**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549





**FORM
      10-K**


**ANNUAL
      REPORT**


**PURSUANT
      TO SECTION 13 OR 15(d) OF THE**


**SECURITIES
      EXCHANGE ACT OF 1934**





**(Mark
      one)**




**x
      ANNUAL REPORT PURSUANT
      TO SECTION 13 OR 15(d) OF THE SECURITIES AND**


**EXCHANGE
      ACT OF 1934**





For
      the
      fiscal year ended December 31, 2006





OR





**o
      TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND**


**EXCHANGE
      ACT OF 1934**





For
      the
      transition period from ________________ to ________________




Commission
      File No.: 001-32685




**Star
      Maritime Acquisition Corp.**


(Exact
      Name of issuer as specified in its charter)




Delaware
            
            20-202873585(State
                or other jurisdiction of
              incorporation
                or organization)
            
            (I.R.S.
                Employer
              Identification
                No.)







103
      Foulk
      Road


Wilmington,
      DE 19803


(Address
      of principal executive offices) (Zip Code)





Registrant's
      telephone number, including area code: 302-656-1950





**Securities
      registered pursuant to Section 12(b) of the Act:**





**Common
      Stock, $.0001 par value**


(Title
      of
      Class)





**Common
      Stock Purchase Warrants**


(Title
      of
      Class)





**Securities
      registered pursuant to Section 12(g) of the Act: None**
















Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.YesoNox





Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Act.  Yes o No x





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.





Yes x  No o





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the best
      of the registrant's knowledge in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any amendment to
      this
      Form 10-K. x





Indicate
      by check mark if the registrant is a large accelerated filer, an accelerated
      filer or a non-accelerated filer.




Large Accelerated Filer o
              Accelerated Filer x
              Non-Accelerated Filer o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).





Yes x  No o





State
      the
      aggregate market value of the voting and non-voting stock held by non-affiliates
      of the Issuer: $191,693,800 (based upon the closing price of Issuer's Common
      Stock, $.0001 par value, as of the last business day of the Issuer's most
      recently completed second fiscal quarter (June 30, 2006).




Indicate
      the number of shares outstanding of each of the Registrant's classes of common
      stock, as of the latest practicable.


Common
                  Stock, $.0001 Par Value
              
              29,026,924(Title
                  of Class)
              
              (No.
                  of Shares Outstanding at March ___,
                  2007)




**DOCUMENTS
      INCORPORATED BY REFERENCE: NONE**








TABLE
      OF
      CONTENTS


PART
                  I
              
              
              
              1Item
                  1.
              
              Business
              
              1Item
                  1A.
              
              Risk
                  Factors
              
              13Item
                  1B.
              
              Unresolved
                  Staff Comments
              
              40Item
                  2.
              
              Properties
              
              40Item
                  3.
              
              Legal
                  Proceedings
              
              41Item
                  4.
              
              Submission
                  of Matters to a Vote of Security Holders
              
              41PART
                  II
              
              
              
              41Item
                  5.
              
              Market
                  for Registrant's Common Equity, Related Stockholder Matters and
                  Issuer
                  Purchases of Equity Securities
              
              41Item
                  6.
              
              Selected
                  Financial Data
              
              43Item
                  7.
              
              Management's
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              
              43Item
                  7A.
              
              Quantitative
                  and Qualitative Disclosures About Market Risk
              
              46Item
                  8.
              
              Financial
                  Statements and Supplementary Data
              
              F-1Item
                  9.
              
              Changes
                  in and Disagreements with Accountants on Accounting and Financial
                  Disclosure
              
              47Item
                  9A.
              
              Controls
                  and Procedures
              
              48Item
                  9B.
              
              Other
                  Information
              
              48PART
                  III
              
              
              
              48Item
                  10.
              
              Directors
                  and Executive Officers of the Registrant
              
              48Item
                  11.
              
              Executive
                  Compensation
              
              51Item
                  12.
              
              Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholder Matters
              
              52Item
                  13.
              
              Certain
                  Relationships, Related Transactions and Director
                  Independence
              
              53Item
                  14.
              
              Principal
                  Accountant Fees and Services
              
              54PART
                  IV
              
              
              
              55Item
                  15.
              
              Exhibits
                  and Financial Statement Schedules
              
              55








**PART
      I**




**Item
      1. Business** ****





**Overview**





Star
      Maritime is a blank check company organized under the laws of the State of
      Delaware on May 13, 2005 to acquire, through a merger, capital stock exchange,
      asset acquisition or similar business combination, one or more “target
      businesses” in the shipping industry. A “target business” includes one or more
      entities with agreements to acquire vessels or an operating business in the
      shipping industry. Following our formation, our officers and directors were
      the
      holders of 9,026,924 shares of common stock representing all of our issued
      and
      outstanding capital stock at such time. On December 21, 2005, we consummated
      our
      initial public offering of 18,867,500 units, which we refer to as the Initial
      Public Offering, with each unit consisting of one share of Star Maritime common
      stock and one warrant to purchase one share of Star Maritime common stock.
      In
      addition, we completed the Private Placement of an aggregate of 1,132,500 units,
      which we refer to as the Private Placement, to Messrs. Tsirigakis and
      Syllantavos, our senior executive officers and Messrs. Pappas and Erhardt,
      two
      of our directors. The gross proceeds of the Private Placement of $11,325,500
      were used to pay all fees and expenses of the Initial Public Offering. After
      deducting the underwriting discounts and commissions, the placement fee and
      the
      offering expenses, the total net proceeds to us from the Initial Public Offering
      and the Private Placement were approximately $189,125,000 of which $188,675,000
      was deposited into a trust account, $599,163 was used to repay interest and
      debt
      to our Chairman and Chief Executive Officer, Mr. Akis Tsirigakis, for a loan
      advanced to us to cover expenses related to the Initial Public Offering and
      the
      remaining proceeds of $533,172, which after payment of approximately $170,000
      of
      additional financing fees, provided us with approximately $363,172, which was
      deposited and held outside of the trust account to be used to provide for
      business, legal and accounting due diligence on prospective business
      combinations and continuing operating expenses. During the fiscal year ended
      December 31, 2006, we incurred $1,211,100 of operating expenses. $363,172 of
      such operating expenses were provided by the net proceeds of the Initial Public
      Offering that were not deposited in the trust account, and $847,928 of such
      operating expenses were provided by distributions of interest income from the
      trust account, made in accordance with the procedures set forth in the
      Investment Management Trust Agreement, dated December 21, 2005 between Star
      Maritime and American Stock Transfer & Trust Company. The net proceeds
      deposited into the trust account remain on deposit in the trust account earning
      interest. As of December 31, 2006, there was $192,915,257 held in the trust
      account, including interest income of $4,240,257.





**Shipping
      Industry Overview**





The
      shipping industry provides a practical and cost-effective means of transporting
      large volumes of cargoes. This is accomplished predominantly by the dry bulk
      and
      tanker sectors, while other related sectors tend to be specialized. The dry
      bulk
      sector involves the transportation of dry bulk and general cargoes, including,
      among other products, coal, minerals, ore, steel products, forest products,
      agricultural products, construction materials and heavy equipment, machinery
      and
      spare parts via dry bulk cargo vessels. The tanker sector involves the
      transportation of wet products such as crude oil, refined petroleum cargoes
      and
      liquid chemicals via different types of tankers. Related sectors comprise,
      but
      are not limited to, the operation of vessels such as containerships, liquefied
      gas carriers, offshore supply and anchor-handling vessels.




We
      may
      seek to acquire a company with agreements to purchase individual vessels, a
      company with a fleet of vessels, a number of such companies as a group, or
      an
      entity which provides commercial management, operational and technical
      management or other services to one or more segments of the shipping industry.
      A
      target company might be a holding company, the sole assets of which are one
      or
      more agreements to acquire individual vessels. If a company we acquire is a
      holding company rather than an operating company, we will need to retain current
      management, seek to retain new management or outsource the commercial and
      technical management of the vessels by contracting with a shipping company
      engaged in this business.




1


***Dry
      bulk sector overview***




Dry
      bulk
      vessels are used to transport commodities such as iron ore, minerals, grains,
      forest products, fertilizers, coking and steam coal. The dry bulk sector can
      be
      divided into four major vessel categories with reference to size. We may explore
      acquisitions of either one or more vessels and/or operating companies that
      are
      focused on these segments of the dry bulk sector, including:





·
            *Capesize*.
                The largest of the dry bulk carrier vessels, with typical cargo capacity
                over 80,000 dead weight tons, or dwt. Capesize vessels are used primarily
                for transporting cargoes consisting of iron ore and coal. Due to the
                size of the vessels, there are a limited number of ports around the
                world that have the infrastructure to accommodate them. Capesize
                vessels
                cannot traverse through the Panama Canal due to their
                size.


·
            *Panamax*.
                The second largest of the dry bulk vessels, with cargo capacity typically
                between 60,000 and 80,000 dwt. Panamax vessels are the largest bulk
                carriers able to transit the Panama Canal. These vessels typically
                carry
                cargoes consisting of coal, grains,
                fertilizers.


·
            *Handymax*.
                Versatile vessels that are dispersed in various geographic locations
                throughout the world. Handymax vessels typically have cargo capacity
                of
                35,000 to 60,000 dwt, and are primarily used to transport grains,
                forest
                products and fertilizers. These vessels are equipped with onboard
                cranes
                which allow for the loading and unloading of cargo. Supramax vessels
                are a
                sub-category of Handymax vessels which have cargo capacity in excess
                of
                50,000 dwt.


·
            *Handysize*.
                The smallest of the dry bulk carrier vessels with cargo capacity
                up to
                35,000 dwt. These vessels are used mainly for regional voyages, are
                extremely versatile and can be used in smaller ports that lack
                infrastructure. Like Handymax vessels, Handysize vessels are also
                equipped
                with onboard cranes.





Prices
      for individual vessels vary widely depending on the type, quality, age and
      discounted future earnings.




***Tanker
      sector overview***




The
      world
      tanker fleet is divided into two primary categories, crude oil and product
      tankers. Tanker charterers of wet cargoes will typically charter the appropriate
      sized tanker based on the length of journey, cargo size and port and canal
      restrictions. Crude oil tankers are typically larger than product tankers.
      The
      four major tanker categories with reference to size are:




·
            *Very
                Large Crude Carriers, or VLCCs*.
                Tanker vessels that are used to transport crude oil with cargo capacity
                typically 200,000 to 320,000 dwt that are more than 300 meters in
                length.
                VLCCs are highly automated and their advanced computer systems allow
                for a
                minimal crew. The majority of the world’s crude oil is transported via
                VLCCs.


·
            *Suezmax*.
                Tanker vessels with cargo capacity typically 120,000 to 200,000 dwt.
                These
                vessels carry primarily crude oil and are used in some of the fastest
                growing oil producing regions of the world, including the Caspian
                Sea and
                West Africa. Suezmax tankers are the largest ships able to transit
                the
                Suez Canal with a full payload and are capable of both long and short
                haul
                voyages.


·
            *Aframax*.
                Tanker vessels with cargo capacity typically 80,000 to 120,000 dwt.
                These
                tankers carry crude oil and serve various trade routes from short
                to
                medium distances mainly in the North Sea and Venezuela. These vessels
                are
                able to enter a larger number of ports throughout the world as compared
                to
                the larger crude oil tankers.


·
            *Product*.
                Tanker vessels with cargo capacity typically less than 60,000 dwt.
                Product
                tankers are capable of carrying refined petroleum products, such
                as fuel
                oils, gasoline and jet fuel, as well as various edible oils, such
                as
                vegetable and palm oil.





Prices
      for individual vessels vary widely depending on the type, quality, age and
      discounted future earnings.




2


***Container
      sector overview***




As
      opposed to dry bulk vessels, which carry raw materials such as iron ore,
      minerals, grains, forest products, coking and steam coal, container vessels
      transport finished goods that are shipped in large containers. Instead of the
      number of dead weight tons that they can carry, container vessels are sized
      according to the number of containers that they can carry and whether the
      vessels can traverse the Panama Canal. We may explore acquisitions of one or
      more vessels and/or operating companies that operate container vessels that
      can
      ship products regionally or globally. Prices for individual vessels vary widely
      depending on the type, quality, age and discounted future earnings.




***Related
      sectors***




Related
      sectors in which we might seek a business combination include, but are not
      limited to, supply vessels, service vessels and anchor handlers that perform
      various functions related to the supply and maintenance of offshore oil
      rigs.




***Shipping
      services sector overview***




In
      addition to acquiring individual vessels and/or an operating company or
      companies with a fleet of vessels, service businesses we may seek to acquire
      could be engaged in, among other activities, operational management, brokerage,
      maintenance and technical support. Service businesses we may seek to acquire
      would typically be engaged in:




·
            Technical
                management services, such as crew retention and training, maintenance,
                repair, capital expenditures, dry-docking, payment of vessel tonnage
                tax,
                maintaining insurance and other vessel operating activities;
                or


·
            Commercial
                management services, such as finding employment for vessels, vessel
                acquisition and disposition, freight and charter hire collection,
                accounts
                control, appointment of agents, bunkering and cargo claims handling
                and
                settlements.





**Government
      Regulations**




Government
      regulation significantly affects the ownership and operation of vessels
      including international conventions, national, state and local laws and
      regulations in force in the countries in which vessels may operate or are
      registered.




A
      variety
      of governmental and private entities subject 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
      administration (country of registry) and charterers, particularly terminal
      operators. Certain of these entities require vessel owners to obtain permits,
      licenses and certificates for the operation of their vessels. Failure to
      maintain necessary permits or approvals could require a vessel owner to incur
      substantial costs or temporarily suspend operation of one or more of its
      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 industry. Increasing environmental
      concerns have created a demand for vessels that conform to the stricter
      environmental standards. Vessel owners are required to maintain operating
      standards for all vessels that will emphasize operational safety, quality
      maintenance, continuous training of officers and crews and compliance with
      United States and international regulations. Because these laws and regulations
      are frequently changed and may impose increasingly stricter requirements, we
      cannot predict the ultimate cost of complying with these requirements, or the
      impact of these requirements on our proposed business.




3


***Environmental
      regulations***




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. In September 1997, the IMO adopted Annex VI to
      the International Convention for the Prevention of Pollution from Ships, which
      was ratified on May 18, 2004, and became effective on May 19, 2005. Annex VI
      sets limits on sulfur oxide and nitrogen oxide emissions from ship exhausts
      and
      prohibits 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. Annex VI and new conventions, laws and regulations
      that may be adopted, in the future, could adversely affect our ability to manage
      vessels we acquire or operate.




Under
      the
      International Safety Management Code or “ISM Code”, promulgated by the IMO, the
      party with operational control of a vessel is required to develop an extensive
      safety management system that includes, among other things, the adoption of
      a
      safety and environmental protection policy setting forth instructions and
      procedures for operating its vessels safely and describing procedures for
      responding to emergencies.




The
      ISM
      Code requires that vessel operators obtain a safety management certificate
      for
      each vessel they operate. This certificate evidences compliance by a vessel’s
      management with code requirements for a safety management system. No vessel
      can
      obtain a certificate unless its manager has been awarded a document of
      compliance, issued by the respective flag state for the vessel, under the ISM
      Code.




Noncompliance
      with the ISM Code and other IMO regulations may subject a ship owner to
      increased liability, may lead to decreases in available insurance coverage
      for
      affected vessels and may result in the denial of access to, or detention in,
      some ports. For example, the United States Coast Guard and European Union
      authorities have indicated that vessels not in compliance with the ISM Code
      will
      be prohibited from trading in ports in the United States and European Union.




***The
      United States Oil Pollution Act of 1990***




The
      United States Oil Pollution Act of 1990, or OPA, established an extensive
      regulatory and liability regime for the protection and cleanup of the
      environment from oil spills. OPA affects all owners and operators whose vessels
      trade in the United States, its territories and possessions or whose vessels
      operate in United States waters, which includes the United States’ territorial
      sea and its two hundred nautical mile exclusive economic zone.




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. 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.





OPA
      limits the liability of responsible parties to the greater of $600 per gross
      ton
      or $500,000 per dry bulk vessel that is over 300 gross tons (subject to possible
      adjustment for inflation). These limits of liability do not apply if an incident
      was directly caused by violation of applicable United States federal safety,
      construction or operating regulations or by a responsible party’s gross
      negligence or willful misconduct, or if the responsible party fails or refuses
      to report the incident or to cooperate and assist in connection with oil removal
      activities.




4


OPA
      requires owners and operators of vessels to establish and maintain with the
      U.S.
      Coast Guard evidence of financial responsibility sufficient to meet their
      potential liabilities under OPA. In December 1994, the U.S. Coast Guard
      implemented regulations requiring evidence of financial responsibility in the
      amount of $1,500 per gross ton, which includes the OPA limitation on liability
      of $1,200 per gross ton and the United States Comprehensive Environmental
      Response, Compensation, and Liability Act liability limit of $300 per gross
      ton.
      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 vessels in the fleet having the greatest maximum liability under
      OPA.




The
      United States Coast Guard’s regulations concerning certificates of financial
      responsibility provide, in accordance with OPA, that claimants may bring suit
      directly against an insurer or guarantor that furnishes certificates of
      financial responsibility. In the event that such insurer or guarantor is sued
      directly, it is prohibited from asserting any contractual defense that it may
      have had against the responsible party and is limited to asserting those
      defenses available to the responsible party and the defense that the incident
      was caused by the willful misconduct of the responsible party. Certain
      organizations, which had typically provided certificates of financial
      responsibility under pre-OPA 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.




The
      United States Coast Guard’s financial responsibility regulations may also be
      satisfied by evidence of surety bond, guaranty or by self-insurance. Under
      the
      self-insurance provisions, the vessel 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.




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. Some states which have enacted such legislation have not yet issued
      implementing regulations defining vessels owners’ responsibilities under these
      laws.




***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.




Although
      the United States is not a party thereto, many countries have ratified and
      follow the liability scheme adopted by the IMO and set out in the International
      Convention on Civil Liability for Oil Pollution Damage, 1969, as amended, or
      the
      CLC, and the Convention for the Establishment of an International Fund for
      Oil
      Pollution of 1971, as amended. Under these conventions, a vessel’s registered
      owner is strictly liable for pollution damage caused on the territorial waters
      of a contracting state by discharge of persistent oil, subject to certain
      complete defenses. Many of the countries that have ratified the CLC have
      increased the liability limits through a 1992 Protocol to the CLC. The liability
      limits in the countries that have ratified this Protocol are currently
      approximately $4 million plus approximately $566 per gross registered ton above
      5,000 gross tons with an approximate maximum of $80.5 million per vessel, with
      the exact amount tied to a unit of account which varies according to a basket
      of
      currencies. The right to limit liability is forfeited under the CLC where the
      spill is caused by the owner’s actual fault or privity and, under the 1992
      Protocol, where the spill is caused by the owner’s intentional or reckless
      conduct. Vessels trading to contracting states must provide evidence of
      insurance covering the limited liability of the owner. In jurisdictions where
      the CLC has not been adopted, various legislative schemes or common law govern,
      and liability is imposed either on the basis of fault or in a manner similar
      to
      the CLC.




5


***Security
      regulation***




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 United States 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 on July 1, 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
      United States 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, by July 1, 2004, a valid
      International Ship Security Certificate, or ISSC, that attests to the vessel’s
      compliance with SOLAS security requirements and the ISPS Code.





**Opportunity
      for stockholder approval of business combination**





Prior
      to
      the completion of a business combination, we will submit the transaction to
      our
      stockholders for approval, even if the nature of the acquisition is such as
      would not ordinarily require stockholder approval under applicable state law.
      In
      connection with seeking stockholder approval of a business combination, we
      will
      furnish our stockholders with proxy solicitation materials prepared in
      accordance with the Securities Exchange Act of 1934.




In
      connection with the vote required for any business combination, all of our
      officers and directors, have agreed to vote their respective shares of common
      stock owned by them immediately prior to the Private Placement and the Initial
      Public Offering in accordance with the majority of the shares of common stock
      voted by the public stockholders. Our officers and directors have agreed to
      vote
      all the shares of our common stock acquired in the Private Placement, the
      Initial Public Offering or in the aftermarket in favor of any transaction that
      they negotiate and present for approval to our stockholders. We will proceed
      with the business combination only if a majority of the shares of common stock
      voted by the public stockholders are voted in favor of the business combination
      and public stockholders owning less than 33% of the shares sold in our Initial
      Public Offering and the Private Placement exercise their redemption rights.




***Redemption
      rights***




At
      the
      time we seek stockholder approval of any business combination, we will offer
      each public stockholder the right to have such stockholder’s shares of common
      stock redeemed for cash if the stockholder votes against the business
      combination and the business combination is approved and completed. The actual
      per-share redemption price will be equal to $10.00 plus any interest not
      previously released to us earned on their pro rata portion of the trust account
      and on that pro rata portion of the underwriters’ contingent compensation
      comprising the redemption price (calculated as of two business days prior to
      the
      consummation of the proposed business combination (net of taxes payable)).
      An
      eligible stockholder may request redemption at any time after the mailing to
      our
      stockholders of the proxy statement and prior to the vote taken with respect
      to
      a proposed business combination at a meeting held for that purpose, but the
      request will not be granted unless the stockholder votes against the business
      combination and the business combination is approved and completed. If a
      stockholder votes against the business combination but fails to properly
      exercise its redemption rights, such stockholder will not have its shares of
      common stock redeemed. Any request for redemption, once made, may be withdrawn
      at any time up to the date of the meeting. It is anticipated that the funds
      to
      be distributed to stockholders entitled to redeem their shares who elect
      redemption will be distributed promptly after completion of a business
      combination. Public stockholders who redeem their stock for their share of
      the
      trust account still have the right to exercise the warrants that they received
      as part of the units. We will not complete any business combination if public
      stockholders, owning 33% or more of the shares sold in our Initial Public
      Offering and the Private Placement, exercise their redemption
      rights.




6


***Liquidation
      if no business combination***




If
      we do
      not complete a business combination on or prior to June 21, 2007, or December
      21, 2007 if the extension criteria described below have been satisfied, we
      will
      dissolve, the trust account will be liquidated and we will distribute to all
      of
      our public stockholders in proportion to their respective equity interests,
      an
      aggregate sum equal to the amount in the trust account, inclusive of any
      interest (net of taxes payable) not previously released to us, plus any
      remaining net assets. Messrs. Tsirigakis, Syllantavos, Anagnostou, Nikiforos,
      Pappas, Erhardt and Søfteland have waived their rights to participate in any
      liquidation distribution with respect to the shares of common stock owned by
      them. In addition, Maxim Group LLC and EarlyBirdCapital, Inc. have agreed to
      waive their rights to the $4,000,000 of contingent underwriting compensation
      and
      placement fees deposited in the trust account for their benefit. There will
      be
      no distribution from the trust account with respect to our warrants, which
      will
      expire worthless.




If
      we are
      unable to consummate a business combination and expend all of the funds in
      our
      trust account, other than the proceeds deposited in the trust account, and
      without taking into account interest, if any, earned on the trust account,
      the
      initial per-share liquidation price to holders of the 18,867,500 shares entitled
      to participate in liquidation distributions would be equal to the $10.00 per
      unit offering price. The funds in the trust account could, however, become
      subject to the claims of our creditors which could be prior to the claims of
      our
      public stockholders. Each member of our board of directors has agreed pursuant
      to agreements with us and Maxim Group LLC, if we liquidate prior to the
      consummation of a business combination, they will be personally liable to pay
      debts and obligations to target businesses or vendors that are owed money by
      us
      for services rendered or products sold to us in excess of the net proceeds
      of
      the Initial Public Offering not held in the trust account at that time. We
      cannot assure you, however, that they would be able to satisfy those
      obligations. Accordingly, we cannot assure you that the actual per-share
      liquidation price will not be less than $10.00, plus interest (net of taxes
      payable), due to claims of creditors.




If
      we
      enter into either a letter of intent, an agreement in principle or a definitive
      agreement to complete a business combination on or prior to June 21, 2007,
      but
      are unable to complete the business combination by such date, then we will
      have
      an additional six months in which to complete the business combination
      contemplated by the letter of intent, agreement in principle or definitive
      agreement. If we are unable to do so on or prior to December 21, 2007, we will
      then liquidate. Upon notice from us, the trustee of the trust account will
      commence liquidating the investments constituting the trust account and will
      turn over the proceeds to our transfer agent for distribution to our public
      stockholders.




Our
      public stockholders shall be entitled to receive funds from the trust account
      only in the event of liquidation or if the stockholders seek to redeem their
      respective shares for cash upon a business combination which the stockholder
      voted against and which is actually completed by us. In no other circumstances
      shall a stockholder have any right or interest of any kind to or in the trust
      account.





7


**Competition**




In
      identifying, evaluating and selecting a target business, we may encounter
      intense competition from other entities having a business objective similar
      to
      ours. Many of these entities are well established and have extensive experience
      identifying and effecting business combinations directly or through affiliates.
      Many of these competitors possess greater technical, human and other resources
      than us and our financial resources will be relatively limited when contrasted
      with those of many of these competitors, which may limit our ability to compete
      in acquiring certain sizable target businesses. This inherent competitive
      limitation gives others an advantage in pursuing the acquisition of a target
      business. Further:




·
            our
                obligation to seek stockholder approval of a business combination
                or
                obtain the necessary financial information to be included in the
                proxy
                statement to be sent to stockholders in connection with such business
                combination may delay or prevent the completion of a
                transaction;


·
            our
                obligation to redeem for cash up to 6,599,999 shares of common stock
                held
                by our public stockholders in certain instances will limit the manner
                in
                which we may structure a business combination (i.e., we will not
                be able
                to undertake an all cash acquisition transaction) and may reduce
                the
                resources available to us for this purpose, as well as for funding
                a
                target company’s business;


·
            our
                outstanding warrants, and the future dilution they potentially represent,
                may not be viewed favorably by certain target businesses;
                and


·
            the
                requirement to acquire either an entity with purchase agreements
                for one
                or more vessels or an operating business that has a fair market value
                equal to at least 80% of our net assets at the time of the acquisition
                could require us to acquire several companies or closely related
                operating
                businesses at the same time, all of which sales would be contingent
                on the
                closings of the other sales, which could make it more difficult to
                consummate the business
                combination.




Any
      of
      these factors may place us at a competitive disadvantage in successfully
      negotiating a business combination. Our management believes, however, that
      to
      the extent that our target business is a privately held entity, our status
      as a
      well-financed public entity may give us a competitive advantage over entities
      having a similar business objective as ours in acquiring a target business
      with
      significant growth potential on favorable terms.




If
      we
      succeed in effecting a business combination, there will be, in all likelihood,
      intense competition from competitors of the target business. We cannot assure
      you that, subsequent to a business combination, we will have the resources
      or
      ability to compete effectively.





**Employees**





We
      have
      four officers, two of whom are also members of our board of directors. These
      individuals are not obligated to contribute any specific number of hours per
      week and intend to devote only as much time as they deem necessary to our
      affairs. The amount of time they will devote in any time period will vary based
      on the availability of suitable target businesses to investigate, although
      we
      expect Mr. Tsirigakis to devote an average of approximately 10 hours per week
      to
      our business during the target identification stage, and close to full time
      during due diligence and negotiation of a business combination. We do not intend
      to have any full time employees prior to the consummation of a business
      combination.





