##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON D.C. 20549
 FORM 20-F
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 o

    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 000-51559
 STEALTHGAS INC.
  Republic of the Marshall Islands
 331 Kifissias Avenue, Erithrea 14561 Athens, Greece
 Andrew J. Simmons
331 Kifissias Avenue, Erithrea 14561, Athens, Greece
Telephone: (011) (30) (210) 625 0001
Facsimile: (011) (30) (210) 625 0018
 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
 Title of each class
    
    Name of each exchange on which registeredCommon Stock, par value $0.01 per share
    
    The Nasdaq Stock Market LLC
 SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
 SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION
PURSUANT TO SECTION 15(d) OF THE ACT:
    o þ
 o þ
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
  U.S. GAAP þ
    
    International Financial Reporting Standards o
    
    Other o
  o Item 17
    
    o Item 18
  o þ




---



##### 



TABLE OF CONTENTS
 PageFORWARD-LOOKING INFORMATION
    
    
    1PART I
    
    
    2ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
    
    
    2ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
    
    
    2ITEM 3. KEY INFORMATION
    
    
    2ITEM 4. INFORMATION ON THE COMPANY
    
    
    26ITEM 4A. UNRESOLVED STAFF COMMENTS
    
    
    37ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
    
    
    37ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
    
    
    59ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
    
    
    64ITEM 8. FINANCIAL INFORMATION
    
    
    68ITEM 9. THE OFFER AND LISTING
    
    
    69ITEM 10. ADDITIONAL INFORMATION
    
    
    70ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    86ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
    
    
    87PART II
    
    
    88ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
    
    
    88ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
    
    
    88ITEM 15. CONTROLS AND PROCEDURES
    
    
    88ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
    
    
    90ITEM 16B. CODE OF ETHICS
    
    
    90ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    90ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
    
    
    91ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
    
    
    91PART III
    
    
    92ITEM 17. FINANCIAL STATEMENTS
    
    
    92ITEM 18. FINANCIAL STATEMENTS
    
    
    92ITEM 19. EXHIBITS
    
    
    92EX-4.28EX-4.29EX-4.30EX-4.31EX-8EX-12.1EX-12.2EX-13.1EX-13.2EX-15.1




---



##### Table of Contents



FORWARD-LOOKING INFORMATION
   
    
    future operating or financial results;
    
    global and regional economic and political conditions;
    
    pending or recent acquisitions, business strategy and expected capital spending or
operating expenses;
    
    competition in the marine transportation industry;
    
    shipping market trends, including charter rates, factors affecting supply and demand and
world fleet composition;
    
    ability to employ our vessels profitably;
    
    performance by the counterparties to our charter agreements;
    
    future liquefied petroleum gas (LPG) and refined petroleum product prices and
production;
    
    future supply and demand for refined petroleum products and natural gas of which LPG is
a byproduct;
    
    our financial condition and liquidity, including our ability to obtain financing in the
future to fund capital expenditures, acquisitions and other general corporate activities,
the terms of such financing and our ability to comply with covenants set forth in our
existing and future financing arrangements; and
    
    expectations regarding vessel acquisitions.




---



##### Table of Contents



PART I
   
 Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 Selected Consolidated Financial Data
   - 2 -




---



##### Table of Contents



Year ended December 31,INCOME STATEMENT DATA
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009Revenues:Voyage revenuesOperating expenses:
    
    $
    36,644,591
    
    
    $
    73,259,369
    
    
    $
    89,995,123
    
    
    $
    112,551,901
    
    
    $
    113,045,961Voyage expenses
    
    
    2,688,155
    
    
    
    6,213,804
    
    
    
    5,369,546
    
    
    
    6,180,754
    
    
    
    10,522,573Vessels operating expenses
    
    
    9,095,576
    
    
    
    19,474,344
    
    
    
    25,435,578
    
    
    
    32,178,385
    
    
    
    38,001,481Dry-docking costs
    
    
    470,384
    
    
    
    2,243,395
    
    
    
    314,181
    
    
    
    1,112,992
    
    
    
    1,266,455Management fees
    
    
    1,473,080
    
    
    
    3,068,609
    
    
    
    4,126,610
    
    
    
    4,618,025
    
    
    
    5,230,990General and administrative expenses
    
    
    779,539
    
    
    
    3,457,688
    
    
    
    5,024,912
    
    
    
    4,772,615
    
    
    
    3,546,779Depreciation
    
    
    5,611,942
    
    
    
    13,058,316
    
    
    
    16,546,692
    
    
    
    23,283,393
    
    
    
    26,766,672Impairment Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,867,777Forfeiture of vessel deposit and
contract termination fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,5000,00Charter termination fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (753,000
    )Net gain (loss) on sale of vessels
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,673,321
    )
    
    
    791,659Total expenses
    
    
    20,118,676
    
    
    
    47,516,156
    
    
    
    56,817,519
    
    
    
    70,472,843
    
    
    
    111,759,386Income from operations
    
    
    16,525,915
    
    
    
    25,743,213
    
    
    
    33,177,604
    
    
    
    42,079,058
    
    
    
    1,286,575Interest and finance costs
    
    
    (2,685,207
    )
    
    
    (7,705,602
    )
    
    
    (9,831,404
    )
    
    
    (9,962,504
    )
    
    
    (9,109,222
    )Change in fair value of derivatives
    
    
    (67,000
    )
    
    
    (192,664
    )
    
    
    (2,573,992
    )
    
    
    (2,713,055
    )
    
    
    (5,478,163
    )Interest income
    
    
    780,434
    
    
    
    735,090
    
    
    
    1,888,070
    
    
    
    743,193
    
    
    
    250,326Foreign exchange loss
    
    
    (18,091
    )
    
    
    (87,528
    )
    
    
    (122,171
    )
    
    
    (159,208
    )
    
    
    (261,401
    )Other expenses, net
    
    
    (1,989,864
    )
    
    
    (7,250,704
    )
    
    
    (10,639,497
    )
    
    
    (12,091,574
    )
    
    
    (14,598,460
    )Net income/(Loss)
    
    
    14,536,051
    
    
    
    18,492,509
    
    
    
    22,538,107
    
    
    
    29,987,484
    
    
    
    (13,311,885
    )Earnings/(Loss) per share, basic
(retroactively adjusted for
60,000-to-1 stock split effected
on August 26, 2005)**
    
    $
    1.84
    
    
    $
    1.31
    
    
    $
    1.25
    
    
    $
    1.35
    
    
    $
    (0.60
    )Earnings/(Loss) per share, diluted
(retroactively adjusted for
60,000-to-1 stock split effected
on August 26, 2005) (1)**
    
    $
    1.84
    
    
    $
    1.31
    
    
    $
    1.25
    
    
    $
    1.34
    
    
    $
    (0.60
    )Weighted (and diluted) average
number of shares outstanding
(retroactively adjusted for
60,000-to-1 stock split effected
on August 26, 2005)
    
    
    7,906,849
    
    
    
    14,161,096
    
    
    
    17,943,346
    
    
    
    22,182,118
    
    
    
    22,219,442Dividends declared per share,
basic and diluted (retroactively
adjusted for 60,000-to-1 stock
split effected on August 26,
2005)*
    
    $
    1.67
    
    
    $
    0.75
    
    
    $
    0.75
    
    
    $
    0.75
    
    
    $
    0.1875
 As of December 31,BALANCE SHEET DATA
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009Current assets, including cash
    
    $
    26,016,248
    
    
    $
    17,891,738
    
    
    $
    69,497,341
    
    
    $
    52,458,518
    
    
    $
    69,031,753Total assets
    
    
    256,978,768
    
    
    
    319,605,321
    
    
    
    477,593,326
    
    
    
    634,347,123
    
    
    
    692,497,010Current liabilities
    
    
    20,725,441
    
    
    
    28,628,998
    
    
    
    37,372,666
    
    
    
    40,774,931
    
    
    
    69,023,455Derivative liability
    
    
    67,000
    
    
    
    35,902
    
    
    
    3,288,989
    
    
    
    12,762,979
    
    
    
    10,327,792Total long-term debt, including current portion
    
    
    97,706,000
    
    
    
    140,948,240
    
    
    
    145,758,529
    
    
    
    283,693,873
    
    
    
    345,822,070Total stockholders equity
    
    
    151,107,327
    
    
    
    163,802,228
    
    
    
    303,030,788
    
    
    
    317,847,325
    
    
    
    300,801,931Capital stock (retroactively adjusted for 60,000-
to-1 stock split effected on August 26, 2005)
    
    
    140,000
    
    
    
    144,000
    
    
    
    222,841
    
    
    
    223,101
    
    
    
    223,101Common shares outstanding (retroactively
adjusted for 60,000-to-1 split effected on
August 26, 2005)
    
    
    14,000,000
    
    
    
    14,400,000
    
    
    
    22,284,105
    
    
    
    22,310,110
    
    
    
    22,310,110
 - 3 -




---



##### Table of Contents



Year ended December 31,OTHER FINANCIAL DATA
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009Net cash provided by operating activities
    
    $
    24,414,729
    
    
    $
    33,224,984
    
    
    $
    47,704,497
    
    
    $
    48,080,792
    
    
    $
    48,347,343Net cash used in investing activities
    
    
    (197,780,709
    )
    
    
    (84,282,368
    )
    
    
    (149,636,615
    )
    
    
    (159,979,986
    )
    
    
    (101,563,715
    )Net cash provided by financing activities
    
    
    196,576,223
    
    
    
    38,994,012
    
    
    
    123,900,119
    
    
    
    120,632,381
    
    
    
    55,444,652FLEET DATAAverage number of vessels(1)
    
    
    11.9
    
    
    
    25.9
    
    
    
    32.8
    
    
    
    38.6
    
    
    
    42.0Total voyage days for fleet(2)
    
    
    4,288
    
    
    
    9,346
    
    
    
    11,871
    
    
    
    14,018
    
    
    
    15,240Total time and bareboat charter days for fleet(3)
    
    
    4,105
    
    
    
    8,209
    
    
    
    11,170
    
    
    
    13,318
    
    
    
    12,276Total spot market days for fleet(4)
    
    
    183
    
    
    
    1,137
    
    
    
    701
    
    
    
    700
    
    
    
    2,964Total calendar days for fleet(5)
    
    
    4,334
    
    
    
    9,451
    
    
    
    11,986
    
    
    
    14,113
    
    
    
    15,335Fleet utilization(6)
    
    
    98.9
    %
    
    
    98.9
    %
    
    
    99.0
    %
    
    
    99.3
    %
    
    
    99.4
    %AVERAGE DAILY RESULTSTime charter equivalent(7)
    
    $
    7,919
    
    
    $
    7,174
    
    
    $
    7,129
    
    
    $
    7,588
    
    
    $
    6,727Vessel operating expenses(8)
    
    
    2,099
    
    
    
    2,061
    
    
    
    2,122
    
    
    
    2,280
    
    
    
    2,478General and administrative expenses
    
    
    180
    
    
    
    366
    
    
    
    419
    
    
    
    338
    
    
    
    232Management fees
    
    
    340
    
    
    
    325
    
    
    
    344
    
    
    
    327
    
    
    
    341Total operating expenses(9)
    
    
    2,279
    
    
    
    2,426
    
    
    
    2,541
    
    
    
    2,618
    
    
    
    2,711
 
 *
    
    As a privately held company, we paid no dividends in 2004 and an
aggregate dividend of $10.0 million in July 2005. We paid no
dividends in 2005 after becoming a public company in October 2005.
We paid our first quarterly dividend since becoming a public
company, of $0.1875 per share, in January 2006. In the first quarter
of 2009, our board of directors decided to suspend the payment of
further cash dividends as a result of market conditions in the
international shipping industry. Our payment of dividends is subject
to the discretion of our Board of Directors. Our loan agreements and
the provisions of Marshall Islands law also restrict our ability to
pay dividends. See Item 3. Risk Factors  Risks Related To Our
Common Stock  Our Board of Directors has determined to suspend the
payment of cash dividends as a result of market conditions in the
international shipping industry, and until such market conditions
improve, it is unlikely we will reinstate the payment of dividends
and Item 8. Financial Information  Dividend Policy.**
    
    On January 1, 2009, the Company adopted new guidance which clarified
that unvested share-based payment awards that contain rights to
receive non forfeitable dividends or dividend equivalents (whether
paid or unpaid) are participating securities, and thus, should be
included in the two-class method of computing earnings per share
(EPS). This standard was applied retroactively to all periods
presented, for the years ended December 31, 2005, 2006, and
reduced basic EPS by $0.01 for the years ended December 31,2007 and
2008 respectively.(1)
    
    Average number of vessels is the number of vessels that constituted
our fleet for the relevant period, as measured by the sum of the
number of days each vessel was a part of our fleet during the period
divided by the number of calendar days in that period.(2)
    
    Our total voyage days for our fleet reflect the total days the
vessels were in our possession for the relevant periods, net of
off-hire days associated with major repairs, drydockings or special
or intermediate surveys.(3)
    
    Total time and bareboat charter days for fleet are the number of
voyage days the vessels in our fleet operated on time or bareboat
charters for the relevant period.(4)
    
    Total spot market charter days for fleet are the number of voyage
days the vessels in our fleet operated on spot market charters for
the relevant period.(5)
    
    Total calendar days are the total days the vessels were in our
possession for the relevant period including off-hire days
associated with major repairs, drydockings or special or
intermediate surveys.(6)
    
    Fleet utilization is the percentage of time that our vessels were
available for revenue generating voyage days, and is determined by
dividing voyage days by fleet calendar days for the relevant period.(7)
    
    Time charter equivalent rate, or TCE rate, is a measure of the
average daily revenue performance of a vessel on a per voyage basis.
Our method of calculating TCE rate is consistent with industry
standards and is determined by dividing voyage revenues (net of
voyage expenses) or time charter equivalent revenues or TCE
revenues by voyage days for the relevant time period. Voyage
expenses primarily consist of port, canal and fuel costs that are
unique to a particular voyage, which would otherwise be paid by the
charterer under a time charter contract, as well as commissions. TCE
revenues, a non-GAAP measure, provides additional meaningful
information in conjunction with voyage revenues, the most directly
comparable GAAP measure, because it assists Company management in
making decisions regarding the deployment and use of its vessels and
in evaluating their financial performance. It is also a standard
shipping industry performance measure used primarily to compare
period-to-period changes in a shipping companys performance despite
changes in the mix of charter types (i.e., spot charters, time
charters and bareboat charters) under which the vessels may be
employed between the periods. Reconciliation of TCE revenues as
reflected in the consolidated statement of income and calculation of
TCE rate follow: - 4 -




---



##### Table of Contents



Year  ended December 31,2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009Voyage revenues
    
    $
    36,644,591
    
    
    $
    73,259,369
    
    
    $
    89,995,123
    
    
    $
    112,551,901
    
    
    $
    113,045,961Voyage expenses
    
    
    (2,688,155
    )
    
    
    (6,213,804
    )
    
    
    (5,369,546
    )
    
    
    (6,180,754
    )
    
    
    (10,522,573
    )Time charter equivalent revenues
    
    $
    33,956,436
    
    
    $
    67,045,565
    
    
    $
    84,625,577
    
    
    $
    106,371,147
    
    
    $
    102,519,480Total voyage days for fleet
    
    
    4,288
    
    
    
    9,346
    
    
    
    11,871
    
    
    
    14,018
    
    
    
    15,240Time charter equivalent (TCE) rate
    
    $
    7,919
    
    
    $
    7,174
    
    
    $
    7,129
    
    
    $
    7,588
    
    
    $
    6,727
 
 (8)
    
    Vessel operating expenses, which include crew costs, provisions, deck
and engine stores, lubricating oil, insurance, maintenance and
repairs, is calculated by dividing vessel operating expenses by fleet
calendar days for the relevant time period.(9)
    
    Total operating expenses, or TOE, is a measurement of our total
expenses associated with operating our vessels. TOE is the sum of
vessel operating expenses and general and administrative expenses.
Daily TOE is calculated by dividing TOE by fleet calendar days for the
relevant time period. Capitalization and Indebtedness
   As of December 31, 2009Actual
    
    
    As AdjustedIn thousands of U.S. DollarsLong-term debt obligations (including current portion)*
    
    $
    345,822,070
    
    
    $
    318,016,353Stockholders equity:Common stock, $0.01 par value per share,
100,000,000 shares authorized, actual and as adjusted;
22,310,000 shares issued and outstanding, actual; 21,104,881 shares issued and 21,104,214 shares
outstanding as adjusted (1)(2)
    
    $
    223,101
    
    
    $
    211,042Additional paid-in capital
    
    $
    284,100,096
    
    
    $
    277,819,769Retained earnings
    
    $
    16,478,374
    
    
    $
    16,478,374Total stockholders equity
    
    $
    300,801,931
    
    
    $
    294,509,545Total capitalization
    
    $
    646,624,001
    
    
    $
    612,525,898
 
 *
    
    All of our indebtedness is secured.(1)
    
    Includes 42,002 unvested restricted shares as of December 31,
2009, of which 6,501 shares vested on March 18, 2010 ,and 667 were
forfeited upon the resignation of one of our directors on April
22, 2010.(2)
    
    The 1,205,229 shares repurchased in 2010 have been cancelled and the 667 forfeited restricted
shares forfeited in 2010 were held as treasury stock as of June
15, 2010. - 5 -




---



##### Table of Contents



Reasons For the Offer and Use of Proceeds
  Risk Factors
 Risks Related To Our Industry
 The cyclical nature of the demand for LPG transportation, which has recently declined, may
lead to significant changes in our chartering and vessel utilization, which may adversely affect
our revenues, profitability and financial position.
      
