================================================================================

               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                               ----------------

FORM 10-Q (Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 2006
                              -------------------

                                      OR


[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                             EXCHANGE ACT OF 1934

                       For the transition period from to

                               ----------------

                       Commission File Number 000-51366

                           EAGLE BULK SHIPPING INC.

            (Exact name of Registrant as specified in its charter)

Republic of the Marshall Islands                                 98-0453513
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                              Identification No.)

                              477 Madison Avenue
                           New York, New York 10022
                             Registrant's Address

      Registrant's telephone number, including area code: (212) 785-2500

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

                                   YES X   NO

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large accelerated Filer      Accelerated Filer      Non-accelerated Filer   X
                       ------                 -----                       -----

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

                                   YES     NO X

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date.

Common Stock, par value $0.01per share 35,900,000 shares outstanding as of
November 10, 2006.

================================================================================

                                                                             1


<PAGE>


                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                  Page
<S>                                                                                               <C>
PART I     INANCIAL INFORMATION
Item 1.    Financial Statements
           Consolidated Balance Sheets
                as of September 30, 2006 (unaudited) and December 31, 2005                           3

           Consolidated Statements of Operations (unaudited)
                for the three-months ended September 30, 2006 and 2005 and for nine months ended
                September 30, 2006 and the period from January 26, 2005 (inception) to September     4
                30, 2005

           Consolidated Statement of Stockholders' Equity (unaudited)
                for the nine-months ended September 30, 2006                                         5

           Consolidated Statements of Cash Flows (unaudited)
                for the nine-months ended September 30, 2006 and for the period from January         6
                26, 2005 (inception) to September 30, 2005.

           Notes to Consolidated Financial Statements                                                7

Item 2.    Management's Discussion and Analysis of Financial Condition
                and Results of Operations                                                           14

Item 3.    Quantitative and Qualitative Disclosures about Market Risks                              32

Item 4.    Controls and Procedures                                                                  33

PART II    OTHER INFORMATION
Item 1.    Legal Proceedings                                                                        34
Item 1A.   Risk Factors                                                                             34
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds                              34
Item 3.    Defaults upon Senior Securities                                                          34
Item 4.    Submission of Matters to a Vote of Security Holders                                      34
Item 5.    Other Information                                                                        34
Item 6.    Exhibits                                                                                 35
           Signatures                                                                               36
</TABLE>


<PAGE>


Part 1 : FINANCIAL INFORMATION
Item 1 : Financial Statements

                           EAGLE BULK SHIPPING INC.
                          CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                             September 30, 2006  December 31, 2005
                                                                                (Unaudited)
<S>                                                                              <C>              <C>
 Current Assets:
   Cash                                                                          $  23,213,588    $  24,526,528
   Accounts Receivable                                                                 398,152          281,094
   Prepaid Charter Revenue                                                           4,844,000        8,508,000
   Prepaid Expenses                                                                  1,599,176          513,145
                                                                                 -------------    -------------
 Total Current Assets                                                               30,054,916       33,828,767
Fixed Assets:
Vessels and Vessel Improvements, at cost, net of Accumulated
   Depreciation of $25,607,187 at September 30, 2006 and $10,384,247
   at December 31, 2005                                                            507,471,279      417,581,610

Restricted Cash                                                                      6,524,616        6,624,616
Deferred Drydock Costs, net of Accumulated Amortization of $543,030 at
 September 30, 2006, and $27,980 at December 31, 2005                                2,148,074          393,702
Deferred Financing Costs, net of Accumulated Amortization of $215,556 at
 September 30, 2006 and $98,065 at December 31, 2005                                 2,169,525        1,268,209
Other Assets                                                                         3,516,513        2,647,077
                                                                                 -------------    -------------
Total Assets                                                                     $ 551,884,923    $ 462,343,981
                                                                                 =============    =============
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable                                                                 $   2,758,788    $   1,861,145
Accrued Interest                                                                       651,441          514,631
Other Accrued Liabilities                                                              971,783          424,669
Deferred Revenue                                                                        77,500        1,306,000
Unearned Charter Hire Revenue                                                        3,299,143        2,444,522
                                                                                 -------------    -------------
 Total Current Liabilities                                                           7,758,655        6,550,967

Long-term Debt                                                                     214,800,000      140,000,000
                                                                                 -------------    -------------
Total Liabilities                                                                  222,558,655      146,550,967
Commitment and Contingencies
Stockholders' Equity:
Preferred Stock, $.01 par value, 25,000,000 shares authorized, none issued                  --               --
Common stock, $.01 par value, 100,000,000 shares authorized, 35,900,000 shares
 issued and outstanding as of September 30, 2006 and 33,150,000 shares issued
 and outstanding as of December 31, 2005, respectively                                 359,000          331,500
Additional Paid-In Capital                                                         357,593,881      320,822,037
Retained Earnings (net of cumulative Dividends declared of $68,081,500 at
 September 30, 2006 and $14,661,000 at December 31, 2005)                          (32,143,126)      (8,007,600)
Accumulated Other Comprehensive Income                                               3,516,513        2,647,077
                                                                                 -------------    -------------
 Total Stockholders' Equity                                                        329,326,268      315,793,014
                                                                                 -------------    -------------
Total Liabilities and Stockholders' Equity                                       $ 551,884,923    $ 462,343,981
                                                                                 =============    =============
</TABLE>
                           -----------------------
             The accompanying notes are an integral part of these
                      Consolidated Financial Statements.


                                                                             3
<PAGE>


                           EAGLE BULK SHIPPING INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                     Period from
                                           Three Months       Three Months        Nine Months      January 26, 2005
                                              ended               ended             ended           (inception) to
                                           September 30,      September 30,      September 30,       September 30,
                                               2006               2005               2006                2005
                                          ---------------    ---------------    ---------------    ---------------
<S>                                       <C>                <C>                <C>                <C>
Revenues, net of commissions              $    28,358,830    $    21,137,615    $    76,254,265    $    31,753,494

Vessel Expenses                                 6,118,038          3,732,726         15,742,457          6,848,124
Depreciation and Amortization                   5,980,747          3,858,943         15,737,990          5,879,515
General and Administrative Expenses             1,266,905            833,384          3,366,408          2,253,421
Management and Other Fees to Affiliates              --                 --                 --            6,175,046
Non-cash Compensation Expense                   3,076,699          3,735,705          5,768,355         11,376,552
                                          ---------------    ---------------    ---------------    ---------------

   Total Operating Expenses                    16,442,389         12,160,758         40,615,210         32,532,658
                                          ---------------    ---------------    ---------------    ---------------

Operating Income/(Loss)                        11,916,441          8,976,857         35,639,055           (779,164)

Interest Expense                                3,180,336          1,727,416          7,364,009          4,961,012
Interest Income                                  (364,632)          (144,848)        (1,009,928)          (239,708)
                                          ---------------    ---------------    ---------------    ---------------

   Net Interest Expense                         2,815,704          1,582,568          6,354,081          4,721,304
                                          ---------------    ---------------    ---------------    ---------------

Net Income/(Loss)                         $     9,100,737    $     7,394,289    $    29,284,974    $    (5,500,468)
                                          ===============    ===============    ===============    ===============

Weighted Average Shares Outstanding :
Basic                                          35,900,000         27,150,000         34,086,813         18,498,387
Diluted                                        35,900,678         27,150,000         34,086,848         18,498,387

Per Share Amounts:
Basic Net Income/(Loss)                   $          0.25    $          0.27    $          0.86    $         (0.30)
Diluted Net Income/(Loss)                 $          0.25    $          0.27    $          0.86    $         (0.30)
Cash dividends declared and paid          $          0.50               --      $          1.57               --
</TABLE>


                           -----------------------
             The accompanying notes are an integral part of these
                      Consolidated Financial Statements.