**SUBSEQUENT
      EVENTS**




**Proposed
      Business Combination**





On
      January 12, 2007, we agreed to purchase, through our newly-formed, wholly-owned
      subsidiary Star Bulk Carriers Corp., a Marshall Islands company ("Star Bulk"),
      eight drybulk carriers (the "Vessels") from certain wholly-owned subsidiary
      affiliates of TMT Co., Ltd., a Taiwan corporation (TMT Co., Ltd. and such
      subsidiary affiliates, collectively, "TMT"), pursuant to separate definitive
      Memoranda of Agreement by and between the Star Bulk and TMT (collectively,
      the
      "MOAs"), as supplemented by a Supplemental Agreement by and among the Company,
      Star Bulk and TMT (the "Supplemental Agreement") and a Master Agreement by
      and
      among the Company, Star Bulk and TMT (the "Master Agreement" and collectively
      with the MOAs and the Supplemental Agreement, the "Acquisition Agreements"),
      which transaction is hereinafter referred to as the "Asset Acquisition". As
      required under our Third Amended and Restated Certificate of Incorporation,
      we
      will hold a special meeting of ourstockholders to vote on the Asset Acquisition
      and a proposed merger of the Company into Star Bulk in which Star Bulk will
      be
      the surviving entity (the "Redomiciliation Merger" and together with the Asset
      Acquisition, the "Business Combination"). The Redomiciliation Merger shall
      occur
      promptly following the approval by our stockholders of the Business
      Combination.





8


On
      February 7, 2007, Star Bulk formed the following wholly-owned subsidiaries
      registered in the Marshall Islands. The share capital of each of the
      subsidiaries consists of 500 authorized and issued shares without par value:





Star
      Alpha Inc.


Star
      Beta
      Inc.


Star
      Gamma Inc.


Star
      Epsilon Inc.


Star
      Iota
      Inc.


Star
      Theta Inc.


Star
      Zeta
      Inc.


Star
      Bulk
      Management Inc.





***Purchase
      Price***





Pursuant
      to the Acquisition Agreements, Star Bulk will acquire the vessels in its initial
      fleet from TMT for an aggregate purchase price of $345,237,520, consisting
      of
      $224,500,000 in cash and 12,537,645 shares of Star Bulk’s common stock. Under
      the Master Agreement, Star Bulk has also agreed to issue to TMT or its nominated
      affiliates up to an additional 1,606,962 shares of common stock of Star Bulk,
      which we refer to as the Additional Stock, as follows: (i) 803,481 shares of
      Star Bulk’s common stock, no more than 10 business days following Star Bulk’s
      filing of its Annual Report on Form 20-F for the fiscal year ended December
      31,
      2007, if the gross revenue of Star Bulk and its consolidated subsidiaries which
      own the vessels exceeds 80% of Star Bulk’s forecasted annual consolidated
      revenue for such subsidiaries for the fiscal year commencing as of the effective
      time of the Redomiciliation Merger and ending on December 31, 2007, as will
      be
      agreed between Star Bulk and TMT prior to the effective time of the
      Redomiciliation Merger; and (ii) an additional 803,481 shares of Star Bulk’s
      common stock, no more than 10 business days following Star Bulk’s filing of its
      Annual Report on Form 20-F for the fiscal year ended December 31, 2008, if
      the
      gross revenue of Star Bulk and its consolidated subsidiaries owning the vessels
      exceeds 80% of the forecasted annual consolidated revenue for such subsidiaries
      as will be agreed between Star Bulk and TMT prior to the effective time of
      the
      Redomiciliation Merger.





On
      February 28, 2007, Star Bulk and TMT amended the Master Agreement to provide
      that Star Bulk’s forecasted annual consolidated revenue for the fiscal year
      commencing on the effective date of the Redomiciliation Merger and ending
      December 31, 2007 will be $40,000,000, assuming that the Redomiciliation Merger
      occurs on June 30, 2007, adjusted pro rata if the Redomiciliation Merger occurs
      after June 30, 2007, and $90,000,000 for the fiscal year ended December 31,
      2008.





***The
      Fleet***





TMT
      is
      obligated to deliver each vessel not later than the completion of such vessel’s
      cargo discharge at the last port of the laden voyage following the
      Redomiciliation Merger. Star Maritime expects that all vessels in the initial
      fleet will be delivered to Star Bulk by TMT within 60 days following the
      Redomiciliation Merger. TMT had undertaken to procure the employment of six
      of
      the eight vessels under time charters with first class charterers, subject
      to
      such minimum terms and aggregate targeted daily time charter hire rates as
      provided in the table below and upon standard industry terms for employment
      of
      the vessels. Each time charter will be novated to the relevant Star
      Bulk-vessel-owning subsidiary upon delivery of the relevant vessel. TMT has
      also
      agreed to procure the time charters with third party charterers or, in the
      case
      of the Panamax vessel and, at its sole option, one of the Supramax vessels,
      with
      a TMT affiliate as charterer. If the aggregate target daily time charter hire
      rate is not achieved, TMT has agreed to pay Star Bulk the difference between
      the
      aggregate daily hire rate fixed by TMT for the vessels under the time charters
      and the agreed aggregate minimum daily time charter hire rate. Subsequent to
      the
      execution of the Master Agreement, Star Bulk entered into time charters with
      TMT
      for two of the six vessels in the initial fleet, the *C
      Duckling* (to
      be
      renamed the *Star
      Gamma* )
      and the *Mommy
      Duckling* (to be
      renamed the *Star
      Iota* ).
      The
      charter rate for the *Star
      Gamma* will be
      $28,500 per day for a term of one year. The charter rate for the *Star
      Iota* will be
      $18,000 per day for a term of one year.





9


The
      table
      below provides summary information about Star Bulk’s fleet:





**Employment****Vessel**
            
            **Type**
            
            **Dwt**
            
            **Year
                Built**
            
            **Type/Term****(1)**
            
            **Daily
                Time Charter****Hire
                Rate****(1)***A
                Duckling*
            
            
            Capesize
            
            
            175,075
            
            
            1992
            
            
            Time
                charter/3 years
            
            $
            47,500*B
                Duckling*
            
            
            Capesize
            
            
            174,691
            
            
            1993
            
            
            Spot(2)
            
            
            N/A*C
                Duckling*
            
            
            Supramax
            
            
            53,098
            
            
            2002
            
            
            Time
                charter/1 year(3)
            
            $
            28,500*F
                Duckling*
            
            
            Supramax
            
            
            52,434
            
            
            2000
            
            
            Time
                charter/2years
            
            $
            25,800*G
                Duckling*
            
            
            Supramax
            
            
            52,402
            
            
            2001
            
            
            Time
                charter/2years
            
            $
            25,550*I
                Duckling*
            
            
            Supramax
            
            
            52,994
            
            
            2003
            
            
            Time
                charter/1 year
            
            $
            30,500*J
                Duckling*
            
            
            Supramax
            
            
            52,425
            
            
            2003
            
            
            Spot(2)
            
            
            N/A*Mommy
                Duckling*
            
            
            Panamax
            
            
            78,585
            
            
            1983
            
            
            Time
                charter/1 year(3)
            
            $
            18,000Totals
            
            **691,704**
            
            
            
            
            
            
            
            **$**
            **175,850**







(1)
      Represents the actual daily time charter rates that TMT has procured subsequent
      to the date of the Master Agreement and the Supplemental Agreement.




(2)
      May
      operate in the spot charter market.




(3)
      Subsidiaries of Star Bulk have entered into time charters with TMT for these
      vessels.




If
      TMT is
      unable to deliver a vessel pursuant to the applicable MOA, Star Bulk and TMT
      have agreed to confer and cooperate to identify a replacement vessel and enter
      into a binding purchase agreement for such replacement vessel. If a binding
      purchase agreement for a replacement vessel is not entered into within 45 days
      from the required delivery date of the vessel being replaced, Star Bulk will
      have the right to terminate the MOA for the vessel being replaced. Star Bulk
      has
      agreed to pay TMT for the price difference in cash if the purchase price (based
      on prevailing market rates) of any replacement vessel will be higher than the
      portion of the purchase price allocated to the vessel being replaced. The
      payment will be made concurrently with the delivery of the replacement vessel.
      If the purchase price (based on prevailing market rates) of any replacement
      vessel is lower than the portion of ** the
      purchase price allocated to the vessel being replaced, Star Bulk will benefit
      from such price reduction. Star Bulk expects that the replacement vessel would
      be a drybulk carrier of the type being replaced (Capesize, Panamax or Supramax)
      or if another type of drybulk carrier, would be able to generate equivalent
      revenue.





10


Under
      each of the MOAs, TMT warrants that each vessel, at the time of its delivery,
      will be free of all encumbrances, mortgages and maritime liens or any other
      debts. TMT will indemnify Star Bulk against all claims made against each vessel
      incurred prior to delivery and Star Bulk will indemnify TMT against all claims
      made against each vessel incurred after
      delivery.





Star
      Gamma Inc., a wholly-owned subsidiary of Star Bulk, entered into a time charter
      agreement dated, February 23, 2007, with TMT for the *C
      Duckling* (to
      be
      renamed the *Star
      Gamma* ).
      The
      charter rate for the *Star
      Gamma* will be
      $28,500 per day for a term of one year. Star Iota Inc., a wholly-owned
      subsidiary of Star Bulk, entered into a time charter agreement, dated February
      26, 2007, with TMT for the *Mommy
      Duckling* (to be
      renamed the *Star
      Iota* ).
      The
      charter rate for the *Star
      Iota* will be
      $18,000 per day for a term of one year. Each charter will commence as of the
      date the vessel is delivered to the purchaser. Pursuant to the Supplemental
      Agreement, these time charters will be null and void if the Redomiciliation
      Merger is not consummated.





***TMT
      Lock-Up Period***





The
      Master Agreement generally restricts TMT and its affiliates holding Star Bulk’s
      common stock issued to TMT as the Stock Consideration, without the prior written
      consent of Star Bulk, from directly or indirectly offering, selling, hedging
      or
      otherwise disposing of Star Bulk’s common stock and from engaging in certain
      other transactions relating to such securities for a period of 180 days
      commencing on the effective date of the Redomiciliation Merger.





***Registration
      Rights***





Under
      the
      Master Agreement, Star Bulk has agreed, with some limited exceptions, to include
      the shares of Star Bulk’s common stock comprising the stock consideration
      portion of the aggregate purchase price of the vessels in the initial fleet
      and
      the Additional Stock, which we collectively refer to as the Registrable
      Securities, in Star Bulk ’ s
      registration statement on Form F-1/F-4. In addition, Star Bulk has granted
      TMT
      (on behalf of itself or its affiliates that hold Registrable Securities) the
      right, under certain circumstances and subject to certain restrictions,
      including lock-up and market stand-off restrictions, to require Star Bulk to
      register the Registrable Securities under the Securities Act of 1933, as
      amended, in the future. Under the Master Agreement, TMT also has the right
      to
      require Star Bulk to make available shelf registration statements permitting
      sales of shares into the market from time to time over an extended period.
      In
      addition, TMT will have the ability to exercise certain piggyback registration
      rights 180 days following the effective date of the Redomiciliation Merger.
      All
      expenses relating to such registration will be borne by Star Bulk. Following
      the
      Redomiciliation Merger, TMT and/or its affiliates will own 12,537,645 shares
      of
      Star Bulk’s common stock entitled to these registration rights and TMT and/or
      its affiliates may own up to additional 1,606,962 shares of Star Bulk’s common
      stock entitled to these registration rights in the event that Star Bulk achieves
      certain revenue targets.





***Director
      Nominees***





Under
      the
      Master Agreement, TMT has the right to nominate, and Star Bulk and Star Maritime
      have agreed to cause the appointment and election of two members of the board
      of
      directors of Star Bulk, Mr. Nobu Su and Mr. Peter Espig, each of whom shall
      serve upon the effective time of the Redomiciliation Merger, until their
      successors have been duly elected and qualified. For so long as Mr. Nobu Su
      serves on the board of directors of Star Bulk, he will receive the title of
      non-executive Co-Chairman of Star Bulk.





***Termination***





The
      Master Agreement will terminate and be of no further force or effect in the
      event that the Redomiciliation Merger is not authorized and approved by the
      requisite vote of Star Maritime’s stockholders.





11


***Expenses***





Under
      the
      Master Agreement, each of Star Maritime, Star Bulk and TMT are responsible
      for
      its own expenses in connection with the preparation, negotiation, execution
      and
      delivery of the MOAs, the Supplemental Agreement and the Master Agreement;
      provided that, regardless of whether the Master Agreement or the transactions
      contemplated by the Master Agreement are terminated, Star Maritime will pay
      for
      or reimburse TMT for all reasonable fees and expenses of its legal counsel
      in
      connection with the preparation, negotiation, execution and delivery of the
      Acquisition Agreements up to $25,000. In addition, Star Bulk has agreed to
      pay
      all reasonable expenses (including legal fees and expenses) of TMT in connection
      with soliciting the stockholders of Star Maritime to vote in favor of, and
      approve, the Redomiciliation Merger.





***Conditions
      to the Purchase of the Vessels***





Conditions
      to Star Bulk’s and TMT’s obligations





The
      obligations of Star Bulk to purchase the vessels in the initial fleet and the
      obligations of TMT to sell the vessels are subject to certain conditions. We
      cannot complete the Redomiciliation Merger unless (i) the holders of at least
      a
      majority of our issued and outstanding shares entitled to vote at the special
      meeting vote in favor of the Redomiciliation Merger; (ii) holders of at least
      a
      majority of the shares of common stock issued in the Initial Public Offering
      and
      the Private Placement vote in favor of the Redomiciliation Merger, and (iii)
      holders of less than 6,600,000 shares of common stock, such number representing
      33.0% of the 20,000,000 shares of common stock issued in the Initial Public
      Offering and the Private Placement, vote against the Redomiciliation Merger
      and
      exercise their redemption rights to have their shares redeemed for
      cash.





Conditions
      to Star Bulk’s obligations





The
      obligation of the Star Bulk to purchase the vessels from TMT is subject to
      the
      satisfaction or waiver of the following conditions:




·
            due
                authorization, execution and delivery by TMT of the Master
                Agreement;


·
            the
                representations and warranties of TMT contained in the Master Agreement
                must be true and correct;


·
            TMT
                and each vessel selling subsidiary have performed all obligations
                requested of them under the Acquisition Agreements in all material
                aspects.


·
            the
                performance of the transactions contemplated in the Master Agreement
                upon
                the terns and subject to the conditions set forth in the Master Agreement
                shall not, in the reasonable judgment of TMT, violate, and shall
                not
                subject TMT to any penalty or liability under, any law, rule or regulation
                binding upon TMT;


·
            no
                legal or governmental action, suit or proceeding shall have been
                instituted or threatened before any court, administrative agency
                or
                tribunal, nor shall any order, judgment or decree have been issued
                or
                proposed to be issued by any court, administrative agency or tribunal,
                to
                set aside, restrain, enjoin or prevent the consummation of the Master
                Agreement of the transactions contemplated thereby;
                and


·
            TMT
                and each vessel selling subsidiary have performed all obligations
                required
                of them under the Acquisition Agreements in all material
                respects.





Conditions
      to TMT’s obligations





The
      obligation of the TMT to sell the vessels in the initial fleet to Star Bulk
      is
      subject to the satisfaction or waiver of the following conditions:




·
            due
                authorization, execution and delivery by Star Bulk of the Master
                Agreement;




·
            the
                representations and warranties of Star Bulk contained in the Master
                Agreement must be true and correct;




12


·
                the
                    performance of the transactions contemplated in the Master Agreement
                    upon
                    the terms and subject to the conditions set forth in the Master
                    Agreement
                    shall not, in the reasonable judgment of Star Bulk, violate,
                    and shall not
                    subject Star Bulk, to any material penalty or liability under,
                    any law,
                    rule or regulation binding upon any of
                    them;
  ·
                no
                    legal or governmental action, suit or proceeding shall have been
                    instituted or threatened before any court, administrative agency
                    or
                    tribunal, nor shall any order, judgment or decree have been issued
                    or
                    proposed to be issued by any court, restrain, enjoin or prevent
                    the
                    consummation of the Master Agreement or the transactions contemplated
                    thereby.
  ·
                Star
                    Maritime, Star Bulk or Star Bulk’s vessel purchasing nominees have
                    performed all obligations required of them under the Acquisition
                    Agreements in all material
                    respects.


**Engagement
      of Financial Advisors**





Star
      Maritime entered into an agreement with Bongard Shipbrokers S.A., or Bongard,
      dated October 4, 2006, for purposes of engaging Bongard in connection with
      sourcing, developing contacts and making referrals for potential target
      businesses and providing evaluations of such potential target businesses. In
      exchange for such services, Star Maritime is obligated to pay a contingent
      fee
      of $800,000 within thirty days of the closing of a business combination
      transaction. In the event that Star Maritime does not consummate a business
      combination transaction, no fees are payable to Bongard pursuant to the
      agreement.





Star
      Maritime entered into an agreement with Cantor Fitzgerald & Co., or
      CF&Co., dated December 20, 2006, for purposes of engaging CF&Co. as
      financial advisor in connection with a possible business combination
      transaction. Pursuant to the agreement, CF & Co. was engaged to provide such
      services as creating financial models, advising on the structure of a possible
      transaction with a target business, negotiating agreements on behalf of and
      in
      conjunction with management and assisting management with the preparation of
      marketing and roadshow materials. In exchange for such services, Star Maritime
      is obligated to pay a contingent fee of $1,250,000, plus expenses of up to
      $60,000, within thirty days of the closing of a business combination transaction
      if such transaction is consummated by December 31, 2007.




Star
      Maritime entered into an agreement with Maxim Group LLC, or Maxim, dated
      December 22, 2006, for purposes of engaging Maxim as co-lead financial advisor
      in connection with a possible business combination transaction. Pursuant to
      the
      agreement, Maxim was engaged to provide such services as creating financial
      models, advising on the structure of a possible transaction with a target
      business and assisting in the preparation of terms sheets or letters of intent.
      In exchange for such services, Star Maritime is obligated to pay a contingent
      fee of $800,000 for any business combination transaction consummated during
      the
      term of the agreement (or within six months of the termination date). The
      agreement terminates on October 31, 2007, unless terminated earlier by either
      Star Maritime or Maxim upon thirty days’ written notice, or extended by mutual
      agreement.





**Item
      1A. Risk Factors**




***Risks
      associated with our business***





The
      following risks are associated with the Company’s current status as a blank
      check company. If the Business Combination is not consummated, the Company
      will
      continue to face these risks.





**We
      are a development stage company with no operating history and, accordingly,
      you
      do not have any basis on which to evaluate our ability to achieve our business
      objective.**




We
      were
      incorporated in May 13, 2005 and are a development stage company with no
      operating results to date. Since we do not have an operating history, you have
      no basis upon which to evaluate our ability to achieve our business objective,
      which is to acquire an operating business. We will not generate any revenues
      until, at the earliest, after the consummation of a business combination.




13




**If
      we are forced to liquidate before a business combination, our warrants will
      expire worthless.**




If
      we are
      unable to complete a business combination and are forced to liquidate the trust
      account, there will be no distribution with respect to our outstanding warrants
      and, accordingly, the warrants will expire worthless.




**If
      third parties bring claims against us, the funds in the trust account could
      be
      reduced and the per-share liquidation price received by stockholders could
      be
      less than $10.00 per share.**




Our
      placing of funds in trust may not protect those funds from third party claims
      against us. Although we will seek to have vendors, prospective target businesses
      or other entities we engage execute agreements with us waiving any right, title,
      interest or claim of any kind in or to any monies held in the trust account
      for
      the benefit of our public stockholders, there is no guarantee that they will
      execute such agreements or even if they execute such agreements that they would
      be prevented from bringing claims against the trust account. If any third party
      refused to execute an agreement waiving such claims to the monies held in the
      trust account, we would perform an analysis of the alternatives available to
      us
      if we chose not to engage such third party and evaluate if such engagement
      would
      be in the best interest of our stockholders if such third party refused to
      waive
      such claims. Examples of possible instances where we may engage a third party
      that refused to execute a waiver include the engagement of a third party
      consultant whose particular expertise or skills are believed by management
      to be
      significantly superior to those of other consultants that would agree to execute
      a waiver or in cases where management is unable to find a provider of required
      services willing to provide the waiver. In addition, there is no guarantee
      that
      such entities will agree to waive any claims they may have in the future as
      a
      result of, or arising out of, any negotiations, contracts or agreements with
      us
      and will not seek recourse against the trust account for any reason.
      Accordingly, the proceeds held in trust could be subject to claims which could
      take priority over the claims of our public stockholders and the per-share
      liquidation price could be less than $10.00, plus interest not previously
      released to us (net of taxes payable), due to claims of such creditors. If
      we
      are unable to complete a business combination and are forced to liquidate the
      trust account, our officers and directors, severally, in accordance with their
      respective beneficial ownership interests in us, will be personally liable
      under
      certain circumstances to ensure that the proceeds in the trust account are
      not
      reduced by the claims of various vendors or other entities that are owed money
      by us for services rendered or contracted for or products sold to us or the
      claims of any target businesses. However, we cannot assure you that they will
      be
      able to satisfy those obligations.




**We
      may issue shares of our capital stock or debt securities to complete a business
      combination, which would reduce the equity interest of our current stockholders
      and likely cause a change in control of our ownership.**





We
      may
      issue a substantial number of additional shares of our common stock or preferred
      stock, or a combination of common and preferred stock, to complete a business
      combination. The issuance of additional shares of our common stock or any number
      of shares of our preferred stock:




·
            may
                significantly reduce the equity interest of our current stockholders;




·
            will
                likely cause a change in control if a substantial number of our shares
                of
                common stock are issued, which may affect, among other things, our
                ability
                to use our net operating loss carry forwards, if any, and most likely
                also
                result in the resignation or removal of our present officers and
                directors; and




·
            may
                adversely affect prevailing market prices for our common stock.





Additionally,
      the shipping industry is capital intensive, traditionally using substantial
      amounts of indebtedness to finance vessel acquisitions, capital expenditures
      and
      working capital needs. If we finance the purchase of any of our vessels through
      the issuance of debt securities, it could result in:




·
            default
                and foreclosure on our assets if our operating cash flow after a
                business
                combination were insufficient to pay our debt obligations;




14




·
            acceleration
                of our obligations to repay the indebtedness even if we have made
                all
                principal and interest payments when due if the debt security contained
                covenants that required the maintenance of certain financial ratios
                or
                reserves and any such covenant were breached without a waiver or
                renegotiation of that covenant;




·
            our
                immediate payment of all principal and accrued interest, if any,
                if the
                debt security was payable on demand; and




·
            our
                inability to obtain additional financing, if necessary, if the debt
                security contained covenants restricting our ability to obtain additional
                financing while such security was outstanding.





**Our
      officers and directors, control a substantial interest in us and thus may
      influence certain actions requiring stockholder vote.**




Our
      officers and directors and their nominees own 35% of our issued and outstanding
      shares of common stock which could permit them to effectively influence the
      outcome of all matters requiring approval by our stockholders at such time,
      including the election of directors and approval of significant corporate
      transactions, following the consummation of our initial business combination.
      In
      addition, our board of directors is divided into three classes, each of which
      will generally serve for a term of three years with only one class of directors
      being elected in each year. As a consequence of our “staggered” board of
      directors, only a minority of the board of directors will be considered for
      election and our officers and directors, because of their ownership position,
      will have considerable influence regarding the outcome. Accordingly, our
      officers and directors will continue to exert control at least until the
      consummation of a business combination.





**Limited
      ability to evaluate the target business’ management**




Although
      we expect certain of our management, particularly Mr. Tsirigakis, to remain
      associated with us following a business combination, it is likely that the
      management of the target business at the time of the business combination will
      remain in place, and we may employ other personnel following the business
      combination. Although we intend to closely scrutinize the management of a
      prospective target business when evaluating the desirability of effecting a
      business combination, we cannot assure you that our assessment of the target
      business’ management will prove to be correct. In addition, we cannot assure you
      that the future management will have the necessary skills, qualifications or
      abilities to manage a public company. Furthermore, the future role of our
      officers and directors, if any, in the target business cannot presently be
      stated with any certainty. Moreover, our current management will only be able
      to
      remain with the combined company after the consummation of a business
      combination if they are able to negotiate and agree to mutually acceptable
      employment terms in connection with any such combination, which terms would
      be
      disclosed to stockholders in any proxy statement relating to such transaction.
      While it is possible that one or more of our directors will remain associated
      in
      some capacity with us following a business combination, it is unlikely that
      any
      of them will devote their full efforts to our affairs subsequent to a business
      combination. Moreover, we cannot assure you that our officers and directors
      will
      have significant experience or knowledge relating to the operations of the
      particular target business.




Following
      a business combination, we may seek to recruit additional managers to supplement
      the incumbent management of the target business. We cannot assure you that
      we
      will have the ability to recruit additional managers, or that those additional
      managers will have the requisite skills, knowledge or experience necessary
      to
      enhance the incumbent management.




**We
      will be dependent upon interest earned on the trust account to fund our search
      for a target company and consummation of a business
      combination.**





Of
      the
      net proceeds of our Initial Public Offering, only approximately $363,172 was
      available to us outside the trust account to fund our working capital
      requirements. During the fiscal year ended December 31, 2006, we received
      distributions in the aggregate amount of $2,500,000 from the interest earned
      on
      the trust account to provide us with additional working capital to search for
      a
      target business and consummate a business combination. As of December 31, 2006,
      we received the maximum amount distributable to us under the terms of the
      Investment Management Trust Agreement. If we do not have sufficient funds
      available as working capital to complete a business combination, we would need
      to borrow funds from our insiders or others or be forced to
      liquidate.




15




**Our
      ability to successfully effect a business combination and to be successful
      afterward will be totally dependent upon the efforts of our key personnel,
      some
      of whom may join us following a business combination and whom we would have
      only
      a limited ability to evaluate. It is also possible that our current officers
      and
      directors will resign upon the consummation of a business
      combination.**




Our
      ability to successfully effect a business combination will be totally dependent
      upon the efforts of our key personnel. The future role of our key personnel
      following a business combination, however, cannot presently be fully
      ascertained. Although we expect several of our management and other key
      personnel, particularly our chairman of the board and chief executive officer,
      to remain associated with us following a business combination, we may employ
      other personnel following the business combination. Moreover, our current
      management will only be able to remain with the combined company after the
      consummation of a business combination if they are able to negotiate and agree
      to mutually acceptable employment terms as part of any such combination, which
      terms would be disclosed to stockholders in any proxy statement relating to
      such
      transaction. If we acquired a target business in an all-cash transaction, it
      would be more likely that current members of management would remain with the
      combined company if they chose to do so. If a business combination were
      structured as a merger whereby the stockholders of the target company were
      to
      control the combined company following a business combination, it may be less
      likely that our current management would remain with the combined company unless
      it was negotiated as part of the transaction via the acquisition agreement,
      an
      employment agreement or other arrangement. In making the determination as to
      whether current management should remain with us following the business
      combination, management will analyze the experience and skill set of the target
      business’ management and negotiate as part of the business combination that
      certain members of current management remain if it is believed that it is in
      the
      best interests of the combined company post-business combination. If management
      negotiates such retention as a condition to any potential business combination,
      management may look unfavorably upon or reject a business combination with
      a
      potential target business whose owners refuse to retain members of our
      management post-business combination, thereby resulting in a conflict of
      interest. While we intend to closely scrutinize any additional individuals
      we
      engage after a business combination, we cannot assure you that our assessment
      of
      these individuals will prove to be correct. These individuals may be unfamiliar
      with the requirements of operating a public company as well as United States
      securities laws which could cause us to have to expend time and resources
      helping them become familiar with such laws. This could be expensive and
      time-consuming and could lead to various regulatory issues which may adversely
      affect our operations.





**If
      we seek to effect a business combination with an entity that is directly or
      indirectly affiliated with our officers or directors, conflicts of interest
      could arise.**




Our
      officers and directors either currently have or may in the future have
      affiliations with companies in the shipping industry. If we were to seek a
      business combination with a target company with which one or more of our
      officers or directors is affiliated, conflicts of interest could arise in
      connection with negotiating the terms of and completing the business
      combination. If conflicts arise, they may not necessarily be resolved in our
      favor.