    
    supply and demand for LPG products;
    
    global and regional economic conditions;
    
    the distance LPG products are to be moved by sea;
    
    availability of alternative transportation means; and
 - 6 -




---



##### Table of Contents




    
    changes in seaborne and other transportation patterns.
  
    
    the number of newbuilding deliveries;
    
    the scrapping rate of older vessels;
    
    LPG carrier prices;
    
    changes in environmental and other regulations that may limit the useful lives of
vessels; and
    
    the number of vessels that are out of service.
  Various economic factors could materially adversely affect our business, financial position and
results of operations, as well as our future prospects.
  If the demand for LPG products and LPG shipping does not grow, or decreases, our business, results
of operations and financial condition could be adversely affected.
  
    
    adverse global or regional economic or political conditions, particularly in LPG
consuming regions, which could reduce energy consumption;
    
    a reduction in global or general industrial activity specifically in the plastics and
chemical industry;
    
    increases in the cost of petroleum and natural gas from which LPG is derived;
 - 7 -




---



##### Table of Contents




    
    decreases in the consumption of LPG or natural gas due to availability of new,
alternative energy sources or increases in the price of LPG or natural gas relative to
other energy sources or other factors making consumption of LPG or natural gas less
attractive; and
 
    
    increases in pipelines for LPG, which are currently few in number, linking production
areas and industrial and residential areas consuming LPG, or the conversion of existing
non-petroleum gas pipelines to petroleum gas pipelines in those markets.
  Our operating results are subject to seasonal fluctuations, which could affect our operating
results and the amount of available cash with which we can pay dividends.
  Our revenues, operations and future growth could be adversely affected by a decrease in supply of
liquefied natural gas, or natural gas.
  The product carrier shipping and crude oil tanker sectors are cyclical, which may lead to lower
charter rates and lower vessel values.
  The market values of our vessels, which have recently declined, may remain at current low, or
lower, levels for a prolonged period and, over time, may fluctuate significantly. If the market
values of our vessels are low, we may incur a loss on sale of a vessel or record an impairment
charge, which may adversely affect our earnings and possibly lead to defaults under our loan
agreements.
  - 8 -




---



##### Table of Contents




    
    general economic and market conditions affecting the shipping industry;
    
    age, sophistication and condition of our vessels;
    
    types and sizes of vessels;
    
    availability of other modes of transportation;
    
    cost and delivery of schedules for newbuildings;
    
    governmental and other regulations;
    
    supply and demand for LPG products and, with respect to our product carriers, refined
petroleum products;
    
    prevailing level of LPG charter rates and, with respect to our product carriers, the
prevailing level of product carrier charter rates; and
    
    technological advances.
  We are subject to regulation and liability under environmental laws that could require significant
expenditures and affect our financial conditions and results of operations.
   - 9 -




---



##### Table of Contents



Our vessels are subject to periodic inspections by a classification society.
    Maritime claimants could arrest our vessels, which could interrupt our cash flow.
  - 10 -




---



##### Table of Contents



Governments could requisition our vessels during a period of war or emergency, resulting in loss of
revenues.
  Risks involved with operating ocean-going vessels could affect our business and reputation, which
would adversely affect our revenues and stock price.
  
    
    marine accident or disaster;
    
    piracy and terrorism;
    
    explosions;
    
    environmental accidents;
    
    pollution;
    
    loss of life;
    
    cargo and property losses or damage; and
    
    business interruptions caused by mechanical failure, human error, war, terrorism,
political action in various countries, labor strikes or adverse weather conditions.
  Our vessels may suffer damage and we may face unexpected repair costs, which could affect our cash
flow and financial condition.
  - 11 -




---



##### Table of Contents



Acts of piracy on ocean-going vessels have recently increased in frequency, which could adversely
affect our business.
 Longchamp
 Our operations outside the United States expose us to global risks, such as terrorism, that may
interfere with the operation of our vessels.
 Limburg
  Risks Related To Our Business
 We are dependent on the ability and willingness of our charterers to honor their commitments to us
for all our revenues.
  - 12 -




---



##### Table of Contents



Gas Ice Gas Ice
 Charters at attractive rates may not be available when we attempt to secure charters for five of
our newbuilding LPG carriers scheduled to be delivered to us from February 2011 to May 2012 and as
the charters for our current vessels expire, which would have an adverse impact on our revenues and
financial condition.
 Gas Ice
 We depend upon a few significant customers for a large part of our revenues. The loss of one or
more of these customers could adversely affect our financial performance.
  Our loan agreements or other financing arrangements contain restrictive covenants that may limit
our liquidity and corporate activities.
  
    
    incur additional indebtedness;
 - 13 -




---



##### Table of Contents




    
    create liens on our assets;
    
    sell capital stock of our subsidiaries;
    
    make investments;
    
    engage in mergers or acquisitions;
    
    pay dividends; and
    
    make capital expenditures.
  
    
    maintain minimum cash balances in a pledged account with the lender at all times;
    
    ensure that our leverage, which is defined as total debt net of cash/total market
adjusted assets, does not at any time exceed 80%;
    
    maintain a ratio of the aggregate market value of the vessels securing the loan to the
principal amount outstanding under such loan at all times in excess of (i) 130% under our
loan agreement with Fortis Bank-Athens Branch and NIBC Bank Netherlands and (ii) 125% under
our loan agreements with Deutsche Bank, DnB NOR Bank ASA, DVB Bank S.E. Nordic Branch, EFG
Eurobank Ergasias S.A., Emporiki Bank, National Bank of Greece and Scotiabank in regard to
the portion of our facility secured by the Gas Iconbut 100% for the portion of our
facility secured by the Navig8 Fidelity; and
    
    ensure that our ratio of EBITDA to interest expense over the preceding twelve months is
at all times more than 2.5 times.
  Navig8 Faith
   - 14 -




---



##### Table of Contents



The current lower charter rates in the LPG carrier and product carrier charter markets and decrease
in LPG carrier and product carrier values and any future declines in these rates and values may
continue to affect our ability to comply with various covenants in our loan agreements, for some of
which we have had to obtain waivers.
   The current state of global financial markets and current economic conditions may adversely impact
our ability to obtain financing on acceptable terms which may hinder or prevent us from fulfilling
our obligations under our agreements to complete contracted vessel acquisitions.
   - 15 -




---



##### Table of Contents



We may be unable to draw down the full amount of our credit facilities if the market values of our
vessels further decline.
  Our ability to obtain additional debt financing may be dependent on the performance of our then
existing charters and the creditworthiness of our charterers.
  A significant increase in our debt levels may adversely affect us and our cash flows.
    The derivative contracts we have entered into to hedge our exposure to fluctuations in interest
rates could result in higher than market interest rates and reductions in our stockholders equity,
as well as charges against our income.
  - 16 -




---



##### Table of Contents



Because we generate all of our revenues in U.S. dollars but incur a portion of our expenses in
other currencies, exchange rate fluctuations could hurt our results of operations.
  Dependence on our relationship with the Vafias Group and Stealth Maritime.
  
    
    our recognition and acceptance in the LPG carrier sector and, to a lesser extent,
product carrier sector, including our ability to attract charterers;
    
    relations with charterers and charter brokers;
    
    operational expertise; and
    
    management experience.
  - 17 -




---



##### Table of Contents



We depend on third party managers to manage part of our fleet.
  We may enter into certain significant transactions with companies affiliated with the Vafias Group
which may result in conflicts of interests.
  Our directors and officers may in the future hold direct or indirect interests in companies that
compete with us.
  Stealth Maritime and companies affiliated with Stealth Maritime, including Brave Maritime, may
acquire vessels that compete with our fleet.
  - 18 -




---



##### Table of Contents



As our fleet has grown in size, we have needed to improve our operations and financial systems,
staff and crew; if we cannot maintain these systems or continues to recruit suitable employees, our
business and results of operations may be adversely affected.
  Delays in deliveries of our additional five newbuilding LPG carriers and one resale new building
Aframax crude oil tanker could harm our operating results.
   
    
    work stoppages or other labor disturbances or other events that disrupt the operations
of the shipyard building the vessels;
    
    quality or engineering problems;
    
    changes in governmental regulations or maritime self-regulatory organization standards;
    
    lack of raw materials;
    
    bankruptcy or other financial crisis of the shipyard building the vessel;
    
    our inability to obtain requisite financing or make timely payments;
    
    a backlog of orders at the shipyard building the vessel;
    
    hostilities, political or economic disturbances in the countries where the vessels are
being built;
    
    weather interference or catastrophic event, such as a major earthquake or fire;
    
    our requests for changes to the original vessel specifications;
    
    requests from our customers, with which we have arranged charters for such vessels, to
delay construction and delivery of such vessels due to weak economic conditions and
shipping demand,;
    
    shortages of or delays in the receipt of necessary construction materials, such as
steel;
 - 19 -




---



##### Table of Contents




    
    our inability to obtain requisite permits or approvals; or
    
    a dispute with the shipyard building the vessel.
   If we fail to manage our growth properly, we may not be able to successfully expand our market
share.
  
    
    locating and acquiring suitable vessels;
    
    identifying and completing acquisitions or joint ventures;
    
    integrating any acquired business successfully with our existing operations;
    
    expanding our customer base;
    
    managing our expansion; and
    
    obtaining required financing.
  We may be unable to attract and retain key management personnel and other employees in the LPG
carrier and product carrier sectors, which may negatively affect the effectiveness of our
management and our results of operation.
  - 20 -




---



##### Table of Contents



In the highly competitive international LPG carrier, product carrier and crude oil tanker markets,
we may not be able to compete for charters with new entrants or established companies with greater
resources.
  We have acquired three medium range product carriers and agreed to acquire one Aframax crude oil
tanker, however, we principally operate in one sector of the shipping industry, the seaborne
transport of LPG, and our lack of a diversified business could adversely affect us.
  We have expanded into the product carrier sector and are expanding into the crude oil tanker sector
with our agreement to acquire one Aframax tanker and we may not be able to successfully execute
this expansion, or any further expansion, in such sectors or any other sectors, such as dry or
other wet or gas shipping sectors we choose to expand into, which could have an adverse effect on
our business, results of operation and financial condition.
  
    
    be costly;
    
    distract us from our core LPG carrier business; and
    
    divert management resources,
  Purchasing and operating previously owned, or secondhand, vessels may result in increased operating
costs and vessels off-hire, which could adversely affect our revenues.
  - 21 -




---



##### Table of Contents



The shipping industry has inherent operational risks that may not be adequately covered by our
insurance.
  Our major stockholder exerts considerable influence on the outcome of matters on which our
stockholders are entitled to vote and his interests may be different from yours.
  We may have to pay tax on United States-source income, which would reduce our earnings.
   - 22 -




---



##### Table of Contents



United States tax authorities could treat us as a passive foreign investment company, which could
have adverse United States federal income tax consequences to United States holders.
   - 23 -




---



##### Table of Contents



Our corporate governance practices are in compliance with the NASDAQ corporate governance
standards, however, as a foreign private issuer, we are entitled to claim an exemption from certain
NASDAQ corporate governance standards, and if we elected to rely on this exemption, you may not
have the same protections afforded to stockholders of companies that are subject to all of the
NASDAQ corporate governance requirements.
  We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed
body of corporate law.
  - 24 -




---



##### Table of Contents



It may be difficult to enforce service of process and enforcement of judgments against us and our
officers and directors.
   Risks Related To Our Common Stock
 The market price of our common stock has fluctuated widely and the market price of our common stock
may fluctuate in the future.
    Our Board of Directors has determined to suspend the payment of cash dividends as a result of
market conditions in the international shipping industry, and until such market conditions improve,
it is unlikely that we will reinstate the payment of dividends.
  - 25 -




---



##### Table of Contents



Anti-takeover provisions in our organizational documents could make it difficult for our
stockholders to replace or remove our current Board of Directors or have the effect of
discouraging, delaying or preventing a merger or acquisition, which could adversely affect the
market price of our common stock.
   
    
    authorizing our Board of Directors to issue blank check preferred stock without
stockholder approval;
    
    providing for a classified Board of Directors with staggered three-year terms;
    
    prohibiting cumulative voting in the election of directors;
    
    authorizing the removal of directors only for cause and only upon the affirmative vote
of the holders of 80% of the outstanding shares of our common stock entitled to vote for
the directors;
    
    limiting the persons who may call special meetings of stockholders;
    
    establishing advance notice requirements for nominations for election to our Board of
Directors or for proposing matters that can be acted on by stockholders at stockholder
meetings; and
    
    prohibiting certain transactions with interested stockholders.
    
    These anti-takeover provisions could substantially impede the ability of public
stockholders to benefit from a change in control and, as a result, may adversely affect the
market price of our common stock and your ability to realize any potential change of
control premium.
 
 Item 4. Information on the Company
 History and Development of the Company
   - 26 -




---



##### Table of Contents



Business Overview
    LPG Carriers
 VesselYear
    
    Size
    
    Vessel
    
    Delivery
    
    Employment
    
    Expiration ofName
    
    Built
    
    (cbm)
    
    Type
    
    Date
    
    Status
    
    Charter(1)Gas Cathar
    
    2001
    
    7,517
    
    fully-pressurized
    
    October 2005
    
    Time Charter
    
    May 2012Gas Premiership
    
    2001
    
    7,200
    
    fully-pressurized
    
    March 2008
    
    Time Charter
    
    March 2012Gas Haralambos
    
    2007
    
    7,000
    
    fully-pressurized
    
    October 2007
    
    Spot
    
    Gas Marathon
    
    1995
    
    6,572
    
    fully-pressurized
    
    November 2005
    
    Time Charter
    
    August 2010Gas Chios
    
    1991
    
    6,562
    
    fully-pressurized
    
    October 2005
    
    Time Charter
    
    April 2011Gas Moxie
    
    1992
    
    6,526
    
    fully-pressurized
    
    May 2005
    
    Spot
    
    Gas Flawless
    
    2007
    
    6,300
    
    fully-pressurized
    
    February 2007
    
    Time Charter
    
    February 2011Gas Monarch
    
    1997
    
    5,018
    
    fully-pressurized
    
    December 2005
    
    Bareboat Charter
    
    November 2010Lyne
    
    1996
    
    5,014
    
    fully-pressurized
    
    May 2006
    
    Bareboat Charter
    
    May 2011Gas Emperor
    
    1995
    
    5,013
    
    fully-pressurized
    
    February 2005
    
    Bareboat Charter
    
    August 2012Catterick
    
    1995
    
    5,001
    
    fully-pressurized
    
    November 2005
    
    Time Charter
    
    January 2012Sir Ivor
    
    2003
    
    5,000
    
    fully-pressurized
    
    May 2006
    
    Bareboat Charter
    
    May 2011Gas Icon
    
    1994
    
    5,000
    
    fully-pressurized
    
    June 2007
    
    Time Charter
    
    July 2010Gas Kalogeros
    
    2007
    
    5,000
    
    fully-pressurized
    
    July 2007
    
    Time Charter
    
    June 2011Gas Defiance
    
    2008
    
    5,000
    
    fully-pressurized
    
    August 2008
    
    Time Charter
    
    January 2011Gas Shuriken
    
    2008
    
    5,000
    
    fully-pressurized
    
    October 2008
    
    Time Charter
    
    October 2010Gas Sincerity
    
    2000
    
    4,123
    
    fully-pressurized
    
    November 2005
    
    Time Charter
    
    August 2010Gas Spirit
    
    2001
    
    4,112
    
    fully-pressurized
    
    December 2005
    
    Time Charter
    
    June 2010Gas Zael
    
    2001
    
    4,111
    
    fully-pressurized
    
    December 2005
    
    Time Charter
    
    January 2011Gas Kaisen
    
    1991
    
    4,109
    
    semi-refrigerated
    
    November 2004
    
    Spot
    
    Gas Shanghai
    
    1999
    
    3,526
    
    fully-pressurized
    
    December 2004
    
    Time Charter
    
    December 2010Gas Nemesis
    
    1996
    
    3,518
    
    fully-pressurized
    
    May 2007
    
    Spot
    
    Gas Evoluzione
    
    1996
    
    3,517
    
    fully-pressurized
    
    July 2007
    
    Spot
    
    Gas Czar
    
    1995
    
    3,510
    
    fully-pressurized
    
    February 2006
    
    Spot
    
    Gas Astrid
    
    2009
    
    3,500
    
    fully-pressurized
    
    April 2009
    
    Time Charter
    
    April 2011Gas Legacy
    
    1998
    
    3,500
    
    fully-pressurized
    
    October 2005
    
    Time Charter
    
    October 2010
 - 27 -




---



##### Table of Contents



VesselYear
    
    Size
    
    Vessel
    
    Delivery
    
    Employment
    
    Expiration ofName
    
    Built
    
    (cbm)
    
    Type
    
    Date
    
    Status
    
    Charter(1)Gas Sikousis
    
    2006
    
    3,500
    
    fully-pressurized
    
    August 2007
    
    Time Charter
    
    May 2011Gas Exelero
    
    2009
    
    3,500
    
    fully-pressurized
    
    June 2009
    
    Time Charter
    
    June 2011Gas Artic
    
    1992
    
    3,434
    
    semi-refrigerated
    
    April 2005
    
    Spot
    
    Gas Ice
    
    1991
    
    3,434
    
    semi-refrigerated
    
    April 2005
    
    Time Charter
    
    July 2010Chiltern
    
    1997
    
    3,312
    
    fully-pressurized
    
    June 2007
    
    Bareboat Charter
    
    May 2013Gas Pasha
    
    1995
    
    3,244
    
    fully-pressurized
    
    June 2006
    
    Time Charter
    
    September 2011Gas Crystal
    
    1990
    
    3,211
    
    semi-refrigerated
    
    November 2005
    
    Spot
    
    Gas Tiny
    
    1991
    
    1,320
    
    semi-refrigerated
    
    October 2004
    
    Time Charter
    
    October 2010Total: 34 vessels
    
    
    
