intelligence in the core commodities trades.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Vessel Management</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We provide our own commercial management services for each of
our vessels on an exclusive basis. Commercial management
services include chartering, the sale and purchase of vessels,
and accounting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Initially, our management team will provide the technical
management of three of our vessels and we will outsource the
technical management of five of our vessels to our third party
Manager. However, we expect to take over the technical
management of our entire fleet by the end of the first quarter
of 2006. Technical vessel management services include arranging
for and managing crews, maintenance, drydocking, repairs,
insurance, ensuring regulatory and classification society
compliance, appointing supervisors and technical consultants and
providing technical support. Please read
&#147;Business&nbsp;&#151; Management of Our Fleet.&#148;
</DIV>
</DIV>

<P align="center" style="font-size: 10pt;">4

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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Dividend Policy</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The payment of dividends is in the discretion of our board of
directors, subject to certain limitations as set forth in the
section of this prospectus entitled &#147;Dividend Policy.&#148;
We have not yet established a dividend policy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that under current law, our dividend payments from
earnings and profits will constitute &#147;qualified dividend
income&#148; and non-corporate United States shareholders will
generally be subject to a 15% United States federal income tax
rate with respect to our dividend payments. Distributions in
excess of our earnings and profits will be treated first as a
non-taxable return of capital to the extent of a United States
shareholder&#146;s tax basis in its common stock on a
dollar-for-dollar basis and thereafter as capital gain. Please
see the sections of this prospectus entitled &#147;Dividend
Policy&#148; and &#147;Tax Considerations&#148; for additional
information regarding dividend payments generally.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Structure</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Quintana Maritime Limited is a holding company incorporated
under the laws of the Marshall Islands. We own our vessels
through separate wholly-owned subsidiaries that are incorporated
in the Marshall Islands. We maintain our principal executive
offices at Pandoras 13&nbsp;&#38; Kyprou Street,
166&nbsp;74&nbsp;Glyfada, Greece. Our telephone number at that
address is 011-30-210-898-5056.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Enforceability of Civil Liabilities</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Quintana Maritime Limited is a Marshall Islands company, and our
principal executive offices are located outside the United
States in Glyfada, Greece. Some of our directors may reside
outside of the United States. Two of our officers, as well as
the shipping industry experts named in the prospectus, also
reside outside the United States. In addition, all of our assets
and a substantial portion of the assets of our
non-U.S.&nbsp;directors, non-U.S.&nbsp;officers and shipping
industry experts are located outside the United States. As a
result, you may have difficulty serving legal process within the
United States upon us or any of these persons. You may also have
difficulty enforcing, both in and outside the United States,
judgments you may obtain in United States courts against us or
these persons in any action, including actions based upon the
civil liability provisions of United States federal or state
securities laws. Furthermore, there is substantial doubt that
the courts of the Marshall Islands or Greece would enter
judgments in original actions brought in those courts predicated
on United States federal or state securities laws.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>The International Drybulk Shipping Industry</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The discussions contained under the sections of this prospectus
entitled &#147;Prospectus Summary&nbsp;&#151; Industry
Trends,&#148; &#147;Business&#148; and &#147;The International
Drybulk Shipping Industry&#148; have been reviewed by Drewry
Shipping Consultants, Ltd., or Drewry, which has confirmed to us
that these sections accurately describe the international
drybulk shipping industry, subject to the reliability of the
data supporting the statistical and graphical information
presented in this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The statistical and graphical information we use in this
prospectus has been compiled by Drewry from its database. Drewry
compiles and publishes data for the benefit of its clients. Its
methodologies for collecting data, and therefore the data
collected, may differ from those of other sources, and its data
do not reflect all or even necessarily a comprehensive set of
the actual transactions occurring in the market.
</DIV>
</DIV>

<P align="center" style="font-size: 10pt;">5

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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>The Offering</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    Common stock offered</TD>
    <TD></TD>
    <TD valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Common stock to be outstanding immediately after this offering</TD>
    <TD></TD>
    <TD valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Use of proceeds</TD>
    <TD></TD>
    <TD valign="top">
    We estimate that the net proceeds to us from this offering,
    after deducting underwriting discounts and estimated offering
    expenses, will be approximately
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
    We intend to use approximately
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of the net proceeds to repay the outstanding debt incurred to
    finance or refinance the purchase of our vessels under our
    secured term loan and to fund a portion of the purchase price of
    any remaining vessels. We intend to use
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of the net proceeds to pay a dividend to Quintana Maritime
    Investors LLC, our sole shareholder existing immediately prior
    to this offering. See &#147;Use of Proceeds.&#148; We also
    intend to use the proceeds we receive from any shares sold
    pursuant to the underwriters&#146; over-allotment option to pay
    an additional dividend to our sole shareholder existing
    immediately prior to the offering. To the extent the
    underwriters&#146; over-allotment option is not exercised in
    full, the additional dividend will be payable to that sole
    shareholder in additional shares. Please see &#147;Related Party
    Transactions&nbsp;&#151; Dividend.&#148;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Nasdaq National Market</TD>
    <TD></TD>
    <TD valign="top">
    We will apply to list our common stock for quotation on the
    Nasdaq National Market under the symbol &#147;QMAR.&#148;</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Risk Factors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Investing in our common stock involves substantial risks. You
should carefully consider all the information in this prospectus
prior to investing in our common stock. In particular, we urge
you to consider carefully the factors set forth in the section
of this prospectus entitled &#147;Risk Factors&#148; beginning
on page&nbsp;8.
</DIV>
</DIV>

<P align="center" style="font-size: 10pt;">6
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<P><HR noshade><P>
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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Quintana Maritime Limited</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>Summary Consolidated Financial Data</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We were incorporated on January&nbsp;13, 2005. The following
table sets forth our summary consolidated financial data for the
period from January&nbsp;13, 2005 (inception) through and as of
March&nbsp;31, 2005. As of March&nbsp;31, 2005, we had not taken
delivery of any of our Panamax vessels and we did not conduct
any significant operations during the period presented. The
following financial data also does not reflect significant
capital contributions and debt incurrences following the balance
sheet date. See &#147;Capitalization.&#148; The data were
derived from our audited consolidated financial statements,
which are included in this prospectus, and should be read in
connection with the consolidated financial statements, related
notes and other financial information included herein.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>For Period from</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;13, 2005</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>through</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>March&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated Statement of Operations Data:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(156.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="6">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated Balance Sheet Data (at period end):</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>707.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>726.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total non-current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,858.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,585.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholder&#146;s equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,430.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="6">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated Cash Flow Data:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash used in operating activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(20.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash used in investing activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(28,858.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash from financing activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,587.0</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>
</DIV>

<P align="center" style="font-size: 10pt;">7

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='102'></A>
</DIV>

<!-- link1 "RISK FACTORS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>RISK FACTORS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>You should consider carefully the following factors, as well
as the other information set forth in this prospectus, before
making an investment in our common stock. Some of the following
risks relate principally to the industry in which we operate and
our business in general. Other risks relate principally to the
securities market and ownership of our common stock. The
occurrence of any of the events described in this section could
significantly and negatively affect our business, financial
condition, operating results or cash available for dividends or
the trading price of our common stock and cause you to lose all
or part of your investment.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Company Specific Risk Factors</B>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Because we are a new company with a limited operating
    history, we may be less successful in implementing our business
    strategy than a more seasoned company.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We were formed in January 2005 and a portion of our fleet
commenced operations in April 2005. As a result, we have a
limited performance record and operating history. Our historical
financial statements predate the commencement of our operations,
and therefore do not provide a meaningful basis for you to
evaluate our operations or our ability to achieve our business
strategy. We may be less successful in implementing our business
strategy than a more seasoned company.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We have not yet adopted a dividend policy and cannot
    assure you that our board of directors will declare
    dividends.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have not yet adopted a dividend policy. The declaration and
payment of dividends, if any, will always be subject to the
discretion of our board of directors and the requirements of
Marshall Islands law. The timing and amount of any dividends
declared, if any, will depend on, among other things, our
earnings, financial condition and cash requirements and
availability, our ability to obtain debt and equity financing on
acceptable terms as contemplated by our growth strategy,
provisions of Marshall Islands law governing the payment of
dividends and restrictive covenants in our existing and future
debt instruments. The international drybulk shipping industry is
highly volatile, and we cannot predict with certainty the amount
of cash, if any, that will be available for distribution as
dividends in any period. Also, there may be a high degree of
variability from period to period in the amount of cash, if any,
that is available for the payment of dividends.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may incur expenses or liabilities or be subject to other
circumstances in the future that reduce or eliminate the amount
of cash that we have available for distribution as dividends, if
any, including as a result of the risks described in this
section of the prospectus. Our growth strategy contemplates that
we will finance the acquisition of additional vessels through a
combination of our operating cash flow and debt and equity
financing. If financing is not available to us on acceptable
terms, our board of directors may determine to finance or
refinance acquisitions with a greater percentage of cash from
operations to the extent available, which would reduce or even
eliminate the amount of cash available for the payment of
dividends. We may also enter into new financing or other
agreements that will restrict our ability to pay dividends.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Marshall Islands law generally prohibits the payment of
dividends other than from surplus or while a company is
insolvent or would be rendered insolvent by the payment of such
a dividend. We may not have sufficient surplus in the future to
pay dividends. In addition, our term loan facility contains, and
we expect that any future debt agreements will contain,
covenants prohibiting us from paying dividends if there is a
default thereunder or if a default would result from the payment
of such dividends. See &#147;Management&#146;s Discussion and
Analysis of Financial Condition and Results of
Operations&nbsp;&#151; Term Loan&nbsp;Facility.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We can give no assurance that dividends will be paid in the
future.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>Our earnings may be adversely affected if we do not
    successfully employ our vessels on medium- or long-term time
    charters or take advantage of favorable opportunities in the
    spot market.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect to seek to employ the majority of our vessels
primarily on medium- and long-term time charters. Although
medium- and long-term charters provide relatively steady streams
of revenue, our vessels committed to such charters may not be
available for immediate chartering for spot charters, during
periods of increasing charter hire rates when spot voyages might
be more profitable. If we cannot re-charter these vessels on new
medium- or long-term charters following the expiration of
previous charters, or employ them in the spot market profitably,
our results of operations and operating cash flow may suffer. We
cannot assure you that future charter hire rates will enable us
to operate our vessels profitably.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD></TD>
    <TD>
    <B><I>Because we will initially depend on our Manager to provide
    the technical management for a majority of our fleet, our
    operations will be vulnerable to any financial or operational
    problems of the Manager.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are a newly formed company with eight employees as of
April&nbsp;30, 2005. We have subcontracted, or will subcontract,
the technical management of five of the eight vessels in our
fleet, including crewing, maintenance and repair, to our Manager
under separate one-year management agreements. Although we
expect to provide the technical management of our entire fleet
through our wholly-owned subsidiary, Quintana Management LLC, by
the end of the first quarter of 2006, the loss of our
Manager&#146;s services or its failure to perform its
obligations to us before we take over the technical management
of our entire fleet could materially and adversely affect our
business, financial condition, results of operations and ability
to pay dividends. In addition, we may not be able to put in
place the required personnel or infrastructure, or otherwise
successfully take over the technical management of the vessels
being managed by our Manager upon the expiration of our current
vessel management agreements. Furthermore, we may find that we
are not a suitable replacement for our Manager.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The ability of our Manager to continue providing services for
our benefit will depend in part on its own financial strength.
Circumstances beyond our control could impair our Manager&#146;s
financial strength. Because our Manager is privately held, it is
unlikely that information about its financial strength would
become public or available to us prior to any default by our
Manager under the management agreement. As a result, an investor
might have little advance warning of problems that affect our
Manager, even though those problems could have a material
adverse effect on us. Our inability to successfully take over
the technical management of the vessels being managed by our
Manager or our inability to perform the technical management of
the vessels being managed by our Manager satisfactorily would
materially and adversely affect our business, financial
condition, results of operations and ability to pay dividends.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
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    <TD></TD>
    <TD>
    <B><I>We may have difficulty properly managing our planned
    growth through acquisitions of additional vessels.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to grow our business through selective acquisitions of
additional vessels. Our future growth will primarily depend on:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    locating and acquiring suitable vessels;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    identifying and consummating vessel acquisitions or joint
    ventures relating to vessel acquisitions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    enlarging our customer base;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    managing our expansion;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    obtaining required financing on acceptable terms.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During periods in which charter hire rates are high, vessel
values generally are high as well, and it may be difficult to
consummate vessel acquisitions at favorable prices. In addition,
growing any business by acquisition presents numerous risks,
such as obtaining additional qualified personnel, managing
relationships with customers and integrating newly acquired
assets into existing infrastructure. We cannot give any
assurance that we will be successful in executing our growth
plans or that we will not incur significant expenses and losses
in connection with our future growth efforts.
</DIV>

<P align="center" style="font-size: 10pt;">9
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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We cannot assure you that we will be able to borrow
    further amounts under our term loan facility, which we will need
    to fund our growth.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our ability to borrow further amounts under our term loan
facility will be subject to satisfaction of certain customary
conditions precedent and compliance with terms and conditions
included in the loan documents. Prior to each borrowing, we will
be required, among other things, to provide the lenders with
acceptable valuations of the vessels in our fleet confirming
that they are sufficient to satisfy minimum security
requirements. To the extent that we are not able to satisfy
these requirements, including as a result of a decline in the
value of our vessels, we may not be able to borrow further
amounts under our term loan facility or any future debt
facility. If we are unable to borrow further amounts under our
term loan facility, we may be unable to fund the acquisition of
the remaining vessels in our initial fleet.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
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</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Restrictive covenants in our term loan facility impose,
    and any future debt facilities will impose, financial and other
    restrictions on us.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The term loan facility imposes and any future debt facility will
impose operating and financial restrictions on us. These
restrictions may limit our ability to, among other things:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    pay dividends or make capital expenditures if we do not repay
    amounts drawn under the term loan facility when due, if there is
    a default under the term loan facility or if the payment of the
    dividend or capital expenditure would result in a default or
    breach of a loan covenant;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    incur additional indebtedness, including through the issuance of
    guarantees;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    change the flag, class or management of our vessels;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    create liens on our assets;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    sell our vessels;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    merge or consolidate with, or transfer all or substantially all
    our assets to, another person;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    enter into a new line of business.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Therefore, we may need to seek permission from our lenders in
order to engage in some corporate actions. Our lenders&#146;
interests may be different from ours and we cannot guarantee
that we will be able to obtain our lenders&#146; permission when
needed. This may limit our ability to pay dividends to our
shareholders, finance our future operations, make acquisitions
or pursue business opportunities.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Servicing future indebtedness would limit funds available
    for other purposes, such as the payment of dividends.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to finance our future fleet expansion program in part
with secured indebtedness. We may incur other indebtedness in
the future. While we may seek to refinance amounts drawn or
incurred, we cannot assure you that we will be able to do so on
terms that are acceptable to us or at all. If we are not able to
refinance these amounts on terms acceptable to us or at all, we
will have to dedicate cash flow from operations to pay the
principal and interest of this indebtedness. If we are not able
to satisfy these obligations, we may have to undertake
alternative financing plans. The actual or perceived credit
quality of our charterers, any defaults by them, and the market
value of our fleet, among other things, may materially affect
our ability to obtain alternative financing. In addition, debt
service payments under any future debt agreements or alternative
financing may limit funds otherwise available for working
capital, capital expenditures and other purposes, such as the
payment of dividends. If we are unable to meet our debt
obligations, or if we otherwise default under any future debt
agreements, our lenders could declare the debt, together with
accrued interest and fees, to be immediately due and payable and
foreclose on our fleet, which could result in the acceleration
of other indebtedness that we may have at such time and the
commencement of similar foreclosure proceedings by other lenders.
</DIV>

<P align="center" style="font-size: 10pt;">10

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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Unless we set aside reserves for vessel replacement, at
    the end of a vessel&#146;s useful life our revenue will decline,
    which would adversely affect our cash flows and income.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Unless we maintain cash reserves for vessel replacement we may
be unable to replace the vessels in our fleet upon the
expiration of their useful lives. Our cash flows and income are
dependent on the revenues earned by the chartering of our
vessels to customers. If we are unable to replace the vessels in
our fleet upon the expiration of their useful lives, our
business, results of operations, financial condition and ability
to pay dividends will be adversely affected. Any reserves set
aside for vessel replacement would not be available for other
cash needs or dividends.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Purchasing and operating secondhand vessels may result in
    increased operating costs and reduced fleet utilization.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our current business strategy includes the acquisition of
high-quality secondhand vessels. While we have the right to
inspect previously owned vessels prior to purchase, such an
inspection does not provide us with the same knowledge about
their condition that we would have if these vessels had been
built for and operated exclusively by us. Secondhand vessels may
have conditions or defects that we were not aware of when we
bought the vessel and that may require us to incur costly
repairs to the vessels. If this were to occur, such hidden
defects or problems may be expensive to repair when detected,
and if not detected may result in accidents or other incidents
for which we may become liable to third parties. Repairs may
require us to put a vessel into drydock, which would reduce our
fleet utilization and increase our costs. We do not expect to
receive the benefit of warranties on secondhand vessels.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>When our initial time charters end, we may not be able to
    replace them promptly or with profitable ones.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We cannot assure you that we will be able to obtain charters at
comparable rates or with comparable charterers, if at all, when
the charters on the vessels in our fleet expire. The charterers
under these charters have no obligation to renew or extend the
charters. We will generally attempt to recharter our vessels at
favorable rates with reputable charterers as the initial
charters expire, unless management determines at that time to
employ the vessel in the spot market. We cannot assure you that
we will succeed. Failure to obtain replacement charters will
reduce or eliminate our revenue, our ability to expand our fleet
and our ability to pay dividends to shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If drybulk vessel charter hire rates are lower than they are
now, we may have to enter into charters with lower charter hire
rates. Also, it is possible that we may not obtain any charters.
In addition, we may have to reposition our vessels without cargo
or compensation to deliver them to future charterers or to move
vessels to areas where we believe that future employment may be
more likely or advantageous. Repositioning our vessels would
increase our vessel operating costs.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The international drybulk shipping industry is highly
    competitive, and we may not be able to compete successfully for
    charters with new entrants or established companies with greater
    resources.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will employ our vessels in a highly competitive market that
is capital intensive and highly fragmented. Competition arises
primarily from other vessel owners, some of whom have
substantially greater resources than we do. Competition for the
transportation of drybulk cargo by sea is intense and depends on
price, location, size, age, condition and the acceptability of
the vessel and its operators to the charterers. Due in part to
the highly fragmented market, competitors with greater resources
could enter the drybulk shipping industry and operate larger
fleets through consolidations or acquisitions and may be able to
offer lower charter hire rates than we are able to offer.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We may be unable to retain key management personnel and
    other employees in the shipping industry, which may negatively
    impact the effectiveness of our management and results of
    operations.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our success depends to a significant extent upon the abilities
and efforts of our management team, which was formed beginning
in January 2005. Our success will depend upon our ability to
retain key members of our management team and to hire new
members as may be necessary. The loss of any of
</DIV>

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<DIV align="left" style="font-size: 10pt;">
these individuals could adversely affect our business prospects
and financial condition. Difficulty in hiring and retaining
replacement personnel could have a similar effect. We do not
intend to maintain &#147;key man&#148; life insurance on any of
our officers.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Risks associated with operating oceangoing vessels could
    negatively affect our business and reputation, which could
    adversely affect our revenues and stock price.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The operation of oceangoing vessels carries inherent risks.
These risks include the possibility of:
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    marine disaster;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    environmental accidents;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    cargo and property losses or damage;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    business interruptions caused by mechanical failure, human
    error, war, terrorism, political action in various countries,
    labor strikes or adverse weather conditions;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    piracy.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any of these circumstances or events could increase our costs or
lower our revenues. Because we will have only eight vessels in
our initial fleet, loss or damage to any one or more of our
vessels would have a material adverse effect on our business,
results of operations, financial condition and our ability to
pay dividends. In addition to any economic cost, the involvement
of our vessels in an environmental disaster may harm our
reputation. Our lack of operating history may increase these
risks.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The operation of drybulk carriers has certain unique
    operational risks.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
With a drybulk carrier, the cargo itself and its interaction
with the ship may create operational risks. By their nature,
drybulk cargoes are often heavy, dense and easily shifted, and
they may react badly to water exposure. In addition, drybulk
carriers are often subjected to battering treatment during
unloading operations with grabs, jackhammers (to pry encrusted
cargoes out of the hold), and small bulldozers. This treatment
may cause damage to the vessel. Vessels damaged due to treatment
during unloading procedures may be more susceptible to breach to
the sea. Hull breaches in drybulk carriers may lead to the
flooding of the vessels holds. If a drybulk vessel suffers
flooding in its forward holds, the bulk cargo may become so
dense and waterlogged that its pressure may buckle the
vessel&#146;s bulkheads, leading to the loss of a vessel. If we
are unable to adequately maintain our vessels, we may be unable
to prevent these events. Any of these circumstances or events
could negatively impact our business, financial condition,
results of operations and ability to pay dividends. In addition,
the loss of any of our vessels could harm our reputation as a
safe and reliable vessel owner and operator.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our vessels may suffer damage and we may face unexpected
    costs, which could adversely affect our cash flow and financial
    condition.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If our vessels suffer damage, they may need to be repaired. The
costs of repairs are unpredictable and can be substantial. The
loss of earnings while our vessels are being repaired and
repositioned, as well as the actual cost of these repairs, would
decrease our earnings and reduce the amount of cash that we have
available for dividends. We may not have insurance that is
sufficient to cover all or any of these costs or losses and may
have to pay costs not covered by our insurance.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The shipping industry has inherent operational risks that
    may not be adequately covered by our insurance.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We procure insurance for our fleet against risks commonly
insured against by vessel owners and operators. Our current
insurance for the vessels of which we have taken delivery
includes hull and machinery insurance, war risks insurance,
protection and indemnity insurance, which includes environmental
damage and pollution insurance. We can give no assurance that we
are adequately insured against all risks or that our insurers
will pay a particular claim. Even if our insurance coverage is
adequate to cover our losses, we may not be able to timely
obtain a replacement vessel in the event of a loss. Furthermore,
</DIV>

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<DIV align="left" style="font-size: 10pt;">
we may not be able to maintain or obtain adequate insurance
coverage at reasonable rates for our fleet. We may also be
subject to calls, or premiums, in amounts based not only on our
own claim records but also the claim records of all other
members of the protection and indemnity associations through
which we receive indemnity insurance coverage for tort
liability. Our insurance policies also contain deductibles,
limitations and exclusions which increase our costs in the event
of a claim.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>If our drybulk carriers are not delivered on time or are
    delivered with significant defects, our earnings and financial
    condition could suffer.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have entered into separate memoranda of agreement with
third-party sellers to acquire five additional Panamax drybulk
carriers. Our operating strategy is based on having a minimum
fleet of eight vessels. We expect that these vessels will be
delivered to us by the end of September 2005. A delay in the
delivery of these vessels to us or the failure of the contract
counterparty to deliver a vessel at all could cause us to breach
our obligations under a related time charter and could adversely
affect our earnings, our financial condition and the amount of
dividends, if any, that we pay in the future. The delivery of
these vessels could be delayed or certain events may arise which
could result in us not taking delivery of a vessel, such as a
total loss of a vessel, a constructive loss of a vessel, or
substantial damage to a vessel prior to delivery. In addition,
the delivery of any of these vessels with substantial defects
could have similar consequences. We intend to conduct only a
limited inspection of these additional drybulk carriers.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The aging of our fleet may result in increased operating
    costs in the future, which could adversely affect our
    earnings.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In general, the cost of maintaining a vessel in good operating
condition increases with the age of the vessel. Our fleet has an
average age of approximately 8&nbsp;years. As our fleet ages, we
will incur increased costs. Older vessels are typically less
fuel efficient and more costly to maintain than more recently
constructed vessels due to improvements in engine technology.
Cargo insurance rates also increase with the age of a vessel,
making older vessels less desirable to charterers. Governmental
regulations, including environmental regulations, safety or
other equipment standards related to the age of vessels may
require expenditures for alterations, or the addition of new
equipment, to our vessels and may restrict the type of
activities in which our vessels may engage. We cannot assure you
that, as our vessels age, market conditions will justify those
expenditures or enable us to operate our vessels profitably
during the remainder of their useful lives.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We may earn United States source income that is subject to
    tax, thereby reducing our earnings.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the U.S.&nbsp;Internal Revenue Code of 1986, or the Code,
50% of our gross income attributable to shipping transportation
that begins or ends, but that does not both begin and end, in
the United States is characterized as United States source
shipping income. Such income generally will be subject to a 4%
U.S.&nbsp;federal income tax without allowance for deduction,
unless we qualify for an exemption from such tax under
Section&nbsp;883 of the Code. Our ability to qualify for the
exemption at any given time will depend upon circumstances
related to the ownership of our common stock at such time and
thus are beyond our control. In addition, our ability to qualify
for the exemption will depend upon our interpretation of
Treasury regulations promulgated under Section&nbsp;883 of the
Code, which is subject to uncertainty following certain recent
statutory changes described in more detail the section of this
prospectus entitled &#147;Tax Considerations.&#148; While we do
not expect to have a material amount of gross income
attributable to shipping transportation that begins or ends in
the United States, we can give no assurance that we would
qualify for the exemption under Section&nbsp;883 with respect to
any such income we earn. Moreover, we can give no assurance that
the trading pattern of our ships will not change in the future.
As a result, our liability for tax could become material and our
net income and cash flow would be reduced by the amount of the
applicable tax. Please see the section of this prospectus
entitled &#147;Tax Considerations&#148; for additional
information relating to the U.S.&nbsp;taxation of our income.
</DIV>

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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>U.S.&nbsp;tax authorities could treat us as a
    &#147;passive foreign investment company,&#148; which could have
    adverse U.S.&nbsp;federal income tax consequences to
    U.S.&nbsp;holders.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A foreign corporation will be treated as a &#147;passive foreign
investment company,&#148; or PFIC, for U.S.&nbsp;federal income
tax purposes if either (1)&nbsp;at least 75% of its gross income
for any taxable year consists of certain types of &#147;passive
income,&#148; or (2)&nbsp;at least 50% of the average value of
the corporation&#146;s assets produce or are held for the
production of those types of &#147;passive income.&#148; For
purposes of these tests, &#147;passive income&#148; includes
dividends, interest, and gains from the sale or exchange of
investment property and rents and royalties other than rents and
royalties that are received from unrelated parties in connection
with the active conduct of a trade or business. For purposes of
these tests, income derived from the performance of services
does not constitute &#147;passive income.&#148;
U.S.&nbsp;shareholders of a PFIC are subject to a
disadvantageous U.S.&nbsp;federal income tax regime with respect
to the income derived by the PFIC, the distributions they
receive from the PFIC, and the gain, if any, they derive from
the sale or other disposition of their shares in the PFIC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on our operations as of the completion of this offering,
we do not believe that we are, nor do we expect to become, a
PFIC with respect to any taxable year. Since we expect to derive
substantially all of our income each year from the time
chartering and voyage chartering activities of our wholly-owned
subsidiaries, we believe that such income will be treated for
relevant U.S.&nbsp;federal income tax purposes as services
income, rather than rental income. Correspondingly, such income
should not constitute &#147;passive income,&#148; and the assets
that we or our wholly-owned subsidiaries own and operate in
connection with the production of that income, in particular our
vessels, should not constitute passive assets for purposes of
determining whether we are a PFIC in any taxable year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Regarding the PFIC issue, there are legal uncertainties involved
in our determination that we are not a PFIC, and we are not
relying on an opinion of counsel on this issue. Furthermore, no
assurance can be given that the Internal Revenue Service will
accept our position or that we would not constitute a PFIC for
any future taxable year if there were to be changes in the
nature and extent of our operations.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Because we expect to generate all of our revenues in
    Dollars but may incur a significant portion of our expenses in
    other currencies, exchange rate fluctuations could hurt our
    results of operations.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect to generate all of our revenues in Dollars. We expect
to incur a portion of our operating expenses in currencies other
than Dollars. This difference could lead to fluctuations in net
income due to changes in the value of the Dollar relative to the
other currencies, in particular the Euro. Expenses, including
extraordinary expenses, incurred in foreign currencies against
which the Dollar falls in value will be higher in Dollar terms,
resulting in a decrease in our operating income. We have not
hedged against these risks. Our operating results could suffer
as a result.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We depend upon a limited number of customers for a large
    part of our revenues and the loss of one or more of these
    customers could adversely affect our financial
    performance.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect to derive a significant part of our revenue from a
limited number of customers. If one or more of these customers
is unable to perform under one or more charters with us and we
are not able to find a replacement charter, or if a customer
exercises certain rights to terminate the charter, we could
suffer a loss of revenues that could adversely affect our
financial condition, results of operations and cash available
for distribution as dividends to our shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We could lose a customer or the benefits of a time charter for
many different reasons, including if:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the customer fails to make charter payments because of its
    financial inability, disagreements with us or otherwise;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the customer terminates the charter because we fail to deliver
    the vessel within a fixed period of time, the vessel is lost or
    damaged beyond repair, there are serious deficiencies in the
    vessel or prolonged periods of off-hire, or we default under the
    charter.</TD>
</TR>

</TABLE>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If we lose a key customer, we may be unable to obtain charters
on comparable terms or may have increased exposure to the
volatile spot market, which is highly competitive and subject to
significant price fluctuations. The loss of any of our
customers, time charters or vessels, or a decline in payments
under our charters, could have a material adverse effect on our
business, results of operations, financial condition and our
ability to pay dividends.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We are a holding company, and we depend on the ability of
    our subsidiaries to distribute funds to us in order to satisfy
    our financial obligations and to make dividend payments.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are a holding company and our subsidiaries conduct all of our
operations and own all of our operating assets. We have no
significant assets other than the equity interests in our
subsidiaries. As a result, our ability to make dividend payments
depends on our subsidiaries and their ability to distribute
funds to us. The ability of a subsidiary to make these
distributions could be affected by a claim or other action by a
third party, including a creditor, or by Marshall Islands law,
which regulates the payment of dividends by companies. If we are
unable to obtain funds from our subsidiaries, our board of
directors may exercise its discretion not to declare or pay
dividends. We do not intend to seek to obtain funds from other
sources to pay dividends.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>As we expand our business, we may need to improve our
    operating and financial systems and will need to recruit
    suitable employees and crew for our vessels.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are a newly formed company. Our current operating and
financial systems may not be adequate as we commence operations
and implement our plan to expand the size of our fleet, and our
attempts to improve those systems may be ineffective. In
addition, as we seek to expand our internal technical management
capabilities and our fleet, we will need to recruit suitable
additional seafarers and shoreside administrative and management
personnel. We cannot guarantee that we or our crewing agent will
be able to hire suitable employees as we expand our fleet. This
task will be made more difficult by our strategy of maintaining
single nationality crews. If we or our crewing agent encounters
business or financial difficulties, we may not be able to
adequately staff our vessels. If we are unable to develop and
maintain effective financial and operating systems or to recruit
suitable employees as we expand our fleet, our financial
performance may be adversely affected and, among other things,
the amount of cash available for distribution as dividends to
our shareholders may be reduced.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Industry Specific Risk Factors</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The international drybulk shipping sector is cyclical and
    volatile, and this may lead to reductions and volatility in our
    charter hire rates, vessel values and results of
    operations.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The drybulk shipping industry is cyclical with attendant
volatility in charter hire rates and industry profitability. The
degree of charter hire rate volatility among different types of
drybulk carriers has varied widely, and charter hire rates for
drybulk carriers are currently near historically high levels.
See &#147;The International Drybulk Shipping
Industry&nbsp;&#151; Charter Rates.&#148; When we enter into a
charter when charter hire rates are low, our revenues and
earnings will be adversely affected as we do not expect to be
able to substantially lower our operating costs during periods
of industry weaknesses. In addition, a decline in charter hire
rates likely will cause the value of our vessels to decline. We
cannot assure you that we will be able to successfully charter
our vessels in the future or renew existing charters at rates
sufficient to allow us to meet our obligations or to pay
dividends to our shareholders. Because the factors affecting the
supply and demand for vessels are outside of our control and are
unpredictable, the nature, timing, direction and degree of
changes in industry conditions are also unpredictable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Factors that influence demand for vessel capacity include:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    demand for and production of drybulk products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    global and regional economic conditions;</TD>
</TR>

</TABLE>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    environmental and other regulatory developments;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the distance drybulk is to be moved by sea;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    changes in seaborne and other transportation patterns.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The factors that influence the supply of vessel capacity include:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the number of newbuilding deliveries;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the scrapping rate of older vessels;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    vessel casualties;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the number of vessels that are out of service;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the price of steel;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    changes in environmental and other regulations that may limit
    the useful lives of vessels;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    port congestion.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We anticipate that the future demand for our drybulk carriers
will be dependent upon, among other things, continued economic
growth in the world&#146;s economies, including China and India,
and will be influenced by seasonal and regional changes in
demand, changes in the capacity of the global drybulk carrier
fleet and the sources and supply of drybulk cargo to be
transported by sea. We believe the capacity of the global
drybulk carrier fleet will increase. If the supply of drybulk
carrier capacity increases and the demand for drybulk carrier
capacity does not increase or increases less quickly, the
charter hire rates paid for our vessels could materially
decline. Adverse economic, political, social or other
developments could have a material adverse effect on our
business, financial condition, results of operations and ability
to pay dividends.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Charter
hire rates in the drybulk sector are near historically high
levels and future growth will depend on continued economic
growth in the world economy that exceeds the capacity of the
growing world fleet&#146;s ability to match it.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Charter hire rates for the drybulk sector are near historically
high levels. We anticipate that future demand for our drybulk
carriers, and in turn our future charter hire rates, will be
dependent upon continued economic growth in the world&#146;s
economy, particularly in China and India, and will be influenced
by seasonal and regional changes in demand and changes in the
capacity of the world&#146;s fleet. We believe the capacity of
the world&#146;s fleet will increase and there can be no
assurance that economic growth will continue. A decline in
demand for commodities transported in drybulk carriers or an
increase in supply of drybulk carriers could cause a decline in
charter hire rates which could have a material adverse effect on
our business, financial condition, results of operations and
ability to pay dividends.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The
market value of our vessels may decrease, which could limit the
amount of funds that we can borrow under our credit facility,
cause us to fail to meet certain financial covenants in our
credit facility and adversely affect our operating
results.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The fair market value of drybulk vessels has generally
experienced high volatility and market prices for secondhand
drybulk carriers are currently near historically high levels.
You should expect the market value of our vessels to fluctuate
depending on general economic and market conditions affecting
the shipping industry and prevailing charter hire rates,
competition from other shipping companies and other modes of
transportation, types, sizes and age of vessels, applicable
governmental regulations and the cost of newbuildings. If the
market value of our fleet declines, we may not be able to draw
down the full amount of our credit facility and we may not be
able to obtain other financing on terms that are acceptable to
us or at all. Please see the section of this prospectus entitled
&#147;International Drybulk Shipping Industry&#148; for
information concerning historical prices of drybulk carriers.
</DIV>

<P align="center" style="font-size: 10pt;">16

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the market value of our vessels decreases, we may breach some
of the covenants contained in the financing agreements relating
to our indebtedness at the time, including covenants in our
credit facility. If we do breach such covenants and we are
unable to remedy the relevant breach, our lenders could
accelerate our debt and foreclose on our fleet. In addition, if
the book value of a vessel is impaired due to unfavorable market
conditions or a vessel is sold at a price below its book value,
we would incur a loss that could have a material adverse effect
on our financial condition and results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Our
substantial operations outside the United States expose us to
political, governmental and economic instability, which could
harm our operations.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Because our operations are primarily conducted outside of the
United States, they may be affected by economic, political and
governmental conditions in the countries where we are engaged in
business or where our vessels are registered. Future hostilities
or political instability in regions where we operate or may
operate could have a material adverse effect on our business,
results of operations and ability to pay dividends. In addition,
tariffs, trade embargoes and other economic sanctions by the
United States or other countries against countries where our
vessels trade may limit trading activities with those countries,
which could also harm our business, financial condition, results
of operations and ability to pay dividends.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Seasonal
fluctuations in industry demand could adversely affect our
operating results and the amount of available cash with which we
can pay dividends.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will operate our vessels in markets that have historically
exhibited seasonal variations in demand and, as a result, in
charter hire rates. This seasonality may result in
quarter-to-quarter volatility in our operating results, which
could affect the amount of dividends, if any, that we pay to our
shareholders from quarter to quarter. The drybulk carrier market
is typically stronger in the fall and winter months in
anticipation of increased consumption of coal and other raw
materials in the northern hemisphere during the winter months.
As a result, we expect our revenues to be weaker during the
fiscal quarters ended June&nbsp;30 and September&nbsp;30, and,
conversely, we expect our revenues to be stronger in fiscal
quarters ended December&nbsp;31 and March&nbsp;31. This
seasonality could materially affect our business, financial
condition, results of operations and ability to pay dividends.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We are subject to regulation and liability under
    environmental laws that could require significant expenditures
    and affect our cash flow and net income.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our business and the operations of our vessels are regulated
under international conventions, national, state and local laws
and regulations in force in the jurisdictions in which our
vessels operate, as well as in the country of their registration
in order to protect against potential environmental impacts. As
a result of highly publicized accidents in recent years,
government regulation of vessels, particularly in the area of
environmental requirements, can be expected to become more
stringent in the future and could require us to incur
significant capital expenditure on our vessels to keep them in
compliance, or even to scrap or sell certain vessels altogether.
For example, various jurisdictions are considering regulating
the management of ballast waters to prevent the introduction of
non-indigenous species that are considered invasive. While we
cannot in every instance predict the extent of the costs that
will be required to comply with these requirements,
environmental regulations should apply to all vessels registered
in countries that have ratified the various conventions upon
which such requirements are based, and should therefore apply to
most of our competitors to the same extent as they apply to us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These requirements can also affect the resale value or useful
lives of our vessels, require a reduction in cargo capacity,
ship modifications or operational changes or restrictions, lead
to decreased availability of or more costly insurance coverage
for environmental matters or result in the denial of access to
certain jurisdictional waters or ports, or detention in certain
ports. Under local, national and foreign laws, as well as
international treaties and conventions, we could incur material
liabilities, including cleanup obligations, natural resource
damages, personal injury and property damage claims in the event
that there is a release
</DIV>

<P align="center" style="font-size: 10pt;">17

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<DIV align="left" style="font-size: 10pt;">
of petroleum or other hazardous materials from our vessels or
otherwise in connection with our operations. Violations of, or
liabilities under, environmental requirements can result in
substantial penalties, fines and other sanctions, including in
certain instances, seizure or detention of our vessels. Events
of this nature would have a material adverse impact on our
financial condition, results of operations and our ability to
pay dividends to our unit holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For additional information on these and other environmental
requirements, you should carefully review the information
contained in &#147;Business-Environmental and Other
Regulations.&#148;
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We are subject to international safety regulations and the
    failure to comply with these regulations may subject us to
    increased liability, may adversely affect our insurance coverage
    and may result in a denial of access to, or detention in,
    certain ports.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The hull and machinery of every commercial vessel must be
classed by a classification society authorized by its country of
registry. The classification society certifies that a vessel is
safe and seaworthy in accordance with the applicable rules and
regulations of the country of registry of the vessel and the
Safety of Life at Sea Convention.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A vessel must undergo Annual Surveys, Intermediate Surveys and
Special Surveys. In lieu of a Special Survey, a vessel&#146;s
machinery may be on a continuous survey cycle, under which the
machinery would be surveyed periodically over a five-year
period. Every vessel is required to be drydocked every two to
three years for inspection of the underwater parts of such
vessel. If any of our vessels does not maintain its class or
fails any Annual Survey, Intermediate Survey or Special Survey,
the vessel will be unable to trade between ports and will be
unemployable. Moreover, as a result, we could be in violation of
certain covenants in our loan agreements, all of which would
negatively impact our revenues and liquidity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The operation of our vessels is affected by the requirements set
forth in the International Maritime Organization&#146;s
International Management Code for the Safe Operation of Ships
and Pollution Prevention, or ISM Code. The ISM Code requires
shipowners and ship managers to develop and maintain an
extensive &#147;Safety Management System&#148; that includes the
adoption of a safety and environmental protection policy setting
forth instructions and procedures for safe operation and
describing procedures for dealing with emergencies. The failure
of a shipowner to comply with the ISM Code may subject it to
increased liability, may invalidate existing insurance or
decrease available insurance coverage for the affected vessels
and may result in a denial of access to, or detention in,
certain ports. We expect to have our own ISM&nbsp;Code
certification for the three vessels for which we will provide
in-house technical management prior to their delivery.
Initially, we will rely on our Manager&#146;s certification
under the ISM Code in order to operate the five vessels under
management agreements with our Manager. We intend to obtain our
own ISM Code certification for these five vessels following this
offering, and prior to the expiration of our management
agreements. We cannot assure you that we will be able to obtain
our own ISM Code certification.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Maritime claimants could arrest one or more of our
    vessels, which could interrupt our cash flow.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Crew members, suppliers of goods and services to a vessel,
shippers of cargo and other parties may be entitled to a
maritime lien against a vessel for unsatisfied debts, claims or
damages. In many jurisdictions, a claimant may seek to obtain
security for its claim by arresting a vessel through foreclosure
proceedings. The arrest or attachment of one or more of our
vessels could cause us to default on a charter, interrupt our
cash flow and require us to pay large sums of money to have the
arrest or attachment lifted. In addition, in some jurisdictions,
such as South Africa, under the &#147;sister ship&#148; theory
of liability, a claimant may arrest both the vessel which is
subject to the claimant&#146;s maritime lien and any
&#147;associated&#148; vessel, which is any vessel owned or
controlled by the same owner. Claimants could attempt to assert
&#147;sister ship&#148; liability against one vessel in our
fleet for claims relating to another of our vessels.
</DIV>

<P align="center" style="font-size: 10pt;">18

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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Governments could requisition our vessels during a period
    of war or emergency, resulting in a loss of earnings.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A government could requisition one or more of our vessels for
title or for hire. Requisition for title occurs when a
government takes control of a vessel and becomes its owner,
while requisition for hire occurs when a government takes
control of a vessel and effectively becomes its charterer at
dictated charter hire rates. Generally, requisitions occur
during periods of war or emergency, although governments may
elect to requisition vessels in other circumstances. Although we
would be entitled to compensation in the event of a requisition
of one or more of our vessels, the amount and timing of payment
would be uncertain. Government requisition of one or more of our
vessels may negatively impact our business, financial condition,
results of operations and ability to pay dividends.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Increased inspection procedures and tighter import and
    export controls could increase costs and disrupt our
    business.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
International shipping is subject to various security and
customs inspections and related procedures in countries of
origin and destination. Inspection procedures can result in the
seizure of contents of our vessels, delays in the loading,
offloading or delivery and the levying of customs, duties, fines
and other penalties against us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
It is possible that changes to inspection procedures could
impose additional financial and legal obligations on us.
Furthermore, changes to inspection procedures could also impose
additional costs and obligations on our customers and may, in
certain cases, render the shipment of certain types of cargo
impractical. Any such changes or developments may have a
material adverse effect on our business, financial condition,
results of operations and our ability to pay dividends.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>An economic slowdown in the Asia Pacific region could have
    a material adverse effect on our business, financial position
    and results of operations.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect that a significant number of the port calls made by
our vessels will involve the loading or discharging of raw
materials in ports in the Asia Pacific region. As a result, a
negative change in economic conditions in any Asia Pacific
country, particularly China, may have an adverse effect on our
business, financial position and results of operations, as well
as our future prospects. In recent years, China has been one of
the world&#146;s fastest growing economies in terms of gross
domestic product, which has had a significant impact on shipping
demand. We cannot assure you that such growth will be sustained
or that the Chinese economy will not experience negative growth
in the future. Moreover, any slowdown in the economies of the
United States, the European Union or certain Asian countries may
adversely affect economic growth in China and elsewhere. Our
business, financial position, results of operations, ability to
pay dividends, as well as our future prospects, will likely be
materially and adversely affected by an economic downturn in any
of these countries.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>World events could affect our results of operations and
    financial condition.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Terrorist attacks such as the attacks on the United States on
September&nbsp;11, 2001, the bombings in Spain on March&nbsp;11,
2004 and the continuing response of the United States to these
attacks, as well as the threat of future terrorist attacks in
the United States or elsewhere, continues to cause uncertainty
in the world financial markets and may affect our business,
operating results and financial condition. The continuing
conflict in Iraq may lead to additional acts of terrorism and
armed conflict around the world, which may contribute to further
economic instability in the global financial markets. In
addition, political tensions or conflicts in the Asia Pacific
Region, particularly involving China, may reduce the demand for
our services. These uncertainties could also adversely affect
our ability to obtain any additional financing or, if we are
able to obtain additional financing, to do so on terms favorable
to us. In the past, political conflicts have also resulted in
attacks on vessels, mining of waterways and other efforts to
disrupt international shipping, particularly in the Arabian Gulf
region. Acts of terrorism and piracy have also affected vessels
trading in regions such as the South China Sea. Any of these
occurrences could have a
</DIV>

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<DIV align="left" style="font-size: 10pt;">
material adverse impact on our business, financial condition,
results of operations and our ability to pay dividends.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Risks Relating to Our Common Stock</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our Sponsors will beneficially own a significant amount of
    our common stock, giving them a substantial influence over our
    corporate transactions and other matters. Their interests may
    conflict with yours, and the concentration of ownership of our
    common stock will limit the influence of public
    shareholders.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon completion of this offering, affiliates of each of
Mr.&nbsp;Robertson, First Reserve and AMCI will beneficially own
approximately
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>%
of our outstanding common stock, (approximately
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>%
if the underwriters exercise their over-allotment option in
full). Due to our Sponsors&#146; significant ownership interest,
it has the ability to exert substantial influence over our board
of directors and its policies. Our Sponsors will be able to
substantially influence the outcome of shareholder votes,
including votes concerning the election of directors, the
adoption or amendment of provisions in our certificate of
incorporation or bylaws and possible mergers, corporate control
contests and other significant corporate transactions. This
concentration of ownership may have the effect of delaying,
deferring or preventing a change in control, a merger,
consolidation, take over or other business combination. This
concentration of ownership could also discourage a potential
acquirer from making a tender offer or otherwise attempting to
obtain control of us, which could in turn have an adverse effect
on the market price of our common stock.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Certain conflicts of interest may adversely affect
    us.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Robertson is the beneficial owner of the controlling
interest in the general partner of NRP, which owns and manages
coal properties. First Reserve is a private equity firm
specializing in the energy industry with economic interests in
the coal sector. AMCI is engaged in the business of production,
handling and marketing of coal, iron ore and steel.
Mr.&nbsp;Robertson, First Reserve and AMCI are in the business
of making investments in companies and may from time to time
acquire and hold interests in businesses that compete directly
or indirectly with us. These other investments may create
competing financial demands on the affiliates of our Sponsors,
give rise to potential conflicts of interest and require efforts
consistent with applicable law to keep the other businesses
separate from our operations. Mr.&nbsp;Robertson, First Reserve
and AMCI and their affiliates may also pursue acquisition
opportunities that may be complementary to our business, and as
a result, those acquisition opportunities may not be available
to us. So long as our Sponsors continue to own a significant
amount of our equity, they will continue to be able to strongly
influence or effectively control our decisions.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>If we do not implement all required accounting practices
    and policies we may be unable to provide the required financial
    information in a timely and reliable manner.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to this offering, as a privately-held company, we did not
adopt the financial reporting practices and policies required of
a publicly traded company. Implementation of these practices and
policies could disrupt our business, distract our management and
employees and increase our costs. If we fail to develop and
maintain effective controls and procedures, we may be unable to
provide the financial information that a publicly traded company
is required to provide in a timely and reliable fashion.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The price of our common stock may be volatile following
    completion of this offering.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The price of our common stock after this offering may be
volatile and may fluctuate due to factors such as:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    actual or anticipated fluctuations in our quarterly and annual
    results and those of other public companies in our industry;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    mergers and strategic alliances in the drybulk shipping industry;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    market conditions in the drybulk shipping industry;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">20

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    changes in government regulation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    shortfalls in our operating results from levels forecast by
    securities analysts;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    announcements concerning us or our competitors;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the general state of the securities market.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The drybulk shipping industry has been highly unpredictable and
volatile. The market for common stock of companies in this
industry may be equally volatile.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We are incorporated in the Marshall Islands, which does
    not have a well-developed body of corporate law.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our corporate affairs are governed by our amended and restated
articles of incorporation and bylaws and by the Marshall Islands
Business Corporations Act, or the BCA. The provisions of the BCA
resemble provisions of the corporation laws of a number of
states in the United States. However, there have been few
judicial cases in the Marshall Islands interpreting the BCA. The
rights and fiduciary responsibilities of directors under the
laws of the Marshall Islands are not as clearly established as
the rights and fiduciary responsibilities of directors under
statutes or judicial precedent in existence in certain United
States jurisdictions. The rights of shareholders of the Marshall
Islands may differ from the rights of shareholders of companies
incorporated in the United States. While the BCA provides that
it is to be interpreted according to the laws of the State of
Delaware and other states with substantially similar legislative
provisions, there have been few, if any, court cases
interpreting the BCA in the Marshall Islands and we can not
predict whether Marshall Islands courts would reach the same
conclusions as United States courts. Thus, you may have more
difficulty in protecting your interests in the face of actions
by our management, directors or controlling shareholders than
would shareholders of a corporation incorporated in a United
States jurisdiction which has developed a more substantial body
of case law in the corporate law area.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Because we are incorporated under the laws of the Marshall
    Islands, it may be difficult to serve us with legal process or
    enforce judgments against us, our directors or our
    management.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are incorporated under the laws of the Marshall Islands, and
all of our assets are located outside of the United States. Our
business is operated primarily from our offices in Glyfada,
Greece. In addition, initially two of our officers are or will
be non-residents of the United States, and all of our assets and
a substantial portion of the assets of these non-residents are
located outside the United States. As a result, it may be
difficult or impossible for you to bring an action against us or
against these individuals in the United States if you believe
that your rights have been infringed under securities laws or
otherwise. Even if you are successful in bringing an action of
this kind, the laws of the Marshall Islands and of other
jurisdictions may prevent or restrict you from enforcing a
judgment against our assets or the assets of our directors and
officers. For more information regarding the relevant laws of
the Marshall Islands, please read &#147;Enforceability of Civil
Liabilities.&#148;
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The shares of our common stock that purchasers purchase in
    this offering will experience immediate and substantial
    dilution.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The initial public offering price of our common stock will be
substantially higher than the tangible book value per share of
our outstanding common stock. Purchasers of our common stock in
this offering will incur dilution of approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share (based on an initial public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, the mid-point of the range set forth on the cover of this
prospectus) in the net tangible book value of their purchased
shares. The shares of our common stock owned by existing
shareholders will receive a material increase in the net
tangible book value per share. Shareholders may experience
additional dilution if we issue common stock in the future. As a
result of this dilution, shareholders may receive significantly
less than the full purchase price they paid for the shares in
the event of a liquidation. Please read &#147;Dilution.&#148;
</DIV>

<P align="center" style="font-size: 10pt;">21
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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Because our common stock has never been publicly traded, a
    trading market may not develop for our common stock and
    shareholders may not be able to sell their stock.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to this offering, there has not been a public market for
our common stock. A liquid trading market for our common stock
may not develop. The initial public offering price will be
determined in negotiations between the representative of the
underwriters and us and may not be indicative of prices that
will prevail in the trading market.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Future sales of our common stock could cause the market
    price of our common stock to decline.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Sales of a substantial number of shares of our common stock in
the public market following this offering, or the perception
that these sales could occur, may depress the market price for
our common stock. These sales could also impair our ability to
raise additional capital through the sale of our equity
securities in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to issue additional shares of our common stock in the
future and our shareholders may elect to sell large numbers of
shares held by them from time to time. Immediately, after this
offering, assuming that the underwriters do not exercise their
over-allotment option, our existing shareholder will
own &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares,
or
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%,
of our outstanding common stock. The number of shares of common
stock available for sale in the public market will be limited by
restrictions applicable under securities laws and agreements
that we and our executive officers, directors and existing
shareholder have entered into with the underwriters of this
offering. Subject to certain exceptions, these agreements
generally restrict us and our executive officers, directors and
existing shareholders from directly or indirectly offering,
selling, pledging, hedging or otherwise disposing of our equity
securities or any security that is convertible into or
exercisable or exchangeable for our equity securities and from
engaging in certain other transactions relating to such
securities for a period of 180&nbsp;days after the date of this
prospectus without the prior written consent of Citigroup Global
Markets Inc. and Morgan Stanley&nbsp;&#38; Co. Incorporated.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Provisions in our amended and restated articles of
    incorporation and amended and restated bylaws may discourage a
    takeover attempt even if doing so might be beneficial to our
    shareholders.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Provisions contained in our amended and restated articles of
incorporation and amended and restated bylaws could impose
impediments to the ability of a third party to acquire us even
if a change of control would be beneficial to our existing
shareholders. Provisions of our amended and restated articles of
incorporation and amended and restated bylaws impose various
procedural and other requirements, which could make it more
difficult for shareholders to effect certain corporate actions.
For example, our amended and restated articles of incorporation
authorize our board of directors to determine the rights,
preferences, privileges and restrictions of unissued series of
preferred stock, without any vote or action by our shareholders.
Thus, our board of directors can authorize and issue shares of
preferred stock with voting or conversion rights that could
adversely affect the voting or other rights of holders of our
common stock. These rights may have the effect of delaying or
deterring a change of control of our company, and could limit
the price that certain investors might be willing to pay in the
future for shares of our common stock. See &#147;Description of
Capital Stock.&#148;
</DIV>

<P align="center" style="font-size: 10pt;">22
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<DIV align="left" style="font-size: 10pt;">
<A name='103'></A>
</DIV>

<!-- link1 "USE OF PROCEEDS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>USE OF PROCEEDS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We estimate that the net proceeds from the sale by us of the
shares of common stock being offered hereby, after deducting
underwriting discounts and estimated offering expenses, will be
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
assuming an initial public offering price per share of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
the mid-point of the range set forth on the cover of this
prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to use approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of the net proceeds to repay all of the outstanding indebtedness
under our secured term loan that we used to finance or refinance
the purchase of our vessels and to fund a portion of the
purchase price of any remaining vessels. We intend to use
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of the net proceeds to pay a dividend to our sole shareholder
existing immediately prior to the offering, Quintana Maritime
Investors LLC, which is owned by affiliates of each of
Mr.&nbsp;Robertson, First Reserve and AMCI. We also intend to
use the proceeds we receive from any shares sold pursuant to the
underwriters&#146; over-allotment option to pay an additional
dividend to Quintana Maritime Investors LLC. In the event the
underwriters exercise their over-allotment option in full,
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;would
be available to pay the additional dividend. To the extent the
underwriters&#146; over-allotment option is not exercised in
full, the additional dividend will be payable to Quintana
Maritime Investors LLC in additional common shares. Please see
&#147;Related Party Transactions&nbsp;&#151; Dividend.&#148;
Holders who purchase common shares in this offering will not be
entitled to receive either of these dividends.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We currently expect that we will use a portion of such net
proceeds to repay all of our secured term loan facility. The
term loan facility currently accrues interest at LIBOR plus
1.625%&nbsp;per annum with respect to Tranche&nbsp;A and LIBOR
plus 2.50%&nbsp;per annum with respect to Tranche&nbsp;B, and is
due to mature on July 29, 2011, with quarterly amortization
prior thereto. Borrowings under the term loan facility will be
used to repay all amounts outstanding under a $150&nbsp;million
bridge loan credit agreement that were incurred to finance the
purchase of a portion of our fleet and, together with the
proceeds of capital contributions, will be used to finance the
purchase of our remaining vessels and to pay related transaction
fees and expenses.
</DIV>

<P align="center" style="font-size: 10pt;">23

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<DIV align="left" style="font-size: 10pt;">
<A name='104'></A>
</DIV>

<!-- link1 "DIVIDEND POLICY" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>DIVIDEND POLICY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The payment of dividends is in the discretion of our board of
directors, subject to the requirements of Marshall Islands law
and the terms of any debt facilities. We have not yet
established a dividend policy. Marshall Islands law generally
prohibits the payment of dividends other than from surplus or
when a company is insolvent or if the payment of the dividend
would render the company insolvent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that, under current law, our dividend payments from
earnings and profits will constitute &#147;qualified dividend
income&#148; and as such non-corporate United States
shareholders will generally be subject to a 15% United States
federal income tax rate with respect to such dividend payments.
Distributions in excess of our earnings and profits will be
treated first as a non-taxable return of capital to the extent
of a United States shareholder&#146;s tax basis in its common
stock on a dollar-for-dollar basis and thereafter as capital
gain. Please see the section of this prospectus entitled
&#147;Tax Considerations&#148; for additional information
relating to the tax treatment of our dividend payments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The dry bulk shipping industry is highly volatile, and we cannot
accurately predict the amount of cash distributions that we may
make in any period. Factors beyond our control may affect the
charter market for our vessels and our charterers&#146; ability
to satisfy their contractual obligations to us, and we cannot
assure you that dividends will actually be declared or paid.
</DIV>

<P align="center" style="font-size: 10pt;">24
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<DIV align="left" style="font-size: 10pt;">
<A name='106'></A>
</DIV>

<!-- link1 "CAPITALIZATION" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>CAPITALIZATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth our consolidated capitalization
as of March&nbsp;31, 2005:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    on an actual basis;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    on an as adjusted basis to give effect to significant changes to
    our capital structure which occurred subsequent to
    March&nbsp;31, 2005, including:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="3%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#151;&nbsp;</TD>
    <TD align="left">
    the contribution of capital by our sole shareholder existing
    immediately prior to this offering;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#151;&nbsp;</TD>
    <TD align="left">
    the incurrence of indebtedness under the secured term loan
    facility to finance or refinance the acquisition of vessels,
    assuming the purchase of all eight of our vessels;&nbsp;and</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    on a further as adjusted basis to give effect to:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="3%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#151;&nbsp;</TD>
    <TD align="left">
    the issuance of shares of common stock in this offering at an
    offering price of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    share, which is the mid-point of the range set forth on the
    cover of this prospectus, and assuming that the underwriters
    have not exercised their over-allotment option;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#151;&nbsp;</TD>
    <TD align="left">
    the application of the net proceeds of this offering to repay
    all of the outstanding debt under the senior secured term loan
    facility, to fund a portion of the purchase price of our vessels
    and to pay a dividend to our sole shareholder existing
    immediately prior to this offering, which is owned by affiliates
    of each of Mr.&nbsp;Robertson, First Reserve and AMCI, as
    described under &#147;Use of Proceeds.&#148;</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following should be read in conjunction with the
accompanying financial statements, and the related notes
thereto, and the discussion under the heading
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations.&#148;
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="54%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>As of March&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>As Adjusted</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>for Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Contribution</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>As Further</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>and Debt</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Adjusted for</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Actual</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Incurrence</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>this Offering</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(Dollars in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cash and cash equivalents</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>707.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Debt:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Senior secured term loan facility</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total debt</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Shareholders&#146; equity:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock at stated value (no par value),
    actual&#151;500&nbsp;shares authorized, issued and outstanding;
    as adjusted&#151;&nbsp;&nbsp;&nbsp;&nbsp;shares authorized
    and &nbsp;&nbsp;&nbsp;&nbsp;shares issued and outstanding; as
    further adjusted&#151;100,000,000 shares authorized
    and &nbsp;&nbsp;&nbsp;&nbsp;shares issued and outstanding</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Additional paid-in capital</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,586.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accumulated earnings (deficit)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(156.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total shareholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,430.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total capitalization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>29,430.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">25
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='107'></A>
</DIV>

<!-- link1 "DILUTION" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>DILUTION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Dilution is the amount by which the offering price paid by the
purchasers of the common stock to be sold in this offering will
exceed the net tangible book value per share of common stock
after the offering. The net tangible book value per share
presented below is equal to the amount of our total tangible
assets (total assets less intangible assets) less total
liabilities as of March&nbsp;31, 2005, divided by the number of
shares of our common stock that would have been held by our sole
shareholder existing prior to this offering as of March&nbsp;31,
2005, assuming that on March&nbsp;31, 2005, (i)&nbsp;we had
completed the distribution of shares of common stock to our sole
shareholder existing prior to this offering (which will occur if
the underwriters do not exercise any portion of their
over-allotment option) and
(ii)&nbsp;the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-for-one
stock split we expect to occur immediately prior to this
offering had occurred. On a pro forma basis, after giving effect
to:
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the contribution of capital by our sole shareholder existing
    immediately prior to this offering and
    the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-for-one stock split;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the incurrence of indebtedness under our secured term loan
    facility to finance or refinance the acquisition of vessels,
    assuming the purchase of all eight of our vessels;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the sale by us
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of common stock in this offering, after deducting underwriting
    discounts and estimated offering expenses and the application of
    the estimated net proceeds of this offering as described under
    &#147;Use of Proceeds;&#148;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the payment of the approximately
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    dividend that we intend to declare prior to the consummation of
    this offering to our sole shareholder existing prior to this
    offering,</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
our pro forma net tangible book value as of March&nbsp;31, 2005
would have been
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
or
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of common stock. This represents an immediate increase in
net tangible book value (or a decrease in net tangible book
deficit) of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to the existing shareholder and an immediate dilution in
net tangible book value of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to new investors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table illustrates the pro forma per share dilution
and appreciation at March&nbsp;31, 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="93%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Initial public offering price per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pro forma net tangible book value per share as of March&nbsp;31,
    2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase in net tangible book value attributable to new
    investors in this offering</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pro forma net tangible book value per share after giving effect
    to this offering</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dilution per share to new investors</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will reduce the number of shares that we will issue in the
stock distribution to our sole shareholder existing prior to
this offering described above by the number of shares sold to
the underwriters, if any, pursuant to their over-allotment
option. We will also make a cash distribution to that sole
shareholder equal to the net proceeds we receive from the sale
of our shares in the over-allotment option. Accordingly, our pro
forma net tangible book value will not be affected by the
underwriters&#146; exercise of their over-allotment option.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table summarizes, on a pro forma basis as at
March&nbsp;31, 2005, the differences between the number of
shares of common stock acquired from us, the total amount paid
and the average price per share paid by the existing holder of
shares of common stock and by you in this offering, based upon
the assumed initial public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Pro Forma Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Total Consideration</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Average</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price Per</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percent</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percent</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Share</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Existing shareholder</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    New investors(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Assumes exercise in full of the underwriters&#146;
    over-allotment option.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">26

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total consideration and average price per share paid by our sole
shareholder existing prior to this offering in the table above
give effect to the approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
dividend we intend to pay to the existing shareholder in
connection with this offering. As the table indicates, the
existing shareholder&#146;s total consideration for its shares
is approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
with an average share price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
which means that the existing shareholder in the aggregate will
have received approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
more than they originally invested.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The number of shares held by our sole shareholder prior to this
offering will be reduced to the extent the underwriters exercise
their option to purchase additional shares. If the underwriters
fully exercise their option the existing shareholder will own a
total
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
or approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our total
outstanding shares which will decrease the average price paid by
the existing shareholder per share
to&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</DIV>

<P align="center" style="font-size: 10pt;">27

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='108'></A>
</DIV>

<!-- link1 "SELECTED CONSOLIDATED FINANCIAL DATA" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SELECTED CONSOLIDATED FINANCIAL DATA</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We were incorporated on January&nbsp;13, 2005. The following
table sets forth our selected consolidated financial data for
the period from January&nbsp;13, 2005 (inception) through
March&nbsp;31, 2005 and as of March&nbsp;31, 2005. As of
March&nbsp;31, 2005, we had not taken delivery of any of our
Panamax vessels, and we did not conduct any significant
operations during the period presented. The following financial
data also does not reflect significant capital contributions and
debt incurrences following the balance sheet date. See
&#147;Capitalization.&#148; The data were derived from our
audited consolidated financial statements, which are included in
this prospectus and should be read in connection with the
consolidated financial statements, related notes and other
financial information included herein.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>For Period from</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;13, 2005</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>through</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>March&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated Statement of Operations Data:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(156.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated Balance Sheet Data (at period end):</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>707.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>726.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total non-current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,858.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,585.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholder&#146;s equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,430.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated Cash Flow Data:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash used in operating activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(20.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash used in investing activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(28,858.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash from financing activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,587.0</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">28

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='109'></A>
</DIV>

<!-- link1 "MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>The following management&#146;s discussion and analysis
should be read in conjunction with our historical consolidated
financial statements and the notes included elsewhere in this
prospectus. This discussion contains forward-looking statements
that reflect our current views with respect to future events and
financial performance. Our actual results may differ materially
from those anticipated in these forward-looking statements as a
result of certain factors, such as those set forth in the
section titled &#147;Risk Factors&#148; and elsewhere in this
prospectus.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Overview</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are an international provider of drybulk marine
transportation services that was incorporated in the Marshall
Islands on January&nbsp;13, 2005 and began operations in April
2005. We expect to own and operate, through our subsidiaries, a
total of eight Panamax drybulk carriers by the end of the third
quarter of 2005. We have financed the acquisition of our fleet
through capital contributions by affiliates of each of
Mr.&nbsp;Robertson, First Reserve and AMCI and borrowings under
a $150&nbsp;million bridge loan facility, which we will repay
through borrowings under our secured term loan facility. We will
use a portion of the net proceeds of this offering to repay all
of our debt under our secured term loan facility, to pay a
dividend to our sole shareholder existing prior to this offering
and to fund a portion of the purchase price of the remaining
vessels in our initial fleet.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of March&nbsp;31, 2005 we had not taken delivery of any of
our Panamax vessels and we and our subsidiaries had no
operations. We took delivery of our first three Panamax vessels
in April 2005, and since then have had limited shipping
operations as well as certain limited operations relating to the
acquisition, chartering and operation of our fleet. We expect to
take delivery of two additional vessels under purchase
agreements in May 2005, and of the remaining three vessels under
purchase agreements in July, August and September, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Charters</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will generate revenues by charging customers for the
transportation of drybulk cargo using our vessels. We expect
that the majority of our vessels will be employed under time
charters to well-established and reputable charterers. We expect
that the remainder of our vessels will be employed under spot
market charters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A time charter is a contract for the use of a vessel for a
specific period of time during which the charterer pays
substantially all of the voyage expenses, including port and
canal charges and the cost of bunkers but the vessel owner pays
the vessel operating expenses. In the case of a spot market
charter, the vessel owner pays both the voyage expenses (less
specified amounts covered by the voyage charterer) and the
vessel operating expenses. Vessels operating in the spot charter
market generate revenues that are less predictable than time
charter revenues but may enable us to capture increased profit
margins during periods of improvements in drybulk rates.
However, we will be exposed to the risk of declining drybulk
rates when operating in the spot market, which may have a
materially adverse impact on our financial performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that the important measures for analyzing future
trends in our results of operations consist of the following:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Ownership days.</I></B> We define ownership days as the
    aggregate number of days in a period during which each vessel in
    our fleet has been owned by us. Ownership days are an indicator
    of the size of our fleet over a period and affect both the
    amount of revenues and the amount of expenses that we record
    during a period.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Available days.</I></B> We define available days as the
    number of our ownership days less the aggregate number of days
    that our vessels are off-hire due to scheduled repairs or
    repairs under guarantee, vessel upgrades or special surveys and
    the aggregate amount of time that we spend positioning our</TD>
</TR>