**Our
      officers and directors may allocate their time to other businesses thereby
      causing conflicts of interest in their determination as to how much time to
      devote to our affairs. This could have a negative impact on our ability to
      consummate a business combination.**




Our
      officers and directors are not required to commit their full time to our
      affairs, which may result in a conflict of interest in allocating their time
      between our operations and other businesses. We do not intend to have any full
      time employees prior to the consummation of a business combination. All of
      our
      executive officers are engaged in several other business endeavors and are
      not
      obligated to contribute any specific number of hours per week to our affairs.
      If
      our executive officers’ other business affairs require them to devote more
      substantial amounts of time to such affairs, it could limit their ability to
      devote time to our affairs and could have a negative impact on our ability
      to
      consummate a business combination.




16




**Our
      officers and directors may in the future become affiliated with entities engaged
      in business activities similar to those intended to be conducted by us and
      accordingly, may have conflicts of interest in determining to which entity
      a
      particular business opportunity should be presented.**




Our
      officers and directors may in the future become affiliated with entities,
      including other “blank check” companies, engaged in business activities similar
      to those intended to be conducted by us. Additionally, our officers and
      directors may become aware of business opportunities which may be appropriate
      for presentation to us as well as the other entities with which they are or
      may
      be affiliated. Further, certain of our officers and directors are currently
      involved in other businesses that are similar to the business activities that
      we
      intend to conduct following a business combination. Due to these existing
      affiliations, they may have fiduciary obligations to present potential business
      opportunities to those entities prior to presenting them to us which could
      cause
      additional conflicts of interest. Accordingly, they may have conflicts of
      interest in determining to which entity a particular business opportunity should
      be presented.





**All
      of our officers and directors own shares of our common stock which will not
      participate in liquidation distributions and therefore they may have a conflict
      of interest in determining whether a particular target business is appropriate
      for a business combination.**





All
      of
      our officers and directors own shares of our common stock in our company but
      have waived their right to receive distributions with respect to those shares
      upon our liquidation upon our failure to complete a business combination. The
      shares and warrants owned by our officers and directors and their affiliates
      will be worthless if we do not consummate a business combination. The personal
      and financial interests of our directors may influence their motivation in
      identifying and selecting a target business and completing a business
      combination timely. Consequently, our directors’ and officers’ discretion in
      identifying and selecting a suitable target business may result in a conflict
      of
      interest when determining whether the terms, conditions and timing of a
      particular business combination are appropriate and in our stockholders’ best
      interest.





**Our
      officers and directors will not receive reimbursement for any out-of-pocket
      expenses incurred by them to the extent that such expenses exceed the amount
      in
      the trust account unless the business combination is consummated and therefore
      they may have a conflict of interest in determining whether a particular target
      business is appropriate for a business combination and in the public
      stockholders’ best interest.**





Our
      officers and directors, will not receive reimbursement for any out-of-pocket
      expenses incurred by them to the extent that such expenses exceed the available
      proceeds not deposited in the trust account and the portion of the interest
      on
      the trust account released to us (which, because interest rates are unknown,
      may
      be insufficient to fund all of our working capital requirements) unless the
      business combination is consummated. The financial interest of our officers
      and
      directors could influence their motivation in selecting a target business and
      thus, there may be a conflict of interest when determining whether a particular
      business combination is in the stockholders’ best interest. For instance, our
      officers and directors may, as part of any such combination, negotiate the
      repayment of some or all of their out-of-pocket expenses in excess of the amount
      not placed in the trust account, which if not agreed to by the target business’
owners, could cause our management to view such potential business combination
      unfavorably, thereby resulting in a conflict of interest.


17


**It
      is probable that our initial business combination will be with a single target
      business, which may cause us to be solely dependent on a single business and
      a
      limited number of services.**




Our
      initial business combination must be with a business or businesses with a
      collective fair market value of at least 80% of our net assets at the time
      of
      such acquisition. We may not be able to acquire more than one target business
      because of various factors, including possible complex accounting issues, which
      would include generating pro forma financial statements reflecting the
      operations of several target businesses as if they had been combined, and
      numerous logistical issues, which could include attempting to coordinate the
      timing of negotiations, proxy statement disclosure and closings with multiple
      target businesses. In addition, we would also be exposed to the risk that
      conditions to closings with respect to the acquisition of one or more of the
      target businesses would not be satisfied bringing the fair market value of
      the
      initial business combination below the required fair market value of 80% of
      our
      net assets threshold. Accordingly, while it is possible that we may attempt
      to
      effect our initial business combination with more than one target business,
      we
      are more likely to choose a single target business if deciding between one
      target business meeting such 80% threshold and comparable multiple target
      business candidates collectively meeting the 80% threshold. Consequently, it
      is
      probable that, unless the purchase price consists substantially of our equity,
      we will have the ability to complete only the initial business combination
      with
      the funds in the trust account. Accordingly, the prospects for our success
      may
      be:




·
            solely
                dependent upon the performance of a single business, or




·
            dependent
                upon the development or market acceptance of a single or limited
                number of
                processes or services.





In
      this
      case, we will not be able to diversify our operations or benefit from the
      possible spreading of risks or offsetting of losses, unlike other entities
      which
      may have the resources to complete several business combinations in different
      industries or different areas of a single industry.




**Because
      of our limited resources and the significant competition for business
      combination opportunities, we may not be able to consummate an attractive
      business combination.**




We
      expect
      to encounter intense competition from other entities having a business objective
      similar to ours, including venture capital funds, leveraged buyout funds and
      operating businesses competing for acquisitions. Many of these entities are
      well
      established and have extensive experience in identifying and effecting business
      combinations directly or through affiliates. Many of these competitors possess
      greater technical, human and other resources than we do and our financial
      resources will be relatively limited when contrasted with those of many of
      these
      competitors. While we believe that there are numerous potential target
      businesses that we could acquire with the funds in our trust account, our
      ability to compete in acquiring certain sizable target businesses will be
      limited by our available financial resources. This inherent competitive
      limitation gives others an advantage in pursuing the acquisition of certain
      target businesses. Further, the obligation we have to seek stockholder approval
      of a business combination may delay the consummation of a transaction, and
      our
      obligation to redeem for cash up to 32.99% of the shares of common stock sold
      in
      the Initial Public Offering and the Private Placement in certain instances
      will
      limit the manner in which we can structure a business combination (i.e. we
      will
      not be able to undertake an all cash acquisition) and may reduce the resources
      available to us for such purpose, as well as for funding a target company’s
      business. Additionally, our outstanding warrants, and the future dilution they
      potentially represent, may not be viewed favorably by certain target businesses.
      Any of these obligations may place us at a competitive disadvantage in
      successfully negotiating a business combination.




**We
      may be unable to obtain additional financing, if required, to complete a
      business combination or to fund the operations and growth of the target
      business, which could compel us to restructure the transaction or abandon a
      particular business combination.**




We
      cannot
      ascertain the capital requirements for any particular transaction. If the net
      proceeds of our Initial Public Offering prove to be insufficient, either because
      of the size of the business combination or the depletion of the available net
      proceeds not held in trust (including interest earned on the trust account
      released to us) in search of a target business, or because we become obligated
      to redeem for cash a significant number of shares from dissenting stockholders,
      we will be required to seek additional financing. We cannot assure you that
      such
      financing would be available on acceptable terms, if at all. To the extent
      that
      additional financing proves to be unavailable when needed to consummate a
      particular business combination, we would be compelled to restructure the
      transaction or abandon that particular business combination and seek an
      alternative target business candidate. In addition, it is possible that we
      could
      use a portion of the funds not in the trust account (including amounts we
      borrowed, if any) to make a deposit, down payment or fund a "no-shop" provision
      with respect to a particular proposed business combination, although we do
      not
      have any current intention to do so. In the event that we were ultimately
      required to forfeit such funds (whether as a result of our breach of the
      agreement relating to such payment or otherwise), if such payment was large
      enough and we had already used up the funds allocated to due diligence and
      related expenses in connection with the aborted transaction, we could be left
      with insufficient funds to continue searching for, or conduct due diligence
      with
      respect to, other potential target businesses. If we were unable to secure
      additional financing (which could be provided by our officers and directors,
      though they are under no obligation to do so), we would most likely fail to
      consummate a business combination in the allotted time and would be forced
      to
      liquidate. In addition, if we consummate a business combination, we may require
      additional financing to fund the operations or growth of the target business.
      The failure to secure additional financing could have a material adverse effect
      on the continued development or growth of the target business. None of our
      officers, directors or stockholders is required to provide any financing to
      us
      in connection with or after a business combination.




18




***Risks
      associated with the shipping industry***




**If
      charter rates fluctuate and the shipping industry continues to undergo cyclical
      turns, it may have a negative impact on our profitability and operations.**




The
      shipping business, including the dry cargo market, has been cyclical in varying
      degrees, experiencing fluctuations in charter rates, profitability and,
      consequently, vessel values.




A
      significant contraction in demand for imported commodities, such as iron ore
      or
      coal, as a result of economic downturns or changes in government policies in
      certain regional markets could have a material adverse impact on dry cargo
      freight rates, as well as the demand, in general for vessels. For instance,
      a
      downturn in the economy of countries such as China, which has experienced
      substantial global economic growth during the past few years, could negatively
      affect the shipping industry. The demand for dry cargo vessels is also greatly
      affected by the demand for consumer goods and perishable foods, dry bulk
      commodities and bagged and finished products, as well as commodity prices,
      environmental concerns and competition. The supply of shipping capacity is
      also
      a function of the delivery of new vessels and the number of older vessels
      scrapped, in lay-up, converted to other uses, reactivated or removed from active
      service. Supply may also be affected by maritime transportation and other types
      of governmental regulation, including that of international authorities. These
      and other factors may cause a decrease in the demand for the services we may
      ultimately provide. As a result, the operations of any prospective target
      business we may ultimately complete a business combination with may be adversely
      affected.





**Changes
      in the shipping industry may reduce the demand for the types of vessels we
      seek
      to acquire or the services we may ultimately provide and thereby reduce our
      profitability.**





The
      future demand for vessels in the markets in which we may ultimately operate
      will
      be dependent, in large part, upon economic growth in the global economy,
      seasonal and regional changes in demand and changes to the capacity of the
      world
      fleet. Adverse economic, political, social or other negative developments could
      have a material adverse effect on the business that we may ultimately complete
      a
      business combination with. Many of the markets in which dry cargo vessels
      operate have been characterized by oversupply. This is frequently the result
      of
      an overestimated growth in demand for these vessels in the applicable shipping
      markets. For example, an oversupply of vessels carrying bulk cargo may be due
      to, among other factors, an overestimation in the demand for imports of bulk
      commodities like grain, sugar, iron ore or coal. While it is our intention
      to
      complete a business combination with a target business that operates in a market
      that will afford the greatest value for the vessels that we ultimately own
      and
      operate, we cannot assure you that we will be able to successfully acquire
      a
      business that provides the valuable market that we seek, or that the value
      of
      the vessels that we ultimately acquire will maintain their value in any of
      these
      markets. Operating ** results
      may be subject to seasonal fluctuations.





19


The
      shipping industry has historically exhibited seasonal variations in demand
      and,
      as a result, in charter hire rates. This seasonality may result in
      quarter-to-quarter volatility in our operating results. 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. In addition, unpredictable weather patterns in these
      months tend to disrupt vessel scheduling and supplies of certain commodities.
      As
      a result, revenues are typically weaker during the fiscal quarters ended June
      30
      and September 30, and, conversely, typically stronger in fiscal quarters ended
      December 31 and March 31.





**If
      we experienced a catastrophic loss and our insurance is not adequate to cover
      such loss, it could have a material adverse affect on our operations.**





The
      ownership and operation of vessels in international trade is affected by a
      number of risks, including mechanical failure, personal injury, vessel and
      cargo
      loss or damage, business interruption due to political conditions in foreign
      countries, hostilities, labor strikes, adverse weather conditions and
      catastrophic marine disaster, including environmental accidents and collisions.
      All of these risks could result in liability, loss of revenues, increased costs
      and loss of reputation. We intend to maintain insurance, consistent with
      industry standards, against these risks on any vessels and other business assets
      we may acquire upon completion of a business combination. However, we cannot
      assure you that we will be able to adequately insure against all risks, that
      any
      particular claim will be paid out of our insurance, or that we will be able
      to
      procure adequate insurance coverage at commercially reasonable rates in the
      future. Our insurers will also require us to pay certain deductible amounts,
      before they will pay claims, and insurance policies may contain limitations
      and
      exclusions, which, although we believe will be standard for the shipping
      industry, may nevertheless increase our costs and lower our profitability.
      Additionally, any increase in environmental and other regulations may also
      result in increased costs for, or the lack of availability of, insurance against
      the risks of environmental damage, pollution and other claims for damages that
      may be asserted against us. Our inability to obtain insurance sufficient to
      cover potential claims or the failure of insurers to pay any significant claims,
      could have a material adverse effect on our profitability and operations.




**We
      may incur significant costs in complying with environmental, safety and other
      governmental regulations and our failure to comply with these regulations could
      result in the imposition of penalties, fines and restrictions on our operations.**




The
      operation of vessels is subject to extensive and changing environmental
      protection, safety and other federal, state and local laws, rules, regulations
      and treaties, compliance with which may entail significant expense, including
      expenses for ship modifications and changes in operating procedures. We cannot
      assure you that we will be able to comply with all laws, rules, regulations
      and
      treaties following a business combination. If we are unable to adhere to these
      requirements, it could result in the imposition of penalties and fines against
      us, and could also result in the imposition of restrictions on our business
      and
      operations. Furthermore, the costs of compliance also could have a material
      adverse effect on our profitability and operations.




**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 and
      the
      continuing response of the United States to these attacks, as well 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,
      operating results and financial condition. The continuing conflict in Iraq
      may
      lead to additional acts of terrorism and armed conflict around the world, which
      may contribute to further economic instability in the global financial markets.
      In the past, political conflicts have also resulted in attacks on vessels,
      mining of waterways and other efforts to disrupt international shipping,
      particularly in the Arabian Gulf region. Acts of terrorism and piracy have
      also
      affected vessels trading in regions such as the South China Sea. Any of theses
      occurrences could have a material adverse impact on our operating results,
      revenues and costs. If a business combination involves the ownership of vessels,
      such vessels could be arrested by maritime claimants, which could result in
      the
      interruption of business and have an adverse effect on revenue and
      profitability.




20


Crew
      members, tort claimants, claimants for breach of certain maritime contracts,
      vessel mortgagees, suppliers of goods and services to a vessel, shippers of
      cargo and other persons may be entitled to a maritime lien against a vessel
      for
      unsatisfied debts, claims or damages, and in many circumstances a maritime
      lien
      holder may enforce its lien by “arresting” a vessel through court processes.
      Additionally, in certain jurisdictions, such as South Africa, under the “sister
      ship” theory of liability, a claimant may arrest not only the vessel with
      respect to which the claimant’s lien has arisen, but also any “associated”
vessel owned or controlled by the legal or beneficial owner of that vessel.
      If
      any vessel ultimately owned and operated by us is “arrested”, this could result
      in a material loss of revenues, or require us to pay substantial amounts to
      have
      the “arrest” lifted.





**We
      anticipate re-domiciling in the Marshall Islands in connection with a business
      combination, and the laws of the Marshall Islands will likely govern all of
      our
      material agreements and we may not be able to enforce our legal rights.**




In
      connection with a business combination, we anticipate relocating the home
      jurisdiction of our business from Delaware to the Marshall Islands to take
      advantage of favorable tax laws. If we determine to do this, the laws of the
      Marshall Islands will likely govern all of our material agreements. We cannot
      assure you that the system of laws and the enforcement of existing laws in
      the
      Marshall Islands would be as certain in implementation and interpretation as
      in
      the United States. The inability to enforce or obtain a remedy under any of
      our
      future agreements could result in a significant loss of business, business
      opportunities or capital. Any such reincorporation and the international nature
      of the shipping industry will likely subject us to foreign
      regulation.




**Governments** ****** **could
      requisition vessels of a target company during a period of war or emergency,
      resulting in a loss of earnings.**




A
      government could requisition a company’s vessels for title or hire. Requisition
      for title occurs when a government takes control of a vessel and becomes her
      owner, while requisition for hire occurs when a government takes control of
      a
      vessel and effectively becomes her 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
      a
      target company would be entitled to compensation in the event of a requisition
      of any of its vessels, the amount and timing of payment would be
      uncertain.




**Because
      our directors and officers reside outside of the United States and, after the
      consummation of a business combination, substantially all of our assets may
      be
      located outside of the United States, it may be difficult for investors to
      enforce their legal rights against such individuals.**




All
      of
      our directors and officers reside outside of the United States and, after the
      consummation of a business combination, substantially all of our assets may
      be
      located outside of the United States. As a result, it may not be possible for
      investors in the United States to enforce their legal rights, to effect service
      of process upon our directors or officers or to enforce judgments of United
      States courts predicated upon civil liabilities and criminal penalties of our
      directors and officers under Federal securities laws.




**We
      may become subject to United States Federal income taxation on our United States
      source shipping income.**




Due
      to
      the nature of the shipping industry, we may complete a business combination
      with
      a target business outside of the United States and, if such acquisition involved
      our reincorporation as a foreign entity, would then attempt to qualify under
      Section 883 of the U.S. Internal Revenue Code of 1986, as amended, for an
      exemption from United States federal income tax on substantially all of our
      shipping income. This exemption may not be available, or may subsequently be
      lost, if 50% or more of our stock is owned, for more than half the number of
      days during the taxable year, by persons in the United States. We can give
      no
      assurance that the ownership of our stock will permit us to qualify for the
      Section 883 exemption. If we do not qualify for an exemption pursuant to Section
      883, we will be subject to United States federal income tax, likely imposed
      on a
      gross basis at 4%, on our United States source shipping income, which
      constitutes not more than 50% of our gross shipping income. In such case, we
      may
      seek to elect to be taxed under what is in essence an alternative tonnage tax
      created by the American Job Creation Act of 2004, which would likely provide
      for
      a substantially reduced tax to the extent it applies. In such a case, our net
      income and cash flow will be reduced by the amount of such tax.





21


**If
      we acquire a business that charters vessels on the spot market, it may increase
      our risk of doing business following the business combination.**





We
      may
      complete a business combination with a business that involves the chartering
      of
      vessels on a spot charter basis, either on voyage charters or short-term time
      charters of less than 12 months’ duration. Although dependence on spot charters
      is not unusual in the shipping industry, the spot charter market is highly
      competitive and spot charter rates are subject to significant fluctuations
      based
      upon available charters and the supply of and demand for seaborne shipping
      capacity. Although our focus on the spot charter market may enable us to benefit
      from strengthening industry conditions should they occur, to do so we may be
      required to consistently procure spot charter business. We cannot assure you
      that spot charters will be available at rates that will be sufficient to enable
      us to operate our business profitably.





In
      addition, our dependence on the spot charter market may result in lower
      utilization of our vessels and consequently decreased profitability. We cannot
      assure you that rates in the spot charter market will not decline, that charters
      in the spot charter market will continue to be available or that our dependence
      on the spot charter market will not result in generally lower overall
      utilization or decreased profitability, the occurrence of any of which events
      could affect our ability to service our debt during these
      periods.




**If
      a target company has or obtains a vessel that is of second-hand or older nature,
      it could increase our costs and decrease our profitability.**




We
      believe that competition for employment of second-hand vessels may be intense
      in
      the dry cargo market. Additionally, second-hand vessels may carry no warranties
      from sellers with respect to their condition as compared to warranties from
      shipyards available for newly-constructed vessels, and may be subject to
      problems created by the use of their original owners. If we purchase any
      second-hand vessels, we may incur additional expenditures as a result of these
      risks, which may reduce our profitability.




While
      it
      will be our intention if we acquire a target business in this area to sell
      or
      retire our vessels before they are considered older vessels, under shipping
      standards, in the rare case where we continue to own and operate a vessel for
      a
      longer period, we could be faced with the additional expenditures necessary
      to
      maintain a vessel in good operating condition as the age of a vessel increases.
      Moreover, port-state authorities in certain jurisdictions may demand that
      repairs be made to this type of vessel before allowing it to berth at or depart
      a particular port, even though that vessel may be in class and in compliance
      with all relevant international maritime conventions. Should any of these types
      of problems or changes develop, income may be lost if a vessel goes off-hire
      and
      additional unforeseen and unbudgeted expenses may be incurred. If we choose
      to
      maintain any vessels past the age that we have planned, we cannot assure you
      that market conditions will justify expenditures with respect to any of the
      foregoing or enable us to operate these vessels profitably.


22


**Management
      services relating to a target company’s vessels may be performed by management
      companies that are affiliates of our officers and directors which could result
      in potential conflicts of interest.**




If
      we
      complete a business combination which involves the acquisition of vessels,
      we
      anticipate engaging the services of one or more management companies to provide
      technical and management services, relating to the operation of such vessels.
      Whether or not members of existing management remain our officers or directors
      post business combination, it is possible that these management services will
      be
      performed by management companies that are controlled by one or more of our
      officers or directors (for example, by acting as our fleet’s technical managers
      and performing all commercial management functions). The management companies
      may receive fees and commissions on gross revenue received by us in respect
      of
      each vessel managed, a commission on the gross sale or purchase price of vessels
      which we purchase or sell, and a commission on all insurance placed. If members
      of our existing management remain as members of management following a business
      combination, the relationships between our officers and directors and the
      applicable management companies may give rise to conflicts of interest between
      us on the one hand and the management companies on the other. In addition,
      some
      of our officers and directors also may hold senior management positions with
      one
      or more of these management companies. In light of their positions, these
      individuals may experience conflicts of interest in selecting between our
      interests and those of the applicable management companies. Because certain
      financial information will be required to be provided to our stockholders in
      connection with a proposed business combination, prospective target businesses
      may be limited.




In
      order
      to seek stockholder approval of a business combination with an operating
      business in the shipping industry, the proposed target business will be required
      to have certain financial statements which are prepared in accordance with,
      or
      which can be reconciled to, U.S. generally accepted accounting principles and
      audited in accordance with the standards of the United States Public Company
      Accounting Oversight Board. Some of the businesses in the shipping industry
      may
      not keep financial statements in accordance with, or that can be reconciled
      with, U.S. generally accepted accounting principles. To the extent that the
      required financial statements or information cannot be prepared or obtained,
      we
      will not be able to complete a business combination with such entities.
      Accordingly, these financial information requirements may limit the pool of
      potential target businesses or vessels which we may acquire.





***Risks
      associated with our common stock.***




**Our
      outstanding warrants may have an adverse effect on the market price of common
      stock and make it more difficult to effect a business combination.**




Currently,
      we have outstanding warrants to purchase 20,000,000 shares of common stock.
      To
      the extent we issue shares of common stock to effect a business combination,
      the
      potential for the issuance of substantial numbers of additional shares upon
      exercise of these warrants could make us a less attractive acquisition vehicle
      in the eyes of a target business as such securities, when exercised, will
      increase the number of issued and outstanding shares of our common stock and
      reduce the value of the shares issued to complete the business combination.
      Accordingly, our warrants may make it more difficult to effectuate a business
      combination or increase the cost of the target business. Additionally, the
      sale,
      or even the possibility of sale, of the shares underlying the warrants could
      have an adverse effect on the market price for our securities or on our ability
      to obtain future public financing. If and to the extent these warrants are
      exercised, you may experience dilution to your holdings.




**If
      our officers and directors exercise their registration rights, it may have
      an
      adverse effect on the market price our common stock and the existence of these
      rights may make it more difficult to effect a business combination.**




Our
      officers and directors are entitled to demand that we register the resale of
      their 9,026,924 shares of common stock owned by them prior to the Initial Public
      Offering and the Private Placement at any time after the date on which their
      shares are released from escrow, which, except in limited circumstances, will
      not be before December 15, 2008. Furthermore, certain of our officers and
      directors are entitled to demand and “piggy-back” registration with respect to
      the 1,132,500 shares, 1,132,500 warrants and 1,132,500 shares underlying the
      warrants comprising the units purchased in the Private Placement at any time
      after we announce that we have entered a letter of intent, an agreement in
      principle or a definitive agreement in connection with a business combination.
      If our officers and directors exercise their registration rights with respect
      to
      all of their shares of common stock, then there will be an additional 10,159,424
      shares of common stock eligible for trading in the public market. The presence
      of this additional number of shares of common stock eligible for trading in
      the
      public market may have an adverse effect on the market price of our common
      stock. In addition, the existence of these rights may make it more difficult
      to
      effectuate a business combination or increase the cost of the target business,
      as the stockholders of the target business may be discouraged from entering
      into
      a business combination with us or request a higher price for their securities
      as
      a result of these registration rights and the potential future effect their
      exercise may have on the trading market for our common stock.




23


**The
      American Stock Exchange may delist our securities from quotation on its exchange
      which could limit investors' ability to make transactions in our securities
      and
      subject us to additional trading restrictions.**




Our
      securities are listed on the American Stock Exchange, a national securities
      exchange. We cannot assure you that our securities will continue to be listed
      on
      the American Stock Exchange in the future prior to a business combination.
      Additionally, in connection with our business combination, it is likely that
      the
      American Stock Exchange may require us to file a new initial listing application
      and meet its initial listing requirements as opposed to its more lenient
      continued listing requirements. We cannot assure you that we will be able to
      meet those initial listing requirements at that time.




If
      the
      American Stock Exchange delists our securities from trading on its exchange,
      we
      could face significant material adverse consequences including:




·
            a
                limited availability of market quotations for our securities;




·
            a
                determination that our common stock is a "penny stock" which will
                require
                brokers trading in our common stock to adhere to more stringent rules
                and
                possibly resulting in a reduced level of trading activity in the
                secondary
                trading market for our common stock;




·
            a
                limited amount of news and analyst coverage for our company; and




·
            a
                decreased ability to issue additional securities or obtain additional
                financing in the future.





**If
      we are deemed to be an investment company, we may be required to institute
      burdensome compliance requirements and our activities may be restricted, which
      may make it difficult for us to complete a business combination.**




If
      we are
      deemed to be an investment company under the Investment Company Act of 1940,
      our
      activities may be restricted, including:




·
            restrictions
                on the nature of our investments;




·
            restrictions
                on the issuance of securities; and




·
            which
                may make it difficult for us to complete a business combination.




In
      addition, we may have imposed upon us burdensome requirements, including:




·
            registration
                as an investment company;




·
            adoption
                of a specific form of corporate structure; and




·
            reporting,
                record keeping, voting, proxy and disclosure requirements and other
                rules
                and regulations.





We
      do not
      believe that our anticipated principal activities will subject us to the
      Investment Company Act of 1940. To this end, the proceeds held in trust may
      only
      be invested by the trust agent in Treasury Bills issued by the United States
      with maturity dates of 180 days or less or in money market funds meeting certain
      conditions under Rule 2a-7 promulgated under the Investment Company Act of
      1940.
      By restricting the investment of the proceeds to these instruments, we intend
      to
      meet the requirements for the exemption provided in Rule 3a-1 promulgated under
      the Investment Company Act of 1940. If we were deemed to be subject to the
      act,
      compliance with these additional regulatory burdens would require additional
      expense that we have not allotted for.




24


**Our
      directors may not be considered “independent” under the policies of the North
      American Securities Administrators Association, Inc.**




Under
      the
      policies of the North American Securities Administrators Association, Inc.,
      an
      international organization devoted to investor protection, because each of
      our
      directors owns shares of our securities and may receive reimbursement for
      out-of-pocket expenses incurred by them in connection with activities on our
      behalf such as identifying potential target businesses and performing due
      diligence on suitable business combinations, state securities administrators
      could take the position that such individuals are not “independent.” If this
      were the case, they would take the position that we would not have the benefit
      of independent directors examining the propriety of expenses incurred on our
      behalf and subject to reimbursement. Additionally, there is no limit on the
      amount of out-of-pocket expenses that could be incurred and there will be no
      review of the reasonableness of the expenses by anyone other than our board
      of
      directors, which would include persons who may seek reimbursement, or a court
      of
      competent jurisdiction if such reimbursement is challenged. Although we believe
      that all actions taken by our directors on our behalf will be in our best
      interests, whether or not they are deemed to be “independent,” we cannot assure
      you that this will actually be the case. If actions are taken, or expenses
      are
      incurred that are actually not in our best interests, it could have a material
      adverse effect on our business and operations and the price of our stock held
      by
      the public stockholders.