    155,204 cbm
 Product Carriers/Crude Oil Tankers
 VesselYear
    
    Size
    
    Vessel
    
    Delivery
    
    Employment
    
    Expiration ofName
    
    Built
    
    (dwt)
    
    Type
    
    Date
    
    Status
    
    Charter(1)Navig8 Fidelity
    
    
    2008
    
    
    
    47,000
    
    
    medium range
product carrier
    
    January 2008
    
    Bareboat Charter
    
    January 2015Navig8 Faith
    
    
    2008
    
    
    
    47,000
    
    
    medium range
product carrier
    
    February 2008
    
    Bareboat Charter
    
    February 2015Alpine Endurance
    
    
    2009
    
    
    
    46,000
    
    
    medium range
product carrier
    
    July 2009
    
    Bareboat Charter
    
    July 2012Spike(2)
    
    
    2010
    
    
    
    115,804
    
    
    Aframax oil tanker
    
    July 2010
    
    Bareboat Charter
    
    July 2015Total: 4 vessels
    
    
    
    
    
    255,804 dwtTotal Current Fleet:38 Vessels
 
 (1)
    
    Earliest date charters could expire. Most charters include options to shorten or extend their term.(2)
    
    The Spikeis scheduled to be delivered to us in July 2010, at which time it is scheduled to be
deployed on a five year bareboat charter.  LPG Carriers
 VesselYear
    
    Size
    
    Vessel
    
    Delivery
    
    Employment
    
    Expiration ofName
    
    Built
    
    (cbm)
    
    Type
    
    Date
    
    Status
    
    CharterTBN
    
    
    2010
    
    
    
    5,000
    
    
    fully-pressurized
    
    February 2011TBN
    
    
    2010
    
    
    
    5,000
    
    
    fully-pressurized
    
    March 2011TBN
    
    
    2011
    
    
    
    5,000
    
    
    fully-pressurized
    
    July 2011TBN
    
    
    2011
    
    
    
    7,500
    
    
    fully-pressurized
    
    November 2011TBN
    
    
    2012
    
    
    
    7,500
    
    
    fully-pressurized
    
    May 2012Total contractedLPG carriers:5 vessels
    
    
    
    
    
    30,000 cbm
 Commercial and Technical Management of Our Fleet
  - 28 -




---



##### Table of Contents



Gas Evoluzione Gas Crystal Gas Cathar Gas Flawless Gas Haralambos Gas Nemesis Gas
Kalogeros Gas Premiership Gas Shuriken Gas Defiance Gas Astrid Gas
Exelero
 Crewing and Employees
   Chartering of the Fleet
  - 29 -




---



##### Table of Contents



Customers
  Year EndedCustomer
    
    December 31, 2009Shell
    
    
    17.0
    %Petredec
    
    
    15.0
    %Vitol
    
    
    13.0
    %Navig8
    
    
    10.0
    %
  Environmental and other Regulations
    - 30 -




---



##### Table of Contents



Environmental Regulations  International Maritime Organization (IMO)
      - 31 -




---



##### Table of Contents



Environmental Regulations  The United States Oil Pollution Act of 1990 (OPA).
    
    
    natural resources damage and the costs of assessment thereof;
 - 32 -




---



##### Table of Contents




    
    real and personal property damage;
    
    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.
       - 33 -




---



##### Table of Contents



Environmental Regulations  Other Environmental Initiatives
  Climate Control Initiatives
  Vessel Security Regulations
  
    
    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.
 - 34 -




---



##### Table of Contents



Classification and Inspection
     Risk of Loss and Liability Insurance
 General
  Hull and Machinery Insurance
  - 35 -




---



##### Table of Contents



Protection and Indemnity Insurance
   Competition
    Employees
  - 36 -




---



##### Table of Contents



Seasonality
  Properties
  
 Item 4A. Unresolved Staff Comments
  
 Item 5. Operating and Financial Review and Prospects
  Overview
   - 37 -




---



##### Table of Contents




    
    Charters and revenues. Under a time charter, the charterer pays a fixed rate per day
over the term of the charter; a time charter, including a short term time charter, may
provide for rate adjustments and profit sharing. Under a bareboat charter, the charterer
pays us a fixed rate for its use of our ship for the term of the charter. Under a voyage
charter, we agree to transport a specified cargo from a loading port to a discharging port
for a fixed amount.
    
    Charters and expenses. Under a time charter, we are responsible for the vessels
operating costs (crew, provisions, stores, lubricants, insurance, maintenance and repairs)
incurred during the term of the charter, while the charterer pays voyage expenses (port,
canal and fuel costs) that are unique to each particular voyage. Under a bareboat charter,
the charterer is responsible for all vessel operating expenses and voyage expenses incurred
during the term of the charter. Under a voyage or spot charter, we are responsible for both
the vessel operating expenses and the voyage expenses incurred in performing the charter.
   - 38 -




---



##### Table of Contents



Factors Affecting Our Results of Operations
  
    
    Calendar days. We define calendar days as the total number of days in a period during
which each vessel in our fleet was in our possession including off-hire days associated
with major repairs, drydockings or special or intermediate surveys. Calendar days are an
indicator of the size of our fleet over a period and affect both the amount of revenue and
the amount of expense that we record during that period.
    
    Voyage days. We define voyage days as the total number of days in a period during which
each vessel in our fleet was in our possession net of off-hire days associated with major
repairs, drydockings or special or intermediate surveys. The shipping industry uses voyage
days (also referred to as available days) to measure the number of days in a period during
which vessels are available to generate revenues.
    
    Fleet utilization. We calculate fleet utilization by dividing the number of our voyage
days during a period by the number of our calendar days during that period. The shipping
industry uses fleet utilization to measure a companys efficiency in finding suitable
employment for its vessels and minimizing the amount of days that its vessels are off-hire
for reasons such as scheduled repairs, vessel upgrades or drydockings and other surveys.
    
    Cyclicality. The international gas carrier market, including the transport of LPG, is
cyclical with attendant volatility in profitability, charter rates and vessel values,
resulting from changes in the supply of, and demand for, LPG carrier capacity. Due to the
current downturn in market conditions, there has been a decrease in the number of vessels
being contracted under time or bareboat charters as charterers seek to keep their
commitments on a shorter term basis, and as of June 15, 2010, we had eight vessels trading
in the spot market. However, in comparing the prevailing one year time charter rate at June
15, 2010 against the prevailing one year time charter rate at June 15, 2009, rates, as well
as vessel values, continue to remain relatively stable in the LPG sector of the shipping
industry. On a fleet wide basis, on June 15, 2010, we had 37 vessels in our fleet, 34 LPG
carriers and three product carriers. Of these vessels, eight were employed on bareboat
charter and 29 were employed either on time charter or in the spot market. On June 15 2009,
we had 42 vessels in our fleet, 40 LPG carriers and two product carriers. Of these vessels,
13 were employed on bareboat charters and 29 were employed either on time charter or in the
spot market. The average rate per day per vessel earned on June 15, 2010 was $6,843
compared to $7,242 on June 15, 2009.To the extent we have vessels in the spot market, we are exposed to changes in spot rates
for LPG carriers and such changes affect our earnings and the value of our LPG carriers at
any given time. When LPG vessel prices are considered to be low, companies not usually
involved in shipping may make speculative vessel orders, thereby increasing the LPG shipping
supply, satisfying demand sooner and potentially suppressing charter rates. Each of the
three product carriers in our fleet as of June 15, 2010 are deployed on a fixed rate
bareboat charter with two expiring in the first quarter of 2015 and the third in the third
quarter of 2012, which will limit our exposure to fluctuations in charter rates in the
product carrier sector.
    
    Seasonality. The LPG carrier market is typically stronger in the fall and winter months
in anticipation of increased consumption of propane and butane for heating 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, our revenues may be
stronger in fiscal quarters ended December 31 and March 31 and relatively weaker during the
fiscal quarters ended June 30 and September 30, as was the case in 2007, 2008 and 2009. We
have limited exposure to seasonality with respect to our product carriers as the three
product carriers in our current fleet are deployed on fixed rate bareboat charters, with
two through the first quarter of 2015 and the third through the third quarter of 2012.
 - 39 -




---



##### Table of Contents



Basis of Presentation and General Information
 Voyage Revenues
   Voyage Expenses
  Time Charter Equivalent
  Vessel Operating Expenses
  - 40 -




---



##### Table of Contents



Management Fees
 .
 General and Administrative Expenses
  Depreciation
  Interest Expense
  Results of Operations
 Year ended December 31, 2009 and the year ended December 31, 2008
   - 41 -




---



##### Table of Contents



- 42 -




---



##### Table of Contents



Gas Sophie Gas
Fortune, Gas Oracle Gas Nemesis Gas Renovatio
 Gas Natalie Gas Prophet Gas Texiana Birgit Kosan Gas Eternity
 Stealth Argentina
     - 43 -




---



##### Table of Contents



Year ended December 31, 2008 and the year ended December 31, 2007
        - 44 -




---



##### Table of Contents



Liquidity and Capital Resources
  Spike
 - 45 -




---



##### Table of Contents



Gas
Natalie Gas Astrid Gas Exelero, Alpine Endurance Spike Stealth Argentina
 Gas Chios, Gas Crystal, Gas
Evoluzione, Gas Zael Catterick,
      Cash Flows
   - 46 -




---



##### Table of Contents



Gas Sophie Gas Fortune Gas Natalie Gas
Astrid Gas Exelero Alpine Endurance Navig8 Fidelity Navig8 Faith Gas Premiership Gas Defiance Gas Shuriken Gas Haralambos Gas Flawless Gas Icon Gas Kalogeros Sea Bird II Gas Evoluzione Gas Sophie Gas Sikousis Gas Renovatio Chiltern Gas Premiership Navig8 Faith Navig8 Fidelity
    Credit Facilities
  - 47 -




---



##### Table of Contents



RemainingAvailable
    
    Outstanding
    
    
    
    
    
    RemainingPrincipal
    
    Principal
    
    
    
    
    
    RepaymentLender(1)
    
    Amount
    
    Amount
    
    Interest Rate
    
    Maturity
    
    InstallmentsFORTIS BANK ATHENS BRANCH(1)(2)
    
    
    
    $50.71 million
    
    The interest rate
margin over LIBOR
varies with the
ratio of the
outstanding balance
of the loan to the
aggregate market
value of the
vessels mortgaged
thereunder as
follows: if the
ratio is less than
67% the interest
rate is 0.75% over
LIBOR; if the ratio
is more than 67%
but less than 77%
the interest rate
is 0.80% over LIBOR
and if the ratio
exceeds 77% the
interest rate is
0.90% over LIBOR.
The facility bore
an average interest
rate, including
margin, of 1.70%
during 2009, which
represented an
average LIBOR rate
of 0.95% plus the
prevailing margin
of 0.75%.
    
    Due May 2016
    
    Twenty six
quarterly
installments of
$1.44 million plus
a balloon payment
of $13.27 million
payable together
with the last
installment.
 - 48 -




---



##### Table of Contents



RemainingAvailable
    
    Outstanding
    
    
    
    
    
    RemainingPrincipal
    
    Principal
    
    
    
    
    
    RepaymentLender(1)
    
    Amount
    
    Amount
    
    Interest Rate
    
    Maturity
    
    InstallmentsDNB NOR BANK ASA(3)
    
    
    
    $67.48 million
    
    The interest rate
margin over LIBOR
varies with the
ratio of the
aggregate market
value of the
vessels mortgaged
under the loan to
the amount
outstanding
thereunder. If the
ratio is equal to
or lower than 130%,
the interest rate
will be 0.85% over
LIBOR; if the ratio
is between 130% and
150%, the interest
rate is 0.75% over
LIBOR and if the
ratio is equal to
or higher than
150%, the interest
rate is 0.70% over
LIBOR. The facility
bore an average
interest rate,
including margin,
of 2.63% during
2009, which
represented an
average LIBOR rate
of 1.88% plus the
prevailing margin
of 0.75%.
    
    Due March 2016
    
    One semi-annual
payment of $8.19
million and eleven
semi-annual
payments of $3.37
million, plus a
balloon payment of
$22.22 million
payable together
with the final
installment.DNB NOR BANK ASA(4)
    
    
    
    $4.13 million
    
    The interest rate
margin over LIBOR
varies with the
ratio of the
aggregate market
value of the vessel
mortgaged under the
loan to the amount
outstanding
thereunder. If the
ratio is equal to
or lower than 130%,
the interest rate
will be 0.85% over
LIBOR; if the ratio
is between 130% and
150%, the interest
rate is 0.75% over
LIBOR and if the
ratio is equal to
or higher than 150%,
    
    Due June 2016
    
    Thirteen
semi-annual
installments of
$0.24 million plus
a balloon payment
of $1.01 million
payable together
with the last
installment.
 - 49 -




---



##### Table of Contents



RemainingAvailable
    
    Outstanding
    
    
    
    
    
    RemainingPrincipal
    
    Principal
    
    
    
    
    
    RepaymentLender(1)
    
    Amount
    
    Amount
    
    Interest Rate
    
    Maturity
    
    Installmentsthe interest
rate is 0.70% over
LIBOR. The facility
bore an average
interest rate,
including margin,
of 1.83% during
2009, which
represented an
average LIBOR rate
of 1.13% plus the
prevailing margin
of 0.70%.SCOTIABANK(5)
    
    
    
    $42.11 million
    
    LIBOR plus 0.70%
    
    Due June 2015 Due
December 2017
    
    $5.15 million is
repayable in ten
consecutive,
semi-annual
installments of
$0.34 million each,
plus a balloon
payment of $1.75
million payable
together with the
last installment.
$36.96 million is
repayable, in
fifteen consecutive
semi-annual
installments of
$1.54 million each,
plus a balloon
payment of $13.86
million payable
together with the
last installment.NATIONAL BANK OF GREECE(6)
    
    
    
    $31.30 million
    
    LIBOR plus 0.95%
until the repayment
of the third
installment and
LIBOR plus 0.80%
thereafter.
    
    Due Nov 2020
    
    Twenty-two
consecutive
semi-annual
installments of
$0.97 million each
plus a balloon
payment of $9.96
million payable
together with the
last installment.DEUTSCHE BANK(7)
    
    
    
    $35.88 million
    
    LIBOR plus 0.70% up
to October 21, 2009
and. LIBOR plus
2.00% thereafter.
    
    Due Feb 2020
    
    Forty consecutive
quarterly
installments of
$0.625 million and
a balloon payment
of $10.88 million.
 - 50 -




---



##### Table of Contents



RemainingAvailable
    
    Outstanding
    
    
    
    
    
    RemainingPrincipal
    
    Principal
    
    
    
    
    
    RepaymentLender(1)
    
    Amount
    
    Amount
    
    Interest Rate
    
    Maturity
    
    InstallmentsEMPORIKI BANK(8)
    
    
    
    $27.72 million
    
    LIBOR plus 0.90%.
    
    Due Oct 2020
    
    Twenty two
semi-annual
installments of
$0.86 million, plus
a balloon payment
of $8.8 million,
payable together
with the last
installment.DVB BANK(9)
    
    
    
    $31.16 million
    
    LIBOR plus 2.85%.
    
    Due Jul 2014
    
    $18.43 million is
repayable in
eighteen
consecutive,
quarterly
installments of
$0.41 million each,
plus a balloon
payment of $11.05
million payable
together with the
last installment.
$12.73 million is
repayable, in
nineteen
consecutive
quarterly
installments of
$0.22 million each,
plus a balloon
payment of $8.55
million payable
together with the
last installment.NIBC BANK(10)
    
    
    
    $26.70 million
    
    LIBOR plus 3.00%.
    
    Due Jul 2014
    
    Five semi-annual
installments of
$1.64 million each
and five
semi-annual
installments of
$1.08 million and a
balloon payment of
$13.10 million.EFG EUROBANK - ERGASIAS(11)
    
    
    
    $28.65 million
    
    LIBOR plus 2.50%.
    