                                                                             4
<PAGE>


                           EAGLE BULK SHIPPING INC.
                CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
                 FOR THE NINE-MONTHS ENDED SEPTEMBER 30, 2006




                                                                   Additional
                                                     Common         Paid-In
                                      Shares         Shares         Capital
                                 -------------   -------------   -------------
Balance at December 31, 2005 .      33,150,000   $     331,500   $ 320,822,037
Comprehensive Income :
   Net Income                             --              --              --
   Net Unrealized gains
on
       derivatives                        --              --              --

Comprehensive Income                      --              --              --
Issuance of Common Stock, net             --
  of issuance costs                  2,750,000          27,500      31,003,489
Cash Dividends                            --              --              --
Non-cash Compensation                     --              --         5,768,355
                                 -------------   -------------   -------------
Balance at September 30, 2006       35,900,000   $     359,000   $ 357,593,881
                                 =============   =============   =============

<TABLE>
<CAPTION>

                                        Retained Earnings
                                                                                       Other           Total
                                                    Cash           Accumulated     Comprehensive   Stockholders'
                                  Net Income      Dividends          Deficit          Income          Equity
                                 -------------   -------------    -------------    -------------   -------------
<S>                              <C>             <C>              <C>              <C>             <C>
Balance at December 31, 2005 .   $   6,653,400   $ (14,661,000)   $  (8,007,600)   $   2,647,077   $ 315,793,014
Comprehensive Income :
   Net Income                       29,284,974            --         29,284,974             --        29,284,974
   Net Unrealized gains
on
       derivatives                        --              --               --            869,436         869,436
                                                                                                   -------------
Comprehensive Income                      --              --               --               --        30,154,410
Issuance of Common Stock, net
  of issuance costs                       --              --               --         31,030,989
Cash Dividends                            --       (53,420,500)     (53,420,500)            --       (53,420,500)
Non-cash Compensation                     --              --               --               --         5,768,355
                                 -------------   -------------    -------------    -------------   -------------
Balance at September 30, 2006    $  35,938,374   $ (68,081,500)   $ (32,143,126)   $   3,516,513   $ 329,326,268
                                 =============   =============    =============    =============   =============
</TABLE>

                           -----------------------
             The accompanying notes are an integral part of these
                      Consolidated Financial Statements.

                                                                             5


<PAGE>


                           EAGLE BULK SHIPPING INC.
                     CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                                 Period from
                                                                                             Nine Months    January 26, 2005
                                                                                                ended         (inception) to
                                                                                             September 30,    September 30,
                                                                                                2006                    2005
                                                                                            ---------------  ---------------
<S>                                                                                         <C>              <C>
 Cash Flows from Operating Activities
 Net Income/(Loss)                                                                          $    29,284,974  $    (5,500,468)
 Adjustments to Reconcile Net Income (Loss) to Net Cash provided by Operating Activities:
 Items included in net income not affecting cash flows:
Depreciation                                                                                     15,222,940        5,879,515
Amortization of Deferred Drydocking Costs                                                           515,050             --
Amortization of Deferred Financing Costs                                                            117,491        1,195,456
Amortization of Prepaid and Deferred Charter Revenue                                              2,435,500          328,500
Non-cash Compensation Expense                                                                     5,768,355       11,376,552
 Changes in Operating Assets and Liabilities:
Accounts Receivable                                                                                (117,058)        (103,431)
Prepaid Revenue                                                                                        --         (1,489,000)
Prepaid Expenses                                                                                 (1,086,031)        (783,946)
Accounts Payable                                                                                    713,068        1,906,956
Accrued Interest                                                                                    136,810          546,784
Accrued Expenses                                                                                    547,114          438,627
Deferred Revenue                                                                                       --          2,056,500
Drydocking Expenditures                                                                          (2,269,422)            --
Unearned Charter Hire Revenue                                                                       854,621        2,507,425
                                                                                            ---------------  ---------------

 Net Cash Provided by Operating Activities                                                       52,123,412       18,359,470
 Cash Flows from Investing Activities
Advances for Vessel Deposits                                                                           --         (7,000,000)
Advances for Vessel Improvements                                                                       --           (820,904)
Purchase of Vessels                                                                            (105,112,609)    (365,733,279)
                                                                                            ---------------  ---------------

 Net Cash Used in Investing Activities                                                         (105,112,609)    (373,554,183)

 Cash Flows from Financing Activities
Capital Contribution                                                                                   --         40,843,662
Issuance of Common Stock                                                                         33,000,000      201,600,000
Equity Issuance Costs                                                                            (1,784,436)     (15,070,710)
Bank Borrowings                                                                                  74,800,000      282,950,000
Rapayment of Bank Debt                                                                                 --       (125,950,000)
Decrease/(Increase) in Restricted Cash                                                              100,000       (5,500,000)
Deferred Financing Costs                                                                         (1,018,807)      (2,503,107)
Borrowings from Eagle Ventures LLC                                                                     --         58,730,434
Repayment of Eagle Ventures LLC Note                                                                   --        (58,730,434)
Cash Dividends                                                                                  (53,420,500)            --
                                                                                            ---------------  ---------------

 Net Cash Provided by Financing Activities                                                       51,676,257      376,369,845
 Net (Decrease)/Increase in Cash                                                                 (1,312,940)      21,175,132
 Cash at Beginning of Period                                                                     24,526,528             --
                                                                                            ---------------  ---------------

 Cash at End of Period                                                                      $    23,213,588  $    21,175,132
                                                                                            ===============  ===============

 Supplemental Cash Flow Information:
Cash paid during the period for Interest (including Fees)                                   $     7,110,772  $     3,218,772
                                                                                            ===============  ===============
</TABLE>


                           -----------------------
             The accompanying notes are an integral part of these
                      Consolidated Financial Statements.

                                                                             6


<PAGE>


                           EAGLE BULK SHIPPING INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1. Basis of Presentation and General Information

     The accompanying unaudited interim consolidated financial statements
include the accounts of Eagle Bulk Shipping Inc. and its wholly-owned
subsidiaries (collectively, the "Company"). The Company is engaged in the
ocean transportation of dry bulk cargoes worldwide through the ownership and
operation of dry bulk vessels. The Company's fleet is comprised of Handymax
bulk carriers, focused on the Supramax sub-class, and the Company operates its
business in one business segment.

     The Company is a holding company incorporated on March 23, 2005, under
the laws of the Republic of the Marshall Islands. Following incorporation, the
Company merged with Eagle Holdings LLC, a Marshall Islands limited liability
company formed on January 26, 2005, and became a wholly-owned subsidiary of
Eagle Ventures LLC, a Marshall Islands limited liability company. Eagle
Ventures LLC is owned by Kelso Investments Associates VII, L.P. and KEP VI,
LLC, both affiliates of Kelso & Company, L.P. ("Kelso"), members of
management, a director, and outside investors. The merger was accounted for as
a reorganization of entities under common control. Eagle Ventures LLC
currently owns approximately 28.2% of the Company's outstanding common stock.
Eagle Ventures LLC is 80.7% owned by affiliates of Kelso.

         The Company is the sole owner of all of the outstanding shares of the
Marshall Island incorporated wholly-owned subsidiaries listed below. The
primary activity of each of these subsidiaries is the ownership of a vessel.
    ---------------------------------------------------------------------

<TABLE>
<CAPTION>
Company                           Owner of         dwt.        Built  Vessel Acquired
                                  Vessel
<S>                               <C>            <C>           <C>    <C>
Cardinal Shipping LLC             Cardinal       55,408        2004   April 18, 2005
Condor Shipping LLC               Condor         50,296        2001   April 29, 2005
Falcon Shipping LLC               Falcon         50,296        2001   April 21, 2005
Griffon Shipping LLC              Griffon        46,635        1995   June 1, 2005
Harrier Shipping LLC              Harrier        50,296        2001   April 19, 2005
Hawk Shipping LLC                 Hawk I         50,296        2001   April 26, 2005
Heron Shipping LLC                Heron          52,827        2001   December 1, 2005
Jaeger Shipping LLC               Jaeger         52,248        2004   July 7, 2006
Kestrel Shipping LLC              Kestrel I      50,326        2004   June 30, 2006
Kite Shipping LLC                 Kite           47,195        1997   May 9, 2005
Merlin Shipping LLC               Merlin         50,296        2001   October 26, 2005
Osprey Shipping LLC               Osprey I       50,206        2002   August 31, 2005
Peregrine Shipping LLC            Peregrine      50,913        2001   June 30, 2005
Shikra Shipping LLC               Shikra         41,096        1984   April 29, 2005
Sparrow Shipping LLC              Sparrow        48,225        2000   July 19, 2005
Tern Shipping LLC                 Tern           50,200        2003   July 3, 2006
</TABLE>

    ---------------------------------------------------------------------

     The commercial and strategic management of the Company is carried out by
a wholly-owned subsidiary of the Company, Eagle Shipping International (USA)
LLC, a Marshall Islands limited liability company.