**Because
      some of our directors and officers reside outside of the United States and,
      after the consummation of a business combination, substantially all of our
      assets may be located outside of the United States, it may be difficult for
      investors to enforce their legal rights against such individuals or such
      assets.**




Some
      of
      our directors and officers reside outside of the United States and, after the
      consummation of a business combination, substantially all of our assets may
      be
      located outside of the United States. As a result, it may not be possible for
      investors in the United States to enforce their legal rights, to effect service
      of process upon our directors or officers or to enforce judgments of United
      States courts predicated upon civil liabilities and criminal penalties of our
      directors and officers under Federal securities laws.




**Because
      we may acquire a company located outside of the United States, we may be subject
      to various risks of the foreign jurisdiction in which we ultimately operate.**




If
      we
      acquire a company that has sales or operations outside the United States, we
      could be exposed to risks that negatively impact our future sales or
      profitability following a business combination, especially if the acquired
      company is in a developing country or a country that is not fully
      market-oriented. If we were to acquire a business that operates in such a
      country, our operations might not develop in the same way or at the same rate
      as
      might be expected in the United States or another country with an economy
      similar to the market-oriented economies of member countries which are members
      of the Organization for Economic Cooperation and Development, or the OECD (an
      international organization helping governments through the economic, social
      and
      governance challenges of a globalized economy).





***Risks
      associated with the proposed Business Combination***





The
      following are risks the Company may face in the event the Business Combination
      is consummated:





**Star
      Bulk has no operating history and may not operate profitably in the
      future.**





Star
      Bulk
      was formed December 13, 2006. Star Bulk has entered into agreements to acquire
      eight drybulk carriers and expects to take delivery of the vessels within sixty
      days following the effective date of the Redomiciliation Merger. However, Star
      Bulk has no operating history. Its financial statements do not provide a
      meaningful basis for you to evaluate its operations and ability to be profitable
      in the future. Star Bulk may not be profitable in the future.





25


**Star
      Bulk’s senior executive officers and directors may not be able to organize and
      manage** ***a*** **publicly
      traded operating company.**





Only
      one
      of Star Bulk’s senior executive officers or directors have previously organized
      and managed a publicly traded operating company, and Star Bulk’s senior
      executive officers and directors may not be successful in doing so. The demands
      of organizing and managing a publicly traded operating company are much greater
      as compared to a private or blank check company and some of Star Bulk’s senior
      executive officers and directors may not be able to meet those increased
      demands.





**If
      any of the eight drybulk carriers in Star Bulk’s fleet are not delivered on time
      or** ** **delivered
      with significant defect, Star Bulk’s proposed business, results of operations
      and financial coalition could suffer.**





Star
      Bulk
      has entered into separate memoranda of agreement with wholly-owned subsidiaries
      of TMT to acquire the eight drybulk carriers in its initial fleet. Star Bulk
      expects that the eight drybulk carriers will be delivered to it within sixty
      days following the effective date of the Redomiciliation Merger. A delay in
      the
      delivery of any of these vessels to Star Bulk or the failure of TMT to deliver
      a
      vessel at all could adversely affect Star Bulk’s business, results of operations
      and financial condition. The delivery of these vessels could be delayed or
      certain events may arise which could result in Star Bulk not taking delivery
      of
      a vessel, such as a total loss of a vessel, a constructive loss of a vessel,
      or
      substantial damage to a vessel prior to delivery. in addition, the delivery
      of
      any of these vessels with substantial defects could have similar
      consequences.





**If
      Star Bulk fails to manage its planned growth properly, it may not be able to
      successfully expand its fleet.**





Star
      Bulk
      intends to continue to expand its fleet. Star Bulk’s growth will depend
      on:




·
            locating
                and acquiring suitable vessels;


·
              identifying
                  and consummating acquisitions or joint
                  ventures;
 ·
                integrating
                    any acquired vessels successfully with its existing
                    operations;
 ·
                  enhancing
                      its customer base;
 ·
                    managing
                        its expansion; and
 ·
                      obtaining
                          required financing.


Growing
      any business by acquisition presents numerous risks such as undisclosed
      liabilities and obligations, difficulty experienced in obtaining additional
      qualified personnel and managing relationships with customers and suppliers
      and
      integrating newly acquired operations into existing infrastructures. Star Bulk
      may not be successful in executing its growth plans and may incur significant
      expenses and losses.





**Star
      Bulk’s loan agreements may contain restrictive covenants that may limit its
      liquidity and corporate activities.**





The
      new
      senior secured credit facility that Star Bulk expects to enter into and any
      future loan agreements may impose operating and financial restrictions on it.
      These restrictions may limit its ability to:


·
              incur
                  additional indebtedness;
 ·
                create
                    liens on its assets;
 ·
                  sell
                      capital stock of its subsidiaries;
 ·
                    make
                        investments;
 ·
                      engage
                          in mergers or acquisitions;
 ·
                        pay
                            dividends;
 ·
                          make
                              capital expenditures;
 26
  ·
                            change
                                the management of its vessels or terminate or materially
                                amend the
                                management agreement relating to each vessel;
                                and
 ·
                              sell
                                  its
                                  vessels.





Therefore,
      Star Bulk may need to seek permission from its lenders in order to engage in
      some important corporate actions. The lenders’ interests may be different from
      those of Star Bulk, and Star Bulk cannot guarantee that it will be able to
      obtain the lenders’ permission when needed. This may prevent Star Bulk from
      taking actions that are in its best interest.





**Servicing
      future debt would limit funds available for other
      purposes.**





Star
      Bulk
      expects to incur up to $40,000,000 of indebtedness in connection with the
      purchase of the vessels in the initial fleet and may also incur additional
      secured debt to finance the acquisition of additional vessels. Star Bulk may
      also incur up to an additional $70,000,000 of indebtedness to replace funds
      from
      our Trust Account that have been utilized to cover the cost of redeeming
      stockholders of Star Maritime. Star Bulk may be required dedicate a portion
      of
      its cash flow from operations to pay the principal and interest on its debt.
      These payments limit funds otherwise available for working capital expenditures
      and other purposes, including payment of dividends. If Star Bulk is unable
      to
      service its debt, it could have a material adverse effect on Star Bulk’s
      financial condition and results of operations.





**Star
      Bulk’s ability to obtain additional debt financing may be dependent on the
      performance and the creditworthiness of it’s charterers.**





The
      actual or perceived credit quality of Star Bulk’s future charterers, and any
      defaults by them, may materially affect its ability to obtain the additional
      debt financing that Star Bulk may require to purchase additional vessels or
      may
      significantly increase its costs of obtaining such financing. Star Bulk’s
      inability to obtain additional financing at all or at a higher than anticipated
      cost may materially affect its results of operations and its ability to
      implement its business strategy.





**In
      the highly competitive international drybulk shipping industry, Star Bulk may
      not be able to compete for charters with new entrants or established companies
      with greater resources.**





Star
      Bulk
      will employ its vessels in a highly competitive market that is capital intensive
      and highly fragmented. Competition arises primarily from other vessel owners,
      some of whom have substantially greater resources than Star Bulk. Competition
      for the transportation of drybulk cargoes can be 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 through
      consolidations or acquisitions that may be able to offer better prices and
      fleets.





**Star
      Bulk may be unable to att** *r* **act
      and retain key management personnel and other employees in the shipping
      industry, which may negatively affect the effectiveness of its management and
      its results of operations.**





Star
      Bulk’s success will depend to a significant extent upon the abilities and
      efforts of its management team. Star Bulk has only two employees, its Chief
      Executive Officer and Chief Financial Officer. Star Bulk’s wholly-owned
      subsidiary, Star Bulk Management Inc., plans to hire additional employees
      following the Redomiciliation Merger to perform the day to day management of
      the
      vessels in the initial fleet. Star Bulk Management does not currently have
      ally
      employees. Star Bulk’s success will depend upon its ability to retain key
      members of its management team and the ability of Star Bulk Management to
      recruit and hire suitable employees. The loss of any of these individuals could
      adversely affect Star Bulk’s business prospects and financial condition.
      Difficulty in hiring and retaining personnel could adversely affect Star Bulk’s
      results of operations. Star Bulk does not intend to maintain “key man” life
      insurance on ally of its officers.





27


**As
      Star Bulk commences its business, it will need to implement its operations
      and
      financial systems and hire new vessel shift if it cannot implement these systems
      or recruit suitable employees, its performance may be adversely
      affected**





Star
      Bulk’s operating and financial systems may not be adequate as it commences
      operations, and its attempts to implement those systems may be ineffective.
      In
      addition, as Star Bulk expands its fleet, it will have to rely on its
      wholly-owned subsidiary, Star Bulk Management Inc., to recruit suitable
      additional seafarers and shoreside administrative and management personnel.
      Star
      Bulk cannot assure you that Star Bulk Management will be able to continue to
      hire suitable employees as Star Bulk expands its fleet. If Star Bulk
      Management’s unaffiliated crewing agent encounters business or financial
      difficulties, Star Bulk may not be able to adequately staff its vessels. If
      Star
      Bulk is unable to operate its financial and operations systems effectively
      or to
      recruit suitable employees, its performance may be materially adversely
      affected.





**Risks
      involved with operating ocean going vessels could affect Star Bulk’s business
      and reputation, which would adversely affect its revenues.**





The
      operation of an ocean-going vessel carries inherent risks. These risks include
      the possibility of:


·
              crew
                  strikes and/or boycotts;
 ·
                marine
                    disaster;
 ·
                  piracy;
 ·
                    environmental
                        accidents;
 ·
                      cargo
                          and property losses or damage; and
 ·
                        business
                            interruptions caused by mechanical failure, human error,
                            war, terrorism,
                            political action in various countries or adverse weather
                            conditions.


Any
      of
      these circumstances or events could increase Star Bulk’s costs or lower its
      revenues.





**Star
      Bulk’s vessels may suffer damage and it may face unexpected drydocking costs,
      which could affect its cash flow and financial condition.**





If
      Star
      Bulk’s vessels suffer damage, they may need to be repaired at a drydocking
      facility. The costs of drydock repairs are unpredictable and can be substantial.
      Star Bulk may have to pay drydocking costs that its insurance does not cover.
      The loss of earnings while these vessels are being repaired and reconditioned,
      as well as the actual cost of these repairs, would decrease its
      earnings.





**Purchasing
      and operating secondhand vessels may result**  **in
      increased operating costs and vessel off-hire, which could adversely affect
      Star
      Bulk’s earnings.**





Star
      Bulk’s inspection of secondhand vessels prior to purchase does not provide it
      with the same knowledge about their condition and cost of any required (or
      anticipated) repairs that it would have had if these vessels had been built
      for
      and operated exclusively by Star Bulk. Generally, Star Bulk will not receive
      the
      benefit of warranties on secondhand vessels.





In
      general, the costs to maintain a vessel in good operating condition increase
      with the age of the vessel. Older vessels are typically less fuel efficient
      and
      more costly to maintain than more recently constructed vessels. Cargo insurance
      rates increase with the age of a vessel, making older vessels less desirable
      to
      charterers.





Governmental
      regulations, safety or other equipment standards related to the age of vessels
      may require expenditures for alterations, or the addition of new equipment,
      to
      Star Bulk’s vessels and may restrict the type of activities in which the vessels
      may engage. Star Bulk cannot assure you that, as Star Bulk’s vessels age, market
      conditions will justify those expenditures or enable it to operate its vessels
      profitably during the remainder of their useful lives.





28


**Star
      Bulk’s worldwide operations will expose it to global risks that may interfere
      with the operation of its vessels.**





Star
      Bulk
      is expected to primarily conduct its operations worldwide. Changing economic,
      political and governmental conditions in the countries where Star Bulk is
      engaged in business or where Star Bulk’s vessels are registered will affect Star
      Bulk’s operations. In the past, political conflicts, particularly in the Arabian
      Gulf, resulted in attacks on vessels, mining of waterways and other efforts
      to
      disrupt shipping in the area. Acts of terrorism and piracy have also affected
      vessels trading in regions such as the South China Sea. The likelihood of future
      acts of terrorism may increase, and Star Bulk’s vessels may face higher risks of
      being attacked. In addition, future hostilities or other political instability
      in regions where Star Bulk’s vessels trade could have a material adverse effect
      on its trade patterns and adversely affect its operations and
      performance.





**Star
      Bulk may not have adequate insurance to compensate it if it loses its
      vessels.**





Star
      Bulk
      is expected to procure hull and machinery insurance, protection and indemnity
      insurance, which includes environmental damage and pollution insurance coverage
      and war risk insurance for its fleet. Star Bulk does not expect to maintain
      for
      all of its vessels insurance against loss of hire, which covers business
      interruptions that result from the loss of use of a vessel. Star Bulk may not
      be
      adequately insured against all risks. Star Bulk may not be able to obtain
      adequate insurance coverage for its fleet in the future. The insurers may not
      pay particular claims. Star Bulk’s insurance policies may contain deductibles
      for which it will be responsible and limitations and exclusions which may
      increase its costs or lower its revenue. Moreover, Star Bulk cannot assure
      that
      the insurers will not default on any claims they are required to pay. If Star
      Bulk’s insurance is not enough to cover claims that may arise, the deficiency
      may have a material adverse effect on Star Bulk’s financial condition and
      results of operations.





**Star
      Bulk is incorporated in the Republic of the Marshall Islands, which does not
      have a well-developed body of corporate law.**





Star
      Bulk’s corporate affairs are governed by its 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 United States jurisdictions. Shareholder rights may differ as well.
      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, 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 United States jurisdiction.





**Because
      Star Bulk is incorporated under the haws of the Marshall Islands, it may be
      difficult to serve Star Bulk with legal process or enforce judgments against
      Star Bulk, its directors or its management**





Star
      Bulk
      is incorporated under the laws of the Republic of the Marshall Islands, and
      all
      of its assets are located outside of the United States. Star Bulk’s business
      will be operated primarily from its offices in Athens, Greece. In addition,
      Star
      Bulk’s directors and officers generally are or will be non-residents of the
      United States, and all or a substantial portion of the assets of these
      non-residents are located outside the United States. As a result, it may be
      difficult or impossible for you to bring an action against Star Bulk or against
      these individuals in the United States if you believe that your rights have
      been
      infringed under securities laws or otherwise. Even if you are successful in
      bringing an action of this kind, the laws of the Marshall Islands and of other
      jurisdictions may prevent or restrict you from enforcing a judgment against
      Star
      Bulk’s assets or the assets of its directors and officers. For more information
      regarding the relevant laws of the Marshall Islands, please read “Enforceability
      of Civil Liabilities.”





29


**There
      is a risk that Star Bulk could be treated as a U.S. domestic corporation for
      U.S. federal income tax purposes after the Redomiciliation
      Merger**





Section
      7874(b) of the U.S. Internal Revenue Code, or the Code, provides that, unless
      certain requirements are satisfied, a corporation organized outside the United
      States which acquires substantially all of the assets of a corporation organized
      in the United States will be treated as a U.S. domestic corporation for U.S.
      federal income tax purposes if shareholders of the U.S. corporation whose assets
      are being acquired own at least 80 percent of the non-U.S. acquiring corporation
      after the acquisition. If Section 7874(b) of the Code were to apply to Star
      Maritime and the Redomiciliation Merger, then, among other consequences, Star
      Bulk, as the surviving entity of the Redomiciliation Merger, would be subject
      to
      U.S. federal income tax as a U.S. domestic corporation on its worldwide income
      after the Redomiciliation Merger. The Redomiciliation Merger has been structured
      so that upon completion of the Redomiciliation Merger and the concurrent
      issuance of stock to TMT is under the Acquisition Agreements, the stockholders
      of Star Maritime will own less than 80% of Star Bulk and therefore, Star Bulk
      should not be subject to Section 7874(b) of the Code after the Redomiciliation
      Merger. However, Star Maritime has not sought a ruling from the U.S. Internal
      Revenue Service, or the IRS, on this point. Therefore, there is no assurance
      that the IRS would not seek to assert that Star Bulk is subject to U.S. federal
      income tax on its worldwide income after the Redomiciliation Merger although
      Star Maritime believes that such an assertion should not be
      successful.





**Star
      Bulk may have to pay tax on United States source income, which would reduce
      its
      earnings.**





Under
      the
      Code, 50% of the gross shipping income of a vessel owning or chartering
      corporation, such as Star Bulk and its subsidiaries, that is attributable to
      transportation that begins or ends, but that does not both begin and end, in
      the
      United States is characterized as U.S. source shipping income and such income
      is
      subject to a 4% U.S. federal income tax without allowance for deduction, unless
      that corporation qualifies for exemption from tax under Section 883 of the
      Code
      and the Treasury regulations promulgated thereunder.





Star
      Bulk
      expects that it and each of its subsidiaries will qualify for this statutory
      tax
      exemption and Star Bulk will take this position for U.S. federal income tax
      return reporting purposes. However, there are factual circumstances beyond
      our
      control that could cause Star Bulk to lose the benefit of this tax exemption
      and
      thereby become subject to U.S. federal income tax on Star Bulk’s U.S. source
      income.





If
      Star
      Bulk or its subsidiaries are not entitled to this exemption under Section 883
      for any taxable year, Star Bulk or its subsidiaries would be subject for those
      years to a 4% U.S. federal income tax on its U.S.-source shipping income. The
      imposition of this taxation could have a negative effect on Star Bulk’s business
      and would result in decreased earnings.





**US.
      tax authorities could treat Star Bulk as a “passive foreign investment company,”
which could have adverse U.S. federal income tax consequences to US.
      holders.**





A
      foreign
      corporation will be treated as a “passive foreign investment company,” or PFIC,
      for U.S. federal income tax purposes if either (I) at least 75% of its gross
      income for any taxable year consists of certain types of “passive income” or (2)
      at least 50% of the average value of the corporation’s assets produce or are
      held for the production of those types of “passive income. ” For
      purposes of these tests, “passive income” includes dividends, interest, and
      gains from the sale or exchange of investment property and rents and royalties
      other than rents and royalties which are received from unrelated parties in
      connection with the active conduct of a trade or business. For purposes of
      these
      tests, income derived from the performance of services does not constitute
      “passive income.” U.S. shareholders of a PFIC may be subject to a
      disadvantageous U.S. federal income tax regime with respect to the income
      derived by the PFIC, the distributions they receive from the PFIC and the gain,
      if any, they derive from the sale or other disposition of their shares in the
      PFIC.





Based
      on
      Star Bulk’s proposed method of operation, Star Bulk does not believe that it
      will be a PFIC with respect to any taxable year. In this regard, Star Bulk
      intends to treat the gross income it will derive or will be deemed to derive
      from its time chartering activities as services income, rather than rental
      income. Accordingly, Star Bulk believes that its income from its time chartering
      activities will not constitute “passive income,” and the assets that it will own
      and operate in connection with the production of that income will not constitute
      passive assets.





30


There
      is,
      however, no direct legal authority under the PFIC rules addressing Star Bulk’s
      proposed method of operation. Accordingly, no assurance can be given that the
      U.S. Internal Revenue Service, or 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 Star Bulk is a PFIC. Moreover, no assurance can be given that Star Bulk
      would not constitute a PFIC for any future taxable year if there were to be
      changes in the nature and extent of its operations.





If
      the
      IRS were to find that Star Bulk is or has been a PFIC for any taxable year,
      its
      U.S. shareholders will face adverse U.S. tax consequences. Under the PFIC rules,
      unless those shareholders make an election available under the Code (which
      election could itself have adverse consequences for such shareholders), such
      shareholders would be liable to pay U.S. federal income tax at the then highest
      income tax rates on ordinary income plus interest upon excess distributions
      and
      upon any gain from the disposition of Star Bulk’s common shares, as if the
      excess distribution or gain had been recognized ratably over the shareholder’s
      holding period of Star Bulk’s common shares.





**Star
      Bulk cannot assure you that it will pay dividends.**





Star
      Bulk’s intention is to pay quarterly dividends. However, Star Bulk may incur
      other expenses or liabilities that would reduce or eliminate the cash available
      for distribution as dividends. Star Bulk’s loan agreements, including the credit
      facility agreement that Star Bulk expects to enter into, may also prohibit
      or
      restrict the declaration and payment of dividends under some
      circumstances.





In
      addition, the declaration and payment of dividends will be subject at all times
      to the discretion of Star Bulk’s board of directors. The timing and amount of
      dividends will depend on Star Bulk’s earnings, financial condition, cash
      requirements and availability, fleet renewal and expansion, restrictions in
      its
      loan agreements, the provisions of Marshall Islands law affecting the payment
      of
      dividends and other factors. Marshall Islands law generally prohibits the
      payment of dividends other than from surplus or while a company is insolvent
      or
      would be rendered insolvent upon the payment of such dividends, or if there
      is
      no surplus, dividends may be declared or paid out of net profits for the fiscal
      year in which the dividend is declared and for the preceding fiscal year. Star
      Bulk may not pay dividends in the anticipated amounts and frequency set forth
      in
      this joint proxy statement/prospectus or at all.





**Star
      Bulk is a holding company, and will depend on the ability of its subsidiaries
      to
      distribute funds to it in order to satisfy its financial obligations or to
      make
      dividend payments.**





Star
      Bulk
      is a holding company and its subsidiaries, all of which are, or upon their
      formation will be, wholly-owned by it either directly or indirectly, will
      conduct all of Star Bulk’s operations and own all of Star Bulk’s operating
      assets. Star Bulk will have no significant assets other than the equity
      interests in its wholly-owned subsidiaries. As a result, Star Bulk’s ability to
      make dividend payments depends on its subsidiaries and their ability to
      distribute funds to Star Bulk. If Star Bulk is unable to obtain funds from
      its
      subsidiaries, Star Bulk’s board of directors may exercise its discretion not to
      pay dividends.





**Servicing
      future debt would limit funds available for other purposes, such as the payment
      of dividends.**





To
      finance future fleet expansion, Star Bulk expects to incur secured debt. Star
      Bulk must dedicate a portion of its cash flow from operations to pay the
      principal and interest on its debt. These payments limit funds otherwise
      available for working capital, capital expenditures and other purposes. Star
      Bulk’s need to service its debt may limit funds available for other purposes,
      including distributing cash to shareholders, and Star Bulk’s inability to
      service debt could lead to acceleration of Star Bulk’s debt and foreclosure on
      its fleet.





31


**Star
      Bulk may be unable to procure financing arrangements which may affect its
      ability to purchase the vessels in the initial fleet**





Star
      Bulk
      has entered into agreements to acquire the eight drybulk carriers in the initial
      fleet for an aggregate purchase price of $345,237,520, consisting of
      $224,500,000 in cash and 12,537,645 shares of common stock of Star Bulk. Star
      Bulk will fund the cash consideration portion of the aggregate purchase price
      with funds deposited in the Trust Account that are not utilized to pay our
      stockholders who have exercised their right to redeem their shares and
      approximately $40,000,000 in borrowings under a new senior secured credit
      facility. If Star Bulk is unable to procure financing arrangements prior to
      the
      effective date of the Redomiciliation Merger, Star Bulk may not be able to
      complete the purchase of the all eight drybulk carriers.





**Star
      Bulk may not he able to borrow amounts under its’ credit** **.** **facility which may affect its ability to purchase the vessels in the initial
      fleet.**





Star
      Bulk’s ability to borrow amounts under its credit facility to acquire the
      initial fleet from TMT will be subject to the satisfaction of customary
      conditions precedent and compliance with terms and conditions included in the
      loan documents, at the discretion of the bank; also, to circumstances that
      may
      be beyond its control such as world events, economic conditions, the financial
      standing of the bank or its willingness to lend to shipping companies such
      as
      Star Bulk. Prior to each drawdown, Star Bulk will be required, among other
      things, to provide the lender with acceptable valuations of the vessels in
      its
      fleet confirming that they are sufficient to satisfy minimum security
      requirements. To the extent that Star Bulk is not able to satisfy these
      requirements, including as a result of a decline in the value of its vessels,
      Star Bulk may not be able to draw down the full amount under its credit facility
      without obtaining a waiver or consent from the lender. Star Bulk will also
      not
      be permitted to borrow amounts under the facility if it experiences a change
      of
      control.





**The
      assumptions underlying Star Bulk’s** **“** **forecasted
      cash available for dividends, reserves and extraordinary expenses are inherently
      uncertain and are subject to significant business, economic, financial,
      regulatory and competitive risks and uncertainties that could cause actual
      results’ to differ materially from those forecasted.**





Star
      Bulk’s financial forecast has been prepared by the management of Star Bulk and
      Star Bulk has not received an opinion or report on it from any independent
      registered public accounting firm and the forecast has not been prepared in
      accordance with generally accepted accounting principles. The assumptions
      underlying the forecast are inherently uncertain and are subject to significant
      business, economic, regulatory and competitive risks and uncertainties that
      could cause actual results to differ materially from those forecasted. If Star
      Bulk does not achieve the forecasted results, Star Bulk may not be able to
      operate profitably, successfully implement our business strategy to expand
      its
      fleet or pay dividends to its shareholders in which event the market price
      of
      Star Bulk’s common shares may decline materially.





**If
      the Redomiciliation Merger is completed, the warrants issued in the Initial
      Public Offering, which will he assumed by Star Bulk, become exercisable and
      you
      may experience dilution.**





Under
      the
      terms of the warrants issued in the Initial Public Offering, the warrants become
      exercisable upon the completion of a business combination transaction. If the
      Redomiciliation Merger is approved, we expect to complete the Redomiciliation
      Merger during the third quarter of 2007. We have 20,000,000 warrants to purchase
      common stock issued and outstanding at an exercise price of $8.00 per common
      share. Our warrants will become exercisable upon the effective date of the
      Redomiciliation Merger and as a result, you may experience
      dilution.


32


**Registration
      rights held by our stockholders who purchased shares prior to the Initial Public
      Offering may have an adverse effect on the market price of Star Bulk’s common
      stock.**




Our
      initial stockholders who purchased common stock prior to the Initial Public
      Offering are entitled to demand that Star Bulk register the resale of their
      shares at any time after they are released from escrow which, except in limited
      circumstances, will not be before December 21, 2008. If such stockholders
      exercise their registration rights with respect to all of their shares, there
      will be an additional 9,026,924 shares of common stock eligible for trading
      in
      the public market. In addition, the stockholders who purchased their shares
      in
      our Private Placement are entitled to demand the registration of the securities
      underlying the 1,132,500 units they purchased in the Private Placement at any
      time into a letter of intent, an agreement in principle or a definitive
      agreement in connection with a business combination. If all of these
      stockholders exercise their registration rights with respect to all of their
      shares of common stock, there will be an additional 10,159,424 shares of common
      stock eligible for trading in the public market. The presence of these
      additional shares may have an adverse effect on the market price of Star Bulk’s
      common stock.





**If
      Star Bulk is unable to receive a listing of its securities on the Nasdaq Global
      Market, it may be more difficult for stockholders to sell their
      securities.**





Star
      Bulk
      is applying for listing of its common stock on the Nasdaq Global Market upon
      consummation of the Redomiciliation Merger. If they are not so listed, then
      it
      may be more difficult for stockholders to sell their securities.





