Cavan Maritime S1 IPO registration

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As filed with the Securities and Exchange Commission on May 13, 2005

Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Wexford Shipping Company
(Exact name of Registrant as specified in its charter)

Republic of the Marshall Islands
(State or other jurisdiction of
Incorporation or organization)

4412
(Primary Standard Industrial
Classification Code Number)

Not Applicable
(I.R.S. Employer
Identification Number)

Wexford Plaza
411 West Putnam Avenue
Greenwich, CT 06830
(203) 862-7000
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive office)

Frederick B. Simon
Chief Executive Officer
Wexford Shipping Company
Wexford Plaza
411 West Putnam Avenue
Greenwich, CT 06830
(203) 862-7000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copies to:

Gregg J. Berman, Esq.
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, NY 10103
(212) 318-3000
Facsimile: (212) 318-3400

Alan P. Baden, Esq.
Vinson & Elkins L.L.P.
666 Fifth Avenue
New York, NY 10103
(212) 237-0000
Facsimile: (917) 849-5337

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 to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, 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, 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

Title Of Each Class Of Securities To Be Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount Of Registration Fee


Common Stock, $.001 par value	$100,000,000	$11,770

(1): Estimated solely for purposes of calculating the registration fee in accordance with Rule 457 of the Securities Act of 1933.
(2): Includes common stock, if any, that may be sold pursuant to the underwriters' over-allotment option.

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 specifically stating that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

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 is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion Dated May , 2005

Prospectus

Shares

Wexford Shipping Company

Common Stock

We are offering shares of our common stock. This is our initial public offering. We estimate that the initial public offering price will be between $ and $ per share. Currently, no public market exists for the shares. We intend to apply to list our common stock on the under the symbol " ."

Investing in our common stock involves risks that are described in the "Risk Factors" section beginning on page 10 of this prospectus.

	Per Share	Total
Initial public offering price	$	$
Underwriting discount	$	$
Proceeds, before expenses, to us	$	$

We have granted the underwriters a 30-day option to purchase up to an additional shares of our common stock from us on the same terms and conditions as set forth above. The net proceeds from any exercise of the underwriters' option to purchase additional shares of our common stock will be used for working capital and other corporate purposes.

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.

The underwriters expect to deliver shares of our common stock to purchasers on or about , 2005.

Jefferies & Company, Inc.

The date of this prospectus is , 2005.

TABLE OF CONTENTS

		Page
Prospectus Summary		2
Risk Factors		10
Use of Proceeds		23
Dividend Policy		24
Capitalization		25
Dilution		26
Selected Financial Information		27
Management's Discussion and Analysis of Financial Condition and Results of Operations		29
The International Dry Bulk Shipping Industry		37
Business		53
Management		66
Related Party Transactions		71
Security Ownership of Certain Beneficial Owners and Management		73
Description of Capital Stock		74
Marshall Islands Company Considerations		78
Tax Considerations		81
Shares Eligible for Future Sale		92
Underwriting		94
Legal Matters		98
International Dry Bulk Shipping Industry Data		99
Experts		100
Where You Can Find Additional Information		101
Special Note Regarding Forward-Looking Statements		102
Glossary of Shipping Terms		103
Index to Financial Statements		F-1

�� You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.

Through and including , 2005 (the 25^th day 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.

PROSPECTUS SUMMARY

This prospectus summary highlights information and 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 financial statements that appear later. We refer you to "Glossary of Shipping Terms" beginning on page 103 for definitions of certain shipping industry terms that we use in this prospectus.

Unless otherwise indicated, all references in this prospectus to our fleet refers to the fleet of six dry bulk carriers that we will own after the closing. Three of these vessels, referred to as the "Wexford Vessels", will be contributed prior to the closing of this offering by affiliates of our majority shareholder, Wexford Capital LLC, referred to as "Wexford", and three of these vessels (the "Identified Vessels") will be acquired by us, contemporaneously with the closing of this offering, from entities controlled by VOC Shipholdings B.V., referred to as "VOC." Unless otherwise indicated, all information in this prospectus assumes that the underwriters' 30-day option to purchase up to additional shares from us will not be exercised. Unless otherwise indicated, references in this prospectus to "Wexford Shipping Company," "we", "us", "our", and "the Company" refer to Wexford Shipping Company and our subsidiaries. We sometimes refer to the contribution of the Wexford Vessels and acquisition of the Identified Vessels as the "Transaction." All references in this prospectus to "$", "U.S.$" and "Dollars" refer to U.S. dollars.

Our Company

We are a newly formed Marshall Islands company that will own and manage dry bulk carriers that transport a variety of dry bulk commodities including major bulks such as coal, iron ore and grains, and minor bulks such as bauxite, phosphate, fertilizers and steel products along worldwide shipping routes. Prior to this offering, we are a majority owned subsidiary of Wexford, an SEC registered investment advisor with approximately $2.5 billion of assets under management as of March 31, 2005.

Our initial operating fleet will consist of three modern dry bulk carriers to be contributed prior to the closing of this offering by Wexford. The Wexford Vessels have a combined carrying capacity of 190,508 dwt and weighted average age by market value of 8.5 years. Contemporaneously with the closing of this offering, we will acquire an additional three dry bulk vessels which have a combined carrying capacity of 174,595 dwt and a weighted average age by market value of 3.0 years. Together, these six ships comprise our combined fleet (the "Combined Fleet"), which will have a combined carrying capacity of 365,103 dwt and weighted average age by market value of 5.8 years. A description of the fleet follows in the table below.

Vessel Name	Flag	Vessel Type	Size (dwt)	Year Built	Shipyard
Wexford Vessels
Anita	Malta	Panamax	72,495	1999	Koyo Dock, Japan
Koby	Malta	Panamax	72,495	1998	Imabari S.B., Japan
Paige	Malta	Handymax	45,518	1994	Tsuneishi, Zosen, Japan
Identified Vessels
VOC Orchid	Bahamas	Handymax	45,512	1996	Jiangnan, China
VOC Enterprise	Bahamas	Ultrahandymax	52,483	2005	Tsuneishi Heavy Industries, Philippines
Clipper Sussex	Hong Kong	Panamax	76,600	2005	Sasebo, Japan

The Identified Vessels will be purchased with approximately $ of the net proceeds from this offering, together with approximately shares of our common stock and borrowings under our new credit facility.

We expect to employ our fleet of modern dry bulk carriers on an opportunistic basis in the spot charter market, under period time charters and in dry bulk carrier pools. We believe that this flexible employment strategy will allow us to take advantage of favorable market conditions.

Our Fleet Managers

The operations of the Wexford Vessels are currently managed by Franco Compania Naviera S.A. ("Franco"), a Panamanian company. The Wexford Vessels currently have management agreements under which Franco provides the vessels with a wide range of shipping services such as technical support and maintenance, insurance, chartering, financial and accounting services, for a monthly management fee of $15,200 per vessel plus 1.25% of gross revenue.

After the closing of this offering, we intend to outsource both commercial and technical fleet management to third parties in arm's length transactions at standard market terms. It is intended that VOC Bulk Shipping USA, Inc. (our "Commercial Manager") will provide us with commercial management services for which we will pay $8,500 per vessel per month. Our Commercial Manager is an affiliate of VOC. We intend to employ a technical manager (our "Technical Manager") which will provide us with technical management services for which we expect to pay $ per vessel per year. Prior to the closing of this offering we will enter into an administrative services agreement with Wexford to provide us with general management, oversight and administrative functions for a fee of $1.5 million per year for the Combined Fleet. See "Related Party Transactions."

The Dry Bulk Shipping Industry

The dry bulk shipping industry is an essential link in international trade, with ocean-going 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 were transported by sea, comprising more than one-third of all international seaborne trade. According to Drewry Shipping Consultants, since the fourth quarter of 2002, the shipping industry has experienced the highest charter rates and vessel values in its modern history due to the favorable imbalance between the supply of and demand for ships. For dry bulk shipping, this imbalance is currently a function of:

Supply:

•: Shipyards where new ships are constructed are fully booked until 2008, limiting the number of new vessels that will enter the market in coming years.
•: The supply of dry bulk carriers is a result of both the number of ships in service and also the operating efficiency of the worldwide fleet. Port congestion absorbed additional tonnage and therefore tightened the underlying supply/demand balance.

Demand:

•: The increased demand for dry bulk carrier capacity has been driven by the underlying demand for commodities transported in dry bulk carriers. Between 1999 and 2004, trade in all dry bulk commodities increased from 1.97 billion tons to 2.46 billion tons, an increase of 25% overall.
•: China has been the main driving force behind the recent increase in seaborne dry bulk 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 dry bulk carriers.

Charter hire rates and vessel values are primarily a function of the underlying balance between vessel supply and demand, although at times other factors may play a role including demand for commodities that are transported by sea. However, vessel charter rates and vessel values historically have been volatile and are affected by numerous factors outside our control.

Our Competitive Strengths

We believe that we possess a number of strengths that distinguish our Company within the dry bulk shipping industry:

Wexford relationship. Wexford manages a series of hedge funds and private equity funds and has extensive experience investing in a wide range of industries and asset classes. Wexford has been active in managing and operating both asset-based and non-asset based companies at all stages of development, including from inception, and as an investment manager with substantial access to both public and private markets. Wexford also has experience in arranging a wide variety of equity and debt financings for these companies. We will be managed by Wexford under an administrative services agreement that we believe will enable us to manage our business more efficiently than could otherwise be achieved on a stand alone basis. This will give us access to an established infrastructure and a team of professionals with significant expertise.

Management experience in the shipping industry. Wexford executives will determine the strategic direction of our Company and manage our business operations as they have historically done with the Wexford Vessels. In addition to management and operations, this team has successfully invested in the shipping sector through individual vessel purchases, consolidation of a number of shipping operations, and investing in an existing shipping company. We believe that the combination of Wexford's management experience and investment expertise will be a competitive advantage as we grow and manage our business.

Modern, high quality fleet. Following the Transaction, we will have a fleet of six modern dry bulk carriers with a weighted average age by market value of 5.8 years. We are focused on maintaining our fleet to a high standard of operational excellence. We believe that a young, well-maintained and well-built fleet of dry bulk carriers will attract high quality charterers at favorable charter hire rates. Additionally, we believe that modern vessels that have been properly maintained will realize superior returns as a result of lower operating expenses and will initially require lower amounts of capital spending than older vessels.

Quality service. We expect our Combined Fleet to serve a variety of quality customers engaged in industrial, commodity and raw material production and trading. We expect to maintain rigorous standards for vessel quality, condition and operations while providing reliable and dependable service. We believe that, as a result of our high standards and the level of service provided by the Wexford Vessels, we have an excellent reputation among our customer base.

Conservative balance sheet management. As adjusted for the Transaction and this offering, our ratio of debt to total capitalization will be . We intend to finance our future growth with a combination of cash flow from operations and debt and equity issuances. We intend to access the capital markets opportunistically while maintaining a conservative leverage structure, which will provide financial stability throughout shipping market cycles and give us the flexibility to pursue our acquisition strategy.

Our Growth Strategy

We intend to grow our fleet and our margins as we seek to become a leading vessel provider in the dry bulk shipping sector. The principal elements of our growth strategy are as follows:

Strategically grow our fleet. We believe that the dry bulk shipping industry is highly fragmented and can be consolidated. We intend to participate in this consolidation and to grow our fleet primarily through the timely acquisition of high quality second hand dry bulk carriers. Our goal is to create a diversified fleet of dry bulk carriers, across all sizes, which will be capable of supplying a broad spectrum of global transportation solutions to our customers worldwide. We intend to continually monitor market conditions for opportunities to acquire modern second hand vessels that represent favorable investment opportunities.

Pursue balanced and opportunistic charter strategy. We intend to employ our fleet on an opportunistic basis in the spot charter market, under period time charters and in dry bulk carrier pools managed by third parties. We believe this chartering strategy will balance the predictability of earnings achieved through time charters with the opportunity to realize superior charter rates in the spot market and thus maximize our return on our vessel investment. We also intend to continually monitor market conditions and relevant global macroeconomic trends and adjust our strategy in order to take advantage of the full variety of options available in the chartering market.

Leverage operational and financial model. We believe that the Transaction will result in managerial and operational efficiencies for our Combined Fleet. The increased scale of the Company will allow us to achieve lower capital costs than previously realized. We believe that these benefits will continue to be realized as we add to our fleet. Additionally, we believe that an expanded fleet operated by a professional management team should attract high quality, high volume customers over time. As a result, we believe our fleet acquisition strategy will enhance revenue and profit potential.

Our Principal Equity Sponsor

Wexford was formed in 1994. As of March 31, 2005, Wexford's assets under management were approximately $2.5 billion, consisting of approximately $1.5 billion in hedge funds and approximately $1.0 billion in private equity investments. Wexford has made private equity investments in many different sectors with particular expertise in bankruptcy/distressed, energy/natural resources, real estate, technology/telecommunications and transportation. Wexford has made a number of successful investments in the shipping sector and made its first private equity shipping investment in 1995, when it purchased the first of five tankers which were later merged into General Maritime Corporation as part of its initial public offering in 2001. Wexford was a significant owner of that company until 2004. From 1999 until 2003, Wexford owned a significant equity position in Seabulk International.

Corporate Structure

We are a holding company incorporated under the laws of the Republic of the Marshall Islands. We maintain our principal executive offices at c/o Wexford Capital LLC, Wexford Plaza, 411 West Putnam Avenue, Greenwich, Connecticut 06830. Our telephone number at that address is (203) 862-7000.

The Offering

Common stock offered		shares
Common stock outstanding after the offering		shares⁽¹⁾
Underwriters' 30-day option to purchase additional shares of common stock		shares
Use of proceeds		We intend to use the net proceeds from this offering, together with approximately shares of our common stock and borrowings under our new credit facility, to acquire the Identified Vessels contemporaneously with the closing of this offering.
		The net proceeds from any exercise of the underwriters' 30-day option to purchase additional shares of our common stock will be used for working capital and other corporate purposes.
Exchange listing		We currently intend to apply to list our common stock on under the symbol " ".

⁽¹⁾

The number of shares outstanding after the offering:

•: excludes shares of common stock reserved for issuance upon exercise of stock options which will be granted in conjunction with this offering at an exercise price equal to the initial public offering price hereof; and
•: includes approximately shares of common stock to be issued as a portion of the consideration for our purchase of the Identified Vessels.

Risk Factors

Investing in our common stock involves risks. You should carefully consider all of 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 "Risk Factors" of this prospectus.

Summary Financial Information

We were formed on May 3, 2005, and did not exist during the period presented. The historical statement of operations data set out below is derived from the historical financial statements of North American Carriers Ltd. and North American Carriers II Ltd., the current owners of the Wexford Vessels, included in this prospectus. The balance sheet data is derived from the historical financial statements giving effect to the contribution of the Wexford Vessels. The following data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and such historical financial statements and the related notes included in this prospectus. The other fleet data set forth below is unaudited.

		For the Period from January 9, 2004 (inception) to December 31, 2004
		(in thousands, except other fleet data)
Statement of Operations Data:
Revenues		$	18,962
Expenses:
	Voyage expenses and commissions		1,231
	Vessel operating expenses		2,404
	Depreciation		2,429
	Amortization of deferred costs		124
	Management fees		363
	General and administrative expenses		250
	Foreign currency losses		21

Operating income			12,140

Interest and finance costs			(825	)
Interest income			89

Net income		$	11,404

Other Financial Data:
EBITDA⁽¹⁾		$	14,782

Other Fleet Data:
Average number of vessels⁽²⁾			1.73
Number of vessels at end of period			3
Total ownership days⁽³⁾			632.5
Total available days⁽⁴⁾			607.2
Total operating days⁽⁵⁾			602.2
Average utilization⁽⁶⁾			96.0	%
Average TCE rate⁽⁷⁾		$	30,854
Average daily vessel operating expenses		$	3,912

	December 31, 2004
	Historical		As adjusted⁽⁸⁾
	(in thousands)
Balance Sheet Data:
Cash	$	6,148
Total current assets		9,943
Vessels		82,485
Other non-current assets		776
Total assets		93,203
Current liabilities		9,757
Other liabilities		68
Long term debt, net of current portion		36,956
Shareholders' equity		46,423

⁽¹⁾: EBITDA represents net income plus interest expense, income tax expense, depreciation and amortization. EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers. Our management uses EBITDA as a performance measure in monthly internal financial statements and it is presented for review at our board meetings. EBITDA may also be used by our prospective lenders in certain loan covenants. For these reasons, we believe that EBITDA is a useful measure to present to our investors. EBITDA is not an item recognized by the generally accepted accounting principles in the United States, or U.S. GAAP, and should not be considered as an alternative to net income, operating income or any other indicator of a company's operating performance required by U.S. GAAP. The definition of EBITDA used here may not be comparable to that used by other companies.

		For the Period January 9, 2004 through December 31, 2004
		(in thousands)
Net income		$	11,404
Interest expense			825
Income tax expense			—
Depreciation			2,429
Amortization			124

	EBITDA	$	14,782

⁽²⁾: Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in the period.
⁽³⁾: We define ownership days as the total number of days in a period during which each vessel in our fleet was in our possession including off hire days associated with major repairs, drydockings or special or intermediate surveys. 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 that period.
⁽⁴⁾: We define available days as the total number of days in a period during which each vessel in our fleet was in our possession net of off hire days associated with major repairs, drydockings or special or intermediate surveys and the aggregate amount of time that we spend positioning our vessels. The shipping industry uses available days (also referred to as voyage days) to measure the number of days in a period during which vessels should be capable of generating revenues.

⁽⁵⁾: 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, 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.
⁽⁶⁾: We calculate fleet utilization by dividing the number of our available days during a period by the number of our ownership days during that 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 such as scheduled repairs, vessel upgrades or drydockings and other surveys.
⁽⁷⁾: 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.
⁽⁸⁾: As adjusted for the sale of shares of common stock hereby at an assumed offering price of $ per share, the mid-point of the filing range, and the application of the net proceeds as set forth in "Use of Proceeds."

RISK FACTORS

Any investment in shares of our common stock involves a high degree of risk. You should consider carefully the following information about these risks, together with all of the other information contained in this prospectus, before making an investment in our common stock. If any of the following risks actually occur, our business, financial condition or results of operations could be adversely affected. Any adverse effect on our business, financial condition or results of operations could result in a decline in the trading price of our common stock and the loss of all or part of your investment.

Risks Related to Our Operations

Because we are a new company with a limited performance record and operating history, we may be less successful in implementing our growth strategy than a more seasoned company.

We are a recently formed entity and have a limited performance record, operating history and historical financial statements based on the operation of the Wexford Vessels upon which you can evaluate us. We cannot assure you that we will be successful in implementing our growth strategy.

We will depend entirely on our Commercial Manager and Technical Manager to charter and manage our fleet.

We are a newly formed company with a chief executive officer and a chief financial officer whose services will be supplied by Wexford pursuant to the terms of an administrative services agreement. We currently have no plans to hire any employees. We intend to subcontract the commercial and technical management of our fleet, including crewing, maintenance and repair, to our Commercial Manager and Technical Manager. See "Business—Our Fleet Managers." The loss of one of our managers or a manager's failure to perform its obligations to us could adversely affect our results of operations and financial condition. Although we may have rights against our managers if they default on their obligations to us, you will have no recourse against our managers. Further, although we have not finalized any credit arrangements, if we do (of which there can be no assurance), we expect that we will need to seek approval from our lenders to change our managers.

Our Commercial Manager and Technical Manager are privately held companies and there is little or no publicly available information about them.

The ability of our Commercial Manager and Technical Manager to continue providing services for our benefit will depend in part on their own financial strength. Circumstances beyond our control could impair the financial strength of either or both of our Commercial Manager and Technical Manager. Because they are privately held, it is unlikely that information about their financial strength would become public unless they began to default on their obligations. As a result, we might have little advance warning of problems affecting our Commercial Manager or Technical Manager, even though these problems could have an adverse effect on our results of operations and financial condition.

Our chief executive officer and chief financial officer have divided responsabilities.

Our chief executive officer, Frederick B. Simon, and our chief financial officer, Jay L. Maymudes, are also principals of Wexford. While they will provide management services to us pursuant to our administrative services agreement with Wexford, they will not devote their full time and resources to us.

Wexford and its affiliates may engage in competition with us.

Wexford and its affiliates may engage in competition with us. Pursuant to the administrative services agreement, Wexford has agreed to give us a right of first refusal with respect to any purchase, lease or similar investment opportunities in Capesize, Panamax, Handymax or Handysize dry bulk vessels presented to or originated by Wexford or us, but excluding any opportunity that constitutes an

investment of any nature whatsoever in a publicly-held company or any derivative transaction relating or indexed to the equity or debt of a publicly-held company. Therefore, this right of first refusal does not limit the ability of Wexford and its affiliates to acquire the common stock, including a controlling interest, in any publicly-held company that owns, directly or through its subsidiaries, dry bulk vessels, including companies which compete with us. See "Business—Corporate Matters; Administrative Services Agreement."

Companies affiliated with our Commercial Manager own and may acquire vessels that compete with our fleet.

Companies affiliated with our intended Commercial Manager own multiple dry bulk carriers. In addition, our intended Commercial Manager or its multiple affiliates may acquire additional dry bulk carriers in the future. These vessels could be in competition with our fleet, and our intended Commercial Manager might be faced with conflicts of interest with respect to its own interests and its obligations to us.

We may have difficulty properly managing our planned growth through the acquisition of additional vessels.

We intend to continue to grow our business through selective acquisitions of additional vessels. Our 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.

Growing any business through acquisitions presents numerous risks, such as obtaining additional qualified personnel, managing relationships with customers and integrating newly acquired assets and operations into existing infrastructures.

Prior to the closing of this offering, we will enter into an administrative services agreement with Wexford to provide us with general management, oversight and administrative functions (excluding vessel management functions). In addition, after the closing of this offering, we intend to outsource both commercial and technical fleet management to third parties. The current operating and financial systems of Wexford, our intended Commercial Manager and our Technical Manager may not be adequate as we commence operations and implement our plan to expand the size of our fleet, and any attempts to improve those systems may be ineffective. In addition, expanding our fleet will impose additional responsibilities on our management as well as on the personnel of Wexford, our intended Commercial Manager and our Technical Manager, and may necessitate that we, and they, hire additional qualified personnel. We cannot guarantee that we, Wexford, our intended Commercial Manager or our Technical Manager will be able to hire suitable personnel as we expand our fleet. If we, Wexford, our intended Commercial Manager or our Technical Manager are unable to develop and maintain effective operating and financial systems or to recruit suitable personnel as we expand our fleet, our results of operations and financial condition could be adversely affected.