    Due Jul 2019
    
    Nine consecutive,
quarterly
installments of
$0.60 million each,
thirty consecutive,
quarterly
installments of
$0.39 million and a
balloon payment of
$11.55 million.
 - 51 -




---



##### Table of Contents



(1)
    
    Our credit facility with Fortis Bank Athens Branch was, as of
December 31, 2009, collateralized by mortgages and other security
relating to eleven LPG vessels, the Sir Ivor, the Lyne, the Gas
Prophet, the Gas Tiny, the Gas Courchevel, the Gas Shanghai, the Gas
Emperor, the Gas Ice, the Gas Arctic, the Gas Texianaand the Gas
Amazon.(2)
    
    Borrowings under our credit facility with Fortis Bank Athens Branch
repaid the outstanding balance of our credit facility with Fortis
Bank for up to $54.0 million, which was fully drawn in May 2005.(3)
    
    Our 2005 credit facility with DnB NOR Bank ASA was, as of December
31, 2009, collateralized by mortgages and other security relating to
the Gas Marathon, the Gas Sincerity, the Gas Cathar, the Gas Legacy,
the Sweet Dream(renamed in February 2006 as the Gas Monarch), the
Gas Czar, the Gas Eternity, the Gas Flawlessand the Gas Premiership(4)
    
    Our 2006 credit facility with DnB NOR Bank ASA was, as of December
31, 2009, collateralized by mortgages and other security relating to
the Gas Pasha.(5)
    
    Our credit facility agreement is with the Scotiabank (Ireland)
Limited, as lender, Scotiabank Europe plc, as security trustee, and
The Bank of Nova Scotia, as swap bank. Our Scotiabank credit facility
was, as of December 31, 2009, collateralized by mortgages and other
security relating to the Gas Icon and the Navig8 Fidelity.(6)
    
    Our 2008 credit facility with National Bank of Greece was, as of
December 31, 2009, collateralized by mortgages and other security
relating to the Gas Defianceand the Gas Shuriken.(7)
    
    Our 2008 credit facility with Deutsche Bank was, as of December 31,
2009, collateralized by mortgages and other security relating to the
Navig8 Faith.(8)
    
    Our 2008 credit facility with Emporiki Bank was, as of December 31,
2009, collateralized by mortgages and other security relating to the
Gas Sikousisand the Gas Kalogeros.(9)
    
    Our 2009 credit facility with DVB Bank was, as of December 31, 2009,
collateralized by mortgages and other security relating to the Gas
Astrid, the Chilternand the Gas Exelero.(10)
    
    Our 2009 credit facility with NIBC Bank was, as of December 31, 2009,
collateralized by mortgages and other security relating to the Gas
Haralambos, the Gas Spiritand the Sea Bird II.(11)
    
    Our 2009 credit facility with EFG Eurobank  Ergasias S.A. was, as
of December 31, 2009, collateralized by mortgages and other security
relating to the Alpine Endurance. Gas Chios, Gas Crystal, Gas
Evoluzione, Gas Zael Catterick
 New DnB NOR Bank ASA Credit Facility
 Spike
 - 52 -




---



##### Table of Contents



Gas Zael Spike Gas Zael
 Financial Covenants
  
    
    ensure that our leverage, which is defined as total debt net of cash/total market
adjusted assets, does not at any time exceed 80%;
    
    maintain a ratio of the aggregate market value of the vessels securing the loan to the
principal amount outstanding under such loan (which we sometimes refer to as the value,
maintenance clause) at all times in excess of (i) 130% under our loan agreement with Fortis
Bank-Athens Branch and NIBC Bank N.V. (ii) 125% under our loan agreements with Deutsche
Bank, DnB NOR Bank ASA, DVB Bank S.E., Nordic Branch, EFG Eurobank Ergasias S.A., Emporiki
Bank, National Bank of Greece and Scotiabank;
    
    ensure that our ratio of EBITDA to interest expense over the preceding twelve months is
at all times more than 2.5 times; and
    
    ensure that members of the Vafias family at all times own at least 15% of our
outstanding capital stock.
    
    In addition, our loan agreement with Fortis Bank-Athens Branch requires us to maintain a
minimum cash balance equivalent to six months interest in a pledged account with the lender
at all times; our loan agreements with Scotiabank and Deutsche Bank each require us to
maintain a cash balance equivalent of $200,000 for each vessel mortgaged to Scotiabank or
Deutsche Bank, as applicable, at all times; our loan agreement with Emporiki Bank requires
us to maintain an average cash balance equivalent of $800,000 with Emporiki Bank at all
times our loan agreement with EFG Eurobank requires us to maintain an aggregate cash
balance equivalent of $200,000 with EFG Eurobank at all times; our loan agreement with
National Bank of Greece requires us to deposit on a monthly basis 1/6th of the relevant
installment of principal and 1/6th of the relevant fraction of the next interest payment
that are both due on a six monthly basis. Our loan agreements with DnB Nor Bank require us
at all times to keep the equivalent of six months interest payable on deposit with the DnB
Nor Bank at all times.
    - 53 -




---



##### Table of Contents



Capital Expenditures
    Navig8 Fidelity Navig8 Faith Gas Premiership Gas Defiance Gas
Shuriken Stealth Argentina Alpine Endurance Gas Natalie
 Gas
Premiership Navig8 Faith Navig8 Fidelity
 Off Balance Sheet Arrangements
  Contractual Obligations
  Payments due by period (in thousands)More than5 years(AfterLess than 1
    
    
    1-3 years
    
    
    3-5 years
    
    
    January 1,Total
    
    
    year (2010)
    
    
    (2011-2012)
    
    
    (2013-2014)
    
    
    2015)Long-term debt obligations
    
    $
    345,822
    
    
    $
    36,167
    
    
    $
    60,718
    
    
    $
    89,963
    
    
    $
    158,975Interest on principal amounts outstanding(1)
    
    
    60,048
    
    
    
    7,248
    
    
    
    16,908
    
    
    
    15,748
    
    
    
    20,144Management fees(2)
    
    
    7,592
    
    
    
    5,127
    
    
    
    2,465
    
    
    
    
    
    
    
    Office lease(3)
    
    
    120
    
    
    
    60
    
    
    
    60
    
    
    
    
    
    
    
    Operating lease(4)
    
    
    90
    
    
    
    49
    
    
    
    41
    
    
    
    
    
    
    
    Vessel purchase agreements(5)
    
    
    104,157
    
    
    
    14,217
    
    
    
    89,940
    
    
    
    
    
    
    
    Total
    
    $
    517,832
    
    
    $
    62,869
    
    
    $
    170,133
    
    
    $
    105,711
    
    
    $
    179,119
 - 54 -




---



##### Table of Contents



(1)
    
    Based on assumed LIBOR rates of 0.75% for 2010, 1.50% for
2011-2012, 2.25% for 2013-2014 and 3.0% thereafter, and the effect
of our interest rate swap arrangements.(2)
    
    Under our management agreement with Stealth Maritime, we pay it
$125 per vessel per day for vessels on bareboat charter and $440
per vessel per day for vessels not on bareboat charter. Based on
the payment of a management fee of $440 per vessel per day for
vessels not on bareboat charter and $125 per day for vessels on
bareboat charter and our currently contracted vessel acquisitions,
we expect to pay at least $5.1 million per year to Stealth
Maritime as management fees under the management agreement. We
also will pay 1.25% of the gross freight, demurrage and charter
hire collected from employment of our ships and 1% of the contract
price of any vessels bought or sold on our behalf. In addition, we
will reimburse Stealth Maritime for its payment of the
compensation to our Chief Executive Officer and Chief Financial
Officer. Such compensation was in the aggregate amount of 902,990
(US $1,267,981 based on the average exchange rate of 1.00: US
$1.404 in effect throughout 2009). The initial term of our
management agreement expires in June 2010 but extends on a
year-to-year basis thereafter unless six-month written notice is
provided prior to the expiration of the term. Such notice has not
been given by either party.(3)
    
    We lease office space from the Vafias Group. This lease was
renewed effective January 3, 2010 for two years at a rate of
42,000 per year.(4)
    
    In October 2005, we entered into a three year cancelable operating
lease for a motor vehicle. The initial term of the lease
terminated in October 2008. The lease was renewed effective
October 2008 for a further three years. The cost is Euro 34,200
per year.(5)
    
    The $104.16 million set forth in the above table (converted from
our contractual obligation for Yen 9,606,400,000 at the exchange
rate on December 31, 2009), represents the remaining balance, as
of December 31, 2009, for five newbuilding handy size LPG carriers
which is due upon the respective delivery of these vessels to us
scheduled from February 2011 and May 2012. On June 4, 2010, we
agreed to acquire one crude oil tanker for $56.5 million, payable
upon its delivery to us scheduled for July 2010, which amount is
not reflected in the above table. Critical Accounting Policies
   Revenue and Expenses
   - 55 -




---



##### Table of Contents



Impairment of long-lived assets
       Depreciation
 - 56 -




---



##### Table of Contents



Vessels Acquisitions
  Derivative Financial Instruments
   Stock Incentive Plan
 - 57 -




---



##### Table of Contents



Recent Accounting Pronouncements
       - 58 -




---



##### Table of Contents



Item 6.
    
    Directors, Senior Management and Employees
  YearYear
    
    DirectorsBecame
    
    CurrentName
    
    Age
    
    Positions
    
    Director
    
    Term ExpiresHarry N. Vafias
    
    
    32
    
    
    President, Chief Executive Officer and

Class III Director
    
    
    2004
    
    
    
    2012Andrew J. Simmons
    
    
    55
    
    
    Chief Financial Officer
    
    
    
    
    
    
    Michael G. Jolliffe
    
    
    60
    
    
    Chairman of the Board, Class II Director
    
    
    2004
    
    
    
    2010Lambros Babilis
    
    
    42
    
    
    Deputy Chairman and Class I Director
    
    
    2007
    
    
    
    2011Markos Drakos
    
    
    50
    
    
    Class III Director
    
    
    2006
    
    
    
    2012
  Harry N. Vafias
 Andrew J. Simmons
 - 59 -




---



##### Table of Contents



Michael G. Jolliffe
 Lambros Babilis
 Markos Drakos
 Board Practices
   - 60 -




---



##### Table of Contents



Corporate Governance
   
    
    a Code of Business Conduct and Ethics;
    
    a Nominating and Corporate Governance Committee Charter;
    
    a Compensation Committee Charter; and
    
    an Audit Committee Charter.
  Committees of the Board of Directors
  - 61 -




---



##### Table of Contents



Audit Committee
   
    
    integrity of the Companys financial statements, including its system of internal
controls;
    
    the Companys compliance with legal and regulatory requirements;
    
    the independent auditors qualifications and independence; and
    
    the performance of the Companys independent audit function and independent auditors,
  Nominating and Corporate Governance Committee
  
    
    reviewing the Board structure, size and composition and making recommendations to the
Board with regard to any adjustments that are deemed necessary;
    
    identifying candidates for the approval of the Board to fill Board vacancies as and when
they arise as well as developing plans for succession, in particular, of the chairman and
executive officers;
    
    overseeing the Boards annual evaluation of its own performance and the performance of
other Board committees; and
    
    developing and recommending to the Board for adoption a set of Corporate Governance
Guidelines applicable to the Company and to periodically review the same.
 Compensation Committee
  
    
    establishing and periodically reviewing the Companys compensation programs;
    
    reviewing the performance of directors, officers and employees of the Company who are
eligible for awards and benefits under any plan or program and adjust compensation
arrangements as appropriate based on performance;
    
    reviewing and monitoring management development and succession plans and activities;
    
    reporting on compensation arrangements and incentive grants to the Board; and
 - 62 -




---



##### Table of Contents




    
    preparing a Compensation Committee report to be included in our annual proxy statement.
 Compensation of Directors and Senior Management
      Employees
  Share Ownership
  - 63 -




---



##### Table of Contents



Equity Compensation Plan
    
 Item 7.
    
    Major Shareholders and Related Party Transactions
 Major Shareholders
  
    
    each person or entity that we know beneficially owns 5% or more of our shares of common
stock;
    
    our chief executive officer and our other members of senior management;
    
    each of our directors; and
    
    all of our current directors and executive officers as a group.
  - 64 -




---



##### Table of Contents



Shares Beneficially OwnedName of Beneficial Owner
    
    Number
    
    
    PercentagePrincipal StockholdersFlawless Management Inc.(1)
    
    
    4,000,000
    
    
    
    19.0
    %331 Kifissias Avenue
Erithrea 14561
Athens, GreeceThe Bessemer Group, Incorporated(2)
    
    
    2,194,200
    
    
    
    10.4
    %100 Woodbridge Center Drive
Woodbridge, New Jersey 07095-0980Castor Investment Company(3)
    
    
    2,000,000
    
    
    
    9.5
    %Trust Company Complex
Ajeltake Road, Ajeltake Island
Marshall Islands MH 96960Zesiger Capital Group LLC(4)
    
    
    1,919,250
    
    
    
    9.1
    %320 Park Avenue, 30th Floor
New York, New York 10022Royce & Associates, LLC(5)
    
    
    1,137,339
    
    
    
    5.4
    %745 Park Avenue
New York, New York 10021Executive Officers and DirectorsHarry N. Vafias(6)
    
    
    4,200,000
    
    
    
    19.9
    (1)Andrew J. Simmons
    
    
    
    
    
    
    Michael G. Jolliffe(7)
    
    
    12,000
    
    
    
    *Lambros Babilis(8)
    
    
    9,396
    
    
    
    *Markos Drakos(9)
    
    
    8,000
    
    
    
    *Thanassis J. Martinos(10)
    
    
    403,333
    
    
    
    1.9
    %All executive officers and directors as a group (5 persons)
    
    
    4,229,396
    
    
    
    20.1
    %
 
 *
    
    Less than 1%.(1)
    
    According to Amendment No. 2 to a Schedule 13G filed with the SEC on
June 27, 2009 jointly filed by Flawless Management Inc. and Harry N.
Vafias, Flawless Management Inc. beneficially owns 4,000,0000 shares
of common stock and has sole voting power and sole dispositive power
with respect to all such shares. Harry N. Vafias, our Chief
Executive Officer, President and Director, is the sole stockholder
of Flawless Management Inc.(2)
    
    According to a Schedule 13G filed with the SEC on February 16, 2010,
The Bessemer Group, Incorporated (BGI), as a parent holding
company, and Bessemer Trust Company, N.A. (BTNA), Bessemer
Investment management LLC (BIM) and Old Westbury Real Return Fund
(the Old Westbury Fund) beneficially own an aggregate of 2,194,200
shares of our common stock. The filing indicates that BTNA is wholly
owned by BGI, BIM is a wholly owned subsidiary of BTNA and is the
investment advisor to the Old Westbury Fund, BTNA is a trust company
that manages accounts for the benefit of others and BIM is a
registered investment advisor that furnishes investment advisory
services to the Old Westbury Fund. The filing also indicates that
the shares are held by the Old Westbury Fund and that BGI, BTNA, BIM
and the Old Westbury Fund have shared voting and shared dispositive
power with respect to the 2,194,200 shares. The address of BGI is
100 Woodbridge Center Drive, Woodbridge, NJ 07095-01980. The address
of BTNA and BIM is 630 Fifth Avenue, New York, NY 10111. The address
of Old Westbury Fund is 3435 Steltzer Road, Columbus, OH 43219.(3)
    
    With respect to the 2,000,000 shares owned by Castor Investment
Company, Mr. Constantinos Tsaousoglou has sole voting and
dispositive power. Castor Investment Companys address is Trust
Company Complex, Ajeltake Road, Ajeltake Island, Marshall Islands MH
96960(4)
    
    According to Amendment No. 3 to Schedule 13G filed with the SEC on
February 10, 2010, Zesiger Capital Group LLC beneficially owns
1,919,250 shares of common stock and has sole voting power with
respect to 1,539,000 such shares and sole dispositive power with
respect to all such shares. The shares of common stock are owned of
record by clients of Zesiger Capital Group LLC, an investment
advisor.(5)
    
    According to a Schedule 13G filed on February 9, 2010, Royce &
Associates, LLC beneficially owns, and has sole voting and
dispositive power with respect to 1,137,339 shares of common stock.
Royce & Associates, LLCs address is 745 Fifth Avenue, New York, NY
10151.(6)
    
    According to Amendment No. 2 to a Schedule 13G filed with the SEC on
July 27, 2009 jointly filed by Flawless Management Inc. and Harry N.
Vafias, Harry N. Vafias beneficially owns 4,200,000 shares of common
stock, which includes (i) 4,200,000 shares of common stock,
4,175,000 of which by virtue of the shares owned indirectly through
Flawless Management Inc., and (ii) 25,000 restricted shares which
are scheduled to vest on October 31, 2010. Harry N. Vafias has sole
voting power and sole dispositive power with respect to all such
shares. - 65 -




---



##### Table of Contents



(7)
    
    Mr. Michael G. Jolliffe beneficially owns (i) 10,000 shares of
common stock and (ii) 2,000 restricted shares which are scheduled to
vest on October 31, 2010.(8)
    
    Mr. Lambros Babilis beneficially owns (i) 7,047 shares of common
stock and (ii) 2,349 restricted shares which are scheduled to vest
on March 18, 2011.(9)
    
    Mr. Markos Drakos beneficially owns (i) 6,666 shares of common stock
and (ii) 1,334 restricted shares which are scheduled to vest on
October 31, 2010.(10)
    
    Mr. Thanassis Martinos beneficially owns 400,000 shares of common
stock by virtue of shares owned indirectly through Nike Investments
Corporation, the beneficial owner being Mr. Thanassis Martinos, a
former director of the Company. The address of Nike Investments
Corporation is 80 Broad Street, Monrovia, Liberia. In addition, Mr.
Thanassis G. Martinos beneficially owns 3,333 shares of common
stock. Mr. Martinos resigned from our Board of Directors, effective
April 22, 2010.    Related Party Transactions
   Management Affiliations
  Management and Other Fees
  - 66 -




---



##### Table of Contents



Deemed Dividend
 Gas
Eternity
 Office Space
  Nike Investments Corporation
  - 67 -




---



##### Table of Contents



Brave Maritime Corp. Bridge Loan
 Chiltern Gas Evoluzione Gas Renovatio Gas Renovatio Chiltern Gas Evoluzione
  Vessel Acquisitions
 Gas Kalogeros Gas Sikousis
 Gas Defiance Gas Shuriken Gas Astrid Gas Exelero Gas Defiance Gas Shuriken Gas Astrid Gas Exelero
 Gas Natalie
   
 Item 8.
    
    Financial Information
  Significant Changes
 Legal Proceedings
 - 68 -




---



##### Table of Contents



Dividend Policy
   
 Item 9.
    