                                                                             7


<PAGE>


         The following table represents certain information about the
Company's revenue earning charters:

    ---------------------------------------------------------------------
                                                                      Daily Time
                  Delivered to                                        Charter
Vessel            Charterer            Time Charter Expiration (1)    Hire Rate
------            ---------            ---------------------------    ---------

Cardinal          April 19, 2005       March 2007 to June 2007          $26,500
Condor            April 30, 2005       November 2006 to March 2007      $24,000
Falcon            April 22, 2005       February 2008 to June 2008       $20,950
Griffon           February 17, 2006    January 2007 to March 2007       $13,550
Harrier           April 21, 2005       March 2007 to June 2007          $23,750
Hawk I            April 28, 2005       March 2007 to June 2007          $23,750
Heron             December 11, 2005    November 2007 to February 2008   $24,000
Jaeger            July 7, 2006         April 2007 to June 2007          $18,550
Kestrel I (2)     July 1, 2006         December 2007 to April 2008      $18,750
Kite              April 17, 2006       March 2007 to May 2007           $14,750
Merlin            October 26, 2005     October 2007 to December 2007    $24,000
Osprey I (3)      August 31, 2005      July 2008 to November 2008       $21,000
Peregrine         July 1, 2005         October 2006 to January 2007     $24,000
Shikra (4)        September 10, 2006   September 2007 to December 2007  $14,800
Sparrow           July 20, 2005        November 2006 to February 2007   $22,500
Tern (5)          July 3, 2006         December 2007 to April 2008      $19,000

--------------------------------------

     (1)The date range provided represents the earliest and latest date on
        which the charterer may redeliver the vessel to the Company upon the
        termination of the charter.

     (2)The charterer of the KESTREL I has an option to extend the charter
        period by 11 to 13 months at a daily time charter rate of $20,000
        per day.

     (3)The charterer of the OSPREY I has an option to extend the charter
        period by up to 26 months at a daily time charter rate of $25,000.

     (4)Upon completion of the current charter in September 2006, the SHIKRA
        commenced a new time charter at $14,800 per day for 12 to 15 months.

     (5)The charterer of the TERN has an option to extend the charter period
        by 11 to 13 months at a daily time charter rate of $20,500 per day.

     The Company began vessel operations in April 2005. The following table
represents certain information about the Company's charterers which
individually accounted for more than 10% of the Company's gross time charter
revenue during the periods indicated:

    ---------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                                               Period from
                                                                                          January 26, 2005
 Charterer        Three-months ended      Three-months ended       Nine-months ended         (inception) to
 ---------        -------------------     -------------------      ------------------        --------------
                   September 30, 2006      September 30, 2005      September 30, 2006    September 30, 2005
                   ------------------      ------------------      ------------------    ------------------
<S>                             <C>                     <C>                     <C>                   <C>
 Charterer A                    14.4%                     --                    15.3%                   --
 Charterer B                    19.4%                   19.6%                   17.3%                 22.4%
 Charterer C                    11.6%                   20.2%                   13.9%                 17.1%
 Charterer D                    12.0%                   10.9%                   12.3%                 12.9%
 Charterer E                     7.2%                    9.9%                    7.8%                 10.9%
 Charterer F                     6.2%                    9.1%                    7.0%                 10.0%
</TABLE>

    ---------------------------------------------------------------------

     The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States, and the rules and regulations of the SEC which apply to interim
financial statements. Accordingly, they do not include all of the information
and footnotes normally included in consolidated financial statements prepared
in conformity with accounting principles in the United States. They

                                                                             8
<PAGE>


should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's 2005 Annual Report on Form 10-K.

     The accompanying unaudited consolidated financial statements include all
adjustments (consisting of normal recurring adjustments) that management
considers necessary for a fair presentation of its consolidated financial
position and results of operations for the interim periods presented. The
results of operations for the interim periods are not necessarily indicative
of the results that may be expected for the entire year.

Note 2. Vessels

     Vessel and Vessel Improvements

     During the three-month period ended September 30, 2006, the Company took
delivery of the TERN, a 2003 built 50,209 dwt. Supramax class dry bulk vessel,
and the JAEGER, a 2004 built 52,265 dwt. Supramax class dry bulk vessel. The
Company funded the balance of the purchase price of $62,100,000 for the two
vessels with a combination of proceeds from cash on hand and borrowings from
its revolving credit facility.

     At September 30, 2006, the Company's fleet consisted of a total of 16 dry
bulk vessels acquired at a total cost of $532,257,562. These costs consist of
the contracted purchase price of $539,877,903, $472,159 in additional costs
relating to the acquisition of the vessels, and adjustments of $8,092,500 in
net prepaid charter revenue relating to the assumption of time charters
associated with certain of the acquired vessels. The Company has also
capitalized $820,904 of costs relating to vessel improvements.

     Vessel and vessel improvement costs have been depreciated from the date
of their acquisition through their remaining estimated useful life.
Depreciation expense for the three-month and nine-month periods ended
September 30, 2006 were $5,775,804 and $15,222,940 respectively.

Note 3. Long-Term Debt

     At September 30, 2006, the Company's debt consisted of $214,800,000 in
borrowings under a revolving credit facility. During the three-month period
ended September 30, 2006, the Company borrowed $32,400,000 from its revolving
credit facility to partly fund the acquisition of the JAEGER.

     In July 2006, the Company amended and increased its existing revolving
credit facility from $330,000,000 to $450,000,000 and extended its maturity
date by one year to July 2016. The entire $450,000,000 facility will be
available for a period of six years from July 30, 2006, compared to four years
remaining in the commitment period of the Company's existing facility. There
are no principal repayment obligations during this initial six-year period.
Over the remaining four years, the facility will reduce in semi-annual amounts
of $25,000,000 with a final reduction of $250,000,000 occurring simultaneously
with the last semi-annual reduction.

     The amended facility will bear interest at the rate of 0.75% to 0.85%
over LIBOR (decreased from 0.95% over LIBOR under its existing facility),
depending upon the amount of debt drawn as a percentage of the value of the
Company's vessels. The Company paid an arrangement fee of $900,000 in
connection with the amended facility and will pay on a quarterly basis a
commitment fee of 0.25% per annum (decreased from 0.40% under its existing
facility) on the undrawn amount of the amended facility.

     At September 30, 2006, the Company had a remaining undrawn capacity of
$235,200,000 available to borrow for future acquisitions of dry bulk vessels.

     For the three-month period ended September 30, 2006, interest rates
applicable on the Company's debt ranged from 4.97% to 6.32%, including the
margin. The weighted average effective interest rate was 5.49%. For the
nine-month period ended September 30, 2006, interest rates applicable on the
Company's debt ranged from 4.97% to 6.32%, including the margin. The weighted
average effective interest rate was 5.37%.

                                                                             9


<PAGE>


Interest Expense consists of:
<TABLE>
<CAPTION>
                                                                                                                 Period from
                                                Three-months          Three-months          Nine-months     January 26, 2005
                                                       ended                 ended                ended       (inception) to
                                                September 30,        September 30,        September 30,        September 30,
                                                        2006                  2005                 2006                 2005
                                           ------------------   ------------------   ------------------   ------------------
<S>                                        <C>                  <C>                  <C>                  <C>

Loan Interest                              $        2,986,183   $        1,467,773   $        6,720,658   $        2,821,079
Commitment Fees                                       142,887              194,900              525,860              336,255
Eagle Ventures Note Interest                             --                   --                   --                608,222
Amortization of Deferred Financing Costs               51,266               64,743              117,491            1,195,456
                                           ------------------   ------------------   ------------------   ------------------
Total Interest Expense                     $        3,180,336   $        1,727,416   $        7,364,009   $        4,961,012
                                           ==================   ==================   ==================   ==================
</TABLE>

Interest-Rate Swaps

     The Company has entered into interest rate swaps to effectively convert a
portion of its debt from a floating to a fixed-rate basis. The swaps are
designated and qualify as cash flow hedges.

     During the quarter ended September 30, 2006, the Company entered an
interest rate swap contract for a notional amount of $84,800,000. This
contract matures in September 2009. On this contract, exclusive of applicable
margin, the Company will pay 5.24% fixed-rate interest and receive
floating-rate interest amounts based on three-month LIBOR settings. The
Company has two other interest rate swap contracts for notional amounts of
$100,000,000 and $30,000,000 which were entered into in 2005. These contracts
mature in September 2010. On these contracts, exclusive of applicable margin,
the Company pays 4.22% and 4.54% fixed-rate interest, respectively, and
receives floating-rate interest amounts based on three-month LIBOR settings.

     The Company records the fair value of the interest rate swaps as an asset
or liability on the balance sheet. The effective portion of the swap is
recorded in accumulated other comprehensive income. At September 30, 2006 and
December 31, 2005, the Company recorded an asset of $3,516,513 and $2,647,077,
respectively, which is included in Other Assets in the accompanying balance
sheet.

Note 4. Related Party Transactions

     The Company did not incur any related party expenses in the three-month
or nine-month periods ended September 30, 2006.