</TABLE>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    vessels. The shipping industry uses available days to measure
    the number of days in a period during which vessels should be
    capable of generating revenues.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Operating days.</I></B> We define operating days as the
    number of our available days in a period less the aggregate
    number of days that our vessels are off-hire due to any reason
    not otherwise excluded in the calculation of available days,
    including unforeseen circumstances. The shipping industry uses
    operating days to measure the aggregate number of days in a
    period during which vessels actually generate revenues.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Fleet utilization.</I></B> We calculate fleet utilization
    by dividing the number of our operating days during a period by
    the number of our available days during the period. The shipping
    industry uses fleet utilization to measure a company&#146;s
    efficiency in finding suitable employment for its vessels and
    minimizing the amount of days that its vessels are off-hire for
    reasons other than scheduled repairs or repairs under guarantee,
    vessel upgrades, special surveys or vessel positioning.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>TCE rates.</I></B> We define TCE rates as our voyage and
    time charter revenues less voyage expenses during a period
    divided by the number of our available days during the period,
    which is consistent with industry standards. TCE rate is a
    shipping industry performance measure used primarily to compare
    daily earnings generated by vessels on time charters with daily
    earnings generated by vessels on voyage charters, because
    charter hire rates for vessels on voyage charters are generally
    not expressed in per day amounts while charter hire rates for
    vessels on time charters generally are expressed in such amounts.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Spot Charter Rates.</I></B> Spot charter hire rates are
    volatile and fluctuate on a seasonal and year to year basis. The
    fluctuations are caused by imbalances in the availability of
    cargoes for shipment and the number of vessels available at any
    given time to transport these cargoes.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Voyage and Time Charter Revenue</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our revenues will be driven primarily by the number of vessels
in our fleet, the number of days during which our vessels
operate and the amount of daily charter hire rates that our
vessels earn under charters, which, in turn, will be affected by
a number of factors, including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the duration of our charters;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our decisions relating to vessel acquisitions and disposals;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the amount of time that we spend positioning our vessels;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the amount of time that our vessels spend in dry-dock undergoing
    repairs;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the amount of time that our vessels spend in connection with
    maintenance and upgrade work;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the age, condition and specifications of our vessels;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    levels of supply and demand in the drybulk shipping
    industry;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    other factors affecting spot market charter hire rates for
    drybulk carriers.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Voyage Expenses</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
When we employ our vessels on spot market voyage charters we
will incur expenses that include port and canal charges and
bunker expenses. We expect that port and canal charges and
bunker expenses will represent a relatively small portion of our
vessels&#146; overall expenses because the majority of our
vessels are expected to be employed under time charters that
require the charterer to bear all of those expenses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As is common in the drybulk shipping industry, we typically
expect to pay commissions ranging from 5% to 6.25% of the total
daily charter hire rate of each charter to unaffiliated ship
brokers associated with the charterers, depending on the number
of brokers involved with arranging the charter.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Vessel Operating Expenses</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Vessel operating expenses include crew wages and related costs,
the cost of insurance, expenses relating to repairs and
maintenance, the cost of spares and consumable stores, tonnage
taxes and other miscellaneous expenses. Our vessel operating
expenses will increase with the enlargement of our fleet. Other
factors beyond our control, some of which may affect the
shipping industry in general, including, for instance,
developments relating to market prices for insurance, may also
cause these expenses to increase.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Other Expenses</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our other expenses will consist of administrative expenses (such
as the salaries and other related costs of the executive
officers and the members of our board of directors and other
employees, our office rents, legal and auditing costs and other
miscellaneous office expenses/corporate overhead), the
vessels&#146; management fees payable under our management
agreement with our Manager and payments under our term loan
facility and any future debt facility consisting of interest and
principal. We will pay our Manager a fixed-rate management fee
of $400&nbsp;per day per each of the five vessels under its
management and reimburse our Manager for the vessel operating
expenses for these five vessels though, as described under
&#147;&#151;&nbsp;Vessel Management,&#148; we expect to assume
technical management of all of our vessels by the end of the
first quarter of 2006. We expect that savings due to elimination
of the fixed-rate management fee will at least partially be
offset by an increase in general and administrative expenses
associated with the hiring of additional personnel to perform
the technical management of more vessels. We expect general and
administrative expenses to increase as a result of this
offering, the costs associated with being a public company and
the enlargement of our fleet.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As we begin operating our fleet we may have other cash expenses
or contingent liabilities for which reserves are required.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We and our subsidiaries do not expect to have any income tax
liabilities in the Marshall Islands.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Depreciation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We depreciate our vessels based on a straight line basis over
the expected useful life of each vessel, which is 25&nbsp;years
from the date of their initial delivery from the shipyard.
Depreciation is based on the cost of the vessel less its
estimated residual value, which is estimated in line with the
scrapping market price per lightweight ton, at the date of the
vessel&#146;s acquisition, which we believe is common in the
drybulk shipping industry.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Secondhand vessels are depreciated from the date of their
acquisition through their remaining estimated useful life.
However, when regulations place limitations over the ability of
a vessel to trade on a worldwide basis, its useful life is
adjusted to end at the date such regulations become effective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Drydocking</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will capitalize the total costs associated with a drydocking
and amortize these costs on a straight-line basis over the
period until the next drydocking becomes due, which is typically
30 to 60&nbsp;months. Regulations and/or incidents may change
the estimated dates of the next drydocking.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Financing costs</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fees incurred for obtaining new loans or refinancing existing
ones are deferred and amortized to interest expense over the
life of the related debt. Unamortized fees relating to loans
repaid or refinanced are expensed in the period the repayment or
refinancing occurs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Vessel Management</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We provide our own commercial management services for each of
our vessels on an exclusive basis. Commercial management
services include chartering, sale and purchase of vessels and
accounting services.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Initially, our management team will provide the technical
management of three of our vessels and we will outsource the
technical management of five of our vessels to our Manager under
separate, one-year management agreements. Under the management
agreements, our Manager will provide technical vessel management
services such as arranging for and managing crews, maintenance,
drydocking, repairs, insurance, ensuring regulatory and
classification society compliance, appointing supervisors and
technical consultants and providing technical support. We will
pay our Manager a fixed management fee for each of the five
vessels under its management. We will also reimburse our Manager
for the operating costs of each of the five vessels under its
management.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect to provide the technical management of our entire
fleet by the end of the first quarter of 2006 through our
wholly-owned subsidiary, Quintana Management LLC. Please read
&#147;Business&nbsp;&#151; Management of Our Fleet.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Share Capital</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of May&nbsp;3, 2005, our sole shareholder had contributed an
amount of $500 to us as paid-in capital for issuance of
500&nbsp;shares of common stock. In addition, our sole
shareholder has made an additional capital contribution of
$66,280,637.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Liquidity and Capital Resources</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our liquidity requirements will relate to our operating
expenses, including payments under our ship management
agreements, quarterly payments of interest and the payment of
principal at maturity under our term loan facility and
anticipated payments under our anticipated revolving credit
facility, cash reserves for contingencies, future growth and
dividend payments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We estimate that our cash flow from our charters will be
sufficient to fund our working capital requirements
approximately for the twelve month period following the closing
of this offering. We intend to enter into a revolving credit
facility on or about the closing date of this offering for
purposes of funding our future acquisitions of vessels. However,
we have not entered into any commitment letter from a
prospective lender, and cannot assure you that we will be able
to obtain a revolving credit facility or do so on favorable
terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Bridge Loan Facility</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We and our subsidiaries entered into a $150&nbsp;million bridge
loan facility, dated as of May&nbsp;3, 2005, with Morgan Stanley
Senior Funding, Inc., as agent, and the initial lenders
thereunder. We initially borrowed $110&nbsp;million thereunder
to finance a portion of the purchase price for the first three
of our vessels and related fees and expenses. We subsequently
borrowed an additional $40&nbsp;million to finance a portion of
the purchase price of one or more additional vessels. We will
repay all amounts outstanding under such bridge loan facility in
early May 2005 out of the proceeds of the term loan facility
described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Term Loan&nbsp;Facility</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>General.</I></B> We and our subsidiaries have entered into
a new $262,456,000 secured delayed-draw term loan facility,
dated as of April&nbsp;29, 2005, with Citibank, N.A. as original
lender, Citigroup Global Markets Limited as mandated lead
arranger, Citibank International plc as administrative agent and
Citicorp Trustee Company Limited as security trustee, and a
syndicate of other financial institutions. Loans under the term
loan facility may be used to finance in part the acquisition and
associated costs and expenses of vessels or to repay any bridge
financing incurred to acquire vessels. We will apply borrowings
under the term loan facility to repay all amounts outstanding,
plus accrued interest, under the bridge loan facility described
above. We may apply additional borrowings under our term loan
facility to fund the acquisition of the remaining vessels in our
fleet. We will apply
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of the net proceeds of the offering to repay all indebtedness
outstanding under the term loan facility.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Fees and Interest.</I></B> We paid an underwriting fee and
a structuring fee upon our acceptance of the commitment letter
that we entered on the date that we signed the loan agreement. A
commitment fee will accrue on the amount of the undrawn balance
from the first available draw down date. An agency and security
trustee fee will be due annually.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interest on amounts drawn will be payable at a rate of
1.625%&nbsp;per annum over LIBOR in respect of Tranche&nbsp;A
and 2.50% over LIBOR in respect of Tranche&nbsp;B, for interest
periods of&nbsp;1, 2, 3 or 6&nbsp;months or, if agreed by all
lenders with commitments, 9 or 12&nbsp;months. In the event the
Tranche&nbsp;B term loans are not syndicated within
45&nbsp;days, Tranches A and B will collapse into a single
tranche&nbsp;and interest will be payable at a rate of
1.75%&nbsp;per annum over LIBOR.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are required to enter into hedging arrangements with respect
to 50% of the amount outstanding under the term loan facility no
later than October&nbsp;1, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Term and Facility Limit.</I></B> The term loan facility
has a term of six years and three months. The term loan facility
will consist of Tranche&nbsp;A, in an aggregate amount equal to
the lesser of $213,245,500 and an amount equal to 65% of the
fair market value of our vessels, and a Tranche&nbsp;B, in an
aggregate amount equal to the lesser of $49,210,500 and 15% of
the fair market value of our vessels. Principal outstanding of
Tranche&nbsp;A is amortizable in 24 quarterly installments
beginning on December&nbsp;30, 2005. Principal outstanding of
Tranche&nbsp;B is amortizable in 24 quarterly installments
beginning on December&nbsp;30, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will be permitted to borrow up to the facility limits,
provided that conditions to drawdown are satisfied. Among other
things, the aggregate principal amount applied in respect of any
vessel acquisition must not exceed 80% of the fair market value
of the vessel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Prepayments.</I></B> We may voluntarily prepay
indebtedness under the secured term loan facility at any time,
without premium, in minimum principal amounts of
$2.0&nbsp;million and in multiples of $1.0&nbsp;million and pro
rata across Tranche&nbsp;A and Tranche&nbsp;B and pro rata
against each repayment installment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are required to mandatorily repay indebtedness upon any sale
of any vessel out of the net sale proceeds received and upon any
loss of any vessel upon the earlier of (i)&nbsp;120&nbsp;days of
such loss or 180&nbsp;days if the collateral maintenance rate is
met and (ii)&nbsp;receipt of such proceeds. Assuming the net
proceeds of this offering are applied to repay at least
$100.0&nbsp;million principal amount under our term loan
facility, we will not be required to apply available cash to
permanently repay indebtedness under the term loan facility. We
also are required to apply the first $50&nbsp;million of net
cash proceeds of this offering and 50% of such net cash proceeds
in excess of $50&nbsp;million to prepay indebtedness under the
term loan facility, in inverse order of maturity for
Tranche&nbsp;A and in order of maturity for Tranche&nbsp;B for
the first $50&nbsp;million and pro rata across Tranche&nbsp;A
and Tranche&nbsp;B thereafter. We may use the remaining 50% of
such proceeds in excess of $50&nbsp;million for general
corporate purposes (including the payment of dividends).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Security.</I></B> Our obligations under Tranche&nbsp;A
under the term loan facility are secured by, among other things,
a first priority mortgage on each of the vessels in our fleet,
stock in our subsidiaries, stock in us owned by Quintana
Maritime Investors, LLC, time charters and insurances. Our
obligations under Tranche&nbsp;B under the term loan facility
are secured by, among other things, a second priority mortgage
on each of the vessels in our fleet, stock in our subsidiaries,
stock in us owned by Quintana Maritime Investors, LLC, time
charters and insurances. Each of the tranches is secured equally
by a first priority security interest in all earnings related to
our vessels. In addition, our obligations under the term loan
facility are guaranteed by our subsidiaries. We may grant
additional security from time to time in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Conditions.</I></B> Our ability to borrow amounts under
the term loan facility will be subject to the execution of
customary documentation relating to the facility, including
security documents, satisfaction of certain customary conditions
precedent and compliance with terms and conditions included in
the loan documents. Prior to each drawdown, we will be required,
among other things, to provide common equity financing equal to
at least 20% of the purchase price of the vessels and appraisals
reasonably satisfactory to the lead arrangers. In addition, on
the date of each vessel acquisition loan, seven of the vessels
shall be employed under a fixed rate charter on terms reasonably
satisfactory to the lead arranger, and
</DIV>

<P align="center" style="font-size: 10pt;">33
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
after giving effect to all vessel acquisitions for our initial
fleet, a specified mix of 3-year, 2-year and 1-year time
charters and in the spot market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Financial Covenants.</I></B> The term loan facility
contains financial covenants requiring us, among other things,
to ensure that:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the ratio of Total Debt (as defined) to Total Capitalization (as
    defined) shall be no greater than 0.80 to 1.00 at any time on or
    after January&nbsp;1, 2006 and prior to January&nbsp;1, 2007 and
    0.60 to 1.00 at any time on or after January&nbsp;1, 2007,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    we have consolidated cash and cash equivalents of not less than
    $5.0&nbsp;million on the last day of each fiscal quarter from
    July&nbsp;31, 2005 until 12&nbsp;months from the closing date,
    increasing to $10.0&nbsp;million from the beginning of the
    second year after the closing date, subject to increase to
    $15.0&nbsp;million if more than half of our vessels fail to be
    employed under fixed rate charters,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the ratio of Consolidated EBITDA (as defined) to cash Interest
    Expense (as defined) is no less than 2.5 to 1.00 commencing
    December&nbsp;31, 2005 and prior to January&nbsp;1, 2008, 2.1 to
    1.00 commencing January&nbsp;1, 2008 and prior to
    January&nbsp;1, 2009, 2.25 to 1.00 commencing January&nbsp;1,
    2009 and prior to January&nbsp;1, 2010 and 2.5 to 1.00 at any
    time on or after January&nbsp;1, 2010,&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the aggregate fair market value of the vessels shall be no less
    than 115% of the aggregate principal amount outstanding under
    the secured term loan facility during the first year after the
    closing date of the secured term loan facility and no less than
    125% of the aggregate principal amount thereafter. If the fair
    market value is less than the required amount, we will be
    required to either prepay indebtedness under the term loan
    facility or provide additional collateral, to the extent
    necessary to restore compliance with this covenant.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Restrictive Covenants.</I></B> The term loan facility will
also contain general covenants that will require us to maintain
adequate insurance coverage and to maintain our properties,
vessels and time charters. The term loan facility also limits us
and our subsidiaries from, among other things, incurring
indebtedness, making capital expenditures, payments, dividends,
entering into mergers, acquisitions (other than vessel
acquisitions) and divestitures or in engaging in transactions
with affiliates. In addition, the term loan facility will
include customary events of default, including those relating to
a failure to pay principal or interest, a breach of covenant,
representation and warranty, a cross-default to other
indebtedness and non-compliance with security documents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Assuming the net proceeds of this offering are applied to repay
at least $100.0&nbsp;million principal amount under our term
loan facility, our term loan facility will not prohibit us from
paying dividends not exceeding in any year Consolidated EBITDA
(as defined therein) less Consolidated Interest Expense (as
defined therein) less the aggregate amount of prepayments of
principal in that year, provided that no event of default has
occurred and is continuing or would occur as a result of the
payment of such dividends or distributions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Inflation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Inflation does not have significant impact on vessel operating
or other expenses. We do not consider inflation to be a
significant risk to costs in the current and foreseeable future
economic environment. However, should the world economy be
affected by inflationary pressures this could result in
increased operating and financing costs.
</DIV>

<P align="center" style="font-size: 10pt;">34
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Contractual Obligations</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth our expected contractual
obligations and their maturity dates as of March&nbsp;31, 2005.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Within</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>One to</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Three to</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>More Than</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>One Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Three Years</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Five Years</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Five Years</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(Dollars in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vessel purchase agreements(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>300,805.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>300,805.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Management fees to Manager(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>666.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>666.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Office lease(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>189.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>284.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>301,565.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>189.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>301,755.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    As of March&nbsp;31, 2005, we had entered into vessel purchase
    agreements for eight vessels for an aggregate purchase price of
    $329.45&nbsp;million, of which we paid a 10% deposit on seven
    vessels, or $28.645&nbsp;million. In April 2005 we paid the 10%
    deposit on the eighth vessel in the amount of $4.3&nbsp;million.
    Subsequent to March&nbsp;31, 2005, we took delivery of three of
    our vessels and paid the $107.865&nbsp;million balance that was
    due on these vessels. We financed the balance of the payments
    with indebtedness under our bridge loan facility. We intend to
    repay all indebtedness under our bridge facility from borrowings
    under our term loan facility. The total purchase price of our
    five undelivered vessels is $209.6 million, of which a balance
    of $188.64&nbsp;million will be due upon delivery of the
    vessels. We intend to pay this balance through a combination of
    additional borrowings under our bridge loan facility, our term
    loan facility, capital contributions, the net proceeds of the
    offering and cash on hand. We intend to repay all outstanding
    indebtedness under our term loan facility from the net proceeds
    of this offering.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Based upon the terms of management agreements with our Manager,
    assuming each of the five vessels under its management for the
    full terms of the management agreements.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Represents the U.S.&nbsp;Dollar equivalent of lease payments in
    Euros as calculated in accordance with the noon buying rate of
    the Federal Reserve Bank of New York of $1.2919 to
    <FONT face="times new roman,times">&#128;</FONT>&nbsp;1.00 as of
    April&nbsp;29, 2005. Our office lease has a three-year term.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Critical Accounting Policies</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Critical accounting policies are those that reflect significant
judgments of uncertainties and potentially result in materially
different results under different assumptions and conditions. We
have described below what we believe will be our most critical
accounting policies, because they generally involve a
comparatively higher degree of judgment in their application.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Impairment of long-lived assets</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We use SFAS&nbsp;No.&nbsp;144 &#147;Accounting for the
Impairment or Disposal of Long-lived Assets,&#148; which
addresses financial accounting and reporting for the impairment
or disposal of long-lived assets. The standard requires that,
long-lived assets and certain identifiable intangibles held and
used or disposed of by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount of the assets may not be recoverable. When the
estimate of undiscounted cash flows, excluding interest charges,
expected to be generated by the use of the asset is less than
its carrying amount, we should evaluate the asset for an
impairment loss. Measurement of the impairment loss is based on
the fair value of the asset as provided by third parties. In
this respect, management regularly reviews the carrying amount
of the vessels in connection with the estimated recoverable
amount for each of the our vessels.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Vessel depreciation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Depreciation is computed using the straight-line method over the
estimated useful life of the vessels, after considering the
estimated salvage value. Each vessel&#146;s salvage value is
equal to the product of its
</DIV>

<P align="center" style="font-size: 10pt;">35

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<DIV align="left" style="font-size: 10pt;">
lightweight tonnage and estimated scrap rate. Management
estimates the useful life of our vessels to be 25&nbsp;years
from the date of initial delivery from the shipyard. Second hand
vessels are depreciated from the date of their acquisition
through their remaining estimated useful life. However, when
regulations place limitations over the ability of a vessel to
trade on a worldwide basis, its useful life is adjusted to end
at the date such regulations become effective.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Dry-docking costs</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We follow the deferral method of accounting for dry-docking
costs whereby actual costs incurred are deferred and are
amortized on a straight-line basis over the period through the
date the next dry-docking is scheduled to become due.
Unamortized dry-docking costs of vessels that are sold are
written-off.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Qualitative and Quantitative Market Risk</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Interest Rates</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our term loan facility initially will accrue interest at LIBOR
plus 1.625%&nbsp;per annum with respect to Tranche&nbsp;A and
LIBOR plus 2.50% with respect to Tranche&nbsp;B. In the event
the Tranche&nbsp;B term loans are not syndicated within
45&nbsp;days, Tranches&nbsp;A and B will collapse into a single
tranche, which will accrue interest at LIBOR plus 1.75% per
annum. Our term loan facility matures on July&nbsp;29, 2011,
with quarterly amortization prior thereto. If any amounts are
outstanding under our term loan facility on October&nbsp;1,
2005, we will be required to enter into one or more interest
rate swap agreements to effectively exchange the floating
LIBOR-based interest rate on 50% of the principal amount then
outstanding for a fixed rate. See &#147;&#151;&nbsp;Term
Loan&nbsp;Facility.&#148; We expect to repay all indebtedness
outstanding under the term loan facility out of the net proceeds
of the offering. Since we do not expect to have any debt
outstanding under the term loan facility following the offering,
we expect to have no sensitivity to interest rate changes
thereunder. However, we expect to have sensitivity to interest
rate changes with respect to future debt facilities, including a
proposed revolving credit facility we expect to enter into on or
about the closing date. We have not entered into any commitment
letter from any prospective lender with respect to such a
facility, and we are not able to estimate at this time the
extent of any such sensitivity, which could be substantial.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Currency and Exchange Rates</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect to generate all of our revenue in Dollars. The
majority of our operating expenses and the entirety of our
management expenses are in Dollars but we expect to incur up to
approximately 20% of our operating expenses in currencies other
than Dollars. This difference could lead to fluctuating in net
income due to changes in the value of the Dollar relative to
other currencies. We do not intend to use financial derivatives
to mitigate the risk of exchange rate fluctuations.
</DIV>

<P align="center" style="font-size: 10pt;">36
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<DIV align="left" style="font-size: 10pt;">
<A name='110'></A>
</DIV>

<!-- link1 "THE INTERNATIONAL DRYBULK SHIPPING INDUSTRY" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>THE INTERNATIONAL DRYBULK SHIPPING INDUSTRY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The information and data in this section relating to the
international drybulk shipping industry has been provided by
Drewry Shipping Consultants, or Drewry, and is taken from Drewry
databases and other sources available in the public domain.
Drewry has advised us that it accurately describes the
international drybulk shipping industry, subject to the
availability and reliability of the data supporting the
statistical and graphical information presented. Drewry&#146;s
methodologies for collecting information and data, and therefore
the information discussed in this section, may differ from those
of other sources, and does not reflect all or even necessarily a
comprehensive set of the actual transactions occurring in the
drybulk shipping industry. Data marked &#147;(p)&#148; is
information presented on a provisional basis, as data reported
from various sources relating to 2004 may be subject to revision
until mid-2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Bulk Carrier Industry Overview</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The international drybulk shipping industry is a vital link in
international trade, with oceangoing vessels representing the
most efficient, and often the only method of transporting large
volumes of basic commodities and finished products. In 2004,
approximately 2.5&nbsp;billion tons of dry bulk cargo was
transported by sea, comprising more than one-third of all
international seaborne trade.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Drybulk cargo is cargo that is shipped in large quantities and
can be easily stowed in a single hold with little risk of cargo
damage. Drybulk cargo is generally categorized as either major
bulk or minor bulk. Major bulk cargo constitutes the vast
majority of drybulk cargo by weight, and includes, among other
things, iron ore, coal and grain. Minor bulk cargo includes
products such as agricultural products, mineral cargoes
(including metal concentrates), cement, forest products and
steel products and represents the balance of the drybulk
industry. Other dry cargo is categorized as container cargo,
which is cargo shipped in 20 or 40-foot containers and includes
a wide variety of finished products, and non-container cargo,
which includes other dry cargoes that cannot be shipped in a
container due to size, weight or handling requirements, such as
large manufacturing equipment or large industrial vehicles.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The balance of seaborne trade involves the transport of liquids
or gases in tanker vessels and includes products such as oil,
refined oil products and chemicals. The breakdown of seaborne
trade by main commodity type is indicated in the following table.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>World Seaborne Trade in 2004 (p)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 3pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Tons (Millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>% Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>All Cargo</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Drybulk</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Liquid (Oils/Gases/Chemicals)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Container Cargo</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>896</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-Container <B>/</B>General Cargo</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>6,365</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>100.0</B></TD>
    <TD align="left" valign="bottom" nowrap><B>%</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 15pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Trade in Drybulk Commodities Only</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 3pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Tons (Millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>% Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Coal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Iron Ore</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>645</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Grain</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>228</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minor Bulks</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>958</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>2,456</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>100.0</B></TD>
    <TD align="left" valign="bottom" nowrap><B>%</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>P = Provisional</B>
</DIV>

<P align="center" style="font-size: 10pt;">37

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<DIV align="center" style="font-size: 10pt;">
<B>Drybulk Seaborne Trade&nbsp;&#151; 2004 (p)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 8pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822701.gif" alt="Dry Bulk Trade">
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 8pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In terms of seaborne trade volumes (and the shipping ton-miles
generated), the dominant influence is that of the major bulk
trades, which include coal, iron ore and grains. During 2004
global seaborne trade in major bulks was an estimated
1.5&nbsp;billion tons, representing 61% of the estimated total
seaborne drybulk trade.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Coal</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Coal is an abundant commodity. At current production rates, coal
reserves would provide approximately 200&nbsp;years of supply,
compared with 41&nbsp;years for oil and 67&nbsp;years for
natural gas. In addition, coal is mined in more than fifty
countries with no world dependence on any one region. Steam coal
is used mainly for power generation. Coking
(metallurgical)&nbsp;coal is used to produce coke to feed blast
furnaces in the production of steel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2003, Japan and the European Union were the first- and
second-largest importers of coal, importing 161&nbsp;million
tons and 110&nbsp;million tons, respectively. Australia, the
largest exporter of steam coal, met much of this demand,
exporting 105&nbsp;million tons in 2003, which represented 25%
of the world&#146;s export market. The second- and third-largest
exporters of steam coal in 2003 were Indonesia and China,
exporting 85&nbsp;million tons and 73&nbsp;million tons,
respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
China&#146;s coal exports and imports have increased
dramatically over the last five&nbsp;years; its 73&nbsp;million
tons of exports in 2003 represented an average annual increase
of 42% since its 1999 exports of 12.7&nbsp;million tons, and its
2003 imports of 10.8&nbsp;million tons, represented an average
annual increase of 47% since the 1.6&nbsp;million in 1999.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Iron Ore</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Iron ore is used as a raw material for the production of steel
along with limestone and coking coal. Steel is the most
important construction and engineering material in the world. In
2004 approximately 650&nbsp;million tons of iron ore were
exported worldwide, with the main importers being China, the
European Union, Japan and South Korea. The main producers and
exporters of iron ore are Australia and Brazil.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As the figures below indicate, Chinese imports of iron ore have
grown significantly in the last few years and have been a major
driving force in the dry bulk sector. Total estimated iron ore
imports for 2004
</DIV>

<P align="center" style="font-size: 10pt;">38

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<DIV align="left" style="font-size: 10pt;">
of 208&nbsp;million tons increased by approximately 40% over
2003 import levels and have increased at a compound annual
growth rate of 30% since 1999.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Chinese Iron Ore Imports</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Volume </B><I>(Million tons)</I></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1999</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2001</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>92.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>111.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2004<I>(p)</I></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>208.1</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This growth rate in iron ore imports is matched by Chinese steel
production. Over the last five years, steel production in China
has grown at an average annual rate of almost 17%, compared to
global production increasing by an average&nbsp;5.6%&nbsp;per
annum, as shown in the table below.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Crude Steel Production (million tons)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>EU</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Japan</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>China</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Global</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1999</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>123.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>787.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>106.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>127.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>829.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2001</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>158.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>150.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>833.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>158.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>107.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>179.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>883.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>159.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>110.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>219.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>944.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>112.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>269.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,033.5</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 8pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Grain</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Grains include wheat, coarse grains (corn, barley, oats, rye and
sorghum) and oil seeds extracted from different crops such as
soybeans and cottonseeds . In general, wheat is used for human
consumption, while coarse grains are used as feed for livestock.
Oil seeds are used to manufacture vegetable oil for human
consumption or for industrial use, while their protein rich
residue is used as a raw material in animal feed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total grain production is dominated by the U.S.&nbsp;Argentina
is the second largest producer followed by Canada and Australia.
In terms of imports, the Asia/ Pacific region (excluding Japan)
ranks first, followed by Latin America, Africa and the Middle
East.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Minor Bulks</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The balance of dry bulk trade, minor bulks, subdivides into two
types of cargo. Firstly secondary bulks or free-flowing cargo,
such as agricultural cargoes, bauxite and alumina, fertilizers
and cement. Second are the so-called neo-bulks, non free-flowing
or part manufactured cargo. These are principally forest
products and steel products including scrap. The latter are
mainly transported in small vessels of less than 40,000 dwt. In
2004, total trade in minor bulks amounted to an estimated
958&nbsp;million tons.
</DIV>

<P align="center" style="font-size: 10pt;">39

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Drybulk Demand</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The demand for drybulk carrier capacity is determined by the
underlying demand for commodities transported in drybulk
carriers, which in turn is influenced by trends in the global
economy. Seaborne dry bulk trade increased by slightly more than
2%, on an average annual basis during the 1980s and 1990s.
However, this rate of growth has increased dramatically in
recent years. Between 1999 and 2004, trade in all drybulk
commodities increased from 1.97&nbsp;billion tons to
2.46&nbsp;billion tons, an increase of 25% overall, as shown in
the graph below.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Drybulk Trade Development</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 8pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822702.gif" alt="Dry Bulk Trade Dev.">
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 4pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Generally, growth in GDP and industrial production correlates
with peaks in demand for seaborne transportation. Certain
economies will act from time to time as the &#147;primary
driver&#148; of the drybulk carrier market. In the 1990s Japan
acted as the primary driver due to growth in Japanese industrial
production. China has been the main driving force behind the
recent increase in seaborne drybulk trades and the demand for
bulk carriers. In addition to coal and iron ore, Chinese imports
of steel products have also increased sharply in the last five
years, thereby creating additional demand for drybulk carriers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table illustrates China&#146;s gross domestic
product growth rate compared to that of the U.S. and global
growth during the periods indicated.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>GDP Growth (% change)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Years</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>China GDP Growth </B><I>(%)</I></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>U.S.&nbsp;GDP Growth </B><I>(%)</I></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Global GDP Growth </B><I>(%)</I></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1981&nbsp;&#150; 1985</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1986&nbsp;&#150; 1990</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1991&nbsp;&#150; 1995</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1996&nbsp;&#150; 2000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2001&nbsp;&#150; 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.2</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 8pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry and Asian Development Bank</I>
</DIV>

<P align="center" style="font-size: 10pt;">40

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While the growth in Chinese trade has principally benefited the
larger sectors of the fleet (Capesize and Panamax), there has
been a significant &#147;trickle down&#148; effect to the
Handymax and Handysize vessels. In times of weak demand the
larger vessels will seek cargoes away from their main trades.
For example, Panamax vessels will carry more grain and forest
products when the coal trade is slow. This inevitably affects
the Handymax and Handysize market. Conversely, when demand for
the major bulks is strong, the Handymax and Handysize vessels
have a much stronger demand scenario, as they are not being
encroached by other sectors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The extent to which increases in drybulk trade have affected
demand for drybulk carriers is shown in estimates of ton-mile
demand. Ton-mile demand is calculated by multiplying the volume
of cargo moved on each route by the distance of the voyage.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Between 1999 and 2004 ton-mile demand in the drybulk sector
increased by a total of 25% to 11.5&nbsp;billion ton-miles. The
table below details the growth in ton mile demand for the main
drybulk commodities. For some commodities there has been over
the years a shift in demand due to changing trade routes. For
example the Brazil to China iron ore route started to be a
significant trade approximately six to eight years ago.
Previously the principal trade was Brazil to Japan. The increase
in trade on the route to China has had an increased effect on
the demand for shipping due to the length of the haul.
Conversely as Chinese demand has grown, there has been some
shift in the sourcing of iron ore away from Atlantic sources to
Pacific regions such as Australia. However this has not yet
reached significant proportions to affect the ton-mile demand.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Billion Ton-Mile Demand by Commodity</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="47%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>99-04</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1999</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2000</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>CAGR</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Iron Ore</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,436</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,713</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.6%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Coal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,367</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,657</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,788</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,950</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.5%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Grain</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,183</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,156</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bauxite/ Alumina</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>192</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>190</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>204</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.0%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Phosrock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>112</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Agribulks</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>434</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>436</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>441</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>453</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Forest Products</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>615</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>638</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>632</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>641</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>669</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fertilisers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>386</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>392</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>399</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.3%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minerals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>156</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.5%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Iron&nbsp;&#38; Steel</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>924</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>977</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,033</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.8%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Manufactured Products</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>487</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>503</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.1%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total Demand</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>9,205</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>9,825</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>9,958</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>10,227</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>10,805</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>11,511</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>4.6%</B></TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following map represents the major global drybulk trade
routes. Drybulk carriers can be the most versatile element of
the global shipping fleets in terms of employment alternatives.
However, drybulk carriers seldom operate on round trip voyages.
Rather, the norm is port-to-port liner service and triangular or
multi-leg voyages. This means that every voyage has a ballast
leg that must be paid for by the laden or revenue earning leg.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
It can be seen from the map that the three major commodities
travel great distances and are not confined to regional trade.
The longest trade route is iron ore from Brazil to China. As the
majority of the vessels that travel this route are Capesize
vessels, the route is via the Cape of Good Hope rather than the
Panama Canal.
</DIV>

<P align="center" style="font-size: 10pt;">41

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Major Drybulk Seaborne Trade Routes</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822703.gif" alt="TRADE ROUTES MAP">
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Seasonality</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The three largest commodity drivers of the bulk industry, iron
ore, steam coal and grains, are all affected by seasonal demand
fluctuations. Transport of iron ore for use as a feed for the
steel industry tends to decline during the summer months when
many of the major steel users such as automotive manufacturers
reduce their production lines significantly during summer
holidays and vice versa. Steam coal is linked to the energy
markets and in general encounters upswings towards the end of
the year in anticipation of the forthcoming winter period, as
power supply companies try to increase their stocks, or during
hot summer periods when increased electricity demand is required
for air conditioning and refrigeration purposes. Grain
production is highly seasonal and driven by the harvest cycle of
the Northern and Southern Hemispheres. However, with five
nations representing the largest grain producers, (the U.S.,
Canada and the European Union in the northern hemisphere and
Argentina and Australia in the southern hemisphere), harvests
and crops reach seaborne markets throughout the year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Supply</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The worldwide dry bulk carrier fleet subdivides into four vessel
size categories, which are based on cargo carrying capacity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Capesize</B>&nbsp;&#151; vessels over 80,000 dwt. The
Capesize sector is focused on long haul iron ore and coal trade
routes. Due to the size of the vessels there are only a
comparatively small number of ports around the world with the
infrastructure to accommodate them. While this is the
traditional definition of a Capesize bulkcarrier, in terms of
deadweight the sector is changing. As per the orderbook detailed
below, there have been a number of new super-Panamaxes
ordered&nbsp;&#151; so-called Kamsarmaxes&nbsp;&#151; which are
82&#150;85,000&nbsp;dwt but are able to transit the Panama Canal
with a full cargo.
</DIV>

<P align="center" style="font-size: 10pt;">42

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<DIV align="left" style="font-size: 10pt;">

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Panamax</B>&nbsp;&#151; vessels between 60,000 dwt and 80,000
dwt. Panamax vessels, defined as those with the maximum beam
(width) of 32.2 meters permitted to transit the Panama Canal,
carry coal, grain, and to a lesser extent, minor bulks,
including steel products, forest products and fertilizers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Handymax</B>&nbsp;&#151; vessels between 35,000 dwt and
60,000 dwt. The Handymax sector operates in a large number of
geographically dispersed global trades, mainly carrying grains
and minor bulks including steel products, forest products, and
fertilizers. Vessels less than 60,000 dwt are built with
on-board cranes that enable them to load and discharge cargo in
countries and ports with limited infrastructure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Handysize</B>&nbsp;&#151; vessels up to 35,000 dwt, which
carry exclusively minor bulk cargoes. Historically, the
Handysize drybulk carrier sector was seen as the most versatile.
Increasingly, however, this has become more of a regional
trading, niche sector. The vessels are well suited for small
ports with length and draft restrictions and also lacking
infrastructure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The supply of drybulk carriers is a function of the delivery of
new vessels and the removal of vessels from the global fleet,
either through scrapping or loss. The following chart
illustrates bulk carrier fleet development since 1990 through
this process.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Drybulk Carrier Fleet Development&nbsp;&#151; Deliveries v
Scrappings</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822704.gif" alt="DELIVERIES &#38; SCRAPPINGS LINE GRAPH">
</DIV>

<DIV align="center" style="font-size: 10pt;">
<I>Source: Drewry</I>
</DIV>

<P align="center" style="font-size: 10pt;">43

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The chart below shows bulk carrier fleet development between
1999 and March 2005 and how the orderbook has fluctuated
throughout this period. During this period, the number of
vessels comprising the bulk carrier fleet has increased at a
compound annual growth rate of 1.9%.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Drybulk Carrier Fleet and Orderbook Development</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822705.gif" alt="(BAR CHART)">
</DIV>

<DIV align="center" style="font-size: 10pt;">
<I>Source: Drewry</I>
</DIV>

<P align="center" style="font-size: 10pt;">44

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following tables illustrate the size and composition of the
world drybulk carrier fleet as of March&nbsp;2005 and
historically back to 2000.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Drybulk Carrier Fleet&nbsp;&#151; March, 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="51%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Current Fleet</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Orderbook</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Size</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dwt</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>% of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dwt</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>% of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>(&#145;000 dwt)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>No.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Million)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fleet</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>No.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Million)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fleet</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    10-30</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,916</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    30-60</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    60-80</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>191</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    80-100</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>179.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    100-150</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    150+</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>5,975</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>328.0</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>100.0</B></TD>
    <TD align="left" valign="bottom" nowrap><B>%</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>894</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>72.6</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>22.1</B></TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NB: In the 80-100,000 dwt sector the definitions are split. Of
the 61&nbsp;vessels in the current fleet, just 9 are of a
Panamax design. Whereas of the 113&nbsp;vessels on order, 68
have a design with a 32.2m&nbsp;beam, that is specifically
designed to transit the Panama Canal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Historical Bulk Carrier Fleet and Orderbook 2000 to 2004</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2000</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Capesize (80,000+ dwt)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No of Vessels</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>555.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>583.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>598.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>625.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>661.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt (in millions)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>86.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>98.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>104.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vessels as % of total fleet</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vessels on order</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>129.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>206.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt on order (millions)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    % of sector fleet on order</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Panamax (60-80,000 dwt)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No of Vessels</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>976.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1040.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1081.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1095.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1170.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt (in millions)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vessels as % of total fleet</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vessels on order</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>360.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>125.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>238.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>271.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt on order (millions)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    % of sector fleet on order</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Handymax (30-60,000 dwt)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No of Vessels</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1892.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1932.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1989.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2034.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2096.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt (in millions)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vessels as % of total fleet</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vessels on order</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>138.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>231.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>238.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>298.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt on order (millions)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    % of sector fleet on order</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">45

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="52%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2000</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Handysize (10-30,000 dwt)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No of Vessels</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2117.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2027.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1924.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1922.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt (in millions)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vessels as % of total fleet</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vessels on order</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt on order (millions)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    % of sector fleet on order</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No of Vessels</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5540.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5582.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5665.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5678.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5849.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt (in millions)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>276.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>287.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>295.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>302.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>316.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vessels on order</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>681.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>499.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>421.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>665.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>833.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt on order (millions)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    % of total fleet on order</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NB: the 80&#150;100,000 dwt sector, included in the Capesize
sector in above table, has some vessels with a Panamax design
(as per previous note.)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table details the leading players in the Panamax
fleet as at March&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Leading Panamax Bulk Carrier Owners</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="59%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Avg. Age</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>No. of Ships</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Dwt</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(yrs)</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    COSCO (Hong Kong)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,330,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    COSCO Bulk Carrier</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,672,681</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    K-Line</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,551,597</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NYK Line</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,529,381</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    MOL Mitsui OSK Lines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,370,589</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Golden Union</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>882,385</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    MISC Malaysian Int.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>803,148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Hebei Ocean Shpg.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>748,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Emirates Trading</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>758,416</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U-Ming Marine Tran.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>753,119</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shoei Kisen K.K.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>719,829</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Clipper Group</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>566,107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    COSCO Qingdao</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>558,067</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Alpha Tankers&nbsp;&#38; Frt.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>581,713</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stamford Navigation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>553,165</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sinotrans Shpg. Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>585,690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Safety Management</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>608,952</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Parakou Shpg.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>592,881</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Nisshin Shpg.Co.Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>603,231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cardiff Marine Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>561,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Augustea Ship Mngt</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>576,414</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Chandris (Hellas)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>577,154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Klaveness Torvald</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>576,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IRISL</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>583,223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>944</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,197,990</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87,841,758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt;">
<I>Source:&nbsp;Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NB: the above fleets are owned vessels only and do not include
vessels operated pursuant to long-term time charter agreements.
</DIV>

<P align="center" style="font-size: 10pt;">46

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The size of the bulk carrier orderbook fluctuates over time and
in March&nbsp;2005 amounted to 72.6&nbsp;million&nbsp;dwt, which
was equivalent to 22% of the existing fleet. Most of the ships
on order will be delivered within the next two to three years.
The Panamax orderbook currently stands at 14.4m&nbsp;dwt
representing 17.5% of the fleet. The table below shows the fleet
orderbook by sector as at end March&nbsp;2005. It can be seen
that the 80-100,000&nbsp;dwt sector of the current fleet is very
small. In the main it consists of older Capesize vessels and
some shallow drafted coal carriers. However the orderbook
associated with this sector is boosted by the new design
82,000&nbsp;dwt Panamax vessels. Of the 113 vessels on order, 68
are of Panamax design.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Drybulk Carrier Orderbook&nbsp;&#151; March, 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2007</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2008+</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Size</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>% of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>(&#146;000 dwt)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>No.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dwt</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>No.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dwt</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>No.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dwt</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>No.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dwt</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>No.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dwt</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>fleet</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    10-30</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>633</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>560</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    30-60</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>131</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,190</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>131</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,271</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,078</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,676</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,215</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    60-80</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,431</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>685</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>191</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,442</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    80-100</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,504</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,672</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>179.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    100-150</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    150+</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,311</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,313</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,953</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,921</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>285</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>20,762</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>300</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>22,962</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>220</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>18,080</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>89</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>10,784</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>894</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>72,587</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>22.1</B></TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NB:&nbsp;the 80-100,000 dwt sector includes 68 vessels with a
Panamax design (as per previous note).
</DIV>

<P align="center" style="font-size: 10pt;">47

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The graph below details the age profile of the drybulk carrier
fleet as at end March&nbsp;2005.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Drybulk Carrier Age Profile&nbsp;&#151; March&nbsp;2005</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822706.gif" alt="(BAR CHART)">
</DIV>

<DIV align="center" style="font-size: 10pt;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This age profile has then been split into sectors, in the four
graphs below. This illustrates where the modern vessels are in
the fleet.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Panamax Bulk Carrier Age&nbsp;Profile (60-80,000
dwt)&nbsp;&#151; March 2005</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822707.gif" alt="(LINE GRAPH)">
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<P align="center" style="font-size: 10pt;">48

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Bulk Carrier Age&nbsp;Profile (80-100,000 dwt)&nbsp;&#151;
March 2005</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822708.gif" alt="(LINE GRAPH)">
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The above graph details vessels of the older Capesize design,
and the modern vessels of the super-Panamax or Kamsarmax design,
as per previous notes.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Capesize Bulk Carrier Age&nbsp;Profile (100-150,000
dwt)&nbsp;&#151; March 2005</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822713.gif" alt="(LINE GRAPH)">
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<P align="center" style="font-size: 10pt;">49

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Capesize Bulk Carrier Age&nbsp;Profile (150,000+
dwt)&nbsp;&#151; March 2005</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822714.gif" alt="(LINE GRAPH)">
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The number of ships removed from the fleet in any period is
dependent upon prevailing market conditions, scrap prices in
relation to current and prospective charter market conditions as
well as the age profile of the existing fleet. Generally, as a
vessel increases in age its operational efficiency declines due
to rising maintenance requirements, to the point where it
becomes unprofitable to keep the ship in operation.
</DIV>

<P align="center" style="font-size: 10pt;">50

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table indicates the scrapping rates of dry bulk
carriers for the period 1999 to 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Drybulk Carrier Scrapping</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1999</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2000</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Capesize (80,000 dwt plus)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>86.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>104.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Vessels</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt (million)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    % of Fleet Scrapped</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Panamax (60&#150;80,000 dwt)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Vessels</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt (million)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    % of Fleet Scrapped</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Handymax (35&#150;60,000 dwt)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Vessels</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt (million)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    % of Fleet Scrapped</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Handysize (up to 35,000 dwt)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Vessels</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwt (million)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    % of Fleet Scrapped</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>268.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>276.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>287.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>295.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>302.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>316.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>No. of Vessels</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>177.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>105.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>123.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Dwt (million)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>% of Fleet Scrapped</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the last five years the average age at which vessels in the
drybulk sector have been demolished is 26&nbsp;years. Even
though there has been little variation in the age at which
drybulk vessels are scrapped, many well maintained vessels
continue to trade to ages of over 30&nbsp;years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The supply of drybulk carriers is not only a result of the
number of ships in service, but also the operating efficiency of
the worldwide fleet. For example, port congestion, which has
been a feature of the market in 2004, has increased voyage times
and effectively absorbed additional tonnage and therefore
tightened the underlying supply/demand balance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Charter Market</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Drybulk carriers are employed in the market via a number of
different chartering options. The general terms typically found
in these types of contracts are described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A <I>&#147;bareboat charter&#148;</I> involves the use of a
vessel usually over longer periods of time ranging over several
years. In this case all voyage related costs, including vessel
fuel and port dues as well as all vessel-operating expenses such
as day-to-day operations, maintenance, crewing and insurance,
transfer to the charterer&#146;s account. The owner of the
vessel receives monthly charter hire payments on a per day basis
and is responsible only for the payment of capital costs related
to the vessel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A <I>&#147;time charter&#148;</I> involves the use of the
vessel, either for a number of months or years or for a trip
between specific delivery and redelivery positions, known as a
trip charter. The charterer pays all voyage related costs. The
owner of the vessel receives semi-monthly charter hire payments
on a per day basis and is responsible for the payment of all
vessel operating expenses and capital costs of the vessel.
</DIV>

<P align="center" style="font-size: 10pt;">51

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A <I>&#147;voyage charter&#148;</I> or <I>&#147;spot
charter&#148;</I> involves the carriage of a specific amount and
type of cargo on a load - port-to-discharge -port basis, subject
to various cargo handling terms. Most of these charters are of a
single voyage nature, as trading patterns do not encourage round
voyage trading. The owner of the vessel receives one payment
derived by multiplying the tons of cargo loaded on board times
the agreed upon freight rate expressed on a per ton basis. The
owner is responsible for the payment of all expenses including
voyage, operating and capital costs of the vessel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A <I>&#147;contract of affreightment&#148;</I>
(coa)&nbsp;relates to the carriage of multiple cargoes over the
same route and enables the coa holder to nominate different
ships to perform the individual sailings. Essentially it
constitutes a number of voyage charters to carry a specified
amount of cargo during the term of the coa, which usually spans
a number of years. All of the ship&#146;s operating, voyage and
capital costs are borne by the ship owner. The freight rate
normally is agreed on a per cargo ton basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Chartering on a single voyage or a trip charter basis may be
referred to as spot chartering activity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Charter Rates</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Charter hire rates paid for drybulk carriers are primarily a
function of the underlying balance between vessel supply and
demand, although at times other factors may play a role.
Furthermore, the pattern seen in charter hire rates is broadly
mirrored across the different charter types and between the
different drybulk carrier categories. However, because demand
for larger drybulk vessels is affected by the volume and pattern
of trade in a relatively small number of commodities, charter
hire rates (and vessel values) of larger ships tend to be more
volatile than those for smaller vessels. Conversely, trade in
minor bulks drives demand for smaller drybulk carriers.
Accordingly, charter hire rates and vessel values for those
vessels are subject to less volatility.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the time charter market, rates vary depending on the length
of the charter period and vessel specific factors such as age,
speed and fuel consumption. Short-term time charter hire rates
are generally higher than long-term charter hire rates. The
market benchmark tends to be a 12-month time charter hire rate,
based on a modern vessel of 5 to 10&nbsp;years age.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the voyage charter market, rates are influenced by cargo
size, commodity, port dues and canal transit fees, as well as
delivery and redelivery regions. In general, a larger cargo size
is quoted at a lower rate per ton than a smaller cargo size.
Routes with costly ports or canals generally command higher
rates than routes with low port dues and no canals to transit.
Voyages with a load port within a region that includes ports
where vessels usually discharge cargo or a discharge port within
a region with ports where vessels load cargo also are generally
quoted at lower rates, because such voyages generally increase
vessel utilization by reducing the unloaded portion (or ballast
leg) that is included in the calculation of the return charter
to a loading area.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Within the drybulk shipping industry, the charter hire rate
references most likely to be monitored are the freight rate
indices issued by the Baltic Exchange. These references are
based on actual charter hire rates under charters entered into
by market participants as well as daily assessments provided to
the Baltic Exchange by a panel of major shipbrokers.
</DIV>

<P align="center" style="font-size: 10pt;">52

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following chart illustrates the one-year time charter rates
for Handymax, Panamax and Capesize dry bulk carriers between
1994 and March 2005.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Time Charter Rates&nbsp;&#151; 12&nbsp;month period, prompt
delivery (US$ per day)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822711.gif" alt="(TIME CHARTER RATES GRAPH)">
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<P align="center" style="font-size: 10pt;">53

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following graph details the Baltic Panamax Index. This is a
daily Index produced by the Baltic Exchange from a range of spot
voyage and trip freight rates. The rates are provided by a panel
of shipbrokers.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822777.gif" alt="(BALTIC PANAMAX INDEX GRAPH)">
</DIV>

<P align="center" style="font-size: 10pt;">54

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Vessel Prices</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Market conditions in each of the major sectors in the shipping
industry&nbsp;&#151; dry bulk carriers, tankers and
containerships&nbsp;&#151; have prospered over the past
18&nbsp;months. This is illustrated from the 20 plus newbuilding
resales seen in 2004 and 18 in 2003. Historically over the five
years previous to this there has been no more than 3 or 4 of
these sales. The vessels are not being sold at a loss but in
excess of their contract price. For example five 82,800 dwt
(Kamsarmax) vessels were contracted by Kambara KK in 2004 for
approximately US$30&nbsp;million each. They have sold in the
last two weeks for approximately US$44-45&nbsp;million each.
This has helped trigger an upsurge in newbuilding activity
across each of these fleet sectors. In addition, newbuilding
demand is also strong for Liquefied Natural Gas
(LNG)&nbsp;carriers and other specialized ship categories.
Consequently, the near -term availability of newbuilding berths
for vessel delivery before the end of 2007 is scarce, and after
a period of stagnation, newbuilding prices for all vessel types
have increased significantly, due to a combination of rising
demand, shortage in berth space and rising raw material costs,
especially the price of steel. The weakening of the US dollar
has also contributed to the recent surge in newbuilding prices,
as yards protect themselves from incurring additional currency
costs. The trend in indicative newbuilding prices for a series
of specific vessels in each size sector is shown in the chart
below.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Dry Bulk Carrier Newbuilding Prices (US$&nbsp;million)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822710.gif" alt="(DRY BULK CARRIER PRICES GRAPH)">
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<P align="center" style="font-size: 10pt;">55

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The steep increase in newbuilding prices and the strength in the
charter market have also affected vessel prices in the
second-hand market, which have increased over the last
18&nbsp;months. Very recently a new benchmark was set in the
Panamax bulk carrier sector, where the sale of the new vessel
Ocean Lady (76,600&nbsp;dwt) achieved a price of
US$55&nbsp;million, almost double its contract price of
US$28&nbsp;million. The table below shows the historical series
for secondhand values for a 5 or 10&nbsp;year old vessels in
each sector of the dry bulk fleet.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Dry Bulk Carrier Secondhand Prices (US$m)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822715.gif" alt="(DRY BULK CARRIER SECONDHAND PRICES GRAPH)">
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<P align="center" style="font-size: 10pt;">56

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
With vessel earnings running at high levels and a dearth of
available newbuilding berths, demand for ships offering early
delivery has been at a premium. In some instances, the market
has witnessed second-hand prices for five to ten year-old dry
bulk carriers reaching levels higher than those for comparably
sized newbuildings to be delivered later. The following chart
illustrates Panamax newbuilding prices versus secondhand prices
from 1999 to present day. The vessels used to produce the data
series are 70-75,000&nbsp;dwt.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Panamax Newbuilding Prices v Secondhand Prices (US$m)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822716.gif" alt="(PANAMAX NEWBUILDING PRICES SECONDHAND VALUES)">
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Source: Drewry</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
It should be noted that the above newbuilding prices are for
forward delivery (usually 18-24&nbsp;months) while the
secondhand prices would be for immediate delivery.
</DIV>

<P align="center" style="font-size: 10pt;">57

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<DIV align="left" style="font-size: 10pt;">
<A name='111'></A>
</DIV>

<!-- link1 "BUSINESS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>BUSINESS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are an international provider of drybulk marine
transportation services that was incorporated in the Marshall
Islands on January&nbsp;13, 2005. We were formed by affiliates
of each of Corbin J. Robertson,&nbsp;Jr., an experienced
investor in coal, oil and gas and other natural resources, First
Reserve Corporation (&#147;First Reserve&#148;), a private
equity firm specializing in the energy industry, and American
Metals&nbsp;&#38; Coal International, Inc. (&#147;AMCI&#148;), a
privately held company engaged in the production, handling and
marketing of coal, iron ore and steel. We began limited
operations in April 2005 and to date have limited operating
revenues, assets and operating history. We expect to own and
operate, through our subsidiaries, a total fleet of eight
Panamax drybulk carriers by the end of the third quarter of
2005. Our vessels will operate on shipping routes worldwide. We
expect a significant number of our vessels to be employed under
time charters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our management team will provide the commercial management of
our fleet, which includes entering into charters and managing
relationships with charterers. Our management team will also
provide the technical management of three of our vessels, which
includes performing day-to-day operations and vessel
maintenance, and we initially will outsource the technical
management of five of our vessels to Blossom Maritime
Corporation, or our Manager, an unaffiliated third-party ship
management company. We expect to perform the technical
management of our entire fleet by the end of the first quarter
of 2006. We currently have a staff of eight personnel to manage
the commercial operations of our entire fleet and the technical
operations of three of our vessels. By the end of 2005, we
expect to have a total staff of approximately fifteen people to
manage both the commercial and technical operations of our
entire fleet.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to continue to increase the size of our fleet
following this offering through selective acquisitions of
additional secondhand drybulk carriers or through whole or
partial fleet acquisitions that complement our business strategy
and are accretive to earnings and cash flow. We believe that the
experience of our management team in locating and acquiring
suitable vessels and fleets will assist us in this process.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect that by the end of the third quarter of 2005, our
fleet will consist of a total of eight Panamax drybulk carriers.
Our first three vessels were delivered in April 2005, and we
currently have contracts to take delivery of two additional
vessels in May 2005. The remaining three vessels are under
contract to be delivered in July, August and September,
respectively. We have purchased or will purchase each of the
vessels in our fleet from shipowners who are unaffiliated with
us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our drybulk carriers transport a variety of cargoes including
coal, iron ore and grain. Our initial fleet will have a combined
carrying capacity of approximately 585,000 dwt and an average
age of approximately 8&nbsp;years. We financed the purchase of
these vessels through capital contributions by affiliates of
each of Mr.&nbsp;Robertson, First Reserve and AMCI and debt
either incurred or refinanced under a secured term loan
facility. We have paid a 10% deposit on the five undelivered
vessels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Initially, most of our vessels will be employed under time
charters of varying durations to well-established and reputable
charterers. None of these vessels were or will be purchased
subject to any existing time charter, but rather will be subject
to new time charters we have entered into or will put in place
in connection with the purchase of the vessel. Under our time
charters, the charterer is obligated to pay us charterhire at a
fixed daily rate and to bear all voyage expenses, including the
cost of bunkers and canal and port charges. We remain
responsible for paying the vessel&#146;s operating expenses,
including the cost of crewing, insuring, repairing and
maintaining the vessel, and paying brokers&#146; commissions on
gross charter hire rates. When a charter expires, we will assess
market conditions in the industry and determine whether to seek
to re-employ the vessel under a long-term time charter, a
short-term time charter or in the spot voyage market. For more
information about our time charters, please read
&#147;&#151;&nbsp;Time Charters.&#148;
</DIV>

<P align="center" style="font-size: 10pt;">58
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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Competitive Strengths</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that we have the following competitive strengths in
the drybulk shipping industry:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;<B><I>&nbsp;</I></B></TD>
    <TD align="left">
    <B><I>High Quality and Young Fleet.</I></B> All of our drybulk
    carriers are modern Panamax vessels with an average age of
    approximately 8.0&nbsp;years. According to Drewry, the average
    age of the world&#146;s Panamax drybulk fleet as of
    April&nbsp;5, 2005 is 12.2&nbsp;years. We believe that owning a
    modern fleet of well-maintained vessels will enable us to
    operate our vessels with low operating costs, obtain favorable
    debt financing terms, and secure employment for our vessels with
    high quality charterers. We intend to maintain the quality of
    our fleet through comprehensive planned and preventative
    maintenance programs. We also believe that secondhand vessels of
    our fleet&#146;s vintage will provide an attractive return on
    capital, given the favorable charter hire rates we expect they
    will command as compared to their purchase price.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;<B><I>&nbsp;</I></B></TD>
    <TD align="left">
    <B><I>Internal Management of Vessel Operations.</I></B> We
    expect to provide the commercial management of our entire fleet.
    Initially, we will perform the technical management of three of
    our vessels and we expect to provide the technical management of
    our remaining vessels by the end of the first quarter of 2006.
    We believe that providing our own internal commercial and
    technical management will favorably distinguish us from many of
    our competitors by allowing us to more closely monitor our
    operations and offer a high quality of performance, reliability
    and efficiency. We also expect that providing our own internal
    commercial and technical management will enable us to further
    limit operating costs by eliminating management fees to third
    parties.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;<B><I>&nbsp;</I></B></TD>
    <TD align="left">
    <B><I>Stable Cash Flow from Well-established and Reputable
    Charterers.</I></B> We expect that most of our vessels will be
    initially employed on time charters to well-established and
    reputable charterers. We believe these time charters will
    provide us with steady cash flow and high vessel utilization
    rates while limiting our exposure to freight rate volatility.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;<B><I>&nbsp;</I></B></TD>
    <TD align="left">
    <B><I>Experienced Management Team and Strong Affiliation with
    Our Sponsors.</I></B> Our executives have considerable
    experience in the management of the commercial and financial
    aspects of international shipping businesses. Our management
    team includes Stamatis Molaris, our chief executive officer, who
    formerly was the chief financial officer of Stelmar Shipping
    Ltd. (&#147;Stelmar&#148;). Stelmar was a leading publicly
    traded product and crude oil transportation company whose fleet
    increased from 2&nbsp;vessels to 41&nbsp;vessels in less than
    13&nbsp;years prior to its acquisition by Overseas Shipholding
    Group Inc. in January 2005. Our Chief Commercial Officer, Nikos
    Frantzeskakis, has 22&nbsp;years of experience in the drybulk
    shipping industry. We also have a strong relationship with our
    Sponsors, Mr.&nbsp;Robertson, First Reserve and AMCI, which
    collectively have considerable experience and relationships in
    the energy, iron ore and coal industry.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;<B><I>&nbsp;</I></B></TD>
    <TD align="left">
    <B><I>Focus on Panamax or Larger Drybulk Vessels.</I></B>
    Initially our fleet will consist entirely of Panamax vessels,
    and we intend to focus our acquisition efforts on obtaining
    either additional Panamax or the larger Capesize vessels.
    Panamax vessels are the most flexible category of drybulk
    vessels, with the ability to access all major ports and to
    travel through the Panama Canal. In addition, unlike smaller
    drybulk vessels, Panamax vessels are able to efficiently
    transport the major drybulk commodities, such as coal, iron ore
    and grain, to Asian markets from outside the region. Panamax
    vessels have the flexibility to handle a wide variety of drybulk
    cargoes and are less vulnerable to market changes in the demand
    for any single commodity than smaller vessels.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;<B><I>&nbsp;</I></B></TD>
    <TD align="left">
    <B><I>Increased Flexibility through Use of Sister Ships.</I></B>
    Our fleet will include two groups of sister ships, including one
    group of four sister ships and another group of two sister
    ships. We believe that a ship&#146;s technical specifications
    are a key factor in charterers&#146; decisions to select a ship.
    The ability to substitute ships with identical specifications
    enhances our fleet&#146;s revenue potential by providing
    increased flexibility to meet charterers&#146; schedules. Sister
    ships also increase our operating efficiencies because technical
    knowledge can be shared across vessels in a series and economies
    of scale can be created when ordering spare parts and supplying
    and crewing vessels.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">59

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Business Strategy</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our business strategy is to provide reliable seaborne
transportation services for drybulk cargoes at a competitive
cost. The principal elements of our business strategy consist of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;<B><I>&nbsp;</I></B></TD>
    <TD align="left">
    <B><I>Optimize Charter Planning.</I></B> We intend to employ a
    significant portion of our fleet under time charters to achieve
    predictable and visible cash flows and increase utilization
    rates. In addition, from time to time we plan to employ some of
    our vessels in the spot market to take advantage of market
    conditions. Our commercial management team will seek to balance
    the mix of short-, medium- and long-term time charters and spot
    market charters in order to permit us to opportunistically
    pursue market conditions while allowing us to maintain
    predictable cash flows.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;<B><I>&nbsp;</I></B></TD>
    <TD align="left">
    <B><I>Focus on High Quality Panamax or Larger Vessels.</I></B>
    We intend to maintain a high quality, cost efficient fleet of
    Panamax or larger drybulk carriers that meet rigorous industry
    standards and our charterers&#146; requirements. We believe that
    we will be able to develop a strong customer base by offering
    the increased reliability and greater operating efficiency that
    is provided by large, high quality vessels. Our fleet initially
    will consist entirely of Panamax vessels, enabling us to
    efficiently transport major drybulk commodities such as coal,
    iron ore and grain to China and other expanding markets.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;<B><I>&nbsp;</I></B></TD>
    <TD align="left">
    <B><I>Maintain Low Cost, Highly Efficient Operations.</I></B> We
    intend to actively control our operating expenses without
    compromising the quality of our vessel management by performing
    internally the commercial management of our entire fleet and the
    technical management for three of our vessels and, by the end of
    the first quarter of 2006, the technical management of the
    remaining vessels in our fleet. We believe that utilizing our
    own commercial and technical management will enable us to reduce
    our operating expenses by eliminating external management fees
    and commissions and that our emphasis on time charters will
    allow us to reduce marketing expenses. In addition, we believe
    that our policy of staffing each of our vessels with qualified
    officers and crews who share a common nationality will enable us
    to increase the efficiency of our vessel operations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;<B><I>&nbsp;</I></B></TD>
    <TD align="left">
    <B><I>Strategically Expand the Size of Our Fleet.</I></B> The
    size of our initial fleet of eight vessels places us within the
    top twenty owners of Panamax drybulk vessels worldwide and we
    believe that this fleet size will provide us with a critical
    mass of vessels to compete in a wide range of marketing and
    efficiently manage our vessels. We plan to further grow our
    fleet in the future through acquisitions of secondhand drybulk
    carriers at times when we believe these acquisitions would
    present favorable investment opportunities. Our goal is to
    further expand our worldwide presence in the drybulk carrier
    market with a fleet capable of servicing virtually all major
    ports and routes used for the seaborne transportation of key
    commodities and raw materials. We believe that our worldwide
    presence will enable us to capitalize on economies of scale in
    the management of our fleet, maximize our fleet&#146;s
    utilization, and minimize positioning days.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;<B><I>&nbsp;</I></B></TD>
    <TD align="left">
    <B><I>Flexible Financial Strategy.</I></B> In order to fund
    future acquisitions we intend to pursue a financial strategy
    that maximizes our flexibility. The proceeds from this offering
    will allow us to pay down a substantial amount of our current
    outstanding indebtedness, and in the future we intend to limit
    our outstanding indebtedness to levels that we believe are
    readily serviceable. We believe our low debt level will provide
    us with the flexibility to take advantage of acquisition
    opportunities as they arise.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;<B><I>&nbsp;</I></B></TD>
    <TD align="left">
    <B><I>Leveraging our Sponsors&#146; Strategic
    Relationships.</I></B> Mr.&nbsp;Robertson, First Reserve, AMCI
    and their affiliates have extensive experience and relationships
    in the coal, steel and iron ore industries. We plan to use these
    relationships to identify chartering opportunities for coal and
    iron ore cargoes. We believe that our current shareholders&#146;
    reputation in the coal, steel and iron ore industries will also
    help us make contacts in the coal and iron ore industries and
    gain market intelligence in these core commodities industries.</TD>
</TR>

</TABLE>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Relationship with Our Sponsors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Quintana Maritime Investors LLC, our parent, is beneficially
owned by affiliates of each of Sponsors, Mr.&nbsp;Robertson,
First Reserve and AMCI. We have a strong relationship with our
Sponsors and certain of their affiliates. Following the
consummation of this offering, we expect that Quintana Maritime
Investors LLC will be liquidated and its ownership interest in
us will be distributed to its members in proportion to their
ownership interests in Quintana Maritime Investors LLC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Robertson, an experienced investor in coal, oil and gas
and other natural resources, is chairman of our board of
directors and is the beneficial owner of the controlling
interest in the general partner of Natural Resource Partners
L.P. (&#147;NRP&#148;). NRP is a publicly traded limited
partnership engaged principally in the business of owning and
managing coal properties in the three major coal-producing
regions of the United States: Appalachia, the Illinois Basin and
the Western United States. As of December&nbsp;31, 2004, NRP
controlled approximately 1.8&nbsp;billion tons of proven and
probable coal reserves in nine states.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
First Reserve Corporation is a private equity firm that actively
pursues building a broadly diversified portfolio within the
energy industry, and was one of the first private equity firms
with such a focus. First Reserve currently advises four active
private equity funds with aggregate committed capital of
$4.7&nbsp;billion. First Reserve funds have made investments
totaling over $3.0&nbsp;billion in more than 80 principal
transactions (in core holdings), and over 200 add-on
acquisitions with their core companies. First Reserve funds
invest solely in the energy industry. First Reserve&#146;s
current management team has been in place since 1983 and has
over 250&nbsp;years of collective energy investment experience.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AMCI, headquartered in Greenwich, Connecticut, is a privately
held company engaged in the production, handling and marketing
of coal, iron ore and steel. Founded in 1986, AMCI has grown to
become one of the largest privately owned international coal
companies. Recently, AMCI has focused on acquiring coal mining
interests in the United States and on obtaining and developing
virgin coal reserves and operating new coal mines in Australia.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that the collective experience of our Sponsors and
their affiliates in the energy, coal, steel and iron ore
industries will be important in helping us execute our growth
strategy and that we will be able to leverage their reputation
and extensive network of contacts in these industries, to
provide us with chartering opportunities as well as market
intelligence in the core commodities trades.
</DIV>

<P align="center" style="font-size: 10pt;">61

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Fleet</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents certain information concerning the
drybulk carriers in our fleet as of April&nbsp;30, 2005.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="14%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Daily</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Time</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Charter</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Charter</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Sister</B></TD><TD></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Hire Rate</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ship-</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ships</B></TD><TD></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD align="left" nowrap><B>Vessel</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Type</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dwt</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Flag</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Built</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Charterer</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(1)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>builder</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(6)</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>King Coal</I>(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>72,873</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Marshall Islands</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Energy Shipping S.p.A.(5)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    April 2008</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$</TD>
    <TD align="right" valign="top" nowrap>24,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">China Shipbuilding Corp., Taiwan</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Fearless I</I>(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>73,427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Marshall Islands</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Deiulemar Compagnia di Navigazione S.p.A.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    April 2008</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$</TD>
    <TD align="right" valign="top" nowrap>25,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Hyundai Heavy Industries Co., Ltd., South Korea</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>A</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Coal Glory</I>(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>73,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Marshall Islands</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    spot</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Hyundai Heavy Industries Co., Ltd., South Korea</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>A</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Coal Age</I>(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>72,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Marshall Islands</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Hyundai Heavy Industries, South Korea</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>A</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Iron Man</I>(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>72,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Marshall Islands</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Hyundai Heavy Industries, South Korea</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>A</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Linda Leah</I>(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>73,390</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Marshall Islands</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Fratelli D&#146;Amato S.p.A.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    August&nbsp;2008</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$</TD>
    <TD align="right" valign="top" nowrap>23,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Halla Samho, South Korea</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>B</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Barbara</I>(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>73,390</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Marshall Islands</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Halla Samho, South Korea</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>B</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <I>Coal Pride</I>(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>Panamax</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>72,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Marshall Islands</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">Imabari Shipbuilding Co. Ltd., Japan</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>None</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    This table shows charter hire rates net of any commissions.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Delivered in April 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Subject to a memorandum of agreement and expected to be
    delivered in May 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Subject to a memorandum of agreement and expected to be
    delivered in the third quarter of 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    The obligations of Energy Shipping S.p.A. are guaranteed by
    Deiulemar Compagnia di Navigazione S.p.A.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    Each vessel with the same letter is a &#147;sister ship&#148; of
    each other vessel that has the same letter.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each of our vessels is, or upon acquisition will be, owned
through a separate wholly-owned Marshall Islands subsidiary and
each of the three vessels of which we have taken delivery has
received classification society notations from Lloyds Register
of Shipping.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our fleet includes two groups of sister ships, including one
group of four sister ships and another group of two sister
ships. We believe that sister ships will enhance our revenue
generating potential by providing us with operational and
maintenance scheduling flexibility, as sister ships generally
can be substituted for similar voyages. Sister ships also
increase our operating efficiencies because technical knowledge
can be applied to all vessels in a series and create cost
efficiencies and economies of scale when ordering spare parts,
supplying and crewing these vessels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Customers</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our customers currently include national, regional and
international companies, such as Deiulemar Compagnia da
Navigazione, S.p.A., a major supplier of coal to Italian
utilities, Energy Shipping S.p.A., an
</DIV>

<P align="center" style="font-size: 10pt;">62
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
Italian maritime coal transport company and Fratelli
D&#146;Amato S.p.A., an Italian maritime transport company. Our
assessment of a charterer&#146;s financial condition and
reliability will be an important factor in negotiating
employment for our vessels. We expect to charter our vessels to
major trading houses (including commodities traders), publicly
traded companies, reputable vessel owners and operators, major
producers of raw materials and government-owned entities rather
than to more speculative or undercapitalized entities. We
evaluate the counterparty risk of potential charterers based on
our management&#146;s long experience in the shipping industry
with the input of two independent credit risk consultants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Management of Our Fleet</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to commercially manage our fleet through a wholly
owned subsidiary, Quintana Management LLC, which will arrange
the charters for our vessels and the management of our
relationships with charterers, and the purchase and sale of
vessels into and out of our fleet.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Initially, our management team will provide the technical
management of three of our vessels in-house and our Manager,
Blossom Maritime Corporation, a privately-owned Greek company
with offices in Piraeus, Greece, will manage the technical
operation of five of our vessels under separate, one-year
management agreements. Each of our one-year management
agreements with our Manager contains early termination
provisions which are exercisable without any penalty or fee upon
six-months notice to our Manager. We expect to provide for the
technical management of our entire fleet through our wholly
owned subsidiary, Quintana Management LLC, by the end of the
first quarter of 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the management agreements our Manager will provide
technical vessel management services such as arranging for and
managing crews, maintenance, drydocking, repairs, insurance,
ensuring regulatory and classification society compliance,
appointing supervisors and technical consultants and providing
technical support. Under the management agreements, our Manager
will present us with an annual budget for the following twelve
months for each vessel. It will also prepare and present us with
their estimate of the working capital requirements of the
vessels. It shall request the funds required to run the vessels
for the ensuing month, including the payment of any occasional
or extraordinary items of expenditure, such as emergency repair
costs, scheduled drydocking and Special Survey costs as well as
additional insurance premiums, bunkers or provisions. We will
pay our Manager a management fee of $400&nbsp;per day for each
of the five vessels under its management. Under our management
agreements, our Manager may subcontract its duties only with our
prior approval.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect to have our own ISM Code certification for the three
vessels for which we will provide in-house technical management
prior to their delivery. Initially, we will rely on our
Manager&#146;s certification under the ISM Code in order to
operate the five vessels under management agreements with our
Manager. We intend to obtain our own ISM Code certification for
these five vessels following this offering, and prior to the
termination of our management agreements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Time Charters</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Initially, most of the vessels in our fleet will be subject to
time charters. A time charter is a contract for the use of a
vessel for a fixed period of time at a specified daily rate.
Under a time charter, the vessel owner provides crewing and
other services related to the vessel&#146;s operation, the cost
of which is included in the daily rate and the customer is
responsible for substantially all of the vessel voyage costs.
The following discussion describes the material terms common to
all of our time charters.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Initial Term; Extensions</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The initial term for a time charter commences upon the
vessel&#146;s delivery. All of our customers have rights to
terminate their charters prior to expiration of the original
term in specified circumstances as described in more detail
below.
</DIV>