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 and our revenue will decline.

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 results of operations and financial condition will be adversely affected.

We may be dependent on spot charters.

At any time, any or all of our vessels may be chartered on a spot charter basis. The spot charter market is highly competitive and spot charter rates may fluctuate significantly based upon available charters and the supply of and demand for dry bulk seaborne shipping capacity. Such dependence makes us vulnerable to declining market rates for spot charters.

We cannot assure you that we will be successful in keeping our vessels fully employed in these short-term markets or that future spot rates will be sufficient to enable us to operate our vessels profitably. A decrease in spot charter rates could adversely affect our results of operations and financial condition.

The international dry bulk shipping industry is highly competitive and we may not be able to compete 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 may have substantially greater resources than we do. Competition for the transportation of dry bulk cargo by sea is intense and depends on price, location, size, age, condition and the acceptability of the vessel and its managers to the charterers. Due in part to the highly fragmented market, competitors with greater resources could operate larger fleets and may be able to offer more competitive charter hire rates than we are able to offer.

We depend upon a few customers for all of our revenue.

For the period ended December 31, 2004, the Wexford Vessels derived all of their revenues from four 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, our results of operations and financial condition would be adversely affected.

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.

If we lose a key customer, we may be unable to obtain charters on comparable terms or may have increased exposure in 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, would adversely affect our results of operations and financial condition.

We may be unable to retain key members of our management team.

Our success depends to a significant extent upon the abilities and efforts of our management team. We will enter into an administrative services contract with Wexford providing for the services of our chief executive officer and our chief financial officer. See—"Business—Corporate Matters; Administrative Services Agreement." Our success will depend upon our ability to retain key members of our management team. The loss of any key member could adversely affect our results of operations and financial condition. We do not intend to maintain key man life insurance on any of our officers.

Our vessels may suffer damage and we may face unexpected costs.

If our vessels suffer damage, they may need to be repaired. The costs of repairs are unpredictable and can be substantial. The loss of revenue while our vessels are being repaired and repositioned as well as the actual cost of these repairs could adversely affect our results of operations and financial condition. We may not have insurance sufficient to cover all or any of these costs or losses and may have to pay costs not covered by our insurance.

Purchasing and operating second hand vessels may result in increased operating costs and reduced fleet utilization.

Our inspection of second hand vessels prior to purchase does not provide us with the same knowledge about their condition that we would have had if these vessels had been built for and operated exclusively by us. Second hand vessels may have conditions or defects that we were not aware of when we bought the vessels and that may require us to incur costly repairs to the vessels. If this were to occur, such hidden defects or problems, when detected, may be expensive to repair, 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. Furthermore, we do not expect to receive the benefit of warranties on second hand vessels.

The aging of our fleet may result in increased operating costs in the future.

In general, the cost of maintaining a vessel in good operating condition increases with the age of the vessel. Assuming the Transaction, as of March 31, 2005, the weighted average age by market value of the vessels in our fleet was 5.8 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 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 older vessels and may restrict the type of activities in which the vessels may engage. We cannot assure you that, as our vessels age, market conditions will justify such expenditures or enable us to operate our vessels profitably during the remainder of their useful lives.

An increase in the price of bunker fuel could adversely affect our results of operations.

In spot chartering, the shipowner is typically responsible for paying both operating and voyage costs, including bunker fuel costs. Since we bear the cost of an increase in the price of bunker fuel in connection with any of our vessels that are chartered on a spot basis, such an increase could adversely affect our results of operations and financial condition.

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 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, 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.

Servicing future debt would limit funds available for other purposes.

We intend to finance our future fleet expansion program in part with secured indebtedness. We also 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. If we are unable to meet our debt obligations, or if we otherwise default under any future debt agreements or alternative financing arrangements, 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.

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.

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 satisfy our financial obligations 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 Maltese law, which regulates the payment of dividends by companies. If we are unable to obtain funds from our subsidiaries, we may not be able to satisfy our financial obligations.

Because we generate all of our revenue in U.S. dollars but may incur a significant portion of our expenses in other currencies, exchange rate fluctuations could hurt our results of operations.

We generate all of our revenue in U.S. dollars. We expect to incur a portion of our expenses in currencies other than U.S. dollars. This difference could lead to fluctuations in net income due to changes in the value of the U.S. dollar relative to the other currencies, in particular the Euro. Expenses incurred in foreign currencies against which the U.S. dollar falls in value will be higher in U.S. dollar terms, resulting in a decrease in our operating income. We have not hedged these risks. Our results of operations could suffer as a result.

U.S. holders may be subject to adverse U.S. federal income tax consequences as a result of our possible status as a passive foreign investment company.

Based on our proposed method of operation, we do not believe that we will be a passive foreign investment company, or PFIC, with respect to any taxable year. There is, however, no direct legal authority under the PFIC rules addressing our proposed method of operation. Accordingly, no assurance can be given that the IRS or a court of law will accept our position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given 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.

If we are a PFIC for any tax year, U.S. holders who owned our common stock during such year may be subject to increased U.S. federal income tax liabilities and reporting requirements for such year and succeeding years, even if we are no longer a PFIC in such succeeding years. We urge purchasers of the common stock to review "Tax Considerations—U.S. Federal Income Taxation of U.S. Holders" and to consult their own tax advisors with respect to the U.S. federal income tax consequences of an investment in our common stock.

Risks Associated With the International Dry Bulk Shipping Industry

Risks associated with operating ocean-going vessels could adversely affect our results of operations and financial condition.

The operation of ocean-going 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 adversely affect our results of operations and financial condition. Furthermore, certain of these incidents may harm our reputation as a safe and reliable vessel owner and operator.

The operation of dry bulk carriers has certain unique operational risks.

With a dry bulk carrier, the cargo itself and its interaction with the ship may create operational risks. By their nature, dry bulk cargoes are often heavy, dense and easily shifted, and they may react badly to water exposure. In addition, dry bulk 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 dry bulk carriers may lead to the flooding of the vessels' holds. If a dry bulk 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 results of operations and financial condition. In addition, the loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator.

The dry bulk shipping industry is cyclical, which may lead to volatility in our charter hire rates and vessel values.

The dry bulk shipping industry is cyclical with attendant volatility in charter hire rates and vessel values. The degree of charter hire rate volatility among different types of dry bulk carriers has varied widely, and charter hire rates for dry bulk carriers are currently near historically high levels. We cannot assure you that we will be able to successfully charter our vessels in the future or renew existing charters at the same or similar rates. If we are required to enter into a charter when charter hire rates are low, our results of operations could be adversely affected.

In addition, the market value of our vessels may fluctuate significantly. A decline in charter hire rates, for example, may cause the value of our vessels to decline. If we sell vessels at a time when

vessel prices have fallen and before we have recorded an impairment adjustment, the sale may be at less than the vessel's carrying amount, resulting in a loss. A decline in the market value of our vessels could also lead to a default under any prospective credit facility to which we become a party and/or limit our ability obtain additional financing.

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, such as charter hire rates and vessel values, are also unpredictable. Factors that influence demand for vessel capacity include:

•: demand for and production of dry bulk products;
•: global and regional economic conditions;
•: environmental and other regulatory developments;
•: the distance dry bulk is to be moved by sea; and
•: changes in seaborne and other transportation patterns.

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;
•: environmental and other regulations that may limit the useful life of vessels; and
•: port congestion.

We anticipate that the future demand for our dry bulk carriers will depend upon, among other factors, 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 dry bulk carrier fleet and the sources and supply of dry bulk cargo to be transported by sea. We believe the capacity of the global dry bulk carrier fleet will increase. If the supply of dry bulk carrier capacity increases and the demand for dry bulk carrier capacity does not increase or increases at a slower pace, the charter hire rates paid for our vessels as well as our vessel values could decline, which could adversely affect our results of operations and financial condition.

Seasonal fluctuations in demand could adversely affect our results of operations and financial condition.

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 results of operations. The dry bulk 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 adversely affect our results of operations and financial condition.

The operation of our vessels is subject to international conventions, national, state and local laws and regulations relating to environmental protection that could require us to incur substantial costs and otherwise adversely affect our results of operations and financial condition.

The operation of our vessels is subject to 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 expenditures 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.

These requirements can also affect the resale value or useful lives of our vessels, cause 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 national, state and local 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 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 could have an adverse affect on our results of operations and financial condition.

For additional information on these and other environmental requirements, please read "Business—Environmental and Other Regulations."

The operation of our vessels is subject to safety rules and regulations, and the failure to comply with such rules and regulations could subject us to increased liabilities and otherwise adversely affect our results of operations and financial condition.

The hull and machinery of every commercial vessel is usually classed by a classification society authorized by its country of registry. The classification society certifies that a vessel meets certain criteria in accordance with the applicable rules of the classification society.

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 funds 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 shipowner 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.

The next special surveys for the Wexford Vessels are due in August 2008, January 2009 and June 2009.

The operation of our vessels is also 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 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 shipowner 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. Currently, each of the vessels in the fleet is ISM code-certified. However, there can be no assurance that such certification will be maintained indefinitely.

For additional information, please read "Business—Environmental and Other Regulations."

International shipping is subject to various security and customs inspection and related procedures that could adversely affect our results of operations and financial condition.

International shipping is subject to various security and customs inspection 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 an adverse effect on our results of operations and financial condition.

Maritime claimants could arrest one or more of our vessels.

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 enforce its lien 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 lifted.

Governments could requisition one or more of our vessels during a period of war or emergency.

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 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 could adversely affect our results of operations and financial condition.

An economic slowdown in the Asia Pacific region could adversely affect our results of operations and our financial condition.

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, but particularly in China, may have an adverse effect on our business, financial condition and results of operations, as well as our future prospects. In particular, 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. An economic downturn in any of these countries could adversely affect our results of operations and financial condition.

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, continue to cause uncertainty in the world financial markets and may affect our business, results of operations 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 vessels. 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 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 adversely affect our results of operations and financial condition.

Risks Related To Our Common Stock

After this offering, the price of our common stock may be volatile and we cannot assure you that the price of our shares will not decline.

The market price of our shares could be subject to significant fluctuations after this offering and could decline below the initial public offering price.

The initial public offering price will be determined by negotiations between the underwriters and our board of directors and may not be representative of the market price at which our shares of common stock will trade after this offering.

The market price of our common stock may fluctuate substantially due to a variety of factors, many of which are beyond our control, including:

•: new regulatory pronouncements and changes in regulatory guidelines;
•: general and industry-specific economic conditions;
•: changes in financial estimates or recommendations by securities analysts;

•: sales of our common stock or other actions by investors with significant shareholdings; and
•: general market conditions.

The stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the market price of our common stock.

In the past, shareholders have sometimes instituted securities class action litigation against companies following periods of volatility in the market price of their securities. Any similar litigation against us could result in substantial costs, divert management's attention and resources and harm our business.

We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law.

Our corporate affairs are governed by our articles of incorporation and by-laws and by the Marshall Islands Business Corporations Act, or 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 Republic of the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the law of the Republic 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 U.S. jurisdictions. Shareholder rights may differ from the rights of shareholders of companies incorporated in the United States. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions there have been few, if any, current cases interpreting the BCA in the Marshall Islands and we cannot predict whether Marshall Islands courts would reach the same conclusions as U.S. courts. Thus, our public shareholders may have more difficulty in protecting their interests in the face of actions by the management, directors or controlling shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction which has developed a relatively more substantive body of case law. For more information with respect to how shareholder rights under Marshall Islands law compare with shareholder rights under Delaware law, please read "Marshall Islands Company Considerations."

Because we are incorporated under the laws of the Republic of the Marshall Islands, it may be difficult to serve us with legal process or enforce judgments against us or our officers and directors.

We are incorporated under the laws of the Republic of the Marshall Islands, and all of our assets are located outside of the United States. Although our business is operated primarily from Wexford's offices in Greenwich, Connecticut, a number of our prospective officers and directors may be non-residents of the United States, and all or a substantial portion of the assets of these non-residents may be 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 Republic 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 officers and directors.

There is no guarantee that an active and liquid public market will develop to resell our common 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 representatives of the underwriters and us and may not be indicative of prices that will prevail in the market. We cannot assure you that you will be able to sell your shares at or above the initial public offering price.

Wexford and its affiliates will beneficially own and control a significant amount of our common stock, giving them 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, Wexford and its affiliates will beneficially own and control approximately % of our outstanding common stock (approximately % if the underwriters exercise their 30-day option in full). Due to Wexford's and its affiliates' significant ownership interest, it has the ability to exert substantial influence over our board of directors and its policies. Wexford and its affiliates will be able to control or substantially influence the outcome of stockholder votes, including votes concerning the election of directors, the adoption or amendment of provisions in our articles of incorporation or by-laws 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, takeover 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.

Purchasers of shares of our common stock in this offering will experience immediate and substantial dilution.

Giving effect to the closing of this offering and the Transaction, we expect the initial public offering price of our common stock would be substantially higher than the net tangible book value per share of our outstanding common stock, resulting in immediate and substantial dilution. The net tangible book value of a share of our common stock purchased at an assumed initial public offering price of $ (the mid-point of the filing range) will be only $ . Additional dilution may be incurred if we issue common stock in the future or if stock options or warrants, whether currently outstanding or subsequently granted, are exercised. If the price of our common stock is greater than the exercise price of the stock options, your interest in our common stock will be diluted. 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."

Future sales of our common stock by our shareholders could depress the price of our common stock.

Sales of a large number of shares of our common stock in the public market, or the availability of a large number of shares for sale, could adversely affect the market price of our common stock and could impair our ability to raise funds in subsequent stock offerings. Upon completion of this offering, we will have shares of common stock outstanding. All of our current shareholders and the sellers of the Identified Vessels will be subject to agreements with the underwriters that restrict their ability to transfer their stock for 180 days after the date of this prospectus. Jefferies & Company, Inc., on behalf of the underwriters, may in its sole discretion and at any time waive the restrictions on transfer in these agreements during this period. After these agreements expire, approximately of these shares will be eligible for sale in the public market. In addition, under our administrative services agreement with Wexford, we have agreed to issue options to our employees, officers and consultants to purchase common shares representing a 6% ownership interest in us as of the completion of the offering, at an exercise price equal to the initial offering price. See "Related Party Transactions." In addition, it is contemplated that VOC Invest Ltd. ("VOC Investment"), as nominee of the sellers of the Identified Vessels, will be entitled to certain registration rights under the terms of a registration rights agreement to be entered into.

Our organizational documents and Marshall Islands law have anti-takeover provisions that could delay or prevent a change in control of our Company.

In addition to the fact that Wexford will own the majority of our common stock after this offering, our articles of incorporation and by-laws and Marshall Islands law contain provisions that could delay

or prevent a change in control of our Company that shareholders may consider favorable. Some of these provisions:

•: authorize the issuance of up to 5,000,000 shares of preferred stock that can be created and issued by our board of directors without prior shareholder approval, commonly referred to as "blank check" preferred stock, with rights senior to those of our common stock;
•: limit the persons who can call special shareholder meetings;
•: provide that a supermajority vote of our shareholders is required to amend certain provisions of our articles of incorporation; and
•: establish advance notice requirements to nominate directors for election to our board of directors or to propose matters that can be acted on by shareholders at shareholder meetings.

These and other provisions in our organizational documents and Marshall Islands law could allow our board of directors to affect your rights as a shareholder by making it more difficult for shareholders to replace board members. Because our board of directors is responsible for appointing members of our management team, these provisions could in turn affect any attempt to replace the current management team. In addition, these provisions could deprive our shareholders of opportunities to realize a premium on their shares of common stock.

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 were not required to 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.

USE OF PROCEEDS

We estimate that the net proceeds we will receive from the sale of the shares of common stock being offered hereby after deducting estimated underwriting discounts and 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 the net proceeds of this offering, together with approximately shares of our common stock and borrowings under our new credit facility, to acquire the Identified Vessels contemporaneously with the closing of this offering.

The net proceeds from any exercise of the underwriters' 30-day option to purchase additional shares will be used for working capital and other corporate purposes.

DIVIDEND POLICY

We have never paid dividends on our common stock and currently do not anticipate declaring or paying any dividends in the foreseeable future. Instead, we intend to retain our future earnings, if any, for use in the operation and expansion of our business. Our board of directors has the authority to declare and pay dividends on our common stock, in its discretion, as long as there are funds legally available and we are contractually permitted to do so. As a holding company, we would only be able to pay dividends from funds received from our subsidiaries.

CAPITALIZATION

The following table sets forth:

•: our capitalization as of December 31, 2004, after giving effect to the contribution of the Wexford Vessels, which is accounted for at historical cost as a reorganization of entities under common control; and
•: our capitalization as of December 31, 2004, as adjusted to reflect the offering of shares of our common stock and the application of the net proceeds from this offering as described in "Use of Proceeds," the issuance of shares of our common stock to VOC Investment and the incurrence of indebtedness to acquire the Identified Vessels.

The following table should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements, including the notes thereto, appearing elsewhere in this prospectus.

		December 31, 2004
		Historical		As adjusted
		(in thousands)
Cash and cash equivalents		$	6,148	$

Debt:
	Current portion of long-term debt		8,592
	Long-term debt, less current portion		36,956
Shareholder's equity:
	Preferred stock, $.001 par value 5,000,000 shares authorized; no shares issued and outstanding		—
	Common stock, $.001 par value; 75,000,000 shares authorized; 1,000 shares issued and outstanding and shares issued and outstanding as adjusted		—
	Additional paid-in capital		35,019
	Retained earnings		11,404

Total shareholders' equity			46,423

Total capitalization		$	91,971	$

DILUTION

If you invest in our common stock, your interest will be diluted to the extent of the difference between the initial public offering price per share and the net tangible book value per share of our common stock after this offering. Our net tangible book value as of December 31, 2004 after giving effect to the contribution of the Wexford Vessels, was $ per share. Net tangible book value per share is determined by dividing our tangible net worth, which is our tangible assets less total liabilities, by the total number of outstanding shares of common stock. After giving effect to the sale of shares of common stock in this offering at an assumed offering price of $ per share, the mid-point of the filing range, and our receipt of the estimated net proceeds and the issuance of the shares to VOC Investment, our net tangible book value at December 31, 2004, would have been $ per share. This represents an immediate increase in the net tangible book value of $ per share to our existing shareholders, and an immediate dilution of $ per share to you if you invest in our common stock. The following table illustrates this dilution of $ per share to new shareholders purchasing our common stock in this offering:

Assumed initial public offering price per share		$
Adjusted net tangible book value per share as of December 31, 2004		$
Increase per share attributable to new investors
As adjusted net tangible book value per share after this offering
Dilution per share to new investors		$

The following table summarizes, on a pro forma basis as of December 31, 2004, the total number of shares of our common stock purchased from us, the total consideration paid and the average price per share paid by our existing shareholders, and by the new investors in this offering at an assumed initial public offering price of $ per share, the midpoint of our filing range, and before deducting estimated underwriting discounts and commissions and our estimated offering expenses:

		Shares Purchased			Total Consideration
		Number		Percent	Amount	Percent	Average Price Per Share
Existing shareholders⁽¹⁾
New investors
	Total		��

If the underwriters exercise their 30-day option in full, the number of shares of common stock held by new investors will increase to , or % of the total number of shares of common stock to be outstanding immediately after this offering and the percentage of the total number of shares of common stock to be outstanding immediately after this offering held by our existing shareholders will decrease to , or %.

The information presented in the table above excludes shares of common stock currently reserved for issuance under options to be granted in conjunction with this offering at an exercise price equal to the initial public offering price.

⁽¹⁾: Includes VOC Investment, an affiliate of the sellers of the Identified Vessels, who will receive shares of our common stock as partial payment of the purchase price of the Identified Vessels.

SELECTED FINANCIAL INFORMATION

We were formed on May 3, 2005, and did not exist during the period presented. The historical statement of operations data set out below is derived from the historical financial statements of North American Carriers Ltd. and North American Carriers II Ltd. included in this prospectus. The balance sheet data is derived from the historical financial statements giving effect to the contribution of the Wexford Vessels. The following data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and such historical financial statements and the related notes included in this prospectus.

Selected Financial Information

		For the Period from January 9, 2004 (Inception) to December 31, 2004
		(in thousands)
Statement of Operations Data:
Revenues		$	18,962
Expenses:
	Voyage expenses and commissions		1,231
	Vessel operating expenses		2,404
	Depreciation		2,429
	Amortization of deferred costs		124
	Management fees		363
	General and administrative expenses		250
	Foreign currency losses		21

	Operating income		12,140

	Interest and finance costs		(825	)
	Interest income		89

	Net income	$	11,404

Other Financial Data:
	EBITDA⁽¹⁾	$	14,782

	December 31, 2004
	(in thousands)
Balance Sheet Data:
Cash	$	6,148
Total current assets		9,943
Vessels		82,485
Other non-current assets		776
Total assets		93,203
Current liabilities		9,757
Other liabilities		68
Long term debt, net of current portion		36,956
Shareholders' equity		46,423

⁽¹⁾: EBITDA represents net income plus interest expense, income tax expense, depreciation and amortization. EBITDA is included here because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers. Our management uses EBITDA as a performance measure in monthly internal financial statements and it is presented for review at

our board meetings. EBITDA may also be used by our prospective lenders in certain loan covenants. For these reasons, we believe that EBITDA is a useful measure to present to our investors. EBITDA is not an item recognized by U.S. GAAP, and should not be considered as an alternative to net income, operating income or any other indicator of a company's operating performance required by U.S. GAAP. The definition of EBITDA used here may not be comparable to that used by other companies.

		For the Period January 9, 2004 through December 31, 2004
		(in thousands)
Net income		$	11,404
Interest expense			825
Income tax expense			—
Depreciation			2,429
Amortization			124

	EBITDA	$	14,782

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of our financial condition and results of operations for the period ended December 31, 2004. You should read this together with the financial statements including the notes to those financial statements included herein. We are a Marshall Islands company that was formed on May 3, 2005 and, prior to this offering, a majority owned subsidiary of Wexford, an SEC registered investment advisor with approximately $2.5 billion of assets under management as of March 31, 2005. This discussion reflects the historical results of the three Wexford Vessels to be contributed to us by Wexford.

General

We will own and manage dry bulk carriers that transport a variety of dry bulk commodities including major bulks such as coal, iron ore and grains, and minor bulks such as bauxite, phosphate, fertilizers and steel products along worldwide shipping routes.

Our initial operating fleet will consist of three modern dry bulk carriers to be contributed prior to the closing of this offering by Wexford. The Wexford Vessels are comprised of two Panamax dry bulk carriers and one Handymax dry bulk carrier with a combined cargo carrying capacity of 190,508 dwt and a weighted average age by market value of 8.5 years.

