SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM
6-K/A
 REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
 Dated:
June 1, 2010
 Commission File No. 001-32520
 NEWLEAD HOLDINGS LTD.
  83 Akti Miaouli & Flessa Str.
185 38 Piraeus Greece
  þ o
  o þ
  o þ
  o þ




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EXPLANATORY NOTE




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NEWLEAD HOLDINGS LTD.
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Operating and Financial Review
       Recent Developments
 Dropdown of six vessels and a ship management company
   
    
    ISO 9001 from American Bureau of Shipping Quality Evaluations for a quality management
system, by consistently providing a service that meets customer and applicable statutory
and regulatory requirements, and by enhancing customer satisfaction through, among other
things, processes for continual improvement;
    
    ISO 14001 from American Bureau of Shipping for environmental management, including
policy and objectives targeting legal and other requirements; and
 1




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##### 




    
    Certificate of Company Compliance by the American Bureau of Shipping for safety, quality
and environmental requirements of the ABS HSQE guide.
 New charter party agreement
  Newbuilding program: three new vessels
    Sale of non-core vessels
   Overview
 General
   2




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
    
    Grow our diversified fleet through sourced networks at favorable terms;
    
    Implement a coherent charter strategy to achieve an optimal mix of spot charters, time charters and bareboat
charters to smooth exposure to market cycles;
    
    Maintain cash flow stability with upside potential;
    
    Solidify a diverse customer base with established reliable charterers to reduce our counterparty risk;
    
    Bring in quality in-house technical managers to ensure efficient operations and optimum fleet utilization; and
    
    Employ leverage with a favorable repayment profile.
 FLEET
   SizeVessel Name
    
    (dwt)
    
    Vessel Type
    
    Year Built
    
    Charter Expiration
    
    
    
    Net Daily Charter Hire RateProduct Tanker VesselsStena Compass
    
    
    72,750
    
    
    Panamax
    
    
    2006
    
    
    December 2010
    
    
    
    $18,232.50 plus 30% profit share above $26,000Stena Compassion
    
    
    72,750
    
    
    Panamax
    
    
    2006
    
    
    June 2010
    
    
    
    $18,232.50 plus 30% profit share above $26,000NewLead Avra
(formerly Altius)
    
    
    73,495
    
    
    Panamax
    
    
    2004
    
    
    Spot
    
    
    
    
    NewLead Fortune
(formerly Fortius)
    
    
    73,495
    
    
    Panamax
    
    
    2004
    
    
    Spot
    
    
    
    
    Hiona
    
    
    37,337
    
    
    Handymax
    
    
    2003
    
    
    min: March 2011
max: May 2011
    
    
    
    $19,012.50 plus profit sharing above $19,500Hiotissa
    
    
    37,329
    
    
    Handymax
    
    
    2004
    
    
    min: April 2011
max: June 2011
    
    
    
    $19,012.50 plus profit sharing above $19,500
 3




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##### 



SizeVessel Name
    
    (dwt)
    
    Vessel Type
    
    Year Built
    
    Charter Expiration
    
    
    
    Net Daily Charter Hire RateDrybulk VesselsBrazil
    
    
    151,738
    
    
    Capesize
    
    
    1995
    
    
    min: October 2014
max: February 2015
    
    
    
    $
    28,985
    
    
    (2)Australia
    
    
    172,972
    
    
    Capesize
    
    
    1993
    
    
    min: November 2011
max: January 2012
    
    
    
    $
    20,391China
    
    
    135,364
    
    
    Capesize
    
    
    1992
    
    
    min: November 2015
max: October 2016
    
    
    
    $
    12,753Grand Ocean
    
    
    149,498
    
    
    Capesize
    
    
    1990
    
    
    min: December 2010
max: April 2011
    
    (3)
    
    $
    15,360Grand Venetico
    
    
    134,982
    
    
    Capesize
    
    
    1990
    
    
    min: June 2011
max: October 2011
    
    (3)
    
    $
    17,760Grand Victoria
    
    
    75,966
    
    
    Panamax
    
    
    2002
    
    
    min: October 2010
max: January 2011
    
    
    
    $
    16,875Grand Rodosi
    
    
    68,788
    
    
    Panamax
    
    
    1990
    
    
    June 2010
    
    
    
    $
    24,375Non-core Product Tanker vesselsNordanvind
    
    
    38,615
    
    
    Handymax
    
    
    2001
    
    
    Spot
    
    (1)
    
    
    Ostria
    
    
    38,615
    
    
    Handymax
    
    
    2000
    
    
    Spot
    
    (1)
    
    
    
    
    
    (4)High Land
    
    
    41,450
    
    
    Handymax
    
    
    1992
    
    
    min: June 2010
max: July 2010
    
    
    
    $
    8,181.25Vessel
    
    Expected
    
    
    
    
    
    Charter RateNewbuildings
    
    Size (dwt)
    
    Type
    
    Delivery Date
    
    Charter term
    
    
    
    (daily, net)S1125
    
    
    92,000
    
    
    Post-Panamax
    
    
    Q2 2011
    
    
    Seven year time charter
    
    
    
    $14,438 plus 50% Profit Sharing when 110% of BPI route index exceeds $17,000N213
    
    
    80,000
    
    
    Kamsarmax
    
    
    Q4 2010
    
    
    Seven year time charter
    
    
    
    $
    28,710
    
    
    (4)N216
    
    
    80,000
    
    
    Kamsarmax
    
    
    Q4 2011
    
    
    Seven year time charter
    
    
    
    $
    27,300
 
 (1)
    
    In March 2010, MOAs for the sale of these vessels have been executed and the sales are
expected to close during the second quarter of 2010.(2)
    
    $28,985 for the first and second years, $26,180 all years thereafter, plus profit sharing
(85% of the Cape Spot 4 TCE Avg. minus $26,600)(3)
    
    Additional option: plus one year for Grand Ocean, plus six months for Grand Venetico.(4)
    
    $28,710 for first five years; owners option for additional two years at $20,000-$28,000
(less 1%). The Product Tanker Industry
   Supply:
 
    
    The recent economic downturn has reduced the rate of new orders placed
in this market segment. Considering the amount of product tankers that
are on order, there are fears that oversupply of tonnage may occur in
the near future. However, it is uncertain what percentage of the
orders will finally materialize;
 4




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
    
    The phase-out of single hull tankers under more stringent regulatory
and environmental protection laws and regulations will reduce the
overall supply of vessels;
    
    The implementation of stringent safety and security measures has
effectively reduced the supply of product tankers that are available
for hire at any particular time; and
    
    Major energy companies are selective in the employment of product
tankers and have strict vetting standards for approval of vessels for
trading.
 Demand:
 
    
    For most of the prior years, the strength of the global economy, and in particular Chinas economic growth, has increased demand;
    
    The increase in the distance petroleum products are transported due to the increased exports from new refineries in the Middle
East and Asia and the expected lack of growth in the refining capacity of the refineries in the U.S. and Europe; and
    
    Increasing global production and consumption of refined petroleum products, and in particular the increase in exports from the
Asian, Russian Baltic and Caspian regions.
 The Dry Bulk Shipping Industry
  
    
    Capesize vesselshave carrying capacities of more than 85,000 dwt.
These vessels generally operate along long haul iron ore and coal
trade routes. There are relatively few ports around the world with the
infrastructure to accommodate vessels of this size.
    
    Panamax vesselshave a carrying capacity of between 60,000 and 85,000
dwt. These vessels carry coal, grains, and, to a lesser extent, minor
bulks, including steel products, forest products and fertilizers.
Panamax vessels are able to pass through the Panama Canal making them
more versatile than larger vessels.
    
    Handymax vesselshave a carrying capacity of between 35,000 and 60,000
dwt. These vessels operate along a large number of geographically
dispersed global trade routes mainly carrying grains and minor bulks.
Vessels below 60,000 dwt are sometimes built with on-board cranes
enabling them to load and discharge cargo in countries and ports with
limited infrastructure.
    