<P align="center" style="font-size: 10pt;">63

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Hire Rate</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Hire&#148; rate refers to the basic payment from the
customer for the use of the vessel. Hire is payable every
fifteen days, in advance, in Dollars as specified in the
charter, less a specified commission for the chartering broker
and approximately 3.75% of the hire rate as an address
commission for the charterer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Hire payments may be reduced, or under some charters, we must
pay liquidated damages, if the vessel does not perform to
certain of its specifications, such as if the average vessel
speed falls below a guaranteed speed or the amount of fuel
consumed to power the vessel under normal circumstances exceeds
a guaranteed amount.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
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<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Expenses</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are responsible for vessel operating expenses, which include
crewing, repairs and maintenance, insurance, stores, lube oils
and communication expenses. We are also directly responsible for
providing all of these items and services. The customer
generally pays the voyage expenses, which include all expenses
relating to particular voyages, including the cost of any
bunkers, port fees, cargo loading and unloading expenses, canal
tolls, agency fees and commissions.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Off-hire</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
When the vessel is &#147;off-hire&#148;&nbsp;&#151; or not
available for service&nbsp;&#151; the customer generally is not
required to pay the hire rate, and we are responsible for all
costs. A vessel generally will be deemed off-hire if there is a
loss of operating time due to, among other things:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    operational deficiencies; drydocking for repairs, maintenance or
    inspection; equipment breakdowns; or delays due to accidents,
    fires or similar problems;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our failure to maintain the vessel in compliance with its
    specifications and contractual standards or to provide the
    required crew;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    seizure or detention by any authority unless such seizure or
    detention is occasioned by any personal act or omission or
    default of the charterers or their agents, or by reason of cargo
    carried;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    arrest of the vessel on behalf of any party having or purporting
    to have a claim against the vessel.</TD>
</TR>

</TABLE>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
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    <TD></TD>
    <TD>
    <B><I>Ship Management and Maintenance</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under all of our time charters, we are responsible for the
technical management of the vessel and for maintaining the
vessel, periodic drydocking, cleaning and painting and
performing work required by regulations. Our Manager will
initially provide many of these services in respect of five of
our vessels to us pursuant to the management agreement and we
will provide them with respect to our other three vessels.
Please read &#147;Business&nbsp;&#151; Management of Our
Fleet.&#148;
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
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    <TD></TD>
    <TD>
    <B><I>Termination</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each time charter terminates automatically upon loss of the
vessel. In addition, we are generally entitled to suspend
performance (but with the continuing accrual to our benefit of
hire payments and default interest) and, under most time
charters, terminate the charter if the customer defaults in its
payment obligations. Under most of our time charters, either
party may also terminate the charter in the event of war in
specified countries or in locations that would significantly
disrupt the free trade of the vessel or if the vessel is
requisitioned by its flag state for more than three months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Other Vessel Employment</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to employ some of our vessels in the spot charter
market. A spot market voyage charter is generally a contract to
carry a specific cargo from a load port to a discharge port for
an agreed upon total
</DIV>

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<DIV align="left" style="font-size: 10pt;">
fee. Under spot market voyage charters, the vessel owner pays
voyage expenses such as port, canal and fuel costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Crewing; Employees</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Initially our internal management team will arrange for the
crewing of three of our vessels while the crews for our other
five vessels will be arranged by our Manager under the
management agreements. We plan to, and we have instructed our
Manager to, staff each of our vessels with officers and crew who
share a common nationality. We believe that on many of our
competitors&#146; vessels, language barriers and other tensions
between officers and crew of diverse nationalities can lead to
poor performance and inefficiency. We believe that by providing
entire crews from a similar national background we will improve
morale, retain better personnel, and increase efficiency.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our Manager will enter into contracts with manning agents for
the five vessels initially under its technical management and we
will enter into contracts with manning agents for our remaining
three vessels. The approved manning agent which both we and our
Manager work with is Phil-Man Marine Agency, Inc. who we believe
has a good track record of providing healthy, well experienced,
educated and trained seamen. The crew manning agent&#146;s
performance during the period of its contracts with us and our
Manager is subject to evaluation at the end of each period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that the crewing arrangements will ensure that our
vessels will be crewed with qualified seamen that have the
licenses required by international regulations and conventions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We currently have a staff of eight personnel to manage the
commercial operations of our entire fleet and the technical
operations of three of our vessels. By the end of 2005 we expect
to have a total staff of approximately fifteen people to manage
both the commercial and technical operations of our entire fleet.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Permits and Authorizations</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are required by various governmental and quasi-governmental
agencies to obtain certain permits, licenses and certificates
with respect to our vessels. The kinds of permits, licenses and
certificates required depend upon several factors, including the
commodity transported, the waters in which the vessel operates,
the nationality of the vessel&#146;s crew and the age of a
vessel. We are in the process of obtaining all permits, licenses
and certificates currently required to permit our vessels to
operate. Additional laws and regulations, environmental or
otherwise, may be adopted which could limit our ability to do
business or increase our cost of doing business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Environmental and Other Regulations</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Government regulation significantly affects the ownership and
operation of our vessels. We are subject to international
conventions and national, state and local laws and regulations
in effect in the countries in which our vessels may operate or
are registered.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A variety of government and private entities subject our vessels
to both scheduled and unscheduled inspections. These entities
include the local port authorities (U.S.&nbsp;Coast Guard,
harbor master or equivalent), classification societies, flag
state administrations (country of registry), charterers and
particularly terminal operators. Certain of these entities
require us to obtain permits, licenses and certificates for the
operation of our vessels. Failure to maintain necessary permits
or approvals could require us to incur substantial costs or
temporarily suspend the operation of one or more of our vessels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that the heightened level of environmental and
quality concerns among insurance underwriters, regulators and
charterers is leading to greater inspection and safety
requirements on all vessels and may accelerate the scrapping of
older vessels throughout the drybulk shipping industry.
Increasing environmental concerns have created a demand for
vessels that conform to the stricter environmental standards. We
are required to maintain operating standards for all of our
vessels that emphasize operational safety, quality maintenance,
continuous training of our officers and crews and compliance
with U.S. and international regulations. We believe that the
operation of our vessels is in
</DIV>

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<DIV align="left" style="font-size: 10pt;">
substantial compliance with environmental laws and regulations
applicable to us as of the date of this prospectus, however, we
have only recently commenced operations. Moreover, as a result
of highly publicized accidents in recent years, we believe that
the regulation of the shipping industry, particularly in the
area of environmental requirements, will continue to become more
stringent and more expensive for us and our competitors. Because
environmental laws and regulations are periodically changed and
may impose increasingly stricter requirements, future
requirements may limit our ability to do business, increase our
operating costs, force the early retirement of our vessels
and/or affect their resale values, all of which could have a
material adverse effect on our financial condition and results
of operations.
</DIV>

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    <TD width="3%"></TD>
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</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>International Maritime Organization</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The International Maritime Organization, or IMO, has negotiated
international conventions that impose liability for oil
pollution in international waters and a signatory&#146;s
territorial waters. For example, the International Convention
for the Prevention of Pollution from Ships (&#147;MARPOL&#148;)
imposes environmental standards on the shipping industry
relating to oil spills, management of garbage, the handling and
disposal of noxious liquids, harmful substances in packaged
forms, sewage and air emissions. Annex&nbsp;III of MARPOL
regulates the transportation of marine pollutants, including
standards on packing, marking, labeling, documentation, stowage,
quality limitations and pollution prevention. These requirements
have been expanded by the International Maritime Dangerous Goods
Code, which imposes additional standards for all aspects of the
transportation of dangerous goods and marine pollutants
by&nbsp;sea. In September 1997, the IMO adopted Annex&nbsp;VI to
MARPOL to address air pollution from ships. Annex&nbsp;VI was
ratified in May 2004, and will become effective in May 2005.
Annex&nbsp;VI, when it becomes effective, will set limits on
sulfur oxide and nitrogen oxide emissions from ship exhausts and
prohibit deliberate emissions of ozone depleting substances,
such as chlorofluorocarbons. Annex&nbsp;VI also includes a
global cap on the sulfur content of fuel oil and allows for
special areas to be established with more stringent controls on
sulfur emissions. The Marshall Islands has ratified
Annex&nbsp;VI of MARPOL, which takes effect on May&nbsp;19,
2005. Pursuant to a Marine Notice issued by the Marine Maritime
Administrator as revised in March 2005, ships flagged by the
Marshall Islands, and that are subject to Annex&nbsp;VI must, if
built before the effective date, obtain an International Air
Pollution Prevention Certificate evidencing compliance with
Annex&nbsp;VI not later than either the first drydocking after
May&nbsp;19, 2005, or May&nbsp;19, 2008. All ships subject to
Annex&nbsp;VI that are built after May&nbsp;19, 2005 must have
the Certificate. Implementing these requirements may require
modifications to the engines or the addition of post-combustion
emission controls, or both as well as the use of lower sulfur
fuels. We are still evaluating the costs of implementing these
requirements but do not expect them to have a material adverse
effect on our operating costs. Additional conventions, laws and
regulations may be adopted that could adversely affect our
ability to operate our vessels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The operation of our vessels is also affected by the
requirements set forth in the IMO&#146;s Management Code for the
Safe Operation of Ships and Pollution Prevention, or ISM Code.
The ISM Code requires ship owners and bareboat charterers to
develop and maintain an extensive &#147;Safety Management
System&#148; that includes the adoption of a safety and
environmental protection policy setting forth instructions and
procedures for safe operation and describing procedures for
dealing with emergencies. The ISM Code requires that vessel
operators obtain a safety management certificate for each vessel
they operate. No vessel can obtain ISM Code certification unless
its manager has been awarded a document of compliance under the
ISM Code. The failure of a ship owner or bareboat charterer to
comply with the ISM Code may subject such party to increased
liability, may decrease available insurance coverage for the
affected vessels and may result in a denial of access to, or
detention in, certain ports. We expect to have our own ISM Code
certification for the three vessels for which we will provide
in-house technical management prior to their delivery.
Initially, we will rely on our Manager&#146;s certification
under the ISM Code in order to operate the five vessels under
management agreements with our Manager. We intend to obtain our
own ISM Code certification for these five vessels following this
offering, and prior to the termination of our management
agreements.
</DIV>

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    <TD width="3%"></TD>
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</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The United States</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The United States Oil Pollution Act of 1990, or OPA, established
an extensive regulatory and liability regime for the protection
and cleanup of the environment from oil spills. OPA affects all
owners and operators whose vessels trade in the United States,
its territories and possessions or whose vessels operate in
United States waters, which includes the United States&#146;
territorial sea and its two hundred nautical mile exclusive
economic zone. Although OPA is primarily directed at oil tankers
(which are not operated by us), it applies to non-tanker ships,
including drybulk carriers, with respect to fuel oil, or
bunkers, used to power such vessels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under OPA, vessel owners, operators and bareboat charterers are
&#147;responsible parties&#148; and are jointly, severally and
strictly liable (unless the spill results solely from the act or
omission of a third party, an act of God or an act of war) for
all containment and clean-up costs and other damages arising
from discharges or threatened discharges of oil from their
vessels, including bunkers (fuel oils). OPA defines these other
damages broadly to include:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    natural resources damages and the costs of assessment thereof;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    real and personal property damages;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    net loss of taxes, royalties, rents, fees and other lost
    revenues;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    lost profits or impairment of earning capacity due to property
    or natural resources damage;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    net cost of public services necessitated by a spill response,
    such as protection from fire, safety or health hazards, and loss
    of subsistence use of natural resources.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title&nbsp;VII of the Coast Guard and Maritime Transportation
Act of 2004 (the &#147;CGMTA&#148;) recently amended OPA to
require the owner or operator of any non-tank vessel of
400&nbsp;gross tons or more, that carries oil of any kind as a
fuel for main propulsion, including bunkers, to prepare and
submit a response plan for each vessel on or before
August&nbsp;8, 2005. Previous law was limited to vessels that
carry oil in bulk as cargo. The vessel response plans include
detailed information on actions to be taken by vessel personnel
to prevent or mitigate any discharge or substantial threat of
such a discharge of ore from the vessel due to operational
activities or casualties. Our third-party Manager, Blossom
Maritime Corporation, has prepared a response plan for each of
our vessels, which conforms to the requirements of the CGMTA and
OPA.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
OPA limits the liability of responsible parties to the greater
of $600&nbsp;per gross ton or $0.5&nbsp;million per drybulk
vessel that is over 300&nbsp;gross tons (subject to possible
adjustment for inflation). These limits of liability do not
apply if an incident was directly caused by violation of
applicable United States federal safety, construction or
operating regulations or by a responsible party&#146;s gross
negligence or willful misconduct, or if the responsible party
fails or refuses to report the incident or to cooperate and
assist in connection with oil removal activities. In addition,
the Comprehensive Environmental Response, Compensation, and
Liability Act, or CERCLA, which applies to the discharge of
hazardous substances (other than oil) whether on land or at sea,
contains a similar liability regime and provides for cleanup,
removal and natural resource damages. Liability under CERCLA is
limited to the greater of $300&nbsp;per gross ton or
$0.5&nbsp;million for vessels not carrying hazardous substances
as cargo or residue, unless the incident is caused by gross
negligence, willful misconduct, or a violation of certain
regulations, in which case liability is unlimited.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We currently maintain pollution liability coverage insurance in
the amount of $1&nbsp;billion per incident for each of our
vessels. If the damages from a catastrophic spill were to exceed
our insurance coverage it could have an adverse effect on our
business and results of operation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
OPA requires owners and operators of all vessels over
300&nbsp;gross tons, even those that do not carry petroleum or
hazardous substances as cargo, to establish and maintain with
the U.S.&nbsp;Coast Guard evidence of financial responsibility
sufficient to meet their potential liabilities under OPA. The
U.S.&nbsp;Coast Guard has implemented regulations requiring
evidence of financial responsibility in the amount of
$900&nbsp;per gross ton, which includes the OPA limitation on
liability of $600&nbsp;per gross ton and the CERCLA liability
limit of $300&nbsp;per gross ton for vessels not carrying
hazardous substances as cargo or residue. Under the regulations,
vessel owners and operators may evidence their financial
responsibility by showing proof of insurance, surety bond,
self-insurance or guaranty. Under OPA, an owner or operator of a
fleet of vessels is
</DIV>

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<DIV align="left" style="font-size: 10pt;">
required only to demonstrate evidence of financial
responsibility in an amount sufficient to cover the vessel in
the fleet having the greatest maximum liability under OPA. Under
the self-insurance provisions, the ship owner or operator must
have a net worth and working capital, measured in assets located
in the United States against liabilities located anywhere in the
world, that exceeds the applicable amount of financial
responsibility. Our third-party Manager has complied with the
U.S.&nbsp;Coast Guard regulations by providing a certificate of
responsibility from third party entities that are acceptable to
the U.S.&nbsp;Coast Guard evidencing sufficient self-insurance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The U.S.&nbsp;Coast Guard&#146;s regulations concerning
certificates of financial responsibility provide, in accordance
with OPA, that claimants may bring suit directly against an
insurer or guarantor that furnishes certificates of financial
responsibility. In the event that such insurer or guarantor is
sued directly, it is prohibited from asserting any contractual
defense that it may have had against the responsible party and
is limited to asserting those defenses available to the
responsible party and the defense that the incident was caused
by the willful misconduct of the responsible party. Certain
organizations, which had typically provided certificates of
financial responsibility under pre-OPA 90 laws, including the
major protection and indemnity organizations, have declined to
furnish evidence of insurance for vessel owners and operators if
they are subject to direct actions or required to waive
insurance policy defenses. This requirement may have the effect
of limiting the availability of the type of coverage required by
the Coast Guard and could increase our costs of obtaining this
insurance as well as the costs of our competitors that also
require such coverage.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
OPA specifically permits individual states to impose their own
liability regimes with regard to oil pollution incidents
occurring within their boundaries, and some states have enacted
legislation providing for unlimited liability for oil spills. In
some cases, states which have enacted such legislation have not
yet issued implementing regulations defining vessels
owners&#146; responsibilities under these laws. We intend to
comply with all applicable state regulations in the ports where
our vessels call.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The Clean Water Act</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A United States District Court has ruled that the United States
Environmental Protection (&#147;U.S.&nbsp;EPA&#148;) lacks the
authority to exclude discharges of vessel ballast water from the
Clean Water Act&#146;s (&#147;Act&#148;) permitting
requirements. The District Court ordered the U.S.&nbsp;EPA to
repeal the regulations it had adopted exempting discharges of
ballast water from the Act&#146;s permitting requirements.
Unless this decision is overturned on appeal or the relief in
question is modified, vessels entering the waters subject to the
Act&#146;s jurisdiction would be required to have a permit to
discharge ballast water. This permitting requirement may lead to
the installation of equipment on our vessels to treat ballast
water before its discharge and could have the affect of limiting
some or all of our vessels from entering waters in the United
States that are subject to this ruling. Because we do not know
how this matter will ultimately be resolved, we cannot estimate
the financial impact on our operations and, therefore, cannot
assure you that the associated costs and effects will not be
material.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Vessel Security Regulations</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since the terrorist attacks of September&nbsp;11, 2001, there
have been a variety of initiatives intended to enhance vessel
security. On November&nbsp;25, 2002, the Maritime Transportation
Security Act of 2002 (MTSA)&nbsp;came into effect. To implement
certain portions of the MTSA, in July 2003, the U.S.&nbsp;Coast
Guard issued regulations requiring the implementation of certain
security requirements aboard vessels operating in waters subject
to the jurisdiction of the United States. Similarly, in December
2002, amendments to the International Convention for the Safety
of Life at Sea, or SOLAS, created a new chapter of the
convention dealing specifically with maritime security. The new
chapter came into effect in July 2004 and imposes various
detailed security obligations on vessels and port authorities,
most of which are contained in the newly created International
Ship and Port Facilities Security Code or ISPS Code. Among the
various requirements are:
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    on-board installation of automatic information systems, or AIS,
    to enhance vessel-to-vessel and vessel-to-shore communications;</TD>
</TR>

</TABLE>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    on-board installation of ship security alert systems;</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the development of vessel security plans;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    compliance with flag state security certification requirements.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The U.S.&nbsp;Coast Guard regulations, intended to align with
international maritime security standards, exempt
non-U.S.&nbsp;vessels from MTSA vessel security measures
provided such vessels have on board a valid International Ship
Security Certificate (ISSC)&nbsp;that attests to the
vessel&#146;s compliance with SOLAS security requirements and
the ISPS Code. We have implemented the various security measures
addressed by the MTSA, SOLAS and the ISPS Code.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD></TD>
    <TD>
    <B><I>Inspection by Classification Societies</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Every seagoing vessel must be &#147;classed&#148; by a
classification society. The classification society certifies
that the vessel is &#147;in class,&#148; signifying that the
vessel has been built and maintained in accordance with the
rules of the classification society and complies with applicable
rules and regulations of the vessel&#146;s country of registry
and the international conventions of which that country is a
member. In addition, where surveys are required by international
conventions and corresponding laws and ordinances of a flag
state, the classification society will undertake them on
application or by official order, acting on behalf of the
authorities concerned.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The classification society also undertakes on request other
surveys and checks that are required by regulations and
requirements of the flag state. These surveys are subject to
agreements made in each individual case and/or to the
regulations of the country concerned.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For maintenance of the class, regular and extraordinary surveys
of hull, machinery, including the electrical plant, and any
special equipment classed are required to be performed as
follows:
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Annual Surveys.</I></B> For seagoing ships, annual surveys
    are conducted for the hull and the machinery, including the
    electrical plant and where applicable for special equipment
    classed, at intervals of 12&nbsp;months from the date of
    commencement of the class period indicated in the certificate.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Intermediate Surveys.</I></B> Extended annual surveys are
    referred to as intermediate surveys and typically are conducted
    two and one-half years after commissioning and each class
    renewal. Intermediate surveys may be carried out on the occasion
    of the second or third annual survey.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <B><I>Class&nbsp;Renewal Surveys.</I></B> Class renewal surveys,
    also known as special surveys, are carried out for the
    ship&#146;s hull, machinery, including the electrical plant and
    for any special equipment classed, at the intervals indicated by
    the character of classification for the hull. At the special
    survey the vessel is thoroughly examined, including
    audio-gauging to determine the thickness of the steel
    structures. Should the thickness be found to be less than class
    requirements, the classification society would prescribe steel
    renewals. The classification society may grant a one year grace
    period for completion of the special survey. Substantial amounts
    of money may have to be spent for steel renewals to pass a
    special survey if the vessel experiences excessive wear and
    tear. In lieu of the special survey every four or five years,
    depending on whether a grace period was granted, a ship owner
    has the option of arranging with the classification society for
    the vessel&#146;s hull or machinery to be on a continuous survey
    cycle, in which every part of the vessel would be surveyed
    within a five year cycle. At an owner&#146;s application, the
    surveys required for class renewal may be split according to an
    agreed schedule to extend over the entire period of class. This
    process is referred to as continuous class renewal.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All areas subject to survey as defined by the classification
society are required to be surveyed at least once per class
period, unless shorter intervals between surveys are prescribed
elsewhere. The period between two subsequent surveys of each
area must not exceed five years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Most vessels are also drydocked every 30 to 36&nbsp;months for
inspection of the underwater parts and for repairs related to
inspections. If any defects are found, the classification
surveyor will issue a &#147;recommendation&#148; which must be
rectified by the ship owner within prescribed time limits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Most insurance underwriters make it a condition for insurance
coverage that a vessel be certified as &#147;in class&#148; by a
classification society which is a member of the International
Association of Classification
</DIV>

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<DIV align="left" style="font-size: 10pt;">
Societies. All our vessels are certified as being &#147;in
class&#148; by Lloyd&#146;s Register of Shipping. All new and
secondhand vessels that we purchase must be certified prior to
their delivery under our standard purchase contracts and
memoranda of agreement. If the vessel is not certified on the
scheduled date of closing, we have no obligation to take
delivery of the vessel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Risk of Loss and Liability Insurance</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>General</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The operation of any drybulk vessel includes risks such as
mechanical failure, collision, property loss, cargo loss or
damage and business interruption due to political circumstances
in foreign countries, hostilities and labor strikes. In
addition, there is always an inherent possibility of marine
disaster, including oil spills and other environmental mishaps,
and the liabilities arising from owning and operating vessels in
international trade. OPA, which imposes virtually unlimited
liability upon owners, operators and demise charterers of
vessels trading in the United States exclusive economic zone for
certain oil pollution accidents in the United States, has made
liability insurance more expensive for ship owners and operators
trading in the United States market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While we maintain hull and machinery insurance, war and strikes
risks insurance, protection and indemnity coverage, increased
value insurance and freight, demurrage and defense coverage for
all of our vessels in amounts that we believe to be prudent to
cover normal risks in our operations, we may not be able to
achieve or maintain this level of coverage throughout a
vessel&#146;s useful life. Furthermore, while we believe that
our present insurance coverage is adequate, not all risks can be
insured, and there can be no guarantee that any specific claim
will be paid, or that we will always be able to obtain adequate
insurance coverage at reasonable rates.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Hull&nbsp;&#38; Machinery and War and Strikes Risks
    Insurance</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We maintain marine hull and machinery and war and strikes risks
insurance, which covers the risk of actual or constructive total
loss, for all of our vessels. Our vessels are each covered up to
at least fair market value with particular average deductibles
of $100,000 per vessel per incident and third party liability
deductibles of $25,000 per vessel per incident. We also maintain
increased value coverage for each of our vessels. Under this
increased value coverage, in the event of total loss of a
vessel, we are entitled to recover amounts not recoverable under
our hull and machinery policy due to under-insurance.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
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</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Protection and Indemnity Insurance</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Protection and indemnity insurance is provided by mutual
protection and indemnity associations, or P&#38;I Clubs, which
insure our third party liabilities in connection with our
shipping activities. This includes third-party liability and
other related expenses resulting from the injury or death of
crew, passengers and other third parties, the loss or damage to
cargo, claims arising from collisions with other vessels, damage
to other third-party property, pollution arising from oil or
other substances and salvage, towing and other related costs,
including wreck removal. Protection and indemnity insurance is a
form of mutual indemnity insurance, extended by protection and
indemnity mutual associations, or &#147;clubs.&#148; Subject to
the &#147;capping&#148; discussed below, our coverage, except
for pollution, is unlimited.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our current protection and indemnity insurance coverage for
pollution is $1&nbsp;billion per vessel per incident. We are a
member of a P&#38;I Club that is a member of the International
Group. The thirteen P&#38;I Clubs that comprise the
International Group insure approximately 90% of the world&#146;s
commercial shipping tonnage and have entered into a pooling
agreement to reinsure each association&#146;s liabilities. The
International Group of P&#38;I Clubs exists to arrange
collective insurance and reinsurance for P&#38;I Clubs, to
represent the views of shipowners and charterers who belong to
those Clubs on matters of concern to the shipping industry and
to provide a forum for the exchange of information. Each of the
constituent P&#38;I Clubs is an independent, non-profit making
mutual insurance association or &#147;Club,&#148; providing
cover for its shipowner and charterer members against
liabilities of their respective businesses. Each Club is
controlled by its members through a board of directors (or
Committee) elected from the membership; the Board (or Committee)
retains responsibility for strategic and policy issues but
delegates to full-time managers the technical running of the
Club.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Although the Clubs compete with each other for business, they
have found it beneficial to pool their larger risks under the
auspices of the International Group. This pooling is regulated
by a contractual agreement which defines the risks that are to
be pooled and exactly how these are to be shared between the
participating Clubs. The pool provides a mechanism for sharing
all claims in excess of US$5&nbsp;million up to a limit of about
US$4.25&nbsp;billion. For a layer of claims between
US$50&nbsp;million and US$2.030&nbsp;billion the International
Group&#146;s Clubs purchase reinsurance from the commercial
market. The pooling system provides participating Clubs with
reinsurance protection at cost to much higher levels than would
normally be available in the commercial reinsurance market. As a
member of a P&#38;I Club that is a member of the International
Group, we are subject to calls payable to the associations based
on the group&#146;s claim records as well as the claim records
of all other members of the individual associations and members
of the pool of P&#38;I Associations comprising the International
Group.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Competition</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We operate in markets that are highly competitive and based
primarily on supply and demand. We compete for charters on the
basis of price, vessel location, size, age and condition of the
vessel, as well as on our reputation as an owner and operator.
We compete with other owners of drybulk carriers in the Panamax
class sector. According to Drewry, ownership of drybulk carriers
is highly fragmented and is divided among approximately 1,400
drybulk carrier owners; however, as of March&nbsp;31, 2005,
there were 24 owners of at least eight Panamax drybulk carriers.
Some of these competitors have larger fleets and greater
financial resources than we do, which may make them more
competitive.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Legal Proceedings</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have not been involved in any legal proceedings which may
have, or have had a significant effect on our business,
financial position, results of operations or liquidity, nor are
we aware of any proceedings that are pending or threatened which
may have a significant effect on our business, financial
position, results of operations or liquidity. From time to time,
we may be subject to legal proceedings and claims in the
ordinary course of business, principally personal injury and
property casualty claims. We expect that these claims would be
covered by insurance, subject to customary deductibles. Those
claims, even if lacking merit, could result in the expenditure
of significant financial and managerial resources.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Pending Claim Against Mr.&nbsp;Molaris</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A private individual has filed a complaint with the public
prosecutor for the Athens Magistrates Court against
Mr.&nbsp;Molaris and four others relating to allegations that,
while Mr.&nbsp;Molaris was employed by Stelmar Shipping Ltd.,
they conspired to defraud the individual of a brokerage fee of
<FONT face="times new roman,times">&#128;</FONT>1.2&nbsp;million
purportedly owed by a shipyard in connection with the repair of
a vessel of Stelmar. Mr.&nbsp;Molaris believes the complaint is
without merit and is vigorously contesting these allegations.
The prosecutor has referred the matter to a Greek judge for
further investigation. The judge will determine whether the
claim has sufficient merit to forward the matter on to a court
for adjudication. We have been advised that an independent
committee of the board of directors of Stelmar has conducted an
inquiry into these allegations and found no evidence to support
them.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Properties</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We do not own any real property. Other than our vessels, we do
not own any material property.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Exchange Controls</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Marshall Islands, there are currently no restrictions on
the export or import of capital, including foreign exchange
controls or restrictions that affect the remittance of
dividends, interest or other payments to non-resident holders of
our common stock.
</DIV>

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<DIV align="left" style="font-size: 10pt;">
<A name='112'></A>
</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>MANAGEMENT</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Directors and Executive Officers</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Set forth below are the names, ages and positions of our
directors and executive officers.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="42%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Age</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Position</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Corbin J. Robertson,&nbsp;Jr.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Chairman</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stamatis Molaris</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Chief Executive Officer and President</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Paul J. Cornell</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Chief Financial Officer</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Nikos Frantzeskakis</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Chief Commercial Officer</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Joseph R. Edwards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Director</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Corbin J. Robertson&nbsp;III</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Director</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Hans J. Mende</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Director</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our board of directors was initially appointed by our parent,
Quintana Maritime Investors LLC, and following this offering
will be elected annually, and each director elected holds office
until his successor shall have been duly elected and qualified,
except in the event of his death, resignation, removal or the
earlier termination of his term of office. Officers are elected
from time to time by vote of our board of directors and hold
office until a successor is elected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Biographical information with respect to each of our directors
and executives is set forth below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Corbin J. Robertson,&nbsp;Jr.</I></B> is chairman of our
board of directors. Mr.&nbsp;Robertson also serves as Chief
Executive Officer and the Chairman of the Board of Directors of
GP Natural Resource Partners LLC, the general partner of Natural
Resource Partners, LP since October 2002. Mr.&nbsp;Robertson has
served as the Chief Executive Officer and Chairman of the Board
of the general partners of Western Pocahontas Properties Limited
Partnership since 1986, Great Northern Properties Limited
Partnership since 1992 and Quintana Minerals Corporation since
1978 and as Chairman of the Board of Directors of New Gauley
Coal Corporation since 1986. Western Pocahontas Properties
Limited Partnership, Great Northern Properties Limited
Partnership and New Gauley Coal Corporation are all affiliates
of Natural Resource Partners L.P. He also serves as Chairman of
the Board of the Baylor College of Medicine and of the Cullen
Trust for Higher Education and on the boards of the American
Petroleum Institute, the National Petroleum Council, the Texas
Medical Center and the World Health and Golf Association.
Mr.&nbsp;Robertson is the father of Corbin J.
Robertson&nbsp;III, another member of our board of directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Stamatis Molaris </I></B>is our Chief Executive Officer
and President. Prior to this, Mr.&nbsp;Molaris served as Chief
Financial Officer and a director of Stelmar Shipping Ltd. from
August 1993 until January 2005. Prior to that, Mr.&nbsp;Molaris
served as an audit manager for Arthur Andersen. Mr.&nbsp;Molaris
obtained an undergraduate degree in Business Administration and
Economics from Richmond College in London and a post-graduate
degree in Finance from Strathclyde University of Glasgow.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Paul J. Cornell </I></B>is our Chief Financial Officer.
Prior to his current role he was Vice President of Finance for
Quintana Minerals Corporation since 1993 and has been employed
with Quintana Minerals Corporation since 1988. Mr.&nbsp;Cornell
received his B.B.A. in Accounting from Niagara University in
1981.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Nikos Frantzeskakis </I></B>is our Chief
Commercial&nbsp;&#38; Operations Officer. Prior to this
position, he was working with Navatrade SA since 1990 as the
exclusive chartering broker of 22&nbsp;vessels.
Mr.&nbsp;Frantzeskakis has a bachelor&#146;s degree in ship
broking practice and ship management from City of London
Polytechnic.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Joseph R. Edwards </I></B>is a member of our board of
directors. Mr.&nbsp;Edwards is a vice president of First Reserve
Corporation, a private equity firm focusing on the energy
industry. Mr.&nbsp;Edwards has served in various capacities at
First Reserve since joining it in March 1998. From July 1995
until March 1998, Mr.&nbsp;Edwards served as a member of the
corporate finance team of Simmons&nbsp;&#38; Company
International, a Houston-based, energy-focused investment
banking firm. Mr.&nbsp;Edwards received a bachelors degree in
Business Administration from the University of Texas, and
currently serves as a director of T-3 Energy Services, Inc. and
Power Well Services, Inc.
</DIV>

<P align="center" style="font-size: 10pt;">72

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Hans J. Mende </I></B>is a member of our board of
directors. He is President and Chief Operating Officer of AMCI,
a position he has held since he co-founded AMCI in 1986. Prior
to founding AMCI, Mr.&nbsp;Mende was employed by the Thyssen
Group, one of the largest German multinational companies with
interests in steel making and general heavy industrial
production, in various senior executive positions. At the time
of his departure from Thyssen Group, Mr.&nbsp;Mende was
President of its international trading company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Corbin J. Robertson&nbsp;III </I></B>is a member of our
board of directors and also is Managing Director of Spring
Street Partners, a long/short hedge fund focused on undervalued
small cap securities. Prior to founding Spring Street Partners,
Mr.&nbsp;Robertson worked for three years as a Vice President of
Sandefer Capital Partners LLC, a private investment partnership
focused on energy related investments, and two years as a
management consultant for Deloitte and Touche LLP.
Mr.&nbsp;Robertson, 34, is a graduate of the University of Texas
with both a BBA and a BA and holds an MBA from Harvard Business
School. In addition to his duties at Spring Street Partners,
Mr.&nbsp;Robertson also serves as Vice President&nbsp;&#151;
Business Development for Quintana Minerals Corporation, a
privately held oil and gas company, as a member of the board of
Gulf Atlantic Refining and Marketing L.P., an operator of a
22,000&nbsp;barrel per day refinery and crude and refined
products storage terminals, as an advisory director to Main
Street Bank, a regional commercial bank, and as a private
investor. Mr.&nbsp;Robertson is the son of Corbin J.
Robertson,&nbsp;Jr., the chairman of our board of directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Committees of the Board of Directors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to the offering, we will have established an audit
committee comprised of three independent members which will be
responsible for reviewing our accounting controls and
recommending to our board of directors the engagement of our
outside auditors. The members of the audit committee will be
Messrs.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
and our board of directors has determined that
Mr.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is
a financial expert and is &#147;independent&#148; as those terms
are defined under the Commission regulations. In addition, we
will establish a compensation committee comprised of the same
three directors, which will be responsible for establishing
executive officers&#146; compensation and benefits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Compensation of Directors and Senior Management</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Non-employee directors will receive annual compensation in the
aggregate amount of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;plus
reimbursement of their out-of-pocket expenses. We do not have a
retirement plan for our officers or directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Equity Incentive Plan</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect to adopt an equity incentive plan, or the Plan, which
will entitle our officers, key employees and directors to
receive options to acquire common stock. Under the Plan, a total
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock will be reserved for issuance. The Plan will be
administered by our board of directors. Under the terms of the
Plan, our board of directors would be able to grant new options
exercisable at a price per share to be determined by our board
of directors. We expect that the price will be equal to the
average daily closing price for our common stock over a
specified trading day period following the closing of this
offering. Under the terms of the Plan, no options would be able
to be exercised until at least two years after the closing of
this offering. Any shares received on exercise of the options
would not be able to be sold until three years after the closing
of this offering. All options will expire 10&nbsp;years from the
date of grant. The Plan will expire 10&nbsp;years from the
closing of this offering.
</DIV>

<P align="center" style="font-size: 10pt;">73

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='113'></A>
</DIV>

<!-- link1 "PRINCIPAL SHAREHOLDERS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PRINCIPAL SHAREHOLDERS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth certain information regarding the
beneficial ownership of our common shares that will be owned
upon the consummation of the offering and the related
transactions by:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    each person known by us to be a beneficial owner of more than
    5.0% of the common shares;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    each of our directors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    each of our named executive officers;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    all directors and executive officers as a group.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except as otherwise indicated, the person or entities listed
below have sole voting and investment power with respect to all
shares of our common stock beneficially owned by them, subject
to community property laws where applicable.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="42%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Shares Beneficially Owned After the Offering</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Assuming the</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Beneficially Owned</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Underwriters&#146;</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Assuming the</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Prior to the</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Option</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Underwriters&#146; Option</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Offering</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>is Not Exercised</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>is Exercised in Full</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Name of Beneficial Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percent</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percent</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percent</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Quintana Maritime Investors LLC(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    FR X Offshore, L.P.(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Corbin J. Robertson,&nbsp;Jr.(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    AMCI Acquisition II, LLC(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stamatis Molaris(5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Paul J. Cornell(6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Nikos Frantzeskakis(5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Joseph R. Edwards(7)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Hans J. Mende(8)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Corbin J. Robertson&nbsp;III(6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    All executive officers and directors as a group
    (seven&nbsp;persons)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>*</TD>
    <TD align="left">
    Less than 1&nbsp;percent of shares of common stock outstanding
    (excluding, in the case of all directors and executive officers
    as a group, shares beneficially owned by Quintana Maritime
    Investors LLC).</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>**</TD>
    <TD align="left">
    We will grant the underwriters an option to purchase up
    to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
    shares in this offering. Prior to the consummation of this
    offering, we will declare a stock dividend, the terms of which
    will require that shortly after the expiration of the
    underwriters&#146; over-allotment option (assuming the
    over-allotment option is not exercised in full) we issue to our
    existing shareholders the number of shares equal to (x)&nbsp;the
    number of additional shares the underwriters have an option to
    purchase minus (y)&nbsp;the actual number of shares the
    underwriters purchase from us pursuant to that option.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    The address of Quintana Maritime Investors LLC is 601 Jefferson
    Street, Suite&nbsp;3600, Houston, Texas 77002. It is currently
    expected that after the consummation of this offering, Quintana
    Maritime Investors LLC will liquidate and distribute the common
    shares it owns in Quintana Maritime Limited to its members, in
    proportion to their respective member interests.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Includes beneficial ownership of shares of common stock of
    Quintana Maritime Limited beneficially owned by Quintana
    Maritime Investors LLC prior to its liquidation. Prior to this
    offering and the liquidation of Quintana Maritime Investors LLC,
    FR X Offshore, L.P. owns 48.6% of the member interests in
    Quintana Maritime Investors LLC, after giving effect to capital
    contributions made in connection with the purchase of all eight
    of our vessels. FR&nbsp;X Offshore GP, L.P. is the general
    partner of FR&nbsp;X Offshore, L.P. FR&nbsp;X Offshore GP
    Limited is the general partner of FR&nbsp;X Offshore GP, L.P.
    First Reserve Corporation is the investment advisor to FR X
    Offshore, L.P. The address of</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">74

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    FR X Offshore, L.P., FR&nbsp;X Offshore GP, L.P., FR&nbsp;X
    Offshore GP Limited and First Reserve Corporation is One
    Lafayette Place, Greenwich, Connecticut 06830.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Includes beneficial ownership of shares of common stock of
    Quintana Maritime Limited beneficially owned by Quintana
    Maritime Investors LLC prior to its liquidation.
    Mr.&nbsp;Robertson owns 100% of QMP Inc., the sole general
    partner of Quintana Maritime Partners L.P., which owns 38.6% of
    the member interests in Quintana Maritime Investors LLC (prior
    to its liquidation), after giving effect to capital
    contributions made in connection with the purchase of all eight
    of our vessels. The address of Mr.&nbsp;Robertson is
    c/o&nbsp;Quintana Minerals Corporation, 601 Jefferson Street,
    Suite&nbsp;3600, Houston, Texas.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Includes beneficial ownership of shares of common stock of
    Quintana Maritime Limited beneficially owned by Quintana
    Maritime Investors LLC prior to its liquidation. AMCI
    Acquisition II, LLC disclaims beneficial ownership of such
    shares. Prior to this offering and the liquidation of Quintana
    Maritime Investors LLC, AMCI Acquisition II, LLC owns 9.3% of
    the member interests in Quintana Maritime Investors LLC, after
    giving effect to capital contributions made in connection with
    the purchase of all eight of our vessels. AMCI Acquisition II,
    LLC is an affiliate of American Metals&nbsp;&#38; Coal
    International, Inc. and Mr. Mende owns 45% of the membership
    interest in AMCI Acquisition II, LLC. The address of AMCI
    Acquisition II, LLC is One Energy Place, Suite 1000, Latrobe,
    Pennsylvania 15650.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Includes beneficial ownership of shares of common stock of
    Quintana Maritime Limited beneficially owned by Quintana
    Maritime Investors LLC prior to its liquidation.
    Messrs.&nbsp;Molaris and Frantzeskakis disclaim beneficial
    ownership of such shares. Prior to this offering and the
    liquidation of Quintana Maritime Investors LLC, Mr.&nbsp;Molaris
    owns 1.1% of the member interests in Quintana Maritime Investors
    LLC and Mr.&nbsp;Frantzeskakis owns 0.4% of the member interests
    in Quintana Maritime Investors&nbsp;LLC. Mr.&nbsp;Molaris is
    Chief Executive Officer and President of Quintana Maritime
    Limited. Mr.&nbsp;Frantzeskakis is Chief Commercial Officer of
    Quintana Maritime Limited. The address of each of
    Messrs.&nbsp;Molaris and Frantzeskakis is c/o&nbsp;Quintana
    Maritime Limited at Pandoras 13 Kyprou Street, 166 74 Glyfada,
    Greece.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    Mr.&nbsp;Cornell is Chief Financial Officer of Quintana Maritime
    Limited. Mr.&nbsp;Robertson&nbsp;III is a director of Quintana
    Maritime Limited. The address of each of Messrs.&nbsp;Cornell
    and Robertson&nbsp;III is c/o&nbsp;Quintana Minerals
    Corporation, 601 Jefferson Street, Suite&nbsp;3600, Houston,
    Texas 77002.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(7)&nbsp;</TD>
    <TD align="left">
    Mr.&nbsp;Edwards is a director of Quintana Maritime Limited and
    a Vice President of First Reserve Corporation. He disclaims
    beneficial ownership of any shares of Quintana Maritime Limited
    beneficially owned by First Reserve Corporation or its
    affiliates. The address of Mr. Edwards is c/o First Reserve
    Corporation, One Lafayette Place, Greenwich, Connecticut 06830.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(8)&nbsp;</TD>
    <TD align="left">
    Mr.&nbsp;Mende is a director of Quintana Maritime Limited and
    President and Chief Operating Officer of AMCI and is the manager
    of AMCI Acquisition II, LLC and disclaims beneficial ownership
    of any shares of Quintana Maritime Limited beneficially owned by
    AMCI or its affiliates. The address of Mr.&nbsp;Mende is
    c/o&nbsp;American Metals&nbsp;&#38; Coal International, Inc., 20
    Dayton Avenue, Greenwich, Connecticut 06830.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">75

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='114'></A>
</DIV>

<!-- link1 "RELATED PARTY TRANSACTIONS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>RELATED PARTY TRANSACTIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Dividend</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to the consummation of this offering, we intend to declare
three dividends which will be payable (in accordance with the
circumstances described below) to our sole existing shareholder
and parent, Quintana Maritime Investors LLC, on the record date
to be set for those dividends.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The first dividend will be a cash dividend of approximately
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
    assuming an initial public offering price per share of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    which we will pay to our sole existing shareholder and parent,
    Quintana Maritime Investors LLC, out of a portion of the net
    proceeds from this offering;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The second dividend will be, in the event the underwriters&#146;
    over-allotment option is exercised, a cash dividend of up to
    approximately
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
    which we will pay to our sole existing shareholder and parent,
    Quintana Maritime Investors LLC, with all of the net proceeds we
    receive from the shares sold pursuant to the underwriters&#146;
    over-allotment option;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The third dividend will be, in the event the underwriters&#146;
    over-allotment is not exercised in full, a stock dividend of up
    to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of our common stock, which we will pay to our sole existing
    shareholder and parent, Quintana Maritime Investors LLC, in an
    equal amount to (assuming the over-allotment option is not
    exercised in full), the number of shares equal to (x)&nbsp;the
    number of additional shares the underwriters have an option to
    purchase minus (y)&nbsp;the actual number of shares the
    underwriters purchase from us pursuant to that option.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Holders who purchase in this offering will not be entitled to
receive any of the three dividends described above. Please read
&#147;Use of Proceeds.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Certain Relationships</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Following this offering, affiliates of Mr.&nbsp;Robertson, First
Reserve and AMCI will beneficially own
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%, respectively, of our
outstanding common stock
(approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% if the
underwriters exercise their over-allotment option in full).
Mr.&nbsp;Robertson is the beneficial owner of the controlling
interest in the general partner of NRP, which owns and manages
coal properties. First Reserve is a private equity firm
specializing in the energy industry with significant economic
interests in the coal sector. AMCI is engaged in the business of
production, handling and marketing of coal. Mr.&nbsp;Robertson,
First Reserve and AMCI are in the business of making investments
in companies and may from time to time acquire and hold
interests in businesses that compete directly or indirectly with
us. These other investments may create competing financial
demands on our Sponsors, potential conflicts of interest and
require efforts consistent with applicable law to keep the other
businesses separate from our operations. Mr.&nbsp;Robertson,
First Reserve and AMCI and their affiliates may also pursue
acquisition opportunities that may be complementary to our
business, and as a result, those acquisition opportunities may
not be available to us. So long as our Sponsors continue to
beneficially own a significant amount of our equity, they will
continue to be able to strongly influence or effectively control
our decisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Registration Rights</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Affiliates of Mr.&nbsp;Robertson and First Reserve will have the
right in certain circumstances after consummation of this
offering and subject to the term of its lock-up agreement with
Citigroup Global Markets Inc. and Morgan Stanley&nbsp;&#38; Co.
Incorporated, to require us to register its shares of common
stock in connection with a public offering and sale. In
addition, in connection with other registered offerings by us
and subject to the term of its lock-up agreement with Citigroup
Global Markets Inc. and Morgan Stanley&nbsp;&#38; Co.
Incorporated, affiliates of Mr.&nbsp;Robertson, First Reserve
and AMCI will have the ability to exercise certain piggyback
registration rights with respect to their shares.
</DIV>

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<DIV align="left" style="font-size: 10pt;">

</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='115'></A>
</DIV>

<!-- link1 "DESCRIPTION OF CAPITAL STOCK" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>DESCRIPTION OF CAPITAL STOCK</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a description of the material terms of our
amended and restated articles of incorporation and bylaws that
will be in effect immediately prior to the consummation of this
offering. We refer you to our amended and restated articles of
incorporation and bylaws, copies of which have been filed as
exhibits to the registration statement of which this prospectus
forms a part.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Purpose</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 now or hereafter be organized under the
Business Corporations Act of the Marshall Islands, or the BCA.
Our amended and restated articles of incorporation and bylaws do
not impose any limitations on the ownership rights of our
shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Authorized Capitalization</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under our articles of incorporation, our authorized capital
stock consists of 100&nbsp;million shares of common stock, no
par value, of
which &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
were issued and outstanding as of the date of this prospectus
and 10&nbsp;million shares of preferred stock, no par value, of
which no shares were issued and outstanding as of the date of
this prospectus. Upon consummation of this offering, we will
have outstanding shares of common stock and no shares of
preferred stock. All of our shares of stock are in registered
form.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Common Stock</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each outstanding share of common stock entitles the holder to
one vote on all matters submitted to a vote of shareholders.
Subject to preferences that may be applicable to any outstanding
shares of preferred stock, holders of shares of common stock are
entitled to receive ratably all dividends, if any, declared by
our board of directors out of funds legally available for
dividends. Please read &#147;Dividend Policy.&#148; Upon our
dissolution or liquidation or the sale of all or substantially
all or our assets, after payment in full of all amounts required
to be paid to creditors and to the holders of preferred stock
having liquidation preferences, if any, the holders or our
common stock will be entitled to receive pro rata our remaining
assets available for distribution. Holders of common stock do
not have conversion, redemption or preemptive rights to
subscribe to any of our securities. The rights, preferences and
privileges of holders of common stock are subject to the rights
of the holders of any shares of preferred stock which we may
issue in the future.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Preferred Stock</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our amended and restated articles of incorporation authorize our
board of directors to establish one or more series of preferred
stock and to determine, with respect to any series of preferred
stock, the terms and rights of that series, including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the designation of the series;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the number of shares of the series, which our board may, except
    where otherwise provided in the preferred stock designation,
    increase or decrease, but not below the number of shares then
    outstanding;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    whether dividends, if any, will be cumulative or non-cumulative
    and the dividend rate of the series;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the dates at which dividends, if any, will be payable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the redemption rights and price or prices, if any, for shares of
    the series;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the terms and amounts of any sinking fund provided for the
    purchase or redemption of shares of the series;</TD>
</TR>

</TABLE>

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the amounts payable on shares of the series in the event of any
    voluntary or involuntary liquidation, dissolution or winding-up
    of the affairs of our company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    whether the shares of the series will be convertible into shares
    of any other class or series, or any other security, of our
    company or any other corporation, and, if so, the specification
    of the other class or series or other security, the conversion
    price or prices or rate or rates, any rate adjustments, the date
    or dates as of which the shares will be convertible and all
    other terms and conditions upon which the conversion may be made;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    restrictions on the issuance of shares of the same series or of
    any other class or series;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the voting rights, if any, of the holders of the series.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Anti-takeover Effects of Certain Provisions of Our Amended
and Restated Articles of Incorporation and Bylaws</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certain provisions of our amended and restated articles of
incorporation and amended and restated bylaws, which are
summarized in the following paragraphs, may have an
anti-takeover effect and may delay, defer or prevent a tender
offer or takeover attempt that a shareholder might consider in
its best interest, including those attempts that might result in
a premium over the market price for the shares held by
shareholders.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Removal of Directors; Vacancies</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our amended and restated bylaws provide that directors may be
removed with or without cause upon the affirmative vote of
holders of at least a majority of the shares of stock entitled
to vote generally in the election of directors, voting together
as a single class. In addition, our amended and restated bylaws
also provide that any vacancies on our board of directors and
newly created directorships will be filled only by the
affirmative vote of a majority of the remaining directors,
although less than a quorum.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>No Cumulative Voting</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The BCA provides that shareholders are not entitled to the right
to cumulate votes in the election of directors unless our
amended and restated articles of incorporation provides
otherwise. Our amended and restated articles of incorporation
prohibits cumulative voting.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Calling of Special Meetings of Shareholders</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our amended and restated bylaws provide that special meetings of
our shareholders may be called only by the chairman of our
board, our president or by resolution of our board of directors
and shall be called by our president or secretary upon the
written request of at least 10% in interest of the shareholders
entitled to vote at the meeting.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Advance Notice Requirements for Shareholder Proposals and
    Director Nominations</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Generally, to be timely, a shareholder&#146;s notice must be
received at our principal executive offices not less than
90&nbsp;days nor more than 120&nbsp;days prior to the first
anniversary date of the date on which the company first mailed
its proxy materials for the previous year&#146;s annual meeting.
Our amended and restated bylaws also specify requirements as to
the form and content of a shareholder&#146;s notice. These
provisions may impede shareholders&#146; ability to bring
matters before an annual meeting of shareholders or make
nominations for directors at an annual meeting of shareholders.
</DIV>

<P align="center" style="font-size: 10pt;">78

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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Amendments to Our Amended and Restated Bylaws</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our amended and restated articles of incorporation grants our
board of directors the authority to amend and repeal our bylaws
without a shareholder vote in any manner not inconsistent with
the laws of the Marshall Islands.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>&#147;Blank Check&#148; Preferred Stock</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 shares of
preferred stock and to determine, with respect to any series of
preferred stock, the terms and rights of that series. Our board
of directors may issue shares of preferred stock on terms
calculated to discourage, delay or prevent a change of control
of our company or the removal of our management.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Shareholder Action by Written Consent</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our amended and restated bylaws permit shareholder action by
written consent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Dissenters&#146; Rights of Appraisal and Payment</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the BCA, our shareholders have the right to dissent from
various corporate actions, including any merger or consolidation
or 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 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 the company&#146;s shares are
primarily traded on a local or national securities exchange.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Shareholders&#146; Derivative Actions</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the BCA, any of our shareholders may bring an action in
our name to procure a judgment in our favor, also known as a
derivative action, provided that the shareholder bringing the
action is a holder of common stock both at the time the
derivative action is commenced and at the time of the
transaction to which the action relates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Limitations on Liability and Indemnification of Officers and
Directors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The BCA authorizes corporations to limit or eliminate the
personal liability of directors and officers to corporations and
their shareholders for monetary damages for breaches of
directors&#146; fiduciary duties. Our bylaws include a provision
that eliminates the personal liability of directors for monetary
damages for actions taken as a director to the fullest extent
permitted by law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our bylaws provide that we must indemnify our directors and
officers to the fullest extent authorized by law. We are also
expressly authorized to advance certain expenses (including
attorneys fees and disbursements and court costs) to our
directors and officers and carry directors&#146; and
officers&#146; insurance providing indemnification for our
directors, officers and certain employees for some liabilities.
We believe that these indemnification provisions and insurance
are useful to attract and retain qualified directors and
executive officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The limitation of liability and indemnification provisions in
our amended and restated articles of incorporation and bylaws
may discourage shareholders from bringing a lawsuit against
directors for breach of their fiduciary duty. These provisions
may also have the effect of reducing the likelihood of
derivative litigation against directors and officers, even
though such an action, if successful, might otherwise benefit us
and our shareholders. In addition, your investment may be
adversely affected to the extent we pay the
</DIV>

<P align="center" style="font-size: 10pt;">79

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<DIV align="left" style="font-size: 10pt;">
costs of settlement and damage awards against directors and
officers pursuant to these indemnification provisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There is currently no pending material litigation or proceeding
involving any of our directors, officers or employees for which
indemnification is sought.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Transfer Agent</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The registrar and transfer agent for the common stock
is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Listing</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will apply to have our common stock included for quotation on
the Nasdaq National Market under the symbol &#147;QMAR.&#148;
</DIV>

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<DIV align="left" style="font-size: 10pt;">
<A name='116'></A>
</DIV>

<!-- link1 "SHARES ELIGIBLE FOR FUTURE SALE" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SHARES ELIGIBLE FOR FUTURE SALE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon completion of this offering, we will
have&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock outstanding. Of these shares,
the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
sold in this offering,
or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
assuming the underwriters exercise their over-allotment option
in full, will be freely transferable in the United States
without restriction under the Securities Act, except for any
shares acquired by one of our &#147;affiliates&#148; as defined
under Rule&nbsp;144. Immediately after consummation of this
offering, affiliates of our Sponsors will continue to
own&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock which were acquired in private transactions not
involving a public offering and these shares are therefore
treated as &#147;restricted securities&#148; for purposes of
Rule&nbsp;144. The restricted securities held by the affiliates
of our Sponsors will be subject to the underwriter&#146;s
180-day lock-up agreement as described below. Restricted
securities may not be resold except in compliance with the
registration requirements of the Securities Act or under an
exemption from those registration requirements, such as the
exemptions provided by Rule&nbsp;144, Regulation&nbsp;S and
other exemptions under the Securities Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In general, under Rule&nbsp;144 as currently in effect, a person
or persons whose shares are aggregated who owns shares that were
acquired from the issuer or an affiliate at least one year ago
would be entitled to sell within any three-month period a number
of shares that does not exceed the greater of (i)&nbsp;1% of the
then outstanding shares of our common stock, which will be
approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
shares immediately after this offering, or (ii)&nbsp;an amount
equal to the average weekly reported volume of trading in shares
of our common stock on all national securities exchanges and/or
reported through the automated quotation system of registered
securities associations during the four calendar weeks preceding
the date on which notice of the sale is filed with the
Securities and Exchange Commission. Sales in reliance on
Rule&nbsp;144 are also subject to other requirements regarding
the manner of sale, notice and availability of current public
information about us. A person or persons whose shares are
aggregated, and who is not deemed to have been one of our
affiliates at any time during the 90&nbsp;days immediately
preceding the sale may sell restricted securities in reliance on
Rule&nbsp;144(k) without regard to the limitations described
above, provided that two years have expired since the later of
the date on which the same restricted securities were acquired
from us or one of our affiliates. As defined in Rule&nbsp;144,
an &#147;affiliate&#148; of an issuer is a person that directly,
or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, that same
issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We and our executive officers, directors and existing
shareholders have agreed with the underwriters not to sell,
dispose of or hedge any of our common stock, or any security
that is convertible into or exercisable or exchangeable for our
common stock, subject to certain exceptions, for a period of
180&nbsp;days after the date of this prospectus, except with the
prior written consent of Citigroup Global Markets Inc. and
Morgan Stanley&nbsp;&#38; Co. Incorporated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will enter into a registration rights agreement immediately
prior to the closing of this offering with our shareholders of
record pursuant to which we will grant them, their affiliates
and certain of their transferees, the right, under certain
circumstances and subject to certain restrictions, including
restrictions included in the lock-up agreements described above,
to require us to register under the Securities Act shares of our
common stock held by them. Shares of common stock, when
registered under any registration statement, will be available
for sale in the open market unless restrictions apply. See
&#147;Related Party Transactions&nbsp;&#151; Registration Rights
Agreement.&#148; In addition, all of these shares would be
available for sale into the public market after one year
pursuant to Rule&nbsp;144, Regulation&nbsp;S and other
exemptions under the Securities Act, as described above.
</DIV>

<P align="center" style="font-size: 10pt;">81

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result a result of the lock-up agreements and rules of the
Securities Act, the restricted shares will be available for sale
in the public market, subject to certain volume and other
restrictions, as mentioned above, as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Days After the Date of this Prospectus</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Eligible for Sale</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Comment</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Date of prospectus</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Shares not locked up and eligible for sale freely or under
    Rule&nbsp;144</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    180&nbsp;days</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Lock-up released; shares eligible for sale under Rule 144</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to this offering, there has been no public market for our
common stock, and no prediction can be made as to the effect, if
any, that future sales or the availability of shares for sale
will have on the market price of our common stock prevailing
from time to time. Nevertheless, sales of substantial amounts of
our common stock in the public market, including shares issued
upon the exercise of options that may be granted under any
employee stock option or employee stock award plan of ours, or
the perception that those sales may occur, could adversely
affect prevailing market prices for our common stock. Please
read &#147;Risk Factors&nbsp;&#151; Future sales of our common
stock could cause the market price of our common stock to
decline.&#148;
</DIV>

<P align="center" style="font-size: 10pt;">82

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<DIV align="left" style="font-size: 10pt;">
<A name='117'></A>
</DIV>

<!-- link1 "CERTAIN MARSHALL ISLANDS COMPANY CONSIDERATIONS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>CERTAIN MARSHALL ISLANDS COMPANY CONSIDERATIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our corporate affairs are governed by our articles of
incorporation and bylaws and by the Business Corporation Act of
the Republic of the Marshall Islands, or BCA. The provisions of
the BCA resemble provisions of the corporation laws of a number
of states in the United States. For example, the BCA allows the
adoption of various anti-takeover measures such as shareholder
&#147;rights&#148; plans. While the BCA also provides that it is
to be interpreted according to the laws of the State of Delaware
and other states with substantially similar legislative
provisions, there have been few, if any, court cases
interpreting the BCA in the Marshall Islands and we can not
predict whether Marshall Islands courts would reach the same
conclusions as U.S.&nbsp;courts. Thus, you may have more
difficulty in protecting your interests in the face of actions
by the management, directors or controlling shareholders than
would shareholders of a corporation incorporated in a United
States jurisdiction which has developed a substantial body of
case law. The following table provides a comparison between the
statutory provisions of the BCA and the Delaware General
Corporation Law relating to shareholders&#146; rights.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="5" align="center" nowrap><B>Marshall Islands</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Delaware</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>


<TR>
    <TD colspan="11" align="center" valign="top">
    <B>Shareholder Meetings</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Held at a time and place as designated in the bylaws</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    May be held at such time or place as designated in the
    certificate of incorporation or the bylaws, or if not so
    designated, as determined by the board of directors</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    May be held within or outside the Marshall Islands</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    May be held within or outside Delaware</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Notice:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Notice:</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Whenever shareholders are required to take action at a meeting,
    written notice shall state the place, date and hour of the
    meeting and indicate that it is being issued by or at the
    direction of the person calling the meeting</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Whenever shareholders are required to take any action at a
    meeting, a written notice of the meeting shall be given which
    shall state the place, if any, date and hour of the meeting, and
    the means of remote communication, if any</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    A copy of the notice of any meeting shall be given personally or
    sent by mail not less than 15 nor more than 60&nbsp;days before
    the meeting</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Written notice shall be given not less than 10 nor more than
    60&nbsp;days before the meeting</TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="5" align="center" nowrap><B>Marshall Islands</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Delaware</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>


<TR>
    <TD colspan="11" align="center" valign="top">
    <B>Shareholder&#146;s Voting Rights</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Any action required to be taken by meeting of shareholders may
    be taken without meeting if consent is in writing and is signed
    by all the shareholders entitled to vote</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Shareholders may act by written consent</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Any person authorized to vote may authorize another person to
    act for him by proxy</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Any person authorized to vote may authorize another person or
    persons to act for him by proxy</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Unless otherwise provided in the articles of incorporation, a
    majority of shares entitled to vote constitutes a quorum. In no
    event shall a quorum consist of fewer than one-third of the
    shares entitled to vote at a meeting</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    For stock corporations, certificate of incorporation or bylaws
    may specify the number to constitute a quorum but in no event
    shall a quorum consist of less than one-third of shares entitled
    to vote at a meeting. In the absence of such specifications, a
    majority of shares entitled to vote shall constitute a quorum</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    The Articles of Incorporation may provide for cumulative voting</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    The certificate of incorporation may provide for cumulative
    voting</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">83

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="5" align="center" nowrap><B>Marshall Islands</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Delaware</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>


<TR>
    <TD colspan="11" align="center" valign="top">
    <B>Directors</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Board must consist of at least one member</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Board must consist of at least one member</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Number of members can be changed by an amendment to the bylaws,
    by the shareholders, or by action of the board</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Number of board members shall be fixed by the bylaws, unless the
    certificate of incorporation fixes the number of directors, in
    which case a change in the number shall be made only by
    amendment of the certificate</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    If the board is authorized to change the number of directors, it
    can only do so by an absolute majority (majority of the entire
    board)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="11" align="center" valign="top">
    <B>Dissenter&#146;s Rights of Appraisal</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Shareholder&#146;s have a right to dissent from a merger or sale
    of all or substantially all assets not made in the usual course
    of business, and receive payment of the fair value of their
    shares</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Appraisal rights shall be available for the shares of any class
    or series of stock of a corporation in a merger or
    consolidation, subject to exceptions</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    A holder of any adversely affected shares who does not vote on
    or consent in writing to an amendment to the articles of
    incorporation has the right to dissent and to receive payment
    for such shares if the amendment:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Alters or abolishes any preferential right of any outstanding
    shares having preference; or</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Creates, alters, or abolishes any provision or right in respect
    to the redemption of any outstanding shares; or</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Alters or abolishes any preemptive right of such holder to
    acquire shares or other securities; or</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Excludes or limits the right of such holder to vote on any
    matter, except as such right may be limited by the voting rights
    given to new shares then being authorized of any existing or new
    class</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="11" align="center" valign="top">
    <B>Shareholder&#146;s Derivative Actions</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    An action may be brought in the right of a corporation to
    procure a judgment in its favor, by a holder of shares or of
    voting trust certificates or of a beneficial interest in such
    shares or certificates. It shall be made to appear that the
    plaintiff is such a holder at the time of bringing the action
    and that he was such a holder at the time of the transaction of
    which he complains, or that his shares or his interest therein
    devolved upon him by operation of law</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    In any derivative suit instituted by a shareholder or a
    corporation, it shall be averred in the complaint that the
    plaintiff was a shareholder of the corporation at the time of
    the transaction of which he complains or that such
    shareholder&#146;s stock thereafter devolved upon such
    shareholder by operation of law</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Complaint shall set forth with particularity the efforts of the
    plaintiff to secure the initiation of such action by the board
    or the reasons for not making such effort</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Such action shall not be discontinued, compromised or settled,
    without the approval of the High Court of the Republic</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="5" align="center" nowrap><B>Marshall Islands</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Delaware</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>


<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Attorney&#146;s fees may be awarded if the action is successful</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    &#149;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Corporation may require a plaintiff bringing a derivative suit
    to give security for reasonable expenses if the plaintiff owns
    less than 5% of any class of stock and the shares have a value
    of less than $50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

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<DIV align="left" style="font-size: 10pt;">
<A name='118'></A>
</DIV>