    The Offer and Listing
 Trading on the NASDAQ Stock Market
  High
    
    
    LowYear Ended December 31, 2005 (October 6, 2005 through December 31, 2005)
    
    $
    14.59
    
    
    $
    10.80Year Ended December 31, 2006
    
    
    14.79
    
    
    
    10.90Year Ended December 31, 2007
    
    
    20.00
    
    
    
    11.402008Year Ended December 31, 2008
    
    
    17.91
    
    
    
    2.51First Quarter
    
    
    16.30
    
    
    
    12.34Second Quarter
    
    
    17.91
    
    
    
    13.75Third Quarter
    
    
    17.09
    
    
    
    12.55Fourth Quarter
    
    
    13.41
    
    
    
    2.512009Year Ended December 31, 2009
    
    
    17.91
    
    
    
    2.51First Quarter
    
    
    6.73
    
    
    
    3.93Second Quarter
    
    
    6.38
    
    
    
    4.05Third Quarter
    
    
    6.64
    
    
    
    4.44Fourth Quarter
    
    
    7.64
    
    
    
    5.65October 2009
    
    
    7.64
    
    
    
    6.03November 2009
    
    
    7.06
    
    
    
    5.65December 2009
    
    
    6.60
    
    
    
    5.95
 - 69 -




---



##### Table of Contents



High
    
    
    Low2010Year Ended December 31, 2010 (through June 18, 2010)
    
    
    6.45
    
    
    
    4.42First Quarter
    
    
    6.45
    
    
    
    4.55January 2010
    
    
    6.45
    
    
    
    4.69February 2010
    
    
    5.11
    
    
    
    4.55March 2010
    
    
    5.50
    
    
    
    4.56Second Quarter (through June 18, 2010)
    
    
    5.98
    
    
    
    4.42April 2010
    
    
    5.98
    
    
    
    4.42May 2010
    
    
    5.63
    
    
    
    4.78June 2010 (through June 18, 2010)
    
    
    5.40
    
    
    
    4.62
 Comparison of Cumulative Total Shareholder Return
  
 
 Item 10.
    
    Additional Information
 Share Capital
  Common Stock
  - 70 -




---



##### Table of Contents



Blank Check Preferred Stock
  Dividends
   Articles of Incorporation and Bylaws
   Directors
  Dissenters Rights of Appraisal and Payment
 - 71 -




---



##### Table of Contents



Stockholders Derivative Actions
 Anti-takeover Provisions of our Charter Documents
 Blank Check Preferred Stock
 Classified Board of Directors
 Election and Removal of Directors
 Calling of Special Meetings of Stockholders
 Advance Notice Requirements for Stockholder Proposals and Director Nominations
  Business Combinations
 - 72 -




---



##### Table of Contents




    
    persons who are the beneficial owners of 15% or more of the outstanding voting stock of
the corporation; and
    
    persons who are affiliates or associates of the corporation and who hold 15% or more of
the corporations outstanding voting stock at any time within three years before the date
on which the persons status as an interested stockholder is determined.
  
    
    certain mergers or consolidations of the corporation or any direct or indirect
majority-owned subsidiary of the company;
 
    
    the sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets
having an aggregate market value equal to 10% or more of either the aggregate market value
of all assets of the corporation, determined on a consolidated basis, or the aggregate
value of all the outstanding stock of the corporation;
    
    certain transactions that result in the issuance or transfer by the corporation of any
stock of the corporation to the interested stockholder;
    
    any transaction involving the corporation that has the effect of increasing the
proportionate share of the stock of any class or series, or securities convertible into the
stock of any class or series, of the corporation that is owned directly or indirectly by
the interested stockholder; and
    
    any receipt by the interested stockholder of the benefit (except as a stockholder) of
any loans, advances, guarantees, pledges or other financial benefits provided by or through
the corporation.
  
    
    before a person becomes an interested stockholder, the board of directors of the
corporation approves the business combination or transaction in which the stockholder
became an interested stockholder;
    
    upon consummation of the transaction that resulted in the interested stockholder
becoming an interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction commenced, other
than certain excluded shares;
    
    following a transaction in which the person became an interested stockholder, the
business combination is (a) approved by the board of directors of the corporation and (b)
authorized at a regular or special meeting of stockholders, and not by written consent, by
the vote of the holders of at least two-thirds of the voting stock of the corporation not
owned by the stockholder; or
    
    a transaction with a stockholder that was or became an interested stockholder prior to
the consummation of our initial public offering.
 Material Contracts
  - 73 -




---



##### Table of Contents



(a) Amended and Restated Management Agreement
  (b) Right of First Refusal Agreement
  (c) Nike Investments Corporation
  (d) Fortis Bank
  (e) DnB NOR Bank ASA
  - 74 -




---



##### Table of Contents



(f) Brave Maritime Corp.
 For a description of the Brave Maritime Corp.
 (g) Scotiabank Credit Facility
  (h) Deutsche Bank
  (i) Emporiki Bank
  (j) National Bank of Greece
  (k) EFG Eurobank Ergasias S.A.
  (l) DVB Bank S.E. Nordic Branch
  (m) NIBC Bank N.V
 - 75 -




---



##### Table of Contents



(n) Vessel Acquisition Agreements
 Gas Kalogeros, 7 Gas Sikousis Gas Kalogeros Gas Sikousis
 Gas Defiance Gas Shuriken Gas Astrid Gas Exelero Gas Defiance Gas Shuriken Gas Astrid Gas Exelero
 Gas Natalie
   Exchange Controls and Other Limitations Affecting Stockholders
   - 76 -




---



##### Table of Contents



Tax Considerations
 Marshall Islands Tax Consequences
  United States Federal Income Tax Consequences
  United States Federal Income Taxation of Our Company
 Taxation of Operating Income: In General
     Exemption of Operating Income from United States Federal Income Taxation
  - 77 -




---



##### Table of Contents



- 78 -




---



##### Table of Contents




    
    we or our subsidiaries have, or are considered to have, a fixed place of business in the
United States involved in the earning of shipping income; and
    
    substantially all (at least 90%) of our United States-source shipping income, other than
leasing income or that of a subsidiary, is attributable to regularly scheduled
transportation, such as the operation of a vessel
 - 79 -




---



##### Table of Contents



that follows a published schedule with repeated sailings at regular intervals between the
same points for voyages that begin or end in the United States.
   
    
    we or our subsidiaries have, or are considered to have a fixed place of business in the
United States that is involved in the meaning of such leasing income; and
    
    substantially all (at least 90%) of our United States-source shipping income from
leasing or that of a subsidiary is attributable to such fixed place of business.
  United States Taxation of Gain on Sale of Vessels
  United States Federal Income Taxation of United States Holders
   Distributions
  - 80 -




---



##### Table of Contents



Sale, Exchange or other Disposition of Common Stock
  PFIC Status and Significant Tax Consequences
  
    
    at least 75% of our gross income for such taxable year consists of passive income (e.g.,
dividends, interest, capital gains and rents derived other than in the active conduct of a
rental business); or
    
    at least 50% of the average value of our assets during such taxable year produce, or are
held for the production of, passive income.
   - 81 -




---



##### Table of Contents



Tidewater Inc. and Subsidiaries v. United States Tidewater Tidewater Tidewater Tidewater
   Taxation of United States Holders Making a Timely QEF Election
  - 82 -




---



##### Table of Contents



Taxation of United States Holders Making a Mark-to-Market Election
  Taxation of United States Holders Not Making a Timely QEF or Mark-to-Market Election
  
    
    the excess distribution or gain would be allocated ratably over the Non-Electing
Holders aggregate holding period for the common stock;
    
    the amount allocated to the current taxable year or to any portion of the United States
Holders holding period prior to the first taxable year for which we were a PFIC would be
taxed as ordinary income; and
    
    the amount allocated to each of the other taxable years would be subject to tax at the
highest rate of tax in effect for the applicable class of taxpayer for that year, and an
interest charge for the deemed deferral benefit would be imposed with respect to the
resulting tax attributable to each such other taxable year.
  Other
PFIC Elections.
  - 83 -




---



##### Table of Contents



United States Federal Income Taxation of Non-United States Holders
  Dividends on Common Stock
  Sale, Exchange or Other Disposition of Common Stock
  
    
    the gain is effectively connected with the Non-United States Holders conduct of a trade
or business in the United States. If the Non-United States Holder is entitled to the
benefits of an income tax treaty with respect to that gain, that gain generally is taxable
only if it is attributable to a permanent establishment maintained by the Non-United States
Holder in the United States; or
 - 84 -




---



##### Table of Contents




    
    the Non-United States Holder is an individual who is present in the United States for
183 days or more during the taxable year of disposition and other conditions are met.
  Backup Withholding and Information Reporting
  
    
    fails to provide an accurate taxpayer identification number;
    
    is notified by the Internal Revenue Service that you have failed to report all interest
or dividends required to be shown on your federal income tax returns; or
    
    in certain circumstances, fails to comply with applicable certification requirements.
    Dividends and Paying Agents
  Statement by Experts
  Documents on Display
  - 85 -




---



##### Table of Contents



Subsidiary Information
  
 Item 11. Quantitative and Qualitative Disclosures About Market Risk
 Our risk management policy
  Interest rate risk
  Floating RateNotional Amount on
    
    Fixed Rate
    
    (StealthGas
    
    Fair Value December
    
    Fair Value December
    
    Fair Value DecemberCounterparty
    
    Contract Trade Date
    
    Effective Date
    
    Termination Date
    
    Effective Date
    
    (StealthGas Pays)
    
    Receives)
    
    31, 2007
    
    31, 2008
    
    31, 2009FORTIS
    
    March 31, 2005
    
    May 30, 2007
    
    May 30, 2016
    
    $22.5 million
    
    
    4.55
    %(1)
    
    3 month U.S. dollar
LIBOR
    
    $(0.3) million
    
    $(1.0) million
    
    $(1.0) millionDNB NOR BANK ASA
    
    January 23, 2006
    
    March 9, 2006
    
    March 9, 2016
    
    $22.5 million
    
    
    4.52
    %(2)
    
    6 month U.S. dollar
LIBOR
    
    $(0.3) million
    
    $(1.7) million
    
    $(1.3) millionDNB NOR BANK ASA
    
    May 22, 2006
    
    September 11, 2006
    
    September 11, 2011
    
    $25.0 million
    
    
    5.42
    %
    
    6 month U.S. dollar
LIBOR
    
    $(1.2) million
    
    $(2.6) million
    
    DNB NOR BANK ASA
    
    June 22, 2007
    
    September 11, 2007
    
    September 11, 2012
    
    $25.0 million
    
    
    5.58
    %
    
    6 month U.S. dollar
LIBOR
    
    $(1.5) million
    
    $(3.5) million
    
    FORTIS
    
    January 15, 2008
    
    January 17, 2008
    
    January 17, 2013
    
    $41.7 million
    
    
    3.66
    %
    
    3 month U.S. dollar
LIBOR
    
    
    
    $(2.4) million
    
    $(1.8) millionDEUTSCHE BANK
    
    March 18, 2008
    
    March 20, 2008
    
    March 20, 2013
    
    $40.3 million
    
    
    3.09
    %
    
    6 month U.S. dollar
LIBOR
    
    
    
    $(1.5) million
    
    $(1.1) millionDNB NOR BANK ASA
    
    July 16, 2009
    
    September 9, 2009
    
    March 9, 2016
    
    $53.3 million
    
    
    4.73
    %
    
    3 month U.S. dollar
LIBOR
    
    
    
    
    
    $(4.8) millionNIBC BANK N.V.
    
    July 16, 2009
    
    July 20, 2009
    
    July 2, 2014
    
    $23.9 million
    
    
    2.77
    %
    
    3 month U.S. dollar
LIBOR
    
    
    
    
    
    $(0.3) million
 
 (1)
    
    If the United States dollar three month LIBOR is less than 7.5%,
the fixed rate is 4.55%. If the United States dollar three month
LIBOR is equal to or higher than 7.5%, then the fixed rate would
be the United States dollar three month LIBOR.(2)
    
    If the United States dollar six month LIBOR is less than or equal
to 5.75%, the fixed rate is 4.52%. If the United States dollar six
month LIBOR is higher than 5.75%, then the fixed rate would be the
United States dollar six month LIBOR less 123 basis points.  - 86 -




---



##### Table of Contents



Foreign exchange rate fluctuation
      
 Item 12. Description of Securities Other than Equity Securities
  - 87 -




---



##### Table of Contents



PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15. Controls and Procedures
 Disclosure Controls and Procedures
   Managements Report on Internal Control over Financial Reporting
     - 88 -




---



##### Table of Contents



Attestation Report of the Registered Public Accounting Firm
  Changes in Internal Control Over Financial Reporting
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      - 89 -




---



##### Table of Contents



Item 16A. Audit Committee Financial Expert
  
 Item 16B. Code of Ethics
  
 Item 16C. Principal Accountant Fees and Services
  2009
    
    2008Audit fees
    
    $
    713
    
    
    $
    661Further assurance/audit related fees
    
    
    
    
    
    
    Tax fees
    
    
    
    
    
    
    All other fees
    
    
    
    
    
    
    Total
    
    $
    713
    
    
    $
    661
 (1) Audit fees
  (2) Further Assurance /Audit Related Fees
  (3) Tax Fees
 - 90 -




---



##### Table of Contents



(4) All Other Fees
  Non-audit services
     
 Item 16D. Exemptions from the Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  Total Numberof Shares
    
    
    MaximumPurchased as
    
    
    Number of SharesTotal
    
    
    Average
    
    
    Part of Publicly
    
    
    that May Yet BeNumber of
    
    
    Price
    
    
    Announced
    
    
    Purchased UnderShares
    
    
    Paid Per
    
    
    Plans or
    
    
    the Plans orPurchased
    
    
    Share
    
    
    Programs
    
    
    ProgramsPeriod
    
    (a)
    
    
    (b)
    
    
    (c)
    
    
    (d)April 22, to April 29, 2010
    
    
    545,843
    
    
    $
    5.40
    
    
    
    545,843
    
    
    
    N/A
    (1)May 6, to May 28, 2010
    
    
    112,629
    
    
    $
    5.05
    
    
    
    658,472
    
    
    
    N/A
    (1)June 2010 (through June 18, 2010)
    
    
    546,757
    
    
    $
    5.06
    
    
    
    1,205,229
    
    
    
    N/A
    (1)
 
 (1)
    
    Approximately $8.72 million remains unused under the approved stock repurchase program as
of the date of this report. Item 16F. Change in Registrants Certifying Accountant
  Item 16G. Corporate Governance
 Statement of Significant Differences Between our Corporate Governance Practices and Nasdaq
Corporate Governance Standards for Non-Controlled U.S. Issuers
  - 91 -




---



##### Table of Contents



PART III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
  
 Item 19. Exhibits
 - 92 -




---



##### Table of Contents



Number
    
    Description1.1
    
    Amended and Restated Articles of Incorporation of the Company*1.2
    
    Amended and Restated Bylaws of the Company*4.1
    
    Amended and Restated Management Agreement between the Company and Stealth Maritime S.A.,
as amended***4.2
    
    Form of Right of First Refusal among the Company, Harry Vafias and Stealth Maritime S.A.*4.3
    
    StealthGas Inc.s 2005 Equity Compensation Plan, amended and restated*****4.4
    
    Loan Agreement with Fortis Bank (Nederland) N.V. and Deed of Release of Security and
Obligations*4.5
    
    Loan Agreement, dated December 5, 2005 with DnB Nor Bank ASA**4.6
    
    Supplemental Agreement, dated February 27, 2006, with DnB Nor Bank ASA**4.7
    
    Loan Agreement, dated May 17, 2006, with Fortis Bank-Athens Branch***4.8
    
    Loan Agreement, dated June 28, 2006, with DnB Nor Bank ASA***4.9
    
    Letter Agreement, dated August 2, 2006, with Nike Investments Corporation, as amended***4.10
    
    Memorandum of Agreement, dated March 30, 2007, for the Gas Kalogeros***4.11
    
    Memorandum of Agreement, dated March 30, 2007, for the Gas Sikousis***4.12
    
    Promissory Note dated May 16, 2007 issued in favor of Brave Maritime Corp.***4.13
    
    Second Supplemental Agreement, between Empire Spirit Ltd., Independent Trader Ltd.,
Triathlon Inc., Soleil Trust Inc., Jungle Investment Limited and Northern Yield Shipping
Limited and DnB NOR Bank ASA, dated January 30, 2007****4.14
    
    Loan Agreement, dated as of June 21, 2007, between StealthGas Inc., as borrower,
Scotiabank (Ireland) Limited, as lender, Scotiabank Europe plc, as security trustee, and
The Bank of Nova Scotia, as swap bank*****4.15
    
    Supplemental Agreement, dated January 8, 2008, between StealthGas Inc., as borrower,
Scotiabank (Ireland) Limited, as lender, Scotiabank Europe plc, as security trustee, and
The Bank of Nova Scotia, as swap bank*****4.16
    
    Memorandum of Agreement, dated February 29, 2008, for the Gas Defiance*****4.17
    
    Memorandum of Agreement, dated February 29, 2008, for the Gas Shuriken*****4.18
    
    Memorandum of Agreement, dated February 29, 2008, for the Gas Astrid*****4.19
    
    Memorandum of Agreement, dated February 29, 2008, for the Gas Exelero*****4.20
    
    Memorandum of Agreement, dated February 29, 2008, for the Gas Natalie****4.21
    
    Loan Agreement, dated July 30, 2008, between StealthGas Inc., as borrower, and National
Bank of Greece, as lender*****4.22
    
    Loan Agreement, dated August 28, 2008, between StealthGas Inc., as borrower, and
Emporiki Bank of Greece, S.A., as lender*****4.23
    
    Third Supplemental Agreement, dated March 14, 2008, Empire Spirit Ltd., Independent
Trader Ltd., Triathlon Inc., Soleil Trust Inc., Jungle Investment Limited and Northern
Yield Shipping Limited, as joint and several borrowers, and DnB NOR Bank ASA, as
lender*****4.24
    
    Loan Agreement, dated January 30, 2009, between Casteli Castle Inc., as borrower, DnB
NOR Bank ASA, as lender, DnB NOR Bank ASA, as Agent, Account Bank and Security Trustee,
and DnB NOR Bank ASA as Swap Bank*****4.25
    