     The Company did not incur any related party expenses in the corresponding
three-month period ended September 30, 2005. During the nine-month period
ended September 30, 2005, the Company recorded an expense of $6,175,046. The
Company had a financial advisory agreement dated February 1, 2005 with Kelso.
Under the terms of the agreement the Company was to pay Kelso annual fees of
up to $500,000. The agreement had also provided for Kelso to be paid fees in
connection with other services. In June 2005, the Company terminated certain
of its obligations under this agreement, including its obligation to pay the
annual fees of $500,000, for a one-time payment of $1,000,000. The Company
recorded an expense of $6,175,046 in the quarter ended June 30, 2005 for fees
incurred under such agreement.

Note 5. Commitments and Contingencies

Vessel Technical Management Contract

     The Company has technical management agreements in place for each of its
vessels with V. Ships Management Ltd., an independent technical manager. V.
Ships is paid a technical management fee of $8,583 per vessel per month.

                                                                            10


<PAGE>


Operating Lease

     In December 2005, the Company entered into a lease for office space. The
lease is secured by a Letter of Credit backed by cash collateral of $124,616
which amount is recorded under Restricted Cash. The Letter of Credit amounts
decline to zero at the conclusion of the lease.

Note 6. Earnings Per Common Share

     The computation of earnings per share is based on the weighted average
number of common shares outstanding during the period. In the three-month
period ended March 31, 2006, the Company granted 56,666 shares of the
Company's stock in options under the 2005 Stock Incentive Plan (see Note 9).
Diluted net income per share gives effect to the aforementioned stock options.
    ---------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                   Period from
                                        Three months       Three months        Nine Months       January 26, 2005
                                           ended               ended             ended           (inception) to
                                        September 30,      September 30,      September 30,       September 30,
                                            2006               2005               2006                2005
                                       --------------     ---------------    ---------------     --------------
<S>                                       <C>                <C>               <C>                <C>

Net Income/(Loss)                         $9,100,737         $7,394,289        $29,284,974        $(5,500,468)
Weighted Average Shares - Basic .
                                          35,900,000         27,150,000         34,086,813         18,498,387
Incremental Shares using
 treasury stock method                           678               --                   35               --
Weighted Average Shares - Diluted
                                          35,900,678         27,150,000         34,086,848         18,498,387
Basic Earnings Per Share                       $0.25              $0.27              $0.86             $(0.30)
Diluted Earnings Per Share                     $0.25              $0.27              $0.86             $(0.30)
</TABLE>

    ---------------------------------------------------------------------

Note 7. Non-cash Compensation

     For the three-months ended September 30, 2006 the Company recorded a
non-cash, non-dilutive compensation charge of $3,076,699 which relates to
profits interests awarded to members of the Company's management by the
Company's principal shareholder Eagle Ventures LLC. For the nine-months ended
September 30, 2006 the Company recorded a non-cash compensation charge of
$5,768,355. This amount includes $5,721,322 in non-cash, non-dilutive charges
relating to profits interests awarded to members of the Company's management
by the Company's principal shareholder Eagle Ventures LLC, and a non-cash
amount of $47,033 which relates to the fair value of the stock options granted
to certain directors of the Company under the 2005 Stock Incentive Plan on the
date of grant (see Note 9).

     These profits interests will dilute only the interests of owners of Eagle
Ventures LLC, and will not dilute the direct holders of the Company's common
stock. For the three-months ended September 30, 2006, Eagle Ventures LLC paid
certain members of the Company's management $1,756,606 as compensation under
the profits interests. The non-cash compensation charge is being recorded as
an expense over the estimated service period in accordance with SFAS No.
123(R). The non-cash compensation charges will be based on the fair value of
the profits interests which will be "marked to market" at the end of each
reporting period. The impact of any changes in the estimated fair value of the
profits interests will be recorded as a change in estimate cumulative to the
date of change. The impact on the amortization of the compensation charge of
any changes to the estimated vesting periods for the performance related
profits interests will be adjusted prospectively as a change in estimate.

Note 8. Capital Stock

     Dividends


                                                                            11
<PAGE>


     The Company's current policy is to declare quarterly dividends to
stockholders in February, April, July and October. Payment of dividends is
limited by the terms of certain agreements which the Company and its
subsidiaries are party to. The Company's revolving credit facility permits it
to pay quarterly dividends in amounts up to its quarterly earnings before
extraordinary or exceptional items, interest, taxes, depreciation and
amortization (Credit Agreement EBITDA), less the aggregate amount of interest
incurred and net amounts payable under interest rate hedging agreements during
the relevant period and an agreed upon reserve for dry-docking for the period,
provided that there is not a default or breach of loan covenant under the
credit facility and the payment of the dividends would not result in a default
or breach of a loan covenant. Depending on market conditions in the dry bulk
shipping industry and acquisition opportunities that may arise, the Company
may be required to obtain additional debt or equity financing which could
affect its dividend policy. However, any determination to pay dividends in the
future will be at the discretion of the Board of Directors and will depend
upon the Company's results of operations, financial condition, capital
restrictions, covenants and other factors deemed relevant by the Board of
Directors.

     On July 18, 2006 the Company's Board of Directors declared a cash
dividend for the second quarter of 2006 of $0.50 per share which was paid on
August 3, 2006 to all shareholders of record as of July 28, 2006. The
aggregate amount of this cash dividend was $17,950,000.

     On October 18, 2006 the Company's Board of Directors declared a cash
dividend for the third quarter of 2006 of $0.51 per share, based on 35,900,000
shares of common stock outstanding, payable on November 2, 2006 to all
shareholders of record as of October 30, 2006. The aggregate amount of the
cash dividend paid to the Company's shareholders on November 2, 2006 was
$18,309,000.

Note 9. 2005 Stock Incentive Plan

     The Company adopted the 2005 Stock Incentive Plan for the purpose of
affording an incentive to eligible persons. The 2005 Stock Incentive Plan
provides for the grant of equity-based awards, including stock options, stock
appreciation rights, restricted stock, restricted stock units, stock bonuses,
dividend equivalents and other awards based on or relating to the Company's
common stock to eligible non-employee directors, selected officers and other
employees and independent contractors. The plan is administered by a committee
of the Company's Board of Directors.

     An aggregate of 2.6 million shares of the Company's common stock has been
authorized for issuance under the plan. As of December 31, 2005, no grants had
been made under the plan. On March 17, 2006, the Company granted options to
purchase 56,666 shares of the Company's common stock to its independent
non-employee directors. These options vested and became exercisable on the
grant date at an exercise price of $13.23 per share. All options expire ten
years from the date of grant. As of September 30, 2006, no other grants have
been made under the plan.

     For purposes of determining compensation cost for the Company's stock
option plans using the fair value method of FAS 123(R), the fair value of the
options granted was estimated on the date of grant using the Black-Scholes
option pricing model with the following weighted average assumptions: risk
free interest rate of 5%, dividend yield of 14%, expected stock price
volatility factor of 0.33.

     On March 17, 2006, the Company also granted a Dividend Equivalent Rights
Award to its independent non-employee directors equivalent to 62,964 shares of
the Company's common stock. This award entitles the participant to receive a
Dividend Equivalent payment each time the Company pays a dividend to the
Company's stockholders. The amount of the Dividend Equivalent payment is equal
to the number of Dividend Equivalent Rights multiplied by the amount of the
per share dividend paid by the Company on its stock on the date the dividend
is paid. In the three-month period ended September 30, 2006, the Company has
recorded $31,482 as compensation expense for the Dividend Equivalent payments
relating to the dividend paid to shareholders on August 3, 2006.

Note 10. Subsequent Events

     Vessel Newbuilding Contract

                                                                            12


<PAGE>


     On November 6, 2006, the Company, through its subsidiaries, entered into
two vessel newbuilding contracts with IHI Marine United Inc., a Japanese
shipyard, for the construction of two `Future-56' class Supramax vessels.
These 56,000 deadweight ton vessels are expected to be delivered in January
and February of 2010, respectively. The contract price for each vessel is
3.655 billion Japanese Yen or approximately $33.5 million after giving effect
to currency hedges. The Company has placed deposits of 1.462 billion Japanese
Yen or $12.4 million for each of the vessels, which were funded through
borrowings from its credit facility, and will pay an additional 10% of the
contract price in November 2009, and the remainder upon delivery. The Company
has hedged its Japanese Yen exposures into U.S. Dollars in order to
effectively eliminate currency risk.

     Credit Facility

     On November 6, 2006, the Company amended its existing revolving credit
facility from its sole lender, Royal Bank of Scotland plc to increase the
borrowing capacity from $450 million to $500 million. The structure of the
financing will enable the Company to capitalize pre-delivery payments under
the vessel newbuilding contracts described above and costs associated with
supervision and financing the new vessels.