**Our
      directors and executive officers have interests in the Redomiciliation Merger
      that are different from yours.**





In
      considering the recommendation of our directors to vote to approve the
      Redomiciliation Merger, you should be aware that they have agreements or
      arrangements that provide them with interests in the Redomiciliation Merger
      that
      differ from, or are in addition to, those of our stockholders generally. Our
      original stockholders, including our directors, are not entitled to receive
      any
      of the Initial Public Offering proceeds distributed upon liquidation of the
      trust account. Therefore, if the Redomiciliation Merger is not approved, the
      shares held by our initial stockholders will in all probability be worthless.
      The personal and financial interests of the members of our Board of Directors
      and executive officers may have influenced their motivation in identifying
      and
      selecting a target business and completing a business combination timely.
      Consequently, their discretion in identifying and selecting a suitable target
      business may result in a conflict of interest when determining whether the
      terms, conditions and timing of a particular business combination are
      appropriate and in our stockholders’ best interest.





**We
      will dissolve and liquidate if we do not consummate the Redomiciliation Merger,
      or another business combination, in which event our stockholders may be held
      liable for claims by third parties against us to the extent of distributions
      received by them**





If
      we do
      not consummate the Redomiciliation Merger or another business combination by
      December 21, 2007, then, pursuant to Article SIXTH of our Third Amended and
      Restated Certificate of Incorporation, our officers must take all actions
      necessary in accordance with the Delaware General Corporation Law to dissolve
      and liquidate the Company within 60 days of that date. Therefore, we will
      dissolve and liquidate the trust account to our public stockholders if we do
      not
      complete the Redomiciliation Merger, or another business combination, by
      December 21, 2007.





Under
      Sections 280 through 282 of the Delaware General Corporation Law, stockholders
      of a corporation may be held liable for claims by third parties against the
      corporation to the extent of distributions received by them in a dissolution
      of
      the corporation. If a corporation complies with certain procedures intended
      to
      ensure that it makes reasonable provision for all claims against it, including
      a
      60-day notice period during which any third-party claims can be brought against
      the corporation, a 90-day period during which the corporation may reject any
      claims brought, and an additional 150-day waiting period before any liquidating
      distributions are made to stockholders, any liability of stockholders with
      respect to a liquidating distribution is limited to the lesser of such
      stockholder’s pro rata share of the claim or the amount distributed to the
      stockholder, and any liability of the stockholder would be barred after the
      third anniversary of the dissolution. Although we will seek stockholder approval
      to liquidate the Trust Account to its public stockholders as part of a plan
      of
      dissolution and liquidation, it does not intend to comply with those procedures.
      In the event that our directors recommend, and the stockholders approve, a
      plan
      of dissolution and liquidation where it is subsequently determined that the
      reserve for claims and liabilities was insufficient, stockholders who received
      a
      return of funds from the trust account could be liable for claims made by
      creditors to the extent of distributions received by them. As such, our
      stockholders could potentially be liable for any claims to the extent of
      distributions received by them in a dissolution, and any such liability of
      our
      stockholders will likely extend beyond the third anniversary of such
      dissolution. Accordingly, we cannot assure its stockholders that third parties
      will not seek to recover from our stockholders amounts owed to them by
      us.





33


The
      procedures we must follow under Delaware law if we dissolve and liquidate may
      result in substantial delays in the liquidation of the trust account to our
      public stockholders as part of our plan of dissolution and
      distribution.





**If
      third parties bring claims against us, the proceeds held in the trust account
      could be reduced and the per-share liquidation value receivable by our public
      stockholders from the trust account as part of our plan of dissolution and
      liquidation will be less than $10.00 per share.**





Placing
      the proceeds of the Initial Public Offering and the Private Placement in trust
      may not protect those funds from third party claims against it. Although we
      will
      seek to have most, if not all, significant creditors agree to arrangements
      that
      will involve them waiving any right, title, interest or claim of any kind in
      or
      to any monies held in the trust account for the benefit of our public
      stockholders, there is no guarantee that they will agree to such arrangements,
      or even if they do that they would be prevented from bringing claims against
      the
      trust account including, but not limited to, claims alleging fraudulent
      inducement, breach of fiduciary responsibility or other similar claims, as
      well
      as claims challenging the enforceability of the waiver, in each case in order
      to
      gain an advantage with a claim against our assets, including the funds held
      in
      the trust account.





Accordingly,
      the proceeds held in trust could be subject to claims that could take priority
      over the claims of our public stockholders and the per-share liquidation value
      receivable by our public stockholders could be less than the $10.00 per share
      held in the trust account, plus interest (net of any taxes due on such
      interest), due to claims of such creditors.





In
      the
      event that our board recommends and our stockholders approve a plan of
      dissolution and liquidation where it is subsequently determined that the reserve
      for claims and liabilities is insufficient, stockholders who received a return
      of funds from the trust account as part of the liquidation could be liable
      for
      claims made by creditors.





Additionally,
      if we are forced to file a bankruptcy case or an involuntary bankruptcy case
      is
      filed against us which is not dismissed, the funds held in the trust account
      may
      be subject to applicable bankruptcy law, and may be included in our bankruptcy
      estate and subject to the claims of third parties with priority over the claims
      of our stockholders. Our stockholders could also be required to return any
      distributions received by them in a dissolution as a preference or under other
      avoidance or recovery theories under applicable bankruptcy law. To the extent
      any bankruptcy claims deplete the trust account, we cannot assure its public
      stockholders that we will be able to return the liquidation amounts due
      them.





**If
      the Redomiciliation Merger or another business combination is not approved
      by
      our stockholders by December 21, 2007, then the funds in the trust account
      may
      only be distributed upon our dissolution.**





If
      the
      Redomiciliation Merger or another business combination is not approved by our
      stockholders by December 21, 2007, then the funds held in the trust account
      may
      not be distributed except upon our dissolution. Unless and until stockholder
      approval to dissolve the Company is obtained from our stockholders, the funds
      held in the trust account will not be released. Consequently, holders of a
      majority of our outstanding stock must approve the dissolution in order to
      receive the funds held in the trust account and the funds will not be available
      for any other corporate purpose. The procedures required for us to liquidate
      under the Delaware General Corporation Law, or a vote to reject any plan of
      dissolution and distribution by our stockholders, may result in substantial
      delays in the liquidation of the trust account to our public stockholders as
      part of our plan of dissolution and distribution.





34


**If
      we do not consummate the Redomciliation Merger or another business combination,
      and dissolves, payments from the trust account to our public stockholders may
      be
      delayed.**





We
      currently believe that any plan of dissolution and liquidation subsequent
      to December
      21, 2007 would proceed in approximately the following manner:




·
            Our
                directors would, consistent with Delaware law and the obligations
                described in our Third Amended and Restated Certificate of Incorporation
                to dissolve, prior to the passing of the December 21, 2007 deadline,
                convene and adopt a specific plan of dissolution and liquidation,
                which we
                would then vote to recommend to our stockholders; at such time we
                would
                also cause to be prepared a preliminary proxy statement setting out
                such
                plan of dissolution and liquidation as well as the board’s recommendation
                of such plan;




·
            upon
                such deadline, we would file a preliminary proxy statement with the
                Securities and Exchange Commission;




·
            if
                the Securities and Exchange Commission does not review the preliminary
                proxy statement, then, approximately 10 days following the passing
                of such
                deadline, we would mail the proxy statements to our stockholders,
                and
                approximately 30 days following the passing of such deadline we would
                convene a meeting of stockholders, at which they would either approve
                or
                reject the plan of dissolution and liquidation;
                and




·
            if
                the Securities and Exchange Commission does review the preliminary
                proxy
                statement, we currently estimate that we would receive their comments
                approximately 30 days following the passing of such deadline. We
                would
                mail the proxy statements to stockholders following the conclusion
                of the
                comment and review process (the length of which cannot be predicted
                with
                any certainty, and which may be substantial) and we would convene
                a
                meeting of our stockholders at which they would either approve or
                reject
                the plan of dissolution and
                liquidation.




Pursuant
      to the terms of ** our
      Third
      Amended and Restated Certificate of Incorporation, our powers following the
      expiration of the permitted time periods for consummating a business combination
      would automatically thereafter be limited to acts and activities relating to
      dissolving and winding up affairs, including liquidation. The funds held in
      the
      trust account may not be distributed except upon dissolution and, unless and
      until such approval is obtained from stockholders, the funds held in the trust
      account would not be released. Consequently, holders of ** a
      majority of our outstanding stock must approve the dissolution in order to
      receive the funds held in the trust account and the funds would not be available
      for any other corporate purpose.





The
      procedures required for us to liquidate under the Delaware law, or a vote to
      reject any plan of dissolution and liquidation by our stockholders, may result
      in substantial delays in the liquidation of the trust account to our public
      stockholders as part of the plan of dissolution and liquidation.





**Industry
      Risk Factors Relating to Star Bulk**





**The
      drybulk shipping industry is cyclical and volatile, and this may lead to
      reductions and volatility of charter rates, vessel values and results of
      operations.**





The
      degree of charter hire rate volatility among different types of drybulk carriers
      has varied widely. If Star Bulk enters into a charter when charter hire rates
      are low, its revenues and earnings will be adversely affected. In addition,
      a
      decline in charter hire rates likely will cause the value of the vessels that
      Star Bulk will own, to decline. Star Bulk cannot assure you that we will be
      able
      to successfully charter its vessels in the future at rates sufficient to allow
      it to operate its business profitably or meet its obligations The factors
      affecting the supply and demand for drybulk carriers are outside of Star Bulk’s
      control and are unpredictable. The nature, timing, direction and degree of
      changes in drybulk shipping market conditions are also
      unpredictable.


35


Factors
      that influence demand for seaborne transportation of cargo include:




·
            demand
                for and production of drybulk
                products;




·
            the
                distance cargo is to be moved by
                sea;




·
            global
                and regional economic and political
                conditions;




·
            environmental
                and other regulatory developments;
                and




·
            changes
                in seaborne and other transportation patterns, including changes
                in the
                distances over which cargo is transported due to geographic changes
                in
                where commodities are produced and cargoes are
                used.





The
      factors that influence the supply of vessel capacity include:




·
            the
                number of new building deliveries;




·
            the
                scrapping rate of older vessels;




·
            vessel
                casualties;




·
            price
                of steel;




·
            number
                of vessels that are out of service;




·
            changes
                in environmental and other regulations that may limit the useful
                life of
                vessels; and




·
            port
                or canal congestion.





Star
      Bulk
      anticipates that the future demand for its vessels will be dependent upon
      continued economic growth in the world ’ s
      economies, including China and India, seasonal and regional changes in demand,
      changes in the capacity of the world’s drybulk carrier fleet and the sources and
      supply of cargo to be transported by sea. If the global vessel capacity
      increases in the drybulk shipping market, but the demand for vessel capacity
      in
      this market does not increase or increases at a slower rate, the charter rates
      could materially decline. Adverse economic, political, social or other
      developments could have a material adverse effect on our business, financial
      condition, results of operations and ability to pay dividends.





**Charter
      rates in the drybulk shipping market are at historically high levels and future
      growth will depend on continued economic growth in he world economy that exceeds
      growth in vessel capacity.**





Charter
      rates for the drybulk carriers recently have been at historically high levels.
      Star Bulk anticipates that future demand for its vessels, and in turn future
      charter rates, will be dependent upon continued economic growth in the world’s
      economy, particularly in China and India, as well as seasonal and regional
      changes in demand and changes in the capacity of the world’s fleet. According to
      Drewry Shipping Consultants Limited, or Drewry, the world’s drybulk carrier
      fleet is expected to increase in 2007 as a result of substantial scheduled
      deliveries of newly constructed vessels and low forecasts for scrapping of
      existing vessels. Continued economic growth in the world economy that exceeds
      growth in vessel capacity will be necessary to sustain current charter rates.
      There can be no assurance that economic growth will not decline or that vessel
      scrapping will occur at an even lower rate than forecasted. A decline in charter
      rates could have a material adverse effect on Star Bulk’s business, financial
      condition and results of operations.





**An
      economic slowdown in the Asia Pacific region could have a material adverse
      effect on Star Bulk’s business,. financial position and results of
      operations**





A
      significant number of the port calls made by Star Bulk’s vessels may involve the
      loading or discharging of raw materials and semi-finished products 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 or India, may have an
      adverse effect on Star Bulk’s future business, financial position and results of
      operations, as well as its future prospects. In particular, in recent years,
      China has been one of the world’s fastest growing economies in terms of gross
      domestic product. Star Bulk cannot assure you that such growth will be sustained
      or that the Chinese economy will not experience contraction in the future.
      Moreover, any slowdown in the economies of the United States, the European
      Union
      or certain Asian countries may adversely effect economic growth in China and
      elsewhere. Star Bulk’s business, financial position and results of operations,
      as well as its future prospects, will likely be materially and adversely
      affected by an economic downturn in any of these countries.





36


**Star
      Bulk may become dependent on spot charters in the volatile shipping
      markets.**





Star
      Bulk
      may employ one or more of its vessels on spot charters, including when time
      charters on vessels expire. The spot charter market is highly competitive and
      rates within this market are subject to volatile fluctuations, while longer-term
      period time charters provide income at pre-determined rates over more extended
      periods of time. If Star Bulk decides to spot charter its vessels, there can
      be
      no assurance that Star Bulk will be successful in keeping all its vessels fully
      employed in these short-tern markets or that future spot rates will be
      sufficient to enable its vessels to be operated profitably. A significant
      decrease in charter rates could affect the value of Star Bulk’s fleet and could
      adversely affect its profitability and cash flows with the result that its
      ability to pay debt service to its lenders and dividends to its shareholders
      could be impaired.





**Star
      Bulk’s operating results will be subject to seasonal** **.** **fluctuations, which could affect its operating results and the amount of
      available cash with which Star Bulk can pay dividends.**





Star
      Bulk
      will operate its 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 its operating results, which
      could affect the amount of dividends that Star Bulk pays to its shareholders
      from quarter to quarter. The drybulk carrier market is typically stronger in
      the
      fall and winter months in anticipation of increased consumption of coal and
      other raw materials in the northern hemisphere during the winter months. In
      addition, unpredictable weather patterns in these months tend to disrupt vessel
      scheduling and supplies of certain commodities. As a result, revenues of drybulk
      carrier operators in general have historically been weaker during the fiscal
      quarters ended June 30 and September 30, and, conversely, been stronger in
      fiscal quarters ended December 31 and March 31. This seasonality may materially
      affect Star Bulk’s operating results and cash available for
      dividends.





**Star
      Bulk will he subject to regulation and liability under environmental laws that
      could require significant expenditures and effect its cash flows and net
      income.**





Star
      Bulk’s business and the operation of its vessels will be materially affected by
      government regulation in the form a of
      international conventions, national, state and local laws and regulations in
      force in the jurisdictions in which its vessels operate, as well as in the
      country or countries of their registration. Because such conventions, laws,
      and
      regulations are often revised, Star Bulk cannot predict the ultimate cost of
      complying with such conventions, laws and regulations or the impact thereof
      on
      the resale prices or useful lives of its vessels. Additional conventions, laws
      and regulations may be adopted which could limit Star Bulk’s ability to do
      business or increase the cost of its doing business and which may materially
      and
      adversely affect its operations. Star Bulk will be required by various
      governmental and quasi-governmental agencies to obtain certain permits, licenses
      and certificates with respect to its operations.





The
      operation of Star Bulk’s vessels is affected by the requirements set forth in
      the United Nations’ International Maritime Organization’s International
      Management Code for the Safe Operation of Ships and Pollution Prevention, or
      ISM
      Code. The ISM Code requires shipowners, ship managers 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 failure of a shipowner or bareboat charterer
      to
      comply with the ISM Code may subject it to increased liability, may invalidate
      existing insurance or decrease available insurance coverage for the affected
      vessels and may result in a denial of access to, or detention in, certain ports.
      Each of Star Bulk’s vessels will be ISM code-certified but we cannot assure that
      such certificate will be maintained indefinitely.





Star
      Bulk
      expects to maintain, for each of its vessels, pollution liability coverage
      insurance in the amount of $1 billion per incident. If the damages from a
      catastrophic incident exceeded Star Bulk’s insurance coverage, it could have a
      material adverse effect on Star Bulk ’ s
      financial condition and results of operations.





37


**The
      operation of drybulk carriers has particular operational risks which could
      affect our earnings and cash flow.**





The
      operation of certain ship types, such as drybulk carriers, has certain
      particular risks. With a drybulk carrier, the cargo itself and its interaction
      with the vessel can be an operational risk. By their nature, drybulk cargoes
      are
      often heavy, dense, easily shifted, and react badly to water exposure. In
      addition, drybulk carriers are often subjected to battering treatment during
      unloading operations with grabs, jackhammers (to pry encrusted cargoes out
      of
      the hold) and small bulldozers. This treatment may cause damage to the vessel.
      Vessels damaged due to treatment during unloading procedures may be more
      susceptible to breach while at sea. Null breaches in drybulk carriers may lead
      to the flooding of the vessels’ holds. If a drybulk carrier suffers flooding in
      its forward holds, the bulk cargo may become so dense and waterlogged that
      its
      pressu r e
      may
      buckle the vessel’s bulkheads leading to the loss of a vessel. If Star Bulk is
      unable to adequately maintain its vessels, it may be unable to prevent these
      events. Any of these circumstances or events could negatively impact Star Bulk’s
      business, financial condition, results of operations and ability to pay
      dividends. In addition, the loss of any of its vessels could harm Star Bulk’s
      reputation as a safe and reliable vessel owner and operator.





**If
      any of Star Bulk’s vessels fails to maintain its class certification and/or
      fails any annual survey, intermediate survey, drydocking or special survey,
      it
      could have a material adverse impact on Star Bulk’s financial condition and
      results of operations.**





The
      hull
      and machinery of every commercial vessel must be classed by a classification
      society authorized by its country of registry. The classification society
      certifies that a vessel is safe and seaworthy in accordance with the applicable
      rules and regulations of the country of registry of the vessel and the Safety
      of
      Life at Sea Convention or SOLAS. Star Bulk’s vessels are expected to be classed
      with one or more classification societies that are members of the International
      Association of Classification Societies.





A
      vessel
      must undergo annual surveys, intermediate surveys, drydockings and special
      surveys. In lieu of a special survey, a vessel ’ s
      machinery may be on a continuous survey cycle, under which the machinery would
      be surveyed periodically over a five-year period. Star Bulk’s vessels are
      expected to be on special survey cycles for hull inspection and continuous
      survey cycles for machinery inspection. Every vessel will also be required
      to be
      drydocked every two to three years for inspection of the underwater parts of
      such vessel.





If
      any
      vessel does not maintain its class and/or fails any annual survey, intermediate
      survey, drydocking or special survey; the vessel will be unable to carry cargo
      between ports and will be unemployable and uninsurable. Any such inability
      to
      carry cargo or be employed, or any such violation of covenants, could have
      a
      material adverse impact on Star Bulk’s financial condition and results of
      operations.





**Maritime
      claimants could arrest Star Bulk’s vessels, which could interrupt its cash
      flow.**





Crew
      members, suppliers of goods and services to a vessel, shippers of cargo and
      other parties may be entitled to a maritime lien against that vessel for
      unsatisfied debts, claims or damages. In many jurisdictions, a maritime
      lienholder may enforce its lien by arresting a vessel through foreclosure
      proceedings. The arresting or attachment of one or more of Star Bulk’s vessels
      could interrupt its cash flow and require it to pay large sums of funds to
      have
      the arrest lifted which would have a material adverse effect on Star Bulk’s
      financial condition and results of operations. In addition, in some
      jurisdictions, such as South Africa, under the “ sister
      ship” theory of liability, a claimant may arrest both the vessel which is
      subject to the claimant’s maritime lien and any “associated” vessel, which is
      any vessel owned or controlled by the same owner. Claimants could try to assert
      “sister ship” liability against one of Star Bulk’s vessels for claims relating
      to another of its vessels.


38


**Governments
      could requisition Star Bulk’s vessels during a period of war or emergency,
      resulting in loss of earnings.**




A
      government could requisition for title or seize Star Bulk’s vessels. Requisition
      for title occurs when a government takes control of a vessel and becomes the
      owner. Also, a government could requisition Star Bulk’s vessels for hire.
      Requisition for hire occurs when a government takes control of a vessel and
      effectively becomes the charterer at dictated charter rates. Generally,
      requisitions occur during a period of war or emergency. Government requisition
      of one or more of Star Bulk’s vessels could have a material adverse effect on
      Star Bulk ’ s
      financial condition and results of operations.





**World
      events outside Star Bulk’s control may negatively affect its operations and
      financial condition.**





Terrorist
      attacks such as the attacks on the United States on September II, 2001, the
      bombings in Spain on March 11, 2004 and in London on July 7, 2005, and the
      continuing response of the United States to these attacks, as well as the threat
      of future terrorist attacks, continue to cause uncertainty in the world
      financial markets and may affect Star Bulk’s 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. These
      uncertainties could also have a material adverse effect on Star Bulk’s ability
      to obtain additional financing on terms acceptable to it or at all. In the
      past,
      political conflicts have also resulted in attacks on vessels, mining of
      waterways and other efforts to disrupt international shipping, particularly
      in
      the Arabian Gulf region. Acts of terrorism and piracy have also affected vessels
      trading in regions such as the South China Sea. Any of these occurrences could
      have a material adverse impact on our operating results, revenues and
      costs.





Terrorist
      attacks may also negatively affect Star Bulk’s operations and financial
      condition and directly impact its vessels or its customers. Future terrorist
      attacks could result in increased volatility of the financial markets in the
      United States and globally and could result in an economic recession in the
      United States or the world. Any of these occurrences could have a material
      adverse impact on Star Bulk’s financial condition and costs.





**Risks
      Factors Relating to the Redomiciliation Merger**





**There
      may not be an active market for Star Bulk’s common stock or warrants, which may
      cause its common stock or warrants to trade at a discount and make it difficult
      to sell your common stock or warrants.**





Prior
      to
      the Redomiciliation Merger, there has been no public market for Star Bulk’s
      common stock or warrants. Star Bulk cannot assure you that an active trading
      market for Star Bulk’s common stock or warrants will develop or be sustained
      after the Redomiciliation Merger or that the price of Star Bulk’s common stock
      or warrants in the public market will reflect its actual financial
      performance.





**The
      price of Star Bulk’s shares after the Redomiciliation Merger may be
      volatile.**





The
      price
      of Star Bulk’s shares after the Redomiciliation Merger may be volatile, and may
      fluctuate due to factors such as:




·
            actual
                or anticipated fluctuations in quarterly and annual
                results;




·
            limited
                operating history;




·
            mergers
                and strategic alliances in the shipping
                industry;




·
            market
                conditions in the industry;




·
            changes
                in government regulation;




·
            fluctuations
                in Star Bulk’s quarterly revenues and earnings and those of its publicly
                held competitors;




·
            shortfalls
                in Star Bulk’s operating results from**levels
                forecasted by securities analysts;




·
            announcements
                concerning Star Bulk or its competitors;
                and




·
            the
                general state of the securities
                markets.




The
      international drybulk shipping industry has been highly unpredictable and
      volatile. The market for common shares in this industry may be equally
      volatile.





39


**Star
      Bulk may choose to redeem its outstanding warrants at a time that is
      disadvantageous to warrant holders.**





Star
      Bulk
      may redeem the warrants issued as a part of the units in the Initial Public
      Offering that will be assumed by Star Bulk in the Redomiciliation Merger at
      any
      time after the warrants become exercisable, in whole and not in part, at a
      price
      of $.01 per warrant, upon a minimum of 30 days prior written notice of
      redemption, if and only if, the last sales price of our common stock equals
      or
      exceeds $14.25 per share for any 20 trading days within a 30 trading day period
      ending three business days before the notice of redemption is sent. Redemption
      of the warrants could force the warrant holders to (i) exercise the
      warrants and pay the exercise price therefor at a time when it may be
      disadvantageous for the holders to do so, (ii) sell the warrants at the
      then-current market price when they might otherwise wish to hold them, or (iii)
      accept the nominal redemption price which, at the time the warrants are called
      for redemption, is likely to be substantially less than the market value of
      the
      warrants.





**We
      expect to incur significant costs associated with the Redomiciliation Merger,
      whether or not the Redomiciliation Merger is completed and the incurrence of
      these costs will reduce the amount of cash available to be used for other
      corporate purposes.**





We
      expect
      to incur significant costs associated with the Redomiciliation Merger, whether
      or not the Redomiciliation Merger is completed. The incurrence of these costs
      will reduce the amount of cash available to be used for other corporate
      purposes, including distribution upon a liquidation.





**As
      a result of the Redomiciliation Merger, Star Bulk stockholders will he solely
      dependent on a single business.**





As
      a
      result of the Redomiciliation Merger, Star Bulk stockholders will be solely
      dependent upon the performance of Star Bulk and its drybulk shipping business.
      Star Bulk will be subject to a number of risks that relate generally to the
      shipping industry and other risks that specifically relate to Star Bulk.





**We
      may waive one or more of the conditions to the Redomiciliation Merger without
      resoliciting stockholder approval for the Redomiciliation
      Merger.**





We
      may
      agree to waive, in whole or in part, some of the conditions to our obligations
      to complete the Redomiciliation Merger, to the extent permitted by applicable
      laws. Our board of directors will evaluate the materiality of any waiver to
      determine whether amendment of joint proxy statement/prospectus to be filed
      with
      the SEC and resolicitation of proxies is warranted. In some instances, if our
      board of directors determines that a waiver is not sufficiently material to
      warrant resolicitation of stockholders, we have the discretion to complete
      the
      Redomiciliation Merger without seeking further stockholder
      approval.





**Item
      1B. Unresolved Staff Comments**




None




**Item
      2. Properties**




From
      January 1, 2006 through December 1, 2006, we maintained our executive offices
      c/o Schwartz & Weiss, P.C. at 457 Madison Avenue, New York, New York 10022.
      The cost for this space and other additional services provided by the law firm
      of Schwartz & Weiss, P.C. was $7,500 per month. On December 19, 2006, we
      entered into a sublease with Blue Diamond Realty, LLC, a Delaware limited
      liability company. Effective as of December 1, 2006, Blue Diamond Realty LLC
      agreed to sublet offices to the Company located at 103 Foulk Road, Wilmington,
      Delaware, and provide the Company with such office space and equipment,
      including a conference room, as well as administrative support necessary for
      the
      Company’s business. The sublease is for thirteen months effective
      December 1, 2006 through December 31, 2007, with an automatic renewal each
      year
      for an additional one year period, unless either party gives the other
      party at least 90 days written notice of its intent to terminate the Agreement.
      The annual base rent and administrative services fees for this space is $4,000
      payable on January 1 each year. We consider our current office space adequate
      for our current operations.




40


**Item
      3. Legal Proceedings******




To
      the
      knowledge of management, there is no litigation currently pending or
      contemplated against us or any of our officers or directors in their capacity
      as
      such.





**Item
      4. Submission of Matters to a Vote of Security Holders** ****





During
      the fourth quarter of our fiscal year ended December 31, 2006, there were no
      matters submitted to a vote of security holders.




**PART
      II**





**Item
      5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities**





The
      Company’s units began trading on the American Stock Exchange under the symbols
“SEAU,” on December 16, 2005, and the Company’s common stock and warrants began
      trading on AMEX under the “SEA” and “SEAW,” respectively, on February 27, 2006.
      Effective on February 27, 2006, the Company’s Common Stock and Warrant began to
      trade separately and the Units ceased trading. The following table sets forth
      the high and low sales information for the Company’s securities from the
      commencement of trading through December 31, 2005, and for the fiscal year
      ended
      December 31, 2006, based upon information supplied by AMEX.





**Units**
            
            **Warrants**
            
            **Common
                Stock****2005**
            
            **High**
            
            **Low**
            
            **High**
            
            **Low**
            
            **High**
            
            **Low**First
                Quarter*
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/ASecond
                Quarter*
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/AThird
                Quarter*
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/AFourth
                Quarter*
              (October
                1 to December 15)
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/AFourth
                Quarter
              (December16
                to December 31)
            
            $
            10.00
            
            $
            9.82
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A







*
      No
      amounts are included as none of our securities commenced trading on AMEX prior
      to December 16, 2005.