Contemporaneously with the closing of this offering we will acquire the Identified Vessels from entities controlled by VOC. The Identified Vessels will be comprised of one Panamax dry bulk carrier, one Handymax dry bulk carrier and one Ultrahandymax dry bulk carrier, which have a combined carrying capacity of 174,595 dwt and weighted average age based on market value of 3.0 years. Our acquisition of the Identified Vessels will increase the size of our Combined Fleet to six dry bulk carriers representing 365,103 dwt and a weighted average age by market value of 5.8 years.

The Wexford Vessels have been managed by Franco and historically employed in the spot market under short-term time charters. After the closing of this offering, we intend to outsource both commercial and technical fleet management to third parties in arm's length transactions at standard market terms. We expect to employ our fleet on an opportunistic basis in the spot charter market, under period time charters and in dry bulk carrier pools. We believe that this flexible employment strategy will allow us to maximize our returns, given current market conditions.

A spot or voyage charter is generally a contract to carry a specific cargo from a load port to a discharge port for an agreed upon total amount. Under spot charters, we pay voyage expenses such as port, canal and fuel costs. A spot market trip time charter and a period time charter are generally contracts to charter a vessel for a fixed period of time at a set daily rate. Under time charters, the charterer pays voyage expenses such as port, canal and fuel costs. Under both types of charters, we pay for vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs. We are also responsible for each vessel's intermediate and special survey costs. Pools have the size and scope to combine spot market voyages, trip time charters, period time charters and contracts of affreightment with freight forward agreements for hedging purposes. With this variety of chartering options they are able to perform more efficient vessel scheduling, thereby increasing fleet utilization.

Factors Affecting Our Results of Operations

We believe that the important measures for analyzing trends in the results of our operations consist of the following:

•: Ownership days. We define ownership days as the total number of days in a period during which each vessel in our fleet was in our possession including off-hire days associated with major

repairs, drydockings or special or intermediate surveys. 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 that period.

•: Available days. We define available days as the total number of days in a period during which each vessel in our fleet was in our possession net of off-hire days associated with major repairs, drydockings or special or intermediate surveys and the aggregate amount of time that we spend positioning our vessels. The shipping industry uses available days (also referred to as voyage 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, 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 available days during a period by the number of our ownership days during that 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 such as scheduled repairs, vessel upgrades or drydockings and other surveys.
•: Time Charter Equivalent ("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 rates are volatile and fluctuate on a daily, 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.

The following table reflects our ownership days, available days, operating days, fleet utilization, TCE rates and daily vessel operating expenses for the period ended December 31, 2004.

			Period Ended December 31, 2004
Ownership days
	Anita			177.6
	Koby			150.1
	Paige			304.7

		Total		632.5

Available days
	Anita			177.6
	Koby			150.1
	Paige			279.5

		Total		607.2

Operating days
	Anita			175.1
	Koby			148.4
	Paige			278.7

		Total		602.2

Fleet utilization
	Anita			100.0	%
	Koby			100.0	%
	Paige			91.7	%

		Fleet average		96.0	%

TCE rate
	Anita		$	25,326
	Koby			34,166
	Paige			33,069

		Fleet average	$	30,854

Daily vessel operating expenses
	Anita		$	3,274
	Koby			4,079
	Paige			4,383

		Fleet average	$	3,912

Voyage Revenues

Our voyage revenues are driven primarily by the number of vessels in our fleet, the number of days during which our vessels generate revenues and the amount of daily charter hire that our vessels earn under charters, which, in turn, are affected by a number of factors, including 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 drydock undergoing repairs, maintenance and upgrade work, the age, condition and specifications of our vessels, levels of supply and demand in the dry bulk carrier transportation market and other factors affecting spot market charter rates for dry bulk carriers.

Vessels operating on period time charters provide more predictable cash flows, but can yield lower profit margins than vessels operating in the spot charter market during periods characterized by favorable market conditions. Vessels operating in the spot charter market generate revenues that are less predictable but may enable us to capture increased profit margins during periods of improvements in dry bulk rates although we are exposed to the risk of declining drybulk rates, which may have a materially adverse impact on our financial performance. If we fix vessels on period time charters, future spot market rates may be higher or lower than those rates at which we have period time chartered our vessels.

Vessel Operating Expenses

Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Our vessel operating expenses, which generally represent fixed costs, are prone to increase as a result of the enlargement of our fleet. We expect these expenses to increase during 2005 following our acquisition of the Identified Vessels. 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.

Depreciation

We depreciate our dry bulk carriers on a straight-line basis over their estimated useful lives, after considering the estimated salvage value, calculated based on $150 per lightweight ton, or "LWT." We estimate 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. We follow the deferral method of accounting for dry-docking and special survey 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, typically 30 to 60 months.

Period Ended December 31, 2004

Voyage Revenues—Voyage revenues for the period ended December 31, 2004 were $19.0 million and were generated from the time charter hire of the Paige, Anita, and Koby vessels, delivered in March, July and August of 2004, respectively.

Voyage Expenses—Voyage expenses, which primarily consist of port, canal and fuel costs that are unique to a particular voyage which would otherwise be paid by the charterer under a time charter contract, as well as commissions, were $1.2 million in 2004. Commissions are calculated as a percentage of voyage revenues.

Vessel Operating Expenses—Vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, were $2.4 million in 2004.

General and Administrative Expenses—General and administrative expenses were $0.3 million in 2004.

Depreciation and Amortization—Total depreciation and amortization, which includes vessel depreciation expense, amortization of dry-dockings and amortization of financing fees, was $2.6 million. Vessel depreciation expense, amortization of dry-dockings and amortization of financing fees was $2.4 million, $0.1 million and $30 thousand in 2004, respectively.

Interest and Finance Costs, Net—Net interest expense was $0.7 million for 2004, including $0.8 million in interest and finance costs and $0.09 million in interest income.

We anticipate that all of the foregoing expenses will increase in 2005 primarily as a result of the operation of the Wexford Vessels for a full year, the acquisition of the Identified Vessels and as a result of becoming a public company.

Foreign Currency Losses—Foreign currency loss was $0.02 million for 2004.

Net Income—Net income was $11.4 million for 2004.

Liquidity and Capital Resources

Historically our principal source of funds has been equity provided by our shareholders, operating cash flows and long-term borrowings. Our principal use of funds has been capital expenditures to establish and grow our fleet, maintain the quality of our dry bulk carriers, comply with international shipping standards and environmental laws and regulations, fund working capital requirements, make principal repayments on outstanding loan facilities, and pay distributions. We expect to rely upon operating cash flows, long-term borrowings, the proceeds of this offering, as well as future equity financings to implement our growth plan. If we do not acquire any additional vessels beyond the Identified Vessels, we believe that our current cash balance as well as operating cash flows will be sufficient to meet our liquidity needs for at least the next 12 months. When we acquire additional vessels, we will rely on new debt, proceeds from this or future offerings and revenues from operations to meet our liquidity needs going forward.

Our business is capital intensive and its future success will depend on our ability to maintain a high quality fleet through the acquisition of newer dry bulk vessels and the selective sale of older dry bulk vessels. These acquisitions will be principally subject to management's expectation of future market conditions as well as our ability to acquire dry bulk carriers on favorable terms.

Cash Flows

We generated $6.1 million in cash during 2004. Working capital is current assets minus current liabilities, including the current portion of long-term debt. Working capital surplus was $0.2 million as of December 31, 2004. The current portion of long-term debt included in our current liabilities was $8.6 million as of December 31, 2004.

Net Cash From Operating Activities—Net cash from operating activities was $13.9 million in 2004, principally the result of our net income of $11.4 million, including depreciation of $2.4 million.

Net Cash Used In Investing Activities—Net cash used in investing activities was $84.9 million during 2004, which reflects the acquisition costs for the Wexford Vessels.

Net Cash From Financing Activities—Net cash from financing activities was $77.1 million during 2004. The cash provided by financing activities relates primarily to the following:

•: $48.7 million in proceeds from the issuance of long-term debt to finance the acquisition of the Wexford Vessels.

•: $38.0 million in proceeds from the issuance of equity to finance the acquisition of the Wexford Vessels.

As of December 31, 2004, we had three outstanding loans with a combined outstanding principal balance of $45.7 million. These loans have principal repayments due between 2005 and 2014 (See table below).

Contractual Obligations

The following table sets forth our contractual obligations and their maturity dates as of December 31, 2004:

	Within One Year		One to Three Years		Three to Five Years		More than Five Years		Total
	(in thousands)
Bank loans⁽¹⁾	$	8,623	$	12,908	$	5,470	$	18,734	$	45,735
Vessel purchase agreement⁽²⁾		—		—		—		—		—
Management agreement⁽³⁾		187		—		—		—		187

⁽¹⁾: As of December 31, 2004, we had $45.7 million of principal indebtedness outstanding under three bank loans associated with the Wexford Vessels. We expect to repay this indebtedness from the proceeds of a new credit facility, although we can give no assurance we will enter into such a facility.
⁽²⁾: As of December 31, 2004, we had no contractual obligations under any vessel purchase agreement. However, prior to the closing of this offering, we intend to enter into a definitive agreement to purchase the Identified Vessels.
⁽³⁾: The Wexford Vessels are currently under management agreements with Franco. The agreements for each of the Wexford Vessels have a one-year renewable term from the date of execution which began 30 days prior to the delivery of each vessel. The agreements are terminable at any time after one year and may be subject to up to $50,000 in severance upon termination. The amounts indicated in the above table are the minimum contractual obligations for one year, exclusive of an additional fee of 1¹/2% of gross revenues. Upon the closing date of this offering, we intend to enter into an agreement with VOC Bulk Shipping USA, Inc. to provide commercial management for the vessels under -year agreements, for which we will pay $8,500 per vessel per month, or an aggregate of $612,000 per year, for our Combined Fleet and expect to enter into an agreement with a technical manager to provide technical management for the vessels, under -year agreements for which we will pay $ vessel per year, or $ for our Combined Fleet. In addition, prior to the closing of this offering we will enter into an administrative services agreement with Wexford, for which we will pay Wexford a fee of $1.5 million per year for our Combined Fleet.

Proposed Credit Facility

On or prior to the closing of this offering, we expect to enter into a new credit facility, consisting of a senior secured term loan and a senior secured revolving credit facility. The new credit facility may be used to refinance existing indebtedness, to fund the acquisition of the Identified Vessels, to fund future vessel acquisitions and for working capital requirements. However, we have not received a commitment from a financial institution with respect to such a facility and may not receive such a commitment or a commitment on favorable terms.

Expected acquisition of three dry bulk vessels.

We have entered into a term sheet to acquire three additional dry bulk vessels, referred to as the Identified Vessels, from entities controlled by VOC. Under our term sheet to acquire the Identified Vessels, the purchase price of each vessel will be equal to its appraised value, to be determined by the weighted average appraisal of such vessel as determined by three appraisers within 30 days before the closing of this offering. The initial appraised values for the Identified Vessels are $42.5 million for the VOC Enterprise, $29.1 million for the VOC Orchid and $54.0 million for the Clipper Sussex. Additional detail regarding the acquisition and purchase price for each vessel can be found under the section "Business—Our Company."

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. The impact of SFAS No. 123(R) could be material to our results of operations.

Quantitative and Qualitative Disclosure of Market Risk

The international dry bulk industry is a capital intensive industry, requiring significant amounts of investment. Much of this investment is provided in the form of long-term debt. Our debt usually contains interest rates that fluctuate with LIBOR. Increasing interest rates could adversely impact future earnings.

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.

Off-balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Foreign Exchange Rate Risk

We generate all of our revenues in U.S. dollars, but incur approximately 10% of our expenses in currencies other than U.S. dollars. For accounting purposes, expenses incurred in Euros are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction. At December 31, 2004, approximately 39% of our outstanding accounts payable was denominated in currencies other than the U.S. dollar (mainly the Euro).

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The preparation of those financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities, revenues

and expenses and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and conditions. We have described below what we believe are our most critical accounting policies that involve a high degree of judgment and the methods of their application. For a description of the significant accounting policies, see Note 2 to the financial statements.

Impairment of long-lived assets. We apply 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, management 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 vessels. The review for impairment of each vessel's carrying amount as of December 31, 2004, did not result in an indication of an impairment loss.

Vessels' depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated salvage value, calculated based on $150 per LWT. Management estimates the useful life of the Wexford 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. 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 and special survey costs. We follow the deferral method of accounting for dry-docking and special survey 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 and included in the calculation of the resulting gain or loss in the year of the vessel's sale.

Allowance for doubtful accounts. Revenue is based on contracted charter parties and although our business is with customers who we believe to be of the highest standard, there is always the possibility of dispute over terms and payment of freight. In such circumstances, we assess the recoverability of amounts outstanding and we estimate a provision if there is a possibility of non-recoverability. Although we believe our provisions to be based on fair judgment at the time of their creation, it is possible that an amount under dispute is not recovered and the estimated provision for doubtful recoverability is inadequate.

THE INTERNATIONAL DRY BULK SHIPPING INDUSTRY

The information and data in this section relating to the international dry bulk 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 dry bulk 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 dry bulk shipping industry.

Bulk Carrier Industry Overview

The marine industry is an essential link in international trade, with ocean-going 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 were transported by sea, comprising more than one-third of all international seaborne trade.

Dry bulk cargo is shipped in large quantities and can be easily stowed in a single hold with little risk of cargo damage. Dry bulk cargo is generally categorized as either major bulk or minor bulk. Major bulk cargo constitutes the vast majority of dry bulk cargo by weight, and includes, among other things, coal, iron ore 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 dry bulk industry.

A similar volume of 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⁽¹⁾

	Tons (Millions)	% Total
All Cargo
Dry bulk	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 Dry Bulk 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

⁽¹⁾: Provisional figures.

Dry Bulk Seaborne Trade—2004⁽¹⁾

⁽¹⁾: Provisional figures.

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 1.5 billion tons, representing 61% of total seaborne dry bulk 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 in 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 iron ore imports for 2004 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⁽¹⁾		208.1

⁽¹⁾: Provisional figures

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.

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 United States. 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 or non-free flowing or part manufactured cargo that is 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 approximately 958 million tons.

Dry Bulk Demand

The demand for dry bulk carrier capacity is determined by the underlying demand for commodities transported in dry bulk 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 dry bulk commodities increased from 1.97 billion tons to 2.46 billion tons, an increase of 25% overall.

Dry Bulk Trade Development

⁽¹⁾: Provisional figures.

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 dry bulk carrier market. In the 1990s Japan acted as the primary driver due to increased demand for seaborne trade and growth in Japanese industrial production. China has been the main driving force behind the recent increase in seaborne dry bulk 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 dry bulk carriers.

The following table illustrates China's gross domestic product growth rate compared to that of the United States 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, Asian Development Bank

While the growth in Chinese trade has principally benefited the larger sectors of the fleet (Capesize), 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 upon by other sectors. The extent to which increases in dry bulk trade have affected demand for dry bulk 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 dry bulk sector increased by a total 25% to 11,500 billion ton-miles. The table below details the growth in ton-mile demand for the main dry bulk 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 some 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

	1999	2000	2001	2002	2003	2004	99-04 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	%
Fertilizers	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 dry bulk trade routes. Dry bulk carriers can be the most versatile element of the global shipping fleets in terms of employment alternatives. However, dry bulk 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. Hence, trade distances assume greater importance in the demand equation.

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.

Major Dry Bulk 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 United States, 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. While this is the traditional definition of a Capesize bulk carrier, 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 Kamsarmax—which are 82 - 85,000 dwt, but which are able to transit the Panama Canal with a full cargo. Thus a more modern definition of Capesize would be based on vessels over 100,000 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.

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 30,000 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 30,000 dwt, which carry exclusively minor bulk cargoes. Historically, the Handysize dry bulk 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 dry bulk 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.

Dry Bulk Carrier Fleet Development—Deliveries v. Scrappings

Source: Drewry

The chart below shows bulk carrier fleet development between 1990 and March 2005 and how the orderbook as a percentage of the fleet has fluctuated throughout this period.

Dry Bulk Carrier Fleet and Orderbook Development

Source: Drewry

The following tables illustrate the size and composition of the world dry bulk carrier fleet as of March 2005.

Dry Bulk Carrier Fleet—March 2005

	Current Fleet				Orderbook
Size ('000 dwt)	No.	Dwt (Million)	% of Fleet		No.	Dwt (Million)	% of 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 nine 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		583		598		625		661
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		70		89		129		206
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		1,040		1,081		1,095		1,170
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		125		87		238		271
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	1,892		1,932		1,989		2,034		2,096
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		231		200		238		298
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	%
Handysize (10-30,000 dwt)
No. of Vessels	2,117		2,027		1,997		1,924		1,922
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		73		45		60		58
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	5,540		5,582		5,665		5,678		5,849
Dwt (in millions)	276.7		287.3		295.7		302.7		316.7
Vessels on order	681		499		421		665		833
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 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 the end of March 2005.

Leading Panamax Bulk Carrier Owners

	No. of Ships	Total Dwt	Avg. Age (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	281	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.

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.

Dry Bulk Carrier Orderbook—March 2005

	2005		2006		2007		2008+		Total
Size ('000 dwt)	2005		2006		2007		2008+		Total		% of fleet
Size ('000 dwt)	No.	Dwt	No.	Dwt	No.	Dwt	No.	Dwt	No.	Dwt	% of 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 sector includes 68 vessels with a Panamax design (as per previous note).

The graph below details the age profile of the dry bulk carrier fleet as of the end of March 2005.

Dry Bulk Carrier Age Profile—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.

The following table indicates the scrapping rates of dry bulk carriers for the period 1999 to 2004.

Dry Bulk 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	4	3	8	2	1
	Dwt (millions)	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	11	28	18	7	1
	Dwt (millions)	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	40	40	25	29	0.0
	Dwt (millions)	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 (p to 35,000 dwt)		47.4	46.4	44.2	43.4	42	41.9
	No. of Vessels	66	50	62	64	25	4
	Dwt (millions)	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	105	123	115	63	6
	Dwt (millions)	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 dry bulk sector have been demolished is 26 years. Even though there has been little variation in the age at which dry bulk vessels are scrapped, many well-maintained vessels continue to trade to 30 years or more. Owners are also more likely to stretch the trading life of a vessel during periods of high freight rates.

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 was a feature of the market in 2004, absorbed additional tonnage and therefore tightened the underlying supply/demand balance.

Charter Market

Dry bulk 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.

•: 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 is normally agreed upon 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 dry bulk 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 dry bulk carrier categories. However, because demand for larger dry bulk 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 dry bulk 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 dry bulk 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.

Time Charter Rates—12-month period, prompt delivery (US$ per day)

Source: Drewry

The preceding chart illustrates the one-year time charter rates for Handymax, Panamax and Capesize dry bulk carriers between 1994 and March 2005.

Dry bulk charter hire rates for all sizes of vessel followed a similar pattern over the historical period. In 2003 and 2004, rates for all sizes of dry bulk carriers strengthened appreciably to historically high levels. The driver of this dramatic upsurge in charter rates was primarily the high level of demand for raw materials imported by China. Rates in 2005 started out at slightly lower levels, but remain relatively high compared to history.

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. A panel of shipbrokers determines the rates.

Baltic Panamax Index—Index Points

Source: Baltic Exchange

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 number of newbuilding resales seen in 2003 and 2004.

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 U.S. 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

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 substantially over the last 18 months. The table below shows the historical series for secondhand values for a 5-or 10-year-old vessel in each sector of the dry bulk fleet.

Dry Bulk Carrier Second Hand Prices (US$ million)

Source: Drewry

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.

BUSINESS

Our Company

We are a newly formed Marshall Islands company that will own and manage dry bulk carriers that transport a variety of dry bulk commodities including major bulks, such as coal, iron ore and grains, and minor bulks, such as bauxite, phosphate, fertilizers and steel products, along worldwide shipping routes. Prior to this offering, we are a majority owned subsidiary of Wexford, an SEC registered investment advisor with approximately $2.5 billion of assets under management as of March 31, 2005.

Our initial operating fleet will consist of three modern dry bulk carriers to be contributed prior to the closing of this offering by Wexford. The Wexford Vessels have a combined carrying capacity of 190,508 dwt and weighted average age by market value of 8.5 years. Contemporaneously with the closing of this offering, we will acquire an additional three dry bulk vessels from entities controlled by VOC, which have a combined carrying capacity of 174,595 dwt and a weighted average age by market value of 3.0 years. Together, these six ships comprise our Combined Fleet, which will have a combined carrying capacity of 365,103 dwt and weighted average age by market value of 5.8 years. A description of our fleet follows in the table below. We believe these acquisitions will allow us to expand our fleet in a manner accretive to our earnings.

Vessel Name	Flag	Vessel Type	Size (dwt)	Year Built	Shipyard
Wexford Vessels
Anita	Malta	Panamax	72,495	1999	Koyo Dock, Japan
Koby	Malta	Panamax	72,495	1998	Imbari S.B., Japan
Paige	Malta	Handymax	45,518	1994	Tsuneishi, Zosen, Japan
Identified Vessels
VOC Orchid	Bahamas	Handymax	45,512	1996	Jiangnan, China
VOC Enterprise	Bahamas	Ultrahandymax	52,483	2005	Tsuneishi Heavy Industries, Philippines
Clipper Sussex	Hong Kong	Panamax	76,600	2005	Sasebo, Japan

Under our term sheet to acquire the Identified Vessels, the purchase price of each vessel will be equal to its appraised value. The appraised value of each vessel will be the weighted average appraisal of such vessel as determined by three agreed appraisers within 30 days prior to the closing of this offering. The purchase price of each vessel will be paid 75% in cash and 25% in shares of our common stock, which will be issued to VOC Investment. We currently anticipate that the aggregate purchase price of the three Identified Vessels will be approximately $ , of which $ would be paid in cash and $ would be paid by issuance of approximately shares of our common stock. The seller of the Identified Vessels is not required to complete the sale of the vessel to us if the appraised value of such vessel is not equal to at least 90% of its initial appraised value. The initial appraised values of the Identified Vessels are $42.5 million for the VOC Enterprise, $29.1 million for the VOC Orchid and $54.0 million for the Clipper Sussex. In addition to the purchase price, we expect to incur approximately $ for the current assets of the Identified Vessels, such as fuel, lubricants, spare parts and stores, as well as approximately $ for other costs and expenses. We expect to take delivery of the Identified Vessels contemporaneously with the closing of this offering.