     There are no principal repayment obligations under the amended facility
until July 2012. Over the remaining four years until maturity in 2016, the
facility will reduce in semi-annual amounts of $28,750,000 with a final
reduction of $270,000,000 occurring simultaneously with the last semi-annual
reduction. All other terms and conditions of the amended facility remain the
same as the existing facility.

     Non-cash Compensation

     On November 9, 2006, the limited liability company agreement of Eagle
Ventures LLC was amended and restated (the "Fifth LLC Agreement"). Pursuant to
the Fifth LLC Agreement, the unvested portion of the performance-related
profits interests that previously vested ratably based on Kelso affiliates
achieving a multiple (ranging from two to four times) on their original
investment in the Company will now vest ratably based on Kelso affiliates
achieving a multiple (ranging from two to 3.25 times) on their original
investment in the Company. In addition, a first priority payment was added so
that certain members of Eagle Ventures receive a first priority distribution
from Eagle Ventures, prior to other distributions to members of Eagle
Ventures, in an aggregate amount of approximately $100,000, in order to adjust
for the interest payments received by Eagle Ventures on loans made by Eagle
Ventures to the Company prior to its initial public offering. Furthermore, all
of the service-related profits interests that are subject to a three-year
vesting schedule are now considered fully vested for purposes of determining
participation in distributions from Eagle Ventures but these service-related
profits interests will remain forfeitable, if applicable, by the management
members (in accordance with the existing three-year vesting schedule) upon
their termination of employment with Eagle Ventures LLC or its subsidiaries
(including the Company). Finally, a second priority payment was added so that
management members receive a second priority distribution from Eagle Ventures,
prior to other distributions to members of Eagle Ventures (other than the
first priority payment described above), in an aggregate amount of
approximately $740,000 in respect of such newly vested service-related profits
interests. Accordingly, the Company anticipates recording an additional charge
in the fourth quarter of approximately $840,000 as a result of the amendment.

                                                                            13


<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION

     The following is a discussion of the Company's financial condition and
results of operation for the three-month and nine-month periods ended
September 30, 2006. This section should be read in conjunction with the
consolidated financial statements included elsewhere in this report and the
notes to those financial statements.

     This discussion contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended and the Private Securities
Litigation Reform Act of 1995 and are intended to be covered by the safe
harbor provided for under these sections. These statements may include words
such as "believe," "estimate," "project," "intend," "expect," "plan,"
"anticipate," and similar expressions in connection with any discussion of the
timing or nature of future operating or financial performance or other events.
Forward looking statements reflect management's current expectations and
observations with respect to future events and financial performance. Where we
express an expectation or belief as to future events or results, such
expectation or belief is expressed in good faith and believed to have a
reasonable basis. However, our forward-looking statements are subject to
risks, uncertainties, and other factors, which could cause actual results to
differ materially from future results expressed, projected, or implied by
those forward-looking statements. The principal factors that affect our
financial position, results of operations and cash flows include, charter
market rates, which have recently increased to historic highs, and periods of
charter hire, vessel operating expenses and voyage costs, which are incurred
primarily in U.S. dollars, depreciation expenses, which are a function of the
cost of our vessels, significant vessel improvement costs and our vessels'
estimated useful lives, and financing costs related to our indebtedness. Our
actual results may differ materially from those anticipated in these forward
looking statements as a result of certain factors which could include the
following: (i) changes in demand in the dry bulk market, including, without
limitation, changes in production of, or demand for, commodities and bulk
cargoes, generally or in particular regions; (ii) greater than anticipated
levels of dry bulk vessel new building orders or lower than anticipated rates
of dry bulk vessel scrapping; (iii) changes in rules and regulations
applicable to the dry bulk industry, including, without limitation,
legislation adopted by international bodies or organizations such as the
International Maritime Organization and the European Union or by individual
countries; (iv) actions taken by regulatory authorities; (v) changes in
trading patterns significantly impacting overall dry bulk tonnage
requirements; (vi) changes in the typical seasonal variations in dry bulk
charter rates; (vii) changes in the cost of other modes of bulk commodity
transportation; (viii) changes in general domestic and international political
conditions; (ix) changes in the condition of the Company's vessels or
applicable maintenance or regulatory standards (which may affect, among other
things, our anticipated dry docking costs); (x) and other factors listed from
time to time in our filings with the Securities and Exchange Commission,
including, without limitation, our Registration Statement on Form S-1 filed
with the Securities and Exchange Commission. This discussion also includes
statistical data regarding world dry bulk fleet and orderbook and fleet age.
We generated some of these data internally, and some were obtained from
independent industry publications and reports that we believe to be reliable
sources. We have not independently verified these data nor sought the consent
of any organizations to refer to their reports in this annual report. We
disclaim any intent or obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or
otherwise, except as may be required under applicable securities laws.

Overview

     We are Eagle Bulk Shipping Inc., a Marshall Islands corporation
headquartered in New York City. We are the largest U.S. based owner of
Handymax dry bulk vessels. Handymax dry bulk vessels range in size from 35,000
to 60,000 deadweight tons, or dwt, and transport a broad range of major and
minor bulk cargoes, including iron ore, coal, grain, cement and fertilizer,
along worldwide shipping routes. As of September 30, 2006, we owned and
operated a modern fleet of 16 Handymax dry bulk vessels that we have purchased
from unrelated third parties. In November 2006, we further expanded our fleet
by placing orders for two newbuilding vessels of 56,000 dwt capacity which are
to be delivered into our fleet in the first quarter of 2010.

     We are focused on maintaining a high quality fleet that is concentrated
primarily in one vessel type - Handymax dry bulk carriers and its sub-category
of Supramax vessels which are Handymax vessels ranging in size


                                                                            14
<PAGE>


from 50,000 to 60,000 dwt. Twelve of the 16 vessels in our operating fleet are
classed as Supramax dry bulk vessels. These vessels have the cargo loading and
unloading flexibility of on-board cranes while offering cargo carrying
capacities approaching that of Panamax dry bulk vessels, which range in size
from 60,000 to 100,000 dwt and must rely on port facilities to load and
offload their cargoes. We believe that the cargo handling flexibility and
cargo carrying capacity of the Supramax class vessels make them attractive to
potential charterers. The 16 vessels in our operating fleet have a combined
carrying capacity of 796,759 dwt and an average age of six years as compared
to an average age for the world Handymax dry bulk fleet of over 15 years.

     Each of our vessels is owned by us through a separate wholly owned
Marshall Islands limited liability company.

     We maintain our principal executive offices at 477 Madison Avenue, New
York, New York 10022. Our telephone number at that address is (212) 785-2500.
Our website address is www.eagleships.com. Information contained on our
website does not constitute part of this quarterly report.

     Our financial performance since inception is based on the following key
elements of our business strategy:

     (1)  concentration in one vessel category: Handymax dry bulk vessels,
          which offer size, operational and geographical advantages (over
          Panamax and Capesize vessels),

     (2)  our strategy is to charter our vessels primarily pursuant to one- to
          three-year time charters to allow us to take advantage of the stable
          cash flow and high utilization rates that are associated with medium
          to long-term time charters. Reliance on the spot market contributes
          to fluctuations in revenue, cash flow, and net income. On the other
          hand, time charters provide a shipping company with a predictable
          level of revenues. We have entered into time charters for all of our
          vessels which range in length from one to three years and provide
          for fixed semi-monthly payments in advance. This strategy is
          effective in strong and weak dry bulk markets, giving us security
          and predictability of cashflows when we look at the volatility of
          the shipping markets,

     (3)  maintain high quality vessels and improve standards of operation
          through improved environmental procedures, crew training and
          maintenance and repair procedures, and

     (4)  maintain a balance between purchasing vessels as market conditions
          and opportunities arise and maintaining prudent financial ratios
          (e.g. leverage ratio).

Our Fleet

The following table presents certain information concerning our fleet as of
September 30, 2006.
    ---------------------------------------------------------------------

 Vessel
                         Year Built   Dwt       Time Charter Employment
                                                    Expiration (1)
SUPRAMAX:
 Cardinal (3)                2004    55,408    March 2007 to June 2007
 Condor (2) (4)              2001    50,296    November 2006 to March 2007
 Falcon (2)                  2001    50,296    February 2008 to June 2008
 Harrier (2)                 2001    50,296    March 2007 to June 2007
 Hawk I (2) (5)              2001    50,296    April 2007
 Heron                       2001    52,827    December 2007 to February 2008
 Jaeger                      2004    52,248    April 2007 to June 2007
 Kestrel ((6))               2004    50,326    December 2007 to April 2008
 Merlin (2)                  2001    50,296    October 2007 to December 2007
 Osprey I (2) (7)            2002    50,206    July 2008 to November 2008
 Peregrine (3) (8)           2001    50,913    October 2006 to January 2007

                                                                            15
<PAGE>



 Tern  (9)                   2003    50,200    December 2007 to April 2008
HANDYMAX:
 Sparrow (3) (10)            2000    48,225    November 2006 to February 2007
 Kite                        1997    47,195    March 2007 to May 2007
 Griffon (11)                1995    46,635    January 2007 to February 2007
 Shikra (12)                 1984    41,096    September 2007 to December 2007

----------------------------------------------------

     (1)  The date range provided represents the earliest and latest date on
          which the charterers may redeliver the vessel to us upon the
          termination of the charter.