**Units*******
            
            **Warrants**
            
            **Common
                Stock****2006**
            
            **High**
            
            **Low**
            
            **High**
            
            **Low**
            
            **High**
            
            **Low**First
                Quarter (January 1 to February 26)
            
            $
            10.25
            
            $
            9.84
            
            $
            N/A
            
            $
            N/A
            
            $
            N/A
            
            $
            N/AFirst
                Quarter (February 27 to March 31)
            
            
            N/A
            
            
            N/A
            
            
            1.25
            
            
            0.87
            
            
            9.92
            
            
            9.62Second
                Quarter
            
            
            N/A
            
            
            N/A
            
            
            1.20
            
            
            0.87
            
            
            10.16
            
            
            9.47Third
                Quarter
            
            
            N/A
            
            
            N/A
            
            
            1.06
            
            
            0.70
            
            
            9.74
            
            
            9.45Fourth
                Quarter
            
            
            N/A
            
            
            N/A
            
            
            0.84
            
            
            0.55
            
            
            9.90
            
            
            9.60





*
      Units
      ceased trading on February 27, 2006 and the Common Stock and Warrants began
      trading separately.




41





**Warrants**
            
            **Common
                Stock****2007**
            
            **High**
            
            **Low**
            
            **High**
            
            **Low**First
                Quarter (January 1 to March 9)*
            
            $
            1.72
            
            $
            0.72
            
            $
            10.02
            
            $
            9.86







*
      The
      last full trading day prior to the announcement of a proposal for a business
      combination involving Star Bulk.




**Number
      of Holders of Common Stock and Warrants.**





On
      March
      12, 2007, there were 9 holders of record of our Common Stock and 5 holders
      of
      record of our Warrants which does not include individual participants in
      security position listings that hold their securities in street name through
      CEDE & Co.





**Dividends.**





There
      were no cash dividends or other cash distributions made by us during the fiscal
      year ended December 31, 2006. Future dividend policy will be determined by
      our
      Board of Directors based on our earnings, financial condition, capital
      requirements and other then existing conditions. It is anticipated that cash
      dividends will not be paid to the holders of our common stock in the foreseeable
      future.





**Recent
      Sales of Unregistered Securities.**




There
      were no sales of unregistered securities during the period covered by this
      Annual Report on Form 10-K.





**Use
      of Proceeds**





On
      December 21, 2005, we consummated our Initial Public Offering of 18,867,500
      units. Each unit consists of one share of common stock and one warrant. Each
      warrant entitles the holder to purchase from us one share of our common stock
      at
      an exercise price of $8.00. The units were sold at an offering price of $10.00
      per unit, generating total gross proceeds of $188,675,000. Maxim Group LLC
      acted
      as lead underwriter. The securities sold in the Initial Public Offering were
      registered under the Securities Act of 1933 on a registration statement on
      Form
      S-1 (No. 333-125662). The Securities and Exchange Commission declared the
      registration statement effective on December 15, 2005. The net proceeds of
      the
      Initial Public Offering are being held in a trust account and will continue
      to
      be invested in short-term U.S. Government Securities, specifically Treasury
      Bills, having a maturity date of 180 days or less until the earlier of (i)
      the
      consummation of the first business combination, of (ii) the distribution of
      the
      trust account if a business combination is not consummated.




**Equity
      Compensation Plan**





None.




42





**Performance
      Graph**





Currently,
      we have no business operations. We were formed as a blank check company for
      the
      sole purpose of acquiring, through a merger, capital stock exchange, asset
      acquisition or other similar business combination, one or more businesses in
      the
      shipping industry. Our current Standard Industrial Classification Code (SIC
      Code) is 6770 for a blank check company, and will remain as such until we
      complete a business combination. At such time that a business combination is
      consummated our SIC Code will change to reflect the industry in which we do
      business. Therefore, at this time we are unable to present stockholder return
      information since we do not currently have operations within an industry that
      can be compared to a peer group index by SIC Code or to the Amex
      Market Index.





**Repurchases
      of Equity Securities.**





None





**Item
      6. Selected Financial Data** ****




The
      selected financial data presented below summarizes certain financial data which
      has been derived from and should be read in conjunction with our financial
      statements and notes thereto included in the section beginning on page F-1.
      See also “Item 7. Management’s Discussion and Analysis of Financial Condition
      and Results of Operations.”




**May
                13, 2005 (date of inception) to**
              **December
                31, 2005**
            
            **May
                13, 2005 (date of inception) to December 31, 2006**
            
            **For
                the year Ended December 31, 2006****Income
                Statement Data**Formation
                and Operating Costs
            
            $
            50,211
            
            $
            1,261,311
            
            $
            1,211,100Interest
                income
            
            
            183,542
            
            
            4,579,415
            
            
            4,395,873Provision
                for income taxes
            
            
            23,000
            
            
            229,687
            
            
            206,687Net
                income
            
            
            110,331
            
            
            3,088,417
            
            
            2,978,086Earnings
                per share (basic and diluted)
            
            $
            0.01
            
            $
            0.14
            
            $
            0.10







**Balance
                Sheet Data****As
                of**
              **December
                31, 2005**
            
            **As
                of**
              **December
                31, 2006**Investments
                in trust account
            
            $
            188,858,542
            
            $
            192,915,257Cash
            
            
            593,281
            
            
            2,118,141Working
                capital
            
            
            185,225,951
            
            
            188,209,781Total
                assets
            
            
            189,579,589
            
            
            195,186,301Total
                stockholders’ equity
            
            $
            120,554,961
            
            $
            123,533,047


**For
                  the Quarter ended 03/31/06**
              
              **For
                      the Quarter ended 06/30/06**
              
              **For
                      the Quarter ended 09/30/06**
              
              **For
                    the Quarter ended 12/31/06****Quarterly
                  Income Statement Data (unaudited):**Interest
                  income
              
              $
              994,654
              
              $
              1,162,544
              
              $
              1,117,933
              
              $
              1,120,742Income
                  before provision for income taxes
              
              
              918,823
              
              
              855,147
              
              
              843,404
              
              
              567,399Net
                  income
              
              
              797,617
              
              
              733,027
              
              
              830,004
              
              
              617,438Earnings
                  per share (basic and diluted)
              
              $
              0.03
              
              $
              0.03
              
              $
              0.03
              
              $
              0.02
  **May
                  13, 2005 (date of inception) to June 30, 2005**
              ****
              **For
                  the Quarter ended 9/30/05**
              ****
              **For
                  the Quarter ended 12/31/05**Interest
                income
              
              $
              -
              
              $
              -
              
              $
              183,542Income/(loss)
                before provision for income taxes
              
              
              (6,770
              )
              
              (77
              )
              
              140,178Net
                income (loss)
              
              
              (6,847
              )
              
              (77
              )
              
              117,255Earnings
                per share (basic and diluted)
              
              $
              (0.00
              )
              $
              (0.00
              )
              $
              0.01


43


**Item
      7. Management's Discussion and Analysis of Financial Condition and Results
      of
      Operations** ****





**Overview**





We
      were
      formed on May 13, 2005 to acquire, through a merger, capital stock exchange,
      asset acquisition or other similar business combination, one or more businesses
      in the shipping industry. Our initial business combination must be with a target
      business or businesses whose fair market value is at least equal to 80% of
      our
      net assets at the time of such acquisition. We intend to utilize cash derived
      from the proceeds of our Initial Public Offering, our capital stock, debt or
      a
      combination of cash, capital stock and debt, in effecting a business
      combination.




If
        Star
        Maritime does not consummate the Redomiciliation Merger or another business
        combination by December 21, 2007, then, pursuant to Article SIXTH of its
        Certificate of Incorporation, Star Maritime’s officers must take all actions
        necessary in accordance with the Delaware General Corporation Law to dissolve
        and liquidate Star Maritime within 60 days of that date. There is substantial
        doubt that Star Maritime will continue as a going concern if the Redomiciliation
        Merger is not approved.


**Critical
      Accounting Policies**





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities at the date of the financial statements and the reported amounts
      of
      expenses during the reporting period. Actual results could differ from those
      estimates.


In
        June 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in
        Income Taxes - an Interpretation of FASB Statement No.109” (“FIN 48”). FIN 48
        clarifies the accounting for uncertainly in income taxes recognized in a
        company’s financial statements in accordance with SFAS No. 109, “Accounting for
        Income Taxes.” FIN 48 prescribes a recognition threshold and measurement
        attribute for the financial statement recognition and measurement of a tax
        position taken or expected to be taken in a tax return. FIN 48 is effective
        for
        fiscal years beginning after December 15, 2006.





Management
      does not believe that any recently issued, but not yet effective, accounting
      standards if currently adopted would have a material effect on the accompanying
      financial statements. Management
      is in the process of evaluating the impact of FIN 48 on its 2007 financial
      statements.





**Results
      of Operations for the Fiscal Year Ended December 31, 2006 and the Period from
      May 13, 2005 (inception) to December 31, 2005**





For
      the
      fiscal year ended December 31, 2006, we incurred $1,211,100 of operating
      expenses, compared to $50,211 during the period from May 13, 2005 (date of
      inception) through December 31, 2005, which were paid from the net proceeds
      that were not deposited into the trust account. Our operating expenses
      consisted primarily of expenses related to professional and office fees of
      $596,423, insurance costs of $112,242, due diligence fees in connection with
      the
      search for a business target of $262,877 and other expenses of $239,558. The
      increase in operating expenses from the period from May 13, 2005 (date of
      inception) through December 31, 2005, was the result of our due diligence
      efforts in searching for a business target after the Initial Public Offering
      and
      the fee payable of $7,500 per month for office space and certain other
      additional services from the law firm of Schwartz & Weiss,
      P.C..





For
      the
      fiscal year ended December 31, 2006, we earned net income after taxes of
      $2,978,086 ($5,141,143 before the deduction of $2,163,057 of net interest
      attributable to common stock subject to possible redemption) compared to
      $110,331 during the period from May 13, 2005 (date of inception) through
      December 31, 2005. Since we did not have any operations, all of our income
      was
      derived from the interest income earned on funds held in the trust account.




**Results
      of Operations for the Period from May 13, 2005 (inception) to December 31,
      2006**





For
      the
      period from May 13, 2005 (date of inception) through December 31, 2006, we
      incurred $1,261,311 of operating expenses, which were paid from the net proceeds
      that were not deposited into the trust account. Our operating expenses consisted
      primarily of expenses related to professional and office fees of $616,023,
      insurance costs of $116,476, due diligence fees in connection with the search
      for a business target of $262,877 and other expenses of $265,935.





For
      the
      period from May 13, 2005 (date of inception) through December 31, 2006, we
      earned net income after taxes of $3,088,417 ($5,251,474 before the deduction
      of
      $2,163,057 of net interest attributable to common stock subject to possible
      redemption). Since we did not have any operations, all of our income was derived
      from the interest income earned on funds held in the trust account.




44





During
      the period from May 13, 2005 (date of inception) through December 31, 2005,
      Mr.
      Tsirigakis advanced a total of $590,000 at an interest rate of 4% per annum
      for
      payment of Initial Public Offering expenses on our behalf. These loans were
      repaid following our Initial Public Offering from the proceeds of the Initial
      Public Offering .




**Liquidity
      and Capital Resources.**




On
      December 15, 2005, we sold 1,132,500 units in the Private Placement to certain
      of our officers and directors. On December 21, 2005, we consummated our Initial
      Public Offering of 18,867,500 units. Each unit in the Private Placement and
      the
      Initial Public Offering consists of one share of common stock and one redeemable
      common stock purchase warrant. Each warrant entitles the holder to purchase
      from
      us one share of our common stock at an exercise price of $8.00. Our common
      stock
      and warrants started trading separately as of February 27, 2006.





The
      net
      proceeds from the sale of our units, after deducting certain offering expenses
      of $10,217,665 including underwriting discounts and commissions and placement
      fees, were $189,807,335. Of this amount, $188,675,000 was placed in the trust
      account, $599,163 was used to repay debt and interest to Mr. Tsirigakis for
      a
      loan used to cover expenses related to the Initial Public Offering and the
      remaining proceeds of $533,172, which after payment of approximately $170,000
      of
      additional financing fees, provided us with approximately $363,172 which was
      deposited and held outside of the trust account to be used to provide for
      business, legal and accounting due diligence on prospective acquisitions and
      continuing general and administrative expenses. The net proceeds deposited
      into
      the trust account remain on deposit in the trust account earning interest.
      As of
      December 31, 2006, there was approximately $192,915,257 held in the trust
      account, of which up to $4,000,000 will be paid to the underwriters if a
      business combination is consummated, but which will be forfeited in part if
      public stockholders elect to have their shares redeemed for cash if a business
      combination is not consummated. We will use substantially all of the net
      proceeds of the Initial Public Offering to acquire a target business, and will
      use the proceeds held outside of the trust account and disbursements of interest
      income to identify and evaluate prospective acquisition candidates, select
      the
      target business, and structure, negotiate and consummate the business
      combination. To the extent that our capital stock is used in whole or in part
      as
      consideration to effect a business combination, the proceeds held in the trust
      account as well as any other net proceeds not expended will be used to finance
      the operations of the target business.





At
      the
      time we seek stockholder approval of our initial business combination, we will
      offer each public stockholder the right to have such stockholder’s shares of
      common stock redeemed for cash if the stockholder votes against the business
      combination and the business combination is approved and completed. The actual
      per-share redemption price will be equal to the amount in the trust account
      (calculated as of two business days prior to the consummation of the proposed
      business combination), inclusive of any interest, net of taxes payable, divided
      by the number of shares sold in the Initial Public Offering . We may effect
      a
      business combination so long as public stockholders owning no more than 32.99%
      of the shares sold in the Initial Public Offering vote against the business
      combination and exercise their redemption rights. In accordance with the terms
      of the Initial Public Offering , 6,599,999 shares of common stock are subject
      to
      possible redemption. Accordingly, at December 31, 2006, $64,679,990 of the
      net
      proceeds from the Initial Public Offering , has been classified as common stock
      subject to possible redemption in the Company’s balance sheet.





We
      believe we will have sufficient available funds outside of the trust account
      to
      operate through December 21, 2007, assuming that a business combination is
      not
      consummated during that time. We do not believe we will need to raise additional
      funds in order to meet the expenditures required for operating our business.
      However, we may need to raise additional funds through a private offering of
      debt or equity securities, or enter into a financing arrangement if such funds
      are required to consummate a business combination that is presented to us.
      We
      would only consummate such a financing simultaneously with the consummation
      of a
      business combination.




45





**Off-Balance
      Sheet Arrangements**





Options
      and warrants issued in conjunction with our Initial Public Offering are equity
      linked derivatives and accordingly represent off balance sheet
      arrangements.  The options and warrants meet the scope exception in
      paragraph 11(a) of FAS 133 and are accordingly not accounted for as derivatives
      for purposes of FAS 133, but instead are accounted for as equity.  See
      Footnote 2 to the financial statements for more information.




**Contractual
      Obligations.**





We
      do not
      have any long term debt, capital lease obligations, operating lease obligations,
      purchase obligations or other long term liabilities.





**Forward
      Looking Statements**





This
      Annual Report on Form 10-K includes forward-looking statements within the
      meaning of Section 27A of the Securities Act of 1933, as amended, and Section
      21E of the Securities Exchange Act of 1934, as amended. We have based these
      forward-looking statements on our current expectations and projections about
      future events. These forward-looking statements are subject to known and unknown
      risks, uncertainties and assumptions about us that may cause our actual results,
      levels of activity, performance or achievements to be materially different
      from
      any future results, levels of activity, performance or achievements expressed
      or
      implied by such forward-looking statements. In some cases, you can identify
      forward-looking statements by terminology such as “may,” “should,” “could,”
“would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or
      the negative of such terms or other similar expressions. Factors that might
      cause or contribute to such a discrepancy include, but are not limited to,
      those
      described above under Item 1A “Risk Factors” and in our other Securities and
      Exchange Commission filings. The following discussion should be read in
      conjunction with our Financial Statements and related Notes thereto included
      elsewhere in this report.





**Item
      7A. Quantitative and Qualitative Disclosures About Market
      Risk******





Market
      risk is the sensitivity of income to changes in interest rates, foreign
      exchanges, commodity prices, equity prices, and other market-driven rates or
      prices. We are not presently engaged in and, if a suitable business target
      is
      not identified by us prior to the prescribed liquidation date of the trust
      account, we may not engage in, any substantive commercial business. Accordingly,
      we are not and, until such time as we consummate a business combination, we
      will
      not be, exposed to risks associated with foreign exchange rates, commodity
      prices, equity prices or other market-driven rates or prices. The net proceeds
      of our Initial Public Offering held in the trust account have been invested
      only
      in money market funds meeting certain conditions under Rule 2a-7 promulgated
      under the Investment Company Act of 1940. Given our limited risk in our exposure
      to money market funds, we do not view the interest rate risk to be significant.




46





**Item
      8. Financial Statements and Supplementary Data**


**Star
        Maritime Acquisition Corp.**
  (a
        corporation in the development stage)
  **Index
        to Financial Statements**
  **Financial
        Statements**
  **Page**Report
                  of independent registered public accounting firm
              
              
              F-2Balance
                  sheet
              
              
              F-3Income
                  statement
              
              
              F-4Statement
                  of stockholders’ equity
              
              
              F-5Statement
                  of cash flows
              
              
              F-6Notes
                  to financial statements
              
              
              F-7
  F-1
 **REPORT
                OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
  To
                the
                Board of Directors
 Star
                Maritime Acquisition Corp.
  We
                have
                audited the accompanying balance sheet of Star Maritime Acquisition
                Corp. (a
                corporation in the development stage) as of December 31, 2006 and
                2005 and the
                related statements of income, stockholders’ equity and cash flows for the year
                ended December 31, 2006 and for the periods from May 13, 2005 (inception)
                to
                December 31, 2005 and May 13, 2005 (inception) to December 31, 2006.
                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 audits.
  We
                conducted our audits in accordance with the standards of the Public
                Company
                Accounting Oversight Board (United States). Those standards require
                that we plan
                and perform the audits to obtain reasonable assurance about whether
                the
                financial statements are free of material misstatement. The audits
                include
                examining, on a test basis, evidence supporting the amounts and disclosures
                in
                the financial statements. The audits also include assessing the accounting
                principles used and significant estimates made by management, as
                well as
                evaluating the overall financial statement presentation. We believe
                that our
                audits provide a reasonable basis for our opinion.
  In
                our
                opinion, the financial statements referred to above present fairly,
                in all
                material respects, the financial position of Star Maritime Acquisition
                Corp. as
                of December 31, 2006 and 2005 and the results of its operations and
                its cash
                flows for the year ended December 31, 2006 and for the periods from
                May 13, 2005
                (inception) to December 31, 2005 and May 13, 2005 (inception) to
                December 31,
                2006 in conformity with United States generally accepted accounting
                principles.
 
 We
                have
                also audited, in accordance with the standards of the Public Company
                Accounting
                Oversight Board (United States), the effectiveness of the Company’s internal
                control over financial reporting as of December 31, 2006, based on
                criteria
                established in Internal Control—Integrated Framework issued by the Committee of
                Sponsoring Organizations of the Treadway Commission (COSO), and our
                report dated
                March 10, 2007 expressed an unqualified opinion on management's assessment
                of
                the effectiveness of the Company's internal control over financial
                reporting and
                an unqualified opinion on the effectiveness of the Company's internal
                control
                over financial reporting.
  The
                accompanying financial statements have been prepared assuming that
                Star Maritime
                Acquisition Corp. will continue as a going concern. As discussed
                in Note 1 to
                the financial statements, the Company may face a mandatory liquidation
                by
                December 21, 2007 if a business combination is not consummated, unless
                certain
                extension criteria are met, which raises substantial doubt its ability
                to
                continue as a going concern. The financial statements do not include
                any
                adjustments that might result from the outcome of this uncertainty.
 
 
 
 **GOLDSTEIN
                GOLUB KESSLER LLP**
  New
                York,
                New York
 March
                10,
                2007
 F-2
  **Star
        Maritime Acquisition Corp.**
 (a
        development stage company)
 
 **Balance
        Sheet**
 **December
                    31,**
                
                **December
                    31,****2006**
                
                **2005****ASSETS****Current
                    Assets**Cash
                
                $
                2,118,141
                
                $
                593,281Investments
                    in trust account
                
                
                192,915,257
                
                
                188,858,542Prepaid
                    expenses and other current assets
                
                
                149,647
                
                
                118,766**Total
                    Current Assets**
                
                
                195,183,045
                
                
                189,570,589Property
                    and Equipment, net
                
                
                3,256
                
                
                -Deferred
                    tax asset
                
                
                -
                
                
                9,000**TOTAL
                    ASSETS**
                
                **$**
                **195,186,301**
                
                **$**
                **189,579,589****LIABILITIES
                    & STOCKHOLDERS' EQUITY****Liabilities**Accounts
                    payable & accrued expenses
                
                $
                603,520
                
                $
                344,638Deferred
                    Interest on investments
                
                
                2,163,057Deferred
                    underwriting fees
                
                
                4,000,000
                
                
                4,000,000Income
                    taxes payable
                
                
                206,687**Total
                    Liabilities**
                
                
                6,973,264
                
                
                4,344,638Common
                    Stock, $.0001 par value, 6,599,999 shares subject to possible
                    redemption,
                    at redemption value of $9.80 per share
                
                
                64,679,990
                
                
                64,679,990**Commitments****Stockholders'
                    Equity**Preferred
                    Stock, $.0001 par value; authorized, 1,000,000 shares; none issued
                    or
                    outstanding
                
                
                -Common
                    Stock, $.0001 par value, authorized, 100,000,000 shares; 29,026,924
                    shares
                    issued and outstanding.
                
                
                2,903
                
                
                2,903(including
                    6,599,999 shares subject to possible redemption)Additional
                    paid in capital
                
                
                120,441,727
                
                
                120,441,727Earnings
                    accumulated in the development stage
                
                
                3,088,417
                
                
                110,331**Total
                    Stockholders' Equity**
                
                
                123,533,047
                
                
                120,554,961**TOTAL
                    LIABILITIES AND STOCKHOLDERS' EQUITY**
                
                **$**
                **195,186,301**
                
                **$**
                **189,579,589**
 
 The
          accompanying notes should be read in conjunction with the financial
          statements.
  F-3
 **Star
        Maritime Acquisition Corp.**
 (a
        development stage company)
  **Statement
        of Income**
  **For
                  the Year Ended**
                **December
                  31, 2006**
              
              **May
                  13, 2005 (date of inception) to December 31, 2005**
              
              **May
                  13, 2005 (date of inception) to December 31, 2006**Operating
                  expensesProfessional
                  fees
              
              $
              596,423
              
              $
              19,600
              
              $
              616,023Insurance
              
              
              112,242
              
              
              4,234
              
              
              116,476Due
                  diligence costs
              
              
              262,877
              
              
              -
              
              
              262,877Other
              
              
              239,558
              
              
              26,377
              
              
              265,935Total
                  operating expenses
              
              
              1,211,100
              
              
              50,211
              
              
              1,261,311Interest
                  income
              
              
              4,395,873
              
              
              183,542
              
              
              4,579,415Income
                  before provision for income taxes
              
              
              3,184,773
              
              
              133,331
              
              
              3,318,104Provision
                  for income taxes
              
              
              206,687
              
              
              23,000
              
              
              229,687Net
                  income
              
              $
              2,978,086
              
              $
              110,331
              
              $
              3,088,417Earnings
                  per share (basic and diluted)
              
              $
              0.10
              
              $
              0.01
              
              $
              0.14Weighted
                  average shares outstanding - basic and diluted
              
              
              29,026,924
              
              
              9,918,282
              
              
              21,601,120
 
 The
          accompanying notes should be read in conjunction with the financial
          statements.
  F-4
  **Star
        Maritime Acquisition Corp.**
 (a
        development stage company)
  **Statement
        of Stockholders’ Equity**
  EarningsaccumulatedAdditional
              
              in
                  the
              
              TotalCommon
                  Stock
              
              paid-in
              
              development
              
              stockholders'Shares
              
              Amount
              
              capital
              
              stage
              
              equityMay
                  13, 2005 (inception) toDecember
                  31, 2006Stock
                  Issuance on May 17, 2005 at $.003 per share
              
              
              9,026,924
              
              $
              903
              
              $
              24,097
              
              $
              -
              
              $
              25,000Private
                  placement issued December 15, 2005 at $10 per share
              
              
              1,132,500
              
              
              113
              
              
              11,324,887
              
              
              
              
              
              11,325,000Common
                  shares issued December 21, 2005 at $10 per share
              
              
              18,867,500
              
              
              1,887
              
              
              188,673,113
              
              
              
              
              
              188,675,000Expenses
                  of offerings
              
              
              
              
              
              
              
              
              (14,900,380
              )
              
              
              
              
              (14,900,380
              )Proceeds
                  subject to possible redemption of 6,599,999 shares
              
              
              
              
              
              
              
              
              (64,679,990
              )
              
              
              
              
              (64,679,990
              )Net
                  income for the period May 13, 2005(inception) to December 31,
                  2005
              
              
              -
              
              
              -
              
              
              -
              
              
              110,331
              
              
              110,331**Balance,
                  December 31, 2005**
              
              
              29,026,924
              
              $
              2,903
              
              $
              120,441,727
              
              $
              110,331
              
              $
              120,554,961Net
                  Income for the year ended December 31, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              2,978,086
              
              
              2,978,086**Balance,
                  December 31, 2006**
              
              
              29,026,924
              
              $
              2,903
              
              $
              120,441,727
              
              $
              3,088,417
              
              $
              123,533,047
 The
          accompanying notes should be read in conjunction with the financial
          statements.
  F-5
  **Star
        Maritime Acquisition Corp.**
 (a
        development stage company)
 **Statement
        of Cash Flows**
  **For
                  the Year Ended December 31, 2006**
              
              **May
                  13, 2005 (date of inception) to December 31, 2005**
              
              **May
                  13, 2005 (date of inception) to December 31, 2006****Cash
                  flows from operating activities:****Net
                  Income**
              
              $
              2,978,086
              
              $
              110,331
              
              $
              3,088,417**Adjustments
                  to reconcile net income to net cash used in operating
                  activities:**Depreciation
              
              
              408
              
              
              
              
              
              408Changes
                  in operating assets and liabilities:
              
              
              
              
              
              
              
              
              -Increase
                  in value of trust account
              
              
              (4,056,715
              )
              
              (183,542
              )
              
              (4,240,257
              )Increase
                  in prepaid expenses and other current assets
              
              
              (30,881
              )
              
              (118,766
              )
              
              (149,647
              )Decrease
                  (increase) in deferred tax asset
              
              
              9,000
              
              
              (9,000
              )
              
              -Increase
                  in accounts payable and accrued expenses
              
              
              429,467
              
              
              174,053
              
              
              603,520Increase
                  in deferred interest
              
              
              2,163,057
              
              
              -
              
              
              2,163,057Increase
                  in taxes payable
              
              
              206,687
              
              
              -
              
              
              206,687**Net
                  cash provided by (used in) operating activities**
              
              
              1,699,109
              
              
              (26,924
              )
              
              1,672,185**Cash
                  flows from investing activities:**Payment
                  to trust account
              
              
              -
              
              
              (188,675,000
              )
              
              (188,675,000
              )Capital
                  expenditures
              
              
              (3,664
              )
              
              -
              
              
              (3,664
              )**Net
                  cash used in investing activities**
              
              
              (3,664
              )
              
              (188,675,000
              )
              
              (188,678,664
              )**Cash
                  flows from financing activities:**Gross
                  proceeds from public offering
              