<!-- link1 "TAX CONSIDERATIONS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>TAX CONSIDERATIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a discussion of the material Marshall Islands
and United States federal income tax considerations relevant to
an investment decision by a U.S.&nbsp;Holder, as defined below,
with respect to the common stock. This discussion does not
purport to deal with the tax consequences of owning common stock
to all categories of investors, some of which (such as financial
institutions, regulated investment companies, real estate
investment trusts, tax-exempt organizations, insurance
companies, persons holding our common stock as part of a
hedging, integrated, conversion or constructive sale transaction
or a straddle, traders in securities that have elected the
mark-to-market method of accounting for their securities,
persons liable for alternative minimum tax, persons who are
investors in pass-through entities, dealers in securities or
currencies and investors whose functional currency is not the
United States dollar) may be subject to special rules. This
discussion deals only with holders who purchase common stock in
connection with this offering. You should consult your own tax
advisors concerning the tax consequences arising in your own
particular situation under United States federal, state, local
or foreign law of the ownership of common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Marshall Islands Tax Considerations</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the opinion of Seward&nbsp;&#38; Kissell&nbsp;LLP, the
following are the material Marshall Islands tax consequences of
our activities to us and shareholders of our common stock. We
are incorporated in the Marshall Islands. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>United States Federal Income Tax Considerations</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the opinion of Vinson&nbsp;&#38; Elkins&nbsp;L.L.P., our
United States counsel, the following are the material United
States federal income tax consequences to us of our activities
and to U.S.&nbsp;Holders, as defined below, of our common stock.
The following discussion of U.S.&nbsp;federal income tax matters
is based on the Internal Revenue Code of 1986, or the Code,
judicial decisions, administrative pronouncements, and existing
regulations issued by the U.S.&nbsp;Department of the Treasury,
all of which are subject to change, possibly with retroactive
effect. The discussion below is based, in part, on the
description of our business as described in &#147;Business&#148;
above and on certain representations made by us to our United
States counsel and assumes that we conduct our business as
described in that section and in such representations.
References in the following discussion to &#147;we&#148; and
&#147;us&#148; are to Quintana Maritime Limited and its
subsidiaries on a consolidated basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>United States Federal Income Taxation of Our Company</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Taxation of Operating Income: In General</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Unless exempt from U.S.&nbsp;federal income taxation under the
rules discussed below, a foreign corporation is subject to
U.S.&nbsp;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 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 &#147;shipping
income,&#148; 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 &#147;U.S.-source shipping
income.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shipping income attributable to transportation that both begins
and ends in the United States is considered to be 100% from
sources within the United States. We do not expect to engage in
transportation that produces income which is considered to be
100% from sources within the United States.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shipping income attributable to transportation exclusively
between non-U.S.&nbsp;ports will be considered to be 100%
derived from sources outside the United States. Shipping income
derived from sources outside the United States will not be
subject to any U.S.&nbsp;federal income tax.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the absence of exemption from tax under Section&nbsp;883 of
the Code, our U.S.-source shipping income would be subject to
either a 4%&nbsp;gross basis tax (<I>i.e.</I>, a tax imposed
without allowance for deductions) or net income taxation and
branch profits taxation in the United States as described below.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Exemption of Operating Income from United States Federal
    Income Taxation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Section&nbsp;883 of the Code and the regulations
thereunder, a foreign corporation will be exempt from
U.S.&nbsp;federal income taxation on its U.S.-source shipping
income if:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    it is organized in a foreign country that grants an
    &#147;equivalent exemption&#148; to corporations organized in
    the United States;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    either</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="4%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(a)&nbsp;</TD>
    <TD align="left">
    more than 50% of the value of its stock is owned, directly or
    indirectly, by individuals who are &#147;residents&#148; of its
    country of organization or of another foreign country that
    grants an &#147;equivalent exemption&#148; to corporations
    organized in the United States, which we refer to as the
    &#147;50%&nbsp;Ownership Test,&#148;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(b)&nbsp;</TD>
    <TD align="left">
    its stock is &#147;primarily and regularly traded on an
    established securities market&#148; in its country of
    organization, in another country that grants an &#147;equivalent
    exemption&#148; to U.S. domestic corporations, or in the United
    States, which we refer to as the &#147;Publicly Traded
    Test,&#148;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(c)&nbsp;</TD>
    <TD align="left">
    it is a &#147;controlled foreign corporation,&#148; or CFC, and
    satisfies certain other requirements as described below, to
    which, collectively, we refer as the &#147;CFC&nbsp;Test.&#148;</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While the Marshall Islands, the jurisdiction where we and our
ship-owning subsidiaries are organized, grants an
&#147;equivalent exemption&#148; to United States corporations,
it is unclear whether we will be able to meet either the
Publicly Traded Test or the CFC&nbsp;Test following the
offering. We do not expect to meet the 50%&nbsp;Ownership Test
following the offering.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Publicly Traded Test</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Treasury regulations promulgated under Section&nbsp;883 provide,
for purposes of determining whether a foreign corporation meets
the Publicly Traded Test, that a class of stock of such
corporation will be considered to be &#147;primarily
traded&#148; if the number of shares of each class of stock that
are traded during any taxable year on all established securities
markets in a given 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. Upon completion
of the offering, we anticipate that our common stock, which will
be our sole class of issued and outstanding stock, will be
&#147;primarily traded&#148; on the Nasdaq National Market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Section&nbsp;883 regulations, a foreign
corporation&#146;s stock will be considered to be
&#147;regularly traded&#148; on an established securities market
if one or more classes of stock of the corporation representing
more than 50% of the corporation&#146;s outstanding shares by
both voting power and value are listed on the market. Further,
with respect to each class of stock relied upon to meet this
requirement, (i)&nbsp;such class of stock is traded on the
market, other than in minimal quantities, on at least
60&nbsp;days during the taxable year or
<FONT style="font-size: 70%"><SUP>1</SUP></FONT>/<FONT style="font-size: 60%">6</FONT>
of the days in any short taxable year; and (ii)&nbsp;the
aggregate number of shares of such class of stock traded on such
market during the taxable year 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 these trading frequency and
trading volume tests. Even if this were not the case, the
regulations provide that the trading frequency and trading
volume tests will be deemed satisfied if, as we expect to be the
case with our common stock, such class of stock is traded on an
established market in the United States and such stock is
regularly quoted by dealers making a market in such stock.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Notwithstanding the foregoing, the Section 883 regulations
provide, in pertinent part, that a class of stock will not be
considered to be &#147;regularly traded&#148; 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 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 at least 5% of the vote and value
of such class of stock, to which we refer as the
&#147;5&nbsp;Percent Override Rule.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For purposes of being able to determine the persons who actually
or constructively own 5% or more of our stock, or
&#147;5%&nbsp;Shareholders,&#148; the regulations permit us to
rely on those persons that are identified on Schedule&nbsp;13G
and Schedule&nbsp;13D filings with the U.S.&nbsp;Securities and
Exchange Commission, or the &#147;SEC,&#148; as having a 5% or
more beneficial interest in our common stock. The regulations
further provide that an investment company that is registered
under the Investment Company Act of 1940, as amended, will not
be treated as a 5%&nbsp;Shareholders for such purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the event the 5&nbsp;Percent Override Rule is triggered, the
regulations provide that the 5&nbsp;Percent Override Rule
nevertheless will not apply if we can establish that among the
closely-held group of 5%&nbsp;Shareholders, there are sufficient
5%&nbsp;Shareholders that are considered to be residents of a
foreign country that grants an &#147;equivalent exemption&#148;
to corporations organized in the United States, or
&#147;qualified shareholders,&#148; to preclude other,
non-qualified shareholders in the closely-held group from owning
50% or more of each class of our stock for more than half the
number of days during the taxable year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since U.S.&nbsp;persons are not qualified shareholders under the
regulations, we do not expect to be able to establish that among
the group of our 5%&nbsp;Shareholders, there are sufficient
qualified shareholders to satisfy the foregoing exception to the
5&nbsp;Percent Override Rule so long as affiliates of each of
Mr.&nbsp;Robertson, First Reserve and AMCI together own at least
50% of our common stock. If the identity or ownership of these
5%&nbsp;Shareholders changes in the future, the Company may be
able to satisfy the Publicly Traded Test at that time. We can
give no assurance, however, that this will be the case.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>CFC&nbsp;Test</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will be a controlled foreign corporation, or a CFC, for
U.S.&nbsp;federal income tax purposes if more than
50&nbsp;percent of our common stock is owned directly,
indirectly or constructively by U.S.&nbsp;persons each of whom
owns 10&nbsp;percent or more of such common stock. We refer to
such U.S.&nbsp;persons as &#147;United States
Shareholders.&#148; We expect to be a CFC so long as affiliates
of each of Mr.&nbsp;Robertson, First Reserve and AMCI together
own more than 50% of our common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Section 883 regulations, which were promulgated in August
2003, provide that a foreign corporation that is a CFC will only
be treated as satisfying the CFC&nbsp;Test if, for the relevant
year in question, more than 50&nbsp;percent of the foreign
corporation&#146;s net income derived from the international
operation of ships is includible in the gross income of one or
more United States Shareholders for such taxable year (we refer
to this requirement as the &#147;50%&nbsp;Inclusion Test&#148;).
At the time the regulations were promulgated, income derived
from the international operation of ships was a separate
category of &#147;Subpart&nbsp;F income.&#148; Other categories
of Subpart&nbsp;F income include certain passive income and
income from transactions with or involving related parties.
Subpart&nbsp;F income is required to be included in income of
United States Shareholders under the special U.S.&nbsp;federal
income tax regime applicable to CFCs and their owners.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subsequent to the promulgation of the Section&nbsp;883
regulations, in October of 2004, the American Jobs Creation Act
of 2004, or the Jobs Act, was enacted. Under the Jobs Act,
income derived from the international operation of ships was
eliminated as a separate category of Subpart&nbsp;F income. As a
result of such change, only very limited types of income derived
from the international operation of ships, such as income from
passive leasing or bareboat chartering activities, may be
treated as Subpart&nbsp;F income. Thus, if literally applied,
the 50%&nbsp;Inclusion Test would only be applicable to a CFC
that earned such limited types of income. Other CFCs, which earn
no such income, could claim that all of their Subpart&nbsp;F
income derived from the international operation of ships (or
zero) is included in income of United States Shareholders.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since we do not expect to earn any Subpart&nbsp;F income derived
from the international operation of ships, under this literal
interpretation, we would be entitled to claim the benefits of
the Section&nbsp;883 exemption for so long as we remain a CFC.
Nonetheless, we believe there is significant risk that this
literal interpretation would not be sustained upon review by the
Internal Revenue Service. If this literal interpretation were
not sustained, and the 50%&nbsp;Inclusion Test were instead
applied on a hypothetical basis assuming income derived from
international shipping income remained a separate category of
Subpart&nbsp;F income, then it is unlikely that we would satisfy
the 50%&nbsp;Inclusion Test due to the substantial indirect
ownership of our common stock by an affiliate of First Reserve,
whose owners do not independently qualify as United States
Shareholders. Consequently, we believe there is significant
uncertainty regarding whether we will qualify for the
Section&nbsp;883 exemption under the CFC&nbsp;Test.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To the extent the benefits of Code Section&nbsp;883 are
unavailable, our U.S.-source shipping income, to the extent not
considered to be &#147;effectively connected&#148; with the
conduct of a U.S.&nbsp;trade or business, as described below,
would be subject to a 4% tax imposed by Section&nbsp;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.&nbsp;sources, the maximum rate of U.S.&nbsp;federal income
tax on our shipping income (unreduced by any allocable
deductions) would never exceed 2% of such income under the
4%&nbsp;gross basis tax regime.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To the extent the benefits of the Code Section&nbsp;883
exemption are unavailable and our U.S.-source shipping income is
considered to be &#147;effectively connected&#148; with the
conduct of a U.S.&nbsp;trade or business, any such
&#147;effectively connected&#148; U.S.-source shipping income,
net of applicable deductions, would be subject to the
U.S.&nbsp;federal corporate income tax currently imposed at
rates of up to 35%. In addition, we may be subject to the
30%&nbsp;&#147;branch profits&#148; tax 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 that is attributable to the
conduct of a U.S.&nbsp;trade or business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our U.S.-source shipping income would be considered
&#147;effectively connected&#148; with the conduct of a
U.S.&nbsp;trade or business only if:
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    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;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    assuming our chartering income is not treated as rental income,
    as described below with respect to our potential status as a
    passive foreign investment company, 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.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We do not intend to have, or permit circumstances that would
result in having, any vessel sailing to or from the United
States on a regularly scheduled basis. Based on the foregoing
and on the expected mode of our shipping operations and other
activities, we believe that none of our U.S.-source shipping
income will be &#147;effectively connected&#148; with the
conduct of a U.S.&nbsp;trade or business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>United States Federal Income Taxation of U.S.&nbsp;Holders</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As used herein, the term &#147;U.S.&nbsp;Holder&#148; means a
beneficial owner of common stock that
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    is an individual U.S.&nbsp;citizen or resident, a corporation or
    other entity taxable as a corporation, for U.S.&nbsp;federal
    income tax purposes, created or organized in or under the laws
    of the United States, any state of the United States or the
    District of Columbia, an estate the income of which is subject
    to U.S.&nbsp;federal income taxation regardless of its source,
    or a trust if a court within the United States is able to
    exercise primary jurisdiction over the administration of the
    trust and one or more U.S.&nbsp;persons have the authority to
    control all substantial decisions of the trust,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    owns our common stock as a capital asset, generally, for
    investment purposes,&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    owns less than 10% of our common stock for U.S.&nbsp;federal
    income tax purposes.</TD>
</TR>

</TABLE>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If a partnership holds our common stock, the tax treatment of a
partner will generally depend upon the status of the partner and
upon the activities of the partnership. If you are a partner in
a partnership holding our common stock, you are urged to consult
your tax advisor.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Distributions</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subject to the discussion of passive foreign investment
companies below, any distributions made by us with respect to
our common stock to a U.S.&nbsp;Holder generally will constitute
dividends, which may be taxable as ordinary income or
&#147;qualified dividend income&#148; as described in more
detail below, to the extent of our current and accumulated
earnings and profits, as determined under U.S.&nbsp;federal
income tax principles. Distributions in excess of our earnings
and profits will be treated first as a nontaxable return of
capital to the extent of the U.S.&nbsp;Holder&#146;s tax basis
in his common stock and thereafter as capital gain.
U.S.&nbsp;Holders that are corporations generally will not be
entitled to claim a dividends received deduction with respect to
any distributions they receive from us. Dividends paid with
respect to our common stock will be treated as &#147;passive
income&#148; for purposes of computing allowable foreign tax
credits for U.S.&nbsp;federal income tax purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Dividends paid on our common stock to a U.S.&nbsp;Holder who is
an individual, trust or estate (a &#147;U.S.&nbsp;Individual
Holder&#148;) should be treated as &#147;qualified dividend
income&#148; that is taxable to such U.S.&nbsp;Individual
Holders at preferential tax rates (generally, through 2008)
provided that (1)&nbsp;the common stock is readily tradable on
an established securities market in the United States (such as
the Nasdaq National Market); (2)&nbsp;we are not a passive
foreign investment company for the taxable year during which the
dividend is paid or the immediately preceding taxable year
(which we do not believe we are or will be); (3)&nbsp;the
U.S.&nbsp;Individual Holder has owned the common stock for more
than 60&nbsp;days in the 121-day period beginning 60&nbsp;days
before the date on which the common stock becomes ex-dividend;
and (4)&nbsp;the U.S.&nbsp;Individual Holder is not under an
obligation to make related payments with respect to positions in
substantially similar or related property. There is no assurance
that any dividends paid on our common stock will be eligible for
these preferential rates in the hands of a U.S.&nbsp;Individual
Holder, although we believe that they will be so eligible. Any
dividends we pay that are not eligible for these preferential
rates will be taxed to a U.S.&nbsp;Individual Holder at regular
rates applicable to ordinary income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Special rules may apply to any &#147;extraordinary
dividend&#148;&nbsp;&#151; generally, a dividend paid by us in
an amount which is equal to or in excess of ten percent of a
shareholder&#146;s adjusted basis (or fair market value in
certain circumstances) in a share of common stock. If we pay an
&#147;extraordinary dividend&#148; on our common stock that is
treated as &#147;qualified dividend income,&#148; then any loss
derived by a U.S.&nbsp;Individual Holder from the sale or
exchange of such common stock will be treated as long-term
capital loss to the extent of such dividend.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Sale, Exchange or Other Disposition of Common Stock</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Assuming we do not constitute a passive foreign investment
company for any taxable year, a U.S.&nbsp;Holder generally will
recognize taxable gain or loss upon a sale, exchange or other
disposition of our common stock in an amount equal to the
difference between the amount realized by the U.S.&nbsp;Holder
from such sale, exchange or other disposition and the
U.S.&nbsp;Holder&#146;s tax basis in such stock. Such capital
gain or loss generally will be treated as U.S.-source income or
loss, as applicable, for purposes of computing any allowable
U.S.&nbsp;foreign tax credit. Long-term capital gains of
U.S.&nbsp;Individual Holders are eligible for reduced rates of
taxation. Such gain or loss will be treated as long-term capital
gain or loss if the U.S.&nbsp;Holder&#146;s holding period is
greater than one year at the time of the sale, exchange or other
disposition. A U.S.&nbsp;Holder&#146;s ability to deduct capital
losses is subject to certain limitations.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Passive Foreign Investment Company Status and Significant
    Tax Consequences</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Special U.S.&nbsp;federal income tax rules apply to a
U.S.&nbsp;Holder who holds stock in a foreign corporation
classified as a passive foreign investment company for
U.S.&nbsp;federal income tax purposes. In general, we
</DIV>

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<DIV align="left" style="font-size: 10pt;">
will be treated as a passive foreign investment company with
respect to a U.S.&nbsp;Holder if, for any taxable year in which
such holder held our common stock, either
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    at least 75% of our gross income for such taxable year consists
    of passive income (e.g.,&nbsp;dividends, interest, capital gains
    and rents derived other than in the active conduct of a rental
    business),&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    at least 50% of the average value of our assets during such
    taxable year produce, or are held for the production of, passive
    income.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For purposes of determining whether we are a passive foreign
investment company, we generally will be treated as earning and
owning our proportionate share of the income and assets,
respectively, of our subsidiaries. Income earned, or deemed
earned, by us in connection with the performance of services
would not constitute passive income. By contrast, rental income
generally would constitute &#147;passive income&#148; unless we
were treated under specific rules as deriving our rental income
in the active conduct of a trade or business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on our current operations and future projections, we do
not believe that we are, nor do we expect to become, a passive
foreign investment company with respect to any taxable year.
Although there is no legal authority directly on point, and we
are not relying upon an opinion of counsel on this issue, our
belief is based principally on the position that, for purposes
of determining whether we are a passive foreign investment
company, the gross income we derive or are deemed to derive from
the time chartering and voyage chartering activities of our
wholly-owned subsidiaries should constitute services income,
rather than rental income. Correspondingly, such income should
not constitute passive income, and the assets owned and operated
in connection with the production of such income, in particular,
the vessels, should not constitute passive assets for purposes
of determining whether we were a passive foreign investment
company. We believe there is substantial legal authority
supporting our position; however, in the absence of any legal
authority specifically relating to the statutory provisions
governing passive foreign investment companies, the Internal
Revenue Service or a court could disagree with our position. In
addition, although we intend to conduct our affairs in a manner
to avoid being classified as a passive foreign investment
company with respect to any taxable year, we cannot assure you
that the nature of our operations will not change in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As discussed more fully below, if we were to be treated as a
passive foreign investment company for any taxable year, a
U.S.&nbsp;Holder would be subject to different taxation rules
depending on whether the U.S.&nbsp;Holder makes an election to
treat us as a &#147;Qualified Electing Fund,&#148; which
election we refer to as a &#147;QEF election.&#148; As an
alternative to making a QEF election, a U.S.&nbsp;Holder should
be able to make a &#147;mark-to-market&#148; election with
respect to our common stock, as discussed below.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Taxation of U.S.&nbsp;Holders Making a Timely QEF
    Election</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If a U.S.&nbsp;Holder makes a timely QEF election, which
U.S.&nbsp;Holder we refer to as an &#147;Electing Holder,&#148;
the Electing Holder must report each year for U.S.&nbsp;federal
income tax purposes his pro rata share of our ordinary earnings
and our net capital gain, if any, for our taxable year that ends
with or within the taxable year of the Electing Holder,
regardless of whether or not distributions were received by the
Electing Holder from us. The Electing Holder&#146;s adjusted tax
basis in his common stock will be increased to reflect taxed but
undistributed earnings and profits. Distributions of earnings
and profits that had been previously taxed will result in a
corresponding reduction in the adjusted tax basis in the common
stock and will not be taxed again once distributed. An Electing
Holder would generally recognize capital gain or loss on the
sale, exchange or other disposition of our common stock. A
U.S.&nbsp;Holder would make a QEF election by filing one copy of
IRS Form&nbsp;8621 with his U.S.&nbsp;federal income tax return.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Taxation of U.S.&nbsp;Holders Making a
    &#147;Mark-to-Market&#148; Election</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As an alternative to a QEF Election, if we were treated as a
passive foreign investment company for any taxable year and, as
we anticipate, our stock is treated as &#147;marketable
stock,&#148; a U.S.&nbsp;Holder would be allowed to make a
&#147;mark-to-market&#148; election with respect to our common
stock, provided the U.S.&nbsp;Holder
</DIV>

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<DIV align="left" style="font-size: 10pt;">
completes and files IRS Form&nbsp;8621 in accordance with the
relevant instructions and related Treasury regulations. If that
election is made, the U.S.&nbsp;Holder generally would include
as ordinary income for each taxable year the excess, if any, of
the fair market value of the common stock at the end of the
taxable year over such holder&#146;s adjusted tax basis in the
common stock. The U.S.&nbsp;Holder also would be permitted an
ordinary loss in respect of the excess, if any, of the
U.S.&nbsp;Holder&#146;s adjusted tax basis in the common stock
over the fair market value of such stock at the end of the
taxable year, but only to the extent of the net amount
previously included in income as a result of the mark-to-market
election. A U.S.&nbsp;Holder&#146;s tax basis in his common
stock would be adjusted to reflect any such income or loss
amount taken into account. Gain realized on the sale, exchange
or other disposition of our common stock would be treated as
ordinary income, and any loss realized on the sale, exchange or
other disposition of the common stock would be treated as
ordinary loss to the extent that such loss does not exceed the
net mark-to-market gains previously included by the
U.S.&nbsp;Holder.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Taxation of U.S.&nbsp;Holders Not Making a Timely QEF or
    Mark-to-Market Election</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Finally, if we were to be treated as a passive foreign
investment company for any taxable year, a U.S.&nbsp;Holder who
does not make either a QEF election or a
&#147;mark-to-market&#148; election for that year, whom we refer
to as a &#147;Non-Electing Holder,&#148; would be subject to
special rules with respect to (1)&nbsp;any excess distribution
(i.e., the portion of any distributions received by the
Non-Electing Holder on our common stock in a taxable year in
excess of 125&nbsp;percent of the average annual distributions
received by the Non-Electing Holder in the three preceding
taxable years, or, if shorter, the Non-Electing Holder&#146;s
holding period for the common stock), and (2)&nbsp;any gain
realized on the sale, exchange or other disposition of our
common stock. Under these special rules:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the excess distribution or gain would be allocated ratably over
    the Non-Electing Holder&#146;s aggregate holding period for the
    common stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the amount allocated to the current taxable year, and any
    taxable year prior to the first taxable year in which we were a
    passive foreign investment company, would be taxed as ordinary
    income;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the amount allocated to each of the other taxable years would be
    subject to tax at the highest rate of tax in effect for the
    applicable class of taxpayer for that year, and an interest
    charge for the deemed deferral benefit would be imposed with
    respect to the resulting tax attributable to each such other
    taxable year.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If we are a passive foreign investment company and a
Non-Electing Holder who is an individual dies while owning our
common stock, such holder&#146;s successor generally would not
receive a step-up in tax basis with respect to such stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>United States Federal Income Taxation of
&#147;Non-U.S.&nbsp;Holders&#148;</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A beneficial owner of common stock (other than a partnership)
that is not a U.S.&nbsp;person is referred to herein as a
&#147;Non-U.S.&nbsp;Holder.&#148;
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Dividends on Common Stock</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Non-U.S.&nbsp;Holders generally will not be subject to
U.S.&nbsp;federal income tax or withholding tax on dividends
received from us with respect to our common stock, unless that
income is effectively connected with the
Non-U.S.&nbsp;Holder&#146;s conduct of a trade or business in
the United States. If the Non-U.S.&nbsp;Holder is entitled to
the benefits of a U.S.&nbsp;income tax treaty with respect to
those dividends, that income is taxable only if it is
attributable to a permanent establishment maintained by the
Non-U.S.&nbsp;Holder in the United States.
</DIV>

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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Sale, Exchange or Other Disposition of Common Stock</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Non-U.S.&nbsp;Holders generally will not be subject to
U.S.&nbsp;federal income tax or withholding tax on any gain
realized upon the sale, exchange or other disposition of our
common stock, unless:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the gain is effectively connected with the
    Non-U.S.&nbsp;Holder&#146;s conduct of a trade or business in
    the United States (and, if the Non-U.S.&nbsp;Holder is entitled
    to the benefits of an income tax treaty with respect to that
    gain, that gain is attributable to a permanent establishment
    maintained by the Non-U.S.&nbsp;Holder in the United
    States);&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the Non-U.S.&nbsp;Holder is an individual who is present in the
    United States for 183&nbsp;days or more during the taxable year
    of disposition and other conditions are met.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the Non-U.S.&nbsp;Holder is engaged in a U.S.&nbsp;trade or
business for U.S.&nbsp;federal income tax purposes, the income
from the common stock, including dividends and the gain from the
sale, exchange or other disposition of the stock that is
effectively connected with the conduct of that trade or business
generally will be subject to regular U.S.&nbsp;federal income
tax in the same manner as discussed in the previous section
relating to the taxation of U.S.&nbsp;Holders. In addition, if
you are a corporate Non-U.S.&nbsp;Holder, your earnings and
profits that are attributable to 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Backup Withholding and Information Reporting</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In general, dividend payments, or other taxable distributions,
made within the United States to a non-corporate
U.S.&nbsp;Holder will be subject to information reporting
requirements. Such payments or distributions to a non-corporate
U.S.&nbsp;Holder also may be subject to backup withholding tax,
if the non-corporate U.S.&nbsp;Holder:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    fails to provide an accurate taxpayer identification number;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    is notified by the Internal Revenue Service that he has failed
    to report all interest or dividends required to be shown on his
    U.S.&nbsp;federal income tax returns;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    in certain circumstances, fails to comply with applicable
    certification requirements.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A Non-U.S.&nbsp;Holder who effects the sale of his shares of
common stock by or through a U.S.&nbsp;office of a broker is
subject to both information reporting and backup withholding tax
on the payment of the proceeds unless he certifies that he is a
not a U.S.&nbsp;person, under penalties of perjury, or otherwise
establishes an exemption. If a Non-U.S.&nbsp;Holder sells his
shares of common stock through a non-U.S.&nbsp;office of a
non-U.S.&nbsp;broker and the sales proceeds are paid to such
holder outside the United States, then information reporting and
backup withholding generally will not apply to that payment.
However, information reporting requirements, but not backup
withholding, will apply to a payment of sales proceeds, even if
that payment is made to a Non-U.S.&nbsp;Holder outside the
United States, if such a holder sells his shares of common stock
through a non-U.S.&nbsp;office of a broker that is a
U.S.&nbsp;person or has some other contacts with the United
States. Such information requirements will not apply, however,
if the broker has documentary evidence in its records that such
holder is a non-U.S.&nbsp;person and certain other conditions
are met, or such holder otherwise establishes an exemption.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Backup withholding tax is not an additional tax. Rather, a
taxpayer generally may obtain a refund of any amounts withheld
under backup withholding rules that exceed such taxpayer&#146;s
U.S.&nbsp;federal income tax liability by filing a refund claim
with the Internal Revenue Service.
</DIV>

<P align="center" style="font-size: 10pt;">93

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<DIV align="left" style="font-size: 10pt;">
<A name='119'></A>
</DIV>

<!-- link1 "UNDERWRITING" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>UNDERWRITING</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Citigroup Global Markets Inc. and Morgan Stanley&nbsp;&#38; Co.
Incorporated are acting as joint bookrunning managers of the
offering and acting as representatives of the underwriters named
below. Subject to the terms and conditions stated in the
underwriting agreement dated the date of this prospectus, each
underwriter named below has agreed to purchase, and we have
agreed to sell to that underwriter, the number of shares set
forth opposite the underwriter&#146;s name.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2" align="center" nowrap><B>Underwriter</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of shares</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Citigroup Global Markets Inc.</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Morgan Stanley&nbsp;&#38; Co. Incorporated</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The underwriting agreement provides that the obligations of the
underwriters to purchase the shares included in this offering
are subject to approval of legal matters by counsel and to other
conditions. The underwriters are obligated to purchase all the
shares (other than those covered by the over-allotment option
described below) if they purchase any of the shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The underwriters propose to offer some of the shares directly to
the public at the public offering price set forth on the cover
page of this prospectus and some of the shares to dealers at the
public offering price less a concession not to exceed
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share. The underwriters may allow, and dealers may reallow, a
concession not to exceed
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share on sales to other dealers. If all of the shares are not
sold at the initial offering price, the representatives may
change the public offering price and the other selling terms.
The representatives have advised us that the underwriters do not
intend sales to discretionary accounts to exceed five percent of
the total number of shares of our common stock offered by them.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have granted to the underwriters an option, exercisable for
30&nbsp;days from the date of this prospectus, to purchase up
to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
shares of common stock at the public offering price less the
underwriting discount. The underwriters may exercise the option
solely for the purpose of covering over-allotments, if any, in
connection with this offering. To the extent the option is
exercised, each underwriter must purchase a number of additional
shares approximately proportionate to that underwriter&#146;s
initial purchase commitment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We and our officers and directors have agreed that, for a period
of 180&nbsp;days from the date of this prospectus, we and they
will not, without the prior written consent of Citigroup Global
Markets Inc. and Morgan Stanley&nbsp;&#38; Co. Incorporated,
sell, dispose of or hedge any shares of our common stock or any
securities convertible into or exercisable or exchangeable for
our common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each underwriter has represented, warranted and agreed that:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    it has not offered or sold and, prior to the expiry of a period
    of six months from the closing date, will not offer or sell any
    shares included in this offering to persons in the United
    Kingdom except to persons whose ordinary activities involve them
    in acquiring, holding, managing or disposing of investments (as
    principal or agent) for the purposes of their businesses or
    otherwise in circumstances which have not resulted and will not
    result in an offer to the public in the United Kingdom within
    the meaning of the Public Offers of Securities Regulations 1995;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    it has only communicated and caused to be communicated and will
    only communicate or cause to be communicated any invitation or
    inducement to engage in investment activity (within the meaning
    of section&nbsp;21 of the Financial Services and Markets Act
    2000 (&#147;FSMA&#148;)) received by it in connection with the
    issue or sale of any shares included in this offering in
    circumstances in which section&nbsp;21(1) of the FSMA does not
    apply to us;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">94

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    it has complied and will comply with all applicable provisions
    of the FSMA with respect to anything done by it in relation to
    the shares included in this offering in, from or otherwise
    involving the United Kingdom;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the offer in The Netherlands of the shares included in this
    offering is exclusively limited to persons who trade or invest
    in securities in the conduct of a profession or business (which
    include banks, stockbrokers, insurance companies, pension funds,
    other institutional investors and finance companies and treasury
    departments of large enterprises).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to this offering, there has been no public market for our
common stock. Consequently, the initial public offering price
for the shares was determined by negotiations between us and the
representatives. Among the factors considered in determining the
initial public offering price were our record of operations, our
current financial condition, our future prospects, our markets,
the economic conditions in and future prospects for the industry
in which we compete, our management, and currently prevailing
general conditions in the equity securities markets, including
current market valuations of publicly traded companies
considered comparable to our company. We cannot assure you,
however, that the prices at which the shares will sell in the
public market after this offering will not be lower than the
initial public offering price or that an active trading market
in our common stock will develop and continue after this
offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to apply to have our common stock included for
quotation on the Nasdaq National Market under the symbol
&#147;QMAR.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table shows the underwriting discounts and
commissions that we are to pay to the underwriters in connection
with this offering. These amounts are shown assuming both no
exercise and full exercise of the underwriters&#146; option to
purchase additional shares of common stock.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Paid by</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Quintana Maritime Limited</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>No Exercise</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Full Exercise</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the offering, Citigroup Global Markets Inc.
and Morgan Stanley&nbsp;&#38; Co. Incorporated on behalf of the
underwriters, may purchase and sell shares of common stock in
the open market. These transactions may include short sales,
syndicate covering transactions and stabilizing transactions.
Short sales involve syndicate sales of common stock in excess of
the number of shares to be purchased by the underwriters in the
offering, which creates a syndicate short position.
&#147;Covered&#148; short sales are sales of shares made in an
amount up to the number of shares represented by the
underwriters&#146; over-allotment option. In determining the
source of shares to close out the covered syndicate short
position, the underwriters will consider, among other things,
the price of shares available for purchase in the open market as
compared to the price at which they may purchase shares through
the over-allotment option. Transactions to close out the covered
syndicate short involve either purchases of the common stock in
the open market after the distribution has been completed or the
exercise of the over-allotment option. The underwriters may also
make &#147;naked&#148; short sales of shares in excess of the
over-allotment option. The underwriters must close out any naked
short position by purchasing shares of common stock in the open
market. A naked short position is more likely to be created if
the underwriters are concerned that there may be downward
pressure on the price of the shares in the open market after
pricing that could adversely affect investors who purchase in
the offering. Stabilizing transactions consist of bids for or
purchases of shares in the open market while the offering is in
progress.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The underwriters also may impose a penalty bid. Penalty bids
permit the underwriters to reclaim a selling concession from a
syndicate member when Citigroup repurchases shares originally
sold by that syndicate member in order to cover syndicate short
positions or make stabilizing purchases.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any of these activities may have the effect of preventing or
retarding a decline in the market price of the common stock.
They may also cause the price of the common stock to be higher
than the price that
</DIV>

<P align="center" style="font-size: 10pt;">95

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<DIV align="left" style="font-size: 10pt;">
would otherwise exist in the open market in the absence of these
transactions. The underwriters may conduct these transactions on
the Nasdaq National Market or in the over-the-counter market, or
otherwise. If the underwriters commence any of these
transactions, they may discontinue them at any time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We estimate that our portion of the total expenses of this
offering will be
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The underwriters have performed investment banking, commercial
banking and advisory services for us from time to time for which
they have received customary fees and expenses. The underwriters
may, from time to time, engage in transactions with and perform
services for us in the ordinary course of their business. Morgan
Stanley Senior Funding, Inc., an affiliate of Morgan
Stanley&nbsp;&#38; Co. Incorporated, is currently the agent and
the lender under a bridge loan facility which we expect to repay
out of the proceeds of our term loan facility. Citigroup Global
Markets Limited, Citibank International plc, Citicorp Trustee
Company Limited and Citibank, N.A., each of which is an
affiliate of Citigroup Global Markets Inc., currently act as
arranger, facility agent, security trustee and a lender under
our term loan facility, respectively. Because Citigroup Global
Markets Inc. is an underwriter of the offering and its
affiliates may receive more than 10% of the net proceeds in this
offering to repay amounts outstanding under our term loan
facility, it may be deemed to have a &#147;conflict of
interest&#148; under the Conduct Rules of the National
Association of Securities Dealers, Inc. Accordingly, this
offering will be made in compliance with the applicable
provisions of Rule&nbsp;2720 of the Conduct Rules.
Rule&nbsp;2720 requires that the price at which the common stock
is distributed to the public may be no higher than that
recommended by a &#147;qualified independent underwriter,&#148;
as defined by the Conduct Rules of the
NASD. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;has
assumed the responsibilities of acting as a qualified
independent underwriter and conducted due diligence
investigations and participated in the preparation of the
registration statement of which this prospectus forms a part.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A prospectus in electronic format may be made available by one
or more of the underwriters. The representatives may agree to
allocate a number of shares to underwriters for sale to their
online brokerage account holders. The representatives will
allocate shares to underwriters that may make internet
distributions on the same basis as other allocations. In
addition, shares may be sold by the underwriters to securities
dealers who resell shares to online brokerage account holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act of
1933, or to contribute to payments the underwriters may be
required to make because of any of those liabilities.
</DIV>

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<DIV align="left" style="font-size: 10pt;">
<A name='120'></A>
</DIV>

<!-- link1 "VALIDITY OF THE SHARES" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>VALIDITY OF THE SHARES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The validity of the common stock and certain other legal matters
with respect to the laws of the Republic of the Marshall Islands
will be passed upon for us by our counsel as to Marshall Islands
law, Seward&nbsp;&#38; Kissel LLP, New York, New York. Certain
other legal matters will be passed upon for us by
Vinson&nbsp;&#38; Elkins L.L.P., New York, New York.
Vinson&nbsp;&#38; Elkins L.L.P. may rely on the opinions of
Seward&nbsp;&#38; Kissel LLP for all matters of Marshall Islands
law. The underwriters have been represented in connection with
this offering by Cravath, Swaine&nbsp;&#38; Moore LLP, New York,
New York.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='121'></A>
</DIV>

<!-- link1 "EXPERTS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>EXPERTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated financial statements of Quintana Maritime
Limited for the period from January&nbsp;13, 2005 through
March&nbsp;31, 2005 and as of March&nbsp;31, 2005 included in
this prospectus and elsewhere in the registration statement have
been audited by Deloitte. Hadjipavlou, Sofianos&nbsp;&#38;
Cambanis S.A., an independent registered public accounting firm,
as stated in their report thereon appearing herein and elsewhere
in the registration statement, and is included in reliance upon
the report of such firm given their authority as experts in
accounting and auditing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The discussions contained under the sections of this prospectus
entitled &#147;Business&#148; and &#147;The International
Drybulk Shipping Industry&#148; have been reviewed by Drewry
Shipping Consultants, Ltd., or Drewry, which has confirmed to us
that they accurately describe the international drybulk shipping
industry, subject to the reliability of the data supporting the
statistical and graphical information presented in this
prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The statistical and graphical information we use in this
prospectus has been compiled by Drewry from its database. Drewry
compiles and publishes data for the benefit of its clients. Its
methodologies for collecting data, and therefore the data
collected, may differ from those of other sources, and its data
does not reflect all or even necessarily a comprehensive set of
the actual transactions occurring in the market.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='122'></A>
</DIV>

<!-- link1 "WHERE YOU CAN FIND ADDITIONAL INFORMATION" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>WHERE YOU CAN FIND ADDITIONAL INFORMATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have filed with the SEC a registration statement on
Form&nbsp;S-1 regarding the common stock. This prospectus does
not contain all of the information found in the registration
statement. For further information regarding us and the common
stock offered in this prospectus, you may desire to review the
full registration statement, including its exhibits. The
registration statement, including the exhibits, may be inspected
and copied at the public reference facilities maintained by the
SEC at Judiciary Plaza, 450&nbsp;Fifth Street, N.W.,
Room&nbsp;1024, Washington,&nbsp;D.C. 20549. Copies of this
material can also be obtained upon written request from the
Public Reference Section of the SEC at Judiciary Plaza,
450&nbsp;Fifth Street,&nbsp;N.W., Room&nbsp;1024,
Washington,&nbsp;D.C. 20549, at prescribed rates or from the
SEC&#146;s website on the Internet at <I>http://www.sec.gov</I>.
Please call the SEC at 1-800-SEC-0330 for further information on
its public reference room.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Following the completion of this offering, we will file with or
furnish to the SEC periodic reports and other information. These
reports and other information may be inspected and copied at the
public reference facilities maintained by the SEC or obtained
from the SEC&#146;s website as provided above.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='123'></A>
</DIV>

<!-- link1 "FORWARD-LOOKING STATEMENTS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>FORWARD-LOOKING STATEMENTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This prospectus includes assumptions, expectations, projections,
intentions and beliefs about future events. These statements are
intended as &#147;forward-looking statements.&#148; All
statements in this document that are not statements of
historical fact are forward-looking statements. These
forward-looking statements may be identified by the use of
predictive, future-tense or forward-looking terminology, such as
&#147;anticipate,&#148; &#147;estimate,&#148;
&#147;intend,&#148; &#147;project,&#148; &#147;forecast,&#148;
&#147;plan,&#148; &#147;potential,&#148; &#147;will,&#148;
&#147;may,&#148; &#147;should,&#148; &#147;expect&#148; or
similar terms.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Forward-looking statements include, but are not limited to, such
matters as:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our future operating or financial results and our future
    revenues and expenses;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    statements about pending or recent acquisitions, business
    strategy and expected capital spending or operating expenses;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our anticipated general and administrative expenses;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    statements about shipping industry trends, including charter
    hire rates and factors affecting supply and demand;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our continued ability to enter into time charters with our
    customers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our ability to obtain additional financing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    expectations regarding the availability of vessel
    acquisitions;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our business strategy and other plans and objectives for future
    operations.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Forward-looking statements are based upon assumptions,
expectations, projections, intentions and beliefs as to future
events that may not prove to be accurate. Actual outcomes and
results may differ materially from what is expressed or forecast
in the forward-looking statements included herein. The reasons
for this include the risks, uncertainties and factors described
under the section of this prospectus entitled &#147;Risk
Factors.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We undertake no obligation to update any forward-looking
statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time
to time, and it is not possible for us to predict all of these
factors. Further, we cannot assess the impact of each such
factor on our business or the extent to which any factor, or
combination of factors, may cause actual results to be
materially different from those contained in any forward-looking
statement.
</DIV>

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<DIV align="left" style="font-size: 10pt;">
<A name='123'></A>
</DIV>

<!-- link1 "GLOSSARY OF SHIPPING TERMS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>GLOSSARY OF SHIPPING TERMS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Following are definitions of shipping terms used in this
Prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Annual Survey</B>&nbsp;&#151; The inspection of a vessel by a
classification society, on behalf of the country whose flag a
vessel flies, or the flag state, that takes place every year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Bareboat Charter</B>&nbsp;&#151; A charter of a vessel under
which the shipowner is usually paid a fixed amount of
charterhire for a certain period of time during which the
charterer is responsible for the vessel operating expenses and
voyage expenses of the vessel and for the management of the
vessel, including crewing. A bareboat charter is also known as a
&#147;demise charter&#148; or a &#147;time charter by
demise.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Bunkers</B>&nbsp;&#151; Heavy fuel oil used to power a
vessel&#146;s engines.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Capesize</B>&nbsp;&#151; A drybulk carrier in excess of
80,000 dwt. While this is the traditional definition of a
Capesize bulkcarrier, in terms of deadweight the sector is
changing. There have been a number of new super-Paramaxes
ordered&nbsp;&#151; so-called Kamsarmaxes&nbsp;&#151; which are
82-85,000 dwt but are able to transit the Panama Canal with a
full cargo.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Charter</B>&nbsp;&#151; The hire of a vessel for a specified
period of time or to carry a cargo for a fixed fee from a
loading port to a discharging port. The contract for a charter
is called a charterparty.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Charterer</B>&nbsp;&#151; The individual or company hiring a
vessel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Charter Hire Rate</B>&nbsp;&#151; A sum of money paid to the
vessel owner by a charterer under a time charterparty for the
use of a vessel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Classification Society</B>&nbsp;&#151; An independent
organization which certifies that a vessel has been built and
maintained in accordance with the rules of such organization and
complies with the applicable rules and regulations of the
country of residence of such vessel and the international
conventions of which that country is a member.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Deadweight Ton</B>&nbsp;&#151;
<B>&#147;dwt&#148;</B>&nbsp;&#151; A unit of a vessel&#146;s
capacity for cargo, fuel oil, stores and crew, measured in tons.
A vessel&#146;s dwt or total deadweight is the total weight the
vessel can carry when loaded to a particular load line.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Demise Charter</B>&nbsp;&#151; See &#147;Bareboat
Charter&#148; above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Draft</B>&nbsp;&#151; Vertical distance between the waterline
and the bottom of the vessel&#146;s keel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Drybulk</B>&nbsp;&#151; Non-liquid cargoes of commodities
shipped in an unpackaged state.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Drybulk Carriers</B>&nbsp;&#151; Vessels that are specially
designed and built to carry large volumes of drybulk.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Drydocking</B>&nbsp;&#151; The removal of a vessel from the
water for inspection or repair of submerged parts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Gross Ton</B>&nbsp;&#151; Unit of 100 cubic feet or 2.831
cubic meters used in arriving at the calculation of gross
tonnage.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Handymax</B>&nbsp;&#151; A drybulk carrier of approximately
35,000 to 60,000 dwt.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Handysize</B>&nbsp;&#151; A drybulk carrier having a carrying
capacity of up to approximately 35,000 dwt.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Hull</B>&nbsp;&#151; The shell or body of a vessel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>International Maritime Organization</B>&nbsp;&#151;
<B>&#147;IMO&#148;</B>&nbsp;&#151; A United Nations agency that
issues international trade standards for shipping.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Intermediate Survey</B>&nbsp;&#151; The inspection of a
vessel by a classification society surveyor which takes place
between two and three years before and after each Special Survey
for such vessel pursuant to the rules of international
conventions and classification societies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>ISM Code</B>&nbsp;&#151; The International Management Code
for the Safe Operation of Ships and for Pollution Prevention, as
adopted by the IMO.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Newbuilding</B>&nbsp;&#151; A newly constructed vessel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Off-Hire</B>&nbsp;&#151; The period in which a vessel is
unable to perform the services for which it is immediately
required under a time charter. Off-hire periods can include days
spent on repairs, drydocking and surveys, whether or not
scheduled.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>OPA</B>&nbsp;&#151; The United States Oil Pollution Act of
1990 (as amended).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Orderbook</B>&nbsp;&#151; A reference to currently placed
orders for the construction of vessels (e.g., the Panamax
orderbook).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Panamax</B>&nbsp;&#151; A drybulk carrier of approximately
60,000 to 80,000&nbsp;dwt of maximum length, depth and draft
capable of passing fully loaded through the Panama Canal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Protection and Indemnity Insurance</B>&nbsp;&#151; Insurance
obtained through a mutual association formed by shipowners to
provide liability insurance protection from large financial loss
to one member through contributions towards that loss by all
members.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Scrapping</B>&nbsp;&#151; The disposal of old or damaged
vessel tonnage by way of sale as scrap metal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Short-Term Time Charter</B>&nbsp;&#151; A time charter which
lasts less than approximately 12&nbsp;months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Sister Ships</B>&nbsp;&#151; Vessels of the same class and
specification which were built by the same shipyard.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>SOLAS</B>&nbsp;&#151; The International Convention for the
Safety of Life at Sea 1974, as amended, adopted under the
auspices of the IMO.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Special Survey</B>&nbsp;&#151; The inspection of a vessel by
a classification society surveyor which takes place a minimum of
every four years and a maximum of every five years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Spot Market</B>&nbsp;&#151; The market for immediate
chartering of a vessel usually for single voyages.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Strict Liability</B>&nbsp;&#151; Liability that is imposed
without regard to fault.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Time Charter</B>&nbsp;&#151; Contract for hire of a ship
under which the ship-owner is paid charter hire rate on a per
day basis for a certain period of time. Under a time charter,
the shipowner is responsible for providing the crew and paying
operating costs while the charterer is responsible for paying
the voyage costs. Any delays at port or during the voyages are
the responsibility of the charterer, save for certain specific
exceptions such as loss of time arising from vessel breakdown
and routine maintenance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Ton</B>&nbsp;&#151; 1,000 kilograms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Vessel Operating Expenses</B>&nbsp;&#151; The costs of
operating a vessel, primarily consisting of crew wages and
associated costs, insurance premiums, lubricants and spare
parts, and repair and maintenance costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Voyage Charter</B>&nbsp;&#151; Contract for hire of a vessel
under which a shipowner is paid freight on the basis of moving
cargo from a loading port to a discharge port. The shipowner is
responsible for paying both operating costs and voyage costs.
The charterer is typically responsible for any delay at the
loading or discharging ports<I>.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Voyage Expenses</B>&nbsp;&#151; Expenses incurred in
connection with a vessel&#146;s traveling from a loading port to
a discharging port, such as fuel (bunker)&nbsp;cost, port
expenses, agent&#146;s fees, canal dues and extra war risk
insurance.
</DIV>

<P align="center" style="font-size: 10pt;">100
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='125'></A>
</DIV>

<!-- link1 "INDEX TO CONSOLIDATED FINANCIAL STATEMENTS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>INDEX TO CONSOLIDATED FINANCIAL STATEMENTS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Page</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#301'>Report of Deloitte.Hadjipavlou,
    Sofianos&nbsp;&#38; Cambanis S.A., Independent Registered Public
    Accounting Firm</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#302'>Consolidated Balance Sheet as of
    March&nbsp;31, 2005</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#303'>Consolidated Statement of Operations from
    January&nbsp;13, 2005 (inception) through March&nbsp;31, 2005</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#304'>Consolidated Statement of
    Shareholder&#146;s Equity from January&nbsp;13, 2005 (inception)
    through March&nbsp;31, 2005</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#305'>Consolidated Statement of Cash Flows from
    January&nbsp;13, 2005 (inception) through March&nbsp;31, 2005</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#306'>Notes to Consolidated Financial
    Statements</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-7</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">F-1

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='301'></A>
</DIV>

<!-- link1 "REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
To the Board of Directors and Shareholder
</DIV>

<DIV align="left" style="font-size: 10pt;">
of Quintana Maritime Limited.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have audited the accompanying consolidated balance sheet of
Quintana Maritime Limited and subsidiaries (the
&#147;Company&#148;) as of March&nbsp;31, 2005 and the related
consolidated statements of operations, shareholder&#146;s
equity, and cash flows for the period from January&nbsp;13, 2005
(inception)&nbsp;through March&nbsp;31, 2005. These financial
statements are the responsibility of the Company&#146;s
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company&#146;s internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of the
Company and subsidiaries at March&nbsp;31, 2005 and the results
of their operations and their cash flows for the period from
January&nbsp;13, 2005 (inception)&nbsp;to March&nbsp;31, 2005,
in conformity with accounting principles generally accepted in
the United States of America.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 36pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
May&nbsp;3, 2005
</DIV>

<DIV align="left" style="font-size: 10pt;">
Deloitte.
</DIV>

<DIV align="left" style="font-size: 10pt;">
Hadjipavlou, Sofianos&nbsp;&#38; Cambanis S.A.
</DIV>

<DIV align="left" style="font-size: 10pt;">
Athens, Greece
</DIV>

<P align="center" style="font-size: 10pt;">F-2

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='302'></A>
</DIV>

<!-- link1 "Quintana Maritime Limited Consolidated balance sheet As of March 31, 2005" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Quintana Maritime Limited</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Consolidated balance sheet</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>As of March&nbsp;31, 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="69%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notes</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>March&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(All amounts expressed</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>in U.S.&nbsp;Dollars)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="9" align="center" valign="top">
    <B>ASSETS</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Current assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>707,786</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other receivables</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,761</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total current assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>726,547</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Non-current assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Advances for vessel deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,760,314</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>98,616</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total non-current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,858,930</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,585,477</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="9">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="9" align="center" valign="top">
    <B>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Current liabilities</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trade accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57,158</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Due to related party</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,900</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Due to management company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,300</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sundry liabilities and accruals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,985</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total current liabilities</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155,343</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Shareholders&#146; equity</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock at stated value (no par value) 500&nbsp;shares
    issued, authorized and outstanding</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Additional paid-in capital</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,586,500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accumulated deficit</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(156,866</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total shareholders&#146; equity</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,430,134</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total liabilities and shareholders&#146; equity</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,585,477</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
The accompanying notes are an integral part of these
Consolidated Financial Statements.
</DIV>

<P align="center" style="font-size: 10pt;">F-3

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='303'></A>
</DIV>

<!-- link1 "Quintana Maritime Limited Consolidated statement of operations From January 13, 2005 (inception) to March 31, 2005" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Quintana Maritime Limited</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Consolidated statement of operations</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>From January&nbsp;13, 2005 (inception)&nbsp;to March&nbsp;31,
2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="77%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>March&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(All amounts</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>expressed in</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>U.S.&nbsp;Dollars)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    General and administrative expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(156,866</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Net loss</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(156,866</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss per share&nbsp;&#151; Basic</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(314</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
The accompanying notes are an integral part of these
Consolidated Financial Statements.
</DIV>

<P align="center" style="font-size: 10pt;">F-4

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='304'></A>
</DIV>

<!-- link1 "Quintana Maritime Limited Consolidated statement of shareholders&#146; equity From January 13, 2005 (inception) to March, 31 2005" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Quintana Maritime Limited</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Consolidated statement of shareholders&#146; equity</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>From January&nbsp;13, 2005 (inception)&nbsp;to March, 31
2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="41%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additional</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Common</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Paid-In</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Retained</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Earnings</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(All amounts, except share data, expressed in U.S.&nbsp;Dollars)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance, January&nbsp;13, 2005</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance of common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,586,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,587,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(156,866</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(156,866</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance, March&nbsp;31, 2005</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,586,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(156,866</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,430,134</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
The accompanying notes are an integral part of these
Consolidated Financial Statements.
</DIV>

<P align="center" style="font-size: 10pt;">F-5

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='305'></A>
</DIV>

<!-- link1 "Quintana Maritime Limited Consolidated statement of cash flows From January 13, 2005 (inception) to March 31, 2005" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Quintana Maritime Limited</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Consolidated statement of cash flows</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>From January&nbsp;13, 2005 (inception)&nbsp;to March&nbsp;31,
2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="77%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>March&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(All amounts</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>expressed in</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>U.S.&nbsp;Dollars)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cash flows from operating activities:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(156,866</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustments to reconcile net loss to net cash provided by
    operating activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Changes in operating assets and liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other receivables</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,761</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trade accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57,158</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payable to related party</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,900</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Due to management company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,300</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sundry liabilities and accruals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,985</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash used in operating activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,284</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cash flows from investing activities:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Advances for vessel deposit</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(28,760,314</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchases of property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(98,616</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash used in investing activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(28,858,930</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cash flows from financing activities:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Paid-in capital</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,586,500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash from financing activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,587,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net increase in cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>707,786</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents at beginning of period</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cash and cash equivalents at end of period</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>707,786</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
The accompanying notes are an integral part of these
Consolidated Financial Statements.
</DIV>

<P align="center" style="font-size: 10pt;">F-6

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='306'></A>
</DIV>

<!-- link1 "Quintana Maritime Limited Notes to the consolidated financial statements From January 13, 2005 (inception) to March 31, 2005 (All amounts expressed in U.S. Dollars)" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Quintana Maritime Limited</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to the consolidated financial statements</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>From January&nbsp;13, 2005 (inception)&nbsp;to March&nbsp;31,
2005</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(All amounts expressed in U.S.&nbsp;Dollars)</B>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>1.</B></TD>
    <TD>
    <B>Basis of Presentation and General Information</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The Company</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The accompanying consolidated financial statement includes the
accounts of Quintana Maritime Limited and its wholly-owned
subsidiaries (collectively, &#147;the Company&#148;). The
Company is engaged in the marine transportation of dry-bulk
cargoes through the ownership and operation of dry-bulk vessels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company is a holding company incorporated on
January&nbsp;13, 2005, under the Laws of the Republic of the
Marshall Islands. The Company was formed by affiliates of each
of Corbin J. Robertson&nbsp;Jr., First Reserve Corporation
(&#147;First Reserve&#148;) and American Metals&nbsp;&#38; Coal
International, Inc. (&#147;AMCI&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company is in the process of acquiring vessels. The Company
is the sole owner of all of the outstanding shares of the
following vessel owning Marshall Islands incorporated
subsidiaries:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Vessel Contracted</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Company</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>to be Acquired</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Agreement Date</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>dwt.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Built</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fearless Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Fearless I</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>18th&nbsp;February 2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,427 mt</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    King Coal Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>King Coal</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>15th&nbsp;February&nbsp; 2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,873 mt</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Iron Man Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Iron Man</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>15th&nbsp;March&nbsp;2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,861 mt</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Coal Age&nbsp;Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Coal Age</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>15th&nbsp;March&nbsp;2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,861 mt</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Coal Glory Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Coal Glory</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>21st&nbsp;March&nbsp;2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,670 mt</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1995</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Barbara Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Barbara</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>24th&nbsp;March&nbsp;2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,390 mt</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Linda Leah Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Linda Leah</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>24th&nbsp;March&nbsp;2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,390 mt</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Coal Pride Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Coal Pride</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>24th&nbsp;March&nbsp;2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,600 mt</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1999</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The operations of the vessels will be managed by our
wholly-owned subsidiary Quintana Management&nbsp;LLC that
subcontracts certain aspects of the technical management of five
vessels to the third-party technical management company, Blossom
Maritime Corporation.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>2.</B></TD>
    <TD>
    <B>Significant Accounting Policies</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Principles of consolidation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The accompanying consolidated financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States of America (U.S.&nbsp;GAAP) and
include the accounts of Quintana Maritime Limited and its
wholly-owned subsidiaries referred to in Note&nbsp;1. All
significant intercompany balances and transactions have been
eliminated in consolidation.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Use of estimates</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The preparation of the consolidated financial statements is in
conformity with U.S. GAAP and requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
</DIV>

<P align="center" style="font-size: 10pt;">F-7

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>Quintana Maritime Limited</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to the consolidated
financial&nbsp;statements&nbsp;&#151; (Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Other comprehensive income/(loss)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company intends to follow the provision of Statement of
Financial Accounting Standards (&#147;SFAS&#148;) No.&nbsp;130,
&#147;Reporting Comprehensive Income&#148;, which requires
separate representation of certain transactions, which are
recorded directly as components of shareholders&#146; equity.
The Company has no other comprehensive income (loss) and,
accordingly, comprehensive income/(loss) equals net
income/(loss).
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Cash and cash equivalents</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company considers highly liquid investments such as time
deposits and certificates of deposit with an original maturity
of three months or less to be cash equivalents.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Impairment of long-lived assets</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company uses SFAS&nbsp;No.&nbsp;144 &#147;Accounting for the
Impairment or Disposal of Long-lived Assets,&#148; which
addresses financial accounting and reporting for the impairment
or disposal of long-lived assets. The standard requires that
long-lived assets and certain identifiable intangibles held and
used or disposed of by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount of the assets may not be recoverable. When the
estimate of undiscounted cash flows, excluding interest charges,
expected to be generated by the use of the asset is less than
its carrying amount, the Company should evaluate the asset for
an impairment loss. Measurement of the impairment loss is based
on the fair value of the asset as provided by third parties. In
this respect, management regularly reviews the carrying amount
of the vessels in connection with the estimated recoverable
amount for each of the Company&#146;s vessels.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Vessel depreciation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Depreciation is computed using the straight-line method over the
estimated useful life of the vessels, after considering the
estimated salvage value. Each vessel&#146;s salvage value is
equal to the product of its lightweight tonnage and estimated
scrap rate. Management estimates the useful life of the
Company&#146;s vessels to be 25&nbsp;years from the date of
initial delivery from the shipyard. Second hand vessels are
depreciated from the date of their acquisition through their
remaining estimated useful life. However, when regulations place
limitations over the ability of a vessel to trade on a worldwide
basis, its useful life is adjusted to end at the date such
regulations become effective.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Dry-docking costs</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company follows the deferral method of accounting for
dry-docking costs whereby actual costs incurred are deferred and
are amortized on a straight-line basis over the period through
the date the next dry-docking is scheduled to become due.
Unamortized dry-docking costs of vessels that are sold are
written-off.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Financing costs</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fees incurred for obtaining new loans or refinancing existing
ones are deferred and amortized to interest expense over the
life of the related debt. Unamortized fees relating to loans
repaid or refinanced are expensed in the period the repayment or
refinancing is made.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Revenues and expenses</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues are generated from voyage and time charter agreements.
Time charter revenues are recorded over the term of the charter
as service is provided. Under a voyage charter the revenues and
</DIV>

<P align="center" style="font-size: 10pt;">F-8

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>Quintana Maritime Limited</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to the consolidated
financial&nbsp;statements&nbsp;&#151; (Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
associated voyage costs are recognized on a pro-rata basis over
the duration of the voyage. Probable losses on voyages are
provided for in full at the time such losses can be estimated. A
voyage is deemed to commence upon the completion of discharge of
the vessel&#146;s previous cargo and is deemed to end upon the
completion of discharge of the current cargo. Demurrage income
represents payments by the charterer to the vessel owner when
loading or discharging time exceeded the stipulated time in the
voyage charter and is recognized as incurred. Vessel operating
expenses are accounted for on the accrual basis.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Repairs and maintenance</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All repair and maintenance expenses including major overhauling
and underwater inspection expenses are expensed as incurred.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Segment reporting</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company reports financial information and evaluates its
operations by charter revenues and not by the length of ship
employment for its customers, i.e.&nbsp;spot or time charters.
The Company does not use discrete financial information to
evaluate the operating results for each such type of charter.
Although revenue can be identified for these types of charters,
management cannot and does not identify expenses, profitability
or other financial information for these charters. As a result,
management, including the chief operating decision maker,
reviews operating results solely by revenue per day and
operating results of the fleet and thus, the Company has
determined that it operates under one reportable segment.
Furthermore, when the Company charters a vessel to a charterer,
the charterer is free to trade the vessel worldwide and, as a
result, the disclosure of geographic information is
impracticable.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Derivatives</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SFAS&nbsp;No.&nbsp;133, &#147;Accounting for Derivative
Instruments and Hedging Activities&#148; as amended establishes
accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments
embedded in other contracts) be recorded in the balance sheet as
either an asset or liability measured at its fair value, with
changes in the derivatives&#146; fair value recognized currently
in earnings unless specific hedge accounting criteria are met.
During the period January&nbsp;26, 2005 (inception)&nbsp;to
March&nbsp;31, 2005, the Company did not engage in any hedging
activities.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Loss per share</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Loss per share has been calculated by dividing the net loss by
the weighted average number of common shares outstanding during
the period.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Recent Accounting Pronouncements:</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;16, 2004, Statement of Financial Accounting
Standards No.&nbsp;123 (revised 2004)
(SFAS&nbsp;No.&nbsp;123(R)), &#147;Share-Based Payment,&#148;
was issued. SFAS&nbsp;No.&nbsp;123(R) is a revision of
SFAS&nbsp;No.&nbsp;123 and supersedes APB No.&nbsp;25. The
approach in SFAS&nbsp;No.&nbsp;123(R) is similar to the approach
described in SFAS&nbsp;No.&nbsp;123. However,
SFAS&nbsp;No.&nbsp;123(R) requires all share-based payments to
employees, including grants of employee stock options, to be
recognized in the income statement based on their fair values.
Pro-forma disclosure, required under SFAS&nbsp;No.&nbsp;123, is
no longer an alternative. This statement will be effective as of
the beginning of the first annual reporting period that begins
after June&nbsp;15, 2005. The Company is currently evaluating
the impact of adopting SFAS No.&nbsp;123(R).
</DIV>

<P align="center" style="font-size: 10pt;">F-9
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>Quintana Maritime Limited</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to the consolidated
financial&nbsp;statements&nbsp;&#151; (Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>3.</B></TD>
    <TD>
    <B>Advances for Vessel Deposits</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company through its subsidiaries has entered into contracts
to purchase eight&nbsp;dry-bulk vessels from separate
unaffiliated ship-owning companies. The Company has funded
deposits for seven of these vessels in the amount of $28,645,000
representing 10% of the purchase price of the seven vessels plus
capitalized expenses of $115,314. The Company paid the 10%
deposit on the eighth vessel in April 2005 in the amount of
$4.3&nbsp;million. At March&nbsp;31, 2005 the unpaid balance of
the purchase price of all the vessels including Coal Pride, for
which no deposit had yet been made at March&nbsp;31, 2005, was
$300,805,000.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>4.</B></TD>
    <TD>
    <B>Related Party Transactions</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s Chief Executive Officer, signed a consulting
agreement with Quintana Minerals Corporation dated as of
January&nbsp;1, 2005 with a duration of one year, but which was
terminated as at March&nbsp;31, 2005.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>5.</B></TD>
    <TD>
    <B>Due to Management Company</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has entered into an agreement with a third-party
management company to technically manage five of the vessels for
an amount of $400&nbsp;per day from the date of signature of the
Memorandum of Agreement. The amounts relating to the period
prior to delivery of the vessel are capitalised to the vessel
cost. The total amount capitalised as at March&nbsp;31, 2005,
included in advances for vessel deposits, amounts to $43,230 and
the total amount payable at that date amounted to $16,300.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>6.</B></TD>
    <TD>
    <B>Commitments</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In February 2005, the Company entered into a three-year
noncancelable operating lease for its office facilities that
terminates in February 2008. Rental expense for the period
January&nbsp;13 through March&nbsp;31, 2005 was $15,769. Future
rental commitments were payable as follows as of March&nbsp;31,
2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    April&nbsp;1, 2005 to March&nbsp;31, 2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>94,309</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    April&nbsp;1, 2006 to March&nbsp;31, 2007</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>101,608</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    April&nbsp;1, 2007 to March&nbsp;31, 2008</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88,172</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>284,089</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>7.</B></TD>
    <TD>
    <B>Subsequent Events</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Subsequent to March&nbsp;31, 2005, our shareholder made
    additional capital contributions totaling $36,693,637.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The Company has entered into agreements with separate
    unaffiliated ship-owning companies to purchase vessels. During
    April 2005, the following three vessels with a total purchase
    price of $119,850,000 (&#147;Fearless&nbsp;I&#148;, &#147;King
    Coal&#148; and &#147;Coal Glory&#148;) were delivered.</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Vessel Contracted</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Company</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>to be Acquired</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Purchase Price</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Delivery Date</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fearless Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Fearless 1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>USD 40,400,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>April&nbsp;11, 2005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    King Coal Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>King Coal</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>USD 40,400,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>April&nbsp;12, 2005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Coal Glory Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Coal Glory</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>USD 39,050,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>April&nbsp;13, 2005</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">F-10
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>Quintana Maritime Limited</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Notes to the consolidated
financial&nbsp;statements&nbsp;&#151; (Continued)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The Company entered into Memoranda of Agreement for the
    following vessels, amounting to $209,600,000:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Vessel Contracted</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Company</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>to be Acquired</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Purchase Price</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Delivery Date</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Iron Man Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Iron Man</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>USD 41,300,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Expected 4/10-5/15/2005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Coal Age&nbsp;Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Coal Age</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>USD 41,300,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Expected 4/10-5/15/2005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Barbara Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Barbara</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>USD 42,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Expected 7/15-8/31/2005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Linda Leah Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Linda Leah</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>USD 42,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Expected 8/1-8/31/2005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Coal Pride Shipco LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Coal Pride</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>USD 43,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Expected 8/1-9/30/2005</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    On April&nbsp;8, 2005, the Company entered into a bridge credit
    agreement for an amount of $110&nbsp;million, which was drawn
    down on April&nbsp;8, 2005. On May&nbsp;3, 2005 the Company
    amended and restated the bridge credit agreement to increase the
    amount available for borrowing thereunder $150&nbsp;million. The
    credit agreement charges a base rate plus a spread.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    On April&nbsp;29, 2005, the Company entered into a term loan
    facility to finance, in part, the acquisition of the vessels, up
    to a maximum amount of $262.456&nbsp;million. The facility is
    available in two tranches not exceeding $262.456&nbsp;million or
    80% of the market value of the vessels.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;&nbsp;</TD>
    <TD align="left">
    The facility charges LIBOR plus the applicable spread and is
    secured by a first or second priority mortgage over the vessels
    involved plus an equal and ratable assignment of the vessel
    earnings plus other collateral.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;&nbsp;</TD>
    <TD align="left">
    The facility contains financial covenants requiring the Company
    to ensure that the aggregate market value of the mortgaged
    vessels at all times exceed 115% of the outstanding amount under
    the facility during the first year following the closing date
    and 125% thereafter, to maintain minimum cash balances of
    $5&nbsp;million on the last day of each fiscal quarter during
    the first year following the closing date and $10&nbsp;million
    thereafter, subject to the increase to $15&nbsp;million under
    certain circumstances; that the ratio of Total Debt (as defined)
    to Total Capitalization (as defined) is no greater than 0.80
    to&nbsp;1.00 on or after January&nbsp;1, 2006 and prior to
    January&nbsp;1, 2007 and 0.60&nbsp;to 1.00 thereafter; and that
    the ratio of Consolidated EBITDA (as defined) to cash Interest
    Expense (as defined) is no less than 2.5&nbsp;to 1.00 commencing
    December&nbsp;31, 2005 and prior to January&nbsp;1, 2008,
    2.1&nbsp;to 1.00 commencing January&nbsp;1, 2008 and prior to
    January&nbsp;1, 2009, 2.25&nbsp;to 1.00 commencing
    January&nbsp;1, 2009 and prior to January&nbsp;1, 2010 and 2.5
    to 1.00 at any time on or after January&nbsp;1, 2010. Assuming
    the net proceeds of the offering are applied to repay at least
    $100&nbsp;million principal amount thereunder, the term loan
    facility will not prohibit dividends in any year exceeding
    Consolidated EBITDA less Consolidated Interest Expense (as
    defined) less principal prepayments, provided that no event of
    default has occurred or is continuing.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">F-11
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 2pt;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 3pt;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Common Stock</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="y08227y0822718.gif" alt="Quintana Maritime Limited Logo">
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 15%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>PROSPECTUS</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005</B>
</DIV>

<DIV align="center" style="font-size: 3pt;">
<DIV style="width: 15%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 16pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Joint Book-Running Managers</B>
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 20pt;">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD align="left"><B>Citigroup</B></TD>
    <TD align="right"><B>Morgan Stanley</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 3pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 4pt;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PART&nbsp;II</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>INFORMATION NOT REQUIRED IN THE PROSPECTUS</B>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;13.</B></TD>
    <TD>
    <B><I>Other Expenses of Issuance and Distribution.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We estimate the expenses in connection with the issuance and
distribution of our common stock in this offering, other than
underwriting discounts and commissions, as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SEC Registration Fee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>35,310</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Printing and Engraving Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Legal Fees and Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accountants&#146; Fees and Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Nasdaq National Market Entry Fee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NASD Fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Blue Sky Fees and Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transfer Agent&#146;s Fees and Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Miscellaneous Costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;14.</B></TD>
    <TD>
    <B><I>Indemnification of Directors and Officers.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The bylaws of the Registrant provide that every director and
officer of the Registrant shall be indemnified out of the funds
of the Registrant against:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    all civil liabilities, loss, damage or expense (including but
    not limited to liabilities under contract, tort and statute or
    any applicable foreign law or regulation and all reasonable
    legal and other costs and expenses properly payable) incurred or
    suffered by him as such director or officer acting in the
    reasonable belief that he has been so appointed or elected
    notwithstanding any defect in such appointment or election,
    provided always that such indemnity shall not extend to any
    matter which would render it void pursuant to any Marshall
    Islands statute from time to time in force concerning companies
    insofar as the same applies to the Registrant (the
    &#147;Companies Acts&#148;);&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    all liabilities incurred by him as such director or officer in
    defending any proceedings, whether civil or criminal, in which
    judgment is given in his favor, or in which he is acquitted, or
    in connection with any application under the Companies Acts in
    which relief from liability is granted to him by the court.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Section&nbsp;60 of the Associations Law of the Republic of the
Marshall Islands provides as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indemnification of directors and officers.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(1)&nbsp; </TD>
    <TD align="left">
    <B><I>Actions not by or in right of the corporation.</I></B> A
    corporation shall have power to indemnify any person who was or
    is a party or is threatened to be made a party to any
    threatened, pending or completed action, suit or proceeding
    whether civil, criminal, administrative or investigative (other
    than an action by or in the right of the corporation) by reason
    of the fact that he is or was a director or officer of the
    corporation, or is or was serving at the request of the
    corporation as a director or officer of another corporation,
    partnership, joint venture, trust or other enterprise, against
    expenses (including attorneys&#146; fees), judgments, fines and
    amounts paid in settlement actually and reasonably incurred by
    him in connection with such action, suit or proceeding if he
    acted in good faith and in a manner he reasonably believed to be
    in or not opposed to the best interests of the corporation, and,
    with respect to any criminal action or proceeding, had no
    reasonable cause to believe his conduct was unlawful. The
    termination of any action, suit or proceeding by judgment,
    order, settlement, conviction, or upon a plea of no contest, or
    its</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">II-1

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    equivalent, shall not, of itself, create a presumption that the
    person did not act in good faith and in a manner which he
    reasonable believed to be in or not opposed to the best
    interests of the corporation, and, with respect to any criminal
    action or proceedings, had reasonable cause to believe that his
    conduct was unlawful.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(2)&nbsp; </TD>
    <TD align="left">
    <B><I>Actions by or in right of the corporation.</I></B> A
    corporation shall have the power to indemnify any person who was
    or is a party or is threatened to be made a party to any
    threatened, pending or completed action or suit by or in the
    right of the corporation to procure a judgment in its favor by
    reason of the fact that he is or was a director or officer of
    the corporation, or is or was serving at the request of the
    corporation, or is or was serving at the request of the
    corporation as a director or officer of another corporation,
    partnership, joint venture, trust or other enterprise against
    expenses (including attorneys&#146; fees) actually and
    reasonably incurred by him or in connection with the defense or
    settlement of such action or suit if he acted in good faith and
    in a manner he reasonably believed to be in or not, opposed to
    the best interests of the corporation and except that no
    indemnification shall be made in respect of any claims, issue or
    matter as to which such person shall have been adjudged to be
    liable for negligence or misconduct in the performance of his
    duty to the corporation unless and only to the extent that the
    court in which such action or suit was brought shall determine
    upon application that, despite the adjudication of liability but
    in view of all the circumstances of the case, such person is
    fairly and reasonably entitled to indemnity for such expenses
    which the court shall deem proper.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(3)&nbsp; </TD>
    <TD align="left">
    <B><I>When director or officer successful.</I></B> To the extent
    that director or officer of a corporation has been successful on
    the merits or otherwise in defense of any action, suit or
    proceeding referred to in subsections (1)&nbsp;or (2)&nbsp;of
    this section, or in the defense of a claim, issue or matter
    therein, he shall be indemnified against expenses (including
    attorneys&#146; fees) actually and reasonably incurred by him in
    connection therewith.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(4)&nbsp; </TD>
    <TD align="left">
    <B><I>Payment of expenses in advance.</I></B> Expenses incurred
    in defending a civil or criminal action, suit or proceeding may
    be paid in advance of the final disposition of such action, suit
    or proceeding as authorized by the board of directors in the
    specific case upon receipt of an undertaking by or on behalf of
    the director or officer to repay such amount if it shall
    ultimately be determined that he is not entitled to be
    indemnified by the corporation as authorized in this section.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(5)&nbsp; </TD>
    <TD align="left">
    <B><I>Continuation of indemnification.</I></B> The
    indemnification and advancement of expenses provided by, or
    granted pursuant to, this section shall, unless otherwise
    provided when authorized or ratified, continue as to a person
    who has ceased to be a director, officer, employee or agent and
    shall inure to the benefit of the heirs, executors and
    administrators of such a person.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(6)&nbsp; </TD>
    <TD align="left">
    <B><I>Insurance.</I></B> A corporation shall have power to
    purchase and maintain insurance on behalf of any person who is
    or was a director or officer of the corporation or is or was
    serving at the request of the corporation as a director or
    officer against any liability asserted against him and incurred
    by him in such capacity whether or not the corporation would
    have the power to indemnify him against such liability under the
    provisions of this section.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;15.</B></TD>
    <TD>
    <B><I>Recent Sales of Unregistered Securities.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the formation of Quintana Maritime Limited,
Quintana Maritime Limited issued to Quintana Maritime Investors
LLC 500&nbsp;shares for $500 in an offering exempt from
registration under Section&nbsp;4(2) of the Securities Act of
1933, as amended. No underwriters were involved in this
transaction. There have been no other sales of unregistered
securities within the past three years.
</DIV>