    Handysize vesselshave a carrying capacity of up to 35,000 dwt. These
vessels carry exclusively minor bulk cargo. Increasingly, these
vessels have operated along regional trading routes. Handysize vessels
are well suited for small ports with length and draft restrictions
that may lack the infrastructure for cargo loading and unloading.
  
    
    Kamsarmax: An approximately 82,000 dwt Panamax with increased length overall (the length of a vessel, referred to herein as
LOA) of 229 meters (m), named for Port Kamsar in Equatorial Guinea.
    
    Postpanamax: An approximately 92,000 dwt vessel with increased LOA of 235m.
    
    Dunkirkmax: An approximately 175,000 dwt large Capesize with maximum LOA of 289m and a maximum beam (the width of a vessel,
referred to herein as B) of 45m, named for the French ports eastern harbor lock at Dunkirk.
    
    Newcastlemax: An approximately 185,000 dwt large Capesize with a maximum B of 47m, named for the Australian port of Newcastle.
    
    Setouchmax: An approximately 205,000 dwt large Capesize (a very large bulk carrier or VLBC) with a low design draught of
16.10m and a maximum LOA of 299.9m, named for ports in the Setouch Sea in Japan.
 Supply:
  5




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Demand:
  Operating results
  Factors Affecting Results of Operations
   
    
    Market exposure:We manage the size and composition of our fleet by
chartering our owned vessels to international charterers. In order to
diversify our Market risk, we attempt to achieve an appropriate
balance of the composition of our vessels between wet and dry vessels.
    
    Available days:Available days is the total number of days a vessel
is controlled by a company less the aggregate number of days that the
vessel is off-hire due to scheduled repairs or repairs under
guarantee, vessel upgrades or special surveys. The shipping industry
uses available days to measure the number of days in a period during
which vessels should be capable of generating revenues.
    
    Operating days:Operating days is the number of available days in a
period less the aggregate number of days that the vessels are off-hire
due to any reason, including lack of demand or 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:Fleet utilization is obtained by dividing the
number of operating days during a period by the number of available
days during the period. The shipping industry uses fleet utilization
to measure a companys efficiency in finding suitable employment for
its vessels and minimizing the amount of days that its vessels are
off-hire for reasons other than scheduled repairs or repairs under
guarantee, vessel upgrades, special surveys or vessel positioning.
    
    Equivalent vessels:Equivalent vessels, is the data of the available
days of the fleet divided by the number of the calendar days in the
respective period.
    
    TCE rates:Time Charter Equivalent, or TCE, rates are defined as
voyage, time charter and bareboat revenues, less voyage expenses and
commissions during a period, divided by the number of available days
during the period. The TCE rate is a standard 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. The Stena Compass and the Stena Compassion were each
employed on bareboat charters during the three month periods ended
March 31, 2010 and 2009. Accordingly, the Stena Compass and the Stena
Compassions charter rates have been adjusted to reflect a TCE rate of
approximately $24,033 per day, assuming operating costs of $5,800 per
day.
 6




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##### 



Voyage and Time Charter
  
    
    the duration of the charters;
    
    the level of spot market rates at the time of charters;
    
    decisions relating to vessel acquisitions and disposals;
    
    the amount of time spent positioning vessels;
    
    the amount of time that vessels spend in dry-dock undergoing repairs and upgrades;
    
    the age, condition and specifications of the vessels; and
    
    the aggregate level of supply and demand in the drybulk shipping industry.
  Three months ended March 31, 2010 compared to three months ended March 31, 2009
    (unaudited)
    
    
    
    (unaudited)Successor
    
    
    
    PredecessorThree months
    
    
    
    Three monthsended March
    
    
    
    ended March31, 2010
    
    
    
    31, 2009Operating revenues
    
    $
    18,066
    
    
    
    $
    11,735Commissions
    
    
    (499
    )
    
    
    
    (261
    )Voyage expenses
    
    
    (4,975
    )
    
    
    
    (1,873
    )Vessel operating expenses
    
    
    (7,376
    )
    
    
    
    (5,363
    )General and administrative expenses
    
    
    (4,116
    )
    
    
    
    (1,318
    )Depreciation and amortization
    
    
    (5,621
    )
    
    
    
    (3,772
    )Impairment loss
    
    
    (12,438
    )
    
    
    
    Management fees
    
    
    (530
    )
    
    
    
    (295
    )(35,555
    )
    
    
    
    (12,882
    )Net operating loss
    
    
    (17,489
    )
    
    
    
    (1,147
    )Interest and finance expense, net
    
    
    (9,777
    )
    
    
    
    (3,468
    )Interest income
    
    
    277
    
    
    
    
    3Other (expense) / income, net
    
    
    (7
    )
    
    
    
    3Change in fair value of derivatives
    
    
    2,485
    
    
    
    
    (106
    )Total other expenses, net
    
    
    (7,022
    )
    
    
    
    (3,568
    )Net loss from continuing operations
    
    
    (24,511
    )
    
    
    
    (4,715
    )Net income from discontinued
operations (includes gain from
sale of vessels of $2.5 million
in 2010 and $0 in 2009)
    
    
    2,254
    
    
    
    
    469Net loss
    
    $
    (22,257
    )
    
    
    $
    (4,246
    )
 7




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##### 



(Unaudited)Three months ended March 31,2010
    
    2009Available days (1)
    
    1,013
    
    810Operating days (2)
    
    835
    
    666Fleet utilization (3)
    
    82.4%
    
    82.2%Equivalent vessels (4)
    
    11
    
    9Time Charter Equivalents (5)
    
    $13,639
    
    $13,142Total Vessel Operating Expenses (6)
    
    $9,473
    
    $10,048
 
 1)
    
    Available days is the total number of days a vessel is
controlled by a company less the aggregate number of days that
the vessel is off-hire due to scheduled repairs or repairs under
guarantee, vessel upgrades or special surveys. The shipping
industry uses available days to measure the number of days in a
period during which vessels should be capable of generating
revenues.2)
    
    Operating days is the number of available days in a period less
the aggregate number of days that the vessels are off-hire due
to any reason, including lack of demand or unforeseen
circumstances. The shipping industry uses operating days to
measure the aggregate number of days in a period during which
vessels actually generate revenues.3)
    
    Fleet utilization is obtained by
dividing the number of operating days
during a period by the number of
available days during the period. The
shipping industry uses fleet
utilization to measure a companys
efficiency in finding suitable
employment for its vessels and
minimizing the amount of days that its
vessels are off-hire for reasons other
than scheduled repairs or repairs
under guarantee, vessel upgrades,
special surveys or vessel positioning.4)
    
    Equivalent vessels data is the
available days of the fleet divided by
the number of the calendar days in the
respective period.5)
    
    Time Charter Equivalent, or TCE, rates
are defined as voyage, time charter
and bareboat revenues, less voyage
expenses and commissions during a
period, divided by the number of
available days during the period.6)
    
    Total vessel operating expenses are defined as the
sum of the vessel operating expenses, amortization
of dry-docking and special survey expense and
management fees, divided by the vessels calendar
days. This has been adjusted to exclude the
calendar days with respect to the Stena Compass and
the Stena Compassion, which were employed on
bareboat charters. Revenues
   8




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##### 



Commissions
  Voyage Expenses
  Vessel operating expenses
  General and Administrative Expenses
  Depreciation and Amortization
  Impairment Loss
  Management Fees
  Interest and Finance Expense, net
  9




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##### 



Change in Fair Value of Derivatives
  Net loss
   Liquidity and Capital Resources
 Overview
    Three months endedMarch 31,2010
    
    
    2009Net cash used in operating activities
    
    $
    (6,501
    )
    
    $
    (1,505
    )Net cash provided by / (used in) investing activities
    
    
    7,047
    
    
    
    (42
    )Net cash (used in) / provided by financing activities
    
    
    (12,020
    )
    
    
    820Net decrease in cash and cash equivalents
    
    
    (11,474
    )
    
    
    (727
    )Cash and cash equivalents, beginning of the period
    
    
    106,255
    
    
    