              
              
              
              
              188,675,000
              
              
              188,675,000Gross
                  proceeds from private placement
              
              
              
              
              
              11,325,000
              
              
              11,325,000Proceeds
                  of note payable to stockholder
              
              
              -
              
              
              590,000
              
              
              590,000Repayment
                  of note payable to stockholder
              
              
              -
              
              
              (590,000
              )
              
              (590,000
              )Proceeds
                  from sale of shares of common stock
              
              
              -
              
              
              25,000
              
              
              25,000Payment
                  of offering costs
              
              
              (170,585
              )
              
              (10,729,795
              )
              
              (10,900,380
              )**Net
                  cash provided by financing activities**
              
              
              (170,585
              )
              
              189,295,205
              
              
              189,124,620**Net
                  cash increase for period**
              
              
              1,524,860
              
              
              593,281
              
              
              2,118,141**Cash
                  at beginning of period**
              
              
              593,281
              
              
              -
              
              
              -**Cash
                  at end of period**
              
              **$**
              **2,118,141**
              
              **$**
              **593,281**
              
              **$**
              **2,118,141****Supplemental
                  cash disclosure**Interest
                  paid
              
              $
              -
              
              $
              9,163
              
              $
              9,163**Supplemental
                  schedule of non-cash financing activities**Accrual
                  of deferred underwriting fees
              
              $
              -
              
              $
              4,000,000
              
              $
              4,000,000Accrual
                  of offering costs
              
              $
              -
              
              $
              170,585
 The
          accompanying notes should be read in conjunction with the financial
          statements.
  F-6
 
 **Star
        Maritime Acquisition Corp.**
 (a
        development stage company)
  **Notes
        to the Financial Statements**
 **December
        31, 2006**
 
 **1.
        ORGANIZATION AND BUSINESS OPERATIONS**
  Star
        Maritime Acquisition Corp. (the “Company”) was incorporated in Delaware on May
        13, 2005. The Company was formed to serve as a vehicle for the acquisition
        through a merger, capital stock exchange, asset acquisition, or other similar
        business combination (“Business Combination”) with one or more businesses in the
        shipping industry. The company has not acquired an entity as of December
        31,
        2006. The Company has selected December 31 as its fiscal year end. The Company
        is considered to be in the development stage and is subject to the risks
        associated with activities of development stage companies. Certain amounts
        in
        the December 31, 2005 financial statements have been reclassified to conform
        to
        the current year presentation.
  On
          December 13, 2006, the Company created a wholly-owned subsidiary, Star
          Bulk
          Carriers Corp. (“Star Bulk”) registered in the Marshall Islands. Star Bulk was
          not funded within 2006, therefore, there is no related effect on the financial
          statements.
 The
        registration statement for the Company’s initial public offering (the “Public
        Offering”) was declared effective on December 15, 2005. The Company completed a
        private placement (the “Private Placement”) on such date and received net
        proceeds of $10,532,250. The Company consummated the Public Offering on December
        21, 2005 and received net proceeds of $174,567,370. The Company’s management has
        broad discretion with respect to the specific application of the net proceeds
        of
        the Private Placement and the Public Offering (collectively the “Offerings”) (as
        described in Note 3), although substantially all of the net proceeds of the
        Offerings are intended to be generally applied toward consummating a business
        combination with a target company. As used herein, a “target business” shall
        include an operating business in the international maritime industry and
        a
“business combination” shall mean the acquisition by the Company of a target
        business.
  Of
        the
        proceeds of the Offerings, $188,675,000 is being held in a trust account
        (“Trust
        Account”) and invested until the earlier of (i) the consummation of the first
        business combination or (ii) the distribution of the Trust Account as described
        below. The amount in the Trust Account includes $3,773,500 of contingent
        underwriting compensation and $226,500 of contingent private placement fees
        (collectively, the “Discount”) which will be paid to the underwriters if a
        business combination is consummated, but which will be forfeited in part
        if
        public stockholders elect to have their shares redeemed for cash if a business
        combination is consummated. The remaining proceeds may be used to pay for
        additional financing costs accrued but not yet paid, business, legal and
        accounting due diligence on prospective acquisitions and continuing general
        and
        administrative expenses.
  The
        Company, after signing a definitive agreement for the acquisition of a target
        business, will submit such transaction for stockholder approval. In the event
        that public stockholders owning 33% or more of the outstanding stock sold
        in the
        Public Offering and Private Placement vote against the business combination
        and
        elect to have the Company redeem their shares for cash, the business combination
        will not be consummated. All of the Company’s stockholders prior to the Public
        Offering, including all of the officers and directors of the Company (“Initial
        Stockholders”), have agreed to vote their 9,026,924 founding shares of common
        stock in accordance with the vote of the majority in interest of all other
        stockholders of the Company with respect to any business combination and
        to vote
        the shares they acquired in the Private Placement or in the aftermarket in
        favor
        of the business combination. After consummation of the Company’s first business
        combination, all of these voting safeguards will no longer be
        applicable.
  With
        respect to the first business combination which is approved and consummated,
        any
        holder of shares sold in the Public Offering, other than the Initial
        Stockholders and their nominees (the “Public Stockholders”) who voted against
        the business combination may demand that the Company redeem his or her shares.
        The per share redemption price will equal $10.00 per share, which amount
        represents $9.80 per share plus their pro rata share of any accrued interest
        earned on the trust account (net of taxes payable) not previously distributed
        to
        us and $0.20 per share plus interest thereon (net of taxes payable) of
        contingent underwriting compensation which the underwriters have agreed to
        forfeit to pay redeeming stockholders. Accordingly, Public Stockholders holding
        32.99% of the aggregate number of shares sold in the Proposed Offerings may
        seek
        redemption of their shares in the event of a business combination.
  F-7
 The
        accompanying financial statements have been prepared assuming that Star Maritime
        Acquisition Corp. will continue as a going concern. The Company’s Certificate of
        Incorporation provides for mandatory liquidation of the Company by December
        21,
        2007, without stockholder approval, in the event that the Company does not
        consummate a business combination within 18 months from the date of consummation
        of the Public Offering, or 24 months from the consummation of the Public
        Offering if certain extension criteria have been satisfied. The Initial
        Stockholders have agreed to waive their rights to participate in any liquidation
        distribution occurring upon its failure to consummate a business combination
        with respect to those shares of common stock acquired by them prior to the
        Public Offering and with respect to the shares included in the 1,132,500
        units
        purchased in the private placement. In addition, the underwriters have agreed
        to
        waive their rights to the $3,773,500 of contingent compensation and $226,500
        of
        placement fees deposited in the trust account for their benefit. Accordingly,
        in
        the event of liquidation, the public stockholders will receive $10.00 per
        unit
        plus interest (net of taxes payable and that portion of the earned interest
        previously released to the Company). The Company will pay the costs of
        liquidation and dissolution from remaining assets outside of the trust account.
        The financial statements do not include any adjustments that might result
        from
        the outcome of this uncertainty.
  **2.
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 **Use
        of estimates**
 
 The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States of America requires management to
        make
        estimates and assumptions that affect the reported amounts of assets and
        liabilities at the date of the financial statements and the reported amounts
        of
        expenses during the reporting period. Actual results could differ from those
        estimates.
 
 **Concentration
        of Credit Risk**
 
 Financial
        instruments that potentially subject the Company to credit risk consist of
        cash
        equivalents and short-term investments. The Company’s policy is to place
        investments with financial institutions evaluated as being creditworthy,
        or in
        short-term money market funds which are exposed to minimal interest rate
        and
        credit risk.
 
 **Cash
        and cash equivalents**
 
 The
        Company considers all highly liquid investments with original maturities
        of
        three months or less to be cash equivalents.
 
 The
        company maintains cash in bank deposit accounts which, at times, exceed
        federally insured limits. The company has not experienced any losses on these
        accounts.
 
 **Deferred
        Interest**
 
 A
        portion
        (32.99%) of the interest earned on the Trust Account has been deferred on
        the
        balance sheet as it represents interest attributable to the common stock
        subject
        to possible redemption (See Note 1).
 
 **Income
        taxes**
 
 Deferred
        income taxes are provided for the differences between the bases of assets
        and
        liabilities for financial reporting and income tax purposes. A valuation
        allowance is established when necessary to reduce deferred tax assets to
        the
        amount expected to be realized.
  F-8
 **Property
        and Equipment**
 
 Property
        and equipment, which is principally computer equipment, is recorded at cost
        and
        is depreciated using the straight-line method over its useful life.
 
 **Stock
        Based Compensation**
 
 In
        December 2004, the Financial Accounting Standards Board issued statement
        of
        Financial Accounting Standards No. 123 (revised 2004) (“SFAS 123 (R)”), “Share
        Based Project.” SFAS 123 (R) required all share-based payments to employees,
        including grants of employee stock options, to be recognized in the financial
        statements based on their fair values. The Company adopted SFAS 123(R) effective
        January 1, 2006. The adoption of this standard has no effect on the financial
        statements as of December 31, 2006.
 
 **Earnings
        per common share**
 
 Basic
        earnings per share are computed by dividing the net income by the weighted
        average common shares outstanding during the period. Diluted earnings per
        share
        reflects the additional dilution for all potentially dilutive securities
        such as
        stock warrants and options. The effect of the 20,000,000 outstanding warrants,
        issued in connection with the initial public offering and the private placement
        described in Note 3 has not been considered in the diluted earnings per share
        since the warrants are contingently exercisable.
  **Recently
        issued accounting pronouncements**
 
 In
        June
        2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in
        Income Taxes-an Interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48
        clarifies the accounting for uncertainty in income taxes recognized in a
        company’s financial statements in accordance with SFAS No. 109, “Accounting for
        Income Taxes.” FIN 48 prescribes a recognition threshold and measurement
        attribute for the financial statement recognition and measurement of the
        tax
        position taken or expected to be taken in a tax return. FIN 48 is effective
        for
        fiscal years beginning after December 15, 2006.
 
 Management
        does not believe that any other recently issued, but not yet effective,
        accounting standards if currently adopted would have a material effect on
        the
        accompanying financial statements.
 
 **3.
        STOCKHOLDERS’ EQUITY**
  **Public
        Offering**
  On
        December 21, 2005, the Company sold 18,867,500 units to the public at a price
        of
        $10.00 per unit. Each unit consists of one share of the Company’s common stock,
        $.0001 par value, and one redeemable common stock purchase warrant (“warrant”).
        Each warrant entitles the holder to purchase from the Company one share of
        common stock at an exercise price of $8.00 commencing the later of the
        completion of a business combination with a target business or December 15,
        2005
        and expiring December 15, 2009. The warrants are redeemable at a price of
        $.01
        per warrant upon 30 days notice after the warrants become exercisable, only
        in
        the event that the last sale price of the common stock is at least $14.25
        per
        share for any 20 trading days within 30 trading day period ending on the
        third
        day prior to date on which notice of redemption is given.
  **Private
        Placement**
  On
        December 15, 2005, the Company sold to certain of its officers and directors
        an
        aggregate of 1,132,500 units identical to the units sold in the Public Offering
        at a price of $10.00 per unit.
 
 F-9
 **Common
        Stock Reserved For Issuance**
  At
        December 31, 2006 20,000,000 shares of common stock were reserved for issuance
        upon exercise of redeemable warrants.
  **Preferred
        Stock**
  The
        Company is authorized to issue 1,000,000 shares of preferred stock with such
        designations, voting, and other rights and preferences, as maybe determined
        from
        time to time by the Board of Directors.
 
 **4.
        - INCOME TAXES**
  The
        provision for income taxes consists of the following:
 **For
                    the period ended****December
                    31,****2006**
                
                **2005**Current-Federal
                
                $
                206,687
                
                $
                -Current-State
                    and Local
                
                
                -
                
                
                32,000Deferred-Federal
                
                
                -
                
                
                -Deferred-State
                    and Local
                
                
                -
                
                
                (9,000
                )Total
                
                $
                206,687
                
                $
                23,000
 
 The
        total
        provision for income taxes differs from the amount which would be computed
        by
        applying the U.S. Federal income tax rate to income before provision for
        income
        taxes as follows:
 **For
                    the period ended****December
                    31,****2006**
                
                **2005**Statutory
                    federal income tax rate
                
                
                34
                %
                
                34
                %State
                    and local income taxes
                
                
                -
                
                
                17
                %Valuation
                    allowance
                
                
                14
                %
                
                —Interest
                    income not taxable for federal tax purposes
                
                
                (41
                %)
                
                (34
                %)Effective
                    tax rate
                
                
                7
                %
                
                17
                %
 
 The
        tax
        effect of temporary differences that give rise to the net deferred tax asset
        is
        as follows:
 
 **For
                  the period ended**
                **December
                  31,****2006**
              
              **2005**Expenses
                  deferred for income taxes
              
              $
              447,712
              
              $
              9,000Valuation
                  allowance
              
              
              (447,712
              )
              
              -Total
                  deferred tax asset
              
              $
              0
              
              $
              9,000
  F-10
  **5.
        COMMITMENTS**
 
 On
        December 19, 2006, the Company entered into a Sublease and Administrative
        Services Agreement with Blue Diamond Realty, LLC, a Delaware limited liability
        company ("Blue Diamond"). Effective as of December 1, 2006, Blue Diamond
        agreed
        to sublet offices to the Company located at 103 Foulk Road, Wilmington, Delaware
        and provide the Company with such office space and equipment, including a
        conference room, as well as administrative support necessary for the Company's
        business. The Agreement is for a one-year term effective December 1, 2006
        through December 31, 2007, with an automatic renewal each year for an additional
        one year period, unless either party gives the other party at least 90 days
        written notice of its intent to terminate the Agreement. The Company shall
        pay
        Blue Diamond annual base rent and administrative services fees in the aggregate
        of $4,000 payable on January 1 each year.
 On
          October 4, 2006, Star Maritime entered into an agreement with Bongard
          Shipbrokers S.A., or Bongard, for purposes of engaging Bongard in connection
          with sourcing, developing contacts and making referrals for potential target
          businesses and providing evaluations of such potential target businesses.
          In
          exchange for such services, Star Maritime is obligated to pay a contingent
          fee
          of $800,000 within thirty days of the closing of a business combination
          transaction. In the event that Star Maritime does not consummate a business
          combination transaction, no fees are payable to Bongard pursuant to the
          agreement.
 
 On
          December 20, 2006, Star Maritime entered into an agreement with Cantor
          Fitzgerald & Co., or CF&Co., for purposes of engaging CF&Co. as
          financial advisor in connection with a possible business combination
          transaction. Pursuant to the agreement, CF & Co. was engaged to provide such
          services as creating financial models, advising on the structure of a possible
          transaction with a target business, negotiating agreements on behalf of
          and in
          conjunction with management and assisting management with the preparation
          of
          marketing and roadshow materials. In exchange for such services, Star Maritime
          is obligated to pay a contingent fee of $1,250,000, plus expenses of up
          to
          $60,000, within thirty days of the closing of a business combination transaction
          if such transaction is consummated by December 31, 2007.
 
 On
          December 22, 2006, Star Maritime entered into an agreement with Maxim Group
          LLC,
          or Maxim, for purposes of engaging Maxim as co-lead financial advisor in
          connection with a possible business combination transaction. Pursuant to
          the
          agreement, Maxim was engaged to provide such services as creating financial
          models, advising on the structure of a possible transaction with a target
          business and assisting in the preparation of terms sheets or letters of
          intent.
          In exchange for such services, Star Maritime is obligated to pay a contingent
          fee of $800,000 for any business combination transaction consummated during
          the
          term of the agreement (or within six months of the termination date). The
          agreement terminates on October 31, 2007, unless terminated earlier by
          either
          Star Maritime or Maxim upon thirty days’ written notice, or extended by mutual
          agreement.
  The
        Initial Stockholders have agreed to surrender up to an aggregate of 200,000
        of
        their shares of common stock to the Company for cancellation upon consummation
        of a business combination in the event public stockholders exercise their
        right
        to have the Company redeem their shares for cash. The number of shares that
        the
        Initial Stockholders will surrender will be determined by calculating the
        dollar
        amount of the Trust Account (exclusive of interest) paid to redeeming
        stockholders above the amount attributable to such stockholders ($9.23 per
        share) and the Discount ($.20 per share) and dividing it by $10.00 (the value
        attributed to the shares for purposes of this calculation). Accordingly,
        for
        each 1,000 shares redeemed up to 3,508,772 shares, the Initial Stockholders
        will
        surrender 57 shares for cancellation.
  The
        Company has engaged the representative of the underwriters, on a non-exclusive
        basis, as its agent for the solicitation of the exercise of the warrants.
        To the
        extent not inconsistent with the guidelines of the NASD and the rules and
        regulations of the Securities and Exchange Commission, the Company has agreed
        to
        pay the representative for bona fide services rendered a commission equal
        to 5%
        of the exercise price for each warrant exercised more than one year after
        the
        date of the prospectus if the exercise was solicited by the underwriters.
        In
        addition to soliciting, either orally or in writing, the exercise of the
        warrants, the representative’s services may also include disseminating
        information, either orally or in writing, to warrant holders about the Company
        or the market for the Company’s securities, and assisting in the processing of
        the exercise of the warrants. No compensation will be paid to the representative
        upon the exercise of the warrants if:
  ·
              the
                  market price of the underlying shares of common stock is lower
                  than the
                  exercise price;
  ·
              the
                  holder of the warrants has not confirmed in writing that the
                  representative solicited the
                  exercise;
  ·
              the
                  warrants are held in a discretionary
                  account;
  ·
              the
                  warrants are exercised in an unsolicited transaction;
                  or
  ·
              the
                  arrangements to pay the commission are not disclosed in the prospectus
                  provided to warrant holders at the time of
                  exercise.
 F-11
 **6.
        SUBSEQUENT EVENTS (UNAUDITED)**
  On
        January 12, 2007, the Company, through its newly-formed, wholly-owned subsidiary
        Star Bulk Carriers Corp., a Marshall Islands company ("Star Bulk"), agreed
        to
        purchase eight drybulk carriers (the "Vessels") from certain wholly-owned
        subsidiary affiliates of TMT Co., Ltd., a Taiwan corporation (TMT Co., Ltd.
        and
        such subsidiary affiliates, collectively, "TMT").The aggregate purchase price
        for the Vessels is $345.2 million (the "Purchase Price"), consisting of $120.7
        million payable in 12,537,645 shares of common stock, par value $0.01, of
        Star
        Bulk (the "Stock Consideration") and $224.5 million in cash (the "Cash
        Consideration").
 
 On
        February 7, 2007, Star Bulk formed the following wholly-owned subsidiaries
        registered in the Marshall Islands. The share capital of each of the
        subsidiaries consists of 500 authorized and issued shares without par value:
 
 Star
        Alpha Inc.
 Star
        Beta
        Inc.
 Star
        Gamma Inc.
 Star
        Epsilon Inc.
 Star
        Iota
        Inc.
 Star
        Theta Inc.
 Star
        Zeta
        Inc.
 Star
        Bulk
        Management Inc.
 
 Star
        Gamma Inc., a wholly-owned subsidiary of Star Bulk, entered into a time charter
        agreement dated, February 23, 2007, with TMT for the *C
        Duckling* (to
        be
        renamed the *Star
        Gamma* ).
        The
        charter rate for the *Star
        Gamma* will be
        $28,500 per day for a term of one year. Star Iota Inc., a wholly-owned
        subsidiary of Star Bulk, entered into a time charter agreement, dated February
        26, 2007, with TMT for the *Mommy
        Duckling* (to be
        renamed the *Star
        Iota* ).
        The
        charter rate for the *Star
        Iota* will be
        $18,000 per day for a term of one year. Each charter will commence as of
        the
        date the vessel is delivered to the purchaser. Pursuant to the Supplemental
        Agreement, these time charters will be null and void if the Redomiciliation
        Merger is not consummated.
 
 F-12





**Item
      9. Changes in and Disagreements with Accountants on Accounting and Financial
      Disclosure******





None




47





**Item
      9A. Controls and Procedures******





*(a)*  *Evaluation
      of Disclosure Controls and Procedures.* An
      evaluation of the effectiveness of our disclosure controls and procedures as
      of
      December 31, 2006 was made under the supervision and with the participation
      of
      our management, including our chief executive officer and chief financial
      officer. Based on that evaluation, they concluded that our disclosure controls
      and procedures are effective as of the end of the period covered by this report
      to ensure that information required to be disclosed by us in reports that we
      file or submit under the Securities Exchange Act of 1934 is recorded, processed,
      summarized and reported within the time periods specified in Securities and
      Exchange Commission rules and forms.





*(b)
      Management’s Annual Report on Internal Control Over Financial Reporting.* Pursuant
      to Section 404 of the Sarbanes-Oxley Act of 2002, and the implementing rules
      of
      the Securities and Exchange Commission, our management assessed the
      effectiveness of the Company’s internal control over financial reporting as of
      December 31, 2006. Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting for the company. Internal control over
      financial reporting is a process to provide reasonable assurance regarding
      the
      reliability of our financial reporting for external purposes in accordance
      with
      accounting principles generally accepted in the United States of America.
      Internal control over financial reporting includes maintaining records that
      in
      reasonable detail accurately and fairly reflect our transactions; providing
      reasonable assurance that transactions are recorded as necessary for preparation
      of our financial statements; providing reasonable assurance that receipts and
      expenditures of company assets are made in accordance with management
      authorization; and providing reasonable assurance that unauthorized acquisition,
      use or disposition of company assets that could have a material effect on our
      financial statements would be prevented or detected on a timely basis. Because
      of its inherent limitations, internal control over financial reporting is not
      intended to provide absolute assurance that a misstatement of our financial
      statements would be prevented or detected.


Management
        conducted an evaluation of the effectiveness of our internal control over
        financial reporting based on the framework in *Internal
        Control - Integrated Framework* issued
        by the Committee of Sponsoring Organizations of the Treadway Commission.
        Based
        on this evaluation, management concluded that the company’s internal control
        over financial reporting was effective as of December 31, 2006.




The
      Company’s management assessment of the effectiveness of its internal control
      over financial reporting as of December 31, 2006 has been audited by
      Goldstein Golub Kessler LLP, our independent registered public accounting
      firm. Their report appears below.




**Report
        of Independent Registered Public Accounting Firm**
 
 The
        Board
        of Directors
 Star
        Maritime Acquisition Corp.
  We
        have
        audited management’s assessment, included in the accompanying Management’s
        Report on Internal Control over Financial Reporting, that Star Maritime
        Acquisition Corp. (a development stage company) maintained effective internal
        control over financial reporting as of December 31, 2006, based on criteria
        established in Internal Control—Integrated Framework issued by the Committee of
        Sponsoring Organizations of the Treadway Commission (COSO). Star Maritime
        Acquisition Corp. management is responsible for maintaining effective internal
        control over financial reporting and for its assessment of the effectiveness
        of
        internal control over financial reporting. Our responsibility is to express
        an
        opinion on management’s assessment and an opinion on the effectiveness of the
        company’s internal control over financial reporting 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 effective
        internal control over financial reporting was maintained in all material
        respects. Our audit included obtaining an understanding of internal control
        over
        financial reporting, evaluating management’s assessment, testing and evaluating
        the design and operating effectiveness of internal control, and performing
        such
        other procedures as we considered necessary in the circumstances. We believe
        that our audit provides a reasonable basis for our opinion.
  A
        company’s internal control over financial reporting is a process designed to
        provide reasonable assurance regarding the reliability of financial reporting
        and the preparation of financial statements for external purposes in accordance
        with generally accepted accounting principles. A company’s internal control over
        financial reporting includes those policies and procedures that (1) pertain
        to the maintenance of records that, in reasonable detail, accurately and
        fairly
        reflect the transactions and dispositions of the assets of the company; (2)
        provide reasonable assurance that transactions are recorded as necessary
        to
        permit preparation of financial statements in accordance with generally accepted
        accounting principles, and that receipts and expenditures of the company
        are
        being made only in accordance with authorizations of management and directors
        of
        the company; and (3) provide reasonable assurance regarding prevention or
        timely
        detection of unauthorized acquisition, use, or disposition of the company’s
        assets that could have a material effect on the financial
        statements.
  Because
        of its inherent limitations, internal control over financial reporting may
        not
        prevent or detect misstatements. Also, projections of any evaluation of
        effectiveness to future periods are subject to the risk that controls may
        become
        inadequate because of changes in conditions, or that the degree of compliance
        with the policies or procedures may deteriorate.
  In
        our
        opinion, management’s assessment that Star Maritime Acquisition Corp. maintained
        effective internal control over financial reporting as of December 31, 2006,
        is
        fairly stated, in all material respects, based on criteria established in
        Internal Control—Integrated Framework issued by the Committee of Sponsoring
        Organizations of the Treadway Commission (COSO). Also, in our opinion, Star
        Maritime Acquisition Corp. maintained, in all material respects, effective
        internal control over financial reporting as of December 31, 2006, based
        on
        criteria established in Internal Control—Integrated Framework issued by the
        Committee of Sponsoring Organizations of the Treadway Commission
        (COSO).
  We
        have
        also audited, in accordance with the standards of the Public Company Accounting
        Oversight Board (United States), the consolidated financial statements of
        Star
        Maritime Acquisition Corp. and our report dated March 10, 2007 expressed
        an
        unqualified opinion on those financial statements.
  **GOLDSTEIN
        GOLUB KESSLER LLP**
 New
        York,
        New York
 March
        10,
        2007




(c) *Changes
      in Internal Control Over Financial Reporting.* During
      the period covered by this Annual Report on Form 10-K, there has been no
      significant change in our internal control over financial reporting that has
      materially affected, or is reasonably likely to materially affect, our internal
      control over financial reporting.





**Item
      9B. Other Information******





None





**PART
      III**





**Item
      10. Directors and Executive Officers of the Registrant**




Our
      current directors and executive officers are as follows:




**Name**
            
            **Age**
            
            **Position**Prokopios
                (Akis) Tsirigakis
            
            52
            
            Chairman
                of the Board, Chief Executive Officer and PresidentGeorge
                Syllantavos
            
            43
            
            Chief
                Financial Officer, Secretary and DirectorChristo
                Anagnostou
            
            59
            
            Vice
                President of OperationsNiko
                Nikiforos
            
            43
            
            Vice
                President of Business DevelopmentPetros
                Pappas
            
            54
            
            DirectorKoert
                Erhardt
            
            51
            
            DirectorTom
                Søfteland
            
            47
            
            Director




48


**Prokopios
      (Akis) Tsirigakis** has been
      our Chairman of the Board, Chief Executive Officer and President since
      inception. Mr. Tsirigakis is experienced in ship management, ship ownership
      and
      overseeing new shipbuilding projects. Since November 2003, he has been the
      Joint
      Managing Director of Oceanbulk Maritime S.A., a dry cargo shipping company
      that
      has operated and managed as much as 1.6 million tons of deadweight vessels
      and
      which is part of the Oceanbulk Group of affiliated companies involved in the
      service sectors of the shipping industry. Since November 1998, Mr. Tsirigakis
      has been the Managing Director of Combine Marine Inc., a company which he
      founded that provides ship management services to third parties and which is
      part of the Oceanbulk Group. From 1991 to 1998, Mr. Tsirigakis was the
      Vice-President and Technical Director of Konkar Shipping Agencies S.A. of
      Athens, after having served as Konkar’s Technical Director from 1984 to 1991,
      which at the time managed 16 dry bulk carriers, multi-purpose vessels and
      tanker/combination carriers. From 1982 to 1984, Mr. Tsirigakis was the Technical
      Manager of Konkar’s affiliate, Arkon Shipping Agencies Inc. of New York, a part
      of the Archirodon Construction Group. He is a member of the Technical Committee
      (CASTEC) of Intercargo, the International Association of Dry Cargo Shipowners,
      and of the Technical Committees of Classification Societies. Mr. Tsirigakis
      received his Masters and B.Sc. in Naval Architecture from The University of
      Michigan, Ann Arbor and has three years of seagoing experience. Since its
      initial public offering in February 2005, Mr. Tsirigakis has served on the
      board
      of directors of Dryships Inc., a company listed on the NASDAQ National Market
      (NNM: DRYS) which provides international seaborne transportation services
      carrying various dry-bulk cargoes.