We expect to employ our fleet of modern dry bulk carriers in the spot charter market, under period time charters and in dry bulk carrier pools. We believe that this employment strategy will allow us to benefit from the predictable cash flows provided by time charters while also realizing increased margins which can be achieved on the spot market. Our goal is to create a diversified fleet of dry bulk

carriers capable of supplying a broad spectrum of transportation solutions to customers on a worldwide basis.

Our Fleet Managers

The operations of the Wexford Vessels are currently managed by Franco, a Panamanian company. The Wexford Vessels currently have management agreements under which Franco provides the vessels with a wide range of shipping services such as technical support and maintenance, insurance, chartering, financial and accounting services, for a monthly fee of $15,200 per vessel plus 1.25% of gross revenue.

Our Competitive Strengths

We believe that we possess a number of strengths that distinguish our Company within the dry bulk shipping industry:

Our Growth Strategy

We intend to grow our fleet and our margins as we seek to become a leading vessel provider in the dry bulk shipping sector. The principal elements of our growth strategy are as follows:

•: Strategically grow our fleet. We believe that the dry bulk shipping industry is highly fragmented and can be consolidated. We intend to participate in this consolidation and grow our fleet through the timely acquisition of high quality second hand dry bulk carriers. Our goal is to create a diversified fleet of dry bulk carriers, across all sizes, which will be capable of supplying a broad spectrum of global transportation solutions to our customers worldwide. We intend to continually monitor market conditions for opportunities to acquire modern second hand vessels that represent favorable investment opportunities.
•: Pursue balanced and opportunistic charter strategy. We intend to employ our fleet on an opportunistic basis in the spot charter market, under period time charters and in dry bulk carrier pools managed by third parties. We believe this chartering strategy will balance the predictability of earnings achieved through time charters with the opportunity to realize superior charter rates in the spot market and thus maximize our return on our vessel investment. We also intend, however, to continually monitor market conditions and relevant global macroeconomic trends and adjust our strategy in order to take advantage of the full variety of options available in the chartering market.
•: Leverage operational and financial model. We believe that the Transaction will result in managerial and operational efficiencies for our Combined Fleet. The increased scale of the Company will allow us to achieve lower capital costs than previously realized. We believe that these benefits will continue to be realized as we add to our fleet. Additionally, we believe that an expanded fleet operated by a professional management team should attract high quality, high volume customers over time. As a result, we believe our fleet acquisition strategy will enhance revenue and profit potential.

Our Principal Equity Sponsor

Wexford was formed in 1994. As of March 31, 2005, Wexford assets under management were approximately $2.5 billion, consisting of approximately $1.5 billion in hedge funds and approximately $1.0 billion in private equity investments. Wexford has made private equity investments in many different sectors with particular expertise in bankruptcy/distressed, energy/natural resources, real estate, technology/telecommunications and transportation. Wexford has made a number of successful investments in the shipping sector and made its first private equity shipping investment in 1995, when it purchased the first of five tankers which were later merged into General Maritime Corporation as part of its initial public offering in 2001. Wexford was a significant owner of that company until 2004. From 1999 until 2003, Wexford owned a significant equity position in Seabulk International.

Corporate Matters; Administrative Services Agreement

We are a Marshall Islands company that was formed in May 2005. Our chief executive officer and chief financial officer, under the guidance of our board of directors, manage our business as a holding company.

Prior to the closing of this offering, we will enter into an administrative services agreement with Wexford to provide us with general management, oversight and administrative functions, including the services of our chief executive officer and chief financial officer and accounting, cash management and treasury services. Under this agreement we will pay Wexford a fee of $1.5 million per year for our Combined Fleet, plus an additional $14,000 per month for each new vessel we acquire. The administrative services agreement will have an initial term of three years and may be extended for one or more years by mutual agreement of us and Wexford in writing at least six months prior to the end of the initial term. The agreement is subject to early termination by us or by Wexford for "cause." Under the agreement, "cause," in relation to early termination by us, is defined as fraud or willful misconduct in relation to the performance of Wexford's responsibilities under the terms of the agreement or the indictment or conviction of Wexford of a felony. "Cause" in relation to early termination by Wexford is defined as our failure to pay an amount due under the agreement, if we have been notified in writing of such failure. If we terminate the agreement prior to the end of its term without "cause," or if Wexford terminates with "cause," we are required to pay Wexford the amount it would have earned if the agreement had not been subject to early termination.

Pursuant to the administrative services agreement, Wexford has agreed to give us a right of first refusal with respect to any purchase, lease or similar investment opportunities in Capesize, Panamax, Handymax or Handysize dry bulk vessels presented to or originated by Wexford or us, excluding the following:

•: any opportunity that constitutes an investment of any nature whatsoever in a publicly-held company or any derivative transactions relating or indexed to the equity or debt of a publicly-held company; or
•: any investment opportunity that does not relate to Capesize, Panamax, Handymax or Handysize dry bulk vessels.

Pursuant to the administrative services agreement, we have agreed to issue options to our employees, officers and consultants to purchase shares of our common stock representing a 6% ownership interest in us as of the completion of this offering. The options will vest in¹/36 equal amounts at the end of each calendar month during the initial term of the agreement, but the options will be fully vested if Wexford terminates the agreement for "cause" or if we terminate the agreement other than for "cause." The exercise price for the options will be equal to the initial public offering price hereof.

Chartering of the Fleet

We do not employ personnel to run our vessel operating and chartering business on a day-to-day basis. We will outsource substantially all of our commercial functions relating to the operation and employment of our vessels to our Commercial Manager pursuant to a management agreement with an initial term expected to be one year. Technical functions relating to the operation of our vessels will be outsourced to our Technical Manager pursuant to a management agreement with an initial term expected to be one year.

After the closing of this offering, we, through our Commercial Manager, expect to actively manage the employment of our fleet between the "spot charter" market (through voyage charters and time charters), which charters generally last from 10 days to four months, "period time charters," which can

last up to several years, and pools managed by third parties. A spot or voyage charter is generally a contract to carry a specific cargo from a load port to a discharge port for an agreed upon total amount. Under spot charters, we pay voyage expenses such as port, canal and fuel costs. A spot market trip time charter and a period time charter are generally contracts to charter a vessel for a fixed period of time at a set daily rate. Under time charters, the charterer pays voyage expenses such as port, canal and fuel costs. Under both types of charters, we pay for vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs. We are also responsible for each vessel's intermediate and special survey costs. Pools have the size and scope to combine spot market voyages, trip time charters, period time charters and contracts of affreightment with freight forward agreements for hedging purposes, to perform more efficient vessel scheduling thereby increasing fleet utilization. Alternatively, vessels can be chartered under "bareboat" contracts whereby the charterer is responsible for the vessel's maintenance and operations, as well as all voyage-related expenses.

Vessels operating on period time charter provide more predictable cash flows, but can yield lower profit margins than vessels operating in the spot market during periods characterized by favorable market conditions. Vessels operating in the spot market generate revenues that are less predictable but may enable us to capture increased profit margins during periods of improvements in dry bulk rates although we are exposed to the risk of declining dry bulk rates, which may be higher or lower than those rates at which we have time chartered our vessels. We are constantly evaluating opportunities to increase the number of our dry bulk carriers employed on time charters, but only expect to enter into additional time charters if we can obtain contract terms that satisfy our criteria.

Spot charters are normally for periods of 10 days to four months while period time charters can range from several months to several years. At the present time all of the Wexford Vessels are operated under time charters.

Although we have not previously done so, we may from time to time utilize forward freight agreements, referred to as FFAs, that enable us to enter into contractual obligations to sell the spot charter market forward and thereby reduce our exposure to a potential deterioration of the charter market. The FFA market provides us with the flexibility to hedge our exposure to potential market decline if we cannot find suitable fixed rate time charter market opportunities that will enable us to secure stable cash flows. Our policy is to use the FFA market for hedging purposes, we do not enter into such contracts for speculative purposes.

Customers

During the year ended December 31, 2004, each of the Wexford Vessels' four customers accounted for more than 10% of such vessels' revenue, namely Australian Wheat Board Ltd. (49%), Fratelli D'Amato (24%), Armada Bulk Carriers Ltd. (15%) and Sk Shipping Co. Ltd. (12%).

Properties

We do not own or lease any properties. Our administrative services are provided by Wexford and our chief executive officer and chief financial officer maintain offices at Wexford's principal place of business.

Competition

We expect to 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. Our Commercial Manager will arrange our charters (whether spot charters, period time charters, bareboat charters or pools) through the use of brokers, who negotiate the terms of the charters based on market conditions. We compete primarily with other owners of dry

bulk carriers in the Panamax, Handymax and Ultrahandymax sectors. Ownership of dry bulk carriers is highly fragmented and is divided among state controlled and independent bulk carrier owners.

Charters for our vessels are negotiated by our Commercial Manager utilizing a worldwide network of shipbrokers. These shipbrokers advise our Commercial Manager on a continuous basis of the availability of cargo for any particular vessel. There may be as many as five shipbrokers involved in any one charter. The negotiation for a charter typically begins prior to the completion of the previous charter in order to avoid any idle time. The terms of the charter are based on industry standards.

Environmental and Other Regulations

Government regulation significantly affects the ownership and operation of our vessels. We are subject to international conventions, national, state and local laws and regulations in force 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 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 dry bulk 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 substantial compliance with environmental laws and regulations applicable to us as of the date of this prospectus. 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. Environmental laws and regulations are periodically changed and may impose increasingly strict 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 value, all of which could have a material adverse effect on our financial condition and results of operations.

Environmental Regulation—International Maritime Organization ("IMO").

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 maritime pollutants, including standards on packaging, 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 maritime pollutants by sea.

The MARPOL Protocol of 1997, Annex VI—Regulations for the Prevention of Air Pollution from Ships, was adopted by the IMO on September 26, 1997, and will enter into force on May 19, 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. Malta has not ratified Annex VI, but as of March 31, 2005, twenty-two signatory countries including Denmark, Finland, Greece, Germany, Japan, Norway, Singapore, Switzerland and the United Kingdom, among others, had ratified it and may enforce it in their territorial waters. Under Annex VI, ships built before the May 19, 2005 effective date must obtain an International Air Pollution Prevention Certificate evidencing compliance with Annex VI not later than either the first dry-docking 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. A plan to comply with the Annex VI regulations is already in place and will be fully effective once Annex VI comes into force. 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 or new conventions, laws and regulations may be adopted that could adversely affect our ability to manage our vessels.

The operation of our vessels is also affected by the requirements set forth in the IMO's International Management Code for the Safe Operation of Ships and Pollution Prevention, or ISM Code. The ISM Code requires shipowners 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 shipowner 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. Currently, each of the vessels in the fleet is ISM code-certified. However, there can be no assurance that such certification will be maintained indefinitely.

Environmental Regulations—The U.S. Oil Pollution Act of 1990 ("OPA").

The U.S. Oil Pollution Act of 1990, or OPA, established an extensive regulatory and liability regime for the protection and clean-up 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 U.S. waters, which includes the United States' territorial sea and its 200 nautical mile exclusive economic zone. Although OPA is primarily directed at oil tankers, which are not operated by us, it also applies to non-tanker vessels, including dry bulk 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 oil from the vessel due to operational activities or casualties. Our manager 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 dry bulk vessel (subject to possible adjustment for inflation). These limits of liability do not apply if an incident was directly caused by violation of applicable U.S. 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 clean-up, 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 for each of our vessels pollution liability coverage insurance in the amount of $1 billion per incident. If the damages from a catastrophic spill were to exceed our insurance coverage, it could have an adverse effect on our business or 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 the OPA. The Coast Guard has implemented regulations requiring evidence of financial responsibility in the amount of $900 per gross ton for vessels other than tank vessels, which includes the OPA limitation on liability of $600 per gross ton applicable to dry bulk vessels and the CERCLA liability limit of $300 per gross ton for vessels not carrying hazardous substances 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 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 manager will comply with the Coast Guard regulations by providing evidence of financial responsibility from third party entities that are acceptable to the Coast Guard evidencing sufficient self-insurance.

The 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 evidence of financial responsibility for a responsible party. 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 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 this kind 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. The Company intends to comply with all applicable state regulations in the ports where the Company's vessels call.

Environmental Regulation—Other Environmental Initiatives.

The European Union is considering legislation that will affect the operation of vessels and the liability of owners for oil pollution. It is difficult to predict what legislation, if any, may be promulgated by the European Union or any other country or authority.

The IMO has several conventions pending that could affect us. In 1996, the IMO has adopted an International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances ("HNS") by Sea (the "HNS Convention"), which will become effective eighteen months after ratification by twelve countries. As of March 31, 2005, eight countries had ratified the HNS Convention. HNS include oils, other liquid substances defined as noxious or dangerous, liquefied gases, ignitable liquid substances, dangerous, hazardous and harmful materials and substances carried in packaged form, and solid bulk materials defined as possessing chemical hazards. The HNS Convention introduces strict liability and compulsory insurance requirements for damages including pollution damages as well as damages due to fire or explosion, including personal injury and property damage. For ships above 2,000 gross tons, the limits of liability will be approximately 10 SDR (about $12.8 million) plus 1,500 SDR will be added for each unit of tonnage from 2001 to 50,000; and 360 SDR for each unit of tonnage in excess of 50,000 units of tonnage. The total possible amount the shipowner is liable for is limited to 100 million SDR (about $128 million). The exact limits of liability will be tied to an International Monetary Fund unit of account called a Special Drawing Right (SDR), which varies according to a basket of currencies.

In 2001, the IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the "Bunker Oil Convention"). The Bunker Oil Convention will become effective twelve months after eighteen states ratify it. As of March 31, 2005, six states had ratified it. The Bunker Oil Convention, if ratified by a sufficient number of countries, will cover pollution damage only and will require compulsory insurance coverage.

We do not expect these IMO Conventions to have a material adverse effect on our operating costs.

The Clean Water Act

A United States District Court has ruled that the U.S. Environmental Protection Agency ("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 effect 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, or 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 went 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, 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;
•: 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 will implement the various security measures addressed by the MTSA, SOLAS and the ISPS Code and ensure that our vessels attain compliance with all applicable security requirements within the prescribed time periods. We do not believe these additional requirements will have a material financial impact on our operations.

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. In addition, where surveys are required by international conventions and corresponding laws and ordinances of a flag state, the classification society often undertakes them on application or by official order, acting on behalf of the authorities 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:

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 funds 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 shipowner 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 subject parts of the vessel would be surveyed within a five-year cycle.

The next special surveys for the Wexford Vessels are due in August 2008, January 2009 and June 2009.

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 dry-docked every 30 to 36 months for inspection of the underwater parts and for repairs related to inspections. If any defects are found, the classification society 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 Societies. All our vessels are certified as being "in class" by Nippon Kaiji Kyokai. All new and second hand 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 date of closing, we have no obligation to take delivery of the vessel.

Risk of Loss and Liability Insurance

General

The operation of any dry bulk vessel includes risks such as mechanical failure, physical damage, 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 or 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 U.S. market. While we maintain hull and machinery insurance, war risk 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 and Machinery Insurance

We have obtained marine hull and machinery and war risk insurance, which includes the risk of actual or constructive total loss, for all of our vessels. The vessels are each covered up to at least fair market value, with particular average deductibles in the amount of $75,000 per vessel per accident.

We also maintain increased value insurance for each of our vessels. Under the increased value insurance, in the event of total loss of a vessel we will be able to recover the sum insured under the increased value policy in addition to the sum insured under the hull and machinery policy. Increased value insurance also covers excess liabilities which are not recoverable in full by the hull and machinery policies by reason of under insurance.

Protection and Indemnity Insurance

Protection and indemnity insurance is provided by mutual protection and indemnity associations, or P&I Clubs, which cover our-third party liabilities in connection with our shipping activities. This includes third-party liability and other related expenses resulting from injury or death of crew, passengers and other third parties, 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 13 P&I Clubs that comprise the International Group insure approximately 90% of the world's commercial tonnage and have entered into a pooling agreement to reinsure each association's liabilities. The International Group of P&I Clubs exist to arrange collective insurance and reinsurance for P&I Clubs, to represent the views of ship owners 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 Club providing coverage for its ship owner 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.

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 $5 million up to a limit of about $4.25 billion. For a layer of claims between $50 million and $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, which is a member of the International Group, we are subject to calls payable to the association based on its claim records as well as the claim records of all other members of the individual associations, and members of the pool of P&I Clubs comprising the International Group.

Legal Proceedings

We are not currently a party to any material lawsuit that, if adversely determined, would have a material adverse effect on our financial position, results of operations or liquidity. As such, we do not believe that pending legal proceedings, taken as a whole, should have any significant impact on our financial statements. From time to time in the future we may be subject to legal proceedings and claims

in the ordinary course of business, principally personal injury and property casualty claims. Those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. We have not been involved in any legal proceedings which may have, or have had a significant effect on our 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 financial position, results of operations or liquidity.

Exchange Controls

Under Marshall Islands law, 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 shares of our common stock.

MANAGEMENT

Executive Officers, Directors and Key Employees

The following table sets forth information regarding our current executive officers, directors and key employees as of March 31, 2005:

Name		Age		Position
Frederick B. Simon		50		Chief Executive Officer and Director
Jay L. Maymudes		44		Chief Financial Officer and Director

Frederick B. Simon has been our chief executive officer and a member of our board of directors since 2005. His services are provided to us pursuant to our agreement with Wexford. Mr. Simon joined Wexford in 1995 and became a Principal in 2001. Mr. Simon focuses primarily on investments in the Wexford Private Equity Funds. He has served on the boards and creditors' committees of a number of public and private companies in which Wexford has held investments. From 1984 to 1994, Mr. Simon was Executive Vice President and a Partner of Greycoat Real Estate Corporation, the U.S. arm of Greycoat PLC, a London Stock Exchange company. While at Greycoat he was involved in both real estate development and investment. From 1980 to 1984, Mr. Simon was a senior lending officer in the real estate division of Citibank N.A.

Jay L. Maymudes has been our chief financial officer and a member of our board of directors since 2005. His services are provided to us pursuant to our agreement with Wexford. Mr. Maymudes joined Wexford in 1994, became a Principal in 1997 and serves as Wexford's Chief Financial Officer. From 1988 to 1994, Mr. Maymudes was the Chief Financial Officer of Dusco, Inc., a real estate investment advisory firm which managed publicly-traded and privately-held real estate investment trusts. He is a certified public accountant. Mr. Maymudes is a director of Republic Airways Holdings, Inc. Mr. Maymudes is also a director of several privately-held companies in which Wexford has an investment.

Committees of the Board of Directors

We have established an executive committee and upon the closing of this offering will establish a compensation committee and an audit committee. Our executive committee acts in respect of matters delegated to it by the full board of directors. The executive committee consists of Messrs. Simon and Maymudes. Our compensation committee will review and recommend to the board of directors the salaries and benefits for all employees, consultants, directors and other individuals compensated by us. The compensation committee will also administer our stock option and other employee benefit plans. The audit committee will review our internal accounting procedures and will consider and report to the board of directors with respect to other auditing and accounting matters, including the selection of our independent auditors, the scope of annual audits, fees to be paid to our independent auditors and the performance of our independent auditors. Our compensation committee and audit committee will be comprised of "independent directors" consistent with the rules of the Securities and Exchange Commission.

Director Compensation

We will pay each of our non-employee directors an annual fee of $ for each fiscal year in which they serve as a director. In addition, each non-employee director will receive an additional fee of $ per year for each committee on which each director serves (as well as an additional annual fee of $ per year for each committee chairmanship held by each director). Each non-employee director will automatically be granted options to purchase shares of our common stock under our 2005 Equity Incentive Plan on the day prior to the commencement of the initial public offering of our common stock at an exercise price equal to the initial public offering price. Each director who first

becomes a non-employee director after the initial public offering of our common stock will automatically be granted options to purchase shares of our common stock under our 2005 Equity Incentive Plan on the first trading day following his or her commencement of service as a non-employee director. In each subsequent year, in conjunction with the annual meeting, each non-employee director will generally be granted options to purchase shares of our common stock under our 2005 Equity Incentive Plan (for a description of the terms and conditions of the options granted to our non-employee directors, see "The 2005 Equity Incentive Plan—Non-Employee Director Stock Options" below).

The Board of Directors

We currently have two members on our board of directors. Each of our directors holds office until his or her successor is duly elected and qualified or until his or her resignation or removal, if earlier, as provided in our by-laws. No family relationship exists among any of the directors or executive officers. Prior to the closing of this offering, we will add at least three independent directors to our board.

Observer and Designee Rights

Until the second annual meeting of shareholders following the closing of this offering, we have agreed to grant VOC Investment the right to appoint one observer to our board of directors. If VOC Investment requests the right to designate a member of our board of directors then the right to designate an observer will terminate and Wexford will vote, and cause its affiliates to vote, its shares in favor of such designee. VOC Investment's right to appoint an observer or request a member of our board will terminate if VOC Investment holds less than 10% of our issued and outstanding shares of common stock.

Executive Compensation

We did not pay any compensation to our executive officers for the fiscal year ended December 31, 2004. We currently have a chief executive officer and a chief financial officer whose services are supplied by Wexford pursuant to the terms of an administrative services agreement and we currently have no plans to hire any additional employees.

Stock Options

To date, we have not granted any options to purchase shares of our common stock. In conjunction with our public offering, we intend to grant stock options to our employees, officers and consultants and stock options to our non-employee directors at exercise prices equal to the public offering price hereof. It is intended that the employee stock options will vest monthly on a pro rata basis for three years, and the director stock options will vest over four years, commencing on the date of grant.

The 2005 Equity Incentive Plan

The following is a description of the material terms of our 2005 Equity Incentive Plan, which will become effective prior to the commencement of this offering. You should, however, refer to the exhibits that are a part of the registration statement for a copy of the 2005 Equity Incentive Plan.

Type of Awards. The 2005 Equity Incentive Plan provides for grants of options to purchase shares of our common stock, including options intended to qualify as Incentive Stock Options (within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended), which we refer to as ISOs, and options which do not qualify as ISOs, which we refer to as NQSOs, restricted shares of our common stock, restricted stock units, the value of which is tied to shares of our common stock and

other equity-based awards related to our common stock, including unrestricted shares of our common stock, stock appreciation rights and dividend equivalents.

Available Shares. A maximum of shares of our common stock has been reserved for issuance, or reference purposes, under the 2005 Equity Incentive Plan, subject to adjustment upon certain changes in capitalization (as described below). New awards may be granted under the 2005 Equity Incentive Plan with respect to shares of our common stock covered by any award that terminates or expires by its terms (by cancellation or otherwise) or with respect to shares of our common stock that are withheld or surrendered to satisfy a recipient's income tax or other withholding obligations or tendered to pay the purchase price of any award.