    4,009Cash and cash equivalents, end of period
    
    $
    94,781
    
    
    $
    3,282
 Cash Flows
 Net cash used in operating activities
  10




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##### 



Net cash provided by / (used in) investing activities
  Net cash (used in) / provided by financing activities
    Indebtedness
    11




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##### 




    
    1.75% if our total shareholders equity divided by our total assets, adjusting the book value
of our fleet to its market value, is equal to or greater than 50%;
    
    2.75% if our total shareholders equity divided by our total assets, adjusting the book value
of our fleet to its market value, is equal to or greater than 27.5% but less than 50%; and
    
    3.25% if our total shareholders equity divided by our total assets, adjusting the book value
of our fleet to its market value, is less than 27.5%.
   
    
    our shareholders equity as a percentage of our total assets, adjusting the book value of our fleet to its market value, must be no less than:
   
    
    maintain, on a consolidated basis on each financial quarter, working capital of not less
than zero dollars ($0);
    
    the minimum liquidity requirement, at five percent of the outstanding loan:
    
    the ratio of EBITDA (earnings before interest, taxes, depreciation and amortization) to interest expense must be no less than;
   12




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##### 




    
    The BCF was valued at $100.5 million and is amortized over the life of
the 7% Notes as interest expense. The BCF represents the difference
between the conversion price of the 7% Notes ($9.00) and the market
price of our common shares at the date of issuance ($15.24), multiplied
by 16.1 million shares, assuming full conversion of the initial
$145.0 million of 7% Notes. Assuming no further conversions of the
remaining $125.0 million of 7% Notes, the annual BCF amortization will
be $14.4 million annually; and
    
    the Make Whole Fundamental Change was valued at $18,127 relating to an
additional benefit of 10% of additional shares that the holders can
potentially acquire when converting the 7% Notes should certain
conditions exist. This will also be amortized over the life of the 7%
Notes as an interest expense.
     13




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##### 



14




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##### 



EBITDA and adjusted EBITDA reconciliation to Net Income
  Successor
    
    
    
    PredecessorJanuary 1,
    
    
    
    January 1,to
    
    
    
    toMarch 31, 2010
    
    
    
    March 31, 2009ADJUSTED EBITDARECONCILIATIONNET LOSS from continuing operationsPLUS:
    
    $
    (24,511
    )
    
    
    $
    (4,715
    )Net interest expense
    
    
    9,500
    
    
    
    
    3,465Depreciation and amortization
    
    
    5,621
    
    
    
    
    3,772EBITDA
    
    $
    (9,390
    )
    
    
    $
    2,522Straight line of revenue
    
    
    180
    
    
    
    
    Provision for doubtful receivables
    
    
    195Change in fair value of derivatives (includes warrants valuations)
    
    
    (2,485
    )
    
    
    
    106Impairment loss
    
    
    12,438Stock-based compensation
    
    
    721
    
    
    
    
    146ADJUSTED EBITDA
    
    $
    1,659
    
    
    
    $
    2,774
 15




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##### 



Off-Balance Sheet Arrangements
  Commitments
 (i) Rental agreements
  Commercial and Technical Ship Management Agreements
     (iii) Sale of vessels
     16




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##### 



Related Parties
 Management services and commissions
    SeaBreeze
  Newfront  Stamford
  Newlead Bulkers S.A.
  Newlead Shipping S.A.
  Terra Stabile A.E.
  Domina Petridou O.E.
  Amounts due (to) / from related parties
  17




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##### 



As of March 31,
    
    
    As of December 31,2010
    
    
    2009Newfront Shipping S.A.
    
    $
    121
    
    
    $
    40Stamford Navigation Inc
    
    
    (377
    )
    
    
    (234
    )Newlead Shipping S.A.
    
    
    (249
    )
    
    
    Newlead Bulkers S.A.
    
    
    59
    
    
    
    Total
    
    $
    (446
    )
    
    $
    (194
    )
 Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Exposure
       Foreign Exchange Rate Exposure
  18




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##### 



INDEX TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 PageCondensed Consolidated Balance Sheets (Unaudited) as of March 31, 2010  and December 31, 2009
    
    
    F-2Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2010 (Successor) and 2009 (Predecessor)
    
    
    F-3Condensed Consolidated Statements of Changes in Shareholders Equity (Unaudited) for the Three Months Ended March 31, 2010 (Successor), for the Period January 1, 2009 to October 13, 2009 (Predecessor) and the Period October 14, 2009 to December 31, 2009 (Successor)
    
    
    F-4Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2010 (Successor) and 2009 (Predecessor)
    
    
    F-5Notes to the Condensed Consolidated Financial Statements (Unaudited)
    
    
    F-6
 F-1




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##### 



NEWLEAD HOLDINGS LTD.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS  (All amounts expressed in thousands of U.S. dollars except share amounts)
 (Unaudited)As of
    
    
    As ofMarch 31,
    
    
    December 31,Notes
    
    
    2010
    
    
    2009(Restated)
    
    
    (Restated)ASSETSCurrent assetsCash and cash equivalents
    
    
    
    
    
    $
    94,781
    
    
    $
    106,255Restricted cash
    
    
    5
    
    
    
    392
    
    
    
    403Trade receivables, net
    
    
    
    
    
    
    2,854
    
    
    
    4,572Other receivables
    
    
    
    
    
    
    531
    
    
    
    496Inventories
    
    
    6
    
    
    
    2,047
    
    
    
    3,085Prepaid expenses
    
    
    
    
    
    
    1,621
    
    
    
    1,082Backlog asset
    
    
    
    
    
    
    2,837
    
    
    
    5,528Total current assets
    
    
    
    
    
    
    105,063
    
    
    
    121,421Restricted cash
    
    
    5
    
    
    
    9,140
    
    
    
    9,668Advances for vessel under construction
    
    
    7
    
    
    
    3,700
    
    
    
    Assets held for sale
    
    
    
    
    
    
    
    
    
    
    8,250Vessels and other fixed assets, net
    
    
    8
    
    
    
    236,666
    
    
    
    253,115Goodwill
    
    
    
    
    
    
    86,036
    
    
    
    86,036Deferred charges, net
    
    
    
    
    
    
    6,540
    
    
    
    6,831Total non-current assets
    
    
    
    
    
    
    342,082
    
    
    
    363,900Total assets
    
    
    
    
    
    $
    447,145
    
    
    $
    485,321LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt
    
    
    9
    
    
    $
    13,879
    
    
    $
    14,240Accounts payable, trade
    
    
    
    
    
    
    7,340
    
    
    
    11,048Accrued liabilities
    
    
    
    
    
    
    16,344
    
    
    
    16,957Deferred income
    
    
    
    
    
    
    419
    
    
    
    226Derivative financial instruments
    
    
    14
    
    
    
    9,665
    
    
    
    9,687Due to managing agent
    
    
    16
    
    
    
    935
    
    
    
    2,054Total current liabilities
    
    
    
    
    
    
    48,582
    
    
    
    54,212Derivative financial instruments
    
    
    14
    
    
    
    4,939
    
    
    
    7,4077% convertible senior notes, net
    
    
    10
    
    
    
    44,996
    
    
    
    41,430Deferred income
    
    
    
    
    
    
    820
    
    
    
    730Long-term debt
    
    
    9
    
    
    
    210,831
    
    
    
    223,030Total non-current liabilities
    
    
    
    
    
    
    261,586
    
    
    
    272,597Total liabilities
    
    
    
    
    
    
    310,168
    
    
    
    326,809Commitments and contingencies
    
    
    15
    
    
    
    
    
    
    
    Shareholders equityPreference Shares, $0.01 par value, 500 million shares authorized,
none issued.Common Shares, $0.01 par value, 1 billion shares authorized, 6.6 and 6.6 million shares issued and outstanding as of March 31,
2010 and December 31, 2009, respectively
    
    
    
    
    
    
    67
    
    
    
    67Additional paid-in capital
    
    
    
    
    
    
    197,039
    
    
    
    196,317Accumulated deficit
    
    
    12
    
    
    
    (60,129
    )
    
    
    (37,872
    )Total shareholders equity
    
    
    
    
    