<P align="center" style="font-size: 10pt;">II-2

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;16.</B></TD>
    <TD>
    <B><I>Exhibits and Financial Statement Schedules.</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="5%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(a)</TD>
    <TD align="left">
    Exhibits</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Underwriting Agreement*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amended and Restated Articles of Incorporation of the Company*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amended and Restated By-laws of the Company*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Share Certificate*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>5</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Opinion of Seward&nbsp;&#38; Kissel LLP, Marshall Islands
    counsel to the Company, as to the validity of the Shares*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>8</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Opinion of Vinson&nbsp;&#38; Elkins L.L.P., United States
    counsel to the Company, with respect to certain tax matters*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Vessel Management Agreement*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Senior Secured Term Loan Agreement*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.4</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Registration Rights Agreement*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>21</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Subsidiaries of the Company</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Seward&nbsp;&#38; Kissel LLP (included in
    Exhibit&nbsp;5.1)*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Vinson&nbsp;&#38; Elkins L.L.P. (included in
    Exhibit&nbsp;8.1)*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Deloitte. Hadjipavlou, Sofianos&nbsp;&#38; Cambanis
    S.A.</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23</TD>
    <TD align="left" valign="top" nowrap>.3</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Drewry Shipping Consultants Ltd.</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>24</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Powers of Attorney**</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>*</TD>
    <TD align="left">
    To be filed by amendment.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>**&nbsp;</TD>
    <TD align="left">
    Contained on the signature page hereto.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Item&nbsp;17.<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Undertakings.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The undersigned registrant hereby undertakes:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(1)&nbsp;To provide to the underwriters at the closing specified
in the underwriting agreement shares certificates in such
denominations and registered in such names as required by the
underwriters to permit prompt delivery to each purchaser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(2)&nbsp;That for purposes of determining any liability under
the Securities Act of 1933, as amended (the &#147;Act&#148;),
the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon
Rule&nbsp;430A and contained in the form of prospectus filed by
the Registrant pursuant to Rule&nbsp;424(b)(1) or (4)&nbsp;under
the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(3)&nbsp;That for purposes of determining any liability under
the Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(4)&nbsp;That insofar as indemnification for liabilities arising
under the Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
</DIV>

<P align="center" style="font-size: 10pt;">II-3

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SIGNATURES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form&nbsp;S-l and has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Glyfada, the country of Greece, on
April&nbsp;29, 2005.
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT style="font-variant:SMALL-CAPS">Quintana Maritime Limited
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 48pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="center">
    /s/ <FONT style="font-variant:SMALL-CAPS">Stamatis Molaris
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt" align="left">&nbsp;</DIV></TD>
</TR>

<TR valign="top"  style="font-size: 10pt;">
    <TD>&nbsp;</TD>
    <TD align="left">
    &nbsp;Name:&nbsp;Stamatis Molaris</TD>
</TR>

<TR valign="top"  style="font-size: 10pt;">
    <TD>&nbsp;</TD>
    <TD align="left">
    &nbsp;Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief Executive
    Officer and President</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints each of
Stamatis Molaris, Paul Cornell, and Joseph R. Edwards his or her
true and lawful attorney-in-fact and agent, with full powers of
substitution and re-substitution, for him or her and in his or
her name, place and stead, in any and all capacities, to sign
any or all amendments (including post-effective amendments) to
this Registration Statement, including any filings pursuant to
Rule&nbsp;462(b) under the Securities Act of 1933, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully for all
intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact
and agent, or his substitute, may lawfully do or cause to be
done by virtue hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons
on April&nbsp;29, 2005 in the capacities indicated.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="56%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Title</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Stamatis Molaris<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Stamatis
    Molaris</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Chief Executive Officer and President<BR>
    (Principal Executive Officer)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Paul J. Cornell<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Paul
    J. Cornell</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Chief Financial Officer<BR>
    (Principal Financial Officer; Principal Accounting Officer)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Corbin J.
    Robertson,&nbsp;Jr.<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Corbin
    J. Robertson,&nbsp;Jr.&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Chairman</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Joseph R. Edwards<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Joseph
    R. Edwards</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Corbin J. Robertson
    III<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Corbin
    J. Robertson&nbsp;III</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Hans J. Mende<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Hans
    J. Mende</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">II-4

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Authorized Representative</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the requirement of the Securities Act of 1933, the
undersigned, the duly authorized representative in the United
States, has signed this registration statement in the City of
Newark, State of Delaware, on April&nbsp;29, 2005.
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT style="font-variant:SMALL-CAPS">PUGLISI&nbsp;&#38;
    ASSOCIATES
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 48pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="center">
    /s/ <FONT style="font-variant:SMALL-CAPS">Donald J. Puglisi
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt" align="left">&nbsp;</DIV></TD>
</TR>

<TR valign="top"  style="font-size: 10pt;">
    <TD>&nbsp;</TD>
    <TD align="left">
    Name:&nbsp;Donald J. Puglisi</TD>
</TR>

<TR valign="top"  style="font-size: 10pt;">
    <TD>&nbsp;</TD>
    <TD align="left">
    Title:&nbsp;&nbsp;Managing Directors</TD>
</TR>

<TR valign="top"  style="font-size: 10pt;">
    <TD>&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Authorized
    Representative in the United States</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">II-5