Eligibility. Awards under the 2005 Equity Incentive Plan may be granted to any of our (or any of our subsidiaries' or affiliates') directors, officers or other employees, including any prospective employee, and to any of our (or any of our subsidiaries' or affiliates') advisors or consultants selected by the compensation committee of our board of directors.

Administration. The 2005 Equity Incentive Plan will be administered by the compensation committee of our board of directors or by our board of directors. However, our board of directors may, in its sole discretion, delegate to one or more of our executive officers the authority to grant options to employees who are not officers or directors on terms specified by our board of directors. The compensation committee will have full discretion and authority to make awards under the 2005 Equity Incentive Plan, to apply and interpret the provisions of the 2005 Equity Incentive Plan and to take such other actions as may be necessary or desirable in order to carry out the provisions of the 2005 Equity Incentive Plan. The determinations of the compensation committee on all matters relating to the 2005 Equity Incentive Plan and the options, restricted stock, restricted stock units and other equity-based awards granted thereunder will be final, binding and conclusive.

Stock Options. The compensation committee may grant ISOs and NQSOs in such amounts and subject to such terms and conditions as it may determine. The exercise price of an option granted under the 2005 Equity Incentive Plan will not be less than the fair market value of our common stock on the date of grant. Unless sooner terminated or exercised, options will generally expire ten years from the date of grant. Payment for shares acquired upon the exercise of an option may be made in cash and/or such other form of payment as may be permitted by the compensation committee from time to time, which may include previously-owned shares of our common stock or payment pursuant to a broker's cashless exercise procedure. Except as otherwise permitted by the compensation committee, no option may be exercised more than 30 days after termination of the optionee's employment or other service or, if the optionee's service is terminated by reason of disability or death, one year after such termination. If, however, an optionee's employment is terminated for "cause" (as defined in the 2005 Equity Incentive Plan), options held by such optionee will immediately terminate.

Restricted Stock and Restricted Stock Units. The compensation committee may grant restricted shares of our common stock in amounts, and subject to terms and conditions (such as time vesting and/or performance-based vesting criteria) as it may determine. Generally, prior to vesting, the recipient will have the rights of a shareholder with respect to the restricted stock, subject to any restrictions and conditions as the compensation committee may include in the award agreement. The 2005 Equity Incentive Plan permits us (or one of our subsidiaries or affiliates) to make loans to recipients of restricted stock. Among other things, these loans will bear interest at a fair interest rate as determined by the compensation committee and, unless otherwise determined by the compensation committee, shall be secured by shares of our common stock having an aggregate fair market value at least equal to the principal amount of the loan. The compensation committee may grant restricted stock units, the value of which is tied to shares of our common stock, in amounts, and subject to terms and conditions, as the compensation committee may determine.

Other Equity-Based Awards. The compensation committee may grant other types of equity-based awards related to our common stock under the 2005 Equity Incentive Plan, including the grant of unrestricted shares of our common stock, stock appreciation rights, and dividend equivalents, in amounts and subject to terms and conditions as the compensation committee may determine. These awards may involve the transfer of actual shares of common stock or the payment in cash or otherwise of amounts based on the value of shares of our common stock.

Non-Employee Director Stock Options. Each non-employee director will be automatically granted options to purchase shares of common stock on the day prior to the commencement of the initial public offering of our common stock with an exercise price equal to the initial public offering price. Each director who first becomes a non-employee director after the initial public offering of our common stock will automatically be granted options to purchase shares of our common stock under our 2005 Equity Incentive Plan on the first trading day following his or her commencement of service as a non-employee director. In addition, each non-employee director will generally be granted an option to purchase shares of common stock on the date of each annual meeting of shareholders at which he or she is reelected as a non-employee director. A non-employee director is any member of our board of directors who is not employed by or a consultant to us of any of our subsidiaries and includes any director who serves as one of our officers but is not paid by us for this service. The exercise price per share covered by an option granted shall be equal to the fair market value of the common stock on the date of grant. Upon the cessation of a non-employee director's service, such individual will generally have 180 days to exercise all options that are exercisable on the termination date. If a director's service terminates by reason of his or her death or disability, his or her beneficiary will generally have 12 months to exercise any portion of a director option that is exercisable on the date of death. Except as otherwise provided herein, if not previously exercised, each option granted shall expire on the tenth anniversary of the date of grant. Upon a change in control as defined in the 2005 Equity Incentive Plan, vesting of the options held by a non-employee director will accelerate and become fully vested.

Adjustments Upon Changes in Capitalization. Upon any increase, reduction, or change or exchange of the common stock for a different number or kind of shares or other securities, cash or property by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares, or any other corporate action that affects our capitalization, an equitable substitution or adjustment may be made in the aggregate number and/or kind of shares reserved for issuance (or reference purposes) under the 2005 Equity Incentive Plan, the aggregate number and/or kind of shares for which prospective awards to non-employee directors are made, the kind, number and/or exercise price of shares or other property subject to outstanding options granted under the 2005 Equity Incentive Plan, and the kind, number and/or purchase price of shares or other property subject to outstanding awards of restricted stock, restricted stock units, stock appreciation rights, dividend equivalents and other equity-based awards granted under the 2005 Equity Incentive Plan, as may be determined by the compensation committee, in its sole discretion. The compensation committee may provide, in its sole discretion, for the cancellation of any outstanding awards in exchange for payment in cash or other property of the fair market value of the shares of our common stock covered by such awards (whether or not otherwise vested or exercisable), reduced, in the case of options, by the exercise price thereof, or for no consideration in the case of awards which are not otherwise then vested or exercisable.

Nonassignability. Except to the extent otherwise provided in an award agreement or approved by the compensation committee, no award granted under the 2005 Equity Incentive Plan will be assignable or transferable other than by will or by the laws of descent and distribution and all awards will be exercisable during the life of a recipient only by the recipient (or in the event of incapacity, his or her guardian or legal representative).

Amendment and Termination. The 2005 Equity Incentive Plan may be amended or terminated at any time by our board of directors, subject, however, to shareholder approval in the case of certain material amendments if required by applicable law, such as an increase in the number of shares available under the 2005 Equity Incentive Plan or a change in the class of individuals eligible to participate in the 2005 Equity Incentive Plan.

U.S. Federal Income Tax Consequences. The following is a brief description of the material U.S. federal income tax consequences generally arising with respect to awards granted under the 2005 Equity Incentive Plan.

In general, the grant of an option will have no income tax consequences to the recipient or to us. Upon the exercise of an option, other than an ISO, the recipient generally will recognize ordinary income equal to the excess of the fair market value of the shares of common stock subject to the option on the date of exercise over the exercise price for such shares (i.e., the option spread), and we generally will be entitled to a corresponding tax deduction in the same amount. Upon the sale of the shares of our common stock acquired pursuant to the exercise of an option, the recipient will recognize capital gain or loss equal to the difference between the selling price and the sum of the exercise price plus the amount of ordinary income recognized on the exercise.

A recipient generally will not recognize ordinary income upon the exercise of an ISO (although, on exercise, the option spread is an item of tax preference income potentially subject to the alternative minimum tax) and we will not receive any deduction. If the stock acquired upon exercise of an ISO is sold or otherwise disposed of within two years from the grant date or within one year from the exercise date, then gain realized on the sale generally is treated as ordinary income to the extent of the ordinary income that would have been realized upon exercise if the option had not been an ISO, and we generally will be entitled to a corresponding deduction in the same amount. Any remaining gain is treated as capital gain.

If the shares acquired upon the exercise of an ISO are held for at least two years from the grant date and one year from the exercise date and the recipient is employed by us at all times beginning on the grant date and ending on the date three months prior to the exercise date, then all gain or loss realized upon the sale will be capital gain or loss and we will not receive any deduction.

In general, an individual who receives an award of restricted stock will recognize ordinary income at the time such award vests in an amount equal to the difference between the value of the vested shares and the purchase price for such shares, if any, and we generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the recipient at such time.

The recipient of an award of restricted stock units generally will recognize ordinary income upon the issuance of the shares of common stock underlying such restricted stock units in an amount equal to the difference between the value of such shares and the purchase price for such units and/or shares, if any, and we generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the recipient at such time.

With respect to other equity-based awards, upon the payment of cash or the issuance of shares or other property that is either not restricted as to transferability or not subject to a substantial risk of forfeiture, the participant will generally recognize ordinary income equal to the cash or the fair market value of shares or other property delivered, less any amount paid by the participant for such award. Generally, we will be entitled to a deduction in an amount equal to the ordinary income recognized by the participant.

RELATED PARTY TRANSACTIONS

Transactions with Wexford Capital LLC

Prior to the closing of this offering, we will enter into an administrative services agreement with Wexford to provide us with general management, oversight and administrative functions, including the services of our executive officers, accounting, cash management and treasury services. Under this agreement we will pay Wexford a fee of $1.5 million per year for our Combined Fleet, plus an additional $14,000 per month for each new vessel we acquire. The administrative services agreement has an initial term of three years and may be extended for one or more years by mutual agreement of us and Wexford in writing at least six months prior to the end of the initial term. The agreement is subject to early termination by us or by Wexford for "cause". Under the agreement, "cause," in relation to early termination by us, is defined as fraud or willful misconduct in relation to the performance of Wexford's responsibilities under the terms of the agreement or the indictment or conviction of Wexford of a felony. "Cause" in relation to early termination by Wexford is defined as our failure to pay an amount due under the agreement, if we have been notified in writing of such failure. If we terminate the agreement prior to the end of its term without "cause," or if Wexford terminates with "cause," we are required to pay Wexford the amount it would have earned if the agreement had not been subject to early termination.

•: any opportunity that constitutes an investment of any nature whatsoever in a publicly-held company or any derivative transactions relating or indexed to the equity or debt of a publicly-held company; or
•: any investment opportunity that does not relate to Capesize, Panamax, Handymax or Handysize dry bulk vessels.

Transactions with VOC Investment

Under our term sheet to acquire the Identified Vessels, the purchase price of each vessel will be equal to its appraised value, to be determined by the weighted average appraisal of such vessel as determined by three appraisers within 30 days before the closing of this offering. The initial appraised values for the Identified Vessels are $42.5 million for the VOC Enterprise, $29.1 million for the VOC Orchid and $54.0 million for the Clipper Sussex. Additional detail regarding the acquisition and purchase price for each vessel can be found under the section "Business—Our Company."

Under our term sheet to acquire the Identified Vessels we have agreed that until the second annual meeting of shareholders following the closing of this offering, VOC Investment will have the right to appoint one observer to our board of directors. If VOC Investment requests the right to designate a member of our board of directors then the right to designate an observer will terminate and Wexford will, and will cause its affiliates to, vote the shares held by it in favor of such designee.

VOC Investment's right to appoint an observer or request a member of our board will terminate if VOC Investment holds less than 10% of our issued and outstanding shares of common stock.

VOC Investment will be entitled to registration rights under the terms of a registration rights agreement to be entered into. Subject to the limitations specified in this agreement, VOC Investment's rights include the following:

Piggyback Registration Rights. VOC Investment has the right to have its shares registered for resale under the Securities Act if we register any of our securities, either for our own account or for the account of other security holders, except with respect to this offering or registrations on Form S-4 and Form S-8, and subject to the right of underwriters to limit the number of shares included in an underwritten offering.

Demand Registration Rights. VOC Investment has a right, at its request, to have its shares registered for resale under the Securities Act one time. VOC Investment has agreed not to exercise its registration right, if at all, until 180 days following the effective date of this prospectus.

We will bear all registration expenses incurred in connection with any of the above registrations. VOC Investment will pay its own underwriting discounts, selling commission and stock transfer taxes applicable to the sale of its securities.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of our common stock that will be owned upon the consummation of the offering by:

•: each person known by us to be a beneficial owner of more than 5% of our common stock;
•: each of our named executive officers;
•: each of our directors; and
•: all directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting or investment power with respect to the securities. Except as otherwise indicated, the persons or entities listed below have sole voting and investment power with respect to all shares of common stock beneficially owned by them, subject to community property laws where applicable. The table assumes that the underwriters' 30-day option to purchase additional shares of common stock is not exercised.

		Percent Beneficially Owned
Name and Address	Shares Beneficially Owned Prior to Offering	Before Offering		After Offering
Wexford Capital LLC⁽¹⁾			%		%
VOC Invest Ltd.			%		%
Frederick B. Simon⁽¹⁾			%		%
Jay L. Maymudes⁽¹⁾			%		%
All directors and executive officers as a group (2 persons)			%		%

*: Less than 1%.
⁽¹⁾: The address of each of these persons is c/o Wexford Capital LLC, Wexford Plaza, 411 West Putnam Avenue, Greenwich, Connecticut 06830.

DESCRIPTION OF CAPITAL STOCK

The following is a description of the material terms of our articles of incorporation and by-laws that will be in effect immediately prior to the consummation of this offering. We refer you to our articles of incorporation and by-laws, 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 articles of incorporation, is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Marshall Islands Business Corporations Act. Our articles of incorporation and by-laws do not impose any limitations on the ownership rights of our shareholders.

Authorized Capitalization

As of the date of this prospectus, we have shares of common stock outstanding out of 75,000,000 shares authorized to be issued. Upon consummation of this offering, we will have outstanding shares of common stock or shares if the underwriters' 30-day option is exercised in full.

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. Upon the dissolution or liquidation or the sale of all or substantially all of 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 of 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. All shares of common stock to be sold in this offering, when issued and paid for, will be fully paid and nonassessable. 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

We are authorized to issue 5,000,000 shares of preferred stock. There are currently no shares of preferred stock outstanding. Our board of directors has the authority to establish series of preferred shares, with such preferences, rights and qualifications, limitations or restrictions as they shall determine.

Registration Rights

Our Articles of Incorporation and By-laws

Under our by-laws, annual shareholder meetings will be held at a time and place selected by our board of directors. The meetings may be held in or outside of the Marshall Islands. Special meetings may be called by our board of directors, or by the chairman of the board, or by the president. Our board of directors may set a record date between 15 and 60 days before the date of any meeting to determine the shareholders that will be eligible to receive notice of and vote at the meeting.

Directors

Our directors are elected by a plurality of the votes cast at a meeting of the shareholders by the holders of shares entitled to vote in the election. There is no provision for cumulative voting. Accordingly, a plurality of the votes cast in any election of directors may elect all of the directors standing for election. As a result, as long as Wexford owns a majority of our common stock, it will control all matters put to a vote of shareholders, including the election of directors and the sale of the Company. We will be controlled by Wexford as long as they own or control a majority of our common stock, and they may make decisions with which you disagree.

The board of directors may change the number of directors only by a vote of not less than a majority of the entire board. Each director shall be elected to serve until his successor shall have been duly elected and qualified, except in the event of his death, resignation or removal. The board of directors has the authority to fix the amounts which shall be payable to the members of our board of directors for attendance at any meeting or for services rendered to us.

Shareholder Action by Written Consent

Our by-laws 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 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 in which our Marshall Islands office is situated or in any appropriate court in any jurisdiction in which the Company's shares are primarily traded on a local or national securities exchange. The value of the shares of the dissenting shareholder is fixed by the court after reference, if the court so elects, to the recommendations of a court-appointed appraiser.

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.

Anti-takeover Provisions of our Charter Documents

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

Amendments to our By-laws

Our articles of incorporation grant our board of directors the authority to amend and repeal our by-laws 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 articles of incorporation, our board of directors has the authority, without any further vote or action by our shareholders, to issue up to 5,000,000 shares of preferred stock and to designate the rights, preferences and privileges of each series of preferred stock, which may be greater than the rights attached to the common stock. It will not be possible to state the actual effect of the issuance of any shares of preferred stock on the rights of holders of common stock until the board of directors determines the specific rights attached to that preferred stock. The effects of issuing preferred stock could include one or more of the following:

•: restricting dividends on the common stock;
•: diluting the voting power of the common stock;
•: impairing the liquidation rights of the common stock; or
•: delaying or preventing a change of control.

No Cumulative Voting

The BCA provides that shareholders are not entitled to the right to cumulative votes in the election of directors unless our articles of incorporation provide otherwise. Our articles of incorporation prohibit cumulative voting.

Election and Removal of Directors

Our by-laws require parties other than the board of directors to give advance written notice of nominations for the election of directors. Our by-laws also provide that our directors may be removed only for cause and only upon the affirmative vote of the holders of at least two-thirds of the outstanding shares of our capital stock entitled to vote for those directors or by our board. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.

Limited Actions by Shareholders

Our articles of incorporation and our by-laws provide that any action required or permitted to be taken by our shareholders must be effected at an annual or special meeting of shareholders or by the unanimous written consent of our shareholders. Our by-laws provide that only our board of directors, or our chairman of the board, or our president may call special meetings of our shareholders and the business transacted at the special meeting is limited to the business brought before the meeting by the board of directors, the chairman or the president.

Special Meetings of Shareholders

Our by-laws provide that special meetings of the shareholders may be called only by the chairman of our board of directors, our president or a majority of our entire board of directors and may not be called by the holders of common stock.

Advance Notice Procedure for Director Nominations and Shareholder Proposals

Our by-laws provide that adequate notice must be given to nominate candidates for election as directors or to make proposals for consideration at annual meetings of shareholders. Notice of a shareholder's intent to nominate a director or propose business to be considered by the shareholders must be delivered to our principal executive offices not less than 45 days nor more than 75 days prior to the first anniversary of the date of the preceding year's annual meeting of shareholders.

Limitation On Liability and Indemnification Matters 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 by-laws also contain provisions indemnifying our directors and officers to the fullest extent permitted by law. We believe that these indemnification provisions are useful to attract and retain qualified directors and executive officers.

Our by-laws provide that we must indemnify our directors and officers to the fullest extent authorized by law.

The limitation of liability and indemnification provisions in our articles of incorporation and by-laws 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 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 And Registrar

The transfer agent and registrar for our common stock is .

Quotation

We currently intend to apply to list our common stock on the under the symbol " ".

MARSHALL ISLANDS COMPANY CONSIDERATIONS

Our corporate affairs are governed by our articles of incorporation and by-laws 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 U.S. 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 by-laws.		•	May be held at such time or place as designated in the certificate of incorporation or the by-laws, 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 stockholders 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.

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.	•	Any action required to be taken by meeting of stockholders may be taken without meeting if consent is in writing and signed by the holders of outstanding stock having the number of votes necessary to take action at a meeting.
•	Any person authorized to vote may authorize another person or persons 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, a certificate of incorporation or by-laws may specify the number of shares 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 specification, 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.
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 by-laws, the shareholders or action of the board.	•	Number of board members will be fixed by the by-laws, unless the certificate of incorporation fixes the number of directors, in which case a change in the number can 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
•	Shareholders 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:

Dissenter's Rights of Appraisal (Continued)
	•	Alters or abolishes any preferential right of any outstanding shares having preference; or
	•	Creates, alters or abolishes any provision or right in respect of 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 the plaintiff is such a holder at the time of bringing the action and that he was such a holder at the 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 stockholder or a corporation, it is to be averred in the complaint that the plaintiff was a stockholder of the corporation at the time of transaction of which he complains or that such stockholder's stock thereafter devolved time upon such stockholder by operation of law.
•	Complaint will 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 will not be discontinued, compromised or settled, without the approval of the High Court of the Republic.
•	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.

TAX CONSIDERATIONS

The following is a summary of certain material Malta and U.S. federal income tax considerations relating to the acquisition, ownership or disposition of shares of our common stock. This summary is based on the laws as in force and as applied in practice, all as currently in effect and all of which are subject to change, possibly with retroactive effect.

This summary deals only with holders who purchase our common stock in connection with this offering. This summary does not discuss all of the tax considerations that may be relevant to holders of our common stock in light of their particular circumstances or to holders of our common stock that may be subject to special rules, such as financial institutions, regulated investment companies, real estate investment trusts, holders subject to the alternative minimum tax, insurance companies, pension funds, tax-exempt organizations, partnerships or other pass-through entities, dealers in securities or currencies, traders who elect to mark to market their securities or persons holding the common stock as part of a hedging or constructive sale transaction, "straddle," conversion transaction, or other integrated transaction, or holders whose functional currency is not the U.S. dollar.

If you are considering purchasing shares of common stock, you should consult your own tax advisors concerning the tax consequences arising in your particular situation under U.S. federal, state, local or foreign law.

Malta Tax Considerations

The following are certain material Maltese tax consequences in relation to our Maltese subsidiaries and us as their shareholders. The Maltese subsidiaries are incorporated under the laws of the Republic of Malta.

Under current Maltese law, the Maltese subsidiaries are not subject to tax on any of their income provided that:

(a) they are in possession of a valid shipping organization license issued under the Merchant Shipping Act, Chapter 234 of the laws of Malta, and

(b) their ships are registered in Malta and are declared as "tonnage tax ships" by the Malta Registrar of Shipping, and

(c) their income is derived from shipping activities, namely the international carriage of goods or passengers by sea or the provision of other services by a ship which are ancillary or related thereto, or such other shipping activities as prescribed in regulations by the Maltese authorities, and

(d) all relevant registration fees and tonnage taxes have been paid.

No capital gains tax is payable on the transfer of any shares in a Maltese licensed shipping organization. No stamp duty is payable on the acquisition, subscription, transfer or new issue of shares in such a shipping organization.

Dividends paid by the Maltese subsidiaries to their non-Maltese shareholders are treated by the Maltese Inland Revenue Department as not being subject to Maltese withholding taxes in view of the non-resident status of the shareholders.

U.S. Federal Income Tax Considerations

The following are certain material U.S. federal income tax consequences of our activities to us and holders of our common stock. This summary addresses only U.S. federal income tax considerations and does not address any state, local or foreign tax considerations, or tax considerations under other federal tax laws. This summary is based on the Internal Revenue Code of 1986, as amended, or the "Code", existing and proposed Treasury regulations promulgated under the Code, published rulings, and

administrative and judicial interpretations of the Code, all as currently in effect and all of which are subject to change, possibly with retroactive effect. In addition, the summary below is based, in part, on the description of our business as described in "Business" above and assumes that we conduct our business as described in that section. We have not requested a ruling from the U.S. Internal Revenue Service, or IRS, with respect to any of the U.S. federal income tax considerations regarding this particular offering. As a result, the IRS could disagree with portions of this discussion.

We have made, or will make, special U.S. tax elections in respect of each of our ship-owning or operating subsidiaries that are potentially subject to tax as a result of deriving income attributable to the transportation of cargoes to or from the United States. The effect of the special U.S. tax elections is to ignore or disregard the subsidiaries for which elections have been made as separate taxable entities and to treat them as part of their parent, the "Company." Therefore, for purposes of the following discussion, the Company, and not the subsidiaries subject to this special election, will be treated as the owner and operator of the vessels and as receiving the income therefrom.