    
    136,977
    
    
    
    158,512Total liabilities and shareholders equity
    
    
    
    
    
    $
    447,145
    
    
    $
    485,321
  F-2




---



##### 



NEWLEAD HOLDINGS LTD.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)  (All amounts expressed in thousands of U.S. dollars, except share and per share amounts)
 Successor
    
    
    
    PredecessorThree months
    
    
    
    Three monthsended March 31,
    
    
    
    ended March 31,Notes
    
    
    2010
    
    
    
    2009OPERATING REVENUES
    
    
    13
    
    
    $
    18,066
    
    
    
    $
    11,735EXPENSES:Commissions
    
    
    16
    
    
    
    (499
    )
    
    
    
    (261
    )Voyage expenses
    
    
    
    
    
    
    (4,975
    )
    
    
    
    (1,873
    )Vessel operating expenses
    
    
    16
    
    
    
    (7,376
    )
    
    
    
    (5,363
    )General and administrative expenses
    
    
    16
    
    
    
    (4,116
    )
    
    
    
    (1,318
    )Depreciation and amortization expenses
    
    
    8
    
    
    
    (5,621
    )
    
    
    
    (3,772
    )Impairment loss
    
    
    3,8
    
    
    
    (12,438
    )
    
    
    
    Management fees
    
    
    
    
    
    
    (530
    )
    
    
    
    (295
    )(35,555
    )
    
    
    
    (12,882
    )Net operating loss
    
    
    
    
    
    
    (17,489
    )
    
    
    
    (1,147
    )OTHER (EXPENSES) / INCOME, NET:Interest and finance expense, net
    
    
    9
    
    
    
    (9,777
    )
    
    
    
    (3,468
    )Interest income
    
    
    
    
    
    
    277
    
    
    
    
    3Other (expense) / income , net
    
    
    
    
    
    
    (7
    )
    
    
    
    3Change in fair value of derivatives
    
    
    14
    
    
    
    2,485
    
    
    
    
    (106
    )Total other expenses, net
    
    
    
    
    
    
    (7,022
    )
    
    
    
    (3,568
    )Net loss from continuing operations
    
    
    
    
    
    
    (24,511
    )
    
    
    
    (4,715
    )Net income from discontinued
operations (includes gain from sale
of vessels $2,497 in 2010 and nil in 2009)
    
    
    17
    
    
    
    2,254
    
    
    
    
    469Net loss
    
    
    
    
    
    $
    (22,257
    )
    
    
    $
    (4,246
    )(Loss) / income per share:Basic and dilutedContinuing operations
    
    
    
    
    
    $
    (3.81
    )
    
    
    $
    (1.97
    )Discontinued operations
    
    
    
    
    
    $
    0.35
    
    
    
    $
    0.20Total
    
    
    
    
    
    $
    (3.46
    )
    
    
    $
    (1.77
    )Weighted average number of shares:Basic and diluted
    
    
    
    
    
    
    6,432,818
    
    
    
    
    2,393,490
  F-3




---



##### 



NEWLEAD HOLDINGS LTD.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (unaudited)  (All amounts expressed in thousands of U.S. dollars, except share amounts)
 CommonShares(Number of
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    TotalShares in
    
    
    Share
    
    
    Paid-in
    
    
    Accumulated
    
    
    ShareholdersNotes
    
    
    Thousands)
    
    
    Capital
    
    
    Capital
    
    
    Deficit
    
    
    EquityBalance at December 31, 2008
(Predecessor)
    
    
    
    
    
    
    2,414
    
    
    $
    24
    
    
    $
    114,053
    
    
    $
    (48,561
    )
    
    $
    65,516Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (125,764
    )
    
    
    (125,764
    )Issuance of common shares
    
    
    11
    
    
    
    7
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    1Share-based compensation
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    793
    
    
    
    
    
    
    
    793Balance at October 13, 2009 (Predecessor)
    
    
    
    
    
    
    2,421
    
    
    
    25
    
    
    
    114,846
    
    
    $
    (174,325
    )
    
    
    (59,454
    )Change in control  basis adjustment, restated
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (77,978
    )
    
    
    174,325
    
    
    
    96,347Contribution of vessels
    
    
    
    
    
    
    1,582
    
    
    
    16
    
    
    
    34,981
    
    
    
    
    
    
    
    34,997Beneficial conversion feature on the 7%
convertible senior notes
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    100,536
    
    
    
    
    
    
    
    100,536Conversion of the 7% convertible senior
notes ($20m)
    
    
    10
    
    
    
    2,222
    
    
    
    22
    
    
    
    19,978
    
    
    
    
    
    
    
    20,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37,872
    )
    
    
    (37,872
    )Share-based compensation
    
    
    11
    
    
    
    390
    
    
    
    4
    
    
    
    3,954
    
    
    
    
    
    
    
    3,958Balance at December 31, 2009 (Successor), restated
    
    
    
    
    
    
    6,615
    
    
    
    67
    
    
    
    196,317
    
    
    
    (37,872
    )
    
    
    158,512Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,257
    )
    
    
    (22,257
    )Issuance of common shares
    
    
    11
    
    
    
    7
    
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0Share-based compensation
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    722
    
    
    
    
    
    
    
    722Balance at March 31, 2010 (Successor), restated
    
    
    
    
    
    
    6,622
    
    
    $
    67
    
    
    $
    197,039
    
    
    $
    (60,129
    )
    
    $
    136,977
  F-4




---



##### 



NEWLEAD HOLDINGS LTD.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)  (All amounts expressed in thousands of U.S. dollars)
 Successor
    
    
    PredecessorNotes
    
    
    January 1, 2010
    
    
    January 1, 2009to
    
    
    toMarch 31, 2010
    
    
    March 31, 2009OPERATING ACTIVITIES:Net loss
    
    
    
    
    
    $
    (22,257
    )
    
    $
    (4,246
    )Adjustments to reconcile net loss to net cash used in operating activities:Non-cash adjustments
    
    
    
    
    
    
    19,012
    
    
    
    5,631Payments for dry-docking / special survey costs
    
    
    
    
    
    
    (2,529
    )
    
    
    Decrease in operating assets
    
    
    
    
    
    
    1,987
    
    
    
    924Decrease in operating liabilities
    
    
    
    
    
    
    (2,714
    )
    
    
    (3,814
    )Net cash used in operating activities
    
    
    
    
    
    
    (6,501
    )
    
    
    (1,505
    )INVESTING ACTIVITIES:Advances for vessel under construction
    
    
    
    
    
    
    (3,700
    )Other fixed asset acquisitions
    
    
    
    
    
    
    
    
    
    
    (42
    )Vessels disposals, net assets / assets held for sale
    
    
    
    
    
    
    10,747Net cash provided by / (used in) investing activities
    
    
    
    
    
    
    7,047
    
    
    
    (42
    )FINANCING ACTIVITIES:Principal repayments of long-term debt
    
    
    9
    
    
    
    (46,840
    )
    
    
    Proceeds from long-term debt
    
    
    9
    
    
    
    34,280
    
    
    
    Restricted cash
    
    
    5
    
    
    
    539
    
    
    
    820Proceeds from issuance of capital shares
    
    
    
    
    
    
    1Net cash (used in) / provided by financing activities
    
    
    
    
    
    
    (12,020
    )
    
    
    820Net decrease in cash and cash equivalents
    
    
    
    
    
    
    (11,474
    )
    
    
    (727
    )Cash and cash equivalentsBeginning of period
    
    
    
    
    
    
    106,255
    
    
    
    4,009End of period
    
    
    
    
    
    $
    94,781
    
    
    $
    3,282Supplemental Cash Flow information:Interest paid
    
    
    
    
    
    $
    3,798
    
    
    $
    3,565
  F-5




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 1. Description of Business
     F-6




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 2.
Basis of Presentation (Restated)
      Restatement
of Previously Issued Financial Statements:
     Successor
    
    
    PredecessorCountry of
    
    
    
    Periods that
    
    
    Periods thatCompany Name
    
    Incorporation
    
    Nature / Vessel Name
    
    vessel operates
    
    
    vessel operates1.
    