    Loan Agreement, dated February 12, 2008, between StealthGas Inc., as borrower, and
Deutsche Bank AG Filiale Deutschlandgeschaft, as lender*****4.26
    
    Loan Agreement, dated February 19, 2009, between EFG Eurobank Ergasias S.A., as lender,
and StealthGas Inc., as borrower*****4.27
    
    Loan Agreement, dated February 18, 2009, between StealthGas Inc., as borrower, DVB Bank
S.E., Nordic Branch, as lender, and DVB BANK S.E., Nordic Branch as Arranger, Agent,
Security Trustee and Swap Bank*****4.28
    
    Memorandum for Agreement, dated June 4, 2010, for the M/V Spike, and Addendum No. 1 thereto, date June 22, 20104.29
    
    Amendment Letter, dated March 18, 2010, between StealthGas and Scotiabank (Ireland)
Limited, in respect of Loan Agreement, dated June 21, 2007, as amended4.30
    
    Supplemental Agreement, dated
October 21, 2009, between StealthGas Inc., as borrower, and Deutsche
Bank AG Filiale Deutschlandgeschaft4.31
    
    Second Supplemental Agreement, dated April 27, 2010, between StealthGas Inc., as
borrower, and
 - 93 -




---



##### Table of Contents



Number
    
    DescriptionDeutsche Bank AG Filiale Deutschlandgeschaft in respect of loan agreement,
dated February 12, 2008, as amended, as supplemented by a supplemental agreement dated
October 21, 2009.8
    
    Subsidiaries11.1
    
    Code of Business Conduct and Ethics***12.1
    
    Certification of the Chief Executive Officer12.2
    
    Certification of the Chief Financial Officer13.1
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as added
by Section 906 of the Sarbanes-Oxley Act of 200213.2
    
    Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as added
by Section 906 of the Sarbanes-Oxley Act of 200215.1
    
    Consent of Independent Registered Public Accounting Firm
 
 *
    
    Previously filed as an exhibit to the Companys Registration
Statement on Form F-1 (File No. 333-127905) filed with the SEC and
hereby incorporated by reference to such Registration Statement.**
    
    Previously filed as an exhibit to the Companys Annual Report on
Form 20-F for the year ended December 31, 2005 filed with the SEC on
April 20, 2006.***
    
    Previously filed as an exhibit to the Companys Annual Report on
Form 20-F for the year ended December 31, 2007 filed with the SEC on
June 5, 2007.****
    
    Previously filed as an exhibit to the Companys Report on Form 6-K
filed with the SEC on July 17, 2007.*****
    
    Previously filed as an exhibit to the Companys Annual Report on
Form 20-F for the year ended December 31, 2008 filed with the SEC on
June 11, 2008.*****
    
    Previously filed as an exhibit to the Companys Annual Report on
Form 20-F for the year ended December 31, 2009 filed with the SEC on
June 18, 2009. - 94 -




---



##### Table of Contents



SIGNATURES
  STEALTHGAS INC.
 By:
    
    /s/  Harry N. VafiasName: Harry N. VafiasTitle: President and Chief Executive Officer
  - 95 -




---



##### Table of Contents



StealthGas Inc.
Consolidated Financial Statements
 Index to consolidated financial statements
 PagesConsolidated Balance Sheets  As of December 31, 2008 and December 31, 2009
    
    
    F-3Consolidated Statements of Operations for the years ended December 31,
2007, 2008 and 2009
    
    
    F-4Consolidated Statement of Changes in Stockholders Equity for the years
ended December 31, 2007, 2008 and 2009
    
    
    F-5Consolidated Statements of Cash Flows for the years ended December 31,
2007, 2008 and 2009
    
    
    F-6Notes to the Consolidated Financial Statements
    
    
    F-7  F-37
 F-1




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      
 F-2




---



##### Table of Contents



StealthGas Inc.

Consolidated Balance Sheets
As of December 31, 2008 and 2009 (Expressed in United States Dollars, except for share data)
 December 31,Note
    
    
    2008
    
    
    2009AssetsCurrent assetsCash and cash equivalents
    
    
    
    
    
    
    41,848,059
    
    
    
    44,076,339Trade and other receivables
    
    
    
    
    
    
    2,325,438
    
    
    
    1,685,558Claims receivable
    
    
    
    
    
    
    607,306
    
    
    
    493,852Inventories
    
    
    4
    
    
    
    1,254,142
    
    
    
    2,146,919Advances and prepayments
    
    
    
    
    
    
    812,654
    
    
    
    625,870Restricted cash
    
    
    
    
    
    
    3,672,439
    
    
    
    4,399,188Vessels held for sale
    
    
    6
    
    
    
    
    
    
    
    13,829,512Fair value of derivatives
    
    
    
    
    
    
    1,938,480
    
    
    
    1,774,515Total current assets
    
    
    
    
    
    
    52,458,518
    
    
    
    69,031,753Non current assetsAdvances for vessels under construction and acquisitions
    
    
    5
    
    
    
    23,009,597
    
    
    
    23,485,905Vessels, net
    
    
    6
    
    
    
    551,771,040
    
    
    
    594,931,791Other receivables
    
    
    
    
    
    
    246,219
    
    
    
    169,616Restricted cash
    
    
    
    
    
    
    600,000
    
    
    
    1,550,000Deferred finance charges, net of accumulated
amortization of $267,118 and $469,888
    
    
    7
    
    
    
    550,226
    
    
    
    1,466,756Fair value of derivatives
    
    
    13
    
    
    
    5,711,523
    
    
    
    1,861,189Total non current assets
    
    
    
    
    
    
    581,888,605
    
    
    
    623,465,257Total assets
    
    
    
    
    
    
    634,347,123
    
    
    
    692,497,010Liabilities and Stockholders EquityCurrent liabilitiesPayable to related party
    
    
    3
    
    
    
    2,407,377
    
    
    
    7,310,097Trade accounts payable
    
    
    
    
    
    
    3,256,175
    
    
    
    4,223,548Other accrued liabilities
    
    
    8
    
    
    
    4,518,097
    
    
    
    6,095,322Customer deposits
    
    
    11
    
    
    
    1,436,369
    
    
    
    3,522,287Deferred income
    
    
    10
    
    
    
    4,776,359
    
    
    
    3,643,963Other current liability
    
    
    5
    
    
    
    
    
    
    
    8,061,250Current portion of long-term debt
    
    
    12
    
    
    
    24,380,554
    
    
    
    31,612,718Current portion of long-term debt associated with vessel held for
sale
    
    
    6
    
    
    
    
    
    
    
    4,554,270Total current liabilities
    
    
    
    
    
    
    40,774,931
    
    
    
    69,023,455Non current liabilitiesFair value of derivatives
    
    
    13
    
    
    
    12,762,979
    
    
    
    10,327,792Customer deposits
    
    
    11
    
    
    
    3,467,017
    
    
    
    Fair value of below market acquired time charter
    
    
    9
    
    
    
    181,552
    
    
    
    Other non current liability
    
    
    5
    
    
    
    
    
    
    
    2,688,750Long-term debt
    
    
    12
    
    
    
    259,313,319
    
    
    
    309,655,082Total non current liabilities
    
    
    
    
    
    
    275,724,867
    
    
    
    322,671,624Total liabilities
    
    
    
    
    
    
    316,499,798
    
    
    
    391,695,079Commitments and contingencies
    
    
    21
    
    
    
    
    
    
    
    Stockholders equityCapital stock5,000,000 preferred shares authorized and zero outstanding
with a par value of $0.01 per share100,000,000
common shares authorized 22,310,110 and 22,310,110 shares issued and outstanding with a par value of $0.01 per share
    
    
    14
    
    
    
    223,101
    
    
    
    223,101Additional paid-in capital
    
    
    14
    
    
    
    283,526,241
    
    
    
    284,100,096Retained earnings
    
    
    
    
    
    
    34,910,189
    
    
    
    17,415,158Accumulated other comprehensive (loss)
    
    
    
    
    
    
    (812,206
    )
    
    
    (936,424
    )Total stockholders equity
    
    
    
    
    
    
    317,847,325
    
    
    
    300,801,931Total liabilities and stockholders equity
    
    
    
    
    
    
    634,347,123
    
    
    
    692,497,010
  F-3




---



##### Table of Contents



StealthGas Inc.

Consolidated Statements of Operations
For the years ended December 31, 2007 2008 and 2009
(Expressed in United States Dollars, except for share data)
 December 31,Note
    
    
    2007
    
    
    2008
    
    
    2009RevenuesVoyage revenues
    
    
    
    
    
    
    89,995,123
    
    
    
    112,551,901
    
    
    
    113,045,961ExpensesVoyage expenses
    
    
    18
    
    
    
    5,369,546
    
    
    
    6,180,754
    
    
    
    10,522,573Vessels operating expenses
    
    
    18
    
    
    
    25,435,578
    
    
    
    32,178,385
    
    
    
    38,001,481Dry-docking costs
    
    
    
    
    
    
    314,181
    
    
    
    1,112,992
    
    
    
    1,266,455Management fees
    
    
    3
    
    
    
    4,126,610
    
    
    
    4,618,025
    
    
    
    5,230,990General and administrative expenses
    
    
    
    
    
    
    5,024,912
    
    
    
    4,772,615
    
    
    
    3,564,779Depreciation
    
    
    6
    
    
    
    16,546,692
    
    
    
    23,283,393
    
    
    
    26,766,672Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,867,777Forfeiture of vessel deposit and
contract termination fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,500,000Charter termination fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (753,000
    )Net (gain)/loss on sale of vessels
    
    
    
    
    
    
    
    
    
    
    (1,673,321
    )
    
    
    791,659Total expenses
    
    
    
    
    
    
    56,817,519
    
    
    
    70,472,843
    
    
    
    111,759,386Income from operations
    
    
    
    
    
    
    33,177,604
    
    
    
    42,079,058
    
    
    
    1,286,575Other income and (expenses)Interest and finance costs
    
    
    
    
    
    
    (9,831,404
    )
    
    
    (9,962,504
    )
    
    
    (9,109,222
    )Change in fair value of derivatives
    
    
    
    
    
    
    (2,573,992
    )
    
    
    (2,713,055
    )
    
    
    (5,478,163
    )Interest income
    
    
    
    
    
    
    1,888,070
    
    
    
    743,193
    
    
    
    250,326Foreign exchange loss
    
    
    
    
    
    
    (122,171
    )
    
    
    (159,208
    )
    
    
    (261,401
    )Other expenses, net
    
    
    
    
    
    
    (10,639,497
    )
    
    
    (12,091,574
    )
    
    
    (14,598,460
    )Net Income / (Loss)
    
    
    
    
    
    
    22,538,107
    
    
    
    29,987,484
    
    
    
    (13,311,885
    )Earnings / (Loss) per share Basic
    
    
    
    
    
    
    1.25
    
    
    
    1.35
    
    
    
    (0.60
    ) Diluted
    
    
    
    
    
    
    1.25
    
    
    
    1.34
    
    
    
    (0.60
    )Weighted average number of sharesBasic
    
    
    
    
    
    
    17,900,576
    
    
    
    22,130,542
    
    
    
    22,219,442Diluted
    
    
    
    
    
    
    17,943,346
    
    
    
    22,182,118
    
    
    
    22,219,442Cash dividends declared per share
    
    
    
    
    
    
    0.75
    
    
    
    0.75
    
    
    
    0.1875
  F-4




---



##### Table of Contents



StealthGas Inc.

Consolidated Statement of Changes in Stockholders Equity
For the years ended December 31, 2007, 2008 and 2009
(Expressed in United States Dollars, except for share data)
 Capital stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    AccumulatedNumber of
    
    
    
    
    
    Additional
    
    
    
    
    
    OtherComprehensive
    
    
    Shares
    
    
    Amount
    
    
    Paid-in Capital
    
    
    Retained
    
    
    ComprehensiveIncome
    
    
    (Note 14)
    
    
    (Note 14)
    
    
    (Note 14)
    
    
    Earnings
    
    
    Income/(Loss)
    
    
    TotalBalance as of January 1, 2007
    
    
    
    
    
    
    14,000,000
    
    
    
    144,000
    
    
    
    150,607,621
    
    
    
    12,826,845
    
    
    
    223,762
    
    
    
    163,802,228Follow-on public offering net of issuance cost
    
    
    
    
    
    
    7,200,000
    
    
    
    72,000
    
    
    
    121,860,958
    
    
    
    
    
    
    
    
    
    
    
    121,932,958Underwriters over-allotment option
exercised net of issuance cost
    
    
    
    
    
    
    460,105
    
    
    
    4,601
    
    
    
    7,821,785
    
    
    
    
    
    
    
    
    
    
    
    7,826,386Issuance of restricted shares and
and related stock based compensation
    
    
    
    
    
    
    224,000
    
    
    
    2,240
    
    
    
    1,322,503
    
    
    
    
    
    
    
    
    
    
    
    1,324,743Dividends paid ($0.75 per share per year)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,714,540
    )
    
    
    
    
    
    
    (13,714,540
    )Net income for the year
    
    
    22,538,107
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,538,107
    
    
    
    
    
    
    
    22,538,107Other comprehensive income Cash flow hedges:Swap contract
    
    
    (628,334
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (628,334
    )
    
    
    (628,334
    )Reclassification adjustment
    
    
    (50,760
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50,760
    )
    
    
    (50,760
    )Comprehensive income
    
    
    21,859,013
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance, December 31, 2007
    
    
    
    
    
    
    22,284,105
    
    
    
    222,841
    
    
    
    281,612,867
    
    
    
    21,650,412
    
    
    
    (455,332
    )
    
    
    303,030,788Issuance of restricted shares and
and related stock based compensation
    
    
    
    
    
    
    26,005
    
    
    
    260
    
    
    
    1,913,374
    
    
    
    
    
    
    
    
    
    
    
    1,913,634Dividends paid ($0.75 per share per year)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,727,707
    )
    
    
    
    
    
    
    (16,727,707
    )Net income for the year
    
    
    29,987,484
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,987,484
    
    
    
    
    
    
    
    29,987,484Other comprehensive income Cash flow hedges:Swap contract
    
    
    (347,162
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (347,162
    )
    
    
    (347,162
    )Reclassification adjustment
    
    
    (9,712
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,712
    )
    
    
    (9,712
    )Comprehensive income
    
    
    29,630,610
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance, December 31, 2008
    
    
    
    
    
    
    22,310,110
    
    
    
    223,101
    
    
    
    283,526,241
    
    
    
    34,910,189
    
    
    
    (812,206
    )
    
    
    317,847,325Stock based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    573,855
    
    
    
    
    
    
    
    
    
    
    
    573,855Dividends paid ($0.1875 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,183,146
    )
    
    
    
    
    
    
    (4,183,146
    )Loss for the year
    
    
    (13,311,885
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,311,885
    )
    
    
    
    
    
    
    (13,311,885
    )Other comprehensive income Cash flow hedges:Swap contract
    
    
    168,825
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    168,825
    
    
    
    168,825Reclassification adjustment
    
    
    (293,043
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (293,043
    )
    
    
    (293,043
    )Comprehensive income
    
    
    (13,436,103
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance, December 31, 2009
    
    
    
    
    
    
    22,310,110
    
    
    
    223,101
    
    
    
    284,100,096
    
    
    
    17,415,158
    
    
    
    (936,424
    )
    
    
    300,801,931
  F-5




---



##### Table of Contents



StealthGas Inc.