**George
      Syllantavos** has
      been
      our Chief Financial Officer and a member of our board of directors since
      inception and our Secretary since December 2005. Since May 1999, he has been
      President and General Manager of Vortex Ltd., an aviation consulting firm
      specializing in strategic and fleet planning. From January 1998 to April 1999,
      he served as a financial advisor to Hellenic Telecommunications Organization
      S.A., where, on behalf of the Chief Executive Officer, he coordinated and led
      the company’s listing on the New York Stock Exchange (NYSE:OTE) and where he had
      responsibilities for the strategic planning and implementation of multiple
      acquisitions of fixed-line telecommunications companies, including RomTelecom.
      Mr. Syllantavos served as a financial and strategic advisor to both the Greek
      Ministry of Industry & Energy (from June 1995 to May 1996) and the Greek
      Ministry of Health (from May 1996 to January 1998), where, in 1997 and 1998,
      he
      helped structure the equivalent of a US$700 million bond issuance for the
      payment of outstanding debts to supplier of the Greek National Health System.
      From 1998 to 2004, he served as a member of the Investment Committee of Rand
      Brothers & Co., a small U.S. merchant banking firm, where he reviewed and
      analyzed more than 35 acquisition targets of small or medium sized
      privately-held manufacturing firms in the U.S. and internationally, of which
      he
      negotiated, structured and directed the acquisition of three such firms with
      transactions ranging in size from $7 million to $11 million. Mr. Syllantavos
      has
      a B.Sc. in Industrial Engineering from Roosevelt University and an MBA in
      Operations Management, International Finance and Transportation Management
      from
      Northwestern University (Kellogg).




**Christo
      Anagnostou** has
      been
      our Vice President of Operations since inception. Since May 2005, he has been
      the General Manager of Combine Marine Inc., and since November 1999, he has
      been
      the General and Marine Operations Manager of Oceanbulk Maritime S.A., each
      of
      which are part of the Oceanbulk Group. In his capacities at Combine Marine
      Inc.
      and Oceanbulk Maritime S.A., he has been responsible for vessel acquisition
      and
      disposition transactions and the daily operational management of up to 32
      vessels. From 1992 to October 1999, he served as the Operations Manager for
      Cardiff Marine Inc., a shipping management company which at the time had a
      fleet
      of over 35 oceangoing dry-bulk, tanker, reefer and container vessels., From
      1981
      to 1991, Mr. Anagnostou was the Operations Manager for Hydroussa Shipping Co,
      Ltd., and from 1974 to 1977, he was a Ship Operator for N.J. Goulandris (London)
      Ltd., both of which are ship management companies based in London, England.
      He
      is a Supporting Member of the London Maritime Arbitrators Association. Mr.
      Anagnostou received his B.Sc. in Economics from Athens Graduate University
      of
      Economics and Business Science and did his post graduate studies in Shipping
      Management at the London School of Foreign Trade, Morley College - London.




**Niko
      Nikiforos** has been
      our Vice President of Business Development since inception. Since September
      1997, he has been the Managing Director of Oceanbulk Shipping and Trading S.A.,
      which provides ocean transportation solutions for international commodity
      companies and which, since December 2002, operates a regular liner service
      between the United States and South America. Since 1997, he has also been the
      Managing Director of Interchart Shipping Inc., which specializes in chartering
      dry cargo ships and serves as the exclusive chartering broker for the Oceanbulk
      Group. Since 1997, he has been the Commercial Director of Oceanbulk Maritime
      S.A. From 1995 to 1997, he served as a Shipbroker for Link Maritime Enterprises
      S.A., a ship brokering company. Mr. Nikiforos received his Diploma in Shipping
      from the London School of Foreign Trade.




49




**Petros
      Pappas** has been
      a member of the board of directors since inception. Throughout his career as
      a
      principal and manager in the shipping industry, Mr. Pappas has been involved
      in
      over 120 vessel acquisitions and disposals. In 1989, he founded Oceanbulk
      Maritime S.A., a dry cargo shipping company that has operated managed vessels
       aggregating as much as 1.6 million deadweight tons of cargo capacity. He
      also founded the Oceanbulk Group of affiliated companies, which are involved
      in
      the service sectors of the shipping industry. The Oceanbulk Group is comprised
      of Oceanbulk Maritime S.A., Interchart Shipping Inc., Oceanbulk Shipping and
      Trading S.A., Interchart Shipping Inc., Oceanbulk Shipping and Trading S.A.,
      Oceanbulk S & P, Combine Marine Inc., More Maritime Agencies Inc., and
      Sentinel Marine Services Inc. Additionally, Mr. Pappas ranked among the top
      25
      Greek ship owners (by number of ocean going vessels) as evaluated by the U.S.
      Department of Commerce’s 2004 report on the Greek shipping industry. Mr. Pappas
      has been a Director of the UK Defense Club, a leading insurance provider of
      legal defense services in the shipping industry worldwide, since January 2002,
      and is a member of the Union of Greek Shipowners (UGS). Mr. Pappas received
      his
      B.A. in Economics and his MBA from The University of Michigan, Ann
      Arbor.




**Koert
      Erhardt** has been
      a member of the board of directors since inception. From September 2004 to
      December 2004, he served as the Chief Executive Officer and a member of the
      board of directors of CC Maritime S.A.M., an affiliate of the Coeclerici Group,
      an international conglomerate whose businesses include shipping and transoceanic
      transportation of dry bulk materials. From 1998 to September 2004, he served
      as
      General Manager of Coeclerici Armatori S.p.A. and Coeclerici Logistics S.p.A.,
      affiliates of the Coeclerici Group, where he created a shipping pool that
      commercially managed over 130 vessels with a carrying volume of 72 million
      tons
      and developed the use of Freight Forward Agreement trading as a hedging
      mechanism to the pool’s exposure and positions. From 1994 to 1998, he served as
      the General Manager of Bulkitalia, a prominent shipping concern which at the
      time owned and operated over 40 vessels. From 1990 to 1994, Mr. Erhardt served
      in various positions with Bulk Italia. From 1988 to 1990, he was the Managing
      Director and Chief Operating Officer of Nedlloyd Dry Bulk, the dry bulk arm
      of
      the Nedlloyd Group, an international conglomerate whose interests include
      container ship liner services, tankers, oil drilling rigs, pipe laying vessels
      and ship brokering.. Mr. Erhardt received his Diploma in Maritime Economics
      and
      Logistics from Hogere Havenen Vervoersschool (now Erasmus University),
      Rotterdam, and received his MBA International Executive Program at INSEAD,
      Fontainebleau, France. Mr. Erhardt has also studied at the London School of
      Foreign Trade.




**Tom
      Søfteland** has been
      a member of the board of directors since inception. Since October 1996, he
      has
      been the Chief Executive Officer of Capital Partners A.S. of Bergen, Norway,
      a
      financial services firm that he founded and which specializes in shipping and
      asset finance. From 1990 to October 1996, he held various positions at Industry
      & Skips Banken, ASA, a bank specializing in shipping, most recently as its
      Deputy Chief Executive Officer. Mr. Søfteland received his B.Sc. in Economics
      from the Norwegian School of Business and Administration (NHH).





**Corporate
      Governance**





***Board
      of Directors***





Our
      board
      of directors is divided into three classes with only one class of directors
      being elected in each year and each class serving a three-year term. Petros
      Pappas was re-elected to serve as a Class I director for a period of three
      years
      at our first annual meeting of stockholders, which was held on February 26,
      2007. The term of office of the second class of directors, consisting of Koert
      Erhardt and Tom Søfteland, will expire at the second annual meeting. The term of
      office of the third class of directors, consisting of Akis Tsirigakis and George
      Syllantavos, will expire at the third annual meeting.




50




***Board
      committees***




The
      Board
      of Directors has a Nominating Committee and an Audit Committee. The Board of
      Directors has not established a Compensation Committee. In accordance with
      The
      American Stock Exchange procedures, a majority of the independent directors
      of
      the Board will determine the compensation of the Chief Executive Officer.





***Nominating
      Committee***





The
      purpose of the Nominating Committee is to assist the Board of Directors in
      identifying qualified individuals to become board members, in determining the
      composition of the Board of Directors and in monitoring the process to assess
      Board effectiveness. There have been no changes to the procedures by which
      the
      stockholders of the Company may recommend nominees to the Board of Directors.




***Audit
      Committee***





The
      Company has a separately designated standing audit committee in accordance
      with
      Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The
      Board of Directors has determined that we have at least one audit committee
      financial expert, as defined in the Exchange Act, serving on our audit
      committee. Mr. Tom Søfteland is the “ audit
      committee financial expert ”
and
      is
      an independent member of the Board of Directors, as defined under Section 121(B)
      (as currently applicable to the Company) of the listing standards of the
      American Stock Exchange and as determined by the Board of
      Directors.





**Code
      of Ethics**





We
      adopted a code of ethics that applies to our Chief Executive Officer and Chief
      Financial Officer, and other persons who perform similar functions. A written
      copy of the Code will be provided upon request at no charge by writing to our
      Chief Financial Officer, 103 Foulk Road, Wilmington, Delaware 19803. Our Code
      of
      Ethics is intended to be a codification of the business and ethical principles
      which guide us, and to deter wrongdoing, to promote honest and ethical conduct,
      to avoid conflicts of interest, and to foster full, fair, accurate, timely
      and
      understandable disclosures, compliance with applicable governmental laws, rules
      and regulations, the prompt internal reporting of violations and accountability
      for adherence to this Code.





**Section
      16(a) Beneficial Ownership Reporting Compliance**




Section
      16(a) of the Securities Exchange Act requires our directors, executive officers
      and persons who own more than 10% of our common stock to file reports of
      ownership and changes in ownership of our common stock with the Securities
      and
      Exchange Commission. Directors, executive officers and persons who own more
      than
      10% of our common stock are required by Securities and Exchange Commission
      regulations to furnish to us copies of all Section 16(a) forms they file. To
      our
      knowledge, based solely upon review of the copies of such reports received
      or
      written representations from the reporting persons, we believe that during
      the
      year ended December 31, 2006, our directors, executive officers and persons
      who
      own more than 10% of our common stock complied with all Section 16(a) filing
      requirements.





**Item
      11. Executive Compensation**




No
      executive officer has received any cash compensation for services rendered
      and
      no compensation of any kind, including finder’s and consulting fees, will be
      paid to any of our officers and directors, or any of their respective
      affiliates, for services rendered prior to or in connection with a business
      combination. However, these individuals will be reimbursed for any out-of-pocket
      expenses incurred in connection with activities on our behalf such as
      identifying potential target businesses and performing due diligence on suitable
      business combinations. Such individuals may be paid consulting, management
      or
      other fees from target businesses as a result of the business combination,
      with
      any and all amounts being fully disclosed to stockholders, to the extent then
      known, in the proxy solicitation materials furnished to the stockholders. There
      is no limit on the amount of these out-of-pocket expenses and there will be
      no
      review of the reasonableness of the expenses by anyone other than our board
      of
      directors, which includes persons who may seek reimbursement, or a court of
      competent jurisdiction if such reimbursement is challenged. Because none of
      our
      directors may be deemed “independent,” we will generally not have the benefit of
      independent directors examining the propriety of expenses incurred on our behalf
      and subject to reimbursement.




51




**Item
      12. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters** ****





The
      following table sets forth, as of February 23, 2007, certain information
      regarding beneficial ownership of our common stock by each person who is known
      by us to beneficially own more than 5% of our common stock. The table also
      identifies the stock ownership of each of our directors, each of our officers,
      and all directors and officers as a group. Except as otherwise indicated, the
      stockholders listed in the table have sole voting and investment powers with
      respect to the shares indicated.





Shares
      of
      common stock which an individual or group has a right to acquire within 60
      days
      pursuant to the exercise or conversion of options, warrants or other similar
      convertible or derivative securities are deemed to be outstanding for the
      purpose of computing the percentage ownership of such individual or group,
      but
      are not deemed to be outstanding for the purpose of computing the percentage
      ownership of any other person shown in the table.





**Name
                and Address of Beneficial Owner(1)**
            
            **Amount
                and**
              **Nature
                of**
              **Beneficial**
              **Ownership(2)(3)**
            
            **Approximate**
              **Percentage
                of**
              **Outstanding
                Common**
              **Stock**Prokopios
                (Akis) Tsirigakis
            
            
            4,007,392
            
            
            12.6
            %George
                Syllantavos
            
            
            1,486,539
            
            
            4.66
            %Christo
                Anagnostou
            
            
            116,108
            
            
            *Niko
                Nikiforos
            
            
            116,108
            
            
            *Petros
                Pappas
            
            
            3,947,873
            
            
            11.53
            %Koert
                Erhardt
            
            
            340,269
            
            
            *Tom
                Søfteland
            
            
            145,135
            
            
            *Sapling,
                LLC (4)
            
            
            2,112,630
            
            
            7.3
            %Fir
                Tree Recovery Master Fund L.P. (4)
            
            
            736,970
            
            
            2.5
            %Fir
                Tree, Inc. (4)
            
            
            2,849,600
            
            
            9.8
            %The
                Baupost Group, L.L.C (5)
            
            
            2,845,200
            
            
            9.8
            %Acqua
                Wellington North American Equities, Ltd. (6)
            
            
            1,550,400
            
            
            5.34
            %Satellite
                Fund II, LP (7)
            
            
            521,840
            
            
            *Satellite
                Fund IV, LP (7)
            
            
            98,240
            
            
            *Satellite
                Overseas Fund, Ltd. (7)
            
            
            1,234,087
            
            
            4.25
            %The
                Apogee Fund, Ltd. (7)
            
            
            233,410
            
            
            *Satellite
                Overseas Fund V, Ltd. (7)
            
            
            112,890
            
            
            *Satellite
                Overseas Fund VI, Ltd. (7)
            
            
            49,110
            
            
            *Satellite
                Overseas Fund VII, Ltd. (7)
            
            
            38,960
            
            
            *Satellite
                Overseas Fund VIII, Ltd. (7)
            
            
            64,040
            
            
            *Satellite
                Overseas Fund IX, Ltd. (7)
            
            
            108,210
            
            
            *Satellite
                Strategic Finance Partners, Ltd. (7)
            
            
            501,000
            
            
            1.73
            %Satellite
                Asset Management, L.P. (7)
            
            
            2,961,787
            
            
            10.20
            %Satellite
                Fund Management LLC (7)
            
            
            2,961,787
            
            
            10.20
            %Satellite
                Advisors, LLC (7)
            
            
            620,080
            
            
            2.14
            %All
                directors and executive officers as a group (7
                individuals)
            
            
            10,159,424
            
            
            35.00
            %





*
      less
      than one (1%) percent.




(1)
      Unless otherwise indicated, the business address of each of the individuals
      is
      c/o 103 Foulk Road, Wilmington, DE 19803.




52




(2)
      Our
      officers and directors have agreed to surrender to us for cancellation up to
      an
      aggregate of 200,000 shares in the event, and to the extent, stockholders
      exercise their right to redeem their shares for cash upon a business
      combination. The share amounts do not reflect any surrender of
      shares.




(3)
      Does
      not include shares of common stock issuable upon exercise of warrants that
      are
      not exercisable in the next 60 days.




(4)
      Derived from a joint filing of a Schedule 13G/A on February 14, 2007, filed
      by
      Sapling, LLC, Fir Tree Recovery Master Fund L.P. and Fir Tree, Inc. Fir Tree,
      Inc. is the investment manager of both Sapling and Fir Tree
      Recovery.




(5)
      Derived from a Schedule 13G filed on February 13, 2007, filed by Baupost Group,
      L.L.C. ("Baupost"), SAK Corporation and Seth A. Klarman. The Baupost is a
      registered investment adviser. SAK Corporation is the Manager of Baupost. Seth
      A. Klarman, as the sole Director of SAK Corporation and a controlling person
      of
      Baupost, may be deemed to have beneficial ownership under Section 13(d) of
      the
      securities beneficially owned by Baupost. Securities beneficially owned by
      Baupost include securities purchased on behalf of various investment limited
      partnerships.




(6)
      Derived from a Schedule 13G Filed on February 1, 2007.




(7)
      Derived from a joint filing of a Schedule 13G/A on October 2, 2006, by Satellite
      I, Satellite II, Satellite IV (collectively, the "Delaware Funds") over which
      Satellite Advisors has discretionary trading authority, as general partner,
      and
      (ii) Satellite Overseas, Apogee, Satellite Overseas V, Satellite Overseas VI,
      Satellite Overseas VII, Satellite Overseas VIII, Satellite Overseas IX and
      SSFP
      (collectively, the "Offshore Funds" and together with the Delaware Funds, the
      "Satellite Funds") over which Satellite Asset Management has discretionary
      investment trading authority. The general partner of Satellite Asset Management
      is Satellite Fund Management. Satellite Fund Management and Satellite Advisors
      each share the same four members that make investment decisions on behalf of
      the
      Satellite Funds.





**Equity
      Compensation Plan**





None.




**Item
      13. Certain Relationships, Related Transactions and Director
      Independence**




There
      were no transactions, or currently proposed transactions in an amount exceeding
      $120,000, since the beginning of the Company’s last fiscal year in which the
      Company was or is to be a participant and in which any related person had or
      will have a direct or indirect material interest.





We
      will
      reimburse our officers and directors for any reasonable out-of-pocket business
      expenses incurred by them in connection with certain activities on our behalf
      such as identifying and investigating possible target businesses and business
      combinations. There is no limit on the amount of accountable out-of-pocket
      expenses reimbursable by us, which will be reviewed only by our board or a
      court
      of competent jurisdiction if such reimbursement is challenged.




53





All
      ongoing and future transactions between us and any of our officers and directors
      or their respective affiliates, including loans by our officers and directors,
      will be on terms believed by us to be no less favorable than are available
      from
      unaffiliated third parties and such transactions or loans, including any
      forgiveness of loans, will require prior approval in each instance by a majority
      of our uninterested “independent” directors (to the extent we have any) or the
      members of our board who do not have an interest in the transaction, in either
      case, who had access, at our expense, to our attorneys or independent legal
      counsel.





Our
      board
      of directors has determined that Mr. Erhardt, Mr. Søfteland and Mr. Pappas are
      considered “ independent ”
under
      Section 121(B) (as currently applicable to the Company) of the listing standards
      of The American Stock Exchange.





**Item
      14. Principal Accountant Fees and Services******




The
      firm
      of Goldstein Golub Kessler LLP (‘‘GGK’’) acts as our principal accountant.
      Through September 30, 2005, GGK had a continuing relationship with American
      Express Tax and Business Services Inc. (TBS), from which it leased auditing
      staff who were full time, permanent employees of TBS and through which its
      partners provide non-audit services. Subsequent to September 30, 2005, this
      relationship ceased and the firm established a similar relationship with RSM
      McGladrey, Inc. (RSM). GGK has no full time employees and therefore, none of
      the
      audit services performed were provided by permanent full-time employees of
      GGK.
      GGK manages and supervises the audit and audit staff, and is exclusively
      responsible for the opinion rendered in connection with its examination. The
      following is a summary of fees paid or to be paid to GGK, TBS and RSM for
      services rendered.




**Audit
      Fees**




The
        aggregate fees billed by Goldstein Golub Kessler LLP for professional services
        rendered for the audit of our annual financial statements for the fiscal
        years
        ended December 31, 2006 and 2005 and for services performed in connection
        with
        the Company's Form S-1 Registration Statement filed in 2005 and in connection
        with the Company’s Annual Report on Form 10-K for the fiscal year ended December
        31, 2005, and the Company’s Quarterly Reports on Form 10-Q for its fiscal
        quarter ended March 31, 2006, June 30, 2006 and September 30, 2006, each
        of
        which were filed in 2006, were approximately $53,000 and $59,238, respectively.





**Audit
      Related Fees**





Other
      than the fees described under the caption "Audit Fees" above, Goldstein Golub
      Kessler LLP did not bill any fees for services rendered to us during fiscal
      years ended December 2006 and 2005 for assurance and related services in
      connection with the audit or review of our financial statements.





**Tax
      Fees**





The
      aggregate fees billed for the fiscal years ended December 31, 2006 and 2005
      for
      the professional services rendered by RSM for tax compliance, tax advice and
      tax
      planning were approximately $7,000 and $0, respectively.





**All
      Other Fees**




There
      were no fees billed by Goldstein Golub Kessler LLP for other professional
      services rendered during the fiscal year ended December 31, 2006 and
      2005.





The
      Audit
      Committee reviewed and approved all audit and non-audit services provided by
      Goldstein Golub Kessler LLP and concluded that these services were compatible
      with maintaining its independence. The Audit Committee approved the provision
      of
      all non-audit services by each firm.




**Pre-Approval
      Policies and Procedures**





The
      Audit
      Committee pre-approves all services, including both audit and non-audit
      services, provided by our independent accountants. For audit services, each
      year
      the independent auditor provides the Audit Committee with an engagement letter
      outlining the scope of proposed audit services to be performed during the year,
      which must be formally accepted by the Committee before the audit commences.
      The
      independent auditor also submits an audit services fee proposal, which also
      must
      be approved by the Committee before he audit commences.




54





**PART
      IV**





**Item
      15. Exhibits and Financial Statement Schedules** ****





**(a)(1)** **Financial
      Statements** ****





An
      index
      to Consolidated Financial Statements appears on page F-1.





**(b)** **Exhibits** ****





The
      following Exhibits are filed as part of this report




**Exhibit****No.**
            
            **Description**3.1
            
            Form
                of Third Amended and Restated Certificate of Incorporation
                (1)3.2
            
            By-laws
                (1)4.1
            
            Specimen
                Unit Certificate (1)4.2
            
            Specimen
                Common Stock Certificate (1)4.3
            
            Specimen
                Warrant Certificate (1)4.4
            
            Form
                of Warrant Agreement between American Stock Transfer & Trust Company
                and the Registrant (1)10.1
            
            Form
                of Letter Agreement among the Registrant, Maxim Group LLC and Akis
                Tsirigakis (1)10.2
            
            Form
                of Letter Agreement among the Registrant, Maxim Group LLC and. George
                Syllantavos (1)10.3
            
            Form
                of Letter Agreement among the Registrant, Maxim Group LLC and Christo
                Anagnostou (1)10.4
            
            Form
                of Letter Agreement among the Registrant, Maxim Group LLC and Niko
                Nikiforos (1)10.5
            
            Form
                of Letter Agreement among the Registrant, Maxim Group LLC and Koert
                Erhardt (1)10.6
            
            Form
                of Letter Agreement among the Registrant, Maxim Group LLC and Tom
                Søfteland (1)10.7
            
            Form
                of Letter Agreement among the Registrant, Maxim Group LLC and Petros
                Pappas (1)10.8
            
            Form
                of Investment Management Trust Agreement between American Stock Transfer
                & Trust Company and the Registrant (1)10.9
            
            Form
                of Stock Escrow Agreement between the Registrant, American Stock
                Transfer
                & Trust Company and the Initial Stockholders (1)10.10
            
            Form
                of Services Agreement with Schwartz & Weiss, P.C.
                (1)10.11
            
            Promissory
                Note dated May 17, 2005 issued to Akis Tsirigakis (1)10.12
            
            Promissory
                Note dated May 26, 2005 issued to Akis Tsirigakis (1)10.13
            
            Form
                of Registration Rights Agreement among the Registrant and the Initial
                Stockholders (1)10.14
            
            Form
                of Placement Unit Agreement among the Registrant, Maxim Group LLC
                and the
                Initial Stockholders (1)10.15
            
            Sublease
                and Administrative Services Agreement between the Registrant and
                Blue
                Diamonds Realty, LLC (2)10.16
            
            Memorandum
                of Agreement relating to the A Duckling dated January 12, 2007 between
                Star Bulk Carriers Corp., as buyer, and A Duckling Corporation, as
                seller.
                (3)10.17
            
            Memorandum
                of Agreement relating to the B Duckling dated January 12, 2007 between
                Star Bulk Carriers Corp., as buyer, and B Duckling Corporation, as
                seller.
                (3)




55


10.18
            
            Memorandum
                of Agreement relating to the C Duckling dated January 12, 2007 between
                Star Bulk Carriers Corp., as buyer, and C Duckling Corporation, as
                seller.
                (3)10.19
            
            Memorandum
                of Agreement relating to the F Duckling dated January 12, 2007 between
                Star Bulk Carriers Corp., as buyer, and F Duckling Corporation, as
                seller.
                (3)10.20
            
            Memorandum
                of Agreement relating to the G Duckling dated January 12, 2007 between
                Star Bulk Carriers Corp., as buyer, and G Duckling Corporation, as
                seller.
                (3)10.21
            
            Memorandum
                of Agreement relating to the I Duckling dated January 12, 2007 between
                Star Bulk Carriers Corp., as buyer, and I Duckling Corporation, as
                seller.
                (3)10.22
            
            Memorandum
                of Agreement relating to the J Duckling dated January 12, 2007 between
                Star Bulk Carriers Corp., as buyer, and J Duckling Corporation, as
                seller.
                (3)10.23
            
            Memorandum
                of Agreement relating to the Mommy Duckling dated January 12, 2007
                between
                Star Bulk Carriers Corp., as buyer, and Mommy Management Corp., as
                seller.
                (3)10.24
            
            Supplemental
                Agreement, dated January 12, 2007, by and among Star Maritime Acquisition
                Corp., Star Bulk Carriers Corp. and TMT Co., Ltd. (3)10.25
            
            Master
                Agreement, dated January 12, 2007, by and among Star Maritime Acquisition
                Corp., Star Bulk Carriers Corp. and TMT Co., Ltd. (3)14
            
            Code
                of Business Conduct and Ethics (1)21
            
            Subsidiaries
                of the Registrant31.1
            
            Certification
                of the Principal Executive Officer and Principal Financial Officer
                pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934,
                as
                amended31.2
            
            Certification
                of the Principal Financial Officer pursuant to Rule 13a-14(a) of
                the
                Securities Exchange Act of 1934, as amended32
            
            Certification
                of the Principal Executive Officer and Principal Financial Officer
                pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of
                The
                Sarbanes-Oxley Act of 2002





(1)
      Incorporated by reference to the Registrant’s Registration Statement on Form S-1
      (File No. 333-125662).




(2)
      Incorporated by reference to the Current Report on Form 8-K filed on December
      26, 2006.




(3)
      Incorporated by reference to the Current Report on Form 8-K filed on January
      17,
      2007.


56





**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15 (d) of the Securities Exchange Act
      of
      1934, the Registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.




STAR
                MARITIME ACQUISITION CORP.March
                14, 2007
            By:
            /s/
              Prokopios (Akis) TsirigakisProkopios
                (Akis) Tsirigakis, Chairman, Chief Executive
              Officer
                and President


Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report has
      been
      signed below by the following persons on behalf of the Registrant and in the
      capacities and on the dates indicated.


March
                    14, 2007
              By:
              /s/
                Prokopios (Akis) TsirigakisProkopios
                    (Akis) Tsirigakis,Chairman,
                    Chief Executive
                  Officer
                    and President
 March
                    14, 2007
              By:
              /s/
                George SyllantavosGeorge
                      Syllantavos, Chief Financial Officer,
                    Secretary
                      andDirector
 March
                    14, 2007
              By:
              /s/
                Koert ErhardtKoert
                      Erhardt, Director
 March
                    14, 2007
              By:
              /s/
                Tom
                SøftelandTom
                        Søfteland,
                        Director
 March
                    14, 2007
              By:
              /s/
                Petros PappasPetros
                          Pappas, Director


57