    Land Marine S.A.
    
    Marshall Islands
    
    M/T High Land
    
    01/01/2010  3/31/2010
    
    
    01/01/2009  3/31/20092.
    
    Rider Marine S.A.
    
    Marshall Islands
    
    M/T High Rider (1)
    
    01/01/2010  3/31/2010
    
    
    01/01/2009  3/31/20093.
    
    Ostria Waves Ltd.
    
    Marshall Islands
    
    M/T Ostria (2)
    
    01/01/2010  3/31/2010
    
    
    01/01/2009  3/31/20094.
    
    Altius Marine S.A.
    
    Marshall Islands
    
    Newlead Avra (3)
    
    01/01/2010  3/31/2010
    
    
    01/01/2009  3/31/20095.
    
    Fortius Marine S.A.
    
    Marshall Islands
    
    Newlead Fortune (4)
    
    01/01/2010  3/31/2010
    
    
    01/01/2009  3/31/20096.
    
    Ermina Marine Ltd.
    
    Marshall Islands
    
    M/T Nordanvind (5)
    
    01/01/2010  3/31/2010
    
    
    01/01/2009  3/31/20097.
    
    Chinook Waves Corporation
    
    Marshall Islands
    
    M/T Chinook (6)
    
    01/01/2010  3/31/2010
    
    
    01/01/2009  3/31/20098.
    
    Compass Overseas Ltd.
    
    Bermuda
    
    M/T Stena Compass
    
    01/01/2010  3/31/2010
    
    
    01/01/2009  3/31/2009
 F-7




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 Successor
    
    
    PredecessorCountry of
    
    
    
    Periods that
    
    
    Periods thatCompany Name
    
    Incorporation
    
    Nature / Vessel Name
    
    vessel operates
    
    
    vessel operates9.
    
    Compassion Overseas Ltd.
    
    Bermuda
    
    M/T Stena Compassion
    
    01/01/2010  3/31/2010
    
    
    01/01/2009  3/31/200910.
    
    Australia Holdings Ltd.
    
    Liberia
    
    M/V Australia
    
    01/01/2010  3/31/2010
    
    
    11.
    
    Brazil Holdings Ltd.
    
    Liberia
    
    M/V Brazil
    
    01/01/2010  3/31/2010
    
    
    12.
    
    China Holdings Ltd.
    
    Liberia
    
    M/V China
    
    01/01/2010  3/31/2010
    
    
    13.
    
    Curby Navigation Ltd.
    
    Liberia
    
    Hull S-1125 (7)
    
    
    
    
    14.
    
    Santa Ana Waves Corporation
    
    Marshall Islands
    
    Vessel owning company
    
    01/01/2010  3/31/2010
    
    
    01/01/2009  3/31/200915.
    
    Makassar Marine Ltd.
    
    Marshall Islands
    
    Vessel owning company (8)
    
    01/01/2010  1/07/2010
    
    
    01/01/2009  3/31/200916.
    
    Seine Marine Ltd.
    
    Marshall Islands
    
    Vessel owning company (9)
    
    01/01/2010  1/20/2010
    
    
    01/01/2009  3/31/200917.
    
    Vintage Marine S.A.
    
    Marshall Islands
    
    Vessel owning company
    
    
    
    
    18.
    
    Jubilee Shipholding S.A.
    
    Marshall Islands
    
    Vessel owning company(10)
    
    
    
    
    01/01/2009  3/31/200919.
    
    Olympic Galaxy Shipping Ltd.
    
    Marshall Islands
    
    Vessel owning company
    
    
    
    
    20.
    
    Dynamic Maritime Co.
    
    Marshall Islands
    
    Vessel owning company
    
    
    
    
    21.
    
    AMT Management Ltd.
    
    Marshall Islands
    
    Operating company
    
    
    
    
    22.
    
    Newlead Holdings (ex Aries
Maritime) (US) LLC
    
    United States of
America
    
    Operating company (11)
    
    
    
    
    23.
    
    Abroad Consulting Ltd.
    
    Marshall Islands
    
    Operating company
    
    
    
    
    
 
 (1)
    
    A memorandum of agreement (MOA) for the sale of the M/T High Rider was signed on March 30, 2010 and delivered to her new owners on April 22, 2010 (see note 19).(2)
    
    A memorandum of agreement (MOA) for the sale of the M/T Ostria was signed on March 31, 2010.(3)
    
    M/T Altius was renamed to Newlead Avra on February 14, 2010.(4)
    
    M/T Fortius was renamed to Newlead Fortune on March 11, 2010. F-8




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 (5)
    
    A memorandum of agreement (MOA) for the sale of the M/T Nordanvind was signed on March 31, 2010.(6)
    
    A memorandum of agreement (MOA) for the sale of the M/T Chinook was signed on February 18, 2010 and delivered to her new owners on April 15, 2010 (see note 19).(7)
    
    On March 30, 2010, NewLead acquired Curby Navigation Ltd., a company which was incorporated on December 30, 2009.(8)
    
    M/V Saronikos Bridge was sold on January 7, 2010 (see notes 17, 19).(9)
    
    M/V MSC Seine was sold on January 20, 2010 (see notes 17, 19).(10)
    
    M/V Ocean Hope was sold on June 29, 2009.(11)
    
    Aries Maritime (US) LLC was incorporated on October 23, 2008, as a representative office in the United States. The company changed its name to Newlead Holdings (US) LLC on January 19, 2010. 3. Summary of Significant Accounting Policies
 Use of Estimates:
  F-9




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 Impairment of Long-lived Assets:
   Accounting for Revenue and Expenses:
     Goodwill:
    4. Recent Accounting Pronouncements
 Transfers of Financial Assets
  F-10




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 Determining the Primary Beneficiary of a Variable Interest Entity
  Measuring Liabilities at Fair Value
  Fair Value Disclosures
  5. Restricted Cash
 As of March 31,
    
    
    As of December 31,2010
    
    
    2009Minimum Liquidity
    
    $
    392
    
    
    $
    403Short term restricted account
    
    
    392
    
    
    
    403Minimum Liquidity
    
    
    9,140
    
    
    
    9,668Long term restricted account
    
    
    9,140
    
    
    
    9,668$
    9,532
    
    
    $
    10,071
 6. Inventories
 As of March 31,
    
    
    As of December 31,2010
    
    
    2009Lubricants
    
    $
    603
    
    
    $
    953Bunkers
    
    
    1,416
    
    
    
    2,075Provisions (Stores)
    
    
    28
    
    
    
    57$
    2,047
    
    
    $
    3,085
 7. Advances for Vessel Under Construction
  F-11




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 8. Vessels and Other Fixed Assets, Net
 Other fixed
    
    
    
    
    
    
    Special
    
    
    Dry-Cost
    
    assets
    
    
    Vessels
    
    
    survey
    
    
    docking
    
    
    TotalPREDECESSORBalance at December 31, 2008
    
    $
    210
    
    
    $
    380,094
    
    
    $
    8,053
    
    
    $
    12,011
    
    
    $
    400,368Additions
    
    
    63
    
    
    
    
    
    
    
    1,358
    
    
    
    4,761
    
    
    
    6,182Disposals  Discontinued operations
    
    
    
    
    
    
    (17,224
    )
    
    
    (421
    )
    
    
    (484
    )
    
    
    (18,129
    )Balance at October 13, 2009
    
    
    273
    
    
    
    362,870
    
    
    
    8,990
    
    
    
    16,288
    
    
    
    388,421SUCCESSORAdditions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,333
    
    
    
    1,333Additions  Contribution from Grandunion
    
    
    
    
    
    
    98,985
    
    
    
    
    
    
    
    5,767
    
    
    
    104,752Change in control  basis adjustment
    
    
    (273
    )
    
    
    (82,870
    )
    
    
    (8,990
    )
    
    
    (16,288
    )
    
    
    (108,421
    )Transfer to assets held for sale
    
    
    
    
    
    
    (8,400
    )
    
    
    
    
    
    
    
    
    