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>EXHIBIT INDEX</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2" align="center" nowrap><B>Exhibit</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Underwriting Agreement*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amended and Restated Articles of Incorporation of the Company*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amended and Restated By-laws of the Company*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Share Certificate*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>5.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Opinion of Seward&nbsp;&#38; Kissel LLP, Marshall Islands
    counsel to the Company, as to the validity of the Shares*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>8.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Opinion of Vinson&nbsp;&#38; Elkins L.L.P., United States
    counsel to the Company, with respect to certain tax matters*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Vessel Management Agreement*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Senior Secured Term Loan Agreement*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Registration Rights Agreement*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>21.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Subsidiaries of the Company</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Seward&nbsp;&#38; Kissel LLP (included in
    Exhibit&nbsp;5.1)*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Vinson&nbsp;&#38; Elkins L.L.P. (included in
    Exhibit&nbsp;8.1)*</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Deloitte. Hadjipavlou, Sofianos&nbsp;&#38; Cambanis
    S.A.</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Drewry Shipping Consultants Ltd.</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>24.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Powers of Attorney**</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>*</TD>
    <TD align="left">
    To be filed by amendment.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>**&nbsp;</TD>
    <TD align="left">
    Contained on the signature page hereto.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">II-6
</BODY>
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QUINTANA MARITIME LTD.
Table of Contents
As filed with the Securities and Exchange Commission on
May 3, 2005
Registration Statement
No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Quintana Maritime Limited
(Exact name of registrant as specified in its charter)
Republic of the Marshall Islands
(State or other jurisdiction of
incorporation or organization)
Quintana Maritime Limited
Attention: Stamatis Molaris
Pandoras 13 & Kyprou Street
166 74 Glyfada
Greece
Telephone: 011-30-210-898-5056
(Address and telephone number of
Registrant's principal executive offices)
4412
(Primary Standard Industrial
Classification Code Number)
98-0454094
(I.R.S. Employer
Identification No.)
Seward & Kissel LLP
Attention: Gary J. Wolfe, Esq.
One Battery Park Plaza
New York, New York 10004
(212) 574-1200
(Name, address and telephone number
of agent for service)
Copies to:
Allan D. Reiss
Vinson & Elkins L.L.P.
666 Fifth Avenue
26th Floor
New York, New York 10103
(212) 237-0000
(telephone number)
(212) 237-0100
(facsimile number)
Dan A. Fleckman
Vinson & Elkins L.L.P.
1001 Fannin Street, Suite 2300
Houston, Texas 77002
(713) 758-2222
(telephone number)
(713) 758-2346
(facsimile number)
Andrew J. Pitts
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
(212) 474-1000
(telephone number)
(212) 474-3700
(facsimile number)
Approximate date of commencement of proposed sale to the
public:
As soon as practicable after the effective date of this
Registration Statement.
If any of the securities being registered on this Form are being
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, check the
following
box.
o
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering.
o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
o
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
o
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following
box.
o
CALCULATION OF REGISTRATION FEE
Proposed Maximum
Title of Each Class of
Aggregate
Amount of
Securities to be Registered
Offering Price(1)
Registration Fee
Common Stock, no par value
$300,000,000
$35,310
(1)
Estimated solely for the purpose of calculating the registration
    fee pursuant to Rule 457 under the Securities Act of 1933.
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
Table of Contents
The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION,
DATED                     ,
2005
PROSPECTUS
Shares
Common Stock
We are
selling                      shares
of our common stock. We intend to use approximately
$           million
of the net proceeds from the sale of the shares offered hereby
to repay all of our outstanding indebtedness and to fund a
portion of the purchase price of our vessels. We intend to use
approximately
$          million
of the net proceeds to pay a dividend to our sole shareholder
existing immediately prior to this offering, which is owned by
affiliates of each of Corbin J. Robertson, Jr., First
Reserve Corporation and American Metals & Coal
International, Inc. We have granted the underwriters an option
to purchase up
to                     additional
shares of common stock to cover over-allotments. The net
proceeds from any exercise of the underwriters'
over-allotment option will be used to pay an additional dividend
to our sole shareholder existing immediately prior to this
offering.
This is the initial public offering of our common stock. We
currently expect the initial public offering price to be between
$          and
$           per
share. We intend to apply to have the common stock included for
quotation on the Nasdaq National Market under the symbol
"QMAR." Prior to this offering, there has been no
public market for our common stock.
Investing in our common stock involves risks. Please read
"Risk Factors" beginning on page 8.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
Per Share
Total
Initial Public Offering Price
$
$
Underwriting Discount
$
$
Proceeds to Quintana Maritime Limited (before expenses)
$
$
The underwriters expect to deliver the shares to purchasers on
or
about                     ,
2005.
Joint Book-Running Managers
Citigroup
Morgan Stanley
,
2005
You should rely only on the information contained in this
prospectus. We have not authorized anyone to provide you with
different information. We are not making an offer of these
securities in any state where the offer is not permitted. You
should not assume that the information contained in this
prospectus is accurate as of any date other than the date on the
front cover of this prospectus.
TABLE OF CONTENTS
Prospectus Summary
1
Risk Factors
8
Use of Proceeds
23
Dividend Policy
24
Capitalization
25
Dilution
26
Selected Consolidated Financial Data
28
Management's Discussion and Analysis
    of Financial Condition and Results of Operations
29
The International Drybulk Shipping
    Industry
37
Business
58
Management
72
Principal Shareholders
74
Related Party Transactions
76
Description of Capital Stock
77
Shares Eligible For Future Sale
81
Certain Marshall Islands Company
    Considerations
83
Tax Considerations
86
Underwriting
94
Validity of the Shares
97
Experts
97
Where You Can Find Additional
    Information
97
Forward-Looking Statements
97
Glossary of Shipping Terms
99
Index to Consolidated Financial
    Statements
F-1
EX-21.1: SUBSIDIARIES OF THE COMPANY
EX-23.2: CONSENT OF DELOITTE, HADJIPAVLOU, SOFIANOS & CAMBANIS S.A.
EX-23.3: CONSENT OF DREWRY SHIPPING CONSULTANTS LIMITED
Until                     ,
2005 (25 days after the date of this prospectus), all
dealers that buy, sell or trade our common stock, whether or not
participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers' obligation
to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
i
Table of Contents
PROSPECTUS SUMMARY
This prospectus summary highlights information and
consolidated financial data that appear later in this prospectus
and is qualified in its entirety by the more detailed
information and financial statements that appear later. This
summary may not contain all of the information that may be
important to you. As an investor or prospective investor, you
should review carefully the entire prospectus, including the
risk factors and the more detailed information and consolidated
financial statements that appear later. We refer you to
"Glossary of Shipping Terms" beginning on page 99
for definitions of certain shipping industry terms that we use
in this prospectus. Unless the context otherwise indicates, the
information presented in this prospectus assumes that the
underwriters do not exercise their option to purchase additional
shares of common stock.
Unless otherwise indicated, all references in this prospectus
to our fleet refer to the fleet of eight drybulk carriers that
we have purchased or entered in contracts to purchase. Unless
otherwise indicated, references in this prospectus to
"Quintana Maritime Limited," "we,"
"us," "our" and the "Company"
refer to Quintana Maritime Limited and our subsidiaries. All
references in this prospectus to "$,"
"U.S.$" and "Dollars" refer to United States
dollars.
Our Company
We are an international provider of drybulk marine
transportation services that was incorporated in the Marshall
Islands on January 13, 2005 and began operations in April
2005. We were formed by affiliates of each of Corbin J.
Robertson, Jr., First Reserve Corporation ("First
Reserve"), and American Metals & Coal
International, Inc. ("AMCI"). We expect to own and
operate a total fleet of eight Panamax drybulk carriers by the
end of the third quarter of 2005, the majority of which we
expect to be employed under time charters. We intend to continue
to increase the size of our fleet following this offering, and
we believe that the extensive experience of our management team
in locating and acquiring suitable vessels and fleets will
assist us in this process.
Our management team will provide the commercial management of
our fleet, which includes entering into charters and managing
relationships with charterers. We initially will outsource the
technical management, which includes day-to-day operations, of
five of our vessels to Blossom Maritime Corporation, (our
"Manager"), an unaffiliated third-party ship
management company. However, we expect to perform the technical
management of our entire fleet by the end of the first quarter
of 2006.
Our Fleet
We took delivery of our first three vessels in April 2005. We
expect to take delivery of two additional vessels under purchase
agreements in May 2005 and of the remaining three vessels under
purchase agreements in July, August and September, respectively.
Our drybulk carriers transport a variety of cargoes including
coal, iron ore and grain. Our initial fleet will have a combined
carrying capacity of approximately 585,000 dwt and an average
age of approximately 8 years. We financed the purchase of
the first three vessels through capital contributions by
affiliates of each of Mr. Robertson, First Reserve and AMCI
("our Sponsors") and debt. We have paid a 10% deposit
on each of the five other vessels.
Initially, most of our vessels will be employed under time
charters of varying durations to well-established and reputable
charterers. None of these vessels were or will be purchased
subject to any existing time charter, but rather will be subject
to new time charters we have or will put in place. When a
charter expires, we will assess market conditions and determine
whether to seek to re-employ the vessel under a long-term time
charter, a short-term time charter or in the spot voyage market.
Please read "Business — Time Charters."
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The table below provides additional, summary information about
our fleet as of April 30, 2005:
Charter
Daily Time
Year
Expiration
Charter Hire
Vessel
Type
Dwt
Built
Charterer
Date
Rate(1)
King Coal
(2)
Panamax
72,873
1997
Energy Shipping S.p.A.(5)
April 2008
$
24,985
Fearless I
(2)
Panamax
73,427
1997
Deiulemar Compagnia di Navigazione S.p.A.
April 2008
25,000
Coal Glory
(2)
Panamax
73,670
1995
Spot
Coal Age
(3)
Panamax
72,861
1997
Iron Man
(3)
Panamax
72,861
1997
Linda Leah
(4)
Panamax
73,390
1997
Fratelli D'Amato S.p.A.
August 2008
23,750
Barbara
(4)
Panamax
73,390
1997
Coal Pride
(4)
Panamax
72,600
1999
(1)
This column shows the charter hire rates net of any commissions.
(2)
Delivered in April 2005.
(3)
Subject to a memorandum of agreement and expected to be
    delivered in May 2005.
(4)
Subject to a memorandum of agreement and expected to be
    delivered in the third quarter of 2005.
(5)
The obligations of Energy Shipping S.p.A. are guaranteed by
    Deiulemar Compagnia di Navigazione, S.p.A.
Drybulk Shipping Industry Trends
The drybulk shipping industry is fundamental to international
trade as it is the only practical and cost effective means of
transporting large volumes of many essential commodities.
Between 1999 and 2004, trade in all drybulk commodities
experienced an aggregate increase of 25%. According to Drewry,
in 2003 and 2004, charter rates for all sizes of drybulk
carriers were at historically high levels, with rates in 2005
remaining relatively high. This increase in charter hire rates
is attributable to the favorable imbalance between the supply of
and demand for drybulk shipping capacity, which is currently a
function of:
Supply:
•
Shipyards where new ships are constructed are fully booked until
    2008, providing visibility into the number and type of new
    vessels that will enter the market in coming years; and
•
Port congestion worldwide has lengthened voyage durations,
    effectively reducing the supply of vessels that are available
    for hire at any particular time.
Demand:
•
In general, increasing global production and consumption and
    international trade have driven the strong demand for drybulk
    capacity; and
•
In particular, China and India continue to drive demand for
    drybulk carriers.
We cannot predict or offer assurances that the current favorable
imbalance between supply and demand described above will
continue.
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Our Competitive Strengths
We believe that the following competitive strengths distinguish
us in the drybulk shipping industry:
•
High Quality and Young Fleet.
All of our drybulk carriers
    are modern Panamax vessels with an average age of approximately
    8.0 years. According to Drewry, the average age of the
    world's Panamax drybulk fleet as of April 5, 2005 is
    12.2 years. We believe that owning a modern fleet of
    well-maintained vessels will enable us to operate our vessels
    with low operating costs and secure employment for our vessels
    with high quality charterers. We also believe that secondhand
    vessels of our fleet's vintage will provide an attractive
    return on capital, given the favorable charter hire rates we
    expect they will command as compared to their purchase price.
•
Stable Cash Flow from Well-established and Reputable
    Charterers.
We expect that the majority of our vessels will
    be initially employed on time charters to well-established and
    reputable charterers. We believe these time charters will
    provide us with steady cash flow and high vessel utilization
    rates while limiting our exposure to freight rate volatility.
•
Internal Management of Vessel Operations.
We believe that
    providing our own technical management will favorably
    distinguish us from many of our competitors by allowing us to
    more closely monitor our operations and offer a high quality of
    performance, reliability and efficiency. We also expect that
    providing our own internal technical management will enable us
    to further limit operating costs by eliminating management fees
    to third parties.
•
Experienced Management Team and Strong Affiliation with Our
    Sponsors.
Our executives have considerable experience in the
    management of the commercial and financial aspects of
    international shipping businesses. We also have a strong
    relationship with our Sponsors, which collectively have
    considerable experience and relationships in the energy, iron
    ore, and coal industries.
•
Focus on Panamax or Larger Drybulk Vessels.
Initially our
    fleet will consist entirely of Panamax vessels, which we believe
    are the most flexible category of drybulk vessels, with the
    ability to access all major ports and to travel through the
    Panama Canal. Unlike smaller drybulk vessels, Panamax vessels
    are able to efficiently transport the major drybulk commodities
    to Asian markets from outside the region, and are less
    vulnerable to market changes in the demand for any single
    commodity.
•
Increased Flexibility through Use of Sister Ships.
Our
    fleet will include two groups of sister ships. The ability to
    substitute ships with identical specifications enhances our
    fleet's revenue potential by providing increased
    flexibility to meet charterers' schedules. Sister ships
    also increase our operating efficiencies because technical
    knowledge can be shared across vessels in a series and economies
    of scale can be created when ordering spare parts and supplying
    and crewing vessels.
Our Business Strategy
Our business strategy is to provide reliable seaborne
transportation services for drybulk cargoes at a competitive
cost. The principal elements of our business strategy consist of:
•
Optimize Charter Planning.
We intend to employ a
    significant portion of our fleet under time charters to achieve
    predictable and visible cash flows and increase utilization
    rates. Our commercial management team will seek to balance the
    mix of short-, medium- and long-term time charters and spot
    market charters in order to permit us to opportunistically
    pursue market conditions while allowing us to maintain
    predictable cash flows.
•
Focus on High Quality Panamax or Larger Drybulk Vessels.
We intend to maintain a high quality, cost efficient fleet of
    Panamax or larger drybulk carriers that meet rigorous industry
    standards and our charterers' requirements. Our fleet will
    enable us to efficiently transport major drybulk commodities
    such as coal, iron ore and grain to China and other expanding
    markets.
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•
Maintain Low Cost, Highly Efficient Operations.
We intend
    to perform internally the commercial management of our entire
    fleet and, by the end of the first quarter of 2006, the
    technical management of our fleet. We believe that utilizing our
    own commercial and technical management will enable us to reduce
    our operating expenses by eliminating external management fees
    and commissions. In addition, we believe that our policy of
    staffing each of our vessels with qualified officers and crews
    who share a common nationality will enable us to increase the
    efficiency of our vessel operations.
•
Strategically Expand the Size of Our Fleet.
The size of
    our initial fleet places us within the top twenty owners of
    Panamax drybulk vessels worldwide, and our goal is to further
    expand our worldwide presence in the drybulk carrier market. We
    believe that our worldwide presence will enable us to capitalize
    on economies of scale in the management of our fleet, maximize
    our fleet's utilization, and minimize positioning days.
•
Flexible Financial Strategy.
In order to fund future
    acquisitions we intend to pursue a financial strategy that
    maximizes our flexibility. The proceeds from this offering will
    allow us to repay our outstanding indebtedness. We believe our
    low debt level will provide us with the flexibility to take
    advantage of acquisition opportunities as they arise.
•
Leveraging our Sponsors' Strategic Relationships.
Our Sponsors and their affiliates have extensive experience and
    relationships in the coal, steel and iron ore industries. We
    plan to use these relationships to identify chartering
    opportunities, make contacts, and gain market intelligence in
    these core commodities industries.
Our Relationship with Our Sponsors
Quintana Maritime Investors LLC, our parent, is beneficially
owned by affiliates of each of Mr. Robertson, First
Reserve, and AMCI. We have a strong relationship with our
Sponsors and certain of their affiliates. Following the
consummation of this offering, we expect that Quintana Maritime
Investors LLC will be liquidated and its ownership interest in
us will be distributed to its members, affiliates of our
Sponsors.
Mr. Robertson is chairman of our board of directors and is
the beneficial owner of the controlling interest in the general
partner of Natural Resource Partners L.P. ("NRP"). NRP
is a publicly traded limited partnership engaged principally in
the business of owning and managing coal properties in the
United States. First Reserve is the largest and oldest private
equity firm specializing in the energy industry, with
$4.7 billion under management across four active funds,
including significant interests in the coal industry. AMCI is
one of the largest privately owned international coal companies,
and is engaged in the production, handling and marketing of
coal, iron ore and steel.
We believe that we will be able to leverage the collective
experience of our Sponsors in the energy, coal, steel and iron
ore industries to obtain chartering opportunities, contacts, and
market intelligence in the core commodities trades.
Our Vessel Management
We provide our own commercial management services for each of
our vessels on an exclusive basis. Commercial management
services include chartering, the sale and purchase of vessels,
and accounting.
Initially, our management team will provide the technical
management of three of our vessels and we will outsource the
technical management of five of our vessels to our third party
Manager. However, we expect to take over the technical
management of our entire fleet by the end of the first quarter
of 2006. Technical vessel management services include arranging
for and managing crews, maintenance, drydocking, repairs,
insurance, ensuring regulatory and classification society
compliance, appointing supervisors and technical consultants and
providing technical support. Please read
"Business — Management of Our Fleet."
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Table of Contents
Our Dividend Policy
The payment of dividends is in the discretion of our board of
directors, subject to certain limitations as set forth in the
section of this prospectus entitled "Dividend Policy."
We have not yet established a dividend policy.
We believe that under current law, our dividend payments from
earnings and profits will constitute "qualified dividend
income" and non-corporate United States shareholders will
generally be subject to a 15% United States federal income tax
rate with respect to our dividend payments. Distributions in
excess of our earnings and profits will be treated first as a
non-taxable return of capital to the extent of a United States
shareholder's tax basis in its common stock on a
dollar-for-dollar basis and thereafter as capital gain. Please
see the sections of this prospectus entitled "Dividend
Policy" and "Tax Considerations" for additional
information regarding dividend payments generally.
Our Structure
Quintana Maritime Limited is a holding company incorporated
under the laws of the Marshall Islands. We own our vessels
through separate wholly-owned subsidiaries that are incorporated
in the Marshall Islands. We maintain our principal executive
offices at Pandoras 13 & Kyprou Street,
166 74 Glyfada, Greece. Our telephone number at that
address is 011-30-210-898-5056.
Enforceability of Civil Liabilities
Quintana Maritime Limited is a Marshall Islands company, and our
principal executive offices are located outside the United
States in Glyfada, Greece. Some of our directors may reside
outside of the United States. Two of our officers, as well as
the shipping industry experts named in the prospectus, also
reside outside the United States. In addition, all of our assets
and a substantial portion of the assets of our
non-U.S. directors, non-U.S. officers and shipping
industry experts are located outside the United States. As a
result, you may have difficulty serving legal process within the
United States upon us or any of these persons. You may also have
difficulty enforcing, both in and outside the United States,
judgments you may obtain in United States courts against us or
these persons in any action, including actions based upon the
civil liability provisions of United States federal or state
securities laws. Furthermore, there is substantial doubt that
the courts of the Marshall Islands or Greece would enter
judgments in original actions brought in those courts predicated
on United States federal or state securities laws.
The International Drybulk Shipping Industry
The discussions contained under the sections of this prospectus
entitled "Prospectus Summary — Industry
Trends," "Business" and "The International
Drybulk Shipping Industry" have been reviewed by Drewry
Shipping Consultants, Ltd., or Drewry, which has confirmed to us
that these sections accurately describe the international
drybulk shipping industry, subject to the reliability of the
data supporting the statistical and graphical information
presented in this prospectus.
The statistical and graphical information we use in this
prospectus has been compiled by Drewry from its database. Drewry
compiles and publishes data for the benefit of its clients. Its
methodologies for collecting data, and therefore the data
collected, may differ from those of other sources, and its data
do not reflect all or even necessarily a comprehensive set of
the actual transactions occurring in the market.
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Table of Contents
The Offering
Common stock offered
shares
Common stock to be outstanding immediately after this offering
shares
Use of proceeds
We estimate that the net proceeds to us from this offering,
    after deducting underwriting discounts and estimated offering
    expenses, will be approximately
    $                     million.
    We intend to use approximately
    $                     million
    of the net proceeds to repay the outstanding debt incurred to
    finance or refinance the purchase of our vessels under our
    secured term loan and to fund a portion of the purchase price of
    any remaining vessels. We intend to use
    $           million
    of the net proceeds to pay a dividend to Quintana Maritime
    Investors LLC, our sole shareholder existing immediately prior
    to this offering. See "Use of Proceeds." We also
    intend to use the proceeds we receive from any shares sold
    pursuant to the underwriters' over-allotment option to pay
    an additional dividend to our sole shareholder existing
    immediately prior to the offering. To the extent the
    underwriters' over-allotment option is not exercised in
    full, the additional dividend will be payable to that sole
    shareholder in additional shares. Please see "Related Party
    Transactions — Dividend."
Nasdaq National Market
We will apply to list our common stock for quotation on the
    Nasdaq National Market under the symbol "QMAR."
Risk Factors
Investing in our common stock involves substantial risks. You
should carefully consider all the information in this prospectus
prior to investing in our common stock. In particular, we urge
you to consider carefully the factors set forth in the section
of this prospectus entitled "Risk Factors" beginning
on page 8.
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Table of Contents
Quintana Maritime Limited
Summary Consolidated Financial Data
We were incorporated on January 13, 2005. The following
table sets forth our summary consolidated financial data for the
period from January 13, 2005 (inception) through and as of
March 31, 2005. As of March 31, 2005, we had not taken
delivery of any of our Panamax vessels and we did not conduct
any significant operations during the period presented. The
following financial data also does not reflect significant
capital contributions and debt incurrences following the balance
sheet date. See "Capitalization." The data were
derived from our audited consolidated financial statements,
which are included in this prospectus, and should be read in
connection with the consolidated financial statements, related
notes and other financial information included herein.
For Period from
January 13, 2005
through
March 31, 2005
(In thousands)
Consolidated Statement of Operations Data:
Net loss
$
(156.9
)
Consolidated Balance Sheet Data (at period end):
Cash and cash equivalents
$
707.8
Total current assets
726.5
Total non-current assets
28,858.9
Total assets
29,585.5
Total liabilities
155.3
Shareholder's equity
29,430.1
Consolidated Cash Flow Data:
Net cash used in operating activities
$
(20.3
)
Net cash used in investing activities
(28,858.9
)
Net cash from financing activities
29,587.0
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RISK FACTORS
You should consider carefully the following factors, as well
as the other information set forth in this prospectus, before
making an investment in our common stock. Some of the following
risks relate principally to the industry in which we operate and
our business in general. Other risks relate principally to the
securities market and ownership of our common stock. The
occurrence of any of the events described in this section could
significantly and negatively affect our business, financial
condition, operating results or cash available for dividends or
the trading price of our common stock and cause you to lose all
or part of your investment.
Company Specific Risk Factors
Because we are a new company with a limited operating
    history, we may be less successful in implementing our business
    strategy than a more seasoned company.
We were formed in January 2005 and a portion of our fleet
commenced operations in April 2005. As a result, we have a
limited performance record and operating history. Our historical
financial statements predate the commencement of our operations,
and therefore do not provide a meaningful basis for you to
evaluate our operations or our ability to achieve our business
strategy. We may be less successful in implementing our business
strategy than a more seasoned company.
We have not yet adopted a dividend policy and cannot
    assure you that our board of directors will declare
    dividends.
We have not yet adopted a dividend policy. The declaration and
payment of dividends, if any, will always be subject to the
discretion of our board of directors and the requirements of
Marshall Islands law. The timing and amount of any dividends
declared, if any, will depend on, among other things, our
earnings, financial condition and cash requirements and
availability, our ability to obtain debt and equity financing on
acceptable terms as contemplated by our growth strategy,
provisions of Marshall Islands law governing the payment of
dividends and restrictive covenants in our existing and future
debt instruments. The international drybulk shipping industry is
highly volatile, and we cannot predict with certainty the amount
of cash, if any, that will be available for distribution as
dividends in any period. Also, there may be a high degree of
variability from period to period in the amount of cash, if any,
that is available for the payment of dividends.
We may incur expenses or liabilities or be subject to other
circumstances in the future that reduce or eliminate the amount
of cash that we have available for distribution as dividends, if
any, including as a result of the risks described in this
section of the prospectus. Our growth strategy contemplates that
we will finance the acquisition of additional vessels through a
combination of our operating cash flow and debt and equity
financing. If financing is not available to us on acceptable
terms, our board of directors may determine to finance or
refinance acquisitions with a greater percentage of cash from
operations to the extent available, which would reduce or even
eliminate the amount of cash available for the payment of
dividends. We may also enter into new financing or other
agreements that will restrict our ability to pay dividends.
Marshall Islands law generally prohibits the payment of
dividends other than from surplus or while a company is
insolvent or would be rendered insolvent by the payment of such
a dividend. We may not have sufficient surplus in the future to
pay dividends. In addition, our term loan facility contains, and
we expect that any future debt agreements will contain,
covenants prohibiting us from paying dividends if there is a
default thereunder or if a default would result from the payment
of such dividends. See "Management's Discussion and
Analysis of Financial Condition and Results of
Operations — Term Loan Facility."
We can give no assurance that dividends will be paid in the
future.
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Table of Contents
Our earnings may be adversely affected if we do not
    successfully employ our vessels on medium- or long-term time
    charters or take advantage of favorable opportunities in the
    spot market.
We expect to seek to employ the majority of our vessels
primarily on medium- and long-term time charters. Although
medium- and long-term charters provide relatively steady streams
of revenue, our vessels committed to such charters may not be
available for immediate chartering for spot charters, during
periods of increasing charter hire rates when spot voyages might
be more profitable. If we cannot re-charter these vessels on new
medium- or long-term charters following the expiration of
previous charters, or employ them in the spot market profitably,
our results of operations and operating cash flow may suffer. We
cannot assure you that future charter hire rates will enable us
to operate our vessels profitably.
Because we will initially depend on our Manager to provide
    the technical management for a majority of our fleet, our
    operations will be vulnerable to any financial or operational
    problems of the Manager.
We are a newly formed company with eight employees as of
April 30, 2005. We have subcontracted, or will subcontract,
the technical management of five of the eight vessels in our
fleet, including crewing, maintenance and repair, to our Manager
under separate one-year management agreements. Although we
expect to provide the technical management of our entire fleet
through our wholly-owned subsidiary, Quintana Management LLC, by
the end of the first quarter of 2006, the loss of our
Manager's services or its failure to perform its
obligations to us before we take over the technical management
of our entire fleet could materially and adversely affect our
business, financial condition, results of operations and ability
to pay dividends. In addition, we may not be able to put in
place the required personnel or infrastructure, or otherwise
successfully take over the technical management of the vessels
being managed by our Manager upon the expiration of our current
vessel management agreements. Furthermore, we may find that we
are not a suitable replacement for our Manager.
The ability of our Manager to continue providing services for
our benefit will depend in part on its own financial strength.
Circumstances beyond our control could impair our Manager's
financial strength. Because our Manager is privately held, it is
unlikely that information about its financial strength would
become public or available to us prior to any default by our
Manager under the management agreement. As a result, an investor
might have little advance warning of problems that affect our
Manager, even though those problems could have a material
adverse effect on us. Our inability to successfully take over
the technical management of the vessels being managed by our
Manager or our inability to perform the technical management of
the vessels being managed by our Manager satisfactorily would
materially and adversely affect our business, financial
condition, results of operations and ability to pay dividends.
We may have difficulty properly managing our planned
    growth through acquisitions of additional vessels.
We intend to grow our business through selective acquisitions of
additional vessels. Our future growth will primarily depend on:
•
locating and acquiring suitable vessels;
•
identifying and consummating vessel acquisitions or joint
    ventures relating to vessel acquisitions;
•
enlarging our customer base;
•
managing our expansion; and
•
obtaining required financing on acceptable terms.
During periods in which charter hire rates are high, vessel
values generally are high as well, and it may be difficult to
consummate vessel acquisitions at favorable prices. In addition,
growing any business by acquisition presents numerous risks,
such as obtaining additional qualified personnel, managing
relationships with customers and integrating newly acquired
assets into existing infrastructure. We cannot give any
assurance that we will be successful in executing our growth
plans or that we will not incur significant expenses and losses
in connection with our future growth efforts.
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We cannot assure you that we will be able to borrow
    further amounts under our term loan facility, which we will need
    to fund our growth.
Our ability to borrow further amounts under our term loan
facility will be subject to satisfaction of certain customary
conditions precedent and compliance with terms and conditions
included in the loan documents. Prior to each borrowing, we will
be required, among other things, to provide the lenders with
acceptable valuations of the vessels in our fleet confirming
that they are sufficient to satisfy minimum security
requirements. To the extent that we are not able to satisfy
these requirements, including as a result of a decline in the
value of our vessels, we may not be able to borrow further
amounts under our term loan facility or any future debt
facility. If we are unable to borrow further amounts under our
term loan facility, we may be unable to fund the acquisition of
the remaining vessels in our initial fleet.
Restrictive covenants in our term loan facility impose,
    and any future debt facilities will impose, financial and other
    restrictions on us.
The term loan facility imposes and any future debt facility will
impose operating and financial restrictions on us. These
restrictions may limit our ability to, among other things:
•
pay dividends or make capital expenditures if we do not repay
    amounts drawn under the term loan facility when due, if there is
    a default under the term loan facility or if the payment of the
    dividend or capital expenditure would result in a default or
    breach of a loan covenant;
•
incur additional indebtedness, including through the issuance of
    guarantees;
•
change the flag, class or management of our vessels;
•
create liens on our assets;
•
sell our vessels;
•
merge or consolidate with, or transfer all or substantially all
    our assets to, another person; and
•
enter into a new line of business.
Therefore, we may need to seek permission from our lenders in
order to engage in some corporate actions. Our lenders'
interests may be different from ours and we cannot guarantee
that we will be able to obtain our lenders' permission when
needed. This may limit our ability to pay dividends to our
shareholders, finance our future operations, make acquisitions
or pursue business opportunities.
Servicing future indebtedness would limit funds available
    for other purposes, such as the payment of dividends.
We intend to finance our future fleet expansion program in part
with secured indebtedness. We may incur other indebtedness in
the future. While we may seek to refinance amounts drawn or
incurred, we cannot assure you that we will be able to do so on
terms that are acceptable to us or at all. If we are not able to
refinance these amounts on terms acceptable to us or at all, we
will have to dedicate cash flow from operations to pay the
principal and interest of this indebtedness. If we are not able
to satisfy these obligations, we may have to undertake
alternative financing plans. The actual or perceived credit
quality of our charterers, any defaults by them, and the market
value of our fleet, among other things, may materially affect
our ability to obtain alternative financing. In addition, debt
service payments under any future debt agreements or alternative
financing may limit funds otherwise available for working
capital, capital expenditures and other purposes, such as the
payment of dividends. If we are unable to meet our debt
obligations, or if we otherwise default under any future debt
agreements, our lenders could declare the debt, together with
accrued interest and fees, to be immediately due and payable and
foreclose on our fleet, which could result in the acceleration
of other indebtedness that we may have at such time and the
commencement of similar foreclosure proceedings by other lenders.
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Unless we set aside reserves for vessel replacement, at
    the end of a vessel's useful life our revenue will decline,
    which would adversely affect our cash flows and income.
Unless we maintain cash reserves for vessel replacement we may
be unable to replace the vessels in our fleet upon the
expiration of their useful lives. Our cash flows and income are
dependent on the revenues earned by the chartering of our
vessels to customers. If we are unable to replace the vessels in
our fleet upon the expiration of their useful lives, our
business, results of operations, financial condition and ability
to pay dividends will be adversely affected. Any reserves set
aside for vessel replacement would not be available for other
cash needs or dividends.
Purchasing and operating secondhand vessels may result in
    increased operating costs and reduced fleet utilization.
Our current business strategy includes the acquisition of
high-quality secondhand vessels. While we have the right to
inspect previously owned vessels prior to purchase, such an
inspection does not provide us with the same knowledge about
their condition that we would have if these vessels had been
built for and operated exclusively by us. Secondhand vessels may
have conditions or defects that we were not aware of when we
bought the vessel and that may require us to incur costly
repairs to the vessels. If this were to occur, such hidden
defects or problems may be expensive to repair when detected,
and if not detected may result in accidents or other incidents
for which we may become liable to third parties. Repairs may
require us to put a vessel into drydock, which would reduce our
fleet utilization and increase our costs. We do not expect to
receive the benefit of warranties on secondhand vessels.
When our initial time charters end, we may not be able to
    replace them promptly or with profitable ones.
We cannot assure you that we will be able to obtain charters at
comparable rates or with comparable charterers, if at all, when
the charters on the vessels in our fleet expire. The charterers
under these charters have no obligation to renew or extend the
charters. We will generally attempt to recharter our vessels at
favorable rates with reputable charterers as the initial
charters expire, unless management determines at that time to
employ the vessel in the spot market. We cannot assure you that
we will succeed. Failure to obtain replacement charters will
reduce or eliminate our revenue, our ability to expand our fleet
and our ability to pay dividends to shareholders.
If drybulk vessel charter hire rates are lower than they are
now, we may have to enter into charters with lower charter hire
rates. Also, it is possible that we may not obtain any charters.
In addition, we may have to reposition our vessels without cargo
or compensation to deliver them to future charterers or to move
vessels to areas where we believe that future employment may be
more likely or advantageous. Repositioning our vessels would
increase our vessel operating costs.
The international drybulk shipping industry is highly
    competitive, and we may not be able to compete successfully for
    charters with new entrants or established companies with greater
    resources.
We will employ our vessels in a highly competitive market that
is capital intensive and highly fragmented. Competition arises
primarily from other vessel owners, some of whom have
substantially greater resources than we do. Competition for the
transportation of drybulk cargo by sea is intense and depends on
price, location, size, age, condition and the acceptability of
the vessel and its operators to the charterers. Due in part to
the highly fragmented market, competitors with greater resources
could enter the drybulk shipping industry and operate larger
fleets through consolidations or acquisitions and may be able to
offer lower charter hire rates than we are able to offer.
We may be unable to retain key management personnel and
    other employees in the shipping industry, which may negatively
    impact the effectiveness of our management and results of
    operations.
Our success depends to a significant extent upon the abilities
and efforts of our management team, which was formed beginning
in January 2005. Our success will depend upon our ability to
retain key members of our management team and to hire new
members as may be necessary. The loss of any of
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these individuals could adversely affect our business prospects
and financial condition. Difficulty in hiring and retaining
replacement personnel could have a similar effect. We do not
intend to maintain "key man" life insurance on any of
our officers.
Risks associated with operating oceangoing vessels could
    negatively affect our business and reputation, which could
    adversely affect our revenues and stock price.
The operation of oceangoing vessels carries inherent risks.
These risks include the possibility of:
•
marine disaster;
•
environmental accidents;
•
cargo and property losses or damage;
•
business interruptions caused by mechanical failure, human
    error, war, terrorism, political action in various countries,
    labor strikes or adverse weather conditions; and
•
piracy.
Any of these circumstances or events could increase our costs or
lower our revenues. Because we will have only eight vessels in
our initial fleet, loss or damage to any one or more of our
vessels would have a material adverse effect on our business,
results of operations, financial condition and our ability to
pay dividends. In addition to any economic cost, the involvement
of our vessels in an environmental disaster may harm our
reputation. Our lack of operating history may increase these
risks.
The operation of drybulk carriers has certain unique
    operational risks.
With a drybulk carrier, the cargo itself and its interaction
with the ship may create operational risks. By their nature,
drybulk cargoes are often heavy, dense and easily shifted, and
they may react badly to water exposure. In addition, drybulk
carriers are often subjected to battering treatment during
unloading operations with grabs, jackhammers (to pry encrusted
cargoes out of the hold), and small bulldozers. This treatment
may cause damage to the vessel. Vessels damaged due to treatment
during unloading procedures may be more susceptible to breach to
the sea. Hull breaches in drybulk carriers may lead to the
flooding of the vessels holds. If a drybulk vessel suffers
flooding in its forward holds, the bulk cargo may become so
dense and waterlogged that its pressure may buckle the
vessel's bulkheads, leading to the loss of a vessel. If we
are unable to adequately maintain our vessels, we may be unable
to prevent these events. Any of these circumstances or events
could negatively impact our business, financial condition,
results of operations and ability to pay dividends. In addition,
the loss of any of our vessels could harm our reputation as a
safe and reliable vessel owner and operator.
Our vessels may suffer damage and we may face unexpected
    costs, which could adversely affect our cash flow and financial
    condition.
If our vessels suffer damage, they may need to be repaired. The
costs of repairs are unpredictable and can be substantial. The
loss of earnings while our vessels are being repaired and
repositioned, as well as the actual cost of these repairs, would
decrease our earnings and reduce the amount of cash that we have
available for dividends. We may not have insurance that is
sufficient to cover all or any of these costs or losses and may
have to pay costs not covered by our insurance.
The shipping industry has inherent operational risks that
    may not be adequately covered by our insurance.
We procure insurance for our fleet against risks commonly
insured against by vessel owners and operators. Our current
insurance for the vessels of which we have taken delivery
includes hull and machinery insurance, war risks insurance,
protection and indemnity insurance, which includes environmental
damage and pollution insurance. We can give no assurance that we
are adequately insured against all risks or that our insurers
will pay a particular claim. Even if our insurance coverage is
adequate to cover our losses, we may not be able to timely
obtain a replacement vessel in the event of a loss. Furthermore,
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we may not be able to maintain or obtain adequate insurance
coverage at reasonable rates for our fleet. We may also be
subject to calls, or premiums, in amounts based not only on our
own claim records but also the claim records of all other
members of the protection and indemnity associations through
which we receive indemnity insurance coverage for tort
liability. Our insurance policies also contain deductibles,
limitations and exclusions which increase our costs in the event
of a claim.
If our drybulk carriers are not delivered on time or are
    delivered with significant defects, our earnings and financial
    condition could suffer.
We have entered into separate memoranda of agreement with
third-party sellers to acquire five additional Panamax drybulk
carriers. Our operating strategy is based on having a minimum
fleet of eight vessels. We expect that these vessels will be
delivered to us by the end of September 2005. A delay in the
delivery of these vessels to us or the failure of the contract
counterparty to deliver a vessel at all could cause us to breach
our obligations under a related time charter and could adversely
affect our earnings, our financial condition and the amount of
dividends, if any, that we pay in the future. The delivery of
these vessels could be delayed or certain events may arise which
could result in us not taking delivery of a vessel, such as a
total loss of a vessel, a constructive loss of a vessel, or
substantial damage to a vessel prior to delivery. In addition,
the delivery of any of these vessels with substantial defects
could have similar consequences. We intend to conduct only a
limited inspection of these additional drybulk carriers.
The aging of our fleet may result in increased operating
    costs in the future, which could adversely affect our
    earnings.
In general, the cost of maintaining a vessel in good operating
condition increases with the age of the vessel. Our fleet has an
average age of approximately 8 years. As our fleet ages, we
will incur increased costs. Older vessels are typically less
fuel efficient and more costly to maintain than more recently
constructed vessels due to improvements in engine technology.
Cargo insurance rates also increase with the age of a vessel,
making older vessels less desirable to charterers. Governmental
regulations, including environmental regulations, safety or
other equipment standards related to the age of vessels may
require expenditures for alterations, or the addition of new
equipment, to our vessels and may restrict the type of
activities in which our vessels may engage. We cannot assure you
that, as our vessels age, market conditions will justify those
expenditures or enable us to operate our vessels profitably
during the remainder of their useful lives.
We may earn United States source income that is subject to
    tax, thereby reducing our earnings.
Under the U.S. Internal Revenue Code of 1986, or the Code,
50% of our gross income attributable to shipping transportation
that begins or ends, but that does not both begin and end, in
the United States is characterized as United States source
shipping income. Such income generally will be subject to a 4%
U.S. federal income tax without allowance for deduction,
unless we qualify for an exemption from such tax under
Section 883 of the Code. Our ability to qualify for the
exemption at any given time will depend upon circumstances
related to the ownership of our common stock at such time and
thus are beyond our control. In addition, our ability to qualify
for the exemption will depend upon our interpretation of
Treasury regulations promulgated under Section 883 of the
Code, which is subject to uncertainty following certain recent
statutory changes described in more detail the section of this
prospectus entitled "Tax Considerations." While we do
not expect to have a material amount of gross income
attributable to shipping transportation that begins or ends in
the United States, we can give no assurance that we would
qualify for the exemption under Section 883 with respect to
any such income we earn. Moreover, we can give no assurance that
the trading pattern of our ships will not change in the future.
As a result, our liability for tax could become material and our
net income and cash flow would be reduced by the amount of the
applicable tax. Please see the section of this prospectus
entitled "Tax Considerations" for additional
information relating to the U.S. taxation of our income.
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U.S. tax authorities could treat us as a
    "passive foreign investment company," which could have
    adverse U.S. federal income tax consequences to
    U.S. holders.
A foreign corporation will be treated as a "passive foreign
investment company," or PFIC, for U.S. federal income
tax purposes if either (1) at least 75% of its gross income
for any taxable year consists of certain types of "passive
income," or (2) at least 50% of the average value of
the corporation's assets produce or are held for the
production of those types of "passive income." For
purposes of these tests, "passive income" includes
dividends, interest, and gains from the sale or exchange of
investment property and rents and royalties other than rents and
royalties that are received from unrelated parties in connection
with the active conduct of a trade or business. For purposes of
these tests, income derived from the performance of services
does not constitute "passive income."
U.S. shareholders of a PFIC are subject to a
disadvantageous U.S. federal income tax regime with respect
to the income derived by the PFIC, the distributions they
receive from the PFIC, and the gain, if any, they derive from
the sale or other disposition of their shares in the PFIC.
Based on our operations as of the completion of this offering,
we do not believe that we are, nor do we expect to become, a
PFIC with respect to any taxable year. Since we expect to derive
substantially all of our income each year from the time
chartering and voyage chartering activities of our wholly-owned
subsidiaries, we believe that such income will be treated for
relevant U.S. federal income tax purposes as services
income, rather than rental income. Correspondingly, 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 that income, in particular our
vessels, should not constitute passive assets for purposes of
determining whether we are a PFIC in any taxable year.
Regarding the PFIC issue, there are legal uncertainties involved
in our determination that we are not a PFIC, and we are not
relying on an opinion of counsel on this issue. Furthermore, no
assurance can be given that the Internal Revenue Service will
accept our position or that we would not constitute a PFIC for
any future taxable year if there were to be changes in the
nature and extent of our operations.
Because we expect to generate all of our revenues in
    Dollars but may incur a significant portion of our expenses in
    other currencies, exchange rate fluctuations could hurt our
    results of operations.
We expect to generate all of our revenues in Dollars. We expect
to incur a portion of our operating expenses in currencies other
than Dollars. This difference could lead to fluctuations in net
income due to changes in the value of the Dollar relative to the
other currencies, in particular the Euro. Expenses, including
extraordinary expenses, incurred in foreign currencies against
which the Dollar falls in value will be higher in Dollar terms,
resulting in a decrease in our operating income. We have not
hedged against these risks. Our operating results could suffer
as a result.
We depend upon a limited number of customers for a large
    part of our revenues and the loss of one or more of these
    customers could adversely affect our financial
    performance.
We expect to derive a significant part of our revenue from a
limited number of customers. If one or more of these customers
is unable to perform under one or more charters with us and we
are not able to find a replacement charter, or if a customer
exercises certain rights to terminate the charter, we could
suffer a loss of revenues that could adversely affect our
financial condition, results of operations and cash available
for distribution as dividends to our shareholders.
We could lose a customer or the benefits of a time charter for
many different reasons, including if:
•
the customer fails to make charter payments because of its
    financial inability, disagreements with us or otherwise; or
•
the customer terminates the charter because we fail to deliver
    the vessel within a fixed period of time, the vessel is lost or
    damaged beyond repair, there are serious deficiencies in the
    vessel or prolonged periods of off-hire, or we default under the
    charter.
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If we lose a key customer, we may be unable to obtain charters
on comparable terms or may have increased exposure to the
volatile spot market, which is highly competitive and subject to
significant price fluctuations. The loss of any of our
customers, time charters or vessels, or a decline in payments
under our charters, could have a material adverse effect on our
business, results of operations, financial condition and our
ability to pay dividends.
We are a holding company, and we depend on the ability of
    our subsidiaries to distribute funds to us in order to satisfy
    our financial obligations and to make dividend payments.
We are a holding company and our subsidiaries conduct all of our
operations and own all of our operating assets. We have no
significant assets other than the equity interests in our
subsidiaries. As a result, our ability to make dividend payments
depends on our subsidiaries and their ability to distribute
funds to us. The ability of a subsidiary to make these
distributions could be affected by a claim or other action by a
third party, including a creditor, or by Marshall Islands law,
which regulates the payment of dividends by companies. If we are
unable to obtain funds from our subsidiaries, our board of
directors may exercise its discretion not to declare or pay
dividends. We do not intend to seek to obtain funds from other
sources to pay dividends.
As we expand our business, we may need to improve our
    operating and financial systems and will need to recruit
    suitable employees and crew for our vessels.
We are a newly formed company. Our current operating and
financial systems may not be adequate as we commence operations
and implement our plan to expand the size of our fleet, and our
attempts to improve those systems may be ineffective. In
addition, as we seek to expand our internal technical management
capabilities and our fleet, we will need to recruit suitable
additional seafarers and shoreside administrative and management
personnel. We cannot guarantee that we or our crewing agent will
be able to hire suitable employees as we expand our fleet. This
task will be made more difficult by our strategy of maintaining
single nationality crews. If we or our crewing agent encounters
business or financial difficulties, we may not be able to
adequately staff our vessels. If we are unable to develop and
maintain effective financial and operating systems or to recruit
suitable employees as we expand our fleet, our financial
performance may be adversely affected and, among other things,
the amount of cash available for distribution as dividends to
our shareholders may be reduced.
Industry Specific Risk Factors
The international drybulk shipping sector is cyclical and
    volatile, and this may lead to reductions and volatility in our
    charter hire rates, vessel values and results of
    operations.
The drybulk shipping industry is cyclical with attendant
volatility in charter hire rates and industry profitability. The
degree of charter hire rate volatility among different types of
drybulk carriers has varied widely, and charter hire rates for
drybulk carriers are currently near historically high levels.
See "The International Drybulk Shipping
Industry — Charter Rates." When we enter into a
charter when charter hire rates are low, our revenues and
earnings will be adversely affected as we do not expect to be
able to substantially lower our operating costs during periods
of industry weaknesses. In addition, a decline in charter hire
rates likely will cause the value of our vessels to decline. We
cannot assure you that we will be able to successfully charter
our vessels in the future or renew existing charters at rates
sufficient to allow us to meet our obligations or to pay
dividends to our shareholders. Because the factors affecting the
supply and demand for vessels are outside of our control and are
unpredictable, the nature, timing, direction and degree of
changes in industry conditions are also unpredictable.
Factors that influence demand for vessel capacity include:
•
demand for and production of drybulk products;
•
global and regional economic conditions;
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•
environmental and other regulatory developments;
•
the distance drybulk is to be moved by sea; and
•
changes in seaborne and other transportation patterns.
The factors that influence the supply of vessel capacity include:
•
the number of newbuilding deliveries;
•
the scrapping rate of older vessels;
•
vessel casualties;
•
the number of vessels that are out of service;
•
the price of steel;
•
changes in environmental and other regulations that may limit
    the useful lives of vessels; and
•
port congestion.
We anticipate that the future demand for our drybulk carriers
will be dependent upon, among other things, continued economic
growth in the world's economies, including China and India,
and will be influenced by seasonal and regional changes in
demand, changes in the capacity of the global drybulk carrier
fleet and the sources and supply of drybulk cargo to be
transported by sea. We believe the capacity of the global
drybulk carrier fleet will increase. If the supply of drybulk
carrier capacity increases and the demand for drybulk carrier
capacity does not increase or increases less quickly, the
charter hire rates paid for our vessels could materially
decline. Adverse economic, political, social or other
developments could have a material adverse effect on our
business, financial condition, results of operations and ability
to pay dividends.
Charter
hire rates in the drybulk sector are near historically high
levels and future growth will depend on continued economic
growth in the world economy that exceeds the capacity of the
growing world fleet's ability to match it.
Charter hire rates for the drybulk sector are near historically
high levels. We anticipate that future demand for our drybulk
carriers, and in turn our future charter hire rates, will be
dependent upon continued economic growth in the world's
economy, particularly in China and India, and will be influenced
by seasonal and regional changes in demand and changes in the
capacity of the world's fleet. We believe the capacity of
the world's fleet will increase and there can be no
assurance that economic growth will continue. A decline in
demand for commodities transported in drybulk carriers or an
increase in supply of drybulk carriers could cause a decline in
charter hire rates which could have a material adverse effect on
our business, financial condition, results of operations and
ability to pay dividends.
The
market value of our vessels may decrease, which could limit the
amount of funds that we can borrow under our credit facility,
cause us to fail to meet certain financial covenants in our
credit facility and adversely affect our operating
results.
The fair market value of drybulk vessels has generally
experienced high volatility and market prices for secondhand
drybulk carriers are currently near historically high levels.
You should expect the market value of our vessels to fluctuate
depending on general economic and market conditions affecting
the shipping industry and prevailing charter hire rates,
competition from other shipping companies and other modes of
transportation, types, sizes and age of vessels, applicable
governmental regulations and the cost of newbuildings. If the
market value of our fleet declines, we may not be able to draw
down the full amount of our credit facility and we may not be
able to obtain other financing on terms that are acceptable to
us or at all. Please see the section of this prospectus entitled
"International Drybulk Shipping Industry" for
information concerning historical prices of drybulk carriers.
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If the market value of our vessels decreases, we may breach some
of the covenants contained in the financing agreements relating
to our indebtedness at the time, including covenants in our
credit facility. If we do breach such covenants and we are
unable to remedy the relevant breach, our lenders could
accelerate our debt and foreclose on our fleet. In addition, if
the book value of a vessel is impaired due to unfavorable market
conditions or a vessel is sold at a price below its book value,
we would incur a loss that could have a material adverse effect
on our financial condition and results of operations.
Our
substantial operations outside the United States expose us to
political, governmental and economic instability, which could
harm our operations.
Because our operations are primarily conducted outside of the
United States, they may be affected by economic, political and
governmental conditions in the countries where we are engaged in
business or where our vessels are registered. Future hostilities
or political instability in regions where we operate or may
operate could have a material adverse effect on our business,
results of operations and ability to pay dividends. In addition,
tariffs, trade embargoes and other economic sanctions by the
United States or other countries against countries where our
vessels trade may limit trading activities with those countries,
which could also harm our business, financial condition, results
of operations and ability to pay dividends.
Seasonal
fluctuations in industry demand could adversely affect our
operating results and the amount of available cash with which we
can pay dividends.
We will operate our vessels in markets that have historically
exhibited seasonal variations in demand and, as a result, in
charter hire rates. This seasonality may result in
quarter-to-quarter volatility in our operating results, which
could affect the amount of dividends, if any, that we pay to our
shareholders from quarter to quarter. The drybulk carrier market
is typically stronger in the fall and winter months in
anticipation of increased consumption of coal and other raw
materials in the northern hemisphere during the winter months.
As a result, we expect our revenues to be weaker during the
fiscal quarters ended June 30 and September 30, and,
conversely, we expect our revenues to be stronger in fiscal
quarters ended December 31 and March 31. This
seasonality could materially affect our business, financial
condition, results of operations and ability to pay dividends.
We are subject to regulation and liability under
    environmental laws that could require significant expenditures
    and affect our cash flow and net income.
Our business and the operations of our vessels are regulated
under international conventions, national, state and local laws
and regulations in force in the jurisdictions in which our
vessels operate, as well as in the country of their registration
in order to protect against potential environmental impacts. As
a result of highly publicized accidents in recent years,
government regulation of vessels, particularly in the area of
environmental requirements, can be expected to become more
stringent in the future and could require us to incur
significant capital expenditure on our vessels to keep them in
compliance, or even to scrap or sell certain vessels altogether.
For example, various jurisdictions are considering regulating
the management of ballast waters to prevent the introduction of
non-indigenous species that are considered invasive. While we
cannot in every instance predict the extent of the costs that
will be required to comply with these requirements,
environmental regulations should apply to all vessels registered
in countries that have ratified the various conventions upon
which such requirements are based, and should therefore apply to
most of our competitors to the same extent as they apply to us.
These requirements can also affect the resale value or useful
lives of our vessels, require a reduction in cargo capacity,
ship modifications or operational changes or restrictions, lead
to decreased availability of or more costly insurance coverage
for environmental matters or result in the denial of access to
certain jurisdictional waters or ports, or detention in certain
ports. Under local, national and foreign laws, as well as
international treaties and conventions, we could incur material
liabilities, including cleanup obligations, natural resource
damages, personal injury and property damage claims in the event
that there is a release
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of petroleum or other hazardous materials from our vessels or
otherwise in connection with our operations. Violations of, or
liabilities under, environmental requirements can result in
substantial penalties, fines and other sanctions, including in
certain instances, seizure or detention of our vessels. Events
of this nature would have a material adverse impact on our
financial condition, results of operations and our ability to
pay dividends to our unit holders.
For additional information on these and other environmental
requirements, you should carefully review the information
contained in "Business-Environmental and Other
Regulations."
We are subject to international safety regulations and the
    failure to comply with these regulations may subject us to
    increased liability, may adversely affect our insurance coverage
    and may result in a denial of access to, or detention in,
    certain ports.
The hull and machinery of every commercial vessel must be
classed by a classification society authorized by its country of
registry. The classification society certifies that a vessel is
safe and seaworthy in accordance with the applicable rules and
regulations of the country of registry of the vessel and the
Safety of Life at Sea Convention.
A vessel must undergo Annual Surveys, Intermediate Surveys and
Special Surveys. In lieu of a Special Survey, a vessel's
machinery may be on a continuous survey cycle, under which the
machinery would be surveyed periodically over a five-year
period. Every vessel is required to be drydocked every two to
three years for inspection of the underwater parts of such
vessel. If any of our vessels does not maintain its class or
fails any Annual Survey, Intermediate Survey or Special Survey,
the vessel will be unable to trade between ports and will be
unemployable. Moreover, as a result, we could be in violation of
certain covenants in our loan agreements, all of which would
negatively impact our revenues and liquidity.
The operation of our vessels is affected by the requirements set
forth in the International Maritime Organization's
International Management Code for the Safe Operation of Ships
and Pollution Prevention, or ISM Code. The ISM Code requires
shipowners and ship managers to develop and maintain an
extensive "Safety Management System" that includes the
adoption of a safety and environmental protection policy setting
forth instructions and procedures for safe operation and
describing procedures for dealing with emergencies. The failure
of a shipowner to comply with the ISM Code may subject it to
increased liability, may invalidate existing insurance or
decrease available insurance coverage for the affected vessels
and may result in a denial of access to, or detention in,
certain ports. We expect to have our own ISM Code
certification for the three vessels for which we will provide
in-house technical management prior to their delivery.
Initially, we will rely on our Manager's certification
under the ISM Code in order to operate the five vessels under
management agreements with our Manager. We intend to obtain our
own ISM Code certification for these five vessels following this
offering, and prior to the expiration of our management
agreements. We cannot assure you that we will be able to obtain
our own ISM Code certification.
Maritime claimants could arrest one or more of our
    vessels, which could interrupt our cash flow.
Crew members, suppliers of goods and services to a vessel,
shippers of cargo and other parties may be entitled to a
maritime lien against a vessel for unsatisfied debts, claims or
damages. In many jurisdictions, a claimant may seek to obtain
security for its claim by arresting a vessel through foreclosure
proceedings. The arrest or attachment of one or more of our
vessels could cause us to default on a charter, interrupt our
cash flow and require us to pay large sums of money to have the
arrest or attachment lifted. In addition, in some jurisdictions,
such as South Africa, under the "sister ship" theory
of liability, a claimant may arrest both the vessel which is
subject to the claimant's maritime lien and any
"associated" vessel, which is any vessel owned or
controlled by the same owner. Claimants could attempt to assert
"sister ship" liability against one vessel in our
fleet for claims relating to another of our vessels.
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Governments could requisition our vessels during a period
    of war or emergency, resulting in a loss of earnings.
A government could requisition one or more of our vessels for
title or for hire. Requisition for title occurs when a
government takes control of a vessel and becomes its owner,
while requisition for hire occurs when a government takes
control of a vessel and effectively becomes its charterer at
dictated charter hire rates. Generally, requisitions occur
during periods of war or emergency, although governments may
elect to requisition vessels in other circumstances. Although we
would be entitled to compensation in the event of a requisition
of one or more of our vessels, the amount and timing of payment
would be uncertain. Government requisition of one or more of our
vessels may negatively impact our business, financial condition,
results of operations and ability to pay dividends.
Increased inspection procedures and tighter import and
    export controls could increase costs and disrupt our
    business.
International shipping is subject to various security and
customs inspections and related procedures in countries of
origin and destination. Inspection procedures can result in the
seizure of contents of our vessels, delays in the loading,
offloading or delivery and the levying of customs, duties, fines
and other penalties against us.
It is possible that changes to inspection procedures could
impose additional financial and legal obligations on us.
Furthermore, changes to inspection procedures could also impose
additional costs and obligations on our customers and may, in
certain cases, render the shipment of certain types of cargo
impractical. Any such changes or developments may have a
material adverse effect on our business, financial condition,
results of operations and our ability to pay dividends.
An economic slowdown in the Asia Pacific region could have
    a material adverse effect on our business, financial position
    and results of operations.
We expect that a significant number of the port calls made by
our vessels will involve the loading or discharging of raw
materials in ports in the Asia Pacific region. As a result, a
negative change in economic conditions in any Asia Pacific
country, particularly China, may have an adverse effect on our
business, financial position and results of operations, as well
as our future prospects. In recent years, China has been one of
the world's fastest growing economies in terms of gross
domestic product, which has had a significant impact on shipping
demand. We cannot assure you that such growth will be sustained
or that the Chinese economy will not experience negative growth
in the future. Moreover, any slowdown in the economies of the
United States, the European Union or certain Asian countries may
adversely affect economic growth in China and elsewhere. Our
business, financial position, results of operations, ability to
pay dividends, as well as our future prospects, will likely be
materially and adversely affected by an economic downturn in any
of these countries.
World events could affect our results of operations and
    financial condition.
Terrorist attacks such as the attacks on the United States on
September 11, 2001, the bombings in Spain on March 11,
2004 and the continuing response of the United States to these
attacks, as well as the threat of future terrorist attacks in
the United States or elsewhere, continues to cause uncertainty
in the world financial markets and may affect our business,
operating results and financial condition. The continuing
conflict in Iraq may lead to additional acts of terrorism and
armed conflict around the world, which may contribute to further
economic instability in the global financial markets. In
addition, political tensions or conflicts in the Asia Pacific
Region, particularly involving China, may reduce the demand for
our services. These uncertainties could also adversely affect
our ability to obtain any additional financing or, if we are
able to obtain additional financing, to do so on terms favorable
to us. In the past, political conflicts have also resulted in
attacks on vessels, mining of waterways and other efforts to
disrupt international shipping, particularly in the Arabian Gulf
region. Acts of terrorism and piracy have also affected vessels
trading in regions such as the South China Sea. Any of these
occurrences could have a
19
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material adverse impact on our business, financial condition,
results of operations and our ability to pay dividends.
Risks Relating to Our Common Stock
Our Sponsors will beneficially own a significant amount of
    our common stock, giving them a substantial influence over our
    corporate transactions and other matters. Their interests may
    conflict with yours, and the concentration of ownership of our
    common stock will limit the influence of public
    shareholders.
Upon completion of this offering, affiliates of each of
Mr. Robertson, First Reserve and AMCI will beneficially own
approximately
%
of our outstanding common stock, (approximately
%
if the underwriters exercise their over-allotment option in
full). Due to our Sponsors' significant ownership interest,
it has the ability to exert substantial influence over our board
of directors and its policies. Our Sponsors will be able to
substantially influence the outcome of shareholder votes,
including votes concerning the election of directors, the
adoption or amendment of provisions in our certificate of
incorporation or bylaws and possible mergers, corporate control
contests and other significant corporate transactions. This
concentration of ownership may have the effect of delaying,
deferring or preventing a change in control, a merger,
consolidation, take over or other business combination. This
concentration of ownership could also discourage a potential
acquirer from making a tender offer or otherwise attempting to
obtain control of us, which could in turn have an adverse effect
on the market price of our common stock.
Certain conflicts of interest may adversely affect
    us.
Mr. Robertson is the beneficial owner of the controlling
interest in the general partner of NRP, which owns and manages
coal properties. First Reserve is a private equity firm
specializing in the energy industry with economic interests in
the coal sector. AMCI is engaged in the business of production,
handling and marketing of coal, iron ore and steel.
Mr. Robertson, First Reserve and AMCI are in the business
of making investments in companies and may from time to time
acquire and hold interests in businesses that compete directly
or indirectly with us. These other investments may create
competing financial demands on the affiliates of our Sponsors,
give rise to potential conflicts of interest and require efforts
consistent with applicable law to keep the other businesses
separate from our operations. Mr. Robertson, First Reserve
and AMCI and their affiliates may also pursue acquisition
opportunities that may be complementary to our business, and as
a result, those acquisition opportunities may not be available
to us. So long as our Sponsors continue to own a significant
amount of our equity, they will continue to be able to strongly
influence or effectively control our decisions.
If we do not implement all required accounting practices
    and policies we may be unable to provide the required financial
    information in a timely and reliable manner.
Prior to this offering, as a privately-held company, we did not
adopt the financial reporting practices and policies required of
a publicly traded company. Implementation of these practices and
policies could disrupt our business, distract our management and
employees and increase our costs. If we fail to develop and
maintain effective controls and procedures, we may be unable to
provide the financial information that a publicly traded company
is required to provide in a timely and reliable fashion.
The price of our common stock may be volatile following
    completion of this offering.
The price of our common stock after this offering may be
volatile and may fluctuate due to factors such as:
•
actual or anticipated fluctuations in our quarterly and annual
    results and those of other public companies in our industry;
•
mergers and strategic alliances in the drybulk shipping industry;
•
market conditions in the drybulk shipping industry;
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•
changes in government regulation;
•
shortfalls in our operating results from levels forecast by
    securities analysts;
•
announcements concerning us or our competitors; and
•
the general state of the securities market.
The drybulk shipping industry has been highly unpredictable and
volatile. The market for common stock of companies in this
industry may be equally volatile.
We are incorporated in the Marshall Islands, which does
    not have a well-developed body of corporate law.
Our corporate affairs are governed by our amended and restated
articles of incorporation and bylaws and by the Marshall Islands
Business Corporations Act, or the BCA. The provisions of the BCA
resemble provisions of the corporation laws of a number of
states in the United States. However, there have been few
judicial cases in the Marshall Islands interpreting the BCA. The
rights and fiduciary responsibilities of directors under the
laws of the Marshall Islands are not as clearly established as
the rights and fiduciary responsibilities of directors under
statutes or judicial precedent in existence in certain United
States jurisdictions. The rights of shareholders of the Marshall
Islands may differ from the rights of shareholders of companies
incorporated in the United States. While the BCA provides that
it is to be interpreted according to the laws of the State of
Delaware and other states with substantially similar legislative
provisions, there have been few, if any, court cases
interpreting the BCA in the Marshall Islands and we can not
predict whether Marshall Islands courts would reach the same
conclusions as United States courts. Thus, you may have more
difficulty in protecting your interests in the face of actions
by our management, directors or controlling shareholders than
would shareholders of a corporation incorporated in a United
States jurisdiction which has developed a more substantial body
of case law in the corporate law area.
Because we are incorporated under the laws of the Marshall
    Islands, it may be difficult to serve us with legal process or
    enforce judgments against us, our directors or our
    management.
We are incorporated under the laws of the Marshall Islands, and
all of our assets are located outside of the United States. Our
business is operated primarily from our offices in Glyfada,
Greece. In addition, initially two of our officers are or will
be non-residents of the United States, and all of our assets and
a substantial portion of the assets of these non-residents are
located outside the United States. As a result, it may be
difficult or impossible for you to bring an action against us or
against these individuals in the United States if you believe
that your rights have been infringed under securities laws or
otherwise. Even if you are successful in bringing an action of
this kind, the laws of the Marshall Islands and of other
jurisdictions may prevent or restrict you from enforcing a
judgment against our assets or the assets of our directors and
officers. For more information regarding the relevant laws of
the Marshall Islands, please read "Enforceability of Civil
Liabilities."
The shares of our common stock that purchasers purchase in
    this offering will experience immediate and substantial
    dilution.
The initial public offering price of our common stock will be
substantially higher than the tangible book value per share of
our outstanding common stock. Purchasers of our common stock in
this offering will incur dilution of approximately
$           per
share (based on an initial public offering price of
$           per
share, the mid-point of the range set forth on the cover of this
prospectus) in the net tangible book value of their purchased
shares. The shares of our common stock owned by existing
shareholders will receive a material increase in the net
tangible book value per share. Shareholders may experience
additional dilution if we issue common stock in the future. As a
result of this dilution, shareholders may receive significantly
less than the full purchase price they paid for the shares in
the event of a liquidation. Please read "Dilution."
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Because our common stock has never been publicly traded, a
    trading market may not develop for our common stock and
    shareholders may not be able to sell their stock.
Prior to this offering, there has not been a public market for
our common stock. A liquid trading market for our common stock
may not develop. The initial public offering price will be
determined in negotiations between the representative of the
underwriters and us and may not be indicative of prices that
will prevail in the trading market.
Future sales of our common stock could cause the market
    price of our common stock to decline.
Sales of a substantial number of shares of our common stock in
the public market following this offering, or the perception
that these sales could occur, may depress the market price for
our common stock. These sales could also impair our ability to
raise additional capital through the sale of our equity
securities in the future.
We intend to issue additional shares of our common stock in the
future and our shareholders may elect to sell large numbers of
shares held by them from time to time. Immediately, after this
offering, assuming that the underwriters do not exercise their
over-allotment option, our existing shareholder will
own                      shares,
or
approximately           %,
of our outstanding common stock. The number of shares of common
stock available for sale in the public market will be limited by
restrictions applicable under securities laws and agreements
that we and our executive officers, directors and existing
shareholder have entered into with the underwriters of this
offering. Subject to certain exceptions, these agreements
generally restrict us and our executive officers, directors and
existing shareholders from directly or indirectly offering,
selling, pledging, hedging or otherwise disposing of our equity
securities or any security that is convertible into or
exercisable or exchangeable for our equity securities and from
engaging in certain other transactions relating to such
securities for a period of 180 days after the date of this
prospectus without the prior written consent of Citigroup Global
Markets Inc. and Morgan Stanley & Co. Incorporated.
Provisions in our amended and restated articles of
    incorporation and amended and restated bylaws may discourage a
    takeover attempt even if doing so might be beneficial to our
    shareholders.
Provisions contained in our amended and restated articles of
incorporation and amended and restated bylaws could impose
impediments to the ability of a third party to acquire us even
if a change of control would be beneficial to our existing
shareholders. Provisions of our amended and restated articles of
incorporation and amended and restated bylaws impose various
procedural and other requirements, which could make it more
difficult for shareholders to effect certain corporate actions.
For example, our amended and restated articles of incorporation
authorize our board of directors to determine the rights,
preferences, privileges and restrictions of unissued series of
preferred stock, without any vote or action by our shareholders.
Thus, our board of directors can authorize and issue shares of
preferred stock with voting or conversion rights that could
adversely affect the voting or other rights of holders of our
common stock. These rights may have the effect of delaying or
deterring a change of control of our company, and could limit
the price that certain investors might be willing to pay in the
future for shares of our common stock. See "Description of
Capital Stock."
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USE OF PROCEEDS
We estimate that the net proceeds from the sale by us of the
shares of common stock being offered hereby, after deducting
underwriting discounts and estimated offering expenses, will be
approximately
$                     million,
assuming an initial public offering price per share of
$          ,
the mid-point of the range set forth on the cover of this
prospectus.
We intend to use approximately
$                     million
of the net proceeds to repay all of the outstanding indebtedness
under our secured term loan that we used to finance or refinance
the purchase of our vessels and to fund a portion of the
purchase price of any remaining vessels. We intend to use
$                million
of the net proceeds to pay a dividend to our sole shareholder
existing immediately prior to the offering, Quintana Maritime
Investors LLC, which is owned by affiliates of each of
Mr. Robertson, First Reserve and AMCI. We also intend to
use the proceeds we receive from any shares sold pursuant to the
underwriters' over-allotment option to pay an additional
dividend to Quintana Maritime Investors LLC. In the event the
underwriters exercise their over-allotment option in full,
$          would
be available to pay the additional dividend. To the extent the
underwriters' over-allotment option is not exercised in
full, the additional dividend will be payable to Quintana
Maritime Investors LLC in additional common shares. Please see
"Related Party Transactions — Dividend."
Holders who purchase common shares in this offering will not be
entitled to receive either of these dividends.
We currently expect that we will use a portion of such net
proceeds to repay all of our secured term loan facility. The
term loan facility currently accrues interest at LIBOR plus
1.625% per annum with respect to Tranche A and LIBOR
plus 2.50% per annum with respect to Tranche B, and is
due to mature on July 29, 2011, with quarterly amortization
prior thereto. Borrowings under the term loan facility will be
used to repay all amounts outstanding under a $150 million
bridge loan credit agreement that were incurred to finance the
purchase of a portion of our fleet and, together with the
proceeds of capital contributions, will be used to finance the
purchase of our remaining vessels and to pay related transaction
fees and expenses.
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Table of Contents
DIVIDEND POLICY
The payment of dividends is in the discretion of our board of
directors, subject to the requirements of Marshall Islands law
and the terms of any debt facilities. We have not yet
established a dividend policy. Marshall Islands law generally
prohibits the payment of dividends other than from surplus or
when a company is insolvent or if the payment of the dividend
would render the company insolvent.
We believe that, under current law, our dividend payments from
earnings and profits will constitute "qualified dividend
income" and as such non-corporate United States
shareholders will generally be subject to a 15% United States
federal income tax rate with respect to such dividend payments.
Distributions in excess of our earnings and profits will be
treated first as a non-taxable return of capital to the extent
of a United States shareholder's tax basis in its common
stock on a dollar-for-dollar basis and thereafter as capital
gain. Please see the section of this prospectus entitled
"Tax Considerations" for additional information
relating to the tax treatment of our dividend payments.
The dry bulk shipping industry is highly volatile, and we cannot
accurately predict the amount of cash distributions that we may
make in any period. Factors beyond our control may affect the
charter market for our vessels and our charterers' ability
to satisfy their contractual obligations to us, and we cannot
assure you that dividends will actually be declared or paid.
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CAPITALIZATION
The following table sets forth our consolidated capitalization
as of March 31, 2005:
•
on an actual basis;
•
on an as adjusted basis to give effect to significant changes to
    our capital structure which occurred subsequent to
    March 31, 2005, including:
—
the contribution of capital by our sole shareholder existing
    immediately prior to this offering; and
—
the incurrence of indebtedness under the secured term loan
    facility to finance or refinance the acquisition of vessels,
    assuming the purchase of all eight of our vessels; and
•
on a further as adjusted basis to give effect to:
—
the issuance of shares of common stock in this offering at an
    offering price of
    $           per
    share, which is the mid-point of the range set forth on the
    cover of this prospectus, and assuming that the underwriters
    have not exercised their over-allotment option; and
—
the application of the net proceeds of this offering to repay
    all of the outstanding debt under the senior secured term loan
    facility, to fund a portion of the purchase price of our vessels
    and to pay a dividend to our sole shareholder existing
    immediately prior to this offering, which is owned by affiliates
    of each of Mr. Robertson, First Reserve and AMCI, as
    described under "Use of Proceeds."
The following should be read in conjunction with the
accompanying financial statements, and the related notes
thereto, and the discussion under the heading
"Management's Discussion and Analysis of Financial
Condition and Results of Operations."
As of March 31, 2005
As Adjusted
for Capital
Contribution
As Further
and Debt
Adjusted for
Actual
Incurrence
this Offering
(Dollars in thousands)
Cash and cash equivalents
$
707.8
Debt:
Senior secured term loan facility
$
—
Total debt
$
—
$
$
Shareholders' equity:
Common stock at stated value (no par value),
    actual—500 shares authorized, issued and outstanding;
    as adjusted—    shares authorized
    and     shares issued and outstanding; as
    further adjusted—100,000,000 shares authorized
    and     shares issued and outstanding
$
0.5
$
$
Additional paid-in capital
29,586.5
Accumulated earnings (deficit)
(156.9
)
Total shareholders' equity
29,430.1
Total capitalization
$
29,430.1
$
$
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DILUTION
Dilution is the amount by which the offering price paid by the
purchasers of the common stock to be sold in this offering will
exceed the net tangible book value per share of common stock
after the offering. The net tangible book value per share
presented below is equal to the amount of our total tangible
assets (total assets less intangible assets) less total
liabilities as of March 31, 2005, divided by the number of
shares of our common stock that would have been held by our sole
shareholder existing prior to this offering as of March 31,
2005, assuming that on March 31, 2005, (i) we had
completed the distribution of shares of common stock to our sole
shareholder existing prior to this offering (which will occur if
the underwriters do not exercise any portion of their
over-allotment option) and
(ii) the           -for-one
stock split we expect to occur immediately prior to this
offering had occurred. On a pro forma basis, after giving effect
to:
•
the contribution of capital by our sole shareholder existing
    immediately prior to this offering and
    the      -for-one stock split;
•
the incurrence of indebtedness under our secured term loan
    facility to finance or refinance the acquisition of vessels,
    assuming the purchase of all eight of our vessels;
•
the sale by us
    of                      shares
    of common stock in this offering, after deducting underwriting
    discounts and estimated offering expenses and the application of
    the estimated net proceeds of this offering as described under
    "Use of Proceeds;" and
•
the payment of the approximately
    $           million
    dividend that we intend to declare prior to the consummation of
    this offering to our sole shareholder existing prior to this
    offering,
our pro forma net tangible book value as of March 31, 2005
would have been
$           million,
or
$           per
share of common stock. This represents an immediate increase in
net tangible book value (or a decrease in net tangible book
deficit) of
$           per
share to the existing shareholder and an immediate dilution in
net tangible book value of
$           per
share to new investors.
The following table illustrates the pro forma per share dilution
and appreciation at March 31, 2005:
Initial public offering price per share
Pro forma net tangible book value per share as of March 31,
    2005
Increase in net tangible book value attributable to new
    investors in this offering
Pro forma net tangible book value per share after giving effect
    to this offering
Dilution per share to new investors
We will reduce the number of shares that we will issue in the
stock distribution to our sole shareholder existing prior to
this offering described above by the number of shares sold to
the underwriters, if any, pursuant to their over-allotment
option. We will also make a cash distribution to that sole
shareholder equal to the net proceeds we receive from the sale
of our shares in the over-allotment option. Accordingly, our pro
forma net tangible book value will not be affected by the
underwriters' exercise of their over-allotment option.
The following table summarizes, on a pro forma basis as at
March 31, 2005, the differences between the number of
shares of common stock acquired from us, the total amount paid
and the average price per share paid by the existing holder of
shares of common stock and by you in this offering, based upon
the assumed initial public offering price of
$           per
share.
Pro Forma Shares
Outstanding
Total Consideration
Average
Price Per
Number
Percent
Amount
Percent
Share
Existing shareholder
%
%
New investors(1)
Total
100.0
%
100.0
%
(1)
Assumes exercise in full of the underwriters'
    over-allotment option.
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Total consideration and average price per share paid by our sole
shareholder existing prior to this offering in the table above
give effect to the approximately
$           million
dividend we intend to pay to the existing shareholder in
connection with this offering. As the table indicates, the
existing shareholder's total consideration for its shares
is approximately
$           million,
with an average share price of
$          ,
which means that the existing shareholder in the aggregate will
have received approximately
$           million
more than they originally invested.
The number of shares held by our sole shareholder prior to this
offering will be reduced to the extent the underwriters exercise
their option to purchase additional shares. If the underwriters
fully exercise their option the existing shareholder will own a
total
of                      shares
or approximately      % of our total
outstanding shares which will decrease the average price paid by
the existing shareholder per share
to $          .
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SELECTED CONSOLIDATED FINANCIAL DATA
We were incorporated on January 13, 2005. The following
table sets forth our selected consolidated financial data for
the period from January 13, 2005 (inception) through
March 31, 2005 and as of March 31, 2005. As of
March 31, 2005, we had not taken delivery of any of our
Panamax vessels, and we did not conduct any significant
operations during the period presented. The following financial
data also does not reflect significant capital contributions and
debt incurrences following the balance sheet date. See
"Capitalization." The data were derived from our
audited consolidated financial statements, which are included in
this prospectus and should be read in connection with the
consolidated financial statements, related notes and other
financial information included herein.
For Period from
January 13, 2005
through
March 31, 2005
(In thousands)
Consolidated Statement of Operations Data:
Net loss
$
(156.9
)
Consolidated Balance Sheet Data (at period end):
Cash and cash equivalents
$
707.8
Total current assets
726.5
Total non-current assets
28,858.9
Total assets
29,585.5
Total liabilities
155.3
Shareholder's equity
29,430.1
Consolidated Cash Flow Data:
Net cash used in operating activities
$
(20.3
)
Net cash used in investing activities
(28,858.9
)
Net cash from financing activities
29,587.0
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following management's discussion and analysis
should be read in conjunction with our historical consolidated
financial statements and the notes included elsewhere in this
prospectus. This discussion contains forward-looking statements
that reflect our current views with respect to future events and
financial performance. Our actual results may differ materially
from those anticipated in these forward-looking statements as a
result of certain factors, such as those set forth in the
section titled "Risk Factors" and elsewhere in this
prospectus.
Overview
We are an international provider of drybulk marine
transportation services that was incorporated in the Marshall
Islands on January 13, 2005 and began operations in April
2005. We expect to own and operate, through our subsidiaries, a
total of eight Panamax drybulk carriers by the end of the third
quarter of 2005. We have financed the acquisition of our fleet
through capital contributions by affiliates of each of
Mr. Robertson, First Reserve and AMCI and borrowings under
a $150 million bridge loan facility, which we will repay
through borrowings under our secured term loan facility. We will
use a portion of the net proceeds of this offering to repay all
of our debt under our secured term loan facility, to pay a
dividend to our sole shareholder existing prior to this offering
and to fund a portion of the purchase price of the remaining
vessels in our initial fleet.
As of March 31, 2005 we had not taken delivery of any of
our Panamax vessels and we and our subsidiaries had no
operations. We took delivery of our first three Panamax vessels
in April 2005, and since then have had limited shipping
operations as well as certain limited operations relating to the
acquisition, chartering and operation of our fleet. We expect to
take delivery of two additional vessels under purchase
agreements in May 2005, and of the remaining three vessels under
purchase agreements in July, August and September, respectively.
Charters
We will generate revenues by charging customers for the
transportation of drybulk cargo using our vessels. We expect
that the majority of our vessels will be employed under time
charters to well-established and reputable charterers. We expect
that the remainder of our vessels will be employed under spot
market charters.
A time charter is a contract for the use of a vessel for a
specific period of time during which the charterer pays
substantially all of the voyage expenses, including port and
canal charges and the cost of bunkers but the vessel owner pays
the vessel operating expenses. In the case of a spot market
charter, the vessel owner pays both the voyage expenses (less
specified amounts covered by the voyage charterer) and the
vessel operating expenses. Vessels operating in the spot charter
market generate revenues that are less predictable than time
charter revenues but may enable us to capture increased profit
margins during periods of improvements in drybulk rates.
However, we will be exposed to the risk of declining drybulk
rates when operating in the spot market, which may have a
materially adverse impact on our financial performance.
We believe that the important measures for analyzing future
trends in our results of operations consist of the following:
•
Ownership days.
We define ownership days as the
    aggregate number of days in a period during which each vessel in
    our fleet has been owned by us. Ownership days are an indicator
    of the size of our fleet over a period and affect both the
    amount of revenues and the amount of expenses that we record
    during a period.
•
Available days.
We define available days as the
    number of our ownership days less the aggregate number of days
    that our vessels are off-hire due to scheduled repairs or
    repairs under guarantee, vessel upgrades or special surveys and
    the aggregate amount of time that we spend positioning our
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vessels. The shipping industry uses available days to measure
    the number of days in a period during which vessels should be
    capable of generating revenues.
•
Operating days.
We define operating days as the
    number of our available days in a period less the aggregate
    number of days that our vessels are off-hire due to any reason
    not otherwise excluded in the calculation of available days,
    including unforeseen circumstances. The shipping industry uses
    operating days to measure the aggregate number of days in a
    period during which vessels actually generate revenues.
•
Fleet utilization.
We calculate fleet utilization
    by dividing the number of our operating days during a period by
    the number of our available days during the period. The shipping
    industry uses fleet utilization to measure a company's
    efficiency in finding suitable employment for its vessels and
    minimizing the amount of days that its vessels are off-hire for
    reasons other than scheduled repairs or repairs under guarantee,
    vessel upgrades, special surveys or vessel positioning.
•
TCE rates.
We define TCE rates as our voyage and
    time charter revenues less voyage expenses during a period
    divided by the number of our available days during the period,
    which is consistent with industry standards. TCE rate is a
    shipping industry performance measure used primarily to compare
    daily earnings generated by vessels on time charters with daily
    earnings generated by vessels on voyage charters, because
    charter hire rates for vessels on voyage charters are generally
    not expressed in per day amounts while charter hire rates for
    vessels on time charters generally are expressed in such amounts.
•
Spot Charter Rates.
Spot charter hire rates are
    volatile and fluctuate on a seasonal and year to year basis. The
    fluctuations are caused by imbalances in the availability of
    cargoes for shipment and the number of vessels available at any
    given time to transport these cargoes.
Voyage and Time Charter Revenue
Our revenues will be driven primarily by the number of vessels
in our fleet, the number of days during which our vessels
operate and the amount of daily charter hire rates that our
vessels earn under charters, which, in turn, will be affected by
a number of factors, including:
•
the duration of our charters;
•
our decisions relating to vessel acquisitions and disposals;
•
the amount of time that we spend positioning our vessels;
•
the amount of time that our vessels spend in dry-dock undergoing
    repairs;
•
the amount of time that our vessels spend in connection with
    maintenance and upgrade work;
•
the age, condition and specifications of our vessels;
•
levels of supply and demand in the drybulk shipping
    industry; and
•
other factors affecting spot market charter hire rates for
    drybulk carriers.
Voyage Expenses
When we employ our vessels on spot market voyage charters we
will incur expenses that include port and canal charges and
bunker expenses. We expect that port and canal charges and
bunker expenses will represent a relatively small portion of our
vessels' overall expenses because the majority of our
vessels are expected to be employed under time charters that
require the charterer to bear all of those expenses.
As is common in the drybulk shipping industry, we typically
expect to pay commissions ranging from 5% to 6.25% of the total
daily charter hire rate of each charter to unaffiliated ship
brokers associated with the charterers, depending on the number
of brokers involved with arranging the charter.
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Vessel Operating Expenses
Vessel operating expenses include crew wages and related costs,
the cost of insurance, expenses relating to repairs and
maintenance, the cost of spares and consumable stores, tonnage
taxes and other miscellaneous expenses. Our vessel operating
expenses will increase with the enlargement of our fleet. Other
factors beyond our control, some of which may affect the
shipping industry in general, including, for instance,
developments relating to market prices for insurance, may also
cause these expenses to increase.
Other Expenses
Our other expenses will consist of administrative expenses (such
as the salaries and other related costs of the executive
officers and the members of our board of directors and other
employees, our office rents, legal and auditing costs and other
miscellaneous office expenses/corporate overhead), the
vessels' management fees payable under our management
agreement with our Manager and payments under our term loan
facility and any future debt facility consisting of interest and
principal. We will pay our Manager a fixed-rate management fee
of $400 per day per each of the five vessels under its
management and reimburse our Manager for the vessel operating
expenses for these five vessels though, as described under
"— Vessel Management," we expect to assume
technical management of all of our vessels by the end of the
first quarter of 2006. We expect that savings due to elimination
of the fixed-rate management fee will at least partially be
offset by an increase in general and administrative expenses
associated with the hiring of additional personnel to perform
the technical management of more vessels. We expect general and
administrative expenses to increase as a result of this
offering, the costs associated with being a public company and
the enlargement of our fleet.
As we begin operating our fleet we may have other cash expenses
or contingent liabilities for which reserves are required.
We and our subsidiaries do not expect to have any income tax
liabilities in the Marshall Islands.
Depreciation
We depreciate our vessels based on a straight line basis over
the expected useful life of each vessel, which is 25 years
from the date of their initial delivery from the shipyard.
Depreciation is based on the cost of the vessel less its
estimated residual value, which is estimated in line with the
scrapping market price per lightweight ton, at the date of the
vessel's acquisition, which we believe is common in the
drybulk shipping industry.
Secondhand vessels are depreciated from the date of their
acquisition through their remaining estimated useful life.
However, when regulations place limitations over the ability of
a vessel to trade on a worldwide basis, its useful life is
adjusted to end at the date such regulations become effective.
Drydocking
We will capitalize the total costs associated with a drydocking
and amortize these costs on a straight-line basis over the
period until the next drydocking becomes due, which is typically
30 to 60 months. Regulations and/or incidents may change
the estimated dates of the next drydocking.
Financing costs
Fees incurred for obtaining new loans or refinancing existing
ones are deferred and amortized to interest expense over the
life of the related debt. Unamortized fees relating to loans
repaid or refinanced are expensed in the period the repayment or
refinancing occurs.
Vessel Management
We provide our own commercial management services for each of
our vessels on an exclusive basis. Commercial management
services include chartering, sale and purchase of vessels and
accounting services.
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Initially, our management team will provide the technical
management of three of our vessels and we will outsource the
technical management of five of our vessels to our Manager under
separate, one-year management agreements. Under the management
agreements, our Manager will provide technical vessel management
services such as arranging for and managing crews, maintenance,
drydocking, repairs, insurance, ensuring regulatory and
classification society compliance, appointing supervisors and
technical consultants and providing technical support. We will