U.S. Federal Income Taxation of Our Company

Taxation of Operating Income: In General

Unless exempt from U.S. federal income tax under the rules discussed below, a foreign corporation is subject to U.S. federal income tax on its "shipping income" that is treated as derived from sources within the United States, to which we refer as "U.S. source shipping income." For tax purposes, "U.S. source shipping income" includes 50% of shipping income that is attributable to transportation that begins or ends in the United States, but that does not both begin and end in the United States.

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 solely from sources outside the United States will not be subject to any U.S. federal income tax.

Shipping income attributable to transportation exclusively between U.S. ports is considered to be 100% derived from U.S. sources. However, we are not permitted to engage in the transportation of cargoes that produces 100% U.S. source income.

As set forth in the notes to the financial statements, we have assumed that we will be subject to the 4% tax on our gross U.S. source shipping income imposed under Section 887 of the Code without allowance for deductions. As further discussed below, it is possible that we will be eligible for an exemption from this tax under Section 883 of the Code.

Exemption of Operating Income from U.S. 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 qualified foreign country, which is one that grants an "equivalent exemption" from tax to corporations organized in the United States in respect of each category of shipping income for which exemption is being claimed under Section 883 and to which we refer as the "Country of Organization Test"; and

(2)

either

(A): more than 50% of the value of its stock is beneficially owned, directly or indirectly, by qualified stockholders, which includes individuals who are "residents" of a qualified foreign country, to which we refer as the "50% Ownership Test," or

(B): its stock is "primarily and regularly traded on an established securities market" in a qualified foreign country or in the United States, to which we refer as the "Publicly-Traded Test"; or
(C): it is a "controlled foreign corporation", or CFC, as described below and, under regulations promulgated under Section 883 in August 2003, it satisfies the "50% Inclusion Test" as described below, to which, collectively, we refer as the "CFC Test."

The Marshall Islands, the jurisdiction where we are incorporated, has been officially recognized by the IRS as a qualified foreign country that grants the requisite "equivalent exemption" from tax in respect of each category of shipping income we earn and currently expect to earn in the future. Therefore, we will be exempt from U.S. federal income tax with respect to our U.S. source shipping income if we satisfy any one of the 50% Ownership Test, the Publicly-Traded Test or the CFC Test.

It is currently anticipated that after the offering, we will be a CFC and therefore, our principal basis for qualifying for exemption rests upon satisfying the CFC Test. If we are not a CFC after the offering our principal basis for qualifying for the exemption will rest upon satisfying the Publicly-Traded Test described in detail below. We do not currently anticipate a circumstance under which we would be able to satisfy the 50% Ownership Test after the offering.

CFC Test

We will be a controlled foreign corporation, or a CFC, for U.S. federal income tax purposes so long as more than 50 percent of our common stock, our sole class of issued and outstanding stock, is owned by U.S. Holders (defined below) each of whom owns 10 percent or more of such common stock, after application of specified attribution rules. We refer to such 10 percent U.S. Holders as "U.S. Stockholders."

The regulations interpreting Section 883, 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 U.S. Stockholders for such taxable year which we refer to as the "50% Inclusion Test." At the time the regulations were promulgated in 2003, income derived from the international operation of ships was a separate category of "Subpart F income." Subpart F income is required to be included in income of U.S. Stockholders under the CFC tax regime rules described below.

Subsequently, in October 2004, the American Jobs Creation Act of 2004, or the Jobs Act, was enacted and eliminated income derived by a foreign corporation from the international operation of ships as a category of includible "Subpart F" income. Under the law as it existed prior to the Jobs Act, we believe we would have satisfied the 50% Inclusion Test and qualified for the Section 883 Exemption on the basis of our status as a CFC immediately following the offering. However, as a result of the enactment of the Jobs Act, it is possible the IRS could assert that we do not satisfy the 50% Inclusion Test. Consequently, our qualification for the Section 883 exemption as a result of our status as a CFC is not free from doubt.

Publicly-Traded Test

We will satisfy the Publicly-Traded Test in the event our stock is "primarily and regularly traded on an established securities market" in a qualified foreign country or in the United States. The regulations under Section 883 of the Code provide, in pertinent part, that stock of a foreign corporation will be considered to be "primarily traded" on an established securities market in a country if the number of shares of each class of stock that are traded during any taxable year on all established securities markets in that country exceeds the number of shares in each such class that are traded during that

year on established securities markets in any other single country. 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 an established securities market in the United States.

Under the regulations, our common stock will be considered to be "regularly traded" on an established securities market if one or more classes of our stock representing more than 50% of our outstanding shares, by both total combined voting power of all classes of stock entitled to vote and total value, are listed on the market, to which we refer as the "listing threshold." Because our common stock, which will be our sole class of issued and outstanding stock, will be listed on an established securities market in the United States, we will satisfy the listing threshold after the offering.

It is further required in order to satisfy the "regularly traded" requirement that with respect to each class of stock relied upon to meet the listing threshold, (i) such class of stock is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year or¹/6 of the days in a short taxable year; and (ii) the aggregate number of shares of such class of stock traded on such market 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 the 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.

Notwithstanding the foregoing, the 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 each of whom owns 5% or more of the vote and value of such class of our outstanding 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% Stockholders," the regulations permit us to rely on those persons that are identified on Schedule 13G or 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 identified that is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Stockholder for such purposes.

In the event the 5 Percent Override Rule is triggered with respect to a class of stock the regulations provide that the 5 Percent Override Rule will nevertheless not apply if we can establish that among the closely-held group of 5% Stockholders, there are sufficient 5% Stockholders that are considered to be "qualified stockholders" for purposes of Section 883 to preclude non-qualified 5% Stockholders in the closely-held group from owning 50% or more of the value of our stock for more than half the number of days during the taxable year.

We believe that, immediately after the offering, we will be subject to the 5 Percent Override Rule. Since U.S. stockholders are not "qualified stockholders" under the regulations, we do not expect to be able to establish that among the group of our 5% Stockholders, there are sufficient 5% Stockholders that are considered to be "qualified stockholders" for purposes of Section 883 of the Code to preclude non-qualified 5% Stockholders from owning 50% or more of our common stock for more than half the number of days during the taxable year. If the identity or ownership of our 5% Stockholders changes in the future, we may be able to satisfy the Publicly-Traded Test at that time. We can give no assurance, however, that this will be the case.

Taxation In Absence of Section 883 Exemption

If the benefits of Section 883 of the Code are unavailable, our U.S. source shipping income would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions to the extent that such income is not considered to be "effectively connected" with the conduct of a U.S. trade or business, as described below. Since under the sourcing rules described above, no more than 50% of our shipping income would be treated as being U.S. source shipping income, the maximum effective rate of U.S. federal income tax on our gross shipping income would never exceed 2% under the 4% gross basis tax regime.

To the extent our U.S. source shipping income is considered to be "effectively connected" with the conduct of a U.S. trade or business, as described below, any such "effectively connected" United States source shipping income, net of applicable deductions, would be subject to U.S. federal 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 attributable to the conduct of our U.S. trade or business.

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

•: we have, or are considered to have, a fixed place of business in the United States involved in the earning of U.S. source shipping income; and
•: substantially all of our U.S. source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.

We do not 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.

If we qualify for exemption from tax under Section 883 in respect of the shipping income derived from the international operation of our vessels, then gain from the sale of any such vessel should likewise be exempt from tax under Section 883. If, however, our shipping income from such vessels does not qualify for exemption under Section 883 and assuming that any decision on a vessel sale is made from and attributable to our U.S. office, as we believe likely to be the case as we are currently structured, then any gain derived from the sale of any such vessel will be treated as derived from U.S. sources and subject to U.S. federal income tax as "effectively connected" income (determined under rules different from those discussed above) under the above described net income tax and branch profits tax regime.

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

For purposes of this summary, the term "U.S. Holder" means a beneficial owner of common stock that holds the common stock as a capital asset within the meaning of Section 1221 of the Code and that is, for U.S. federal income tax purposes:

•: a citizen or individual resident of the United States;
•: a corporation, or other entity treated as a corporation, created in or under the laws of the United States or of any political subdivision thereof;
•: an estate the income of which is subject to U.S. federal income tax regardless of its source; or

•: a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or a trust that has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner will generally depend on the status of the partner and upon the activities of the partnership. If you are a partner of a partnership holding our common stock, we suggest you consult your own tax advisor.

Distributions

Subject to the discussion of passive foreign investment companies, or PFICs, and CFCs below and other than distributions in liquidation and distributions in redemption of common stock that are treated as exchanges, any distributions made by us with respect to our common stock to a U.S. Holder will generally constitute dividends to the extent of our current and accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of such earnings and profits will be treated first as a nontaxable return of capital reducing the U.S. Holder's tax basis in the common stock to the extent of the distributions and thereafter as capital gain. Because we are not a U.S. corporation, 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 on our common stock to a U.S. Holder who is an individual, trust or estate will generally be treated as "qualified dividend income" that is taxable to such U.S. Holder at a maximum preferential tax rate of 15% (through 2008) provided that (1) the common stock is readily tradable on an established securities market in the United States; (2) we are not a PFIC for the taxable year during which the dividend is paid or the immediately preceding taxable year (see the discussion below under the heading "Passive Foreign Investment Company Status and Significant Tax Consequences"); (3) the U.S. 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. 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. Holder. Any dividends out of earnings and profits which are not eligible for these preferential rates will be taxed as ordinary income to such U.S. Holder. U.S. Holders are urged to consult their own tax advisors regarding the U.S. federal income tax rate that will be applicable to their receipt of any dividends paid with respect to our common stock. In addition, special rules may apply to any "extraordinary dividend"—generally, a dividend in an amount which is equal to or in excess of ten percent of a stockholder's adjusted basis in a share of common stock—paid with respect to our 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 non-corporate U.S. Holder from the sale or exchange of such common stock will be treated as long-term capital loss to the extent of such dividend.

Dividends with respect to our common stock generally will be classified as foreign-source "passive income" or, in certain cases, "financial services income," in computing a U.S. Holder's foreign tax credit limitations for U.S. foreign tax credit purposes. U.S. Holders should note, however, that recently enacted legislation eliminates the "financial services income" category for taxable years beginning after December 31, 2006. Under the new legislation, the foreign tax credit limitation categories are limited to "passive category income" and "general category income." The rules relating to the determination of U.S. foreign tax credits are complex, and we urge you to consult your tax advisor to determine whether and to what extent you would be entitled to these credits.

Sale, Exchange or Other Disposition of Common Stock

A U.S. Holder generally will recognize capital 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. Subject to the discussion of PFICs and CFCs below, 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. Individuals, trusts and estates currently are subject to a maximum tax rate of 15% on long-term capital gain for taxable years beginning on or before December 31, 2008. The deductibility of capital losses is subject to limitations. Gain or loss recognized by a U.S. Holder on a sale or exchange of common stock generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes.

Controlled Foreign Corporation Status and Significant Tax Consequences

Special U.S. federal income tax rules apply to a "U.S. Stockholder" (as defined above) of a CFC. It is currently anticipated that, after this offering, we will be a CFC.

Each U.S. Holder who is a U.S. Stockholder on the last day of our taxable year on which we are a CFC will be required to include his pro rata share of our "Subpart F income" in income currently as ordinary income, whether or not we make any distributions of such income. Subpart F income does not include income derived from the international operation of ships. However, Subpart F income does include, among other things, passive investment income, income from the sale or purchase of certain goods to or from a related party, certain income from the provision of services with respect to which a related party provides substantial assistance and any increase in our investments in certain property located in the United States.

Inclusions of Subpart F income will increase a U.S. Stockholder's adjusted basis in such U.S. Stockholder's common stock. Any subsequent distributions of earnings and profits attributable to previously included Subpart F income generally will be non-taxable to a U.S. Stockholder and will reduce a U.S. Stockholder's adjusted basis in the common stock.

A U.S. Stockholder's gain on the disposition of our common stock will be treated as a dividend (which may be eligible for the preferential rates applicable to "qualified dividend income" discussed above) to the extent of the U.S. Stockholder's pro rata share of our earnings and profits not previously taxed to such U.S. Stockholder as Subpart F income. This recharacterization rule would continue to apply for a period of five years after we cease to be a CFC. Any gain in excess of untaxed earnings and profits would be treated as capital gain, which may be treated as long-term capital gain as discussed above.

A U.S. Stockholder generally will also be required to annually file an information return on IRS Form 5471 reporting such U.S. Stockholder's ownership of our common stock and providing certain information regarding us. We will provide our U.S. Stockholders with the information necessary to complete Form 5471. The application of the CFC tax regimen to U.S. stockholders is complex, and U.S. Holders are urged to consult their own tax advisors if they believe they are or may be U.S. stockholders of us.

Passive Foreign Investment Company Status and Significant Tax Consequences

Special U.S. federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a PFIC for U.S. federal income tax purposes. Generally, a foreign corporation is treated as a PFIC for U.S. federal income tax purposes for any tax year if, in such tax year, either (i) 75% or more of its gross income, including its pro rata share of the gross income of any company in which it is considered to own 25% or more of the shares by value, is passive in nature (the "Income

Test"), or (ii) the average percentage of its assets during such tax year, including its pro rata share of the assets of any company in which it is considered to own 25% or more of the shares by value, which produce, or are held for the production of, passive income (determined by averaging the percentage of the fair market value of its total assets which are passive assets as of the end of each quarter of such year) is 50% or more (the "Asset Test").

The PFIC rules will not apply to any U.S. Holder for any period during which we are a CFC and such holder is a U.S. Stockholder.

Based on our current operations and future projections, we do not believe that we are, nor do we expect to become, a PFIC with respect to any taxable year. Although there is no legal authority directly on point, our belief is based principally on the position that, for purposes of determining whether we are a PFIC, the gross income we derive from our time chartering and voyage chartering activities should constitute services income, rather than rental income. Accordingly, such income should not constitute passive income, and the assets that we own and operate in connection with the production of such income, in particular, the vessels, should not constitute passive assets for purposes of determining whether we are a PFIC. We believe there is substantial legal authority supporting our position consisting of case law and IRS pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, in the absence of any legal authority specifically relating to the statutory provisions governing PFICs the IRS or a court could disagree with our position. Our belief is also based on our expectation that most of the gross income we derive will be from our time chartering and voyage chartering activities and very little, if any, of the gross income we derive will be from chartering our vessels under "bareboat" contracts as any income derived from "bareboat" contracts may constitute passive income. In addition, depending on how quickly we employ the net proceeds realized from the sale of common stock in this offering, the amount of such net proceeds and the earnings thereon may affect our PFIC status. Moreover, certain factors relevant to the PFIC determination, such as declines in the market value of our stock, are not within our control and can cause us to become a PFIC. Accordingly, there can be no assurance that we will not be deemed a PFIC in 2005 or any future tax year.

In view of the uncertainty regarding the characterization of income derived from time charters and voyage charters, our use of the net proceeds realized from the sale of the common stock in this offering, and the complexity of the issues regarding our treatment as a PFIC, U.S. Holders are urged to consult their own tax advisors for guidance as to our status as a PFIC. For those U.S. Holders who determine that we are a PFIC for 2005 or any tax subsequent year and notify us in writing of their request for the information required in order to effectuate the "QEF Election" described below, we will promptly make such information available to them.

If we are treated as a PFIC for U.S. federal income tax purposes for any year during a U.S. Holder's holding period of common stock and the U.S. Holder does not make a QEF Election or a "mark-to-market" election (both as described below), such U.S. Holder would be subject to special rules with respect to (1) any excess distribution (generally, any distributions to a U.S. Holder during a single taxable year that is greater than 125% of the average amount of distributions received by such U.S. Holder during the three preceding taxable years in respect of the common stock or, if shorter, such U.S. 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:

•: excess distribution or gain would be allocated ratably over a U.S. Holder's aggregate holding period for the common stock;
•: the amount allocated to the taxable year in which a U.S. Holder realizes the excess distribution or gain will be taxed as ordinary income and would not be "qualified dividends"; and

•: the amount allocated to each prior year, with certain exceptions, will be taxed at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such year.

Although we generally will be treated as a PFIC as to any U.S. Holder if we are a PFIC for any year during the U.S. Holder's holding period, if we cease to satisfy the requirements for PFIC classification, the U.S. Holder may avoid the consequences of PFIC classification for subsequent years by electing to recognize gain based on the unrealized appreciation in the common stock through the close of the tax year in which we cease to be a PFIC. Additionally, if we are treated as a PFIC, a U.S. Holder who acquires the common stock from a decedent would be denied the normally available step-up in tax basis for the common stock to fair market value at the date of death and instead would have a tax basis equal to the lower of the fair market value or the decedent's tax basis.

A U.S. Holder who beneficially owns shares of a PFIC must file an IRS Form 8621 (Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund) with the IRS for each tax year in which the U.S. Holder holds shares in a PFIC. This form describes any distributions received with respect to these shares and any gain realized upon the disposition of these shares.

For any tax year in which we are treated as a PFIC, a U.S. Holder of common stock may elect to treat the shares as an interest in a qualified electing fund (a "QEF Election"), in which case, the U.S. Holder would be required to include in income currently such U.S. Holder's proportionate share of our earnings and profits in years in which we are a PFIC regardless of whether distributions of our earnings and profits are actually distributed to the U.S. Holder. No portion of any such inclusions will be treated as "qualified dividend income." Any gain subsequently recognized upon the sale or other disposition by the U.S. Holder of the ordinary shares, however, generally would be taxed as capital gain and the denial of the basis step-up at death described above would not apply.

A U.S. Holder may make a QEF Election with respect to a PFIC for any tax year of the U.S. Holder. A QEF Election is effective for the year in which the election is made and all subsequent tax years of the U.S. Holder. Procedures exist for both retroactive elections and the filing of protective statements. An additional election is available to defer the payment of taxes that may result from a QEF Election, although interest must be paid on any deferred taxes. A U.S. Holder making the QEF Election must make the election on or before the due date, as extended, for the filing of the U.S. Holder's income tax return for the first tax year to which the election will apply. A U.S. Holder makes a QEF Election by completing Form 8621 and attaching it to such U.S. Holder's U.S. federal income tax return, and must satisfy additional filing requirements each year the election remains in effect.

As an alternative to a QEF Election, a U.S. Holder of common stock generally may elect to mark the common stock to market annually, recognizing ordinary income or loss (subject to certain limitations) equal to the difference, as of the close of the taxable year, between the fair market value of the shares and their adjusted tax basis. Losses would be allowed only to the extent of net mark-to-market gain accrued under the election. If a mark-to-market election with respect to the shares is in effect on the date of a U.S. Holder's death, the normally available step-up in tax basis to fair market value will not be available. Rather, the tax basis of the shares in the hands of a U.S. Holder who acquired them from a decedent will be the lesser of the decedent's tax basis or the fair market value of the ordinary shares. Once made, a mark-to-market election generally continues, unless revoked with the consent of the IRS.

The implementation of many aspects of the Code's PFIC rules requires the issuance of regulations which in many instances have yet to be promulgated and which may have retroactive effect. We cannot be sure that any of these regulations will be promulgated or, if so, what form they will take or what effect they will have on the foregoing discussion. Accordingly, and due to the complexity of the PFIC rules, U.S. Holders should consult their own tax advisors regarding our status as a PFIC and the eligibility, manner and advisability of making a QEF Election or a mark-to-market election.

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

For purposes of this summary, the term "Non-U.S. Holder" means a beneficial owner of common stock that is neither a U.S. person nor a person subject to the rules applicable to former citizens as long-term residents.

Subject to the discussion below concerning information reporting and backup withholding, dividends to a Non-U.S. Holder in respect of the common stock or gain realized by a Non-U.S. Holder on the sale, exchange or other taxable disposition of the common stock will not be subject to U.S. federal income or withholding tax unless (i) such income is effectively connected with the conduct of a trade or business within the United States by such Non-U.S. Holder (and, if required by an applicable income tax treaty as a condition for subjecting such Non-U.S. Holder to federal taxation on a net income basis, such income is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States) or (ii) in the case of a sale of common stock by a Non-U.S. Holder who is an individual, such individual was present in the United States for at least 183 days during the taxable year in which the gain is realized and other specified conditions are met.

Income that is effectively connected with the conduct of a U.S. trade or business by a Non-U.S. Holder generally will be subject to regular U.S. federal income tax in the same manner as if it were realized by a U.S. Holder. In addition, if a corporate Non-U.S. Holder recognizes "effectively connected" income, such Non-U.S. Holder may, under certain circumstances, be subject to an additional branch profits tax at a 30% rate, or at a lower rate if such Non-U.S. Holder is eligible for the benefits of an income tax treaty that provides for a lower rate.

Information Reporting and Backup Withholding

U.S. Holders

Payments in respect of the common stock that are made in the United States or by certain U.S.-related financial intermediaries may be subject to information reporting to the IRS and to U.S. backup withholding tax at rates equal to 28% through 2010 and 31% after 2010. Backup withholding will not apply, however, to a U.S. Holder that (i) is a corporation or comes within certain exempt categories, and demonstrates that fact when so required, or (ii) furnishes a correct taxpayer identification number and makes any other required certifications. Backup withholding is not an additional tax. Amounts withheld under the backup withholding rules may be credited against a U.S. Holder's U.S. tax liability, and a U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS.

Non-U.S. Holders

Non-U.S. Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on IRS Form W-8BEN, W-8ECI or W-8IMY, as applicable.

If you are a Non-U.S. Holder and you sell your common stock to or through a U.S. office of a broker, the payment of the proceeds is subject to both U.S. backup withholding and information reporting unless you certify that you are a non-U.S. person, under penalties of perjury, or you otherwise establish an exemption. If you sell your common stock through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to you outside the United States, then information reporting and backup withholding generally will not apply to that payment. However, U.S. information reporting requirements, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made to you outside the United States, if you sell your 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 reporting requirements will not apply, however, if the broker has documentary

evidence in its records that you are a non-U.S. person and certain other conditions are met, or you otherwise establish an exemption.

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

THE FOREGOING DISCUSSION OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY, EACH PROSPECTIVE INVESTOR SHOULD CONSULT WITH HIS, HER OR ITS OWN TAX ADVISER REGARDING U.S. FEDERAL, STATE, LOCAL AND NON-U.S. INCOME AND OTHER TAX CONSEQUENCES OF THE ACQUISITION, HOLDING AND DISPOSING OF THE COMMON STOCK.