     (2)  These vessels are sister ships.

     (3)  These vessels are similar ships built at the same shipyard.

     (4)  Upon completion of the current charter the CONDOR will enter a new
          time charterat $20,500 per day for 26 to 29 months.

     (5)  The charter for the HAWK I has been renewed at $22,000 per day
          commencing in April 2007 for 24 to 26 months.

     (6)  The charterer of the KESTREL I has an option to extend the charter
          period by 11 to 13 months at a daily time charter rate of $20,000
          per day.

     (7)  The charterer of the OSPREY I has an option to extend the charter
          period by up to 26 month at a daily time charter rate of $25,000 per
          day.

     (8)  Upon completion of the current charter the PEREGRINE will enter a
          new time charter at $20,500 per day for 24 to 26 months.

     (9)  The charterer of the TERN has an option to extend the charter period
          by 11 to 13 months at a daily time charter rate of $20,500 per day..

     (10) Upon completion of the current charter the SPARROW will enter a new
          time charter at a base rate of $24,000 per day for 11 to 13 months
          with a profit share of 30% of up to the first $3,000 per day over
          the base rate

     (11) Upon completion of the current charter the GRIFFON will enter a new
          time charter at $20,075 per day for 24 to 26 months.

     (12) Upon completion of the current charter in September 2006, the SHIKRA
          commenced a new time charter at $14,800 per day for 12 to 15 months.

New Acquisitions

     In November 2006, the Company, through its subsidiaries, entered into two
vessel newbuilding contracts with IHI Marine United Inc., a Japanese shipyard,
for the construction of two `Future-56' class Supramax vessels. These 56,000
deadweight ton vessels are expected to be delivered in January and February of
2010, respectively. The contract price for each vessel is 3.655 billion
Japanese Yen or approximately $33.5 million after giving effect to currency
hedges. The Company has placed deposits of 1.462 billion Japanese Yen or $12.4
million for each of the vessels, which were funded through borrowings from its
credit facility, and will pay an additional 10% of the contract price in
November 2009, and the remainder upon delivery. The Company has hedged its
Japanese Yen exposures into U.S. Dollars in order to effectively eliminate
currency risk.

Fleet Management

     The management of our fleet includes the following functions:

o    Strategic management. We locate, obtain financing and insurance for,
     purchase and sell vessels.

o    Commercial management. We obtain employment for our vessels and manage
     our relationships with charterers.

o    Technical management. The technical manager performs day-to-day
     operations and maintenance of our vessels.

Commercial and Strategic Management


                                                                            16
<PAGE>


     We carry out the commercial and strategic management of our fleet through
our wholly owned subsidiary, Eagle Shipping International (USA) LLC, a
Marshall Islands limited liability company that maintains its principal
executive offices in New York City. We currently have a total of eight shore
based personnel, including our senior management team and our office staff,
either directly or through this subsidiary, provides the following services:

          o    commercial operations and technical supervision;

          o    safety monitoring;

          o    vessel acquisition; and

          o    financial, accounting and information technology services.

Technical Management

     The technical management of our fleet is provided by our technical
manager, V.Ships, an unaffiliated third party, that we believe is the world's
largest provider of independent ship management and related services. We
review the performance of V.Ships on an annual basis and may add or change
technical managers.

     Technical management includes managing day-to-day vessel operations,
performing general vessel maintenance, ensuring regulatory and classification
society compliance, supervising the maintenance and general efficiency of
vessels, arranging our hire of qualified officers and crew, arranging and
supervising drydocking and repairs, purchasing supplies, spare parts and new
equipment for vessels, appointing supervisors and technical consultants and
providing technical support. V.Ships also manages and processes all crew
insurance claims. Our technical manager maintains records of all costs and
expenditures incurred in connection with its services that are available for
our review on a daily basis. Our technical manager is a member of Marine
Contracting Association Limited (MARCAS), an association that arranges bulk
purchasing for its members, which enables us to benefit from economies of
scale.

     We currently crew our vessels with Ukrainian officers and seamen supplied
by V.Ships in its capacity as technical manager. These officers and seamen are
employees of our wholly owned vessel owning subsidiaries while aboard our
vessels. We currently employ a total of 341 officers and seamen on the 16
vessels in our operating fleet. Our technical manager handles each seaman's
training, travel, and payroll and ensures that all our seamen have the
qualifications and licenses required to comply with international regulations
and shipping conventions. Additionally, our seafaring employees perform most
commissioning work and assist in supervising work at shipyards and drydock
facilities. We typically man our vessels with more crew members than are
required by the country of the vessel's flag in order to allow for the
performance of routine maintenance duties. All of our crew members are subject
to and are paid commensurate with international collective bargaining
agreements and, therefore, we do not anticipate any labor disruptions. No
international collective bargaining agreements to which we are a party are set
to expire within two years.

     For the three and nine-month periods ended September 30, 2006, we paid
our technical manager a fee of $8,583 per vessel per month, plus actual costs
incurred by our vessels.

Competition

     We compete with a large number of international fleets. The international
shipping industry is highly competitive and fragmented with many market
participants. There are approximately 6,300 drybulk carriers aggregating
approximately 360 million dwt, and the ownership of these vessels is divided
among approximately 1,400 mainly private independent dry bulk vessel owners
with no one shipping group owning or controlling more than 5.0% of the world
dry bulk fleet. We primarily compete with other owners of dry bulk vessels in
the Handymax class that are mainly privately owned fleets.

     Competition in the ocean shipping industry varies primarily according to
the nature of the contractual relationship as well as with respect to the kind
of commodity being shipped. Our business will fluctuate in line with the main
patterns of trade of dry bulk cargoes and varies according to changes in the
supply and demand for these


                                                                            17
<PAGE>


items. Competition in virtually all bulk trades is intense and based primarily
on supply and demand. We compete for charters on the basis of price, vessel
location, size, age and condition of the vessel, as well as on our reputation
as an owner and operator. Increasingly, major customers are demonstrating a
preference for modern vessels based on concerns about the environmental and
operational risks associated with older vessels. Consequently, owners of large
modern fleets have gained a competitive advantage over owners of older fleets.

     As in the spot market, the time charter market is price sensitive and
also depends on our ability to demonstrate the high quality of our vessels and
operations to chartering customers. However, because of the longer term
commitment, customers entering time charters are more concerned about their
exposure and image from chartering vessels that do not comply with
environmental regulations or that will be forced out of service for extensive
maintenance and repairs. Consequently, in the time charter market, factors
such as the age and quality of a vessel and the reputation of the owner and
operator tend to be more significant than in the spot market in competing for
business.

Value of Assets and Cash Requirements

     The replacement costs of comparable new vessels may be above or below the
book value of our fleet. The market value of our fleet may be below book value
when market conditions are weak and exceed book value when markets are strong.
In common with other shipowners, we may consider asset redeployment which at
times may include the sale of vessels at less than their book value.

     The Company's results of operations and cash flow may be significantly
affected by future charter markets.

Critical Accounting Policies

     The discussion and analysis of our financial condition and results of
operations is based upon our interim consolidated financial statements, which
have been prepared in accordance with U.S. GAAP. The preparation of those
financial statements requires us to make estimates and judgments that affect
the reported amounts of assets and liabilities, revenues and expenses and
related disclosure of contingent assets and liabilities at the date of our
financial statements. Actual results may differ from these estimates under
different assumptions and conditions.

     Critical accounting policies are those that reflect significant judgments
of uncertainties and potentially result in materially different results under
different assumptions and conditions. We have described below what we believe
are our most critical accounting policies, because they generally involve a
comparatively higher degree of judgment in their application.

Revenue Recognition

     We currently generate all of our revenue from time charters. Time
charters are for a specific period of time at a specific rate per day or
month, and are generally not as complex or as subjective as voyage charters.
If we had a vessel on a voyage charter, or a charter in the spot market, we
would agree to provide a vessel for the transport of specific goods between
specific ports in return for the payment of an agreed upon freight per ton of
cargo or, alternatively, for a specified total amount. All operating costs
would be for our account.