Consolidated Statements of Cash Flows
For the years ended December 31, 2007 2008 and 2009
(Expressed in United States Dollars)
 December 31,2007
    
    
    2008
    
    
    2009Cash flows from operating activitiesNet income / (loss) for the year
    
    
    22,538,107
    
    
    
    29,987,484
    
    
    
    (13,311,885
    )Items included in net income not affecting cash flows:Depreciation and amortization of deferred finance charges
    
    
    16,621,400
    
    
    
    23,388,379
    
    
    
    26,969,442Amortization of fair value of time charter
    
    
    (1,377,146
    )
    
    
    (1,005,865
    )
    
    
    (181,552
    )Forfeiture of vessel deposit and contract termination fees
    
    
    
    
    
    
    
    
    
    
    16,500,000Share based compensation
    
    
    1,324,743
    
    
    
    1,913,634
    
    
    
    573,855Change in fair value of derivatives
    
    
    2,573,992
    
    
    
    1,467,113
    
    
    
    1,454,894Impairment loss
    
    
    
    
    
    
    
    
    
    
    9,867,777(Gain)/loss on sale of vessels
    
    
    
    
    
    
    (1,673,321
    )
    
    
    791,659Changes in operating assets and liabilities:(Increase)/decrease inTrade and other receivables
    
    
    (1,252,630
    )
    
    
    (222,382
    )
    
    
    716,483Claims receivable
    
    
    (26,041
    )
    
    
    (561,236
    )
    
    
    (642,259
    )Inventories
    
    
    (89,491
    )
    
    
    (417,777
    )
    
    
    (892,777
    )Advances and prepayments
    
    
    57,451
    
    
    
    (599,735
    )
    
    
    186,784Increase/(decrease) inPayable to related party
    
    
    5,648,235
    
    
    
    (5,439,314
    )
    
    
    4,902,720Trade accounts payable
    
    
    1,356,965
    
    
    
    (150,246
    )
    
    
    967,373Other accrued liabilities
    
    
    (753,460
    )
    
    
    590,069
    
    
    
    1,577,225Deferred income
    
    
    1,082,372
    
    
    
    803,989
    
    
    
    (1,132,396
    )Net cash provided by operating activities
    
    
    47,704,497
    
    
    
    48,080,792
    
    
    
    48,347,343Cash flows from investing activitiesInsurance proceeds
    
    
    269,893
    
    
    
    
    
    
    
    755,713Advances for vessel under construction and acquisitions
    
    
    (12,450,000
    )
    
    
    (23,009,597
    )
    
    
    (11,976,308
    )Proceeds from sale of vessels, net
    
    
    
    
    
    
    26,883,889
    
    
    
    11,669,374Acquisition of vessels
    
    
    (133,846,574
    )
    
    
    (167,509,111
    )
    
    
    (100,335,745
    )Decrease/(increase) in restricted cash account
    
    
    (3,609,934
    )
    
    
    3,654,833
    
    
    
    (1,676,749
    )Net cash used in investing activities
    
    
    (149,636,615
    )
    
    
    (159,979,986
    )
    
    
    (101,563,715
    )Cash flows from financing activitiesCapital stock
    
    
    76,601
    
    
    
    
    
    
    
    Follow-on offering
    
    
    129,528,000
    
    
    
    
    
    
    
    Underwriters over allotment option exercised
    
    
    8,277,289
    
    
    
    
    
    
    
    Stock Issuance costs
    
    
    (8,122,546
    )
    
    
    
    
    
    
    Dividends paid
    
    
    (13,714,540
    )
    
    
    (16,727,707
    )
    
    
    (4,183,146
    )Deferred finance charges
    
    
    (145,795
    )
    
    
    (304,549
    )
    
    
    (1,119,300
    )Customer deposits
    
    
    3,190,821
    
    
    
    (270,707
    )
    
    
    (1,381,099
    )Loan repayment
    
    
    (48,757,211
    )
    
    
    (23,866,656
    )
    
    
    (26,021,803
    )Proceeds from short-term bridge facility
    
    
    26,500,000
    
    
    
    
    
    
    
    Proceeds from long-term debt
    
    
    27,067,500
    
    
    
    161,802,000
    
    
    
    88,150,000Net cash provided by financing activities
    
    
    123,900,119
    
    
    
    120,632,381
    
    
    
    55,444,652Net increase in cash and cash equivalents
    
    
    21,968,001
    
    
    
    8,733,187
    
    
    
    2,228,280Cash and cash equivalents at beginning of year
    
    
    11,146,871
    
    
    
    33,114,872
    
    
    
    41,848,059Cash and cash equivalents at end of year
    
    
    33,114,872
    
    
    
    41,848,059
    
    
    
    44,076,339Supplemental Cash Flow Information:Cash paid during the year for interest, net of amounts capitalized
    
    
    9,329,123
    
    
    
    10,743,998
    
    
    
    8,716,032Non cash items:Fair value of below market acquired time charter
    
    
    1,572,000
    
    
    
    
    
    
    
    
  F-6




---



##### Table of Contents



StealthGas Inc.
 
 Notes to the consolidated financial statements
(Expressed in United States Dollars)
 1. Basis of Presentation and General Information
   LPG carriers
 Acquisition /Name of Company
    
    Vessel Name
    
    Disposition Date
    
    cbm1.
    
    VCM Trading Ltd.
    
    Ming Long
    
    October 12, 2004
    
    
    3,515.552.
    
    Gaz De Brazil Inc.
    
    Gas Prodigy
    
    October 15, 2004
    
    
    3,014.593.
    
    LPGONE Ltd.
    
    Gas Tiny
    
    October 29, 2004
    
    
    1,319.964.
    
    Geneve Butane Inc.
    
    Gas Courchevel
    
    November 24, 2004
    
    
    4,102.005.
    
    Matrix Gas Trading Ltd.
    
    Gas Shanghai
    
    December 7, 2004
    
    
    3,525.926.
    
    Pacific Gases Ltd.
    
    Gas Emperor
    
    February 2, 2005
    
    
    5,009.077.
    
    Semichlaus Exports Ltd.
    
    Gas Ice
    
    April 7, 2005
    
    
    3,434.088.
    
    Ventspils Gases Ltd.
    
    Gas Arctic
    
    April 7, 2005
    
    
    3,434.089.
    
    Industrial Materials Inc.
    
    Gas Texiana
    
    April 11, 2005
    
    
    5,013.33Independent Trader Ltd.
    
    Gas Oracle
    
    April 26, 2005
    
    
    3,014.59(sold on January 28, 2008)10.
    
    Aracruz Trading Ltd.
    
    Gas Amazon
    
    May 19, 2005
    
    
    6,562.4111.
    
    Continent Gas Inc.
    
    Gas Chios
    
    May 20, 2005
    
    
    6,562.0912.
    
    Empire Spirit Ltd.
    
    Gas Monarch
    
    May 31, 2005
    
    
    5,018.3513.
    
    Jungle Investment Limited
    
    Gas Cathar
    
    July 27, 2005
    
    
    7,517.1814.
    
    Northern Yield Shipping Ltd.
    
    Gas Legacy
    
    October 27, 2005
    
    
    3,500.0015.
    
    Triathlon Inc.
    
    Gas Marathon
    
    November 2, 2005
    
    
    6,572.2016.
    
    Iceland Ltd.
    
    Gas Crystal
    
    November 11, 2005
    
    
    3,211.0417.
    
    Soleil Trust Inc.
    
    Gas Sincerity
    
    November 14, 2005
    
    
    4,128.9818.
    
    East Propane Inc.
    
    Catterick
    
    November 24, 2005
    
    
    5,001.4119.
    
    Petchem Trading Inc.
    
    Gas Spirit
    
    December 16, 2005
    
    
    4,112.18Malibu Gas Inc.
    
    Feisty Gas*
    
    December 16, 2005
    
    
    4,111.2420.
    
    Balkan Holding Inc.
    
    Gas Czar
    
    February 14, 2006
    
    
    3,509.65Transgalaxy Inc.
    
    Gas Fortune
    
    February 24, 2006
    
    
    3,512.78(sold on December 9, 2009)21.
    
    International Gases Inc
    
    Gas Zael*
    
    April 03, 2006
    
    
    4,111.2422.
    
    Balkan Profit Ltd
    
    Gas Eternity
    
    March 09, 2006
    
    
    3,528.2123.
    
    Oxfordgas Inc.
    
    Lyne
    
    May 19, 2006
    
    
    5,013.9024.
    
    Energetic Peninsula Limited
    
    Sir Ivor
    
    May 26, 2006
    
    
    5,000.00Ocean Blue Limited
    
    Gas Nemesis
    
    June 15, 2006
    
    
    5,016.05(sold on January 29, 2008)25.
    
    Baroness Holdings Inc.
    
    Gas Pasha
    
    June 30, 2006
    
    
    3,244.0426.
    
    Evolution Crude Inc.
    
    Gas Flawless
    
    February 1, 2007
    
    
    6,300.0027.
    
    Aura Gas Inc.
    
    Sea Bird II
    
    May 18, 2007
    
    
    3,518.00European Energy Inc.
    
    Gas Renovatio
    
    May 29, 2007
    
    
    3,312.50(sold on March 19, 2008)28.
    
    Fighter Gas Inc.
    
    Gas Icon
    
    June 27, 2007
    
    
    5,000.0029.
    
    Luckyboy Inc.
    
    Chiltern
    
    June 28, 2007
    
    
    3,312.00
 F-7




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 1.
    
    Basis of Presentation and General Information  Continued
 Acquisition /Name of Company
    
    Vessel Name
    
    Disposition Date
    
    cbm30.
    
    Italia Trades Inc.
    
    Gas Evoluzione
    
    July 23, 2007
    
    
    3,517.0031.
    
    Studio City Inc.
    
    Gas Kalogeros
    
    July 27, 2007
    
    
    5,000.0032.
    
    Gastech Inc.
    
    Gas Sikousis
    
    August 03, 2007
    
    
    3,500.00Espace Inc.
    
    Gas Sophie
    
    October 15, 2007
    
    
    3,500.00(sold on June 10, 2009)33.
    
    Cannes View Inc.
    
    Gas Haralambos
    
    October 30, 2007
    
    
    7,000.0034.
    
    Ecstasea Inc.
    
    Gas Premiership
    
    March 19, 2008
    
    
    7,200.0035.
    
    Spacegas Inc.
    
    Gas Defiance
    
    August 1, 2008
    
    
    5,000.0036.
    
    Financial Power Inc.
    
    Gas Shuriken
    
    November 3, 2008
    
    
    5,000.0037.
    
    Tankpunk Inc.
    
    Gas Natalie
    
    January 22, 2009
    
    
    3,213.9238.
    
    Sound Effex Inc.
    
    Gas Astrid
    
    April 16, 2009
    
    
    3,500.0039.
    
    Revolution Inc.
    
    Gas Exelero
    
    June 30, 2009
    
    
    3,500.00Name of Company
    
    Vessel Name
    
    To be delivered on
    
    cbmPelorus Inc.
    
    Hull K 421
    
    July 2011
    
    
    5,000.00Rising Sun Inc.
    
    Hull K 422
    
    February 2011
    
    
    5,000.00Carinthia Inc.
    
    Hull K 423
    
    March 2011
    
    
    5,000.00Tatoosh Beauty Inc.
    
    Hull K 424
    
    May 2012
    
    
    7,500.00Octopus Gas Inc.
    
    Hull K 425
    
    November 2011
    
    
    7,500.00M.R. type product carriersName of Company
    
    Vessel Name
    
    Acquisition Date
    
    dwt40.
    
    Clean Power Inc.
    
    Navig8 Fidelity
    
    January 9, 2008
    
    
    46,754.2941.
    
    MR Roi Inc.
    
    Navig8 Faith
    
    February 27, 2008
    
    
    46,754.2942.
    
    King of Hearts Inc.
    
    Alpine Endurance
    
    July 14, 2009
    
    
    47,000.00Name of Company
    
    Vessel Name
    
    Cancelled on
    
    dwtCastell Castle Inc.
    
    Stealth Argentina
    
    December 18, 2009
    
    
    50,500.00
 
 *
    
    On April 3, 2006, the Feisty Gas was delivered to International Gases Inc., subsidiary of
StealthGas Inc., and renamed to Gas Zael.   Year ended December 31,Charterer
    
    2007
    
    2008
    
    2009A
    
    
    27
    %
    
    
    22
    %
    
    
    17
    %B
    
    
    21
    %
    
    
    21
    %
    
    
    15
    %C
    
    
    20
    %
    
    
    20
    %
    
    
    13
    %D
    
    
    
    
    
    
    
    
    
    
    10
    %
 F-8




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 2. Significant Accounting Policies
 Principles of Consolidation:
 Use of Estimates:
 Other Comprehensive Income:
 Foreign Currency Translation:
 Cash and Cash Equivalents:
 Restricted Cash:
 Trade Receivables:
 Claims Receivable:
 Inventories:
 F-9




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 2. Significant Accounting Policies  Continued
 Vessels Acquisitions:
  Impairment or Disposal of Long-lived Assets:
    Vessels Depreciation:
 F-10




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 2. Significant Accounting Policies  Continued
 Assets held for sale:
 Trade Accounts Payable:
 Segmented Reporting:
 Accounting for Special Survey and Dry-docking Costs:
 Deferred Finance Charges:
 Pension and Retirement Benefit Obligations  Crew:
 Accounting for Revenue and Related Expenses:
 F-11




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 2. Significant Accounting Policies  Continued
    Leasing:
 Stock Incentive Plan:
 Earnings/(Loss) per Share:
  Income Taxes:
 F-12




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 2. Significant Accounting Policies  Continued
 Derivatives:
   Fair Value Measurements
 Recent Accounting Pronouncements:
  F-13




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 2. Significant Accounting Policies  Continued
     Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles
   F-14




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 2. Significant Accounting Policies  Continued
  3. Transactions with Related Party
        F-15




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 3. Transactions with Related Party  Continued
  4. Inventories
  December 31,2008
    
    2009Bunkers
    
    
    384,481
    
    
    
    956,903Lubricants
    
    
    869,661
    
    
    
    1,190,016Total
    
    
    1,254,142
    
    
    
    2,146,919
 5. Advances for Vessels Under Construction and Acquisitions
  Balance, December 31, 2007
    
    
    12,450,000Advances for vessels acquisitions
    
    
    11,500,000Advances for vessels under construction
    
    
    11,120,002Capitalized interest
    
    
    389,595Vessels delivered
    
    
    (12,450,000
    )Balance, December 31, 2008
    
    
    23,009,597Advances for vessels under construction
    
    
    11,375,989Capitalized interest
    
    
    600,319Vessel delivered
    
    
    (5,750,000
    )Forfeiture of vessel deposit
    
    
    (5,750,000
    )Balance, December 31, 2009
    
    
    23,485,905
    F-16




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 5. Advances for Vessels Under Construction and Acquisitions  Continued
  6. Vessels, net
 AccumulatedVessel cost
    
    Depreciation
    
    Net Book ValueBalance, December 31, 2007
    
    
    428,842,324
    
    
    
    (33,747,002
    )
    
    
    395,095,322Acquisitions
    
    
    179,959,111
    
    
    
    
    
    
    
    179,959,111Depreciation for the year
    
    
    
    
    
    
    (23,283,393
    )
    
    
    (23,283,393
    )Balance, December 31, 2008
    
    
    608,801,435
    
    
    
    (57,030,395
    )
    
    
    551,771,040Acquisitions
    
    
    106,085,745
    
    
    
    
    
    
    
    106,085,745Held for sale
    
    
    (16,271,256
    )
    
    
    2,441,744
    
    
    
    (13,829,512
    )Disposals
    
    
    (14,741,063
    )
    
    
    2,280,030
    
    
    
    (12,461,033
    )Impairment loss
    
    
    (9,867,777
    )
    
    
    
    
    
    
    (9,867,777
    )Depreciation for the year
    
    
    
    
    
    
    (26,766,672
    )
    
    
    (26,766,672
    )Balance, December 31, 2009
    
    
    674,007,084
    
    
    
    (79,075,293
    )
    
    
    594,931,791
    F-17




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 6. Vessels, net  Continued
    7. Deferred Finance Charges
  8. Accrued Liabilities
  December 31,2008
    
    
    2009Interest on long-term debt
    
    
    1,875,515
    
    
    
    1,358,831Administrating expenses
    
    
    202,904
    
    
    
    377,588Vessels operating and voyage expenses
    
    
    2,439,678
    
    
    
    4,358,903Total
    
    
    4,518,097
    
    
    
    6,095,322
 F-18




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 9. Fair value of acquired time charter
  Amortization
    
    
    
    
    
    
    AmortizationFair
    
    
    Unamortized
    
    
    
    
    
    
    Unamortized
    
    
    for the year
    
    
    Unamortized
    
    
    for the year
    
    
    Unamortizedvalue of Acquired
    
    
    balance as at
    
    
    Amortization for
    
    
    balance as at
    
    
    ended
    
    
    balance as at
    
    
    Ended
    
    
    balance as atEnd of Time
    
    
    Time
    
    
    December
    
    
    the year ended
    
    
    December
    
    
    December
    
    
    December
    
    
    December
    
    
    DecemberVessel
    
    Charter
    
    
    Charter
    
    
    31, 2006
    
    
    December 31, 2007
    
    
    31, 2007
    
    
    31, 2008
    
    
    31, 2008
    
    
    31, 2009
    
    
    31, 2009Fair value of
acquired time
charter  AssetCatterick
    
    January 2007
    
    
    (421,000
    )
    
    
    397,282
    
    
    
    23,718
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    (421,000
    )
    
    
    397,282
    
    
    
    23,718
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Fair value of
acquired time
charter  LiabilitySir Ivor
    
    April 2009
    
    
    479,000
    
    
    
    (98,406
    )
    
    
    (164,010
    )
    
    
    216,584
    
    
    
    (164,459
    )
    
    
    52,125
    
    
    
    (52,125
    )
    
    
    Lyne
    
    April 2009
    
    
    483,000
    
    
    
    (101,732
    )
    
    
    (164,303
    )
    
    
    216,965
    
    
    
    (164,751
    )
    
    
    52,214
    
    
    
    (52,214
    )
    
    
    Gas Pasha
    
    June 2008
    
    
    340,000
    
    
    
    (85,581
    )
    
    
    (169,767
    )
    
    
    84,652
    
    
    
    (84,652
    )
    
    
    
    
    
    
    
    
    
    
    Sea Bird II
    
    May 2009
    
    
    409,000
    
    
    
    
    
    
    
    (127,008
    )
    
    
    281,992
    
    
    
    (204,779
    )
    
    
    77,213
    
    
    
    (77,213
    )
    
    
    Gas Renovatio
    
    January 2008
    
    
    310,000
    
    
    
    
    
    
    
    (271,093
    )
    
    
    38,907
    
    
    
    (38,907
    )
    
    
    
    
    
    
    
    
    
    
    Chiltern
    
    March 2008
    
    
    300,000
    
    
    
    
    
    
    
    (201,444
    )
    
    
    98,556
    
    
    
    (98,556
    )
    
    
    
    
    
    
    
    
    
    
    Gas Kalogeros
    
    May 2008
    
    
    411,000
    
    
    
    
    
    
    
    (231,280
    )
    
    
    179,720
    
    
    
    (179,720
    )
    
    
    
    
    
    
    
    
    
    
    Gas Sikousis
    
    May 2008
    
    
    142,000
    
    
    
    
    
    
    
    (71,959
    )
    
    
    70,041
    
    
    
    (70,041
    )
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    2,874,000
    
    
    
    (285,719
    )
    
    
    (1,400,864
    )
    
    
    1,187,417
    
    
    
    (1,005,865
    )
    
    
    181,552
    
    
    
    (181,552
    )
    
    
    2,453,000
    
    
    
    111,563
    
    
    
    (1,377,146
    )
    
    
    1,187,417
    
    
    
    (1,005,865
    )
    
    
    181,552
    
    
    
    (181,552
    )
    
    
    