SHARES ELIGIBLE FOR FUTURE SALE

Rule 144 Securities. Upon the consummation of this offering, we will have shares of common stock outstanding, assuming no exercise of the underwriters' option to purchase additional shares. All of the shares of common stock sold in this offering will be freely transferable without restriction or further registration under the Securities Act of 1933, referred to as the Securities Act, except for any of the shares that are acquired by "affiliates" as that term is defined in Rule 144. The shares of common stock held by Wexford, VOC Investment and our directors and executive officers after the offering will be "restricted" securities under the meaning of Rule 144 and may not be sold in the absence of registration under the Securities Act, unless an exemption from registration is available, including exemptions pursuant to Rule 144 or Rule 144A.

In general, under Rule 144 as currently in effect, beginning 90 days after the date of this prospectus, a person who has beneficially owned shares of our common stock for at least one year would be entitled to sell within any three-month period a number of shares that does not exceed the greater of either of the following:

•: 1% of the total number of shares of common stock then outstanding, or
•: the average weekly reported trading volume of the common stock on the during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

Sales under Rule 144 are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

Under Rule 144(k), a person who is not deemed to have been one of our "affiliates" at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner other than an "affiliate," is entitled to sell its shares without complying with the manner of sale provisions, current public information requirements, volume limitations or notice requirements of Rule 144. Therefore, unless otherwise restricted, "144(k) shares" may be sold immediately upon the completion of this offering.

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, such issuer.

We, our executive officers and directors, VOC Investment and Wexford have agreed that, without the prior written consent of Jefferies & Company, Inc. on behalf of the underwriters, we will not, during the period ended 180 days after the date of this prospectus, sell shares of common stock or take certain related actions, subject to limited exceptions, all as described under "Underwriting—Lock-up Agreements."

Rule 701. In general, under Rule 701 of the Securities Act, any of our directors, officers, consultants or advisors who purchases common stock from us in connection with a compensatory stock or option plan or other written compensatory benefit plan before the effective date of this prospectus is entitled to resell those shares 90 days after the effective date of this prospectus in reliance on Rule 144, without having to comply with certain provisions (including the holding period requirements) contained in Rule 144.

Rule 701 permits "affiliates," as defined in Rule 144, to sell their shares issued under Rule 701 without complying with the holding period requirements of Rule 144. It permits non-affiliates to sell their "Rule 701 shares" in reliance on Rule 144 without having to comply with the holding period requirements, current public information requirements, volume limitations or notice requirements of Rule 144. All holders of shares issued under Rule 701 are required to wait until 90 days after the date of this prospectus before selling those shares.

Stock Options. Following the completion of this offering, we intend to file a registration statement on Form S-8 under the Securities Act covering shares of common stock issued or reserved for issuance under the 2005 Equity Incentive Plan. The registration statement will become effective automatically upon filing. Accordingly, shares registered will, subject to vesting provisions and Rule 144 volume limitations applicable to our affiliates, be available for sale in the open market immediately after the 180-day lock-up agreements expire.

UNDERWRITING

Subject to the terms and conditions set forth in an underwriting agreement dated the date of this prospectus, each of the underwriters named below, acting through their representative, Jefferies & Company, Inc., has severally agreed to purchase from us the number of shares of common stock set forth below opposite their respective names.

Underwriters		Number of Shares
Jefferies & Company, Inc.

The underwriting agreement provides that the obligations of the several underwriters to purchase and accept delivery of the shares of common stock offered by this prospectus are subject to approval by their counsel of legal matters and to other conditions set forth in the underwriting agreement. The underwriters are obligated to purchase and accept delivery of all the shares of common stock offered hereby, other than those shares covered by the 30-day option described below, if any are purchased.

Option to Purchase Additional Shares

We have granted the underwriters an option exercisable for 30 days after the date of this prospectus to purchase from time to time up to an aggregate of additional shares of common stock at the initial public offering price less underwriting discounts and commissions. Such option may be exercised to cover over-allotments, if any, made in connection with the offering. To the extent that this option is exercised, each underwriter will be obligated, subject to satisfaction of the terms and conditions set forth in the underwriting agreement, to purchase a number of additional shares of common stock proportionate to the underwriter's initial commitment as indicated in the preceding table. We will use the net proceeds from any exercise of the underwriters' option to purchase additional shares of common stock for working capital and other corporate purposes.

Commissions and Expenses

The following table shows the initial public offering price, the underwriting discounts and commissions payable to the underwriters by us and the proceeds, before expenses, to us. Such amounts are shown assuming both no exercise and full exercise of the underwriters' 30-day option to purchase additional shares.

	Per Share		Total
	Without 30-day Option	With 30-day Option	Without 30-day Option	With 30-day Option
Initial public offering price
Underwriting discounts and commissions payable by us
Proceeds, before expenses, to us

The representative has advised us that the underwriters propose to offer the shares of common stock directly to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $ per share. The underwriters may allow, and certain dealers may reallow, a discount from the concession not in excess of $ per share of common stock to certain brokers and dealers. After this offering, the initial public offering price, concession and reallowance to dealers may be reduced by the representative. No such reduction shall change the amount of proceeds to be received by us as set forth on the cover page of this prospectus.

We estimate expenses payable by us in connection with this offering, other than underwriting discounts and commissions, will be approximately $ .

Indemnification

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act and liabilities arising from breaches of representations and warranties contained in the underwriting agreement, or to contribute to payments that the underwriters may be required to make in respect of those liabilities.

Lock-Up Agreements

We, our officers and directors, Wexford and VOC Investment have agreed, subject to specified exceptions, not to directly or indirectly:

•: offer to sell, contract to sell, or otherwise sell, dispose of, loan, pledge or grant any rights with respect to any shares of common stock or any options or warrants to purchase any shares of common stock, or any securities convertible into or exchangeable for shares of common stock, or
•: enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any shares of common stock (regardless of whether any of these transactions are to be settled by the delivery of shares of common stock, or such other securities, in cash or otherwise)

for a period of 180 days after the date of this prospectus without the prior written consent of Jefferies & Company, Inc.

This restriction terminates after the close of trading of the shares of common stock on and including the 180 days after the date of this prospectus. However, in the event that either (i) during the last 17 days of the 180-day restricted period, we release earnings results or material news or a material event relating to us occurs or (ii) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day restricted period, then in either case the expiration of the 180-day restricted period will be extended until the expiration of the 18-day period beginning on the date of the release of earnings results or the material news or the occurrence of the material event, as applicable, unless Jefferies & Company, Inc. waives, in writing, such an extension.

Jefferies & Company, Inc. may, in its sole discretion and at any time or from time to time before the termination of the 180-day restricted period, without notice, release all or any portion of the securities subject to lock-up agreements.

Listing

We currently intend to apply to list our common stock on the under the symbol " ."

Electronic Distribution

A prospectus in electronic format may be made available on websites or through other online services maintained by one or more of the underwriters of this offering, or by their affiliates. Other than the prospectus in electronic format, the information on any underwriter's website and any information contained in any other website maintained by an underwriter is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or any underwriter in its capacity as underwriter and should not be relied upon by investors.

Stabilization, Short Positions and Penalty Bids

The representative has advised us that, pursuant to Regulation M under the Securities Exchange Act of 1934, some participants in the offering may engage in transactions, including stabilizing bids, short sales and purchases to cover positions created by short sales or the imposition of penalty bids, that may have the effect of raising or maintaining the market price of shares of our common stock or preventing or retarding a decline in the market price of shares of our common stock. As a result, the price of shares of our common stock may be higher than the price that might otherwise exist in the open market.

A stabilizing bid is a bid for or the purchase of shares of common stock on behalf of the underwriters for the purpose of fixing or maintaining the price of the shares of common stock.

A short position involves a sale by the underwriters of shares of common stock in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. This short position may be either a covered short position or a naked short position. In a covered short position, the number of shares involved in the sales made by the underwriters in excess of the number of shares they are obligated to purchase is not greater than the number of shares they may purchase by exercising their option to purchase additional shares. In a naked short position, the number of shares involved is greater than the number of shares in their option to purchase additional shares. The underwriters may close out any short position by either exercising their option to purchase additional shares and/or purchasing shares in the open market. Syndicate-covering transactions involve purchases of shares of common stock in the open market after the distribution has been completed in order to cover syndicate short positions.

Penalty bids permit the representative to reclaim the selling concession otherwise accruing to an underwriter or syndicate member in connection with this offering if the shares of common stock originally sold by such underwriter or syndicate member are purchased by the representative in a stabilizing or syndicate-covering transaction and have therefore not been effectively placed by such underwriter or syndicate member.

The representative has advised us that such transactions may be effected on the or otherwise and, if commenced, may be discontinued at any time.

Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of shares of our common stock. In addition, neither we nor any of the underwriters make any representation that the underwriters will engage in these transactions or that any transaction, if commenced, will not be discontinued without notice.

Determination of Offering Price

Prior to this offering, there has not been a public market for our common stock. Consequently, the initial public offering price for our shares of common stock was determined by negotiations between us and the representative of the underwriters subject to the applicable provisions of Rule 2720 of the NASD. Among the factors considered in these negotiations were

•: the information set forth in this prospectus and otherwise available to the representative;
•: the history and the prospects for the industry in which we operate;
•: our financial information;
•: the ability of our management;
•: our business potential and earnings; and

•: the general condition of the securities markets at the time of this offering.

We offer no assurances that the initial public offering price will correspond to the price at which the common stock will trade in the public market subsequent to this offering or that an active trading market for the common stock will develop and continue after the offering.

Discretionary Sales

The underwriters do not intend to confirm sales to any accounts over which they exercise discretionary authority.

Affiliations

Certain of the underwriters or their respective affiliates have in the past performed, and may in the future perform, from time to time investment banking and other financial services for us and our affiliates for which they received or will receive advisory or transaction fees, as applicable, plus out-of-pocket expenses, of the nature and in amounts customary in the industry for these financial services.

LEGAL MATTERS

The validity of the shares of common stock offered by this prospectus and other legal matters concerning this offering relating to Marshall Islands law will be passed upon for us by Reeder & Simpson P.C. Some legal matters concerning this offering relating to United States law will be passed upon for us by Fulbright & Jaworski L.L.P., New York, New York. On matters of Marshall Islands law, Fulbright & Jaworski L.L.P. is relying upon the opinion of Reeder & Simpson P.C.

Certain legal matters related to the offering will be passed upon for the underwriters by Vinson & Elkins L.L.P., New York, New York.

INTERNATIONAL DRY BULK SHIPPING INDUSTRY DATA

The discussions contained in the sections "The International Dry Bulk Shipping Industry" and "Prospectus Summary—The Dry Bulk Shipping Industry" of this prospectus have been reviewed by Drewry Shipping Consultants, referred to as Drewry, which has confirmed to us that they accurately describe the international dry bulk 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.

EXPERTS

The financial statements of Wexford Shipping Company at May 3, 2005, appearing in this prospectus and registration statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The combined financial statements of North American Carriers Ltd. and North American Carriers II Ltd. as of December 31, 2004, and for the period from January 9, 2004 (inception) to December 31, 2004, included in this prospectus and registration statement have been audited by Ernst & Young (Hellas) certified auditors accountants S.A., independent registered public accounting firm, as stated in their report thereon appearing herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The sections in this prospectus entitled "Prospectus Summary—The Dry Bulk Shipping Industry" and "The International Dry Bulk Shipping Industry" have been reviewed by Drewry, which has confirmed to us that they accurately describe the international dry bulk shipping industry, subject to the availability and reliability of the data supporting the statistical information presented in this prospectus, as indicated in the consent of Drewry filed as an exhibit to the registration statement on Form S-1 under the Securities Act of which this prospectus is a part.

100

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the Commission a registration statement on Form S-1, which includes amendments, exhibits, schedules and supplements, under the Securities Act and the rules and regulations under the Securities Act, for the registration of the common stock offered by this prospectus. Although this prospectus, which forms a part of the registration statement, contains all material information included in the registration statement, parts of the registration statement have been omitted from this prospectus as permitted by the rules and regulations of the Commission. For further information about us and the common stock offered by this prospectus, please refer to the registration statement. Statements contained in this prospectus as to the contents of any contracts or other document referred to in this prospectus are not necessarily complete and, where such contract or other document is an exhibit to the registration statement, each such statement is qualified in all respects by the provisions of such exhibit, to which reference is now made. The registration statement can be inspected and copied at prescribed rates at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at other public reference facilities maintained by the Commission. The public may obtain information regarding the Washington, D.C. Public Reference Room by calling the Commission at 1-800-SEC-0330. In addition, the registration statement is publicly available through the Commission's site on the Internet's World Wide Web, located at: http://www.sec.gov.

After the offering, we will be subject to the full informational requirements of the Securities Exchange Act. To comply with these requirements, we will file periodic reports, proxy statements and other information with the Commission.

101

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and uncertainties. These include statements about our expectations, plans, objectives, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "management believes," "we believe," "we intend" and similar expressions. These statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed for the reasons described in this prospectus. You should not place undue reliance on these forward-looking statements.

The forward-looking statements speak only as of the date on which they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

102

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 a flag state, that takes place every year.

Bareboat Charter—Contract or hire of a ship under which the shipowner is usually paid a fixed amount of charter hire rate for a certain period of time during which the charterer is responsible for the operating costs and voyage costs of the vessel as well as arranging for crewing. Also known as "demise charter."

Bulk—Unpackaged homogeneous (non-liquid) cargo poured into the hold of a vessel.

Bunkers—Heavy fuel oil used to power a vessel's engines.

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 charter 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 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 metric tons. A vessel's DWT or total deadweight is the total weight the vessel can carry when loaded to a particular load line.

Draft—Vertical distance between the waterline and the bottom of the vessel's keel.

Dry bulk—Non-liquid cargoes of commodities shipped in an unpackaged state.

Dry bulk Carriers—Vessels which are specially designed and built to carry large volumes of non-liquid cargoes of commodities shipped in an unpackaged state.

Dry-docking—The removal of a vessel from the water for inspection and/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.

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 Pollution Prevention, as adopted by the IMO.

103

Metric Ton—A unit of weight equal to 1,000 kilograms.

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, dry-docking and surveys, whether or not scheduled.

OPA—The U.S. Oil Pollution Act of 1990 (as amended).

Orderbook—A reference to currently placed orders for the construction of vessels (e.g., the Panamax orderbook).

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.

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. A charter under which the ship-owner is paid charter hire rate on a per day basis for a certain period of time, the shipowner being 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—See "Metric Ton".

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. Vessel operating expenses exclude fuel cost, port expenses, agents' fees, canal dues and extra war risk insurance, as well as commissions, which are included in "voyage expenses".

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 due to 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, as well as commissions.

Weighted Average Age by Market Value—Weighted average age by market value of a fleet is the weighted average age taking into account the age of the ships in the fleet and is weighted by the relative appraised market value of the ships in the fleet.

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Index to Financial Statements

		Page
Wexford Shipping Company
	Report of Ernst & Young LLP Independent Registered Public Accounting Firm	F-2
	Balance Sheet as of May 3, 2005 (date of incorporation)	F-3
	Notes to Financial Statement	F-4
North American Carriers Ltd. and North American Carriers II Ltd.
	Combined Financial Statements
	Report of Ernst & Young (Hellas), Independent Registered Public Accounting Firm	F-5
	Combined Balance Sheet as of December 31, 2004	F-6
	Combined Statement of Income for the period from January 9, 2004 (inception) to December 31, 2004	F-7
	Combined Statement of Owner's Investment for the period from January 9, 2004 (inception) to December 31, 2004	F-8
	Combined Statement of Cash Flows for the period from January 9, 2004 (inception) to December 31, 2004	F-9
	Notes to the Combined Financial Statements	F-10

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholder of Wexford Shipping Company

We have audited the accompanying balance sheet of Wexford Shipping Company. The balance sheet is the responsibility of the Company's management. Our responsibility is to express an opinion on the balance sheet based on our audit.

We conducted our audit in accordance with 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. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audit 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, the balance sheet referred to above presents fairly, in all material respects, the financial position of the Company on May 3, 2005, in conformity with U.S. generally accepted accounting principles.

	/s/ ERNST & YOUNG LLP
May 11, 2005 New York, New York

F-2

WEXFORD SHIPPING COMPANY

Balance Sheet
May 3, 2005

ASSETS
Subscription Receivable		$	1,000

TOTAL ASSETS		$	1,000

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:		$	—

Stockholder's Equity
Registered Shares, par value $.001; 75,000,000 shares authorized, 1000 shares issued and outstanding			1
Preferred Shares par value $.001 5,000,000 shares authorized, no shares issued and outstanding			—
Additional Paid-in Capital			999
Retained Earnings			—

	Total stockholder's equity		1,000

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY		$	1,000

The accompanying notes are an integral part of this financial statement.

F-3

WEXFORD SHIPPING COMPANY

Notes To Financial Statements

1. Basis of Presentation and General Information:

The accompanying financial statement includes the accounts of Wexford Shipping Company (the "Company"). The Company will be engaged in the ocean transportation of dry bulk cargoes worldwide through the ownership and operation of dry bulk vessels. The Company is a holding company incorporated on May 3, 2005, under the laws of the Republic of the Marshall Islands. The Company is a wholly owned subsidiary of Callidus Investors LLC.

The Company is in the process of acquiring vessels. Our initial operating fleet will consist of three modern dry bulk carriers to be contributed by affiliates prior to the closing of this public offering. We have entered into a term sheet to acquire three additional dry bulk vessels, from entities controlled by VOC Shipholdings B.V. Under our term sheet to acquire the vessels, the purchase price of each vessel will be equal to its appraised value, to be determined by the weighted average appraisal of such vessel as determined by three appraisers within 30 days before the closing of an offering. The initial appraised value for the vessels was approximately $125 million.

The Subscription Receivable was paid on May 11, 2005.

F-4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of
North American Carriers Ltd. and North American Carriers II Ltd.

We have audited the accompanying combined balance sheet of North American Carriers Ltd and North American Carriers II Ltd., ("the Company"), as of December 31, 2004 and the related combined statements of income, owners? investment and cash flows for the period from January 9, 2004 (inception) to December 31, 2004. 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. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audit 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, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of North American Carriers Ltd. and North American Carriers II Ltd. at December 31, 2004 and the combined results of their operations and their cash flows for the period from January 9, 2004 (inception) to December 31, 2004, in conformity with U.S. generally accepted accounting principles.

ERNST & YOUNG (HELLAS) CERTIFIED AUDITORS ACCOUNTANTS S.A.

Athens, Greece
May 10, 2005.

F-5

NORTH AMERICAN CARRIERS LTD. AND NORTH AMERICAN CARRIERS II LTD.

Combined Balance Sheet
December 31, 2004
(Expressed in thousands of US Dollars)

ASSETS
CURRENT ASSETS
	Cash and cash equivalents	$	6,148
	Restricted cash		2,960
	Accounts receivable—trade, net		542
	Inventories (Note 3)		127
	Prepaid insurance and other		165

Total current assets			9,942

FIXED ASSETS
	Vessels at cost (Note 1)		84,914
	Accumulated depreciation		(2,429	)

Total fixed assets			82,485

OTHER NON CURRENT ASSETS
	Deferred Charges, net (Note 4)		326
	Restricted cash		450

TOTAL ASSETS		$	93,203

LIABILITIES AND OWNERS' INVESTMENT
CURRENT LIABILITIES
	Current portion of long-term debt (Note 5)	$	8,592
	Accounts payable		346
	Accrued liabilities (Note 6)		252
	Unearned revenue		567

Total current liabilities			9,757

DEFERRED INCOME			68

LONG-TERM DEBT, net of current portion (Note 5)			36,956

OWNERS' INVESTMENT
	Capital (Note 8)		35,018
	Retained earnings		11,404

Total owners' investment			46,422

TOTAL LIABILITIES AND OWNERS' INVESTMENT		$	93,203

The accompanying notes are an integral part of these combined financial statements.

F-6

NORTH AMERICAN CARRIERS LTD. AND NORTH AMERICAN CARRIERS II LTD.

Combined Statement of Income
For the period from January 9, 2004 (inception) to December 31, 2004
(Expressed in thousands of US Dollars)

REVENUES
	Voyage revenues (Note 1)	$	18,962
EXPENSES:
	Voyage expenses and commissions (Notes 1 and 9)		1,231
	Vessel operating expenses (Note 9)		2,404
	Depreciation		2,429
	Amortization of deferred charges		124
	Management fees (Note 1)		363
	General and administrative expenses		250
	Foreign currency losses		21

	Operating income		12,140

OTHER INCOME (EXPENSES):
	Interest and finance costs (Notes 5 and 11)		(825	)
	Interest income		89

			(736	)

Net Income		$	11,404

The accompanying notes are an integral part of these combined financial statements.

F-7

NORTH AMERICAN CARRIERS LTD. AND NORTH AMERICAN CARRIERS II LTD.

Combined Statement of Owners' Investment
For the period from January 9, 2004 (inception) to December 31, 2004
(Expressed in thousands of US Dollars, unless otherwise stated)

			Common Stock
	Comprehensive Income		# of Shares	Par Value (in US Dollars)		Additional Paid-in Capital			Total Capital			Retained Earnings		Total
Issuance of share capital		—	1,100	$	11		—			—			—		—
Additional paid-in capital		—	—		—	$	38,018		$	38,018			—	$	38,018
Refund of additional paid-in capital		—	—		—		(3,000	)		(3,000	)		—		(3,000	)
Net income	$	11,404	—		—		—			—			11,404		11,404

Comprehensive income	$	11,404	—		—		—			—			—		—

BALANCE, December 31, 2004			1,100	$	11	$	35,018		$	35,018		$	11,404	$	46,422

The accompanying notes are an integral part of these combined financial statements.

F-8

NORTH AMERICAN CARRIERS AND NORTH AMERICAN CARRIERS II LTD.

Combined Statement of Cash Flows
For the period from January 9, 2004 (inception) to December 31, 2004
(Expressed in thousands of US Dollars)

Cash Flows from (used in) Operating Activities
Net income			$	11,404
	Adjustments to reconcile net income to net cash provided by operating activities
		Depreciation		2,429
		Amortization of deferred charges		124
		Amortization of financing fees		30
		Payments for dry-docking and special survey		(450	)
	(Increase) Decrease in:
		Accounts receivable trade, net		(542	)
		Inventories		(127	)
		Prepaid insurance and other		(165	)
	Increase (Decrease) in:
		Accounts payable		346
		Accrued liabilities		252
		Unearned revenue		567
		Deferred Income		68

Net Cash from Operating Activities				13,936

Cash Flows used in Investing Activities
		Vessel acquisitions		(84,914	)

Net cash used in investing activities				(84,914	)

Cash Flows from (used in) Financing Activities
		Proceeds from long-term debt		48,685
		Payments of financing costs		(217	)
		Payments of long-term debt		(2,950	)
		Restricted cash		(3,410	)
		Additional paid-in capital		38,018
		Refund of additional paid-in capital		(3,000	)

Net cash from financing activities				77,126

Net increase in cash and cash equivalents				6,148
Cash and cash equivalents at beginning of period				—

Cash and cash equivalents at end of year			$	6,148

The accompanying notes are an integral part of these combined financial statements.