Vessel Lives and Impairment

     The carrying value of each of our vessels represents its original cost at
the time it was delivered or purchased less depreciation. We depreciate our
dry bulk vessels on a straight-line basis over their estimated useful lives,
estimated to be 28 years from date of initial delivery from the shipyard to
the original owner. Depreciation is based on cost less the estimated residual
salvage value. Salvage, or scrap, value is based upon a vessel's lightweight
tonnage ("lwt") multiplied by a scrap rate. We use a scrap rate of $150 per
lwt, which we believe is common in the dry bulk shipping industry, to compute
each vessel's salvage value. An increase in the useful life of a dry bulk
vessel or in its salvage value would have the effect of decreasing the annual
depreciation charge and extending it into later periods. A decrease in the
useful life of a dry bulk vessel or in its salvage value would have the effect
of increasing the annual depreciation charge. However, when regulations place
limitations over the ability of a vessel to trade on a worldwide

                                                                            18


<PAGE>


basis, the vessel's useful life is adjusted to end at the date such
regulations become effective. The estimated scrap value is used in the
computation of depreciation expense and recoverability of the carrying value
of each vessel when evaluating for impairment of vessels. Management's
estimates for salvage values may differ from actual results.

     The carrying values of the Company's vessels may not represent their fair
market value at any point in time since the market prices of second-hand
vessels tend to fluctuate with changes in charter rates and the cost of
newbuildings. Historically, both charter rates and vessel values tend to be
cyclical. We evaluate the carrying amounts and periods over which long-lived
assets are depreciated to determine if events have occurred which would
require modification to their carrying values or useful lives. In evaluating
useful lives and carrying values of long-lived assets, we review certain
indicators of potential impairment, such as undiscounted projected operating
cash flows, vessel sales and purchases, business plans and overall market
conditions. We determine undiscounted projected net operating cash flow for
each vessel and compare it to the vessel carrying value. This assessment is
made at the individual vessel level since separately identifiable cash flow
information for each vessel is available. In developing estimates of future
cash flows, the Company must make assumptions about future charter rates, ship
operating expenses, and the estimated remaining useful lives of the vessels.
These assumptions are based on historical trends as well as future
expectations. Although management believes that the assumptions used to
evaluate potential impairment are reasonable and appropriate, such assumptions
are highly subjective. In the event that an impairment were to occur, we would
determine the fair value of the related asset and record a charge to
operations calculated by comparing the asset's carrying value to the estimated
fair value. We estimate fair value primarily through the use of third party
valuations performed on an individual vessel basis.

Deferred Drydock Cost

     There are three methods that are used by the shipping industry to account
for drydockings; first is the prepaid method where drydock costs are
capitalized when incurred and amortized over the period to the next scheduled
drydock; second, is the accrual method where the estimated cost of the next
scheduled drydock is accrued over the period preceding such drydock, and
lastly; expensing drydocking costs in the period it is incurred. We use the
prepaid method of accounting for drydock expenses. Under the prepaid method,
drydock expenses are capitalized and amortized on a straight-line basis until
the next drydock, which we estimate to be a period of two to three years. We
believe the prepaid method better matches costs with revenue and minimizes any
significant changes in estimates associated with the accrual method, including
the disposal of vessels before a drydock which has been accrued before it is
performed. We use judgment when estimating the period between drydocks
performed, which can result in adjustments to the estimated amortization of
drydock expense. If the vessel is disposed of before the next drydock, the
remaining balance in prepaid drydock is written-off to the gain or loss upon
disposal of vessels in the period when contracted. We expect that our vessels
will be required to be drydocked approximately every 30 to 60 months for major
repairs and maintenance that cannot be performed while the vessels are
operating. Costs capitalized as part of the drydocking include actual costs
incurred at the drydock yard and parts and supplies used in making such
repairs.

Vessel Acquisitions

     Where we identify any intangible assets or liabilities associated with
the acquisition of a vessel, we record all identified tangible and intangible
assets or liabilities at fair value. Fair value is determined by reference to
market data and the amount of expected future cash flows. We value any asset
or liability arising from the market value of the time charters assumed when
an acquired vessel is delivered to us.

     Where we have assumed an existing charter obligation or enter into a time
charter with the existing charterer in connection with the purchase of a
vessel at charter rates that are less than market charter rates, we record a
liability in Deferred Revenues based on the difference between the assumed
charter rate and the market charter rate for an equivalent vessel. Conversely,
where we assume an existing charter obligation or enter into a time charter
with the existing charterer in connection with the purchase of a vessel at
charter rates that are above market charter rates, we record an asset in
Prepaid Charter Revenue, based on the difference between the market charter
rate and the contracted charter rate for an equivalent vessel. This
determination is made at the time the vessel is delivered to us, and such
assets and liabilities are amortized to revenue over the remaining period of
the charter. The determination of the fair value of acquired assets and
assumed liabilities requires us to make significant assumptions and estimates
of many


                                                                            19
<PAGE>


variables including market charter rates, expected future charter rates,
future vessel operation expenses, the level of utilization of our vessels and
our weighted average cost of capital. The use of different assumptions could
result in a material change in the fair value of these items, which could have
a material impact on our financial position and results of operations. In the
event that the market charter rates relating to the acquired vessels are lower
than the contracted charter rates at the time of their respective deliveries
to us, our net earnings for the remainder of the terms of the charters may be
adversely affected although our cash flows will not be so affected.

Factors Affecting Our Results of Operations

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

     o    Ownership days: We define ownership days as the aggregate number of
          days in a period during which each vessel in our fleet has been
          owned by us. Ownership days are an indicator of the size of our
          fleet over a period and affect both the amount of revenues and the
          amount of expenses that we record during a period.

     o    Available days: We define available days as the number of our
          ownership days less the aggregate number of days that our vessels
          are off-hire due to vessel familiarization upon acquisition,
          scheduled repairs or repairs under guarantee, vessel upgrades or
          special surveys and the aggregate amount of time that we spend
          positioning our vessels. The shipping industry uses available days
          to measure the number of days in a period during which vessels
          should be capable of generating revenues.

     o    Operating days: We define operating days as the number of our
          available days in a period less the aggregate number of days that
          our vessels are off-hire due to any reason, including unforeseen
          circumstances. The shipping industry uses operating days to measure
          the aggregate number of days in a period during which vessels
          actually generate revenues.

     o    Fleet utilization: We calculate fleet utilization by dividing the
          number of our operating days during a period by the number of our
          available days during the period. The shipping industry uses fleet
          utilization to measure a company's efficiency in finding suitable
          employment for its vessels and minimizing the amount of days that
          its vessels are off-hire for reasons other than scheduled repairs or
          repairs under guarantee, vessel upgrades, special surveys or vessel
          positioning.

     Voyage and Time Charter Revenue

     Shipping revenues are highly sensitive to patterns of supply and demand
for vessels of the size and design configurations owned and operated by a
Company and the trades in which those vessels operate. In the drybulk sector
of the shipping industry, rates for the transportation of drybulk cargoes such
as ores, grains, steel, fertilizers, and similar commodities, are determined
by market forces such as the supply and demand for such commodities, the
distance that cargoes must be transported, and the number of vessels expected
to be available at the time such cargoes need to be transported. The demand
for shipments then is significantly affected by the state of the economy
globally and in discrete geographical areas. The number of vessels is affected
by newbuilding deliveries and by the removal of existing vessels from service,
principally because of scrapping.

     Our revenues are driven primarily by the number of vessels in our fleet,
the number of days during which our vessels operate and the amount of the
daily charter hire rates that our vessels earn under charters, which, in turn,
are affected by a number of factors, including:

     o    the duration of our charters;

     o    our decisions relating to vessel acquisitions and disposals;

     o    the amount of time that we spend positioning our vessels;

     o    the amount of time that our vessels spend in dry-dock undergoing
          repairs;

     o    maintenance and upgrade work;


                                                                            20
<PAGE>

     o    the age, condition and specifications of our vessels;

     o    levels of supply and demand in the dry bulk shipping industry; and

     o    other factors affecting spot market charter rates for dry bulk
          carriers.

     As is common in the shipping industry, we pay commissions ranging from
1.25% to 6.25% of the total daily charter hire rate of each charter to
unaffiliated ship brokers and in-house brokers associated with the charterers,
depending on the number of brokers involved with arranging the charter.

     Vessel operating expenses include crew wages and related costs, the cost
of insurance, expenses relating to repairs and maintenance, the cost of spares
and consumable stores, tonnage taxes, other miscellaneous expenses, and
technical management fees.

     Insurance expense varies with overall insurance market conditions as well
as the insured's loss record, level of insurance and desired coverage. The
main vessel insurance expenses include Protection and Indemnity ("P & I")
insurance (i.e. liability insurance) costs, and hull and machinery insurance
(i.e. asset insurance) costs. Certain other insurances, such as basic war risk
premiums based on voyages into designated war risk areas are often for the
account of the charterers.