    
    (8,400
    )Balance at December 31, 2009
    
    
    
    
    
    
    370,585
    
    
    
    
    
    
    
    7,100
    
    
    
    377,685Additions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    86
    
    
    
    86Balance at March 31, 2010
    
    
    
    
    
    
    370,585
    
    
    
    
    
    
    
    7,186
    
    
    
    377,771Accumulated Depreciation and AmortizationPREDECESSORBalance at December 31, 2008
    
    
    (99
    )
    
    
    (89,472
    )
    
    
    (4,921
    )
    
    
    (9,413
    )
    
    
    (103,905
    )Depreciation and Amortization for the period
    
    
    (174
    )
    
    
    (14,073
    )
    
    
    (1,071
    )
    
    
    (2,050
    )
    
    
    (17,368
    )Impairment loss
    
    
    
    
    
    
    (91,601
    )
    
    
    
    
    
    
    
    
    
    
    (91,601
    )Disposals
    
    
    
    
    
    
    9,361
    
    
    
    421
    
    
    
    484
    
    
    
    10,266Balance at October 13, 2009
    
    
    (273
    )
    
    
    (185,785
    )
    
    
    (5,571
    )
    
    
    (10,979
    )
    
    
    (202,608
    )SUCCESSORAdditions  Contribution from Grandunion
    
    
    
    
    
    
    (27,894
    )
    
    
    
    
    
    
    (1,569
    )
    
    
    (29,463
    )Change in control  basis adjustment
(Depreciation and Amortization for the
period)
    
    
    273
    
    
    
    94,184
    
    
    
    5,571
    
    
    
    10,979
    
    
    
    111,007Depreciation and Amortization for the period
    
    
    
    
    
    
    (3,187
    )
    
    
    
    
    
    
    (469
    )
    
    
    (3,656
    )Transfer to assets held for sale
    
    
    
    
    
    
    150
    
    
    
    
    
    
    
    
    
    
    
    150Balance at December 31, 2009
    
    
    
    
    
    
    (122,532
    )
    
    
    
    
    
    
    (2,038
    )
    
    
    (124,570
    )Depreciation and Amortization for the period
    
    
    
    
    
    
    (3,477
    )
    
    
    
    
    
    
    (620
    )
    
    
    (4,097
    )Impairment loss (note 3)
    
    
    
    
    
    
    (12,438
    )
    
    
    
    
    
    
    
    
    
    
    (12,438
    )Balance at March 31, 2010
    
    
    
    
    
    
    (138,447
    )
    
    
    
    
    
    
    (2,658
    )
    
    
    (141,105
    )PREDECESSORNet book value  December 31, 2008
    
    
    111
    
    
    
    290,622
    
    
    
    3,132
    
    
    
    2,598
    
    
    
    296,463Net book value  October 13, 2009
    
    
    
    
    
    
    177,085
    
    
    
    3,419
    
    
    
    5,309
    
    
    
    185,813SUCCESSORNet book value  December 31, 2009
    
    
    
    
    
    
    248,053
    
    
    
    
    
    
    
    5,062
    
    
    
    253,115Net book value  March 31, 2010
    
    $
    
    
    
    $
    232,138
    
    
    $
    
    
    
    $
    4,528
    
    
    $
    236,666
 F-12




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 9. Long-Term Debt
 Senior Secured Credit Agreement
  Facility
    
    
    CreditDescription
    
    Agreement
    
    
    Facility
    
    
    TotalLong-term
    
    $
    182,791
    
    
    $
    28,040
    
    
    $
    210,831Short-term
    
    
    7,639
    
    
    
    6,240
    
    
    
    13,879Total
    
    $
    190,430
    
    
    $
    34,280
    
    
    $
    224,710
  (a)
    
    Facility Agreement
      
    
    1.75% if the Companys total shareholders equity divided by the Companys
total assets, adjusting the book value of the Companys fleet to its market value, is
equal to or greater than 50%;
    
    2.75% if the Companys total shareholders equity divided by the Companys
total assets, adjusting the book value of the Companys fleet to its market value, is
equal to or greater than 27.5% but less than 50%; and
    
    3.25% if the Companys total shareholders equity divided by the Companys
total assets, adjusting the book value of the Companys fleet to its market value, is
less than 27.5%.
 F-13




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
   
    
    the Companys shareholders equity as a percentage of the Companys total
assets, adjusting the book value of the Companys fleet to its market value, must be
no less than:
 (a)
    
    25% from the financial quarter ending September 30, 2012 until June 30, 2013; and(b)
    
    30% from the financial quarter ending September 30, 2013 onwards.
 
    
    maintain, on a consolidated basis on each financial quarter, working capital of not less
than zero dollars ($0);
    
    the minimum liquidity requirement, at five percent of the outstanding loan:
    
    the ratio of EBITDA (earnings before interest, taxes, depreciation and
amortization) to interest expense must be no less than;
 (a)
    
    2.00 to 1.00 from the financial quarter day ending September 30, 2012 until June
30, 2013; and(b)
    
    2.50 to 1.00 from the financial quarter day ending September 30, 2013 onwards.
 (b)
    
    Credit Facility
   Successor
    
    
    
    PredecessorThree months ended
    
    
    
    Three months endedMarch 31, 2010
    
    
    
    March 31, 2009Interest expense
    
    $
    5,644
    
    
    
    $
    3,146Amortization of deferred charges
    
    
    291
    
    
    
    
    187Amortization of the beneficial conversion feature (see note 10)
    
    
    3,561
    
    
    
    
    Other expenses
    
    
    281
    
    
    
    
    135$
    9,777
    
    
    
    $
    3,468
  F-14




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
  March 31, 2011
    
    $
    13,879March 31, 2012
    
    
    13,879March 31, 2013
    
    
    13,879March 31, 2014
    
    
    13,879March 31, 2015 and thereafter
    
    
    169,194$
    224,710
 10. 7% Convertible Senior Notes
       F-15




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
  7% convertiblesenior notes7% convertible senior notes  initially issued
    
    $
    (145,000
    )Partial conversion of the convertible senior notes
    
    
    20,0007% convertible senior notes  outstanding
    
    
    (125,000
    )Beneficial conversion feature
    
    
    100,536Amortization of the beneficial conversion feature
    
    
    (17,000
    )Make whole fundamental change
    
    
    34Balance at December 31, 2009
    
    
    (41,430
    )Amortization of the beneficial conversion feature
    
    
    (3,561
    )Amortization of the Make whole fundamental change
    
    
    (5
    )Balance at March 31, 2010
    
    $
    (44,996
    )
 11. Share Based Compensation
 Equity Incentive Plan
     Restricted Common Shares
    F-16




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 WeightedWeighted
    
    
    AverageNumber of
    
    
    Average
    
    
    Vesting PeriodShares
    
    
    Fair Values
    
    
    (Years)Outstanding
and non-vested
shares, as of
December 31, 2008
(Predecessor)
    
    
    20,000
    
    
    $
    39.30
    
    
    
    1.6Outstanding and
non-vested
shares, as of
March 31, 2009
(Predecessor)
    
    
    20,000
    
    
    
    39.30
    
    
    
    1.6Granted (1)
    
    
    7,293
    
    
    
    15.24
    
    
    
    0.0Vested
    
    
    (27,293
    )
    
    
    32.87
    
    
    
    Outstanding
and non-vested
shares, as of
October 13, 2009
(Predecessor)
    
    
    
    
    
    
    
    
    
    
    0.0Granted (2)
    
    
    390,001
    
    
    
    15.13
    
    
    
    0.8Vested
    
    
    (208,334
    )
    
    
    15.24
    
    
    
    Outstanding
and non-vested
shares, as of
December 31, 2009
(Successor)
    
    
    181,667
    
    
    
    15.01
    
    
    
    1.8Granted (3)
    
    
    6,667
    
    
    
    11.04
    
    
    
    1.0Vested
    
    
    
    
    
    
    
    
    
    
    Outstanding
and non-vested
shares, as of
March 31, 2010
(Successor)
    
    
    188,334
    
    
    $
    14.88
    
    
    