F-9

NORTH AMERICAN CARRIERS LTD. AND NORTH AMERICAN CARRIERS II LTD.
Notes to Combined Financial Statements

December 31, 2004
(Expressed in thousands of United States Dollars)

1. Basis of Presentation and General Information:

North American Carriers Ltd. andNorth American Carriers II Ltd. were incorporated in Cayman Islands in January 2004. The Company is 95% owned by two other "Delaware" companies, who are ultimately controlled by Wexford Capital LLC. The remaining 5% is owned by Companies affiliated with the manager of the vessels. The object of the Company is to acquire, operate, charter, and otherwise deal with and dispose three dry bulk carrier vessels, through the following subsidiary vessel-owning companies as follows:

(a): Sun Quest Maritime Co. Ltd., incorporated in Malta in January 2004, owner of the 45,518 DWT, 1994 built, Maltese flag dry bulk carrier Paige, which was acquired and delivered in January and March 2004, respectively. Sun Quest Maritime Co. Ltd. is a 100% subsidiary of North American Carriers Ltd.
(b): Long Island Maritime Co. Ltd., incorporated in Malta in January 2004, owner of the 72,495 DWT, 1999 built, Maltese flag dry bulk carrier Anita, which was acquired and delivered in January and July 2004, respectively.
(c): Long Island Shipping Co. Ltd., incorporated in Malta in February 2004, owner of the 72,495 DWT, 1998 built, Maltese flag dry bulk carrier vessel Koby, which was acquired and delivered in February and August 2004, respectively.

Long Island Maritime Co. Ltd. and Long Island Shipping Co. Ltd. are 100% subsidiaries of North American Carriers II Ltd.

North American Carriers Ltd. and North American Carriers II Ltd., together with the above three vessel-owning subsidiaries, are thereafter referred to as "the Company".

The operations of the vessels are managed by Franco Compania Naviera S.A. (the "Manager"), a Panamanian company established in Greece under the provisions of Law 89 of 1967, as amended. The "Manager" is an affiliate to the 5% minority shareholders of the Company. The vessels have management agreements under which the Manager provides the vessels with a wide range of shipping services such as technical support and maintenance, insurance, chartering, financial and accounting services, for a monthly fee of $15.2. The management agreements are for a non specified period of time, however they may be terminated by either party by giving thirty days notice in writing. The management fees for 2004 totaled $363 and are separately reflected in the accompanying combined statement of income. In addition, the Manager receives a chartering commission of 1.25% on all vessels' freights and hires. Such commission for 2004 totaled $236 and is included in voyage expenses and commissions in the accompanying combined statement of income (Note 9). At December 31, 2004, the outstanding balance due to the Manager amounted to $5 representing expenses paid by the manager on behalf of the vessel-owning companies, and is included in accounts payable in the accompanying combined balance sheet.

F-10

During 2004, four charterers individually accounted for more than 10% of the Company's voyage revenues and in the aggregate 100% as follows:

Charterer
Australian Wheat Board Ltd.	49	%
Fratelli D Amato	24	%
SK Shipping Co Ltd.	12	%
Armada Bulk Carriers Ltd.	15	%

Total	100	%

At December 31, 2004, all three vessels were operating under short-term time charters. All of the Company's vessels, having a total carrying value of $82,485 at December 31, 2004, have been mortgaged to lending banks to secure the loans discussed in Note 5.

2. Significant Accounting Policies:

(a): Basis of Combination: The accompanying combined financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("US GAAP") and include the accounts of the companies listed in Note 1 above. The combination was based on common control. All significant intercompany balances and transactions have been eliminated in combination.
(b): Use of Estimates: The preparation of combined financial statements in conformity with U.S. generally accepted accounting principles 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 combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
(c): Other Comprehensive Income: The Company follows the provisions of Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income", which requires separate presentation of certain transactions, which are recorded directly as components of owners? investment. The Company has no such transactions which affect comprehensive income and, accordingly, comprehensive income equals net income.
(d): Foreign Currency Translation: The functional currency of the Company is the U.S. Dollar because the Company's vessels operate in international shipping markets, in which the U.S. Dollar is utilized to transact business. The Company's accounting books are also maintained in U.S. Dollars. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated to reflect the year-end exchange rates. Resulting gains or losses are reflected separately in the accompanying combined statement of income.
(e): Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with original maturities of three months or less to be cash

F-11

equivalents. Restricted cash concerns minimum cash deposits required to be maintained with banks, for loan compliance purposes, which are classified in non current assets and deposits with certain banks that can only be used for the purposes of loan repayments, which are classified in current assets.

(f): Accounts Receivable—Trade, net: The amount shown as accounts receivable, trade, at each balance sheet date, includes estimated recoveries from charterers for hire, freight and demurrage billings, net of allowance for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate allowance for doubtful accounts, which at December 31, 2004 totaled $30.
(g): Insurance Claims: Insurance claims are recorded on the accrual basis and represent the claimable expenses, net of deductibles, incurred through December 31 of each year, which are expected to be recovered from insurance companies.
(h): Inventories: Inventories consist mainly of lubricants, paints and victuals and are stated at the lower of cost or market value. Cost is determined by the weighted average method.
(i): Vessels' Cost: Vessels are stated at cost, which consists of the contract price and any material expenses incurred upon acquisition (initial repairs, improvements and delivery expenses). Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the useful life, increase the earning capacity or improve the efficiency or safety of the vessels, otherwise these amounts are charged to expenses as incurred.
(j): Impairment of Long-Lived Assets: The Company applies 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. The review for impairment of each vessel's carrying amount as of December 31, 2004, did not result in an indication of an impairment loss.
(k): Vessels' Depreciation: Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated salvage value, calculated based on US $150 per LWT. 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.

F-12

(k): Vessels' Depreciation: (Continued)
: 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.
(l): Accounting for Dry-docking and Special Survey Costs: The Company follows the deferral method of accounting for dry-docking and special survey 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 and included in the calculation of the resulting gain or loss in the year of the vessel's sale.
(m): Financing Costs: Fees incurred for obtaining new loans or refinancing existing ones are recorded as a contra to debt and are amortized to interest and financing costs over the life of the related debt using the effective interest rate method. Unamortized fees relating to loans repaid or refinanced are expensed in the period the repayment or refinancing is made.
(n): Accounting for P&I Back Calls: The vessels' Protection and Indemnity (P&I) Club insurance is subject to additional premiums referred to as back calls or supplemental calls, and are accounted for on the accrual basis.
(o): Pension and Retirement Benefit Obligations—Crew: The vessel owning Companies included in the combination employ vessel crew, under short-term contracts (usually up to nine months) and accordingly, the Company is not liable for any pension or post retirement benefits.
(p): Accounting for Revenue 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, revenues and associated voyage costs are recognized on a pro-rata basis over the duration of the voyage. 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. Vessel operating expenses are accounted for on the accrual basis. Unearned revenue represents cash received prior to year-end related to revenue applicable to periods after December 31 of each year.
(q): Repairs and Maintenance: All repair and maintenance expenses including underwater inspection expenses are expensed in the year incurred and are included in vessel operating expenses in the accompanying combined statement of income.
(r): Segmental 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 have 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.

F-13

3. Inventories:

The amount in the accompanying combined balance sheet is analyzed as follows:

Lubricants		$	92
Paints			20
Victuals			15

	*Total*	$	127

4. Deferred Charges:

The unamortized amount shown in the accompanying combined balance sheet represents dry docking and special survey costs of $450 incurred in April 2004 for vessel Paige, net of the related amortization of $124.

5. Long-Term Debt:

The amounts in the accompanying combined balance sheet are analyzed as follows:

	Borrower(s)	Principal			Issue Costs			Net proceeds
(a)	Sun Quest Maritime Co. Ltd	$	8,050		$	49		$	8,001
(b)	Long Island Maritime Co. Ltd		18,560			64			18,496
(c)	Long Island Shipping Co. Ltd		19,125			74			19,051

	*Total*		45,735			187			45,548
	*Less: Current portion*		(8,623	)		(31	)		(8,592	)

	*Long-term portion*	$	37,112		$	(156	)	$	36,956

Total issue costs were $217 of which $30 was amortized in 2004 and is included in Interest and Finance Costs (Note 11).

(a): Bank loan for an amount of $11,000 (before issuance costs of $49), obtained in February 2004 to partially finance the acquisition of vessel Paige. In August 2004, the Company made an early repayment of $2,000 together with the first installment of $950. The outstanding principal balance of the loan at December 31, 2004 is payable in one installment of $950 followed by fourteen equal consecutive semi-annual installments of $393 each, from February 2005 through August 2012 and a balloon payment of $1,600 payable together with the last installment. The loan bears interest at LIBOR plus a margin and the interest rate at December 31, 2004 was 3.67%.
(b): Bank loan for an amount of $18,560 (before issue costs of $64), drawn in July 2004 to partially finance the acquisition of vessel Anita. The outstanding principal balance of the loan at December 31, 2004 is payable in two semi-annual installments of $1,980 each, due in 2005, followed by eighteen consecutive semi-annual installments of $565 each, from January 2006 through July 2014 and a balloon installment of $4,430 payable together with the last

F-14

installment. The loan bears interest at LIBOR plus a margin and the interest rate at December 31, 2004 was 3.59%.

(c): Bank loan for an amount of $19,125 (before issue costs of $74), drawn in August 2004 to partially finance the acquisition of vessel Koby. The outstanding principal balance of the loan at December 31, 2004 is payable in two semi-annual installments of $1,660 each, due in 2005 and sixteen consecutive semi-annual variable installments from February 2006 through August 2013, an interim balloon installment of $1,700 being payable in August 2006 and a final balloon installment of $4,995 payable together with the last installment. The loan bears interest at LIBOR plus a margin and the interest rate at December 31, 2004 was 3.56%.

The loans are secured with a first priority mortgage over the three vessels, assignments of earnings, insurance and requisition compensation of the vessels, and a pledge over the operating and retention bank accounts. The shares of the vessel-owning companies Sun Quest Maritime Co. Ltd. and Long Island Shipping Co. Ltd. have also been pledged as security in relation to the respective loans—(a) and (c).

The loan agreements, among others, include covenants requiring the borrowers to obtain the lenders' prior consent in order to incur or issue any financial indebtedness, assign or otherwise dispose of any of its book debts, dissolve or merge with another corporation, acquire a subsidiary, sell vessels and assets and change the beneficial ownership or management of the vessels. In addition, the loan agreements require for audited financial statements of each borrower to be submitted to the banks within 180 days after the year-end. Furthermore, the vessel-owning subsidiaries are not permitted to pay or declare dividends, make any distribution of assets or pay shareholders? loans without the lenders' prior consent or notice and/or upon the compliance with certain conditions regarding liquidity and installment repayments as specified in each individual loan agreement. More specifically, distributions of the retained earnings of the vessel-owning company Long Island Maritime Co. Ltd. are restricted by the related loan agreement up until the outstanding balance of the loan at the time of the intended distribution has been repaid to equal between $14,600 to $12,100 at which time the borrower may distribute 50% of the surplus funds. Early repayments of the loan are required to be made until the outstanding balance of the loan equals between $12,100 and $9,600 at which time the borrower may distribute 75% of surplus funds. If the outstanding balance of the loan equals less than $9,600, 100% of the surplus funds may be distributed freely by the borrower. In April 2005, Long Island Maritime Co. Ltd. made a repayment amounting to $2,600 (Note 13(a)) in order to effect a distribution to its shareholder of $600. Distributions of the retained earnings of the vessel-owning company Long Island Shipping Co. Ltd. are restricted by the related loan agreement until the Interim Balloon of $1,700 has been fully repaid and subject to liquidity conditions and consideration of the bank. The Interim Balloon installment was fully repaid in April 2005 (Note 13(a)). Finally, the covenants require the borrowers to maintain a minimum hull value in connection with the vessels' outstanding loans, insurance coverage of the vessels against all risks and maintenance of bank accounts with minimum balances.

F-15

The annual principal payments required to be made after December 31, 2004, are as follows:

Year	Amount
2005	$	8,623
2006		6,936
2007		3,186
2008		2,786
2009 and thereafter		24,204

	$	45,735

Interest expense for the period from January 9 (inception) to December 31, 2004 amounted to $762, and is included in interest and finance costs in the accompanying combined statement of income (Note 11). Interest paid amounted to $658. The weighted average interest rate of the above loans during 2004 was 2.95%.

6. Accrued Liabilities:

The amount in the accompanying combined balance sheet is analyzed as follows:

Bank loan interest		$	104
Finance costs			12
Back calls and other vessel operating expenses			48
General administrative expenses			85
Other			3

	*Total*	$	252

7. Commitments and Contingencies:

Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company's vessels. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying combined financial statements.

The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying combined financial statements. A minimum of up to $1 billion of the liabilities associated with the individual vessels actions, mainly for oil pollution, are covered by the Protection and Indemnity (P&I) Club insurance.

F-16

8. Capital:

Issued capital represents the combined issued ordinary shares of the Company. The liability of the owners is limited to the amount, if any, unpaid on the shares respectively held by them. The amounts in the accompanying combined balance sheet are analyzed as follows:

	Number of Shares		Value (Expressed in U.S. Dollars)
Company	Authorized	Issued	Par Value		Issued Capital		Additional Paid-in Capital		Total Capital
North American Carriers Ltd.	5,000,000	1,000	$	0.01	$	10	$	4,635	$	4,635
North American Carriers II Ltd.	5,000,000	100	$	0.01		1		30,383		30,383

	10,000,000	1,100			$	11	$	35,018	$	35,018

Additional paid-in capital represents amounts paid by the owners in excess of above par value to partially finance the vessels? acquisition. Initially, the additional paid-in capital amounted to $38,018. In October and December 2004, the Board of Directors of North American Carriers Ltd. approved the distribution and payment to the Company's shareholders of amounts $1,700 and $1,300, respectively, as a refund of additional paid-in capital.

9. Expenses:

The amounts in the accompanying combined statement of income are analyzed as follows:

*Voyage Expenses and Commissions*
Commissions, including $236 to the Manager (Note 1)		$	1,178
Miscellaneous			53

	*Total*	$	1,231

*Vessel Operating Expenses*
Crew wages and related costs		$	1,163
Insurance			310
Repairs and maintenance			404
Consumable stores			406
Tonnage taxes (Note 10)			9
Miscellaneous			112

	*Total*	$	2,404

10. Income Taxes:

Under the laws of Malta, the country of the vessel-owning companies' incorporation and vessels' registration, the companies are not subject to income taxes, however, they are subject to registration and tonnage taxes, which have been included in vessels' operating expenses in the accompanying combined statement of income.

F-17

Pursuant to the Internal Revenue Code of the United States (the "Code"), U.S. source income from the international operations of ships is generally exempt from U.S. tax if the company operating the ships meets both of the following requirements, (a) the Company is organized in a foreign country that grants an equivalent exemption to corporations organized in the United States and (b) either (i) more than 50% of the value of the Company's stock is owned, directly or indirectly, by individuals who are "residents" of the Company's country of organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States (50% Ownership Test) or (ii) the Company's 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 United States corporations, or in the United States (Publicly-Traded Test).

Under the regulations, the Company's stock will be considered to be "regularly traded" on an established securities market if (i) one or more classes of its stock representing 50% or more of its outstanding shares, by voting power and value, is listed on the market and is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year; and (ii) the aggregate number of shares of stock traded during the taxable year is at least 10% of the average number of shares of the stock outstanding during the taxable year.

Treasury regulations under the Code were promulgated in final form in August 2003. These regulations apply to taxable years beginning after September 24, 2004. As a result, such regulations will be effective for calendar year taxpayers, like the Company, beginning with the calendar year 2005. Malta, the jurisdiction where the ship-owning subsidiaries are incorporated, grant an "equivalent exemption" to United States corporations and, therefore, for 2004 the Company was entitled to exemption from U.S. federal income tax in respect of its U.S. source shipping income. Beginning with the calendar year 2005, when the final regulations will be in effect, the Company will be subject to U.S. federal income tax in respect of its U.S. source shipping income.

11. Interest and Finance Costs:

The amounts in the accompanying combined statement of income are analyzed as follows:

Interest on long-term debt (Note 5)		$	762
Amortization of financing fees (Note 5)			30
Other			33

	*Total*	$	825

12. Financial Instruments:

The principal financial assets of the Company consist of cash on hand and at banks and accounts receivable. The principal financial liabilities of the Company consist of long-term bank loans and accounts payable due to suppliers.

(a): Interest rate risk: The Company's interest rates and long-term loan repayment terms are described in Note 5.

F-18

(b): Concentration of credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and trade accounts receivable. The Company places its temporary cash investments, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions with which it places its temporary cash investments. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers' financial condition and generally does not require collateral for its accounts receivable.
(c): Fair value: The carrying values of cash and cash equivalents, accounts receivable and accounts payable are reasonable estimates of their fair value due to the short-term nature of these financial instruments. The fair value of the long-term bank loans discussed in Note 5, bearing interest at variable interest rates, approximates the recorded value.

13. Subsequent events:

(a): Prepayment of loans: On April 21, 2005, the Company made early repayments in relation to the loans obtained by Long Island Maritime Co. Ltd. and Long Island Shipping Co. Ltd. (Notes 5b and c) of $2,600 and $1,700, respectively.
(b): Refund of additional paid in capital: In April 2005, the Board of Directors of North American Carriers Ltd. and North American Carriers II Ltd. approved the distribution and payment to the Company's shareholders of $5,170 as a refund of additional paid-in capital.

F-19

WEXFORD SHIPPING COMPANY

Shares

Common Stock

P R O S P E C T U S

Jefferies & Company, Inc.

, 2005

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The expenses payable by the Registrant in connection with the issuance and distribution of the securities being registered (other than underwriting discounts and commissions) are estimated to be as follows:

Securities and Exchange Commission registration fee		$	11,770
National Association of Securities Dealers filing fee		$	10,500
Exchange listing fee		$
Legal fees and expenses		$
Blue Sky fees and expenses		$
Accounting fees and expenses		$
Transfer agent fees and expenses		$
Printing and engraving fees		$

Miscellaneous		$

	Total	$

Item 14. Indemnification of Directors and Officers

Section 60 of the Associations Law of the Republic of the Marshall Islands provides as follows:

(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 equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably 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,

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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.

The Registrant's by-laws provide that the Registrant shall indemnify certain persons, including officers and directors, to the fullest extent permitted by the law of the Republic of the Marshall Islands.

Item 15. Recent Sales of Unregistered Securities

In May 2005, in connection with the formation of the Registrant, the Registrant issued 1,000 shares of common stock to Callidus Investors LLC, an affiliate of Wexford Capital LLC, in an offering exempt from registration under Section 4(2) of the Securities Act of 1933.

In connection with the acquisition of the Identified Vessels, the Registrant will issue approximately shares of common stock to VOC Investment in partial payment of the purchase price for the Identified Vessels in an offering exempt from registration pursuant to Regulation S of the Securities Act of 1933.

There have been no other sales of unregistered securities within the past three years.

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Item 16. Exhibits and Financial Statement Schedules

(a): Exhibits.

Exhibit No.		Description
1.1*		Form of Underwriting Agreement
3.1*		Articles of Incorporation
3.2*		By-laws
4.1*		Specimen Stock Certificate
5.1*		Opinion of Marshall Islands Counsel
10.1*		2005 Equity Incentive Plan
10.2*		Form of Option Agreement for Non-Employee Directors
10.3*		Form of Option Agreement for Officers
10.4*		Administrative Services Agreement
21.1*		Subsidiaries of Wexford Shipping Company
23.1*		Consent of Marshall Islands Counsel (included in Exhibit 5.1)
23.2		Consent of Ernst & Young LLP
23.3		Consent of Ernst & Young (Hellas)
23.4		Consent of Drewry Shipping Consultants
24.1		Powers of Attorney (on signature page)

*: To be filed by amendment.

Item 17. Undertakings

Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 Securities Act of 1933 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 of whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

The undersigned registrant hereby undertakes that:

(1): For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.
(2): For the purpose of determining any liability under the Securities Act of 1933, 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.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Greenwich, State of Connecticut on May 11, 2005.

		WEXFORD SHIPPING COMPANY
		By:	/s/ FREDERICK B. SIMON Name: Frederick B. Simon Title: Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Frederick B. Simon and Jay L. Maymudes, or any one of them acting alone, his true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign (i) any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and all documents in connection therewith, and (ii) a Registration Statement, and any and all amendments thereto, relating to the offering covered hereby filed pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto each 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 in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that any said attorneys-in-fact and agents, or any substitute or substitutes of any of them, 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 in the capacities and on the dates indicated:

Signature	Title	Date

/s/ FREDERICK B. SIMON Frederick B. Simon	Chief Executive Officer and Director (Principal Executive Officer)	May 11, 2005
/s/ JAY L. MAYMUDES Jay L. Maymudes	Chief Financial Officer, and Director (Principal Financial and Accounting Officer)	May 11, 2005

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EXHIBIT INDEX

Exhibit No.		Description
1.1*		Form of Underwriting Agreement
3.1*		Articles of Incorporation
3.2*		By-laws
4.1*		Specimen Stock Certificate
5.1*		Opinion of Marshall Islands Counsel
10.1*		2005 Equity Incentive Plan
10.2*		Form of Option Agreement for Non-Employee Directors
10.3*		Form of Option Agreement for Officers
10.4*		Administrative Services Agreement
21.1*		Subsidiaries of Wexford Shipping Company
23.1*		Consent of Marshall Islands Counsel (included in Exhibit 5.1)
23.2		Consent of Ernst & Young LLP
23.3		Consent of Ernst & Young (Hellas)
23.4		Consent of Drewry Shipping Consultants
24.1		Powers of Attorney (on signature page)

*: To be filed by amendment.

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Item 13. Other Expenses of Issuance and Distribution

Item 14. Indemnification of Directors and Officers

Item 15. Recent Sales of Unregistered Securities

Item 16. Exhibits and Financial Statement Schedules

Item 17. Undertakings

SIGNATURES
EXHIBIT INDEX

Cavan Maritime Inactive S-1IPO registration