 10. Deferred Income
  11. Customer Deposits
    F-19




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 12. Long-term Debt
 December 31,
    
    
    Movement in 2009
    
    
    December 31,2008
    
    
    Additions
    
    
    Repayments
    
    
    2009Fortis Bank
    
    
    56,635,280
    
    
    
    
    
    
    
    (5,921,680
    )
    
    
    50,713,600DnB Nor Bank
    
    
    80,139,579
    
    
    
    
    
    
    
    (8,547,208
    )
    
    
    71,592,371Scotia Bank
    
    
    45,867,014
    
    
    
    
    
    
    
    (3,755,500
    )
    
    
    42,111,514Deutsche Bank
    
    
    38,375,000
    
    
    
    
    
    
    
    (2,500,000
    )
    
    
    35,875,000National Bank of Greece
    
    
    33,240,000
    
    
    
    
    
    
    
    (1,939,000
    )
    
    
    31,301,000Emporiki Bank
    
    
    29,437,000
    
    
    
    
    
    
    
    (1,717,166
    )
    
    
    27,719,834DVB Bank
    
    
    
    
    
    
    32,200,000
    
    
    
    (1,041,249
    )
    
    
    31,158,751NIBC
    
    
    
    
    
    
    26,700,000
    
    
    
    
    
    
    
    26,700,000EFG Eurobank
    
    
    
    
    
    
    29,250,000
    
    
    
    (600,000
    )
    
    
    28,650,000Total
    
    
    283,693,873
    
    
    
    88,150,000
    
    
    
    (26,021,803
    )
    
    
    345,822,070
 a.
    F-20




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 12. Long-term Debt  Continued
 b.
      c.
 F-21




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 12. Long-term Debt  Continued
   d.
      F-22




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 12. Long-term Debt  Continued
    .
  e.
 F-23




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 12. Long-term Debt  Continued
   f.
   g.
 F-24




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 12. Long-term Debt  Continued
   h.
   i.
 F-25




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 12. Long-term Debt  Continued
   $
   December  31,
    
    Amount2010
    
    
    36,166,9882011
    
    
    30,822,0222012
    
    
    29,895,5882013
    
    
    29,125,5882014
    
    
    60,837,179Thereafter
    
    
    158,974,705Total
    
    
    345,822,070
 13. Derivatives and Fair Value Disclosures
  F-26




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 13. Derivatives and Fair Value Disclosures  Continued
      December 31, 2008
    
    
    December 31, 2009Derivatives not designated as hedging
    
    
    
    
    
    Asset
    
    
    Liability
    
    
    Asset
    
    
    Liabilityinstruments
    
    Balance Sheet Location
    
    
    Derivatives
    
    
    Derivatives
    
    
    Derivatives
    
    
    DerivativesForeign Currency Contract
    
    Current assets - Fair value of derivatives
    
    
    1,938,480
    
    
    
    
    
    
    
    1,774,515
    
    
    
    Foreign Currency Contract
    
    Non current assets - Fair value of derivatives
    
    
    5,711,523
    
    
    
    
    
    
    
    1,861,189
    
    
    
    Interest Rate Swap Agreements
    
    Non current liabilities - Fair value
of derivatives
    
    
    
    
    
    
    12,762,979
    
    
    
    
    
    
    
    10,327,792Total derivatives not designated as
hedging instruments
    
    
    
    
    
    
    7,650,003
    
    
    
    12,762,979
    
    
    
    3,635,704
    
    
    
    10,327,792Total derivatives
    
    
    
    
    
    
    7,650,003
    
    
    
    12,762,979
    
    
    
    3,635,704
    
    
    
    10,327,792
  F-27




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 13. Derivatives and Fair Value Disclosures  Continued
 December 31, 2008
    
    December 31, 2009Derivatives designated as hedging instruments
    
    Amount of Gain / (Loss) Recognized in OCL on Derivative (Effective Portion)Interest Rate Swap Agreement
    
    
    (356,874
    )
    
    
    (124,218
    )
  Derivatives designated as hedging instruments
    
    
    
    
    
    December 31, 2008
    
    
    December 31, 2009Location of Gain / (Loss) Reclassified from Accumulated OCL into Income (Effective Portion)
    
    
    Amount of Gain / (Loss) Reclassified from Accumulated OCL into Income (Effective Portion)Interest Rate Swap
Agreement
    
    Change in fair value of derivatives
    
    
    203,699
    
    
    
    484,369Location of Gain / (Loss)
Recognized in Income on Derivative
(Ineffective Portion)
    
    Amount of Gain / (Loss) Recognized in
Income on Derivative (Ineffective
Portion)Interest Rate Swap
Agreement
    
    Change in fair value of derivatives
    
    
    (193,987
    )
    
    
    (191,325
    )
 Derivatives not designated as hedging instruments
    
    Location of Gain / (Loss) RecognizedInterest Rate Swap
- Fair Value
    
    Change in fair value of derivatives
    
    
    (9,126,828
    )
    
    
    2,266,362Interest Rate Swap
- Realized loss
    
    Change in fair value of derivatives
    
    
    (1,245,942
    )
    
    
    (4,023,270
    )Foreign Currency
Contract  Fair
Value
    
    Change in fair value of derivatives
    
    
    7,650,003
    
    
    
    (4,014,299
    )Total loss on
derivatives not
designated as
hedging instruments
    
    
    
    
    
    
    (2,722,767
    )
    
    
    (5,771,207
    )Total loss on
derivatives
    
    
    
    
    
    
    (2,713,055
    )
    
    
    (5,478,163
    )
 Fair Value of Financial Instruments:
 F-28




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 13. Derivatives and Fair Value Disclosures  Continued
  Fair Value Disclosures:
     Fair Value Measurements UsingQuoted Prices inActive Markets for
    
    
    Significant Other
    
    
    SignificantFair Value as of
    
    
    Identical Assets
    
    
    Observable Inputs
    
    
    Unobservable InputsDescription
    
    December 31, 2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets/(Liabilities):Foreign Currency Contract
    
    
    3,635,704
    
    
    
    
    
    
    
    1,774,515
    
    
    
    1,861,189Interest Rate Swap
Agreements
    
    
    (10,327,792
    )
    
    
    
    
    
    
    (10,327,792
    )
    
    
    Total
    
    
    (6,692,088
    )
    
    
    
    
    
    
    (8,553,277
    )
    
    
    1,861,189
    F-29




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 13. Derivatives and Fair Value Disclosures   Continued
 Fair Value Measurements Using Significant Unobservable Inputs(Level 3)Foreign Currency ContractBalance, January 1, 2009
    
    
    6,514,523Total unrealized (losses)Included in earnings
    
    
    (4,653,334
    )Balance, December 31, 2009
    
    
    1,861,189The amount of total (losses) for the period included in earnings
attributable to the change in unrealized (losses) relating to
assets still held at the reporting date
    
    
    (4,653,334
    )
  Fair Value Measurements UsingQuoted Prices inActive Markets for
    
    
    Significant Other
    
    
    SignificantFair Value as of
    
    
    Identical Assets
    
    
    Observable Inputs
    
    
    Unobservable InputsDescription
    
    December 31, 2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    (Losses)Vessels and
vessels held for
sale
    
    
    25,728,913
    
    
    
    
    
    
    
    25,728,913
    
    
    
    
    
    
    
    (9,867,777
    )Total
    
    
    25,728,913
    
    
    
    
    
    
    
    25,728,913
    
    
    
    
    
    
    
    (9,867,777
    )
  14. Common Stock and Additional Paid-in Capital
   F-30




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 14. Common Stock and Additional Paid-in Capital  Continued
    15. Equity Compensation Plan
      F-31




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 15. Equity Compensation Plan  Continued
         Weighted averagegrant date fairNumber of
    
    
    value perrestricted shares
    
    
    non-vested shareNon-vested, January 1, 2009
    
    
    113,005
    
    
    
    15.69Granted
    
    
    
    
    
    
    Vested
    
    
    (71,003
    )
    
    
    15.98Forfeited
    
    
    
    
    
    
    Non-vested, December 31, 2009
    
    
    42,002
    
    
    
    15.20
  F-32




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 16. Earnings per share
      Year ended December 31,2007
    
    
    2008
    
    
    2009NumeratorNet income/(loss)
    
    
    22,538,107
    
    
    
    29,987,484
    
    
    
    (13,311,885
    )Less: Dividends declared and undistributed
Earnings allocated to
non-vested shares
    
    
    (114,899
    )
    
    
    (217,727
    )
    
    
    Net income/(loss) attributable to common
shareholders, basic
    
    
    22,423,208
    
    
    
    29,769,757
    
    
    
    (13,311,885
    )DenominatorBasic Weighted average shares  outstanding
    
    
    17,900,576
    
    
    
    22,130,542
    
    
    
    22,219,442Effect on dilutive securities:Non-vested restricted shares
    
    
    42,770
    
    
    
    51,576
    
    
    
    Diluted Weighted average shares  outstanding
    
    
    17,943,346
    
    
    
    22,182,118
    
    
    
    22,219,442Basic earnings /(loss) per share
    
    
    1.25
    
    
    
    1.35
    
    
    
    (0.60
    )Diluted earnings /(loss) per share
    
    
    1.25
    
    
    
    1.34
    
    
    
    (0.60
    )
 F-33




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 17. Dividends Paid
  18. Voyage Expenses and Vessel Operating Expenses
  Year ended December 31,Voyage Expenses
    
    2007
    
    
    2008
    
    
    2009Port expenses
    
    
    1,227,235
    
    
    
    773,058
    
    
    
    2,015,814Bunkers
    
    
    1,546,050
    
    
    
    2,265,062
    
    
    
    5,065,204Commissions charged by third parties
    
    
    1,397,945
    
    
    
    1,598,447
    
    
    
    1,731,276Commissions charged by related party
    
    
    1,096,426
    
    
    
    1,385,767
    
    
    
    1,418,024Other voyage expenses
    
    
    101,890
    
    
    
    158,420
    
    
    
    292,255Total
    
    
    5,369,546
    
    
    
    6,180,754
    
    
    
    10,522,573
 Year ended December 31,Vessels Operating Expenses
    
    2007
    
    
    2008
    
    
    2009Crew wages and related costs
    
    
    14,009,471
    
    
    
    19,227,571
    
    
    
    23,706,087Insurance
    
    
    1,561,173
    
    
    
    1,497,568
    
    
    
    1,696,571Repairs and maintenance
    
    
    3,386,081
    
    
    
    4,104,822
    
    
    
    4,574,386Spares and consumable stores
    
    
    4,185,461
    
    
    
    4,967,128
    
    
    
    5,641,944Miscellaneous expenses
    
    
    2,293,392
    
    
    
    2,381,296
    
    
    
    2,382,493Total
    
    
    25,435,578
    
    
    
    32,178,385
    
    
    
    38,001,481
 19. Income Taxes
   F-34




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 19. Income Taxes  Continued
  20. Financial Instruments
  21. Commitments and Contingencies
 
    
    From time to time the Company expects to be subject to legal proceedings and claims in
the ordinary course of its business, principally personal injury and property casualty
claims. Such claims, even if lacking merit, could result in the expenditure of significant
financial and managerial resources. The Company is not aware of any such claims or
contingent liabilities which should be disclosed, or for which a provision should be
established in the accompanying consolidated financial statements.
 
    
    In January 2005, the Company entered into a three-year cancelable operating lease for
its office facilities that terminated in January 2008. In January 2008, the Company entered
into a new two-year cancelable operating lease for its office facilities that terminated in
January 2010. In January 2010, the Company entered into a new two-year cancelable operating
lease for its office facilities that terminates in January 2012. Rental expense for the
years ended December 31, 2007, 2008 and 2009 was $33,388, $48,201 and $45,102,
respectively. In October 2005, the Company entered into a three-year cancelable operating
lease for an armored car that terminated in October 2008. In October 2008 the Company
entered into a new three-year cancelable operating lease for an armored car that terminates
in October 2011. Rental expense for the years ended December 31, 2007, 2008 and 2009 was
$46,642, $50,016 and $47,955 and are recorded in the consolidated statements of operations
under the caption General and administrative expenses.Future rental commitments were payable as follows:
 December 31,

    
    Office Lease
    
    Car Rent
    
    Total2010
    
    
    
    
    60,488
    
    
    
    49,255
    
    
    
    109,7432011
    
    
    
    
    60,488
    
    
    
    41,046
    
    
    
    101,534120,976
    
    
    
    90,301
    
    
    
    211,277
 
    
    As described in Note 5, as of December 31, 2009 the Company has long-term outstandings
commitments for installment payments for five vessels under construction, as follows:
 F-35




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 21. Commitments and Contingencies  Continued
 Year ended
    
    Shipbuilding Contracts2010
    
    
    14,216,6312011
    
    
    68,734,6832012
    
    
    21,205,681Total
    
    
    104,156,995
 As of December 31, 2009, the Companys long term obligations due under the shipbuilding
contracts with Mitsubishi Corporation of Japan totaled to JPY9,606,400,000 were converted to
US Dollars based upon the foreign currency forward contracts entered into by the Company and
the prevailing USD/JPY exchange rate as at December 31, 2009. The total obligation under
these contracts was $104,156,995.
 Based upon the above the prevailing USD/JPY exchange rate used for the calculation of the
total obligation was 92.23 JPY to $1.
 
    
    Future minimum contractual charter revenue, based on vessels committed to noncancelable,
long-term time and bareboat charter contracts as of December 31, 2009, will be $62,575,271
during 2010, $28,045,200 during 2011, $17,278,684 during 2012, $11,678,200 during 2013 and
$11,198,200 during 2014. These amounts do not include any assumed off-hire.
 22. Subsequent Events
  (a)
    
    On January 15, 2010, the Company sold the vessel Gas Natalie. The Company had previously
recorded an impairment charge of $3,616,878 to write down the carrying amount of this vessel
to fair market value less costs to sell and this was included in the Companys consolidated
statement of operations in the fourth quarter of 2009.
 (b)
    
    On January 26, 2010, the Company concluded a memorandum of agreement for the disposal of the
vessel Gas Prophet to an unaffiliated third party for $6,800,000. The vessel was delivered
to her new owners on March 16, 2010 and the Company realized a gain from the sale of this
vessel of $11,118 which was included in the Companys consolidated statement of income in the
first quarter of 2010. The Company had previously recorded an impairment charge of $160,237 to
write down the carrying amount of the vessel to fair market value less costs to sell and was
included in the Companys consolidated statement of operations in the fourth quarter of 2009.
 (c)
    
    On February 18, 2010, the Company concluded a memorandum of agreement for the disposal of the
vessel Gas Texiana to an unaffiliated third party for $11,180,000. The vessel was delivered
to her new owners on April 6, 2010 and the Company realized a gain from the sale of this
vessel of $1,048,415 which will be included in the Companys consolidated statement of income
in the second quarter of 2010.
 (d)
    
    On February 26, 2010, before the delivery of Gas Prophet to her new owners, the Company
prepaid $3,756,563 of the then outstanding amount of the Fortis-Athens loan.
 F-36




---



##### Table of Contents



StealthGas Inc.
Notes to the consolidated financial statements
(Expressed in United States Dollars)
 22. Subsequent Events  Continued
 (e)
    
    On March 3, 2010, before the delivery of Gas Texiana to her new owners, the Company prepaid
$6,091,665 of the then outstanding amount of the Fortis-Athens loan.
 (f)
    
    On March 9, 2010, before the delivery of Gas Eternity to her new owners, the Company
prepaid $4,554,270 of the then outstanding amount of the DnB loan.
 (g)
    
    On March 22, 2010, the Companys Board of Directors adopted a new stock repurchase plan for
up to $15,000,000 to be used for repurchasing the Companys common shares. All repurchased
common shares shall be cancelled and removed from the Companys capital stock. As of June 18,
2010, the Company had completed the repurchase of 1,205,229 shares.
 (h)
    
    On March 26, 2010, the Company concluded a memorandum of agreement for the disposal of the
vessel Gas Prodigy to an unaffiliated third party for $6,050,000. The vessel was delivered
to her new owners on April 9, 2010. The Company had previously recorded an impairment charge
of $83,852 to write down the carrying amount of the vessel to fair market value less costs to
sell which was included in the Companys consolidated statement of income in the first quarter
of 2010.
 (i)
    
    On June 4, 2010, the Company entered into a memorandum of agreement to acquire from an
affiliated entity an under construction Aframax crude oil tanker named Spike (formerly Hull
No 1757) which is scheduled to be delivered in the third quarter of 2010. The purchase price
of this vessel is $56,500,000. As provided by the relate memorandum of agreement, no advance
payment will be given.
 (j)
    
    On June 8, 2010, the Company signed a commitment letter with the DnB NOR Bank to partially
finance the acquisition of an under construction Aframax tanker named Spike (formerly Hull
No 1757), by one of the Companys wholly owned subsidiary and secured by the Gas Zael, a
vessel already owned by a Companys wholly owned subsidiary. The senior secured term loan
facility comprised of two tranches aggregating up to $45,000,000. The one tranche will be the
lesser of the amount of $40,000,000 or 70% of the under construction tanker market value at
the time of delivery and the second tranche will be the lesser of the amount of $5,000,000 or
50% of Gas Zaels market value at the same time. The senior secured term loan will be fully
drawn down in a single tranche no later than September 15, 2010 and will be repayable in
twenty four consecutive quarterly installments of $850,000 each plus a balloon payment of
$24,600,000 payable together with the last installment. The term loan charges interest at
LIBOR plus 2.40% and is secured by a first priority mortgage over the vessels involved and
cross-collateralized with security vessels under the DnB Loan plus the assignment of the
vessels insurances, earnings and the vessels operating and retention account, and the
guarantee of StealthGas Inc.
 F-37