    1.7
 
 (1)
    
    Vested on the date of the recapitalization.(2)
    
    208,334 shares had immediate vesting, 166,667 have a two-year vesting schedule (at January
1, 2011, and 2012), while 15,000 vest in three years (at January 1, 2011, 2012, and 2013).(3)
    
    6,667 shares were granted on January 1, 2010 and vest over a one year period (January 1, 2011).  F-17




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 Share options
  Weighted
    
    
    Weighted
    
    
    WeightedNumber of
    
    
    Average
    
    
    Average Fair
    
    
    average VestingOptions
    
    
    Exercise Price
    
    
    Value
    
    
    Period (years)Outstanding, as of December 31, 2008 (Predecessor)
    
    
    25,000
    
    
    $
    104.00
    
    
    $
    6.20
    
    
    
    3.0Outstanding, as of March 31, 2009 (Predecessor)(1)
    
    
    25,000
    
    
    
    104.00
    
    
    
    6.20
    
    
    
    0.0Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding, as of October 13, 2009 (Predecessor)
    
    
    25,000
    
    
    
    104.00
    
    
    
    6.20
    
    
    
    0.0Granted (2)
    
    
    250,000
    
    
    
    19.80
    
    
    
    6.25
    
    
    
    3.0Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding, as of December 31, 2009 (Successor)
    
    
    275,000
    
    
    
    27.45
    
    
    
    6.24
    
    
    
    3.0Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding, as of March 31, 2010 (Successor)
    
    
    275,000
    
    
    
    27.45
    
    
    
    6.24
    
    
    
    3.0Exercisable at March 31, 2010
    
    
    66,667
    
    
    $
    51.36
    
    
    $
    6.24
    
    
    
    
 
 (1)
    
    In 2008, the Company granted 25,000 share options to purchase
common shares subject to a vesting period of three annual equal
installments. The fair value of these share option awards has been
calculated based on the Binomial lattice model method. The Company
used this model given that the options granted are exercisable at
a specified time after vesting period (up to 10 years). The
assumptions utilized in the Binomial lattice valuation model for
the share option included a dividend yield of 5% and an expected
volatility of 43%. For the first two vesting dates, the risk-free
interest rate was 3.8% and the fair value per share option
amounted to $6.60 with an expected life of 6 years. For the third
vesting date, the risk-free interest rate was 4.6% with an
expected life of 10 years, while the fair value per share option
amounted to $5.40. No share options were granted during the year
ended December 31, 2007. On October 13, 2009, all these shares
were vested due to the recapitalization.(2)
    
    In 2009, the Company granted 250,000 share options to purchase
common shares, which vest equally over 36 months and are subject
to accelerated vesting upon certain circumstances. The fair value
of these share option awards has been calculated based on the
Binomial lattice model method. The Company used this model given
that the options granted are exercisable at a specified time after
vesting period (through five years from October 13, 2009). The
assumptions utilized in the Binomial lattice valuation model for
the share option included a dividend yield of 0% and an expected
volatility of 90%. The risk-free interest rate was 2.3% and the
weighted average fair value per share option amounted to $6.25.   F-18




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
   12. Common Shares and Dividends
  13. Segment Information (Restated)
   Wet
        
        
        Dry
        
        
        TotalSuccessor
        
        
        
        Predecessor
        
        
        Successor
        
        
        
        Predecessor
        
        
        Successor
        
        
        
        PredecessorJanuary 1,
        
        
        
        January 1,
        
        
        January 1,
        
        
        
        January 1,
        
        
        January 1,
        
        
        
        January 1,to
        
        
        
        to
        
        
        to
        
        
        
        to
        
        
        to
        
        
        
        toMarch 31,
        
        
        
        March 31,
        
        
        March 31,
        
        
        
        March 31,
        
        
        March 31,
        
        
        
        March 31,2010
        
        
        
        2009
        
        
        2010
        
        
        
        2009
        
        
        2010
        
        
        
        2009(Restated)
        
        
        
        
        
        
        (Restated)
        
        
        
        
        
        
        (Restated)Operating revenue
        
        $
        11,702
        
        
        
        $
        11,735
        
        
        $
        6,544
        
        
        
        $
        
        
        
        $
        18,246
        
        
        
        $
        11,735Commissions
        
        
        (365
        )
        
        
        
        (261
        )
        
        
        (134
        )
        
        
        
        
        
        
        
        (499
        )
        
        
        
        (261
        )Voyage expenses
        
        
        (4,975
        )
        
        
        
        (1,873
        )
        
        
        
        
        
        
        
        
        
        
        
        (4,975
        )
        
        
        
        (1,873
        )Vessel operating expenses
        
        
        (5,261
        )
        
        
        
        (5,363
        )
        
        
        (2,115
        )
        
        
        
        
        
        
        
        (7,376
        )
        
        
        
        (5,363
        )General and administrative
            expenses
        
        
        (1,719
        )
        
        
        
        (1,172
        )
        
        
        (532
        )
        
        
        
        
        
        
        
        (2,251
        )
        
        
        
        (1,172
        )Management fees
        
        
        (392
        )
        
        
        
        (295
        )
        
        
        (138
        )
        
        
        
        
        
        
        
        (530
        )
        
        
        
        (295
        )Other (expense) / income,
            net
        
        
        (1
        )
        
        
        
        3
        
        
        
        (6
        )
        
        
        
        
        
        
        
        (7
        )
        
        
        
        3Net operating (loss)
            / income before depreciation and amortization
        
        
        (1,011
        )
        
        
        
        2,774
        
        
        
        3,619
        
        
        
        
        
        
        
        
        2,608
        
        
        
        
        2,774Depreciation and amortization
            expenses
        
        
        (3,678
        )
        
        
        
        (3,772
        )
        
        
        (1,943
        )
        
        
        
        
        
        
        
        (5,621
        )
        
        
        
        (3,772
        )Impairment loss
        
        
        (12,438
        )
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (12,438
        )
        
        
        
        Net operating (loss)
            / income
        
        
        (17,127
        )
        
        
        
        (998
        )
        
        
        1,676
        
        
        
        
        
        
        
        
        (15,451
        )
        
        
        
        (998
        )Transaction costs
        
        
        (712
        )
        
        
        
        
        
        
        
        (237
        )
        
        
        
        
        
        
        
        (949
        )
        
        
        
        Straight line revenue
        
        
        
        
        
        
        
        
        
        
        
        (180
        )
        
        
        
        
        
        
        
        (180
        )
        
        
        
        Compensation costs
        
        
        (542
        )
        
        
        
        (146
        )
        
        
        (179
        )
        
        
        
        
        
        
        
        (721
        )
        
        
        
        (146
        )Provision for doubtful
            receivables
        
        
        (195
        )
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (195
        )Interest and finance
            expenses, net
        
        
        (7,769
        )
        
        
        
        (3,468
        )
        
        
        (2,008
        )
        
        
        
        
        
        
        
        (9,777
        )
        
        
        
        (3,468
        )Interest income
        
        
        207
        
        
        
        
        3
        
        
        
        70
        
        
        
        
        
        
        
        
        277
        
        
        
        
        3Change in fair value
            of derivatives
        
        
        2,263
        
        
        
        
        (106
        )
        
        
        222
        
        
        
        
        
        
        
        
        2,485
        
        
        
        
        (106
        )Net loss from continuing
            operations
        
        $
        (23,875
        )
        
        
        $
        (4,715
        )
        
        $
        (636
        )
        
        
        $
        
        
        
        $
        (24,511
        )
        
        
        $
        (4,715
        )Total Assets
        
        $
        349,525
        
        
        
        $
        309,425
        
        
        $
        97,620
        
        
        
        
        
        
        
        $
        447,145
        
        
        
        $
        309,425Goodwill
        
        $
        65,768
        
        
        
        
        
        
        
        $
        20,268
        
        
        
        
        
        
        
        $
        86,036
        
        
        
        
        Long Lived assets
        
        $
        164,929
        
        
        
        $
        290,768
        
        
        $
        75,437
        
        
        
        
        
        
        