pay our Manager a fixed management fee for each of the five
vessels under its management. We will also reimburse our Manager
for the operating costs of each of the five vessels under its
management.
We expect to provide the technical management of our entire
fleet by the end of the first quarter of 2006 through our
wholly-owned subsidiary, Quintana Management LLC. Please read
"Business — Management of Our Fleet."
Share Capital
As of May 3, 2005, our sole shareholder had contributed an
amount of $500 to us as paid-in capital for issuance of
500 shares of common stock. In addition, our sole
shareholder has made an additional capital contribution of
$66,280,637.
Liquidity and Capital Resources
Our liquidity requirements will relate to our operating
expenses, including payments under our ship management
agreements, quarterly payments of interest and the payment of
principal at maturity under our term loan facility and
anticipated payments under our anticipated revolving credit
facility, cash reserves for contingencies, future growth and
dividend payments.
We estimate that our cash flow from our charters will be
sufficient to fund our working capital requirements
approximately for the twelve month period following the closing
of this offering. We intend to enter into a revolving credit
facility on or about the closing date of this offering for
purposes of funding our future acquisitions of vessels. However,
we have not entered into any commitment letter from a
prospective lender, and cannot assure you that we will be able
to obtain a revolving credit facility or do so on favorable
terms.
Bridge Loan Facility
We and our subsidiaries entered into a $150 million bridge
loan facility, dated as of May 3, 2005, with Morgan Stanley
Senior Funding, Inc., as agent, and the initial lenders
thereunder. We initially borrowed $110 million thereunder
to finance a portion of the purchase price for the first three
of our vessels and related fees and expenses. We subsequently
borrowed an additional $40 million to finance a portion of
the purchase price of one or more additional vessels. We will
repay all amounts outstanding under such bridge loan facility in
early May 2005 out of the proceeds of the term loan facility
described below.
Term Loan Facility
General.
We and our subsidiaries have entered into
a new $262,456,000 secured delayed-draw term loan facility,
dated as of April 29, 2005, with Citibank, N.A. as original
lender, Citigroup Global Markets Limited as mandated lead
arranger, Citibank International plc as administrative agent and
Citicorp Trustee Company Limited as security trustee, and a
syndicate of other financial institutions. Loans under the term
loan facility may be used to finance in part the acquisition and
associated costs and expenses of vessels or to repay any bridge
financing incurred to acquire vessels. We will apply borrowings
under the term loan facility to repay all amounts outstanding,
plus accrued interest, under the bridge loan facility described
above. We may apply additional borrowings under our term loan
facility to fund the acquisition of the remaining vessels in our
fleet. We will apply
$           million
of the net proceeds of the offering to repay all indebtedness
outstanding under the term loan facility.
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Table of Contents
Fees and Interest.
We paid an underwriting fee and
a structuring fee upon our acceptance of the commitment letter
that we entered on the date that we signed the loan agreement. A
commitment fee will accrue on the amount of the undrawn balance
from the first available draw down date. An agency and security
trustee fee will be due annually.
Interest on amounts drawn will be payable at a rate of
1.625% per annum over LIBOR in respect of Tranche A
and 2.50% over LIBOR in respect of Tranche B, for interest
periods of 1, 2, 3 or 6 months or, if agreed by all
lenders with commitments, 9 or 12 months. In the event the
Tranche B term loans are not syndicated within
45 days, Tranches A and B will collapse into a single
tranche and interest will be payable at a rate of
1.75% per annum over LIBOR.
We are required to enter into hedging arrangements with respect
to 50% of the amount outstanding under the term loan facility no
later than October 1, 2005.
Term and Facility Limit.
The term loan facility
has a term of six years and three months. The term loan facility
will consist of Tranche A, in an aggregate amount equal to
the lesser of $213,245,500 and an amount equal to 65% of the
fair market value of our vessels, and a Tranche B, in an
aggregate amount equal to the lesser of $49,210,500 and 15% of
the fair market value of our vessels. Principal outstanding of
Tranche A is amortizable in 24 quarterly installments
beginning on December 30, 2005. Principal outstanding of
Tranche B is amortizable in 24 quarterly installments
beginning on December 30, 2005.
We will be permitted to borrow up to the facility limits,
provided that conditions to drawdown are satisfied. Among other
things, the aggregate principal amount applied in respect of any
vessel acquisition must not exceed 80% of the fair market value
of the vessel.
Prepayments.
We may voluntarily prepay
indebtedness under the secured term loan facility at any time,
without premium, in minimum principal amounts of
$2.0 million and in multiples of $1.0 million and pro
rata across Tranche A and Tranche B and pro rata
against each repayment installment.
We are required to mandatorily repay indebtedness upon any sale
of any vessel out of the net sale proceeds received and upon any
loss of any vessel upon the earlier of (i) 120 days of
such loss or 180 days if the collateral maintenance rate is
met and (ii) receipt of such proceeds. Assuming the net
proceeds of this offering are applied to repay at least
$100.0 million principal amount under our term loan
facility, we will not be required to apply available cash to
permanently repay indebtedness under the term loan facility. We
also are required to apply the first $50 million of net
cash proceeds of this offering and 50% of such net cash proceeds
in excess of $50 million to prepay indebtedness under the
term loan facility, in inverse order of maturity for
Tranche A and in order of maturity for Tranche B for
the first $50 million and pro rata across Tranche A
and Tranche B thereafter. We may use the remaining 50% of
such proceeds in excess of $50 million for general
corporate purposes (including the payment of dividends).
Security.
Our obligations under Tranche A
under the term loan facility are secured by, among other things,
a first priority mortgage on each of the vessels in our fleet,
stock in our subsidiaries, stock in us owned by Quintana
Maritime Investors, LLC, time charters and insurances. Our
obligations under Tranche B under the term loan facility
are secured by, among other things, a second priority mortgage
on each of the vessels in our fleet, stock in our subsidiaries,
stock in us owned by Quintana Maritime Investors, LLC, time
charters and insurances. Each of the tranches is secured equally
by a first priority security interest in all earnings related to
our vessels. In addition, our obligations under the term loan
facility are guaranteed by our subsidiaries. We may grant
additional security from time to time in the future.
Conditions.
Our ability to borrow amounts under
the term loan facility will be subject to the execution of
customary documentation relating to the facility, including
security documents, satisfaction of certain customary conditions
precedent and compliance with terms and conditions included in
the loan documents. Prior to each drawdown, we will be required,
among other things, to provide common equity financing equal to
at least 20% of the purchase price of the vessels and appraisals
reasonably satisfactory to the lead arrangers. In addition, on
the date of each vessel acquisition loan, seven of the vessels
shall be employed under a fixed rate charter on terms reasonably
satisfactory to the lead arranger, and
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after giving effect to all vessel acquisitions for our initial
fleet, a specified mix of 3-year, 2-year and 1-year time
charters and in the spot market.
Financial Covenants.
The term loan facility
contains financial covenants requiring us, among other things,
to ensure that:
•
the ratio of Total Debt (as defined) to Total Capitalization (as
    defined) shall be no greater than 0.80 to 1.00 at any time on or
    after January 1, 2006 and prior to January 1, 2007 and
    0.60 to 1.00 at any time on or after January 1, 2007,
•
we have consolidated cash and cash equivalents of not less than
    $5.0 million on the last day of each fiscal quarter from
    July 31, 2005 until 12 months from the closing date,
    increasing to $10.0 million from the beginning of the
    second year after the closing date, subject to increase to
    $15.0 million if more than half of our vessels fail to be
    employed under fixed rate charters,
•
the ratio of Consolidated EBITDA (as defined) to cash Interest
    Expense (as defined) is no less than 2.5 to 1.00 commencing
    December 31, 2005 and prior to January 1, 2008, 2.1 to
    1.00 commencing January 1, 2008 and prior to
    January 1, 2009, 2.25 to 1.00 commencing January 1,
    2009 and prior to January 1, 2010 and 2.5 to 1.00 at any
    time on or after January 1, 2010, and
•
the aggregate fair market value of the vessels shall be no less
    than 115% of the aggregate principal amount outstanding under
    the secured term loan facility during the first year after the
    closing date of the secured term loan facility and no less than
    125% of the aggregate principal amount thereafter. If the fair
    market value is less than the required amount, we will be
    required to either prepay indebtedness under the term loan
    facility or provide additional collateral, to the extent
    necessary to restore compliance with this covenant.
Restrictive Covenants.
The term loan facility will
also contain general covenants that will require us to maintain
adequate insurance coverage and to maintain our properties,
vessels and time charters. The term loan facility also limits us
and our subsidiaries from, among other things, incurring
indebtedness, making capital expenditures, payments, dividends,
entering into mergers, acquisitions (other than vessel
acquisitions) and divestitures or in engaging in transactions
with affiliates. In addition, the term loan facility will
include customary events of default, including those relating to
a failure to pay principal or interest, a breach of covenant,
representation and warranty, a cross-default to other
indebtedness and non-compliance with security documents.
Assuming the net proceeds of this offering are applied to repay
at least $100.0 million principal amount under our term
loan facility, our term loan facility will not prohibit us from
paying dividends not exceeding in any year Consolidated EBITDA
(as defined therein) less Consolidated Interest Expense (as
defined therein) less the aggregate amount of prepayments of
principal in that year, provided that no event of default has
occurred and is continuing or would occur as a result of the
payment of such dividends or distributions.
Inflation
Inflation does not have significant impact on vessel operating
or other expenses. We do not consider inflation to be a
significant risk to costs in the current and foreseeable future
economic environment. However, should the world economy be
affected by inflationary pressures this could result in
increased operating and financing costs.
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Table of Contents
Contractual Obligations
The following table sets forth our expected contractual
obligations and their maturity dates as of March 31, 2005.
Within
One to
Three to
More Than
One Year
Three Years
Five Years
Five Years
Total
(Dollars in thousands)
Vessel purchase agreements(1)
$
300,805.0
$
—
$
—
$
—
$
300,805.0
Management fees to Manager(2)
666.0
—
—
—
666.0
Office lease(3)
94.3
189.8
—
—
284.1
Total
$
301,565.3
$
189.8
$
—
$
—
$
301,755.1
(1)
As of March 31, 2005, we had entered into vessel purchase
    agreements for eight vessels for an aggregate purchase price of
    $329.45 million, of which we paid a 10% deposit on seven
    vessels, or $28.645 million. In April 2005 we paid the 10%
    deposit on the eighth vessel in the amount of $4.3 million.
    Subsequent to March 31, 2005, we took delivery of three of
    our vessels and paid the $107.865 million balance that was
    due on these vessels. We financed the balance of the payments
    with indebtedness under our bridge loan facility. We intend to
    repay all indebtedness under our bridge facility from borrowings
    under our term loan facility. The total purchase price of our
    five undelivered vessels is $209.6 million, of which a balance
    of $188.64 million will be due upon delivery of the
    vessels. We intend to pay this balance through a combination of
    additional borrowings under our bridge loan facility, our term
    loan facility, capital contributions, the net proceeds of the
    offering and cash on hand. We intend to repay all outstanding
    indebtedness under our term loan facility from the net proceeds
    of this offering.
(2)
Based upon the terms of management agreements with our Manager,
    assuming each of the five vessels under its management for the
    full terms of the management agreements.
(3)
Represents the U.S. Dollar equivalent of lease payments in
    Euros as calculated in accordance with the noon buying rate of
    the Federal Reserve Bank of New York of $1.2919 to
€
1.00 as of
    April 29, 2005. Our office lease has a three-year term.
Critical Accounting Policies
Critical accounting policies are those that reflect significant
judgments of uncertainties and potentially result in materially
different results under different assumptions and conditions. We
have described below what we believe will be our most critical
accounting policies, because they generally involve a
comparatively higher degree of judgment in their application.
Impairment of long-lived assets
We use SFAS No. 144 "Accounting for the
Impairment or Disposal of Long-lived Assets," which
addresses financial accounting and reporting for the impairment
or disposal of long-lived assets. The standard requires that,
long-lived assets and certain identifiable intangibles held and
used or disposed of by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount of the assets may not be recoverable. When the
estimate of undiscounted cash flows, excluding interest charges,
expected to be generated by the use of the asset is less than
its carrying amount, we should evaluate the asset for an
impairment loss. Measurement of the impairment loss is based on
the fair value of the asset as provided by third parties. In
this respect, management regularly reviews the carrying amount
of the vessels in connection with the estimated recoverable
amount for each of the our vessels.
Vessel depreciation
Depreciation is computed using the straight-line method over the
estimated useful life of the vessels, after considering the
estimated salvage value. Each vessel's salvage value is
equal to the product of its
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Table of Contents
lightweight tonnage and estimated scrap rate. Management
estimates the useful life of our vessels to be 25 years
from the date of initial delivery from the shipyard. Second hand
vessels are depreciated from the date of their acquisition
through their remaining estimated useful life. However, when
regulations place limitations over the ability of a vessel to
trade on a worldwide basis, its useful life is adjusted to end
at the date such regulations become effective.
Dry-docking costs
We follow the deferral method of accounting for dry-docking
costs whereby actual costs incurred are deferred and are
amortized on a straight-line basis over the period through the
date the next dry-docking is scheduled to become due.
Unamortized dry-docking costs of vessels that are sold are
written-off.
Qualitative and Quantitative Market Risk
Interest Rates
Our term loan facility initially will accrue interest at LIBOR
plus 1.625% per annum with respect to Tranche A and
LIBOR plus 2.50% with respect to Tranche B. In the event
the Tranche B term loans are not syndicated within
45 days, Tranches A and B will collapse into a single
tranche, which will accrue interest at LIBOR plus 1.75% per
annum. Our term loan facility matures on July 29, 2011,
with quarterly amortization prior thereto. If any amounts are
outstanding under our term loan facility on October 1,
2005, we will be required to enter into one or more interest
rate swap agreements to effectively exchange the floating
LIBOR-based interest rate on 50% of the principal amount then
outstanding for a fixed rate. See "— Term
Loan Facility." We expect to repay all indebtedness
outstanding under the term loan facility out of the net proceeds
of the offering. Since we do not expect to have any debt
outstanding under the term loan facility following the offering,
we expect to have no sensitivity to interest rate changes
thereunder. However, we expect to have sensitivity to interest
rate changes with respect to future debt facilities, including a
proposed revolving credit facility we expect to enter into on or
about the closing date. We have not entered into any commitment
letter from any prospective lender with respect to such a
facility, and we are not able to estimate at this time the
extent of any such sensitivity, which could be substantial.
Currency and Exchange Rates
We expect to generate all of our revenue in Dollars. The
majority of our operating expenses and the entirety of our
management expenses are in Dollars but we expect to incur up to
approximately 20% of our operating expenses in currencies other
than Dollars. This difference could lead to fluctuating in net
income due to changes in the value of the Dollar relative to
other currencies. We do not intend to use financial derivatives
to mitigate the risk of exchange rate fluctuations.
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Table of Contents
THE INTERNATIONAL DRYBULK SHIPPING INDUSTRY
The information and data in this section relating to the
international drybulk shipping industry has been provided by
Drewry Shipping Consultants, or Drewry, and is taken from Drewry
databases and other sources available in the public domain.
Drewry has advised us that it accurately describes the
international drybulk shipping industry, subject to the
availability and reliability of the data supporting the
statistical and graphical information presented. Drewry's
methodologies for collecting information and data, and therefore
the information discussed in this section, may differ from those
of other sources, and does not reflect all or even necessarily a
comprehensive set of the actual transactions occurring in the
drybulk shipping industry. Data marked "(p)" is
information presented on a provisional basis, as data reported
from various sources relating to 2004 may be subject to revision
until mid-2005.
Bulk Carrier Industry Overview
The international drybulk shipping industry is a vital link in
international trade, with oceangoing vessels representing the
most efficient, and often the only method of transporting large
volumes of basic commodities and finished products. In 2004,
approximately 2.5 billion tons of dry bulk cargo was
transported by sea, comprising more than one-third of all
international seaborne trade.
Drybulk cargo is cargo that is shipped in large quantities and
can be easily stowed in a single hold with little risk of cargo
damage. Drybulk cargo is generally categorized as either major
bulk or minor bulk. Major bulk cargo constitutes the vast
majority of drybulk cargo by weight, and includes, among other
things, iron ore, coal and grain. Minor bulk cargo includes
products such as agricultural products, mineral cargoes
(including metal concentrates), cement, forest products and
steel products and represents the balance of the drybulk
industry. Other dry cargo is categorized as container cargo,
which is cargo shipped in 20 or 40-foot containers and includes
a wide variety of finished products, and non-container cargo,
which includes other dry cargoes that cannot be shipped in a
container due to size, weight or handling requirements, such as
large manufacturing equipment or large industrial vehicles.
The balance of seaborne trade involves the transport of liquids
or gases in tanker vessels and includes products such as oil,
refined oil products and chemicals. The breakdown of seaborne
trade by main commodity type is indicated in the following table.
World Seaborne Trade in 2004 (p)
Tons (Millions)
% Total
All Cargo
Drybulk
2,456
38.3
%
Liquid (Oils/Gases/Chemicals)
2,520
39.8
%
Container Cargo
896
14.1
%
Non-Container
/
General Cargo
493
7.8
%
Total
6,365
100.0
%
Trade in Drybulk Commodities Only
Tons (Millions)
% Total
Coal
625
25.4
%
Iron Ore
645
26.3
%
Grain
228
9.3
%
Minor Bulks
958
39.0
%
Total
2,456
100.0
%
Source: Drewry
P = Provisional
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Drybulk Seaborne Trade — 2004 (p)
Source: Drewry
In terms of seaborne trade volumes (and the shipping ton-miles
generated), the dominant influence is that of the major bulk
trades, which include coal, iron ore and grains. During 2004
global seaborne trade in major bulks was an estimated
1.5 billion tons, representing 61% of the estimated total
seaborne drybulk trade.
Coal
Coal is an abundant commodity. At current production rates, coal
reserves would provide approximately 200 years of supply,
compared with 41 years for oil and 67 years for
natural gas. In addition, coal is mined in more than fifty
countries with no world dependence on any one region. Steam coal
is used mainly for power generation. Coking
(metallurgical) coal is used to produce coke to feed blast
furnaces in the production of steel.
In 2003, Japan and the European Union were the first- and
second-largest importers of coal, importing 161 million
tons and 110 million tons, respectively. Australia, the
largest exporter of steam coal, met much of this demand,
exporting 105 million tons in 2003, which represented 25%
of the world's export market. The second- and third-largest
exporters of steam coal in 2003 were Indonesia and China,
exporting 85 million tons and 73 million tons,
respectively.
China's coal exports and imports have increased
dramatically over the last five years; its 73 million
tons of exports in 2003 represented an average annual increase
of 42% since its 1999 exports of 12.7 million tons, and its
2003 imports of 10.8 million tons, represented an average
annual increase of 47% since the 1.6 million in 1999.
Iron Ore
Iron ore is used as a raw material for the production of steel
along with limestone and coking coal. Steel is the most
important construction and engineering material in the world. In
2004 approximately 650 million tons of iron ore were
exported worldwide, with the main importers being China, the
European Union, Japan and South Korea. The main producers and
exporters of iron ore are Australia and Brazil.
As the figures below indicate, Chinese imports of iron ore have
grown significantly in the last few years and have been a major
driving force in the dry bulk sector. Total estimated iron ore
imports for 2004
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of 208 million tons increased by approximately 40% over
2003 import levels and have increased at a compound annual
growth rate of 30% since 1999.
Chinese Iron Ore Imports
Year
Volume
(Million tons)
1999
55.3
2000
70.0
2001
92.5
2002
111.3
2003
148.2
2004
(p)
208.1
Source: Drewry
This growth rate in iron ore imports is matched by Chinese steel
production. Over the last five years, steel production in China
has grown at an average annual rate of almost 17%, compared to
global production increasing by an average 5.6% per
annum, as shown in the table below.
Crude Steel Production (million tons)
Year
EU
Japan
China
Global
1999
155.8
94.2
123.7
787.7
2000
163.3
106.4
127.2
829.6
2001
158.5
102.9
150.9
833.8
2002
158.1
107.7
179.7
883.9
2003
159.5
110.5
219.3
944.0
2004
170.0
112.7
269.3
1,033.5
Source: Drewry
Grain
Grains include wheat, coarse grains (corn, barley, oats, rye and
sorghum) and oil seeds extracted from different crops such as
soybeans and cottonseeds . In general, wheat is used for human
consumption, while coarse grains are used as feed for livestock.
Oil seeds are used to manufacture vegetable oil for human
consumption or for industrial use, while their protein rich
residue is used as a raw material in animal feed.
Total grain production is dominated by the U.S. Argentina
is the second largest producer followed by Canada and Australia.
In terms of imports, the Asia/ Pacific region (excluding Japan)
ranks first, followed by Latin America, Africa and the Middle
East.
Minor Bulks
The balance of dry bulk trade, minor bulks, subdivides into two
types of cargo. Firstly secondary bulks or free-flowing cargo,
such as agricultural cargoes, bauxite and alumina, fertilizers
and cement. Second are the so-called neo-bulks, non free-flowing
or part manufactured cargo. These are principally forest
products and steel products including scrap. The latter are
mainly transported in small vessels of less than 40,000 dwt. In
2004, total trade in minor bulks amounted to an estimated
958 million tons.
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Drybulk Demand
The demand for drybulk carrier capacity is determined by the
underlying demand for commodities transported in drybulk
carriers, which in turn is influenced by trends in the global
economy. Seaborne dry bulk trade increased by slightly more than
2%, on an average annual basis during the 1980s and 1990s.
However, this rate of growth has increased dramatically in
recent years. Between 1999 and 2004, trade in all drybulk
commodities increased from 1.97 billion tons to
2.46 billion tons, an increase of 25% overall, as shown in
the graph below.
Drybulk Trade Development
Source: Drewry
Generally, growth in GDP and industrial production correlates
with peaks in demand for seaborne transportation. Certain
economies will act from time to time as the "primary
driver" of the drybulk carrier market. In the 1990s Japan
acted as the primary driver due to growth in Japanese industrial
production. China has been the main driving force behind the
recent increase in seaborne drybulk trades and the demand for
bulk carriers. In addition to coal and iron ore, Chinese imports
of steel products have also increased sharply in the last five
years, thereby creating additional demand for drybulk carriers.
The following table illustrates China's gross domestic
product growth rate compared to that of the U.S. and global
growth during the periods indicated.
GDP Growth (% change)
Years
China GDP Growth
(%)
U.S. GDP Growth
(%)
Global GDP Growth
(%)
1981 – 1985
10.1
2.6
2.4
1986 – 1990
7.8
2.6
2.8
1991 – 1995
12.0
2.3
1.2
1996 – 2000
8.3
4.1
3.5
2001 – 2003
7.9
1.9
3.2
Source: Drewry and Asian Development Bank
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While the growth in Chinese trade has principally benefited the
larger sectors of the fleet (Capesize and Panamax), there has
been a significant "trickle down" effect to the
Handymax and Handysize vessels. In times of weak demand the
larger vessels will seek cargoes away from their main trades.
For example, Panamax vessels will carry more grain and forest
products when the coal trade is slow. This inevitably affects
the Handymax and Handysize market. Conversely, when demand for
the major bulks is strong, the Handymax and Handysize vessels
have a much stronger demand scenario, as they are not being
encroached by other sectors.
The extent to which increases in drybulk trade have affected
demand for drybulk carriers is shown in estimates of ton-mile
demand. Ton-mile demand is calculated by multiplying the volume
of cargo moved on each route by the distance of the voyage.
Between 1999 and 2004 ton-mile demand in the drybulk sector
increased by a total of 25% to 11.5 billion ton-miles. The
table below details the growth in ton mile demand for the main
drybulk commodities. For some commodities there has been over
the years a shift in demand due to changing trade routes. For
example the Brazil to China iron ore route started to be a
significant trade approximately six to eight years ago.
Previously the principal trade was Brazil to Japan. The increase
in trade on the route to China has had an increased effect on
the demand for shipping due to the length of the haul.
Conversely as Chinese demand has grown, there has been some
shift in the sourcing of iron ore away from Atlantic sources to
Pacific regions such as Australia. However this has not yet
reached significant proportions to affect the ton-mile demand.
Billion Ton-Mile Demand by Commodity
99-04
1999
2000
2001
2002
2003
2004
CAGR
Iron Ore
2,436
2,713
2,718
2,927
3,266
3,516
7.6%
Coal
2,367
2,530
2,612
2,657
2,788
2,950
4.5%
Grain
1,138
1,194
1,260
1,183
1,156
1,241
1.7%
Bauxite/ Alumina
192
195
190
197
204
212
2.0%
Phosrock
112
111
113
113
117
120
1.4%
Agribulks
434
424
440
436
441
453
0.9%
Forest Products
615
638
621
632
641
669
1.7%
Fertilisers
389
400
386
392
399
415
1.3%
Minerals
156
164
162
170
183
194
4.5%
Iron & Steel
924
984
977
1,033
1,107
1,225
5.8%
Manufactured Products
443
472
479
487
503
516
3.1%
Total Demand
9,205
9,825
9,958
10,227
10,805
11,511
4.6%
Source: Drewry
The following map represents the major global drybulk trade
routes. Drybulk carriers can be the most versatile element of
the global shipping fleets in terms of employment alternatives.
However, drybulk carriers seldom operate on round trip voyages.
Rather, the norm is port-to-port liner service and triangular or
multi-leg voyages. This means that every voyage has a ballast
leg that must be paid for by the laden or revenue earning leg.
It can be seen from the map that the three major commodities
travel great distances and are not confined to regional trade.
The longest trade route is iron ore from Brazil to China. As the
majority of the vessels that travel this route are Capesize
vessels, the route is via the Cape of Good Hope rather than the
Panama Canal.
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Table of Contents
Major Drybulk Seaborne Trade Routes
Source: Drewry
Seasonality
The three largest commodity drivers of the bulk industry, iron
ore, steam coal and grains, are all affected by seasonal demand
fluctuations. Transport of iron ore for use as a feed for the
steel industry tends to decline during the summer months when
many of the major steel users such as automotive manufacturers
reduce their production lines significantly during summer
holidays and vice versa. Steam coal is linked to the energy
markets and in general encounters upswings towards the end of
the year in anticipation of the forthcoming winter period, as
power supply companies try to increase their stocks, or during
hot summer periods when increased electricity demand is required
for air conditioning and refrigeration purposes. Grain
production is highly seasonal and driven by the harvest cycle of
the Northern and Southern Hemispheres. However, with five
nations representing the largest grain producers, (the U.S.,
Canada and the European Union in the northern hemisphere and
Argentina and Australia in the southern hemisphere), harvests
and crops reach seaborne markets throughout the year.
Supply
The worldwide dry bulk carrier fleet subdivides into four vessel
size categories, which are based on cargo carrying capacity.
Capesize
— vessels over 80,000 dwt. The
Capesize sector is focused on long haul iron ore and coal trade
routes. Due to the size of the vessels there are only a
comparatively small number of ports around the world with the
infrastructure to accommodate them. While this is the
traditional definition of a Capesize bulkcarrier, in terms of
deadweight the sector is changing. As per the orderbook detailed
below, there have been a number of new super-Panamaxes
ordered — so-called Kamsarmaxes — which are
82–85,000 dwt but are able to transit the Panama Canal
with a full cargo.
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Table of Contents
Panamax
— vessels between 60,000 dwt and 80,000
dwt. Panamax vessels, defined as those with the maximum beam
(width) of 32.2 meters permitted to transit the Panama Canal,
carry coal, grain, and to a lesser extent, minor bulks,
including steel products, forest products and fertilizers.
Handymax
— vessels between 35,000 dwt and
60,000 dwt. The Handymax sector operates in a large number of
geographically dispersed global trades, mainly carrying grains
and minor bulks including steel products, forest products, and
fertilizers. Vessels less than 60,000 dwt are built with
on-board cranes that enable them to load and discharge cargo in
countries and ports with limited infrastructure.
Handysize
— vessels up to 35,000 dwt, which
carry exclusively minor bulk cargoes. Historically, the
Handysize drybulk carrier sector was seen as the most versatile.
Increasingly, however, this has become more of a regional
trading, niche sector. The vessels are well suited for small
ports with length and draft restrictions and also lacking
infrastructure.
The supply of drybulk carriers is a function of the delivery of
new vessels and the removal of vessels from the global fleet,
either through scrapping or loss. The following chart
illustrates bulk carrier fleet development since 1990 through
this process.
Drybulk Carrier Fleet Development — Deliveries v
Scrappings
Source: Drewry
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The chart below shows bulk carrier fleet development between
1999 and March 2005 and how the orderbook has fluctuated
throughout this period. During this period, the number of
vessels comprising the bulk carrier fleet has increased at a
compound annual growth rate of 1.9%.
Drybulk Carrier Fleet and Orderbook Development
Source: Drewry
44
Table of Contents
The following tables illustrate the size and composition of the
world drybulk carrier fleet as of March 2005 and
historically back to 2000.
Drybulk Carrier Fleet — March, 2005
Current Fleet
Orderbook
Size
Dwt
% of
Dwt
% of
('000 dwt)
No.
(Million)
Fleet
No.
(Million)
Fleet
10-30
1,916
43.4
13.2
%
64
1.4
3.2
30-60
2,217
93.5
28.5
%
380
18.2
19.5
60-80
1,164
82.4
25.1
%
191
14.4
17.5
80-100
61
5.4
1.7
%
113
9.7
179.1
100-150
161
22.4
6.8
%
—
—
—
150+
456
80.9
24.7
%
146
28.8
35.6
Total
5,975
328.0
100.0
%
894
72.6
22.1
Source: Drewry
NB: In the 80-100,000 dwt sector the definitions are split. Of
the 61 vessels in the current fleet, just 9 are of a
Panamax design. Whereas of the 113 vessels on order, 68
have a design with a 32.2m beam, that is specifically
designed to transit the Panama Canal.
Historical Bulk Carrier Fleet and Orderbook 2000 to 2004
2000
2001
2002
2003
2004
Capesize (80,000+ dwt)
No of Vessels
555.0
583.0
598.0
625.0
661.0
Dwt (in millions)
86.3
91.3
94.0
98.6
104.9
Vessels as % of total fleet
10.0
%
10.4
%
10.6
%
11.0
%
11.3
%
Vessels on order
89.0
70.0
89.0
129.0
206.0
Dwt on order (millions)
14.5
10.9
14.5
18.9
30.7
% of sector fleet on order
16.8
%
12.0
%
15.4
%
19.2
%
29.2
%
Panamax (60-80,000 dwt)
No of Vessels
976.0
1040.0
1081.0
1095.0
1170.0
Dwt (in millions)
67.3
72.4
75.7
76.7
82.1
Vessels as % of total fleet
17.6
%
18.6
%
19.1
%
19.3
%
20.0
%
Vessels on order
360.0
125.0
87.0
238.0
271.0
Dwt on order (millions)
23.0
9.1
6.1
16.8
18.5
% of sector fleet on order
34.2
%
12.6
%
8.0
%
21.9
%
22.6
%
Handymax (30-60,000 dwt)
No of Vessels
1892.0
1932.0
1989.0
2034.0
2096.0
Dwt (in millions)
76.8
79.4
82.6
85.4
87.8
Vessels as % of total fleet
34.2
%
34.6
%
35.1
%
35.8
%
35.8
%
Vessels on order
138.0
231.0
200.0
238.0
298.0
Dwt on order (millions)
5.8
10.7
9.0
10.6
13.5
% of sector fleet on order
7.6
%
13.5
%
10.9
%
12.4
%
15.3
%
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2000
2001
2002
2003
2004
Handysize (10-30,000 dwt)
No of Vessels
2117.0
2027.0
1997.0
1924.0
1922.0
Dwt (in millions)
46.3
44.2
43.4
42.0
41.9
Vessels as % of total fleet
38.2
%
36.3
%
35.3
%
33.9
%
32.9
%
Vessels on order
94.0
73.0
45.0
60.0
58.0
Dwt on order (millions)
2.2
1.6
0.9
1.2
1.2
% of sector fleet on order
4.8
%
3.6
%
2.1
%
2.8
%
3.0
%
Total
No of Vessels
5540.0
5582.0
5665.0
5678.0
5849.0
Dwt (in millions)
276.7
287.3
295.7
302.7
316.7
Vessels on order
681.0
499.0
421.0
665.0
833.0
Dwt on order (millions)
45.6
32.4
30.4
47.5
63.9
% of total fleet on order
16.5
%
11.3
%
10.3
%
15.7
%
20.2
%
Source: Drewry
NB: the 80–100,000 dwt sector, included in the Capesize
sector in above table, has some vessels with a Panamax design
(as per previous note.)
The following table details the leading players in the Panamax
fleet as at March 31, 2005.
Leading Panamax Bulk Carrier Owners
Avg. Age
No. of Ships
Total Dwt
(yrs)
COSCO (Hong Kong)
33
2,330,076
10.6
COSCO Bulk Carrier
24
1,672,681
13.1
K-Line
19
1,551,597
5.2
NYK Line
18
1,529,381
7.8
MOL Mitsui OSK Lines
17
1,370,589
9.0
Golden Union
13
882,385
20.3
MISC Malaysian Int.
11
803,148
9.7
Hebei Ocean Shpg.
11
748,072
18.2
Emirates Trading
11
758,416
15.3
U-Ming Marine Tran.
10
753,119
8.1
Shoei Kisen K.K.
10
719,829
5.2
Clipper Group
8
566,107
9.4
COSCO Qingdao
8
558,067
15.6
Alpha Tankers & Frt.
8
581,713
7.1
Stamford Navigation
8
553,165
21.8
Sinotrans Shpg. Ltd.
8
585,690
7.0
Safety Management
8
608,952
2.6
Parakou Shpg.
8
592,881
5.4
Nisshin Shpg.Co.Ltd.
8
603,231
4.0
Cardiff Marine Inc.
8
561,768
13.0
Augustea Ship Mngt
8
576,414
9.8
Chandris (Hellas)
8
577,154
6.8
Klaveness Torvald
8
576,110
10.3
IRISL
8
583,223
4.8
Others
944
67,197,990
Total
1,225
87,841,758
12.3
Source: Drewry
NB: the above fleets are owned vessels only and do not include
vessels operated pursuant to long-term time charter agreements.
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The size of the bulk carrier orderbook fluctuates over time and
in March 2005 amounted to 72.6 million dwt, which
was equivalent to 22% of the existing fleet. Most of the ships
on order will be delivered within the next two to three years.
The Panamax orderbook currently stands at 14.4m dwt
representing 17.5% of the fleet. The table below shows the fleet
orderbook by sector as at end March 2005. It can be seen
that the 80-100,000 dwt sector of the current fleet is very
small. In the main it consists of older Capesize vessels and
some shallow drafted coal carriers. However the orderbook
associated with this sector is boosted by the new design
82,000 dwt Panamax vessels. Of the 113 vessels on order, 68
are of Panamax design.
Drybulk Carrier Orderbook — March, 2005
2005
2006
2007
2008+
Total
Size
% of
('000 dwt)
No.
Dwt
No.
Dwt
No.
Dwt
No.
Dwt
No.
Dwt
fleet
10-30
28
633
25
560
10
217
1
29
64
1,439
3.2
30-60
131
6,190
131
6,271
84
4,078
34
1,676
380
18,215
19.5
60-80
72
5,431
57
4,315
53
4,011
9
685
191
14,442
17.5
80-100
14
1,197
41
3,504
40
3,430
18
1,541
113
9,672
179.1
100-150
—
—
—
—
—
—
—
—
—
—
—
150+
40
7,311
46
8,313
33
6,344
28
6,953
147
28,921
35.7
Total
285
20,762
300
22,962
220
18,080
89
10,784
894
72,587
22.1
Source: Drewry
NB: the 80-100,000 dwt sector includes 68 vessels with a
Panamax design (as per previous note).
47
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The graph below details the age profile of the drybulk carrier
fleet as at end March 2005.
Drybulk Carrier Age Profile — March 2005
Source: Drewry
This age profile has then been split into sectors, in the four
graphs below. This illustrates where the modern vessels are in
the fleet.
Panamax Bulk Carrier Age Profile (60-80,000
dwt) — March 2005
Source: Drewry
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Bulk Carrier Age Profile (80-100,000 dwt) —
March 2005
Source: Drewry
The above graph details vessels of the older Capesize design,
and the modern vessels of the super-Panamax or Kamsarmax design,
as per previous notes.
Capesize Bulk Carrier Age Profile (100-150,000
dwt) — March 2005
Source: Drewry
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Capesize Bulk Carrier Age Profile (150,000+
dwt) — March 2005
Source: Drewry
The number of ships removed from the fleet in any period is
dependent upon prevailing market conditions, scrap prices in
relation to current and prospective charter market conditions as
well as the age profile of the existing fleet. Generally, as a
vessel increases in age its operational efficiency declines due
to rising maintenance requirements, to the point where it
becomes unprofitable to keep the ship in operation.
50
Table of Contents
The following table indicates the scrapping rates of dry bulk
carriers for the period 1999 to 2004.
Drybulk Carrier Scrapping
1999
2000
2001
2002
2003
2004
Capesize (80,000 dwt plus)
78
81.9
86.9
89.2
93.6
104.9
No. of Vessels
13.0
4.0
3.0
8.0
2.0
1.0
Dwt (million)
1.2
0.5
0.4
0.9
0.3
0.1
% of Fleet Scrapped
1.5
0.6
0.5
1.0
0.3
0.1
Panamax (60–80,000 dwt)
72.6
71.1
76.8
80.5
81.7
82.1
No. of Vessels
45.0
11.0
28.0
18.0
7.0
1.0
Dwt (million)
3.0
0.7
1.9
1.2
0.5
0.1
% of Fleet Scrapped
4.3
1.0
2.5
1.5
0.6
1.1
Handymax (35–60,000 dwt)
70.9
76.8
79.4
82.6
85.4
87.8
No. of Vessels
53.0
40.0
40.0
25.0
29.0
0.0
Dwt (million)
2.2
1.5
1.5
0.9
1.1
0.0
% of Fleet Scrapped
3.1
2.0
1.9
1.1
1.3
0.0
Handysize (up to 35,000 dwt)
47.4
46.4
44.2
43.4
42
41.9
No. of Vessels
66.0
50.0
62.0
64.0
25.0
4.0
Dwt (million)
1.5
1.2
1.4
1.6
0.6
0.1
% of Fleet Scrapped
3.2
2.6
3.2
3.7
1.4
0.2
Total
268.9
276.2
287.3
295.7
302.7
316.7
No. of Vessels
177.0
105.0
123.0
115.0
63.0
6.0
Dwt (million)
8.3
3.8
5.2
4.7
2.4
0.3
% of Fleet Scrapped
3.1
1.4
1.8
1.6
0.8
0.1
Source: Drewry
In the last five years the average age at which vessels in the
drybulk sector have been demolished is 26 years. Even
though there has been little variation in the age at which
drybulk vessels are scrapped, many well maintained vessels
continue to trade to ages of over 30 years.
The supply of drybulk carriers is not only a result of the
number of ships in service, but also the operating efficiency of
the worldwide fleet. For example, port congestion, which has
been a feature of the market in 2004, has increased voyage times
and effectively absorbed additional tonnage and therefore
tightened the underlying supply/demand balance.
Charter Market
Drybulk carriers are employed in the market via a number of
different chartering options. The general terms typically found
in these types of contracts are described below.
A
"bareboat charter"
involves the use of a
vessel usually over longer periods of time ranging over several
years. In this case all voyage related costs, including vessel
fuel and port dues as well as all vessel-operating expenses such
as day-to-day operations, maintenance, crewing and insurance,
transfer to the charterer's account. The owner of the
vessel receives monthly charter hire payments on a per day basis
and is responsible only for the payment of capital costs related
to the vessel.
A
"time charter"
involves the use of the
vessel, either for a number of months or years or for a trip
between specific delivery and redelivery positions, known as a
trip charter. The charterer pays all voyage related costs. The
owner of the vessel receives semi-monthly charter hire payments
on a per day basis and is responsible for the payment of all
vessel operating expenses and capital costs of the vessel.
51
Table of Contents
A
"voyage charter"
or
"spot
charter"
involves the carriage of a specific amount and
type of cargo on a load - port-to-discharge -port basis, subject
to various cargo handling terms. Most of these charters are of a
single voyage nature, as trading patterns do not encourage round
voyage trading. The owner of the vessel receives one payment
derived by multiplying the tons of cargo loaded on board times
the agreed upon freight rate expressed on a per ton basis. The
owner is responsible for the payment of all expenses including
voyage, operating and capital costs of the vessel.
A
"contract of affreightment"
(coa) relates to the carriage of multiple cargoes over the
same route and enables the coa holder to nominate different
ships to perform the individual sailings. Essentially it
constitutes a number of voyage charters to carry a specified
amount of cargo during the term of the coa, which usually spans
a number of years. All of the ship's operating, voyage and
capital costs are borne by the ship owner. The freight rate
normally is agreed on a per cargo ton basis.
Chartering on a single voyage or a trip charter basis may be
referred to as spot chartering activity.
Charter Rates
Charter hire rates paid for drybulk carriers are primarily a
function of the underlying balance between vessel supply and
demand, although at times other factors may play a role.
Furthermore, the pattern seen in charter hire rates is broadly
mirrored across the different charter types and between the
different drybulk carrier categories. However, because demand
for larger drybulk vessels is affected by the volume and pattern
of trade in a relatively small number of commodities, charter
hire rates (and vessel values) of larger ships tend to be more
volatile than those for smaller vessels. Conversely, trade in
minor bulks drives demand for smaller drybulk carriers.
Accordingly, charter hire rates and vessel values for those
vessels are subject to less volatility.
In the time charter market, rates vary depending on the length
of the charter period and vessel specific factors such as age,
speed and fuel consumption. Short-term time charter hire rates
are generally higher than long-term charter hire rates. The
market benchmark tends to be a 12-month time charter hire rate,
based on a modern vessel of 5 to 10 years age.
In the voyage charter market, rates are influenced by cargo
size, commodity, port dues and canal transit fees, as well as
delivery and redelivery regions. In general, a larger cargo size
is quoted at a lower rate per ton than a smaller cargo size.
Routes with costly ports or canals generally command higher
rates than routes with low port dues and no canals to transit.
Voyages with a load port within a region that includes ports
where vessels usually discharge cargo or a discharge port within
a region with ports where vessels load cargo also are generally
quoted at lower rates, because such voyages generally increase
vessel utilization by reducing the unloaded portion (or ballast
leg) that is included in the calculation of the return charter
to a loading area.
Within the drybulk shipping industry, the charter hire rate
references most likely to be monitored are the freight rate
indices issued by the Baltic Exchange. These references are
based on actual charter hire rates under charters entered into
by market participants as well as daily assessments provided to
the Baltic Exchange by a panel of major shipbrokers.
52
Table of Contents
The following chart illustrates the one-year time charter rates
for Handymax, Panamax and Capesize dry bulk carriers between
1994 and March 2005.
Time Charter Rates — 12 month period, prompt
delivery (US$ per day)
Source: Drewry
53
Table of Contents
The following graph details the Baltic Panamax Index. This is a
daily Index produced by the Baltic Exchange from a range of spot
voyage and trip freight rates. The rates are provided by a panel
of shipbrokers.
54
Table of Contents
Vessel Prices
Market conditions in each of the major sectors in the shipping
industry — dry bulk carriers, tankers and
containerships — have prospered over the past
18 months. This is illustrated from the 20 plus newbuilding
resales seen in 2004 and 18 in 2003. Historically over the five
years previous to this there has been no more than 3 or 4 of
these sales. The vessels are not being sold at a loss but in
excess of their contract price. For example five 82,800 dwt
(Kamsarmax) vessels were contracted by Kambara KK in 2004 for
approximately US$30 million each. They have sold in the
last two weeks for approximately US$44-45 million each.
This has helped trigger an upsurge in newbuilding activity
across each of these fleet sectors. In addition, newbuilding
demand is also strong for Liquefied Natural Gas
(LNG) carriers and other specialized ship categories.
Consequently, the near -term availability of newbuilding berths
for vessel delivery before the end of 2007 is scarce, and after
a period of stagnation, newbuilding prices for all vessel types
have increased significantly, due to a combination of rising
demand, shortage in berth space and rising raw material costs,
especially the price of steel. The weakening of the US dollar
has also contributed to the recent surge in newbuilding prices,
as yards protect themselves from incurring additional currency
costs. The trend in indicative newbuilding prices for a series
of specific vessels in each size sector is shown in the chart
below.
Dry Bulk Carrier Newbuilding Prices (US$ million)
Source: Drewry
55
Table of Contents
The steep increase in newbuilding prices and the strength in the
charter market have also affected vessel prices in the
second-hand market, which have increased over the last
18 months. Very recently a new benchmark was set in the
Panamax bulk carrier sector, where the sale of the new vessel
Ocean Lady (76,600 dwt) achieved a price of
US$55 million, almost double its contract price of
US$28 million. The table below shows the historical series
for secondhand values for a 5 or 10 year old vessels in
each sector of the dry bulk fleet.
Dry Bulk Carrier Secondhand Prices (US$m)
Source: Drewry
56
Table of Contents
With vessel earnings running at high levels and a dearth of
available newbuilding berths, demand for ships offering early
delivery has been at a premium. In some instances, the market
has witnessed second-hand prices for five to ten year-old dry
bulk carriers reaching levels higher than those for comparably
sized newbuildings to be delivered later. The following chart
illustrates Panamax newbuilding prices versus secondhand prices
from 1999 to present day. The vessels used to produce the data
series are 70-75,000 dwt.
Panamax Newbuilding Prices v Secondhand Prices (US$m)
Source: Drewry
It should be noted that the above newbuilding prices are for
forward delivery (usually 18-24 months) while the
secondhand prices would be for immediate delivery.
57
Table of Contents
BUSINESS
We are an international provider of drybulk marine
transportation services that was incorporated in the Marshall
Islands on January 13, 2005. We were formed by affiliates
of each of Corbin J. Robertson, Jr., an experienced
investor in coal, oil and gas and other natural resources, First
Reserve Corporation ("First Reserve"), a private
equity firm specializing in the energy industry, and American
Metals & Coal International, Inc. ("AMCI"), a
privately held company engaged in the production, handling and
marketing of coal, iron ore and steel. We began limited
operations in April 2005 and to date have limited operating
revenues, assets and operating history. We expect to own and
operate, through our subsidiaries, a total fleet of eight
Panamax drybulk carriers by the end of the third quarter of
2005. Our vessels will operate on shipping routes worldwide. We
expect a significant number of our vessels to be employed under
time charters.
Our management team will provide the commercial management of
our fleet, which includes entering into charters and managing
relationships with charterers. Our management team will also
provide the technical management of three of our vessels, which
includes performing day-to-day operations and vessel
maintenance, and we initially will outsource the technical
management of five of our vessels to Blossom Maritime
Corporation, or our Manager, an unaffiliated third-party ship
management company. We expect to perform the technical
management of our entire fleet by the end of the first quarter
of 2006. We currently have a staff of eight personnel to manage
the commercial operations of our entire fleet and the technical
operations of three of our vessels. By the end of 2005, we
expect to have a total staff of approximately fifteen people to
manage both the commercial and technical operations of our
entire fleet.
We intend to continue to increase the size of our fleet
following this offering through selective acquisitions of
additional secondhand drybulk carriers or through whole or
partial fleet acquisitions that complement our business strategy
and are accretive to earnings and cash flow. We believe that the
experience of our management team in locating and acquiring
suitable vessels and fleets will assist us in this process.
We expect that by the end of the third quarter of 2005, our
fleet will consist of a total of eight Panamax drybulk carriers.
Our first three vessels were delivered in April 2005, and we
currently have contracts to take delivery of two additional
vessels in May 2005. The remaining three vessels are under
contract to be delivered in July, August and September,
respectively. We have purchased or will purchase each of the
vessels in our fleet from shipowners who are unaffiliated with
us.
Our drybulk carriers transport a variety of cargoes including
coal, iron ore and grain. Our initial fleet will have a combined
carrying capacity of approximately 585,000 dwt and an average
age of approximately 8 years. We financed the purchase of
these vessels through capital contributions by affiliates of
each of Mr. Robertson, First Reserve and AMCI and debt
either incurred or refinanced under a secured term loan
facility. We have paid a 10% deposit on the five undelivered
vessels.
Initially, most of our vessels will be employed under time
charters of varying durations to well-established and reputable
charterers. None of these vessels were or will be purchased
subject to any existing time charter, but rather will be subject
to new time charters we have entered into or will put in place
in connection with the purchase of the vessel. Under our time
charters, the charterer is obligated to pay us charterhire at a
fixed daily rate and to bear all voyage expenses, including the
cost of bunkers and canal and port charges. We remain
responsible for paying the vessel's operating expenses,
including the cost of crewing, insuring, repairing and
maintaining the vessel, and paying brokers' commissions on
gross charter hire rates. When a charter expires, we will assess
market conditions in the industry and determine whether to seek
to re-employ the vessel under a long-term time charter, a
short-term time charter or in the spot voyage market. For more
information about our time charters, please read
"— Time Charters."
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Our Competitive Strengths
We believe that we have the following competitive strengths in
the drybulk shipping industry:
•
High Quality and Young Fleet.
All of our drybulk
    carriers are modern Panamax vessels with an average age of
    approximately 8.0 years. According to Drewry, the average
    age of the world's Panamax drybulk fleet as of
    April 5, 2005 is 12.2 years. We believe that owning a
    modern fleet of well-maintained vessels will enable us to
    operate our vessels with low operating costs, obtain favorable
    debt financing terms, and secure employment for our vessels with
    high quality charterers. We intend to maintain the quality of
    our fleet through comprehensive planned and preventative
    maintenance programs. We also believe that secondhand vessels of
    our fleet's vintage will provide an attractive return on
    capital, given the favorable charter hire rates we expect they
    will command as compared to their purchase price.
•
Internal Management of Vessel Operations.
We
    expect to provide the commercial management of our entire fleet.
    Initially, we will perform the technical management of three of
    our vessels and we expect to provide the technical management of
    our remaining vessels by the end of the first quarter of 2006.
    We believe that providing our own internal commercial and
    technical management will favorably distinguish us from many of
    our competitors by allowing us to more closely monitor our
    operations and offer a high quality of performance, reliability
    and efficiency. We also expect that providing our own internal
    commercial and technical management will enable us to further
    limit operating costs by eliminating management fees to third
    parties.
•
Stable Cash Flow from Well-established and Reputable
    Charterers.
We expect that most of our vessels will be
    initially employed on time charters to well-established and
    reputable charterers. We believe these time charters will
    provide us with steady cash flow and high vessel utilization
    rates while limiting our exposure to freight rate volatility.
•
Experienced Management Team and Strong Affiliation with
    Our Sponsors.
Our executives have considerable
    experience in the management of the commercial and financial
    aspects of international shipping businesses. Our management
    team includes Stamatis Molaris, our chief executive officer, who
    formerly was the chief financial officer of Stelmar Shipping
    Ltd. ("Stelmar"). Stelmar was a leading publicly
    traded product and crude oil transportation company whose fleet
    increased from 2 vessels to 41 vessels in less than
    13 years prior to its acquisition by Overseas Shipholding
    Group Inc. in January 2005. Our Chief Commercial Officer, Nikos
    Frantzeskakis, has 22 years of experience in the drybulk
    shipping industry. We also have a strong relationship with our
    Sponsors, Mr. Robertson, First Reserve and AMCI, which
    collectively have considerable experience and relationships in
    the energy, iron ore and coal industry.
•
Focus on Panamax or Larger Drybulk Vessels.
Initially our fleet will consist entirely of Panamax vessels,
    and we intend to focus our acquisition efforts on obtaining
    either additional Panamax or the larger Capesize vessels.
    Panamax vessels are the most flexible category of drybulk
    vessels, with the ability to access all major ports and to
    travel through the Panama Canal. In addition, unlike smaller
    drybulk vessels, Panamax vessels are able to efficiently
    transport the major drybulk commodities, such as coal, iron ore
    and grain, to Asian markets from outside the region. Panamax
    vessels have the flexibility to handle a wide variety of drybulk
    cargoes and are less vulnerable to market changes in the demand
    for any single commodity than smaller vessels.
•
Increased Flexibility through Use of Sister Ships.
Our fleet will include two groups of sister ships, including one
    group of four sister ships and another group of two sister
    ships. We believe that a ship's technical specifications
    are a key factor in charterers' decisions to select a ship.
    The ability to substitute ships with identical specifications
    enhances our fleet's revenue potential by providing
    increased flexibility to meet charterers' schedules. Sister
    ships also increase our operating efficiencies because technical
    knowledge can be shared across vessels in a series and economies
    of scale can be created when ordering spare parts and supplying
    and crewing vessels.
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Our Business Strategy
Our business strategy is to provide reliable seaborne
transportation services for drybulk cargoes at a competitive
cost. The principal elements of our business strategy consist of:
•
Optimize Charter Planning.
We intend to employ a
    significant portion of our fleet under time charters to achieve
    predictable and visible cash flows and increase utilization
    rates. In addition, from time to time we plan to employ some of
    our vessels in the spot market to take advantage of market
    conditions. Our commercial management team will seek to balance
    the mix of short-, medium- and long-term time charters and spot
    market charters in order to permit us to opportunistically
    pursue market conditions while allowing us to maintain
    predictable cash flows.
•
Focus on High Quality Panamax or Larger Vessels.
We intend to maintain a high quality, cost efficient fleet of
    Panamax or larger drybulk carriers that meet rigorous industry
    standards and our charterers' requirements. We believe that
    we will be able to develop a strong customer base by offering
    the increased reliability and greater operating efficiency that
    is provided by large, high quality vessels. Our fleet initially
    will consist entirely of Panamax vessels, enabling us to
    efficiently transport major drybulk commodities such as coal,
    iron ore and grain to China and other expanding markets.
•
Maintain Low Cost, Highly Efficient Operations.
We
    intend to actively control our operating expenses without
    compromising the quality of our vessel management by performing
    internally the commercial management of our entire fleet and the
    technical management for three of our vessels and, by the end of
    the first quarter of 2006, the technical management of the
    remaining vessels in our fleet. We believe that utilizing our
    own commercial and technical management will enable us to reduce
    our operating expenses by eliminating external management fees
    and commissions and that our emphasis on time charters will
    allow us to reduce marketing expenses. In addition, we believe
    that our policy of staffing each of our vessels with qualified
    officers and crews who share a common nationality will enable us
    to increase the efficiency of our vessel operations.
•
Strategically Expand the Size of Our Fleet.
The
    size of our initial fleet of eight vessels places us within the
    top twenty owners of Panamax drybulk vessels worldwide and we
    believe that this fleet size will provide us with a critical
    mass of vessels to compete in a wide range of marketing and
    efficiently manage our vessels. We plan to further grow our
    fleet in the future through acquisitions of secondhand drybulk
    carriers at times when we believe these acquisitions would
    present favorable investment opportunities. Our goal is to
    further expand our worldwide presence in the drybulk carrier
    market with a fleet capable of servicing virtually all major
    ports and routes used for the seaborne transportation of key
    commodities and raw materials. We believe that our worldwide
    presence will enable us to capitalize on economies of scale in
    the management of our fleet, maximize our fleet's
    utilization, and minimize positioning days.
•
Flexible Financial Strategy.
In order to fund
    future acquisitions we intend to pursue a financial strategy
    that maximizes our flexibility. The proceeds from this offering
    will allow us to pay down a substantial amount of our current
    outstanding indebtedness, and in the future we intend to limit
    our outstanding indebtedness to levels that we believe are
    readily serviceable. We believe our low debt level will provide
    us with the flexibility to take advantage of acquisition
    opportunities as they arise.
•
Leveraging our Sponsors' Strategic
    Relationships.
Mr. Robertson, First Reserve, AMCI
    and their affiliates have extensive experience and relationships
    in the coal, steel and iron ore industries. We plan to use these
    relationships to identify chartering opportunities for coal and
    iron ore cargoes. We believe that our current shareholders'
    reputation in the coal, steel and iron ore industries will also
    help us make contacts in the coal and iron ore industries and
    gain market intelligence in these core commodities industries.
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Our Relationship with Our Sponsors
Quintana Maritime Investors LLC, our parent, is beneficially
owned by affiliates of each of Sponsors, Mr. Robertson,
First Reserve and AMCI. We have a strong relationship with our
Sponsors and certain of their affiliates. Following the
consummation of this offering, we expect that Quintana Maritime
Investors LLC will be liquidated and its ownership interest in
us will be distributed to its members in proportion to their
ownership interests in Quintana Maritime Investors LLC.
Mr. Robertson, an experienced investor in coal, oil and gas
and other natural resources, is chairman of our board of
directors and is the beneficial owner of the controlling
interest in the general partner of Natural Resource Partners
L.P. ("NRP"). NRP is a publicly traded limited
partnership engaged principally in the business of owning and
managing coal properties in the three major coal-producing
regions of the United States: Appalachia, the Illinois Basin and
the Western United States. As of December 31, 2004, NRP
controlled approximately 1.8 billion tons of proven and
probable coal reserves in nine states.
First Reserve Corporation is a private equity firm that actively
pursues building a broadly diversified portfolio within the
energy industry, and was one of the first private equity firms
with such a focus. First Reserve currently advises four active
private equity funds with aggregate committed capital of
$4.7 billion. First Reserve funds have made investments
totaling over $3.0 billion in more than 80 principal
transactions (in core holdings), and over 200 add-on
acquisitions with their core companies. First Reserve funds
invest solely in the energy industry. First Reserve's
current management team has been in place since 1983 and has
over 250 years of collective energy investment experience.
AMCI, headquartered in Greenwich, Connecticut, is a privately
held company engaged in the production, handling and marketing
of coal, iron ore and steel. Founded in 1986, AMCI has grown to
become one of the largest privately owned international coal
companies. Recently, AMCI has focused on acquiring coal mining
interests in the United States and on obtaining and developing
virgin coal reserves and operating new coal mines in Australia.
We believe that the collective experience of our Sponsors and
their affiliates in the energy, coal, steel and iron ore
industries will be important in helping us execute our growth
strategy and that we will be able to leverage their reputation
and extensive network of contacts in these industries, to
provide us with chartering opportunities as well as market
intelligence in the core commodities trades.
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Our Fleet
The following table presents certain information concerning the
drybulk carriers in our fleet as of April 30, 2005.
Daily
Time
Charter
Charter
Sister
Year
Expiration
Hire Rate
Ship-
Ships
Vessel
Type
Dwt
Flag
Built
Charterer
Date
(1)
builder
(6)
King Coal
(2)
Panamax
72,873
Marshall Islands
1997
Energy Shipping S.p.A.(5)
April 2008
$
24,985
China Shipbuilding Corp., Taiwan
Fearless I
(2)
Panamax
73,427
Marshall Islands
1997
Deiulemar Compagnia di Navigazione S.p.A.
April 2008
$
25,000
Hyundai Heavy Industries Co., Ltd., South Korea
A
Coal Glory
(2)
Panamax
73,670
Marshall Islands
1995
spot
Hyundai Heavy Industries Co., Ltd., South Korea
A
Coal Age
(3)
Panamax
72,861
Marshall Islands
1997
Hyundai Heavy Industries, South Korea
A
Iron Man
(3)
Panamax
72,861
Marshall Islands
1997
Hyundai Heavy Industries, South Korea
A
Linda Leah
(4)
Panamax
73,390
Marshall Islands
1997
Fratelli D'Amato S.p.A.
August 2008
$
23,750
Halla Samho, South Korea
B
Barbara
(4)
Panamax
73,390
Marshall Islands
1997
Halla Samho, South Korea
B
Coal Pride
(4)
Panamax
72,600
Marshall Islands
1999
Imabari Shipbuilding Co. Ltd., Japan
None
(1)
This table shows charter hire rates net of any commissions.
(2)
Delivered in April 2005.
(3)
Subject to a memorandum of agreement and expected to be
    delivered in May 2005.
(4)
Subject to a memorandum of agreement and expected to be
    delivered in the third quarter of 2005.
(5)
The obligations of Energy Shipping S.p.A. are guaranteed by
    Deiulemar Compagnia di Navigazione S.p.A.
(6)
Each vessel with the same letter is a "sister ship" of
    each other vessel that has the same letter.
Each of our vessels is, or upon acquisition will be, owned
through a separate wholly-owned Marshall Islands subsidiary and
each of the three vessels of which we have taken delivery has
received classification society notations from Lloyds Register
of Shipping.
Our fleet includes two groups of sister ships, including one
group of four sister ships and another group of two sister
ships. We believe that sister ships will enhance our revenue
generating potential by providing us with operational and
maintenance scheduling flexibility, as sister ships generally
can be substituted for similar voyages. Sister ships also
increase our operating efficiencies because technical knowledge
can be applied to all vessels in a series and create cost
efficiencies and economies of scale when ordering spare parts,
supplying and crewing these vessels.
Our Customers
Our customers currently include national, regional and
international companies, such as Deiulemar Compagnia da
Navigazione, S.p.A., a major supplier of coal to Italian
utilities, Energy Shipping S.p.A., an
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Italian maritime coal transport company and Fratelli
D'Amato S.p.A., an Italian maritime transport company. Our
assessment of a charterer's financial condition and
reliability will be an important factor in negotiating
employment for our vessels. We expect to charter our vessels to
major trading houses (including commodities traders), publicly
traded companies, reputable vessel owners and operators, major
producers of raw materials and government-owned entities rather
than to more speculative or undercapitalized entities. We
evaluate the counterparty risk of potential charterers based on
our management's long experience in the shipping industry
with the input of two independent credit risk consultants.
Management of Our Fleet
We intend to commercially manage our fleet through a wholly
owned subsidiary, Quintana Management LLC, which will arrange
the charters for our vessels and the management of our
relationships with charterers, and the purchase and sale of
vessels into and out of our fleet.
Initially, our management team will provide the technical
management of three of our vessels in-house and our Manager,
Blossom Maritime Corporation, a privately-owned Greek company
with offices in Piraeus, Greece, will manage the technical
operation of five of our vessels under separate, one-year
management agreements. Each of our one-year management
agreements with our Manager contains early termination
provisions which are exercisable without any penalty or fee upon
six-months notice to our Manager. We expect to provide for the
technical management of our entire fleet through our wholly
owned subsidiary, Quintana Management LLC, by the end of the
first quarter of 2006.
Under the management agreements our Manager will provide
technical vessel management services such as arranging for and
managing crews, maintenance, drydocking, repairs, insurance,
ensuring regulatory and classification society compliance,
appointing supervisors and technical consultants and providing
technical support. Under the management agreements, our Manager
will present us with an annual budget for the following twelve
months for each vessel. It will also prepare and present us with
their estimate of the working capital requirements of the
vessels. It shall request the funds required to run the vessels
for the ensuing month, including the payment of any occasional
or extraordinary items of expenditure, such as emergency repair
costs, scheduled drydocking and Special Survey costs as well as
additional insurance premiums, bunkers or provisions. We will
pay our Manager a management fee of $400 per day for each
of the five vessels under its management. Under our management
agreements, our Manager may subcontract its duties only with our
prior approval.
We expect to have our own ISM Code certification for the three
vessels for which we will provide in-house technical management
prior to their delivery. Initially, we will rely on our
Manager's certification under the ISM Code in order to
operate the five vessels under management agreements with our
Manager. We intend to obtain our own ISM Code certification for
these five vessels following this offering, and prior to the
termination of our management agreements.
Time Charters
Initially, most of the vessels in our fleet will be subject to
time charters. A time charter is a contract for the use of a
vessel for a fixed period of time at a specified daily rate.
Under a time charter, the vessel owner provides crewing and
other services related to the vessel's operation, the cost
of which is included in the daily rate and the customer is
responsible for substantially all of the vessel voyage costs.
The following discussion describes the material terms common to
all of our time charters.
Initial Term; Extensions
The initial term for a time charter commences upon the
vessel's delivery. All of our customers have rights to
terminate their charters prior to expiration of the original
term in specified circumstances as described in more detail
below.
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Hire Rate
"Hire" rate refers to the basic payment from the
customer for the use of the vessel. Hire is payable every
fifteen days, in advance, in Dollars as specified in the
charter, less a specified commission for the chartering broker
and approximately 3.75% of the hire rate as an address
commission for the charterer.
Hire payments may be reduced, or under some charters, we must
pay liquidated damages, if the vessel does not perform to
certain of its specifications, such as if the average vessel
speed falls below a guaranteed speed or the amount of fuel
consumed to power the vessel under normal circumstances exceeds
a guaranteed amount.
Expenses
We are responsible for vessel operating expenses, which include
crewing, repairs and maintenance, insurance, stores, lube oils
and communication expenses. We are also directly responsible for
providing all of these items and services. The customer
generally pays the voyage expenses, which include all expenses
relating to particular voyages, including the cost of any
bunkers, port fees, cargo loading and unloading expenses, canal
tolls, agency fees and commissions.
Off-hire
When the vessel is "off-hire" — or not
available for service — the customer generally is not
required to pay the hire rate, and we are responsible for all
costs. A vessel generally will be deemed off-hire if there is a
loss of operating time due to, among other things:
•
operational deficiencies; drydocking for repairs, maintenance or
    inspection; equipment breakdowns; or delays due to accidents,
    fires or similar problems;
•
our failure to maintain the vessel in compliance with its
    specifications and contractual standards or to provide the
    required crew;
•
seizure or detention by any authority unless such seizure or
    detention is occasioned by any personal act or omission or
    default of the charterers or their agents, or by reason of cargo
    carried; or
•
arrest of the vessel on behalf of any party having or purporting
    to have a claim against the vessel.
Ship Management and Maintenance
Under all of our time charters, we are responsible for the
technical management of the vessel and for maintaining the
vessel, periodic drydocking, cleaning and painting and
performing work required by regulations. Our Manager will
initially provide many of these services in respect of five of
our vessels to us pursuant to the management agreement and we
will provide them with respect to our other three vessels.
Please read "Business — Management of Our
Fleet."
Termination
Each time charter terminates automatically upon loss of the
vessel. In addition, we are generally entitled to suspend
performance (but with the continuing accrual to our benefit of
hire payments and default interest) and, under most time
charters, terminate the charter if the customer defaults in its
payment obligations. Under most of our time charters, either
party may also terminate the charter in the event of war in
specified countries or in locations that would significantly
disrupt the free trade of the vessel or if the vessel is
requisitioned by its flag state for more than three months.
Other Vessel Employment
We intend to employ some of our vessels in the spot charter
market. A spot market voyage charter is generally a contract to
carry a specific cargo from a load port to a discharge port for
an agreed upon total
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fee. Under spot market voyage charters, the vessel owner pays
voyage expenses such as port, canal and fuel costs.
Crewing; Employees
Initially our internal management team will arrange for the
crewing of three of our vessels while the crews for our other
five vessels will be arranged by our Manager under the
management agreements. We plan to, and we have instructed our
Manager to, staff each of our vessels with officers and crew who
share a common nationality. We believe that on many of our
competitors' vessels, language barriers and other tensions
between officers and crew of diverse nationalities can lead to
poor performance and inefficiency. We believe that by providing
entire crews from a similar national background we will improve
morale, retain better personnel, and increase efficiency.
Our Manager will enter into contracts with manning agents for
the five vessels initially under its technical management and we
will enter into contracts with manning agents for our remaining
three vessels. The approved manning agent which both we and our
Manager work with is Phil-Man Marine Agency, Inc. who we believe
has a good track record of providing healthy, well experienced,
educated and trained seamen. The crew manning agent's
performance during the period of its contracts with us and our
Manager is subject to evaluation at the end of each period.
We believe that the crewing arrangements will ensure that our
vessels will be crewed with qualified seamen that have the
licenses required by international regulations and conventions.
We currently have a staff of eight personnel to manage the
commercial operations of our entire fleet and the technical
operations of three of our vessels. By the end of 2005 we expect
to have a total staff of approximately fifteen people to manage
both the commercial and technical operations of our entire fleet.
Permits and Authorizations
We are required by various governmental and quasi-governmental
agencies to obtain certain permits, licenses and certificates
with respect to our vessels. The kinds of permits, licenses and
certificates required depend upon several factors, including the
commodity transported, the waters in which the vessel operates,
the nationality of the vessel's crew and the age of a
vessel. We are in the process of obtaining all permits, licenses
and certificates currently required to permit our vessels to
operate. Additional laws and regulations, environmental or
otherwise, may be adopted which could limit our ability to do
business or increase our cost of doing business.
Environmental and Other Regulations
Government regulation significantly affects the ownership and
operation of our vessels. We are subject to international
conventions and national, state and local laws and regulations
in effect in the countries in which our vessels may operate or
are registered.
A variety of government and private entities subject our vessels
to both scheduled and unscheduled inspections. These entities
include the local port authorities (U.S. Coast Guard,
harbor master or equivalent), classification societies, flag
state administrations (country of registry), charterers and
particularly terminal operators. Certain of these entities
require us to obtain permits, licenses and certificates for the
operation of our vessels. Failure to maintain necessary permits
or approvals could require us to incur substantial costs or
temporarily suspend the operation of one or more of our vessels.
We believe that the heightened level of environmental and
quality concerns among insurance underwriters, regulators and
charterers is leading to greater inspection and safety
requirements on all vessels and may accelerate the scrapping of
older vessels throughout the drybulk shipping industry.
Increasing environmental concerns have created a demand for
vessels that conform to the stricter environmental standards. We
are required to maintain operating standards for all of our
vessels that emphasize operational safety, quality maintenance,
continuous training of our officers and crews and compliance
with U.S. and international regulations. We believe that the
operation of our vessels is in
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substantial compliance with environmental laws and regulations
applicable to us as of the date of this prospectus, however, we
have only recently commenced operations. Moreover, as a result
of highly publicized accidents in recent years, we believe that
the regulation of the shipping industry, particularly in the
area of environmental requirements, will continue to become more
stringent and more expensive for us and our competitors. Because
environmental laws and regulations are periodically changed and
may impose increasingly stricter requirements, future
requirements may limit our ability to do business, increase our
operating costs, force the early retirement of our vessels
and/or affect their resale values, all of which could have a
material adverse effect on our financial condition and results
of operations.
International Maritime Organization
The International Maritime Organization, or IMO, has negotiated
international conventions that impose liability for oil
pollution in international waters and a signatory's
territorial waters. For example, the International Convention
for the Prevention of Pollution from Ships ("MARPOL")
imposes environmental standards on the shipping industry
relating to oil spills, management of garbage, the handling and
disposal of noxious liquids, harmful substances in packaged
forms, sewage and air emissions. Annex III of MARPOL
regulates the transportation of marine pollutants, including
standards on packing, marking, labeling, documentation, stowage,
quality limitations and pollution prevention. These requirements
have been expanded by the International Maritime Dangerous Goods
Code, which imposes additional standards for all aspects of the
transportation of dangerous goods and marine pollutants
by sea. In September 1997, the IMO adopted Annex VI to
MARPOL to address air pollution from ships. Annex VI was
ratified in May 2004, and will become effective in May 2005.
Annex VI, when it becomes effective, will set limits on
sulfur oxide and nitrogen oxide emissions from ship exhausts and
prohibit deliberate emissions of ozone depleting substances,
such as chlorofluorocarbons. Annex VI also includes a
global cap on the sulfur content of fuel oil and allows for
special areas to be established with more stringent controls on
sulfur emissions. The Marshall Islands has ratified
Annex VI of MARPOL, which takes effect on May 19,
2005. Pursuant to a Marine Notice issued by the Marine Maritime
Administrator as revised in March 2005, ships flagged by the
Marshall Islands, and that are subject to Annex VI must, if
built before the effective date, obtain an International Air
Pollution Prevention Certificate evidencing compliance with
Annex VI not later than either the first drydocking after
May 19, 2005, or May 19, 2008. All ships subject to
Annex VI that are built after May 19, 2005 must have
the Certificate. Implementing these requirements may require
modifications to the engines or the addition of post-combustion
emission controls, or both as well as the use of lower sulfur
fuels. We are still evaluating the costs of implementing these
requirements but do not expect them to have a material adverse
effect on our operating costs. Additional conventions, laws and
regulations may be adopted that could adversely affect our
ability to operate our vessels.
The operation of our vessels is also affected by the
requirements set forth in the IMO's Management Code for the
Safe Operation of Ships and Pollution Prevention, or ISM Code.
The ISM Code requires ship owners and bareboat charterers to
develop and maintain an extensive "Safety Management
System" that includes the adoption of a safety and
environmental protection policy setting forth instructions and
procedures for safe operation and describing procedures for
dealing with emergencies. The ISM Code requires that vessel
operators obtain a safety management certificate for each vessel
they operate. No vessel can obtain ISM Code certification unless
its manager has been awarded a document of compliance under the
ISM Code. The failure of a ship owner or bareboat charterer to
comply with the ISM Code may subject such party to increased
liability, may decrease available insurance coverage for the
affected vessels and may result in a denial of access to, or
detention in, certain ports. We expect to have our own ISM Code
certification for the three vessels for which we will provide
in-house technical management prior to their delivery.
Initially, we will rely on our Manager's certification
under the ISM Code in order to operate the five vessels under
management agreements with our Manager. We intend to obtain our
own ISM Code certification for these five vessels following this
offering, and prior to the termination of our management
agreements.
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The United States
The United States Oil Pollution Act of 1990, or OPA, established
an extensive regulatory and liability regime for the protection
and cleanup of the environment from oil spills. OPA affects all
owners and operators whose vessels trade in the United States,
its territories and possessions or whose vessels operate in
United States waters, which includes the United States'
territorial sea and its two hundred nautical mile exclusive
economic zone. Although OPA is primarily directed at oil tankers
(which are not operated by us), it applies to non-tanker ships,
including drybulk carriers, with respect to fuel oil, or
bunkers, used to power such vessels.
Under OPA, vessel owners, operators and bareboat charterers are
"responsible parties" and are jointly, severally and
strictly liable (unless the spill results solely from the act or
omission of a third party, an act of God or an act of war) for
all containment and clean-up costs and other damages arising
from discharges or threatened discharges of oil from their
vessels, including bunkers (fuel oils). OPA defines these other
damages broadly to include:
•
natural resources damages and the costs of assessment thereof;
•
real and personal property damages;
•
net loss of taxes, royalties, rents, fees and other lost
    revenues;
•
lost profits or impairment of earning capacity due to property
    or natural resources damage; and
•
net cost of public services necessitated by a spill response,
    such as protection from fire, safety or health hazards, and loss
    of subsistence use of natural resources.
Title VII of the Coast Guard and Maritime Transportation
Act of 2004 (the "CGMTA") recently amended OPA to
require the owner or operator of any non-tank vessel of
400 gross tons or more, that carries oil of any kind as a
fuel for main propulsion, including bunkers, to prepare and
submit a response plan for each vessel on or before
August 8, 2005. Previous law was limited to vessels that
carry oil in bulk as cargo. The vessel response plans include
detailed information on actions to be taken by vessel personnel
to prevent or mitigate any discharge or substantial threat of
such a discharge of ore from the vessel due to operational
activities or casualties. Our third-party Manager, Blossom
Maritime Corporation, has prepared a response plan for each of
our vessels, which conforms to the requirements of the CGMTA and
OPA.
OPA limits the liability of responsible parties to the greater
of $600 per gross ton or $0.5 million per drybulk
vessel that is over 300 gross tons (subject to possible
adjustment for inflation). These limits of liability do not
apply if an incident was directly caused by violation of
applicable United States federal safety, construction or
operating regulations or by a responsible party's gross
negligence or willful misconduct, or if the responsible party
fails or refuses to report the incident or to cooperate and
assist in connection with oil removal activities. In addition,
the Comprehensive Environmental Response, Compensation, and
Liability Act, or CERCLA, which applies to the discharge of
hazardous substances (other than oil) whether on land or at sea,
contains a similar liability regime and provides for cleanup,
removal and natural resource damages. Liability under CERCLA is
limited to the greater of $300 per gross ton or
$0.5 million for vessels not carrying hazardous substances
as cargo or residue, unless the incident is caused by gross
negligence, willful misconduct, or a violation of certain
regulations, in which case liability is unlimited.
We currently maintain pollution liability coverage insurance in
the amount of $1 billion per incident for each of our
vessels. If the damages from a catastrophic spill were to exceed
our insurance coverage it could have an adverse effect on our
business and results of operation.
OPA requires owners and operators of all vessels over
300 gross tons, even those that do not carry petroleum or
hazardous substances as cargo, to establish and maintain with
the U.S. Coast Guard evidence of financial responsibility
sufficient to meet their potential liabilities under OPA. The
U.S. Coast Guard has implemented regulations requiring
evidence of financial responsibility in the amount of
$900 per gross ton, which includes the OPA limitation on
liability of $600 per gross ton and the CERCLA liability
limit of $300 per gross ton for vessels not carrying
hazardous substances as cargo or residue. Under the regulations,
vessel owners and operators may evidence their financial
responsibility by showing proof of insurance, surety bond,
self-insurance or guaranty. Under OPA, an owner or operator of a
fleet of vessels is
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required only to demonstrate evidence of financial
responsibility in an amount sufficient to cover the vessel in
the fleet having the greatest maximum liability under OPA. Under
the self-insurance provisions, the ship owner or operator must
have a net worth and working capital, measured in assets located
in the United States against liabilities located anywhere in the
world, that exceeds the applicable amount of financial
responsibility. Our third-party Manager has complied with the
U.S. Coast Guard regulations by providing a certificate of
responsibility from third party entities that are acceptable to
the U.S. Coast Guard evidencing sufficient self-insurance.
The U.S. Coast Guard's regulations concerning
certificates of financial responsibility provide, in accordance
with OPA, that claimants may bring suit directly against an
insurer or guarantor that furnishes certificates of financial
responsibility. In the event that such insurer or guarantor is
sued directly, it is prohibited from asserting any contractual
defense that it may have had against the responsible party and
is limited to asserting those defenses available to the
responsible party and the defense that the incident was caused
by the willful misconduct of the responsible party. Certain
organizations, which had typically provided certificates of
financial responsibility under pre-OPA 90 laws, including the
major protection and indemnity organizations, have declined to
furnish evidence of insurance for vessel owners and operators if
they are subject to direct actions or required to waive
insurance policy defenses. This requirement may have the effect
of limiting the availability of the type of coverage required by
the Coast Guard and could increase our costs of obtaining this
insurance as well as the costs of our competitors that also
require such coverage.
OPA specifically permits individual states to impose their own
liability regimes with regard to oil pollution incidents
occurring within their boundaries, and some states have enacted
legislation providing for unlimited liability for oil spills. In
some cases, states which have enacted such legislation have not
yet issued implementing regulations defining vessels
owners' responsibilities under these laws. We intend to
comply with all applicable state regulations in the ports where
our vessels call.
The Clean Water Act
A United States District Court has ruled that the United States
Environmental Protection ("U.S. EPA") lacks the
authority to exclude discharges of vessel ballast water from the
Clean Water Act's ("Act") permitting
requirements. The District Court ordered the U.S. EPA to
repeal the regulations it had adopted exempting discharges of
ballast water from the Act's permitting requirements.
Unless this decision is overturned on appeal or the relief in
question is modified, vessels entering the waters subject to the
Act's jurisdiction would be required to have a permit to
discharge ballast water. This permitting requirement may lead to
the installation of equipment on our vessels to treat ballast
water before its discharge and could have the affect of limiting
some or all of our vessels from entering waters in the United
States that are subject to this ruling. Because we do not know
how this matter will ultimately be resolved, we cannot estimate
the financial impact on our operations and, therefore, cannot
assure you that the associated costs and effects will not be
material.
Vessel Security Regulations
Since the terrorist attacks of September 11, 2001, there
have been a variety of initiatives intended to enhance vessel
security. On November 25, 2002, the Maritime Transportation
Security Act of 2002 (MTSA) came into effect. To implement
certain portions of the MTSA, in July 2003, the U.S. Coast
Guard issued regulations requiring the implementation of certain
security requirements aboard vessels operating in waters subject
to the jurisdiction of the United States. Similarly, in December
2002, amendments to the International Convention for the Safety
of Life at Sea, or SOLAS, created a new chapter of the
convention dealing specifically with maritime security. The new
chapter came into effect in July 2004 and imposes various
detailed security obligations on vessels and port authorities,
most of which are contained in the newly created International
Ship and Port Facilities Security Code or ISPS Code. Among the
various requirements are:
•
on-board installation of automatic information systems, or AIS,
    to enhance vessel-to-vessel and vessel-to-shore communications;
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•
on-board installation of ship security alert systems;
•
the development of vessel security plans; and
•
compliance with flag state security certification requirements.
The U.S. Coast Guard regulations, intended to align with
international maritime security standards, exempt
non-U.S. vessels from MTSA vessel security measures
provided such vessels have on board a valid International Ship
Security Certificate (ISSC) that attests to the
vessel's compliance with SOLAS security requirements and
the ISPS Code. We have implemented the various security measures
addressed by the MTSA, SOLAS and the ISPS Code.
Inspection by Classification Societies
Every seagoing vessel must be "classed" by a
classification society. The classification society certifies
that the vessel is "in class," signifying that the
vessel has been built and maintained in accordance with the
rules of the classification society and complies with applicable
rules and regulations of the vessel's country of registry
and the international conventions of which that country is a
member. In addition, where surveys are required by international
conventions and corresponding laws and ordinances of a flag
state, the classification society will undertake them on
application or by official order, acting on behalf of the
authorities concerned.
The classification society also undertakes on request other
surveys and checks that are required by regulations and
requirements of the flag state. These surveys are subject to
agreements made in each individual case and/or to the
regulations of the country concerned.
For maintenance of the class, regular and extraordinary surveys
of hull, machinery, including the electrical plant, and any
special equipment classed are required to be performed as
follows:
•
Annual Surveys.
For seagoing ships, annual surveys
    are conducted for the hull and the machinery, including the
    electrical plant and where applicable for special equipment
    classed, at intervals of 12 months from the date of
    commencement of the class period indicated in the certificate.
•
Intermediate Surveys.
Extended annual surveys are
    referred to as intermediate surveys and typically are conducted
    two and one-half years after commissioning and each class
    renewal. Intermediate surveys may be carried out on the occasion
    of the second or third annual survey.
•
Class Renewal Surveys.
Class renewal surveys,
    also known as special surveys, are carried out for the
    ship's hull, machinery, including the electrical plant and
    for any special equipment classed, at the intervals indicated by
    the character of classification for the hull. At the special
    survey the vessel is thoroughly examined, including
    audio-gauging to determine the thickness of the steel
    structures. Should the thickness be found to be less than class
    requirements, the classification society would prescribe steel
    renewals. The classification society may grant a one year grace
    period for completion of the special survey. Substantial amounts
    of money may have to be spent for steel renewals to pass a
    special survey if the vessel experiences excessive wear and
    tear. In lieu of the special survey every four or five years,
    depending on whether a grace period was granted, a ship owner
    has the option of arranging with the classification society for
    the vessel's hull or machinery to be on a continuous survey
    cycle, in which every part of the vessel would be surveyed
    within a five year cycle. At an owner's application, the
    surveys required for class renewal may be split according to an
    agreed schedule to extend over the entire period of class. This
    process is referred to as continuous class renewal.
All areas subject to survey as defined by the classification
society are required to be surveyed at least once per class
period, unless shorter intervals between surveys are prescribed
elsewhere. The period between two subsequent surveys of each
area must not exceed five years.
Most vessels are also drydocked every 30 to 36 months for
inspection of the underwater parts and for repairs related to
inspections. If any defects are found, the classification
surveyor will issue a "recommendation" which must be
rectified by the ship owner within prescribed time limits.
Most insurance underwriters make it a condition for insurance
coverage that a vessel be certified as "in class" by a
classification society which is a member of the International
Association of Classification
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Societies. All our vessels are certified as being "in
class" by Lloyd's Register of Shipping. All new and
secondhand vessels that we purchase must be certified prior to
their delivery under our standard purchase contracts and
memoranda of agreement. If the vessel is not certified on the
scheduled date of closing, we have no obligation to take
delivery of the vessel.
Risk of Loss and Liability Insurance
General
The operation of any drybulk vessel includes risks such as
mechanical failure, collision, property loss, cargo loss or
damage and business interruption due to political circumstances
in foreign countries, hostilities and labor strikes. In
addition, there is always an inherent possibility of marine
disaster, including oil spills and other environmental mishaps,
and the liabilities arising from owning and operating vessels in
international trade. OPA, which imposes virtually unlimited
liability upon owners, operators and demise charterers of
vessels trading in the United States exclusive economic zone for
certain oil pollution accidents in the United States, has made
liability insurance more expensive for ship owners and operators
trading in the United States market.
While we maintain hull and machinery insurance, war and strikes
risks insurance, protection and indemnity coverage, increased
value insurance and freight, demurrage and defense coverage for
all of our vessels in amounts that we believe to be prudent to
cover normal risks in our operations, we may not be able to
achieve or maintain this level of coverage throughout a
vessel's useful life. Furthermore, while we believe that
our present insurance coverage is adequate, not all risks can be
insured, and there can be no guarantee that any specific claim
will be paid, or that we will always be able to obtain adequate
insurance coverage at reasonable rates.
Hull & Machinery and War and Strikes Risks
    Insurance
We maintain marine hull and machinery and war and strikes risks
insurance, which covers the risk of actual or constructive total
loss, for all of our vessels. Our vessels are each covered up to
at least fair market value with particular average deductibles
of $100,000 per vessel per incident and third party liability
deductibles of $25,000 per vessel per incident. We also maintain
increased value coverage for each of our vessels. Under this
increased value coverage, in the event of total loss of a
vessel, we are entitled to recover amounts not recoverable under
our hull and machinery policy due to under-insurance.
Protection and Indemnity Insurance
Protection and indemnity insurance is provided by mutual
protection and indemnity associations, or P&I Clubs, which
insure our third party liabilities in connection with our
shipping activities. This includes third-party liability and
other related expenses resulting from the injury or death of
crew, passengers and other third parties, the loss or damage to
cargo, claims arising from collisions with other vessels, damage
to other third-party property, pollution arising from oil or
other substances and salvage, towing and other related costs,
including wreck removal. Protection and indemnity insurance is a
form of mutual indemnity insurance, extended by protection and
indemnity mutual associations, or "clubs." Subject to
the "capping" discussed below, our coverage, except
for pollution, is unlimited.
Our current protection and indemnity insurance coverage for
pollution is $1 billion per vessel per incident. We are a
member of a P&I Club that is a member of the International
Group. The thirteen P&I Clubs that comprise the
International Group insure approximately 90% of the world's
commercial shipping tonnage and have entered into a pooling
agreement to reinsure each association's liabilities. The
International Group of P&I Clubs exists to arrange
collective insurance and reinsurance for P&I Clubs, to
represent the views of shipowners and charterers who belong to
those Clubs on matters of concern to the shipping industry and
to provide a forum for the exchange of information. Each of the
constituent P&I Clubs is an independent, non-profit making
mutual insurance association or "Club," providing
cover for its shipowner and charterer members against
liabilities of their respective businesses. Each Club is
controlled by its members through a board of directors (or
Committee) elected from the membership; the Board (or Committee)
retains responsibility for strategic and policy issues but
delegates to full-time managers the technical running of the
Club.
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Although the Clubs compete with each other for business, they
have found it beneficial to pool their larger risks under the
auspices of the International Group. This pooling is regulated
by a contractual agreement which defines the risks that are to
be pooled and exactly how these are to be shared between the
participating Clubs. The pool provides a mechanism for sharing
all claims in excess of US$5 million up to a limit of about
US$4.25 billion. For a layer of claims between
US$50 million and US$2.030 billion the International
Group's Clubs purchase reinsurance from the commercial
market. The pooling system provides participating Clubs with
reinsurance protection at cost to much higher levels than would
normally be available in the commercial reinsurance market. As a
member of a P&I Club that is a member of the International
Group, we are subject to calls payable to the associations based
on the group's claim records as well as the claim records
of all other members of the individual associations and members
of the pool of P&I Associations comprising the International
Group.
Competition
We operate in markets that are highly competitive and based
primarily on supply and demand. We compete for charters on the
basis of price, vessel location, size, age and condition of the
vessel, as well as on our reputation as an owner and operator.
We compete with other owners of drybulk carriers in the Panamax
class sector. According to Drewry, ownership of drybulk carriers
is highly fragmented and is divided among approximately 1,400
drybulk carrier owners; however, as of March 31, 2005,
there were 24 owners of at least eight Panamax drybulk carriers.
Some of these competitors have larger fleets and greater
financial resources than we do, which may make them more
competitive.
Legal Proceedings
We have not been involved in any legal proceedings which may
have, or have had a significant effect on our business,
financial position, results of operations or liquidity, nor are
we aware of any proceedings that are pending or threatened which
may have a significant effect on our business, financial
position, results of operations or liquidity. From time to time,
we may be subject to legal proceedings and claims in the
ordinary course of business, principally personal injury and
property casualty claims. We expect that these claims would be
covered by insurance, subject to customary deductibles. Those
claims, even if lacking merit, could result in the expenditure
of significant financial and managerial resources.
Pending Claim Against Mr. Molaris
A private individual has filed a complaint with the public
prosecutor for the Athens Magistrates Court against
Mr. Molaris and four others relating to allegations that,
while Mr. Molaris was employed by Stelmar Shipping Ltd.,
they conspired to defraud the individual of a brokerage fee of
€
1.2 million
purportedly owed by a shipyard in connection with the repair of
a vessel of Stelmar. Mr. Molaris believes the complaint is
without merit and is vigorously contesting these allegations.
The prosecutor has referred the matter to a Greek judge for
further investigation. The judge will determine whether the
claim has sufficient merit to forward the matter on to a court
for adjudication. We have been advised that an independent
committee of the board of directors of Stelmar has conducted an
inquiry into these allegations and found no evidence to support
them.
Properties
We do not own any real property. Other than our vessels, we do
not own any material property.
Exchange Controls
Under Marshall Islands, there are currently no restrictions on
the export or import of capital, including foreign exchange
controls or restrictions that affect the remittance of
dividends, interest or other payments to non-resident holders of
our common stock.
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MANAGEMENT
Directors and Executive Officers
Set forth below are the names, ages and positions of our
directors and executive officers.
Name
Age
Position
Corbin J. Robertson, Jr.
57
Chairman
Stamatis Molaris
43
Chief Executive Officer and President
Paul J. Cornell
45
Chief Financial Officer
Nikos Frantzeskakis
45
Chief Commercial Officer
Joseph R. Edwards
32
Director
Corbin J. Robertson III
34
Director
Hans J. Mende
61
Director
Our board of directors was initially appointed by our parent,
Quintana Maritime Investors LLC, and following this offering
will be elected annually, and each director elected holds office
until his successor shall have been duly elected and qualified,
except in the event of his death, resignation, removal or the
earlier termination of his term of office. Officers are elected
from time to time by vote of our board of directors and hold
office until a successor is elected.
Biographical information with respect to each of our directors
and executives is set forth below.
Corbin J. Robertson, Jr.
is chairman of our
board of directors. Mr. Robertson also serves as Chief
Executive Officer and the Chairman of the Board of Directors of
GP Natural Resource Partners LLC, the general partner of Natural
Resource Partners, LP since October 2002. Mr. Robertson has
served as the Chief Executive Officer and Chairman of the Board
of the general partners of Western Pocahontas Properties Limited
Partnership since 1986, Great Northern Properties Limited
Partnership since 1992 and Quintana Minerals Corporation since
1978 and as Chairman of the Board of Directors of New Gauley
Coal Corporation since 1986. Western Pocahontas Properties
Limited Partnership, Great Northern Properties Limited
Partnership and New Gauley Coal Corporation are all affiliates
of Natural Resource Partners L.P. He also serves as Chairman of
the Board of the Baylor College of Medicine and of the Cullen
Trust for Higher Education and on the boards of the American
Petroleum Institute, the National Petroleum Council, the Texas
Medical Center and the World Health and Golf Association.
Mr. Robertson is the father of Corbin J.
Robertson III, another member of our board of directors.
Stamatis Molaris
is our Chief Executive Officer
and President. Prior to this, Mr. Molaris served as Chief
Financial Officer and a director of Stelmar Shipping Ltd. from
August 1993 until January 2005. Prior to that, Mr. Molaris
served as an audit manager for Arthur Andersen. Mr. Molaris
obtained an undergraduate degree in Business Administration and
Economics from Richmond College in London and a post-graduate
degree in Finance from Strathclyde University of Glasgow.
Paul J. Cornell
is our Chief Financial Officer.
Prior to his current role he was Vice President of Finance for
Quintana Minerals Corporation since 1993 and has been employed
with Quintana Minerals Corporation since 1988. Mr. Cornell
received his B.B.A. in Accounting from Niagara University in
1981.
Nikos Frantzeskakis
is our Chief
Commercial & Operations Officer. Prior to this
position, he was working with Navatrade SA since 1990 as the
exclusive chartering broker of 22 vessels.
Mr. Frantzeskakis has a bachelor's degree in ship
broking practice and ship management from City of London
Polytechnic.
Joseph R. Edwards
is a member of our board of
directors. Mr. Edwards is a vice president of First Reserve
Corporation, a private equity firm focusing on the energy
industry. Mr. Edwards has served in various capacities at
First Reserve since joining it in March 1998. From July 1995
until March 1998, Mr. Edwards served as a member of the
corporate finance team of Simmons & Company
International, a Houston-based, energy-focused investment
banking firm. Mr. Edwards received a bachelors degree in
Business Administration from the University of Texas, and
currently serves as a director of T-3 Energy Services, Inc. and
Power Well Services, Inc.
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Hans J. Mende
is a member of our board of
directors. He is President and Chief Operating Officer of AMCI,
a position he has held since he co-founded AMCI in 1986. Prior
to founding AMCI, Mr. Mende was employed by the Thyssen
Group, one of the largest German multinational companies with
interests in steel making and general heavy industrial
production, in various senior executive positions. At the time
of his departure from Thyssen Group, Mr. Mende was
President of its international trading company.
Corbin J. Robertson III
is a member of our
board of directors and also is Managing Director of Spring
Street Partners, a long/short hedge fund focused on undervalued
small cap securities. Prior to founding Spring Street Partners,
Mr. Robertson worked for three years as a Vice President of
Sandefer Capital Partners LLC, a private investment partnership
focused on energy related investments, and two years as a
management consultant for Deloitte and Touche LLP.
Mr. Robertson, 34, is a graduate of the University of Texas
with both a BBA and a BA and holds an MBA from Harvard Business
School. In addition to his duties at Spring Street Partners,
Mr. Robertson also serves as Vice President —
Business Development for Quintana Minerals Corporation, a
privately held oil and gas company, as a member of the board of
Gulf Atlantic Refining and Marketing L.P., an operator of a
22,000 barrel per day refinery and crude and refined
products storage terminals, as an advisory director to Main
Street Bank, a regional commercial bank, and as a private
investor. Mr. Robertson is the son of Corbin J.
Robertson, Jr., the chairman of our board of directors.
Committees of the Board of Directors
Prior to the offering, we will have established an audit
committee comprised of three independent members which will be
responsible for reviewing our accounting controls and
recommending to our board of directors the engagement of our
outside auditors. The members of the audit committee will be
Messrs.                     ,                     and                     ,
and our board of directors has determined that
Mr.                     is
a financial expert and is "independent" as those terms
are defined under the Commission regulations. In addition, we
will establish a compensation committee comprised of the same
three directors, which will be responsible for establishing
executive officers' compensation and benefits.
Compensation of Directors and Senior Management
Non-employee directors will receive annual compensation in the
aggregate amount of
$                    plus
reimbursement of their out-of-pocket expenses. We do not have a
retirement plan for our officers or directors.
Equity Incentive Plan
We expect to adopt an equity incentive plan, or the Plan, which
will entitle our officers, key employees and directors to
receive options to acquire common stock. Under the Plan, a total
of                      shares
of common stock will be reserved for issuance. The Plan will be
administered by our board of directors. Under the terms of the
Plan, our board of directors would be able to grant new options
exercisable at a price per share to be determined by our board
of directors. We expect that the price will be equal to the
average daily closing price for our common stock over a
specified trading day period following the closing of this
offering. Under the terms of the Plan, no options would be able
to be exercised until at least two years after the closing of
this offering. Any shares received on exercise of the options
would not be able to be sold until three years after the closing
of this offering. All options will expire 10 years from the
date of grant. The Plan will expire 10 years from the
closing of this offering.
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PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of our common shares that will be owned
upon the consummation of the offering and the related
transactions by:
•
each person known by us to be a beneficial owner of more than
    5.0% of the common shares;
•
each of our directors;
•
each of our named executive officers; and
•
all directors and executive officers as a group.