        $
        240,366
        
        
        
        
        290,768
 F-19




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 14. Financial Instruments
  Fair Values
  Warrant Derivative Liability
     Interest Rate Risk
  Concentration of Credit Risk
  Interest Rate Swaps
   F-20




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
  Counter-party
 Fair ValueAs of
    
    
    
    As ofValue
    
    Termination
    
    Notional
    
    
    Fixed
    
    
    Floating
    
    March 31,
    
    
    
    December 31,Interest rate swaps
    
    Date
    
    Date
    
    Amount
    
    
    Rate
    
    
    Rate
    
    2010
    
    
    
    2009SMBC Bank
    
    3/7/2006
    
    4/4/2011
    
    $
    20,000
    
    
    
    5.63
    %
    
    3-month
LIBOR
    
    $
    (1,298
    )
    
    
    $
    (1,475
    )Bank of Ireland
    
    3/7/2006
    
    4/4/2011
    
    $
    20,000
    
    
    
    5.63
    %
    
    3-month
LIBOR
    
    
    (1,294
    )
    
    
    
    (1,484
    )HSH Nordbank
    
    3/7/2006
    
    4/4/2011
    
    $
    20,000
    
    
    
    5.63
    %
    
    3-month
LIBOR
    
    
    (1,294
    )
    
    
    
    (1,483
    )Nordea Bank
    
    3/7/2006
    
    4/4/2011
    
    $
    20,000
    
    
    
    5.63
    %
    
    3-month
LIBOR
    
    
    (1,295
    )
    
    
    
    (1,481
    )Bank of Scotland
    
    3/7/2006
    
    4/4/2011
    
    $
    20,000
    
    
    
    5.63
    %
    
    3-month
LIBOR
    
    
    (1,293
    )
    
    
    
    (1,481
    )Nordea Bank*
    
    3/4/2008
    
    4/4/2011
    
    $
    23,333
    
    
    
    4.14
    %
    
    3-month
LIBOR
    
    
    (1,071
    )
    
    
    
    (1,195
    )Bank of Scotland**
    
    3/4/2008
    
    3/4/2011
    
    $
    46,667
    
    
    
    4.285
    %
    
    3-month
LIBOR
    
    
    (1,113
    )
    
    
    
    (1,249
    )Marfin Egnatia Bank***
    
    2/9/2009
    
    2/9/2014
    
    $
    37,400
    
    
    
    4.08
    %
    
    3-month
LIBOR
    
    
    (2,062
    )
    
    
    
    (1,926
    )$
    (10,720
    )
    
    
    $
    (11,774
    )
 Fair ValueAs of
    
    
    
    As ofMarch 31,
    
    
    
    December 31,2010
    
    
    
    2009Short-term
    
    $
    (9,665
    )
    
    
    $
    (9,687
    )Long-term
    
    
    (1,055
    )
    
    
    
    (2,087
    )$
    (10,720
    )
    
    
    $
    (11,774
    )
 
 *
    
    Synthetic swap including interest rate cap detailed as follows: Counter-party
    
    Value Date
    
    Termination Date
    
    Notional Amount
    
    CapNordea
    
    
    03/04/08
    
    
    
    04/04/11
    
    
    $
    23,333
    
    
    
    4.14
    %
 
 **
    
    Synthetic swap including interest rate floor detailed as follows: Counter-party
    
    Value Date
    
    Termination Date
    
    Notional Amount
    
    FloorBank of Scotland
    
    
    03/04/08
    
    
    
    03/04/11
    
    
    $
    23,333
    
    
    
    4.285
    %
 
 ***
    
    As part of the contribution from Grandunion on October 13, 2009,
the Company assumed a $37,400 interest rate swap by Marfin Egnatia
Bank.  F-21




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 Fair Value Hierarchy
   Quoted Prices
    
    Significantin Active
    
    Other
    
    SignificantMarkets for
    
    Observable
    
    UnobservableIdentical Assets
    
    Inputs
    
    InputsTotal
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)December 31, 2009LiabilitiesInterest rate swaps
    
    $
    11,774
    
    
    $
    
    
    
    $
    11,774
    
    
    $
    Warrants
    
    $
    5,273
    
    
    $
    
    
    
    $
    5,273
    
    
    $
    Make Whole Fundamental Change
    
    $
    42
    
    
    $
    
    
    
    $
    42
    
    
    $
    March 31, 2010AssetsVessel valuations
    
    $
    29,761
    
    
    $
    
    
    
    $
    29,761
    
    
    $
    LiabilitiesInterest rate swaps
    
    $
    10,720
    
    
    $
    
    
    
    $
    10,720
    
    
    $
    Warrants
    
    $
    3,866
    
    
    $
    
    
    
    $
    3,866
    
    
    $
    Make Whole Fundamental Change
    
    $
    18
    
    
    $
    
    
    
    $
    18
    
    
    $
    
   15. Commitments and Contingent Liabilities
 (1)
    
    Commitments
 Rental Agreements
   F-22




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
  March 31, 2011
    
    $
    103March 31, 2012
    
    
    103March 31, 2013
    
    
    103March 31, 2014
    
    
    103March 31, 2015 and thereafter
    
    
    820$
    1,232
 Commercial & Technical Ship Management Agreements
     Sale of vessels
     F-23




---



##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 (2) Contingencies
  
    
    The charterers of the Newlead Avra notified the Company in
October 2008 of their intention to pursue the following
claims and notified the appointment of an arbitrator in
relation to them:
 a)
    
    Damages suffered by sub-charterers of the vessel in respect
of remaining on board cargo at New York in September 2007;b)
    
    Damages suffered by sub-charterers of the vessel as a
result of a change in management and the consequent dispute
regarding oil major approval from October 2007; andc)
    
    Damages suffered by sub-charterers of the vessel resulting from grounding at Houston in October 2007.
 
    
    The charterers of the Newlead Fortune notified the Company
in October 2008 of their intention to pursue the following
claims, and notified the appointment of an arbitrator in
relation to them:
 a)
    
    Damages as a result of a change in management and the consequent dispute regarding oil major approval from
October 2007; andb)
    
    Damages resulting from the creation of hydrogen sulphide in the vessels tanks at two ports in the United States.
  16. Transactions Involving Related Parties
 Management Services and Commissions
   SeaBreeze
  F-24




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##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 Newfront  Stamford
  Newlead Bulkers S.A.
  Newlead Shipping S.A.
  Terra Stabile A.E.
  Domina Petridou O.E.
  Amounts due (to) / from managing agent
  As of March 31,
    
    
    As of December 31,2010
    
    
    2009International Tanker Management
    
    $
    (319
    )
    
    $
    (1,812
    )Wilhelmsen Ship Management
    
    
    
    
    
    
    8Newfront Shipping S.A.
    
    
    121
    
    
    
    40Stamford Navigation Inc
    
    
    (377
    )
    
    
    (234
    )Ernst Jacob Ship Management GmbH
    
    
    (170
    )
    
    
    (56
    )Newlead Shipping S.A.
    
    
    (249
    )
    
    
    Newlead Bulkers S.A.
    
    
    59
    
    
    
    Total
    
    $
    (935
    )
    
    $
    (2,054
    )
 F-25




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##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
 17. Discontinued Operations
      Successor
    
    
    PredecessorJanuary 1, to
    
    
    January 1, toMarch 31, 2010
    
    
    March 31, 2009Operating Revenues
    
    $
    1,207
    
    
    
    $
    4,396Net income
    
    $
    2,254
    
    
    
    $
    469
  18. Goodwill
  GoodwillSUCCESSORBalance at January 1, 2010, restated
    
    $
    86,036Additions
    
    
    Balance at March 31, 2010, restated
    
    $
    86,036
 19. Subsequent Events
      F-26




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##### 



NEWLEAD HOLDINGS LTD.
 Notes to Condensed Consolidated Financial Statements
     F-27




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##### 



SIGNATURES
  NEWLEAD HOLDINGS LTD.By:
    /s/ Michail ZolotasMichail ZolotasChief Executive OfficerDated: June 30, 2011