Except as otherwise indicated, the person or entities listed
below have sole voting and investment power with respect to all
shares of our common stock beneficially owned by them, subject
to community property laws where applicable.
Shares Beneficially Owned After the Offering
Shares
Assuming the
Beneficially Owned
Underwriters'
Assuming the
Prior to the
Option
Underwriters' Option
Offering
is Not Exercised
is Exercised in Full
Name of Beneficial Owner
Number
Percent
Number
Percent
Number
Percent
Quintana Maritime Investors LLC(1)
100%
—
—
—
—
FR X Offshore, L.P.(2)
Corbin J. Robertson, Jr.(3)
AMCI Acquisition II, LLC(4)
Stamatis Molaris(5)
Paul J. Cornell(6)
Nikos Frantzeskakis(5)
Joseph R. Edwards(7)
Hans J. Mende(8)
Corbin J. Robertson III(6)
All executive officers and directors as a group
    (seven persons)
*
Less than 1 percent of shares of common stock outstanding
    (excluding, in the case of all directors and executive officers
    as a group, shares beneficially owned by Quintana Maritime
    Investors LLC).
**
We will grant the underwriters an option to purchase up
    to                     additional
    shares in this offering. Prior to the consummation of this
    offering, we will declare a stock dividend, the terms of which
    will require that shortly after the expiration of the
    underwriters' over-allotment option (assuming the
    over-allotment option is not exercised in full) we issue to our
    existing shareholders the number of shares equal to (x) the
    number of additional shares the underwriters have an option to
    purchase minus (y) the actual number of shares the
    underwriters purchase from us pursuant to that option.
(1)
The address of Quintana Maritime Investors LLC is 601 Jefferson
    Street, Suite 3600, Houston, Texas 77002. It is currently
    expected that after the consummation of this offering, Quintana
    Maritime Investors LLC will liquidate and distribute the common
    shares it owns in Quintana Maritime Limited to its members, in
    proportion to their respective member interests.
(2)
Includes beneficial ownership of shares of common stock of
    Quintana Maritime Limited beneficially owned by Quintana
    Maritime Investors LLC prior to its liquidation. Prior to this
    offering and the liquidation of Quintana Maritime Investors LLC,
    FR X Offshore, L.P. owns 48.6% of the member interests in
    Quintana Maritime Investors LLC, after giving effect to capital
    contributions made in connection with the purchase of all eight
    of our vessels. FR X Offshore GP, L.P. is the general
    partner of FR X Offshore, L.P. FR X Offshore GP
    Limited is the general partner of FR X Offshore GP, L.P.
    First Reserve Corporation is the investment advisor to FR X
    Offshore, L.P. The address of
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FR X Offshore, L.P., FR X Offshore GP, L.P., FR X
    Offshore GP Limited and First Reserve Corporation is One
    Lafayette Place, Greenwich, Connecticut 06830.
(3)
Includes beneficial ownership of shares of common stock of
    Quintana Maritime Limited beneficially owned by Quintana
    Maritime Investors LLC prior to its liquidation.
    Mr. Robertson owns 100% of QMP Inc., the sole general
    partner of Quintana Maritime Partners L.P., which owns 38.6% of
    the member interests in Quintana Maritime Investors LLC (prior
    to its liquidation), after giving effect to capital
    contributions made in connection with the purchase of all eight
    of our vessels. The address of Mr. Robertson is
    c/o Quintana Minerals Corporation, 601 Jefferson Street,
    Suite 3600, Houston, Texas.
(4)
Includes beneficial ownership of shares of common stock of
    Quintana Maritime Limited beneficially owned by Quintana
    Maritime Investors LLC prior to its liquidation. AMCI
    Acquisition II, LLC disclaims beneficial ownership of such
    shares. Prior to this offering and the liquidation of Quintana
    Maritime Investors LLC, AMCI Acquisition II, LLC owns 9.3% of
    the member interests in Quintana Maritime Investors LLC, after
    giving effect to capital contributions made in connection with
    the purchase of all eight of our vessels. AMCI Acquisition II,
    LLC is an affiliate of American Metals & Coal
    International, Inc. and Mr. Mende owns 45% of the membership
    interest in AMCI Acquisition II, LLC. The address of AMCI
    Acquisition II, LLC is One Energy Place, Suite 1000, Latrobe,
    Pennsylvania 15650.
(5)
Includes beneficial ownership of shares of common stock of
    Quintana Maritime Limited beneficially owned by Quintana
    Maritime Investors LLC prior to its liquidation.
    Messrs. Molaris and Frantzeskakis disclaim beneficial
    ownership of such shares. Prior to this offering and the
    liquidation of Quintana Maritime Investors LLC, Mr. Molaris
    owns 1.1% of the member interests in Quintana Maritime Investors
    LLC and Mr. Frantzeskakis owns 0.4% of the member interests
    in Quintana Maritime Investors LLC. Mr. Molaris is
    Chief Executive Officer and President of Quintana Maritime
    Limited. Mr. Frantzeskakis is Chief Commercial Officer of
    Quintana Maritime Limited. The address of each of
    Messrs. Molaris and Frantzeskakis is c/o Quintana
    Maritime Limited at Pandoras 13 Kyprou Street, 166 74 Glyfada,
    Greece.
(6)
Mr. Cornell is Chief Financial Officer of Quintana Maritime
    Limited. Mr. Robertson III is a director of Quintana
    Maritime Limited. The address of each of Messrs. Cornell
    and Robertson III is c/o Quintana Minerals
    Corporation, 601 Jefferson Street, Suite 3600, Houston,
    Texas 77002.
(7)
Mr. Edwards is a director of Quintana Maritime Limited and
    a Vice President of First Reserve Corporation. He disclaims
    beneficial ownership of any shares of Quintana Maritime Limited
    beneficially owned by First Reserve Corporation or its
    affiliates. The address of Mr. Edwards is c/o First Reserve
    Corporation, One Lafayette Place, Greenwich, Connecticut 06830.
(8)
Mr. Mende is a director of Quintana Maritime Limited and
    President and Chief Operating Officer of AMCI and is the manager
    of AMCI Acquisition II, LLC and disclaims beneficial ownership
    of any shares of Quintana Maritime Limited beneficially owned by
    AMCI or its affiliates. The address of Mr. Mende is
    c/o American Metals & Coal International, Inc., 20
    Dayton Avenue, Greenwich, Connecticut 06830.
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RELATED PARTY TRANSACTIONS
Dividend
Prior to the consummation of this offering, we intend to declare
three dividends which will be payable (in accordance with the
circumstances described below) to our sole existing shareholder
and parent, Quintana Maritime Investors LLC, on the record date
to be set for those dividends.
•
The first dividend will be a cash dividend of approximately
    $           million,
    assuming an initial public offering price per share of
    $          ,
    which we will pay to our sole existing shareholder and parent,
    Quintana Maritime Investors LLC, out of a portion of the net
    proceeds from this offering;
•
The second dividend will be, in the event the underwriters'
    over-allotment option is exercised, a cash dividend of up to
    approximately
    $           million,
    which we will pay to our sole existing shareholder and parent,
    Quintana Maritime Investors LLC, with all of the net proceeds we
    receive from the shares sold pursuant to the underwriters'
    over-allotment option; and
•
The third dividend will be, in the event the underwriters'
    over-allotment is not exercised in full, a stock dividend of up
    to            shares
    of our common stock, which we will pay to our sole existing
    shareholder and parent, Quintana Maritime Investors LLC, in an
    equal amount to (assuming the over-allotment option is not
    exercised in full), the number of shares equal to (x) the
    number of additional shares the underwriters have an option to
    purchase minus (y) the actual number of shares the
    underwriters purchase from us pursuant to that option.
Holders who purchase in this offering will not be entitled to
receive any of the three dividends described above. Please read
"Use of Proceeds."
Certain Relationships
Following this offering, affiliates of Mr. Robertson, First
Reserve and AMCI will beneficially own
approximately      %
and      %, respectively, of our
outstanding common stock
(approximately      % if the
underwriters exercise their over-allotment option in full).
Mr. Robertson is the beneficial owner of the controlling
interest in the general partner of NRP, which owns and manages
coal properties. First Reserve is a private equity firm
specializing in the energy industry with significant economic
interests in the coal sector. AMCI is engaged in the business of
production, handling and marketing of coal. Mr. Robertson,
First Reserve and AMCI are in the business of making investments
in companies and may from time to time acquire and hold
interests in businesses that compete directly or indirectly with
us. These other investments may create competing financial
demands on our Sponsors, potential conflicts of interest and
require efforts consistent with applicable law to keep the other
businesses separate from our operations. Mr. Robertson,
First Reserve and AMCI and their affiliates may also pursue
acquisition opportunities that may be complementary to our
business, and as a result, those acquisition opportunities may
not be available to us. So long as our Sponsors continue to
beneficially own a significant amount of our equity, they will
continue to be able to strongly influence or effectively control
our decisions.
Registration Rights
Affiliates of Mr. Robertson and First Reserve will have the
right in certain circumstances after consummation of this
offering and subject to the term of its lock-up agreement with
Citigroup Global Markets Inc. and Morgan Stanley & Co.
Incorporated, to require us to register its shares of common
stock in connection with a public offering and sale. In
addition, in connection with other registered offerings by us
and subject to the term of its lock-up agreement with Citigroup
Global Markets Inc. and Morgan Stanley & Co.
Incorporated, affiliates of Mr. Robertson, First Reserve
and AMCI will have the ability to exercise certain piggyback
registration rights with respect to their shares.
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DESCRIPTION OF CAPITAL STOCK
The following is a description of the material terms of our
amended and restated articles of incorporation and bylaws that
will be in effect immediately prior to the consummation of this
offering. We refer you to our amended and restated articles of
incorporation and bylaws, copies of which have been filed as
exhibits to the registration statement of which this prospectus
forms a part.
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 now or hereafter be organized under the
Business Corporations Act of the Marshall Islands, or the BCA.
Our amended and restated articles of incorporation and bylaws do
not impose any limitations on the ownership rights of our
shareholders.
Authorized Capitalization
Under our articles of incorporation, our authorized capital
stock consists of 100 million shares of common stock, no
par value, of
which            shares
were issued and outstanding as of the date of this prospectus
and 10 million shares of preferred stock, no par value, of
which no shares were issued and outstanding as of the date of
this prospectus. Upon consummation of this offering, we will
have outstanding shares of common stock and no shares of
preferred stock. All of our shares of stock are in registered
form.
Common Stock
Each outstanding share of common stock entitles the holder to
one vote on all matters submitted to a vote of shareholders.
Subject to preferences that may be applicable to any outstanding
shares of preferred stock, holders of shares of common stock are
entitled to receive ratably all dividends, if any, declared by
our board of directors out of funds legally available for
dividends. Please read "Dividend Policy." Upon our
dissolution or liquidation or the sale of all or substantially
all or our assets, after payment in full of all amounts required
to be paid to creditors and to the holders of preferred stock
having liquidation preferences, if any, the holders or our
common stock will be entitled to receive pro rata our remaining
assets available for distribution. Holders of common stock do
not have conversion, redemption or preemptive rights to
subscribe to any of our securities. The rights, preferences and
privileges of holders of common stock are subject to the rights
of the holders of any shares of preferred stock which we may
issue in the future.
Preferred Stock
Our amended and restated articles of incorporation authorize our
board of directors to establish one or more series of preferred
stock and to determine, with respect to any series of preferred
stock, the terms and rights of that series, including:
•
the designation of the series;
•
the number of shares of the series, which our board may, except
    where otherwise provided in the preferred stock designation,
    increase or decrease, but not below the number of shares then
    outstanding;
•
whether dividends, if any, will be cumulative or non-cumulative
    and the dividend rate of the series;
•
the dates at which dividends, if any, will be payable;
•
the redemption rights and price or prices, if any, for shares of
    the series;
•
the terms and amounts of any sinking fund provided for the
    purchase or redemption of shares of the series;
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•
the amounts payable on shares of the series in the event of any
    voluntary or involuntary liquidation, dissolution or winding-up
    of the affairs of our company;
•
whether the shares of the series will be convertible into shares
    of any other class or series, or any other security, of our
    company or any other corporation, and, if so, the specification
    of the other class or series or other security, the conversion
    price or prices or rate or rates, any rate adjustments, the date
    or dates as of which the shares will be convertible and all
    other terms and conditions upon which the conversion may be made;
•
restrictions on the issuance of shares of the same series or of
    any other class or series; and
•
the voting rights, if any, of the holders of the series.
Anti-takeover Effects of Certain Provisions of Our Amended
and Restated Articles of Incorporation and Bylaws
Certain provisions of our amended and restated articles of
incorporation and amended and restated bylaws, which are
summarized in the following paragraphs, may have an
anti-takeover effect and may delay, defer or prevent a tender
offer or takeover attempt that a shareholder might consider in
its best interest, including those attempts that might result in
a premium over the market price for the shares held by
shareholders.
Removal of Directors; Vacancies
Our amended and restated bylaws provide that directors may be
removed with or without cause upon the affirmative vote of
holders of at least a majority of the shares of stock entitled
to vote generally in the election of directors, voting together
as a single class. In addition, our amended and restated bylaws
also provide that any vacancies on our board of directors and
newly created directorships will be filled only by the
affirmative vote of a majority of the remaining directors,
although less than a quorum.
No Cumulative Voting
The BCA provides that shareholders are not entitled to the right
to cumulate votes in the election of directors unless our
amended and restated articles of incorporation provides
otherwise. Our amended and restated articles of incorporation
prohibits cumulative voting.
Calling of Special Meetings of Shareholders
Our amended and restated bylaws provide that special meetings of
our shareholders may be called only by the chairman of our
board, our president or by resolution of our board of directors
and shall be called by our president or secretary upon the
written request of at least 10% in interest of the shareholders
entitled to vote at the 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
90 days nor more than 120 days prior to the first
anniversary date of the date on which the company first mailed
its proxy materials for the previous year's annual meeting.
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.
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Amendments to Our Amended and Restated Bylaws
Our amended and restated articles of incorporation grants our
board of directors the authority to amend and repeal our bylaws
without a shareholder vote in any manner not inconsistent with
the laws of the Marshall Islands.
"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 shares of
preferred stock and to determine, with respect to any series of
preferred stock, the terms and rights of that series. Our board
of directors may issue shares of preferred stock on terms
calculated to discourage, delay or prevent a change of control
of our company or the removal of our management.
Shareholder Action by Written Consent
Our amended and restated bylaws permit shareholder action by
written consent.
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
or 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 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 the company's shares are
primarily traded on a local or national securities exchange.
Shareholders' Derivative Actions
Under the BCA, any of our shareholders may bring an action in
our name to procure a judgment in our favor, also known as a
derivative action, provided that the shareholder bringing the
action is a holder of common stock both at the time the
derivative action is commenced and at the time of the
transaction to which the action relates.
Limitations on Liability and Indemnification of Officers and
Directors
The BCA authorizes corporations to limit or eliminate the
personal liability of directors and officers to corporations and
their shareholders for monetary damages for breaches of
directors' fiduciary duties. Our bylaws include a provision
that eliminates the personal liability of directors for monetary
damages for actions taken as a director to the fullest extent
permitted by law.
Our bylaws provide that we must indemnify our directors and
officers to the fullest extent authorized by law. We are also
expressly authorized to advance certain expenses (including
attorneys fees and disbursements and court costs) to our
directors and officers and carry directors' and
officers' insurance providing indemnification for our
directors, officers and certain employees for some liabilities.
We believe that these indemnification provisions and insurance
are useful to attract and retain qualified directors and
executive officers.
The limitation of liability and indemnification provisions in
our amended and restated articles of incorporation and bylaws
may discourage shareholders from bringing a lawsuit against
directors for breach of their fiduciary duty. These provisions
may also have the effect of reducing the likelihood of
derivative litigation against directors and officers, even
though such an action, if successful, might otherwise benefit us
and our shareholders. In addition, your investment may be
adversely affected to the extent we pay the
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costs of settlement and damage awards against directors and
officers pursuant to these indemnification provisions.
There is currently no pending material litigation or proceeding
involving any of our directors, officers or employees for which
indemnification is sought.
Transfer Agent
The registrar and transfer agent for the common stock
is                                         .
Listing
We will apply to have our common stock included for quotation on
the Nasdaq National Market under the symbol "QMAR."
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SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, we will
have           shares
of common stock outstanding. Of these shares,
the           shares
sold in this offering,
or              shares
assuming the underwriters exercise their over-allotment option
in full, will be freely transferable in the United States
without restriction under the Securities Act, except for any
shares acquired by one of our "affiliates" as defined
under Rule 144. Immediately after consummation of this
offering, affiliates of our Sponsors will continue to
own           shares
of common stock which were acquired in private transactions not
involving a public offering and these shares are therefore
treated as "restricted securities" for purposes of
Rule 144. The restricted securities held by the affiliates
of our Sponsors will be subject to the underwriter's
180-day lock-up agreement as described below. Restricted
securities may not be resold except in compliance with the
registration requirements of the Securities Act or under an
exemption from those registration requirements, such as the
exemptions provided by Rule 144, Regulation S and
other exemptions under the Securities Act.
In general, under Rule 144 as currently in effect, a person
or persons whose shares are aggregated who owns shares that were
acquired from the issuer or an affiliate at least one year ago
would be entitled to sell within any three-month period a number
of shares that does not exceed the greater of (i) 1% of the
then outstanding shares of our common stock, which will be
approximately           million
shares immediately after this offering, or (ii) an amount
equal to the average weekly reported volume of trading in shares
of our common stock on all national securities exchanges and/or
reported through the automated quotation system of registered
securities associations during the four calendar weeks preceding
the date on which notice of the sale is filed with the
Securities and Exchange Commission. Sales in reliance on
Rule 144 are also subject to other requirements regarding
the manner of sale, notice and availability of current public
information about us. A person or persons whose shares are
aggregated, and who is not deemed to have been one of our
affiliates at any time during the 90 days immediately
preceding the sale may sell restricted securities in reliance on
Rule 144(k) without regard to the limitations described
above, provided that two years have expired since the later of
the date on which the same restricted securities were acquired
from us or one of our affiliates. As defined in Rule 144,
an "affiliate" of an issuer is a person that directly,
or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, that same
issuer.
We and our executive officers, directors and existing
shareholders have agreed with the underwriters not to sell,
dispose of or hedge any of our common stock, or any security
that is convertible into or exercisable or exchangeable for our
common stock, subject to certain exceptions, for a period of
180 days after the date of this prospectus, except with the
prior written consent of Citigroup Global Markets Inc. and
Morgan Stanley & Co. Incorporated.
We will enter into a registration rights agreement immediately
prior to the closing of this offering with our shareholders of
record pursuant to which we will grant them, their affiliates
and certain of their transferees, the right, under certain
circumstances and subject to certain restrictions, including
restrictions included in the lock-up agreements described above,
to require us to register under the Securities Act shares of our
common stock held by them. Shares of common stock, when
registered under any registration statement, will be available
for sale in the open market unless restrictions apply. See
"Related Party Transactions — Registration Rights
Agreement." In addition, all of these shares would be
available for sale into the public market after one year
pursuant to Rule 144, Regulation S and other
exemptions under the Securities Act, as described above.
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As a result a result of the lock-up agreements and rules of the
Securities Act, the restricted shares will be available for sale
in the public market, subject to certain volume and other
restrictions, as mentioned above, as follows:
Number of Shares
Days After the Date of this Prospectus
Eligible for Sale
Comment
Date of prospectus
Shares not locked up and eligible for sale freely or under
    Rule 144
180 days
Lock-up released; shares eligible for sale under Rule 144
Prior to this offering, there has been no public market for our
common stock, and no prediction can be made as to the effect, if
any, that future sales or the availability of shares for sale
will have on the market price of our common stock prevailing
from time to time. Nevertheless, sales of substantial amounts of
our common stock in the public market, including shares issued
upon the exercise of options that may be granted under any
employee stock option or employee stock award plan of ours, or
the perception that those sales may occur, could adversely
affect prevailing market prices for our common stock. Please
read "Risk Factors — Future sales of our common
stock could cause the market price of our common stock to
decline."
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CERTAIN MARSHALL ISLANDS COMPANY CONSIDERATIONS
Our corporate affairs are governed by our articles of
incorporation and bylaws and by the Business Corporation Act of
the Republic of the Marshall Islands, or BCA. The provisions of
the BCA resemble provisions of the corporation laws of a number
of states in the United States. For example, the BCA allows the
adoption of various anti-takeover measures such as shareholder
"rights" plans. While the BCA also provides that it is
to be interpreted according to the laws of the State of Delaware
and other states with substantially similar legislative
provisions, there have been few, if any, court cases
interpreting the BCA in the Marshall Islands and we can not
predict whether Marshall Islands courts would reach the same
conclusions as U.S. courts. Thus, you may have more
difficulty in protecting your interests in the face of actions
by the management, directors or controlling shareholders than
would shareholders of a corporation incorporated in a United
States jurisdiction which has developed a substantial body of
case law. The following table provides a comparison between the
statutory provisions of the BCA and the Delaware General
Corporation Law relating to shareholders' rights.
Marshall Islands
Delaware
Shareholder Meetings
•
Held at a time and place as designated in the bylaws
•
May be held at such time or place as designated in the
    certificate of incorporation or the bylaws, or if not so
    designated, as determined by the board of directors
•
May be held within or outside the Marshall Islands
•
May be held within or outside Delaware
•
Notice:
•
Notice:
•
Whenever shareholders are required to take action at a meeting,
    written notice shall state the place, date and hour of the
    meeting and indicate that it is being issued by or at the
    direction of the person calling the meeting
•
Whenever shareholders are required to take any action at a
    meeting, a written notice of the meeting shall be given which
    shall state the place, if any, date and hour of the meeting, and
    the means of remote communication, if any
•
A copy of the notice of any meeting shall be given personally or
    sent by mail not less than 15 nor more than 60 days before
    the meeting
•
Written notice shall be given not less than 10 nor more than
    60 days before the meeting
Marshall Islands
Delaware
Shareholder's Voting Rights
•
Any action required to be taken by meeting of shareholders may
    be taken without meeting if consent is in writing and is signed
    by all the shareholders entitled to vote
•
Shareholders may act by written consent
•
Any person authorized to vote may authorize another person to
    act for him by proxy
•
Any person authorized to vote may authorize another person or
    persons to act for him by proxy
•
Unless otherwise provided in the articles of incorporation, a
    majority of shares entitled to vote constitutes a quorum. In no
    event shall a quorum consist of fewer than one-third of the
    shares entitled to vote at a meeting
•
For stock corporations, certificate of incorporation or bylaws
    may specify the number to constitute a quorum but in no event
    shall a quorum consist of less than one-third of shares entitled
    to vote at a meeting. In the absence of such specifications, a
    majority of shares entitled to vote shall constitute a quorum
•
The Articles of Incorporation may provide for cumulative voting
•
The certificate of incorporation may provide for cumulative
    voting
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Marshall Islands
Delaware
Directors
•
Board must consist of at least one member
•
Board must consist of at least one member
•
Number of members can be changed by an amendment to the bylaws,
    by the shareholders, or by action of the board
•
Number of board members shall be fixed by the bylaws, unless the
    certificate of incorporation fixes the number of directors, in
    which case a change in the number shall be made only by
    amendment of the certificate
•
If the board is authorized to change the number of directors, it
    can only do so by an absolute majority (majority of the entire
    board)
Dissenter's Rights of Appraisal
•
Shareholder's have a right to dissent from a merger or sale
    of all or substantially all assets not made in the usual course
    of business, and receive payment of the fair value of their
    shares
•
Appraisal rights shall be available for the shares of any class
    or series of stock of a corporation in a merger or
    consolidation, subject to exceptions
•
A holder of any adversely affected shares who does not vote on
    or consent in writing to an amendment to the articles of
    incorporation has the right to dissent and to receive payment
    for such shares if the amendment:
•
Alters or abolishes any preferential right of any outstanding
    shares having preference; or
•
Creates, alters, or abolishes any provision or right in respect
    to the redemption of any outstanding shares; or
•
Alters or abolishes any preemptive right of such holder to
    acquire shares or other securities; or
•
Excludes or limits the right of such holder to vote on any
    matter, except as such right may be limited by the voting rights
    given to new shares then being authorized of any existing or new
    class
Shareholder's Derivative Actions
•
An action may be brought in the right of a corporation to
    procure a judgment in its favor, by a holder of shares or of
    voting trust certificates or of a beneficial interest in such
    shares or certificates. It shall be made to appear that the
    plaintiff is such a holder at the time of bringing the action
    and that he was such a holder at the time of the transaction of
    which he complains, or that his shares or his interest therein
    devolved upon him by operation of law
•
In any derivative suit instituted by a shareholder or a
    corporation, it shall be averred in the complaint that the
    plaintiff was a shareholder of the corporation at the time of
    the transaction of which he complains or that such
    shareholder's stock thereafter devolved upon such
    shareholder by operation of law
•
Complaint shall set forth with particularity the efforts of the
    plaintiff to secure the initiation of such action by the board
    or the reasons for not making such effort
•
Such action shall not be discontinued, compromised or settled,
    without the approval of the High Court of the Republic
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Marshall Islands
Delaware
•
Attorney's fees may be awarded if the action is successful
•
Corporation may require a plaintiff bringing a derivative suit
    to give security for reasonable expenses if the plaintiff owns
    less than 5% of any class of stock and the shares have a value
    of less than $50,000
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TAX CONSIDERATIONS
The following is a discussion of the material Marshall Islands
and United States federal income tax considerations relevant to
an investment decision by a U.S. Holder, as defined below,
with respect to the common stock. This discussion does not
purport to deal with the tax consequences of owning common stock
to all categories of investors, some of which (such as financial
institutions, regulated investment companies, real estate
investment trusts, tax-exempt organizations, insurance
companies, persons holding our common stock as part of a
hedging, integrated, conversion or constructive sale transaction
or a straddle, traders in securities that have elected the
mark-to-market method of accounting for their securities,
persons liable for alternative minimum tax, persons who are
investors in pass-through entities, dealers in securities or
currencies and investors whose functional currency is not the
United States dollar) may be subject to special rules. This
discussion deals only with holders who purchase common stock in
connection with this offering. You should consult your own tax
advisors concerning the tax consequences arising in your own
particular situation under United States federal, state, local
or foreign law of the ownership of common stock.
Marshall Islands Tax Considerations
In the opinion of Seward & Kissell LLP, the
following are the material Marshall Islands tax consequences of
our activities to us and shareholders of our common stock. We
are incorporated in the Marshall Islands. 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.
United States Federal Income Tax Considerations
In the opinion of Vinson & Elkins L.L.P., our
United States counsel, the following are the material United
States federal income tax consequences to us of our activities
and to U.S. Holders, as defined below, of our common stock.
The following discussion of U.S. federal income tax matters
is based on the Internal Revenue Code of 1986, or the Code,
judicial decisions, administrative pronouncements, and existing
regulations issued by the U.S. Department of the Treasury,
all of which are subject to change, possibly with retroactive
effect. The discussion below is based, in part, on the
description of our business as described in "Business"
above and on certain representations made by us to our United
States counsel and assumes that we conduct our business as
described in that section and in such representations.
References in the following discussion to "we" and
"us" are to Quintana Maritime Limited and its
subsidiaries on a consolidated basis.
United States Federal Income Taxation of Our Company
Taxation of Operating Income: In 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 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 100% from
sources within the United States. We do not expect to engage in
transportation that produces income which is considered to be
100% from sources within the United States.
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Shipping income attributable to transportation exclusively
between non-U.S. ports will be considered to be 100%
derived from sources outside the United States. Shipping income
derived from sources outside the United States will not be
subject to any U.S. federal income tax.
In the absence of exemption from tax under Section 883 of
the Code, our U.S.-source shipping income would be subject to
either a 4% gross basis tax (
i.e.
, a tax imposed
without allowance for deductions) or net income taxation and
branch profits taxation in the United States as described below.
Exemption of Operating Income from United States Federal
    Income Taxation
Under Section 883 of the Code and the regulations
thereunder, a foreign corporation will be exempt from
U.S. federal income taxation on its U.S.-source shipping
income if:
(1)
it is organized in a foreign country that grants an
    "equivalent exemption" to corporations organized in
    the United States; and
(2)
either
(a)
more than 50% of the value of its stock is owned, directly or
    indirectly, by individuals who are "residents" of its
    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,"
(b)
its stock is "primarily and regularly traded on an
    established securities market" in its country of
    organization, in another country that grants an "equivalent
    exemption" to U.S. domestic corporations, or in the United
    States, which we refer to as the "Publicly Traded
    Test," or
(c)
it is a "controlled foreign corporation," or CFC, and
    satisfies certain other requirements as described below, to
    which, collectively, we refer as the "CFC Test."
While the Marshall Islands, the jurisdiction where we and our
ship-owning subsidiaries are organized, grants an
"equivalent exemption" to United States corporations,
it is unclear whether we will be able to meet either the
Publicly Traded Test or the CFC Test following the
offering. We do not expect to meet the 50% Ownership Test
following the offering.
Publicly Traded Test
Treasury regulations promulgated under Section 883 provide,
for purposes of determining whether a foreign corporation meets
the Publicly Traded Test, that a class of stock of such
corporation will be considered to be "primarily
traded" if the number of shares of each class of stock that
are traded during any taxable year on all established securities
markets in a given 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. Upon completion
of the offering, we anticipate that our common stock, which will
be our sole class of issued and outstanding stock, will be
"primarily traded" on the Nasdaq National Market.
Under the Section 883 regulations, a foreign
corporation's stock 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 corporation's outstanding shares by
both voting power and value are listed on the market. Further,
with respect to each class of stock relied upon to meet this
requirement, (i) such class of stock is traded on the
market, other than in minimal quantities, on at least
60 days during the taxable year or
1
/
6
of the days in any short taxable year; and (ii) the
aggregate number of shares of such class of stock traded on such
market during the taxable year 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 these trading frequency and
trading volume tests. Even if this were not the case, the
regulations provide that the trading frequency and trading
volume tests will be deemed satisfied if, as we expect to be the
case with our common stock, such class of stock is traded on an
established market in the United States and such stock is
regularly quoted by dealers making a market in such stock.
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Notwithstanding the foregoing, the Section 883 regulations
provide, in pertinent part, that a class of 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 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 at least 5% of the vote and value
of such class of stock, to which we refer as the
"5 Percent Override Rule."
For purposes of being able to determine the persons who actually
or constructively own 5% or more of our stock, or
"5% Shareholders," the regulations permit us to
rely on those persons that are identified on Schedule 13G
and Schedule 13D filings with the U.S. Securities and
Exchange Commission, or the "SEC," as having a 5% or
more beneficial interest in our common stock. The regulations
further provide that an investment company that is registered
under the Investment Company Act of 1940, as amended, will not
be treated as a 5% Shareholders for such purposes.
In the event the 5 Percent Override Rule is triggered, the
regulations provide that the 5 Percent Override Rule
nevertheless will not apply if we can establish that among the
closely-held group of 5% Shareholders, there are sufficient
5% Shareholders that are considered to be residents of a
foreign country that grants an "equivalent exemption"
to corporations organized in the United States, or
"qualified shareholders," to preclude other,
non-qualified shareholders in the closely-held group from owning
50% or more of each class of our stock for more than half the
number of days during the taxable year.
Since U.S. persons are not qualified shareholders under the
regulations, we do not expect to be able to establish that among
the group of our 5% Shareholders, there are sufficient
qualified shareholders to satisfy the foregoing exception to the
5 Percent Override Rule so long as affiliates of each of
Mr. Robertson, First Reserve and AMCI together own at least
50% of our common stock. If the identity or ownership of these
5% Shareholders changes in the future, the Company may be
able to satisfy the Publicly Traded Test at that time. We can
give no assurance, however, that this will be the case.
CFC Test
We will be a controlled foreign corporation, or a CFC, for
U.S. federal income tax purposes if more than
50 percent of our common stock is owned directly,
indirectly or constructively by U.S. persons each of whom
owns 10 percent or more of such common stock. We refer to
such U.S. persons as "United States
Shareholders." We expect to be a CFC so long as affiliates
of each of Mr. Robertson, First Reserve and AMCI together
own more than 50% of our common stock.
The Section 883 regulations, which were promulgated in August
2003, provide that a foreign corporation that is a CFC will only
be treated as satisfying the CFC Test if, for the relevant
year in question, more than 50 percent of the foreign
corporation's net income derived from the international
operation of ships is includible in the gross income of one or
more United States Shareholders for such taxable year (we refer
to this requirement as the "50% Inclusion Test").
At the time the regulations were promulgated, income derived
from the international operation of ships was a separate
category of "Subpart F income." Other categories
of Subpart F income include certain passive income and
income from transactions with or involving related parties.
Subpart F income is required to be included in income of
United States Shareholders under the special U.S. federal
income tax regime applicable to CFCs and their owners.
Subsequent to the promulgation of the Section 883
regulations, in October of 2004, the American Jobs Creation Act
of 2004, or the Jobs Act, was enacted. Under the Jobs Act,
income derived from the international operation of ships was
eliminated as a separate category of Subpart F income. As a
result of such change, only very limited types of income derived
from the international operation of ships, such as income from
passive leasing or bareboat chartering activities, may be
treated as Subpart F income. Thus, if literally applied,
the 50% Inclusion Test would only be applicable to a CFC
that earned such limited types of income. Other CFCs, which earn
no such income, could claim that all of their Subpart F
income derived from the international operation of ships (or
zero) is included in income of United States Shareholders.
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Since we do not expect to earn any Subpart F income derived
from the international operation of ships, under this literal
interpretation, we would be entitled to claim the benefits of
the Section 883 exemption for so long as we remain a CFC.
Nonetheless, we believe there is significant risk that this
literal interpretation would not be sustained upon review by the
Internal Revenue Service. If this literal interpretation were
not sustained, and the 50% Inclusion Test were instead
applied on a hypothetical basis assuming income derived from
international shipping income remained a separate category of
Subpart F income, then it is unlikely that we would satisfy
the 50% Inclusion Test due to the substantial indirect
ownership of our common stock by an affiliate of First Reserve,
whose owners do not independently qualify as United States
Shareholders. Consequently, we believe there is significant
uncertainty regarding whether we will qualify for the
Section 883 exemption under the CFC Test.
To the extent the benefits of Code Section 883 are
unavailable, 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 rate of U.S. federal income
tax on our shipping income (unreduced by any allocable
deductions) would never exceed 2% of such income under the
4% gross basis tax regime.
To the extent the benefits of the Code Section 883
exemption 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, any such
"effectively connected" U.S.-source shipping income,
net of applicable deductions, would be subject to the
U.S. federal corporate income tax currently imposed at
rates of up to 35%. In addition, we may be subject to the
30% "branch profits" tax 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 that is attributable to the
conduct of a 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
•
assuming our chartering income is not treated as rental income,
    as described below with respect to our potential status as a
    passive foreign investment company, 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 intend to have, or permit circumstances that would
result in having, any vessel sailing to or from the United
States on a regularly scheduled basis. Based on the foregoing
and on the expected mode of our shipping operations and other
activities, we believe that none of our U.S.-source shipping
income will be "effectively connected" with the
conduct of a U.S. trade or business.
United States Federal Income Taxation of U.S. Holders
As used herein, the term "U.S. Holder" means a
beneficial owner of common stock that
•
is an individual U.S. citizen or resident, a corporation or
    other entity taxable as a corporation, for U.S. federal
    income tax purposes, created or organized in or under the laws
    of the United States, any state of the United States or the
    District of Columbia, an estate the income of which is subject
    to U.S. federal income taxation regardless of its source,
    or a trust if a court within the United States is able to
    exercise primary jurisdiction over the administration of the
    trust and one or more U.S. persons have the authority to
    control all substantial decisions of the trust,
•
owns our common stock as a capital asset, generally, for
    investment purposes, and
•
owns less than 10% of our common stock for U.S. federal
    income tax purposes.
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If a partnership holds our common stock, the tax treatment of a
partner will generally depend upon the status of the partner and
upon the activities of the partnership. If you are a partner in
a partnership holding our common stock, you are urged to consult
your tax advisor.
Distributions
Subject to the discussion of passive foreign investment
companies below, any distributions made by us with respect to
our common stock to a U.S. Holder generally will constitute
dividends, which may be taxable as ordinary income or
"qualified dividend income" as described in more
detail below, to the extent of our current and accumulated
earnings and profits, as determined under U.S. federal
income tax principles. Distributions in excess of our 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 stock and thereafter as capital gain.
U.S. Holders that are corporations generally will not be
entitled to claim a dividends received deduction with respect to
any distributions they receive from us. Dividends paid with
respect to our common stock will be treated as "passive
income" for purposes of computing allowable foreign tax
credits for U.S. federal income tax purposes.
Dividends paid on our common stock to a U.S. Holder who is
an individual, trust or estate (a "U.S. Individual
Holder") should be treated as "qualified dividend
income" that is taxable to such U.S. Individual
Holders at preferential tax rates (generally, through 2008)
provided that (1) the common stock is readily tradable on
an established securities market in the United States (such as
the Nasdaq National Market); (2) we are not a passive
foreign investment company for the taxable year during which the
dividend is paid or the immediately preceding taxable year
(which we do not believe we are or will be); (3) the
U.S. Individual Holder has owned the common stock for more
than 60 days in the 121-day period beginning 60 days
before the date on which the common stock becomes ex-dividend;
and (4) the U.S. Individual Holder is not under an
obligation to make related payments with respect to positions in
substantially similar or related property. There is no assurance
that any dividends paid on our common stock will be eligible for
these preferential rates in the hands of a U.S. Individual
Holder, although we believe that they will be so eligible. Any
dividends we pay that are not eligible for these preferential
rates will be taxed to a U.S. Individual Holder at regular
rates applicable to ordinary income.
Special rules may apply to any "extraordinary
dividend" — generally, a dividend paid by us in
an amount which is equal to or in excess of ten percent of a
shareholder's adjusted basis (or fair market value in
certain circumstances) in a share of common stock. If we pay an
"extraordinary dividend" on our common stock that is
treated as "qualified dividend income," then any loss
derived by a U.S. Individual Holder from the sale or
exchange of such common stock will be treated as long-term
capital loss to the extent of such dividend.
Sale, Exchange or Other Disposition of Common Stock
Assuming we do not constitute a passive foreign investment
company for any taxable year, a U.S. Holder generally will
recognize taxable gain or loss upon a sale, exchange or other
disposition of our common stock in an amount equal to the
difference between the amount realized by the U.S. Holder
from such sale, exchange or other disposition and the
U.S. Holder's tax basis in such stock. Such capital
gain or loss generally will be treated as U.S.-source income or
loss, as applicable, for purposes of computing any allowable
U.S. foreign tax credit. Long-term capital gains of
U.S. Individual Holders are eligible for reduced rates of
taxation. 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. A U.S. Holder's ability to deduct capital
losses is subject to certain limitations.
Passive Foreign Investment Company Status and Significant
    Tax Consequences
Special U.S. federal income tax rules apply to a
U.S. Holder who holds stock in a foreign corporation
classified as a passive foreign investment company for
U.S. federal income tax purposes. In general, we
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will be treated as a passive foreign investment company with
respect to a U.S. Holder if, for any taxable year in which
such holder held our common stock, 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), or
•
at least 50% of the average value of our assets during such
    taxable year produce, or are held for the production of, passive
    income.
For purposes of determining whether we are a passive foreign
investment company, we generally will be treated as earning and
owning our proportionate share of the income and assets,
respectively, of our subsidiaries. Income earned, or deemed
earned, by us in connection with the performance of services
would not constitute passive income. By contrast, rental income
generally would constitute "passive income" unless we
were treated under specific rules as deriving our rental income
in the active conduct of a trade or business.
Based on our current operations and future projections, we do
not believe that we are, nor do we expect to become, a passive
foreign investment company with respect to any taxable year.
Although there is no legal authority directly on point, and we
are not relying upon an opinion of counsel on this issue, our
belief is based principally on the position that, for purposes
of determining whether we are a passive foreign investment
company, the gross income we derive or are deemed to derive from
the time chartering and voyage chartering activities of our
wholly-owned subsidiaries should constitute services income,
rather than rental income. Correspondingly, such income should
not constitute passive income, and the assets owned and operated
in connection with the production of such income, in particular,
the vessels, should not constitute passive assets for purposes
of determining whether we were a passive foreign investment
company. We believe there is substantial legal authority
supporting our position; however, in the absence of any legal
authority specifically relating to the statutory provisions
governing passive foreign investment companies, the Internal
Revenue Service or a court could disagree with our position. In
addition, although we intend to conduct our affairs in a manner
to avoid being classified as a passive foreign investment
company with respect to any taxable year, we cannot assure you
that the nature of our operations will not change in the future.
As discussed more fully below, if we were to be treated as a
passive foreign investment company for any taxable year, a
U.S. Holder would be subject to different taxation rules
depending on whether the U.S. Holder makes an election to
treat us as a "Qualified Electing Fund," which
election we refer to as a "QEF election." As an
alternative to making a QEF election, a U.S. Holder should
be able to make a "mark-to-market" election with
respect to our common stock, as discussed below.
Taxation of U.S. Holders Making a Timely QEF
    Election
If a U.S. Holder makes a timely QEF election, which
U.S. Holder we refer to as an "Electing Holder,"
the Electing Holder must report each year for U.S. federal
income tax purposes his pro rata share of our ordinary earnings
and our net capital gain, if any, for our taxable year that ends
with or within the taxable year of the Electing Holder,
regardless of whether or not distributions were received by the
Electing Holder from us. The Electing Holder's adjusted tax
basis in his common stock will be increased to reflect taxed but
undistributed earnings and profits. Distributions of earnings
and profits that had been previously taxed will result in a
corresponding reduction in the adjusted tax basis in the common
stock and will not be taxed again once distributed. An Electing
Holder would generally recognize capital gain or loss on the
sale, exchange or other disposition of our common stock. A
U.S. Holder would make a QEF election by filing one copy of
IRS Form 8621 with his U.S. federal income tax return.
Taxation of U.S. Holders Making a
    "Mark-to-Market" Election
As an alternative to a QEF Election, if we were treated as a
passive foreign investment company for any taxable year and, as
we anticipate, our stock is treated as "marketable
stock," a U.S. Holder would be allowed to make a
"mark-to-market" election with respect to our common
stock, provided the U.S. Holder
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completes and files IRS Form 8621 in accordance with the
relevant instructions and related Treasury regulations. If that
election is made, the U.S. Holder generally would include
as ordinary income for each taxable year the excess, if any, of
the fair market value of the common stock at the end of the
taxable year over such holder's adjusted tax basis in the
common stock. The U.S. Holder also would be permitted an
ordinary loss in respect of the excess, if any, of the
U.S. Holder's adjusted tax basis in the common stock
over the fair market value of such stock at the end of the
taxable year, but only to the extent of the net amount
previously included in income as a result of the mark-to-market
election. A U.S. Holder's tax basis in his common
stock would be adjusted to reflect any such income or loss
amount taken into account. Gain realized on the sale, exchange
or other disposition of our common stock would be treated as
ordinary income, and any loss realized on the sale, exchange or
other disposition of the common stock would be treated as
ordinary loss to the extent that such loss does not exceed the
net mark-to-market gains previously included by the
U.S. Holder.
Taxation of U.S. Holders Not Making a Timely QEF or
    Mark-to-Market Election
Finally, if we were to be treated as a passive foreign
investment company for any taxable year, a U.S. Holder who
does not make either a QEF election or a
"mark-to-market" election for that year, whom we refer
to as a "Non-Electing Holder," would be subject to
special rules with respect to (1) any excess distribution
(i.e., the portion of any distributions received by the
Non-Electing Holder on our common stock in a taxable year in
excess of 125 percent of the average annual distributions
received by the Non-Electing Holder in the three preceding
taxable years, or, if shorter, the Non-Electing Holder's
holding period for the common stock), and (2) any gain
realized on the sale, exchange or other disposition of our
common stock. Under these special rules:
•
the excess distribution or gain would be allocated ratably over
    the Non-Electing Holder's aggregate holding period for the
    common stock;
•
the amount allocated to the current taxable year, and any
    taxable year prior to the first taxable year in which we were a
    passive foreign investment company, would be taxed as ordinary
    income; and
•
the amount allocated to each of the other taxable years would be
    subject to tax at the highest rate of tax in effect for the
    applicable class of taxpayer for that year, and an interest
    charge for the deemed deferral benefit would be imposed with
    respect to the resulting tax attributable to each such other
    taxable year.
If we are a passive foreign investment company and a
Non-Electing Holder who is an individual dies while owning our
common stock, such holder's successor generally would not
receive a step-up in tax basis with respect to such stock.
United States Federal Income Taxation of
"Non-U.S. Holders"
A beneficial owner of common stock (other than a partnership)
that is not a U.S. person is referred to herein as a
"Non-U.S. Holder."
Dividends on Common Stock
Non-U.S. Holders generally will not be subject to
U.S. federal income tax or withholding tax on dividends
received from us with respect to our common stock, unless that
income is effectively connected with the
Non-U.S. Holder's conduct of a trade or business in
the United States. If the Non-U.S. Holder is entitled to
the benefits of a U.S. income tax treaty with respect to
those dividends, that income is taxable only if it is
attributable to a permanent establishment maintained by the
Non-U.S. Holder in the United States.
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Sale, Exchange or Other Disposition of Common Stock
Non-U.S. Holders generally will not be subject to
U.S. federal income tax or withholding tax on any gain
realized upon the sale, exchange or other disposition of our
common stock, unless:
•
the gain is effectively connected with the
    Non-U.S. Holder's conduct of a trade or business in
    the United States (and, if the Non-U.S. Holder is entitled
    to the benefits of an income tax treaty with respect to that
    gain, that gain 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 other conditions are met.
If the Non-U.S. Holder is engaged in a U.S. trade or
business for U.S. federal income tax purposes, the income
from the common stock, including dividends and the gain from the
sale, exchange or other disposition of the stock that is
effectively connected with the conduct of that trade or business
generally will 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 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
In general, dividend payments, or other taxable distributions,
made within the United States to a non-corporate
U.S. Holder will be subject to information reporting
requirements. Such payments or distributions to a non-corporate
U.S. Holder also may be subject to backup withholding tax,
if the non-corporate U.S. Holder:
•
fails to provide an accurate taxpayer identification number;
•
is notified by the Internal Revenue Service that he has failed
    to report all interest or dividends required to be shown on his
    U.S. federal income tax returns; or
•
in certain circumstances, fails to comply with applicable
    certification requirements.
A Non-U.S. Holder who effects the sale of his shares of
common stock by or through a U.S. office of a broker is
subject to both information reporting and backup withholding tax
on the payment of the proceeds unless he certifies that he is a
not a U.S. person, under penalties of perjury, or otherwise
establishes an exemption. If a Non-U.S. Holder sells his
shares of common stock through a non-U.S. office of a
non-U.S. broker and the sales proceeds are paid to such
holder outside the United States, then information reporting and
backup withholding generally will not apply to that payment.
However, information reporting requirements, but not backup
withholding, will apply to a payment of sales proceeds, even if
that payment is made to a Non-U.S. Holder outside the
United States, if such a holder sells his shares of common stock
through a non-U.S. office of a broker that is a
U.S. person or has some other contacts with the United
States. Such information requirements will not apply, however,
if the broker has documentary evidence in its records that such
holder is a non-U.S. person and certain other conditions
are met, or such holder otherwise establishes an exemption.
Backup withholding tax is not an additional tax. Rather, a
taxpayer generally may obtain a refund of any amounts withheld
under backup withholding rules that exceed such taxpayer's
U.S. federal income tax liability by filing a refund claim
with the Internal Revenue Service.
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UNDERWRITING
Citigroup Global Markets Inc. and Morgan Stanley & Co.
Incorporated are acting as joint bookrunning managers of the
offering and acting as representatives of the underwriters named
below. Subject to the terms and conditions stated in the
underwriting agreement dated the date of this prospectus, each
underwriter named below has agreed to purchase, and we have
agreed to sell to that underwriter, the number of shares set
forth opposite the underwriter's name.
Underwriter
Number of shares
Citigroup Global Markets Inc.
Morgan Stanley & Co. Incorporated
Total
The underwriting agreement provides that the obligations of the
underwriters to purchase the shares included in this offering
are subject to approval of legal matters by counsel and to other
conditions. The underwriters are obligated to purchase all the
shares (other than those covered by the over-allotment option
described below) if they purchase any of the shares.
The underwriters propose to offer some of the shares directly to
the public at the public offering price set forth on the cover
page of this prospectus and some of the shares to dealers at the
public offering price less a concession not to exceed
$           per
share. The underwriters may allow, and dealers may reallow, a
concession not to exceed
$           per
share on sales to other dealers. If all of the shares are not
sold at the initial offering price, the representatives may
change the public offering price and the other selling terms.
The representatives have advised us that the underwriters do not
intend sales to discretionary accounts to exceed five percent of
the total number of shares of our common stock offered by them.
We have granted to the underwriters an option, exercisable for
30 days from the date of this prospectus, to purchase up
to                    additional
shares of common stock at the public offering price less the
underwriting discount. The underwriters may exercise the option
solely for the purpose of covering over-allotments, if any, in
connection with this offering. To the extent the option is
exercised, each underwriter must purchase a number of additional
shares approximately proportionate to that underwriter's
initial purchase commitment.
We and our officers and directors have agreed that, for a period
of 180 days from the date of this prospectus, we and they
will not, without the prior written consent of Citigroup Global
Markets Inc. and Morgan Stanley & Co. Incorporated,
sell, dispose of or hedge any shares of our common stock or any
securities convertible into or exercisable or exchangeable for
our common stock.
Each underwriter has represented, warranted and agreed that:
•
it has not offered or sold and, prior to the expiry of a period
    of six months from the closing date, will not offer or sell any
    shares included in this offering to persons in the United
    Kingdom except to persons whose ordinary activities involve them
    in acquiring, holding, managing or disposing of investments (as
    principal or agent) for the purposes of their businesses or
    otherwise in circumstances which have not resulted and will not
    result in an offer to the public in the United Kingdom within
    the meaning of the Public Offers of Securities Regulations 1995;
•
it has only communicated and caused to be communicated and will
    only communicate or cause to be communicated any invitation or
    inducement to engage in investment activity (within the meaning
    of section 21 of the Financial Services and Markets Act
    2000 ("FSMA")) received by it in connection with the
    issue or sale of any shares included in this offering in
    circumstances in which section 21(1) of the FSMA does not
    apply to us;
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•
it has complied and will comply with all applicable provisions
    of the FSMA with respect to anything done by it in relation to
    the shares included in this offering in, from or otherwise
    involving the United Kingdom; and
•
the offer in The Netherlands of the shares included in this
    offering is exclusively limited to persons who trade or invest
    in securities in the conduct of a profession or business (which
    include banks, stockbrokers, insurance companies, pension funds,
    other institutional investors and finance companies and treasury
    departments of large enterprises).
Prior to this offering, there has been no public market for our
common stock. Consequently, the initial public offering price
for the shares was determined by negotiations between us and the
representatives. Among the factors considered in determining the
initial public offering price were our record of operations, our
current financial condition, our future prospects, our markets,
the economic conditions in and future prospects for the industry
in which we compete, our management, and currently prevailing
general conditions in the equity securities markets, including
current market valuations of publicly traded companies
considered comparable to our company. We cannot assure you,
however, that the prices at which the shares will sell in the
public market after this offering will not be lower than the
initial public offering price or that an active trading market
in our common stock will develop and continue after this
offering.
We intend to apply to have our common stock included for
quotation on the Nasdaq National Market under the symbol
"QMAR."
The following table shows the underwriting discounts and
commissions that we are to pay to the underwriters in connection
with this offering. These amounts are shown assuming both no
exercise and full exercise of the underwriters' option to
purchase additional shares of common stock.
Paid by
Quintana Maritime Limited
No Exercise
Full Exercise
Per share
$
$
Total
$
$
In connection with the offering, Citigroup Global Markets Inc.
and Morgan Stanley & Co. Incorporated on behalf of the
underwriters, may purchase and sell shares of common stock in
the open market. These transactions may include short sales,
syndicate covering transactions and stabilizing transactions.
Short sales involve syndicate sales of common stock in excess of
the number of shares to be purchased by the underwriters in the
offering, which creates a syndicate short position.
"Covered" short sales are sales of shares made in an
amount up to the number of shares represented by the
underwriters' over-allotment option. In determining the
source of shares to close out the covered syndicate short
position, the underwriters will consider, among other things,
the price of shares available for purchase in the open market as
compared to the price at which they may purchase shares through
the over-allotment option. Transactions to close out the covered
syndicate short involve either purchases of the common stock in
the open market after the distribution has been completed or the
exercise of the over-allotment option. The underwriters may also
make "naked" short sales of shares in excess of the
over-allotment option. The underwriters must close out any naked
short position by purchasing shares of common stock in the open
market. A naked short position is more likely to be created if
the underwriters are concerned that there may be downward
pressure on the price of the shares in the open market after
pricing that could adversely affect investors who purchase in
the offering. Stabilizing transactions consist of bids for or
purchases of shares in the open market while the offering is in
progress.
The underwriters also may impose a penalty bid. Penalty bids
permit the underwriters to reclaim a selling concession from a
syndicate member when Citigroup repurchases shares originally
sold by that syndicate member in order to cover syndicate short
positions or make stabilizing purchases.
Any of these activities may have the effect of preventing or
retarding a decline in the market price of the common stock.
They may also cause the price of the common stock to be higher
than the price that
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would otherwise exist in the open market in the absence of these
transactions. The underwriters may conduct these transactions on
the Nasdaq National Market or in the over-the-counter market, or
otherwise. If the underwriters commence any of these
transactions, they may discontinue them at any time.
We estimate that our portion of the total expenses of this
offering will be
$          .
The underwriters have performed investment banking, commercial
banking and advisory services for us from time to time for which
they have received customary fees and expenses. The underwriters
may, from time to time, engage in transactions with and perform
services for us in the ordinary course of their business. Morgan
Stanley Senior Funding, Inc., an affiliate of Morgan
Stanley & Co. Incorporated, is currently the agent and
the lender under a bridge loan facility which we expect to repay
out of the proceeds of our term loan facility. Citigroup Global
Markets Limited, Citibank International plc, Citicorp Trustee
Company Limited and Citibank, N.A., each of which is an
affiliate of Citigroup Global Markets Inc., currently act as
arranger, facility agent, security trustee and a lender under
our term loan facility, respectively. Because Citigroup Global
Markets Inc. is an underwriter of the offering and its
affiliates may receive more than 10% of the net proceeds in this
offering to repay amounts outstanding under our term loan
facility, it may be deemed to have a "conflict of
interest" under the Conduct Rules of the National
Association of Securities Dealers, Inc. Accordingly, this
offering will be made in compliance with the applicable
provisions of Rule 2720 of the Conduct Rules.
Rule 2720 requires that the price at which the common stock
is distributed to the public may be no higher than that
recommended by a "qualified independent underwriter,"
as defined by the Conduct Rules of the
NASD.                     has
assumed the responsibilities of acting as a qualified
independent underwriter and conducted due diligence
investigations and participated in the preparation of the
registration statement of which this prospectus forms a part.
A prospectus in electronic format may be made available by one
or more of the underwriters. The representatives may agree to
allocate a number of shares to underwriters for sale to their
online brokerage account holders. The representatives will
allocate shares to underwriters that may make internet
distributions on the same basis as other allocations. In
addition, shares may be sold by the underwriters to securities
dealers who resell shares to online brokerage account holders.
We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act of
1933, or to contribute to payments the underwriters may be
required to make because of any of those liabilities.
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VALIDITY OF THE SHARES
The validity of the common stock and certain other legal matters
with respect to the laws of the Republic of the Marshall Islands
will be passed upon for us by our counsel as to Marshall Islands
law, Seward & Kissel LLP, New York, New York. Certain
other legal matters will be passed upon for us by
Vinson & Elkins L.L.P., New York, New York.
Vinson & Elkins L.L.P. may rely on the opinions of
Seward & Kissel LLP for all matters of Marshall Islands
law. The underwriters have been represented in connection with
this offering by Cravath, Swaine & Moore LLP, New York,
New York.
EXPERTS
The consolidated financial statements of Quintana Maritime
Limited for the period from January 13, 2005 through
March 31, 2005 and as of March 31, 2005 included in
this prospectus and elsewhere in the registration statement have
been audited by Deloitte. Hadjipavlou, Sofianos &
Cambanis S.A., an independent registered public accounting firm,
as stated in their report thereon appearing herein and elsewhere
in the registration statement, and is included in reliance upon
the report of such firm given their authority as experts in
accounting and auditing.
The discussions contained under the sections of this prospectus
entitled "Business" and "The International
Drybulk Shipping Industry" have been reviewed by Drewry
Shipping Consultants, Ltd., or Drewry, which has confirmed to us
that they accurately describe the international drybulk shipping
industry, subject to the reliability of the data supporting the
statistical and graphical information presented in this
prospectus.
The statistical and graphical information we use in this
prospectus has been compiled by Drewry from its database. Drewry
compiles and publishes data for the benefit of its clients. Its
methodologies for collecting data, and therefore the data
collected, may differ from those of other sources, and its data
does not reflect all or even necessarily a comprehensive set of
the actual transactions occurring in the market.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on
Form S-1 regarding the common stock. This prospectus does
not contain all of the information found in the registration
statement. For further information regarding us and the common
stock offered in this prospectus, you may desire to review the
full registration statement, including its exhibits. The
registration statement, including the exhibits, may be inspected
and copied at the public reference facilities maintained by the
SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549. Copies of this
material can also be obtained upon written request from the
Public Reference Section of the SEC at Judiciary Plaza,
450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, at prescribed rates or from the
SEC's website on the Internet at
http://www.sec.gov
.
Please call the SEC at 1-800-SEC-0330 for further information on
its public reference room.
Following the completion of this offering, we will file with or
furnish to the SEC periodic reports and other information. These
reports and other information may be inspected and copied at the
public reference facilities maintained by the SEC or obtained
from the SEC's website as provided above.
FORWARD-LOOKING STATEMENTS
This prospectus includes assumptions, expectations, projections,
intentions and beliefs about future events. These statements are
intended as "forward-looking statements." All
statements in this document that are not statements of
historical fact are forward-looking statements. These
forward-looking statements may be identified by the use of
predictive, future-tense or forward-looking terminology, such as
"anticipate," "estimate,"
"intend," "project," "forecast,"
"plan," "potential," "will,"
"may," "should," "expect" or
similar terms.
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Forward-looking statements include, but are not limited to, such
matters as:
•
our future operating or financial results and our future
    revenues and expenses;
•
statements about pending or recent acquisitions, business
    strategy and expected capital spending or operating expenses;
•
our anticipated general and administrative expenses;
•
statements about shipping industry trends, including charter
    hire rates and factors affecting supply and demand;
•
our continued ability to enter into time charters with our
    customers;
•
our ability to obtain additional financing;
•
expectations regarding the availability of vessel
    acquisitions; and
•
our business strategy and other plans and objectives for future
    operations.
Forward-looking statements are based upon assumptions,
expectations, projections, intentions and beliefs as to future
events that may not prove to be accurate. Actual outcomes and
results may differ materially from what is expressed or forecast
in the forward-looking statements included herein. The reasons
for this include the risks, uncertainties and factors described
under the section of this prospectus entitled "Risk
Factors."
We undertake no obligation to update any forward-looking
statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time
to time, and it is not possible for us to predict all of these
factors. Further, we cannot assess the impact of each such
factor on our business or the extent to which any factor, or
combination of factors, may cause actual results to be
materially different from those contained in any forward-looking
statement.
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GLOSSARY OF SHIPPING TERMS
Following are definitions of shipping terms used in this
Prospectus.
Annual Survey
— The inspection of a vessel by a
classification society, on behalf of the country whose flag a
vessel flies, or the flag state, that takes place every year.
Bareboat Charter
— A charter of a vessel under
which the shipowner is usually paid a fixed amount of
charterhire for a certain period of time during which the
charterer is responsible for the vessel operating expenses and
voyage expenses of the vessel and for the management of the
vessel, including crewing. A bareboat charter is also known as a
"demise charter" or a "time charter by
demise."
Bunkers
— Heavy fuel oil used to power a
vessel's engines.
Capesize
— A drybulk carrier in excess of
80,000 dwt. While this is the traditional definition of a
Capesize bulkcarrier, in terms of deadweight the sector is
changing. There have been a number of new super-Paramaxes
ordered — so-called Kamsarmaxes — which are
82-85,000 dwt but are able to transit the Panama Canal with a
full cargo.
Charter
— The hire of a vessel for a specified
period of time or to carry a cargo for a fixed fee from a
loading port to a discharging port. The contract for a charter
is called a charterparty.
Charterer
— The individual or company hiring a
vessel.
Charter Hire Rate
— A sum of money paid to the
vessel owner by a charterer under a time charterparty for the
use of a vessel.
Classification Society
— An independent
organization which certifies that a vessel has been built and
maintained in accordance with the rules of such organization and
complies with the applicable rules and regulations of the
country of residence of such vessel and the international
conventions of which that country is a member.
Deadweight Ton
—
"dwt"
— A unit of a vessel's
capacity for cargo, fuel oil, stores and crew, measured in tons.
A vessel's dwt or total deadweight is the total weight the
vessel can carry when loaded to a particular load line.
Demise Charter
— See "Bareboat
Charter" above.
Draft
— Vertical distance between the waterline
and the bottom of the vessel's keel.
Drybulk
— Non-liquid cargoes of commodities
shipped in an unpackaged state.
Drybulk Carriers
— Vessels that are specially
designed and built to carry large volumes of drybulk.
Drydocking
— The removal of a vessel from the
water for inspection or repair of submerged parts.
Gross Ton
— Unit of 100 cubic feet or 2.831
cubic meters used in arriving at the calculation of gross
tonnage.
Handymax
— A drybulk carrier of approximately
35,000 to 60,000 dwt.
Handysize
— A drybulk carrier having a carrying
capacity of up to approximately 35,000 dwt.
Hull
— The shell or body of a vessel.
International Maritime Organization
—
"IMO"
— A United Nations agency that
issues international trade standards for shipping.
Intermediate Survey
— The inspection of a
vessel by a classification society surveyor which takes place
between two and three years before and after each Special Survey
for such vessel pursuant to the rules of international
conventions and classification societies.
ISM Code
— The International Management Code
for the Safe Operation of Ships and for Pollution Prevention, as
adopted by the IMO.
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Newbuilding
— A newly constructed vessel.
Off-Hire
— The period in which a vessel is
unable to perform the services for which it is immediately
required under a time charter. Off-hire periods can include days
spent on repairs, drydocking and surveys, whether or not
scheduled.
OPA
— The United States Oil Pollution Act of
1990 (as amended).
Orderbook
— A reference to currently placed
orders for the construction of vessels (e.g., the Panamax
orderbook).
Panamax
— A drybulk carrier of approximately
60,000 to 80,000 dwt of maximum length, depth and draft
capable of passing fully loaded through the Panama Canal.
Protection and Indemnity Insurance
— Insurance
obtained through a mutual association formed by shipowners to
provide liability insurance protection from large financial loss
to one member through contributions towards that loss by all
members.
Scrapping
— The disposal of old or damaged
vessel tonnage by way of sale as scrap metal.
Short-Term Time Charter
— A time charter which
lasts less than approximately 12 months.
Sister Ships
— Vessels of the same class and
specification which were built by the same shipyard.
SOLAS
— The International Convention for the
Safety of Life at Sea 1974, as amended, adopted under the
auspices of the IMO.
Special Survey
— The inspection of a vessel by
a classification society surveyor which takes place a minimum of
every four years and a maximum of every five years.
Spot Market
— The market for immediate
chartering of a vessel usually for single voyages.
Strict Liability
— Liability that is imposed
without regard to fault.
Time Charter
— Contract for hire of a ship
under which the ship-owner is paid charter hire rate on a per
day basis for a certain period of time. Under a time charter,
the shipowner is responsible for providing the crew and paying
operating costs while the charterer is responsible for paying
the voyage costs. Any delays at port or during the voyages are
the responsibility of the charterer, save for certain specific
exceptions such as loss of time arising from vessel breakdown
and routine maintenance.
Ton
— 1,000 kilograms.
Vessel Operating Expenses
— The costs of
operating a vessel, primarily consisting of crew wages and
associated costs, insurance premiums, lubricants and spare
parts, and repair and maintenance costs.
Voyage Charter
— Contract for hire of a vessel
under which a shipowner is paid freight on the basis of moving
cargo from a loading port to a discharge port. The shipowner is
responsible for paying both operating costs and voyage costs.
The charterer is typically responsible for any delay at the
loading or discharging ports
.
Voyage Expenses
— Expenses incurred in
connection with a vessel's traveling from a loading port to
a discharging port, such as fuel (bunker) cost, port
expenses, agent's fees, canal dues and extra war risk
insurance.
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Deloitte.Hadjipavlou,
    Sofianos & Cambanis S.A., Independent Registered Public
    Accounting Firm
F-2
Consolidated Balance Sheet as of
    March 31, 2005
F-3
Consolidated Statement of Operations from
    January 13, 2005 (inception) through March 31, 2005
F-4
Consolidated Statement of
    Shareholder's Equity from January 13, 2005 (inception)
    through March 31, 2005
F-5
Consolidated Statement of Cash Flows from
    January 13, 2005 (inception) through March 31, 2005
F-6
Notes to Consolidated Financial
    Statements
F-7
F-1
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholder
of Quintana Maritime Limited.
We have audited the accompanying consolidated balance sheet of
Quintana Maritime Limited and subsidiaries (the
"Company") as of March 31, 2005 and the related
consolidated statements of operations, shareholder's
equity, and cash flows for the period from January 13, 2005
(inception) through March 31, 2005. These financial
statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of the
Company and subsidiaries at March 31, 2005 and the results
of their operations and their cash flows for the period from
January 13, 2005 (inception) to March 31, 2005,
in conformity with accounting principles generally accepted in
the United States of America.
May 3, 2005
Deloitte.
Hadjipavlou, Sofianos & Cambanis S.A.
Athens, Greece
F-2
Table of Contents
Quintana Maritime Limited
Consolidated balance sheet
As of March 31, 2005
Notes
March 31, 2005
(All amounts expressed
in U.S. Dollars)
ASSETS
Current assets
Cash and cash equivalents
707,786
Other receivables
18,761
Total current assets
726,547
Non-current assets
Advances for vessel deposits
3
28,760,314
Property, plant and equipment
98,616
Total non-current assets
28,858,930
Total assets
29,585,477
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable
57,158
Due to related party
5
24,900
Due to management company
6
16,300
Sundry liabilities and accruals
56,985
Total current liabilities
155,343
Shareholders' equity
Common stock at stated value (no par value) 500 shares
    issued, authorized and outstanding
500
Additional paid-in capital
29,586,500
Accumulated deficit
(156,866
)
Total shareholders' equity
29,430,134
Total liabilities and shareholders' equity
29,585,477
The accompanying notes are an integral part of these
Consolidated Financial Statements.
F-3
Table of Contents
Quintana Maritime Limited
Consolidated statement of operations
From January 13, 2005 (inception) to March 31,
2005
March 31, 2005
(All amounts
expressed in
U.S. Dollars)
General and administrative expenses
(156,866
)
Net loss
(156,866
)
Loss per share — Basic
(314
)
The accompanying notes are an integral part of these
Consolidated Financial Statements.
F-4
Table of Contents
Quintana Maritime Limited
Consolidated statement of shareholders' equity
From January 13, 2005 (inception) to March, 31
2005
Additional
Number of
Common
Paid-In
Retained
Shares
Shares
Capital
Earnings
Total
(All amounts, except share data, expressed in U.S. Dollars)
Balance, January 13, 2005
—
—
—
—
—
Issuance of common stock
500
500
29,586,500
—
29,587,000
Net loss
—
—
—
(156,866
)
(156,866
)
Balance, March 31, 2005
500
500
29,586,500
(156,866
)
29,430,134
The accompanying notes are an integral part of these
Consolidated Financial Statements.
F-5
Table of Contents
Quintana Maritime Limited
Consolidated statement of cash flows
From January 13, 2005 (inception) to March 31,
2005
March 31, 2005
(All amounts
expressed in
U.S. Dollars)
Cash flows from operating activities:
Net loss
(156,866
)
Adjustments to reconcile net loss to net cash provided by
    operating activities
—
Changes in operating assets and liabilities:
Other receivables
(18,761
)
Trade accounts payable
57,158
Payable to related party
24,900
Due to management company
16,300
Sundry liabilities and accruals
56,985
Net cash used in operating activities
(20,284
)
Cash flows from investing activities:
Advances for vessel deposit
(28,760,314
)
Purchases of property, plant and equipment
(98,616
)
Net cash used in investing activities
(28,858,930
)
Cash flows from financing activities:
Common stock
500
Paid-in capital
29,586,500
Net cash from financing activities
29,587,000
Net increase in cash and cash equivalents
707,786
Cash and cash equivalents at beginning of period
—
Cash and cash equivalents at end of period
707,786
The accompanying notes are an integral part of these
Consolidated Financial Statements.
F-6
Table of Contents
Quintana Maritime Limited
Notes to the consolidated financial statements
From January 13, 2005 (inception) to March 31,
2005
(All amounts expressed in U.S. Dollars)
1.
Basis of Presentation and General Information
The Company
The accompanying consolidated financial statement includes the
accounts of Quintana Maritime Limited and its wholly-owned
subsidiaries (collectively, "the Company"). The
Company is engaged in the marine transportation of dry-bulk
cargoes through the ownership and operation of dry-bulk vessels.
The Company is a holding company incorporated on
January 13, 2005, under the Laws of the Republic of the
Marshall Islands. The Company was formed by affiliates of each
of Corbin J. Robertson Jr., First Reserve Corporation
("First Reserve") and American Metals & Coal
International, Inc. ("AMCI").
The Company is in the process of acquiring vessels. The Company
is the sole owner of all of the outstanding shares of the
following vessel owning Marshall Islands incorporated
subsidiaries:
Vessel Contracted
Company
to be Acquired
Agreement Date
dwt.
Built
Fearless Shipco LLC
Fearless I
18th February 2005
73,427 mt
1997
King Coal Shipco LLC
King Coal
15th February  2005
72,873 mt
1997
Iron Man Shipco LLC
Iron Man
15th March 2005
72,861 mt
1997
Coal Age Shipco LLC
Coal Age
15th March 2005
72,861 mt
1997
Coal Glory Shipco LLC
Coal Glory
21st March 2005
73,670 mt
1995
Barbara Shipco LLC
Barbara
24th March 2005
73,390 mt
1997
Linda Leah Shipco LLC
Linda Leah
24th March 2005
73,390 mt
1997
Coal Pride Shipco LLC
Coal Pride
24th March 2005
72,600 mt
1999
The operations of the vessels will be managed by our
wholly-owned subsidiary Quintana Management LLC that
subcontracts certain aspects of the technical management of five
vessels to the third-party technical management company, Blossom
Maritime Corporation.
2.
Significant Accounting Policies
Principles of consolidation
The accompanying consolidated financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States of America (U.S. GAAP) and
include the accounts of Quintana Maritime Limited and its
wholly-owned subsidiaries referred to in Note 1. All
significant intercompany balances and transactions have been
eliminated in consolidation.
Use of estimates
The preparation of the consolidated financial statements is in
conformity with U.S. GAAP and requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
F-7
Table of Contents
Quintana Maritime Limited
Notes to the consolidated
financial statements — (Continued)
Other comprehensive income/(loss)
The Company intends to follow the provision of Statement of
Financial Accounting Standards ("SFAS") No. 130,
"Reporting Comprehensive Income", which requires
separate representation of certain transactions, which are
recorded directly as components of shareholders' equity.
The Company has no other comprehensive income (loss) and,
accordingly, comprehensive income/(loss) equals net
income/(loss).
Cash and cash equivalents
The Company considers highly liquid investments such as time
deposits and certificates of deposit with an original maturity
of three months or less to be cash equivalents.
Impairment of long-lived assets
The Company uses SFAS No. 144 "Accounting for the
Impairment or Disposal of Long-lived Assets," which
addresses financial accounting and reporting for the impairment
or disposal of long-lived assets. The standard requires that
long-lived assets and certain identifiable intangibles held and
used or disposed of by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount of the assets may not be recoverable. When the
estimate of undiscounted cash flows, excluding interest charges,
expected to be generated by the use of the asset is less than
its carrying amount, the Company should evaluate the asset for
an impairment loss. Measurement of the impairment loss is based
on the fair value of the asset as provided by third parties. In
this respect, management regularly reviews the carrying amount
of the vessels in connection with the estimated recoverable
amount for each of the Company's vessels.
Vessel depreciation
Depreciation is computed using the straight-line method over the
estimated useful life of the vessels, after considering the
estimated salvage value. Each vessel's salvage value is
equal to the product of its lightweight tonnage and estimated
scrap rate. Management estimates the useful life of the
Company's vessels to be 25 years from the date of
initial delivery from the shipyard. Second hand vessels are
depreciated from the date of their acquisition through their
remaining estimated useful life. However, when regulations place
limitations over the ability of a vessel to trade on a worldwide
basis, its useful life is adjusted to end at the date such
regulations become effective.
Dry-docking costs
The Company follows the deferral method of accounting for
dry-docking costs whereby actual costs incurred are deferred and
are amortized on a straight-line basis over the period through
the date the next dry-docking is scheduled to become due.
Unamortized dry-docking costs of vessels that are sold are
written-off.
Financing costs
Fees incurred for obtaining new loans or refinancing existing
ones are deferred and amortized to interest expense over the
life of the related debt. Unamortized fees relating to loans
repaid or refinanced are expensed in the period the repayment or
refinancing is made.
Revenues and expenses
Revenues are generated from voyage and time charter agreements.
Time charter revenues are recorded over the term of the charter
as service is provided. Under a voyage charter the revenues and
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Quintana Maritime Limited
Notes to the consolidated
financial statements — (Continued)
associated voyage costs are recognized on a pro-rata basis over
the duration of the voyage. Probable losses on voyages are
provided for in full at the time such losses can be estimated. A
voyage is deemed to commence upon the completion of discharge of
the vessel's previous cargo and is deemed to end upon the
completion of discharge of the current cargo. Demurrage income
represents payments by the charterer to the vessel owner when
loading or discharging time exceeded the stipulated time in the
voyage charter and is recognized as incurred. Vessel operating
expenses are accounted for on the accrual basis.
Repairs and maintenance
All repair and maintenance expenses including major overhauling
and underwater inspection expenses are expensed as incurred.
Segment reporting
The Company reports financial information and evaluates its
operations by charter revenues and not by the length of ship
employment for its customers, i.e. spot or time charters.
The Company does not use discrete financial information to
evaluate the operating results for each such type of charter.
Although revenue can be identified for these types of charters,
management cannot and does not identify expenses, profitability
or other financial information for these charters. As a result,
management, including the chief operating decision maker,
reviews operating results solely by revenue per day and
operating results of the fleet and thus, the Company has
determined that it operates under one reportable segment.
Furthermore, when the Company charters a vessel to a charterer,
the charterer is free to trade the vessel worldwide and, as a
result, the disclosure of geographic information is
impracticable.
Derivatives
SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" as amended establishes
accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments
embedded in other contracts) be recorded in the balance sheet as
either an asset or liability measured at its fair value, with
changes in the derivatives' fair value recognized currently
in earnings unless specific hedge accounting criteria are met.
During the period January 26, 2005 (inception) to
March 31, 2005, the Company did not engage in any hedging
activities.
Loss per share
Loss per share has been calculated by dividing the net loss by
the weighted average number of common shares outstanding during
the period.
Recent Accounting Pronouncements:
On December 16, 2004, Statement of Financial Accounting
Standards No. 123 (revised 2004)
(SFAS No. 123(R)), "Share-Based Payment,"
was issued. SFAS No. 123(R) is a revision of
SFAS No. 123 and supersedes APB No. 25. The
approach in SFAS No. 123(R) is similar to the approach
described in SFAS No. 123. However,
SFAS No. 123(R) requires all share-based payments to
employees, including grants of employee stock options, to be
recognized in the income statement based on their fair values.
Pro-forma disclosure, required under SFAS No. 123, is
no longer an alternative. This statement will be effective as of
the beginning of the first annual reporting period that begins
after June 15, 2005. The Company is currently evaluating
the impact of adopting SFAS No. 123(R).
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Table of Contents
Quintana Maritime Limited
Notes to the consolidated
financial statements — (Continued)
3.
Advances for Vessel Deposits
The Company through its subsidiaries has entered into contracts
to purchase eight dry-bulk vessels from separate
unaffiliated ship-owning companies. The Company has funded
deposits for seven of these vessels in the amount of $28,645,000
representing 10% of the purchase price of the seven vessels plus
capitalized expenses of $115,314. The Company paid the 10%
deposit on the eighth vessel in April 2005 in the amount of
$4.3 million. At March 31, 2005 the unpaid balance of
the purchase price of all the vessels including Coal Pride, for
which no deposit had yet been made at March 31, 2005, was
$300,805,000.
4.
Related Party Transactions
The Company's Chief Executive Officer, signed a consulting
agreement with Quintana Minerals Corporation dated as of
January 1, 2005 with a duration of one year, but which was
terminated as at March 31, 2005.
5.
Due to Management Company
The Company has entered into an agreement with a third-party
management company to technically manage five of the vessels for
an amount of $400 per day from the date of signature of the
Memorandum of Agreement. The amounts relating to the period
prior to delivery of the vessel are capitalised to the vessel
cost. The total amount capitalised as at March 31, 2005,
included in advances for vessel deposits, amounts to $43,230 and
the total amount payable at that date amounted to $16,300.
6.
Commitments
In February 2005, the Company entered into a three-year
noncancelable operating lease for its office facilities that
terminates in February 2008. Rental expense for the period
January 13 through March 31, 2005 was $15,769. Future
rental commitments were payable as follows as of March 31,
2005:
Amount
April 1, 2005 to March 31, 2006
$
94,309
April 1, 2006 to March 31, 2007
101,608
April 1, 2007 to March 31, 2008
88,172
Total
$
284,089
7.
Subsequent Events
•
Subsequent to March 31, 2005, our shareholder made
    additional capital contributions totaling $36,693,637.
•
The Company has entered into agreements with separate
    unaffiliated ship-owning companies to purchase vessels. During
    April 2005, the following three vessels with a total purchase
    price of $119,850,000 ("Fearless I", "King
    Coal" and "Coal Glory") were delivered.
Vessel Contracted
Company
to be Acquired
Purchase Price
Delivery Date
Fearless Shipco LLC
Fearless 1
USD 40,400,000
April 11, 2005
King Coal Shipco LLC
King Coal
USD 40,400,000
April 12, 2005
Coal Glory Shipco LLC
Coal Glory
USD 39,050,000
April 13, 2005
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Table of Contents
Quintana Maritime Limited
Notes to the consolidated
financial statements — (Continued)
•
The Company entered into Memoranda of Agreement for the
    following vessels, amounting to $209,600,000:
Vessel Contracted
Company
to be Acquired
Purchase Price
Delivery Date
Iron Man Shipco LLC
Iron Man
USD 41,300,000
Expected 4/10-5/15/2005
Coal Age Shipco LLC
Coal Age
USD 41,300,000
Expected 4/10-5/15/2005
Barbara Shipco LLC
Barbara
USD 42,000,000
Expected 7/15-8/31/2005
Linda Leah Shipco LLC
Linda Leah
USD 42,000,000
Expected 8/1-8/31/2005
Coal Pride Shipco LLC
Coal Pride
USD 43,000,000
Expected 8/1-9/30/2005
•
On April 8, 2005, the Company entered into a bridge credit
    agreement for an amount of $110 million, which was drawn
    down on April 8, 2005. On May 3, 2005 the Company
    amended and restated the bridge credit agreement to increase the
    amount available for borrowing thereunder $150 million. The
    credit agreement charges a base rate plus a spread.
•
On April 29, 2005, the Company entered into a term loan
    facility to finance, in part, the acquisition of the vessels, up
    to a maximum amount of $262.456 million. The facility is
    available in two tranches not exceeding $262.456 million or
    80% of the market value of the vessels.
The facility charges LIBOR plus the applicable spread and is
    secured by a first or second priority mortgage over the vessels
    involved plus an equal and ratable assignment of the vessel
    earnings plus other collateral.
The facility contains financial covenants requiring the Company
    to ensure that the aggregate market value of the mortgaged
    vessels at all times exceed 115% of the outstanding amount under
    the facility during the first year following the closing date
    and 125% thereafter, to maintain minimum cash balances of
    $5 million on the last day of each fiscal quarter during
    the first year following the closing date and $10 million
    thereafter, subject to the increase to $15 million under
    certain circumstances; that the ratio of Total Debt (as defined)
    to Total Capitalization (as defined) is no greater than 0.80
    to 1.00 on or after January 1, 2006 and prior to
    January 1, 2007 and 0.60 to 1.00 thereafter; and that
    the ratio of Consolidated EBITDA (as defined) to cash Interest
    Expense (as defined) is no less than 2.5 to 1.00 commencing
    December 31, 2005 and prior to January 1, 2008,
    2.1 to 1.00 commencing January 1, 2008 and prior to
    January 1, 2009, 2.25 to 1.00 commencing
    January 1, 2009 and prior to January 1, 2010 and 2.5
    to 1.00 at any time on or after January 1, 2010. Assuming
    the net proceeds of the offering are applied to repay at least
    $100 million principal amount thereunder, the term loan
    facility will not prohibit dividends in any year exceeding
    Consolidated EBITDA less Consolidated Interest Expense (as
    defined) less principal prepayments, provided that no event of
    default has occurred or is continuing.
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Table of Contents
Shares
Common Stock
PROSPECTUS
,
2005
Joint Book-Running Managers
Citigroup
Morgan Stanley
Table of Contents
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 13.
Other Expenses of Issuance and Distribution.
We estimate the expenses in connection with the issuance and
distribution of our common stock in this offering, other than
underwriting discounts and commissions, as follows:
SEC Registration Fee
$
35,310
Printing and Engraving Expenses
Legal Fees and Expenses
Accountants' Fees and Expenses
Nasdaq National Market Entry Fee
100,000
NASD Fees
30,500
Blue Sky Fees and Expenses
Transfer Agent's Fees and Expenses
Miscellaneous Costs
Total
$
Item 14.
Indemnification of Directors and Officers.
The bylaws of the Registrant provide that every director and
officer of the Registrant shall be indemnified out of the funds
of the Registrant against:
(1)
all civil liabilities, loss, damage or expense (including but
    not limited to liabilities under contract, tort and statute or
    any applicable foreign law or regulation and all reasonable
    legal and other costs and expenses properly payable) incurred or
    suffered by him as such director or officer acting in the
    reasonable belief that he has been so appointed or elected
    notwithstanding any defect in such appointment or election,
    provided always that such indemnity shall not extend to any
    matter which would render it void pursuant to any Marshall
    Islands statute from time to time in force concerning companies
    insofar as the same applies to the Registrant (the
    "Companies Acts"); and
(2)
all liabilities incurred by him as such director or officer in
    defending any proceedings, whether civil or criminal, in which
    judgment is given in his favor, or in which he is acquitted, or
    in connection with any application under the Companies Acts in
    which relief from liability is granted to him by the court.
Section 60 of the Associations Law of the Republic of the
Marshall Islands provides as follows:
Indemnification of directors and officers.
(1)
Actions not by or in right of the corporation.
A
    corporation shall have power to indemnify any person who was or
    is a party or is threatened to be made a party to any
    threatened, pending or completed action, suit or proceeding
    whether civil, criminal, administrative or investigative (other
    than an action by or in the right of the corporation) by reason
    of the fact that he is or was a director or officer of the
    corporation, or is or was serving at the request of the
    corporation as a director or officer of another corporation,
    partnership, joint venture, trust or other enterprise, against
    expenses (including attorneys' fees), judgments, fines and
    amounts paid in settlement actually and reasonably incurred by
    him in connection with such action, suit or proceeding if he
    acted in good faith and in a manner he reasonably believed to be
    in or not opposed to the best interests of the corporation, and,
    with respect to any criminal action or proceeding, had no
    reasonable cause to believe his conduct was unlawful. The
    termination of any action, suit or proceeding by judgment,
    order, settlement, conviction, or upon a plea of no contest, or
    its
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equivalent, shall not, of itself, create a presumption that the
    person did not act in good faith and in a manner which he
    reasonable believed to be in or not opposed to the best
    interests of the corporation, and, with respect to any criminal
    action or proceedings, had reasonable cause to believe that his
    conduct was unlawful.
(2)
Actions by or in right of the corporation.
A
    corporation shall have the power to indemnify any person who was
    or is a party or is threatened to be made a party to any
    threatened, pending or completed action or suit by or in the
    right of the corporation to procure a judgment in its favor by
    reason of the fact that he is or was a director or officer of
    the corporation, or is or was serving at the request of the
    corporation, or is or was serving at the request of the
    corporation as a director or officer of another corporation,
    partnership, joint venture, trust or other enterprise against
    expenses (including attorneys' fees) actually and
    reasonably incurred by him or in connection with the defense or
    settlement of such action or suit if he acted in good faith and
    in a manner he reasonably believed to be in or not, opposed to
    the best interests of the corporation and except that no
    indemnification shall be made in respect of any claims, issue or
    matter as to which such person shall have been adjudged to be
    liable for negligence or misconduct in the performance of his
    duty to the corporation unless and only to the extent that the
    court in which such action or suit was brought shall determine
    upon application that, despite the adjudication of liability but
    in view of all the circumstances of the case, such person is
    fairly and reasonably entitled to indemnity for such expenses
    which the court shall deem proper.
(3)
When director or officer successful.
To the extent
    that director or officer of a corporation has been successful on
    the merits or otherwise in defense of any action, suit or
    proceeding referred to in subsections (1) or (2) of
    this section, or in the defense of a claim, issue or matter
    therein, he shall be indemnified against expenses (including
    attorneys' fees) actually and reasonably incurred by him in
    connection therewith.
(4)
Payment of expenses in advance.
Expenses incurred
    in defending a civil or criminal action, suit or proceeding may
    be paid in advance of the final disposition of such action, suit
    or proceeding as authorized by the board of directors in the
    specific case upon receipt of an undertaking by or on behalf of
    the director or officer to repay such amount if it shall
    ultimately be determined that he is not entitled to be
    indemnified by the corporation as authorized in this section.
(5)
Continuation of indemnification.
The
    indemnification and advancement of expenses provided by, or
    granted pursuant to, this section shall, unless otherwise
    provided when authorized or ratified, continue as to a person
    who has ceased to be a director, officer, employee or agent and
    shall inure to the benefit of the heirs, executors and
    administrators of such a person.
(6)
Insurance.
A corporation shall have power to
    purchase and maintain insurance on behalf of any person who is
    or was a director or officer of the corporation or is or was
    serving at the request of the corporation as a director or
    officer against any liability asserted against him and incurred
    by him in such capacity whether or not the corporation would
    have the power to indemnify him against such liability under the
    provisions of this section.
Item 15.
Recent Sales of Unregistered Securities.
In connection with the formation of Quintana Maritime Limited,
Quintana Maritime Limited issued to Quintana Maritime Investors
LLC 500 shares for $500 in an offering exempt from
registration under Section 4(2) of the Securities Act of
1933, as amended. No underwriters were involved in this
transaction. There have been no other sales of unregistered
securities within the past three years.
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Table of Contents
Item 16.
Exhibits and Financial Statement Schedules.
(a)
Exhibits
Exhibit
Number
Description
1
.1
Form of Underwriting Agreement*
3
.1
Amended and Restated Articles of Incorporation of the Company*
3
.2
Amended and Restated By-laws of the Company*
4
.1
Form of Share Certificate*
5
.1
Opinion of Seward & Kissel LLP, Marshall Islands
    counsel to the Company, as to the validity of the Shares*
8
.1
Opinion of Vinson & Elkins L.L.P., United States
    counsel to the Company, with respect to certain tax matters*
10
.1
Form of Vessel Management Agreement*
10
.2
Senior Secured Term Loan Agreement*
10
.4
Form of Registration Rights Agreement*
21
.1
Subsidiaries of the Company
23
.1
Consent of Seward & Kissel LLP (included in
    Exhibit 5.1)*
23
.2
Consent of Vinson & Elkins L.L.P. (included in
    Exhibit 8.1)*
23
.2
Consent of Deloitte. Hadjipavlou, Sofianos & Cambanis
    S.A.
23
.3
Consent of Drewry Shipping Consultants Ltd.
24
.1
Powers of Attorney**
*
To be filed by amendment.
**
Contained on the signature page hereto.
Item 17.
Undertakings.
The undersigned registrant hereby undertakes:
(1) To provide to the underwriters at the closing specified
in the underwriting agreement shares certificates in such
denominations and registered in such names as required by the
underwriters to permit prompt delivery to each purchaser.
(2) That for purposes of determining any liability under
the Securities Act of 1933, as amended (the "Act"),
the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon
Rule 430A and contained in the form of prospectus filed by
the Registrant pursuant to Rule 424(b)(1) or (4) under
the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(3) That for purposes of determining any liability under
the Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(4) That insofar as indemnification for liabilities arising
under the Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-l and has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Glyfada, the country of Greece, on
April 29, 2005.
Quintana Maritime Limited
By:
/s/
Stamatis Molaris
Name: Stamatis Molaris
Title:     Chief Executive
    Officer and President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints each of
Stamatis Molaris, Paul Cornell, and Joseph R. Edwards his or her
true and lawful attorney-in-fact and agent, with full powers of
substitution and re-substitution, for him or her and in his or
her name, place and stead, in any and all capacities, to sign
any or all amendments (including post-effective amendments) to
this Registration Statement, including any filings pursuant to
Rule 462(b) under the Securities Act of 1933, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully for all
intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact
and agent, or his substitute, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons
on April 29, 2005 in the capacities indicated.
Signature
Title
/s/
Stamatis Molaris
Stamatis
    Molaris
Chief Executive Officer and President
(Principal Executive Officer)
/s/
Paul J. Cornell
Paul
    J. Cornell
Chief Financial Officer
(Principal Financial Officer; Principal Accounting Officer)
/s/
Corbin J.
    Robertson, Jr.
Corbin
    J. Robertson, Jr.
Chairman
/s/
Joseph R. Edwards
Joseph
    R. Edwards
Director
/s/
Corbin J. Robertson
    III
Corbin
    J. Robertson III
Director
/s/
Hans J. Mende
Hans
    J. Mende
Director
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Table of Contents
Authorized Representative
Pursuant to the requirement of the Securities Act of 1933, the
undersigned, the duly authorized representative in the United
States, has signed this registration statement in the City of
Newark, State of Delaware, on April 29, 2005.
PUGLISI &
    ASSOCIATES
By:
/s/
Donald J. Puglisi
Name: Donald J. Puglisi
Title:  Managing Directors
Authorized
    Representative in the United States
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Table of Contents
EXHIBIT INDEX
Exhibit
Number
Description
1.1
Form of Underwriting Agreement*
3.1
Amended and Restated Articles of Incorporation of the Company*
3.2
Amended and Restated By-laws of the Company*
4.1
Form of Share Certificate*
5.1
Opinion of Seward & Kissel LLP, Marshall Islands
    counsel to the Company, as to the validity of the Shares*
8.1
Opinion of Vinson & Elkins L.L.P., United States
    counsel to the Company, with respect to certain tax matters*
10.1
Form of Vessel Management Agreement*
10.2
Senior Secured Term Loan Agreement*
10.4
Form of Registration Rights Agreement*
21.1
Subsidiaries of the Company
23.1
Consent of Seward & Kissel LLP (included in
    Exhibit 5.1)*
23.2
Consent of Vinson & Elkins L.L.P. (included in
    Exhibit 8.1)*
23.2
Consent of Deloitte. Hadjipavlou, Sofianos & Cambanis
    S.A.
23.3
Consent of Drewry Shipping Consultants Ltd.
24.1
Powers of Attorney**
*
To be filed by amendment.
**
Contained on the signature page hereto.
II-6