     With regard to vessel operating expenses, we have entered into technical
management agreements for each of our vessels with V. Ships Management Ltd,
our independent technical manager. In conjunction with our management, V.
Ships has established an operating expense budget for each vessel and performs
the technical management of our vessels. All deviations from the budgeted
amounts are for our account.

     Technical management services include managing day-to-day vessel
operations, performing general vessel maintenance, ensuring regulatory and
classification society compliance, supervising the maintenance and general
efficiency of vessels, arranging the hire of qualified officers and crew,
arranging dry-docking and repairs, purchasing stores, supplies, spare parts
and new equipment, appointing supervisors and technical consultants and
providing technical support.

     Our vessel operating expenses, which generally represent costs under the
vessel operating budgets, cost of insurance and vessel registry and other
regulatory fees, will increase with the enlargement of our fleet. Other
factors beyond our control, some of which may affect the shipping industry in
general, may also cause these expenses to increase, including, for instance,
developments relating to market prices for insurance and petroleum-based
lubricants and supplies.

     Voyage Expenses

     To the extent that we employ our vessels on voyage charters, we will
incur expenses that include port and canal charges, bunker (fuel oil) expenses
and commissions, as these expenses are borne by the vessel owner on voyage
charters. Port and canal charges and bunker expenses primarily increase in
periods during which vessels are employed on voyage charters because these
expenses are for the account of the vessels. Currently all our vessels are
employed under time charters that require the charterer to bear all of those
expenses, hence we expect that any port and canal charges and bunker expenses,
if incurred, will represent a relatively minor portion of our vessels' overall
expenses.

Results of Operations for the three-month periods ended September 30, 2006 and
September 30, 2005 and nine-months ended September 30, 2006 and the period
from January 26, 2005 (inception) to September 30, 2005

     Fleet Data

     Fleet utilization was steady for the three-month periods ending September
30, 2006 and September 30, 2005 respectively even as fleet days increased by
57% in the three-month period from a year before due to increase in fleet
size.


                                                                            21
<PAGE>

<TABLE>
<CAPTION>

                                                                                 Period from January 26
                       Three Months ended  Three Months ended  Nine Months ended    (inception) to
                          September 30,       September 30,      September 30,       September 30,
                              2006                2005               2006                2005
                        ----------------    ----------------   ----------------    ----------------
<S>                     <C>                 <C>                <C>                <C>
Ownership Days                1,463                932              3,816              1,422
Available Days                1,443                929              3,752              1,408
Operating Days                1,437                926              3,734              1,403
Fleet Utilization              99.6%              99.7%              99.5%              99.6%
</TABLE>

     Revenues

     Net revenues, for the three-month period ended September 30, 2006, of
$28,358,830 includes billed time charter revenues of $30,671,690 and
deductions for brokerage commissions of $1,587,860 and $725,000 in
amortization of net prepaid and deferred charter revenue. Net revenues for the
three-month period ended September 30, 2006 were 134% greater than net
revenues for the three-month period ended September 30, 2005, primarily due to
a larger fleet size as reflected by increased operating days. Net revenue, for
the same three-month period ended September 30, 2005, was $21,137,615 which
included billed time charter revenues of $22,315,461 and deductions for
brokerage commissions of $1,054,346 and $123,500 in amortization of net
prepaid and deferred charter revenue.

     Net revenues, for the nine-month period ended September 30, 2006, of
$76,254,265 includes billed time charter revenues of $82,919,582 and
deductions for brokerage commissions of $4,229,817 and $2,435,500 in
amortization of net prepaid and deferred charter revenue. Net revenue, for the
period from January 26, 2005 (inception) to September 30, 2005, was
$31,753,494 which included billed time charter revenues of $33,801,872 and
deductions for brokerage commissions of $1,719,878 and $328,500 in
amortization of net prepaid and deferred charter revenue. Net revenues for the
nine-month period ended September 30, 2006 were greater than net revenues for
the period from January 26, 2005 (inception) to September 30, 2005 primarily
due to a larger fleet size and to reflect the shorter operating period in 2005
as vessel operations commenced only in April 2005.

     Vessel Expenses

     For the three-month period ended September 30, 2006, total vessel
expenses incurred amounted to $6,118,038. These expenses included $5,231,420
in vessel operating costs, $410,353 in technical management fees, $213,636 in
delivery and pre-operating costs, including costs for providing initial
provisions, stores and spares, for the three newly acquired vessels which went
into operation in the quarter, and $262,629 in costs associated with vessel
on-board inventory. Total vessel expenses for the corresponding three-month
period ended September 30, 2005 were $3,732,726 and this included vessel
operating costs of $3,420,859, delivery and pre-operating costs of $275,383,
and inventory costs of $36,484. Total vessel expenses for the three-month
period ended September 30, 2006 were higher than the same three-month period
ended September 30, 2005 primarily due to the increase in fleet size and
corresponding increase in vessel ownership days.

     For the nine-month period ended September 30, 2006, total vessel expenses
incurred amounted to $15,742,457. These expenses included $14,080,431 in
vessel operating costs, $1,079,853 in technical management fees, $213,636 in
delivery and pre-operating costs, including costs for providing initial
provisions, stores and spares, for the three newly acquired vessels which went
into operation in the quarter, and $368,537 in costs associated with vessel
on-board inventory. Total vessel expenses for the period from January 26, 2005
(inception) to September 30, 2005 were $6,848,124 and this included vessel
operating costs of $4,983,409, delivery and pre-operating costs of $1,462,933,
and inventory costs of $401,782. Total vessel expenses for the nine-month
period ended September 30, 2006 were higher than the period from January 26,
2005 (inception) to September 30, 2005 due to the increase in fleet size and
the increase in vessel ownership days.

     Depreciation and Amortization


                                                                            22
<PAGE>


     For the three-month period ended September 30, 2006, total depreciation
and amortization expense was $5,980,747 of which amount, $5,775,804 relates to
depreciation and $204,943 relates to the amortization of deferred drydocking
costs. Total depreciation expense for the corresponding three-month period
ended September 30, 2005 was $3,858,943. Depreciation expenses increased from
the corresponding three-month period ended September 30, 2005 due to the
growth in our fleet. Amortization of deferred financing costs for the
three-month periods ended September 30, 2006 and 2005 is included in interest
expense.

     For the nine-month period ended September 30, 2006, total depreciation
and amortization expense was $15,737,990 of which amount, $15,222,940 relates
to depreciation and $515,050 relates to the amortization of deferred
drydocking costs. Total depreciation expense for the period from January 26,
2005 (inception) to September 30, 2005 was $5,879,515. Depreciation expenses
increased from the corresponding period from January 26, 2005 (inception) to
September 30, 2005 due to the growth in our fleet. Amortization of deferred
financing costs for the nine-month period ended September 30, 2006 and the
period from January 26, 2005 (inception) to September 30, 2005 is included in
interest expense.

     General and Administrative Expenses

     General and Administrative Expenses for the three-month periods ended
September 30, 2006 and 2005 were $1,266,905 and $833,384 respectively. The
increase in such expenses was primarily due to increase in recurring
administrative costs as our fleet expanded. Our general and administrative
expenses include recurring administrative costs and non-recurring formation
and advisory costs. Recurring costs include our onshore vessel administration
related expenses such as legal and professional expenses and administrative
and other expenses including payroll and expenses relating to our executive
officers and office staff, office rent and expenses, directors fees and
compensation, and directors and officers insurance. For the three-month
periods ended September 30, 2006 and 2005, all of our general and
administrative costs were recurring in nature. We expect general and
administrative expenses to increase as our fleet expands.

     General and Administrative Expenses for the nine-month period ended
September 30, 2006 and period from January 26, 2005 (inception) to September
30, 2005 were $3,366,408 and $2,253,421, respectively. The increase in such
expenses was primarily due to increase in recurring administrative costs as
our fleet expanded. For the nine-month period ended September 30, 2006, all of
our general and administrative costs were recurring in nature. For the
corresponding period from January 26, 2005 (inception) to September 30, 2005,
recurring administrative costs amounted to $1,443,154 and non-recurring costs
amounted to $810,267.

     Financial Advisory Fees

     We did not incur any related party expenses in the three-month or
nine-month periods ended September 30, 2006. We did not incur any related
party expenses in the corresponding three-month period ended September 30,
2005. For the nine- month period ended September 30, 2005, the Company
recorded an expense of $6,175,046 which relates to a financial advisory
agreement dated February 1, 2005 with Kelso which was terminated in 2005.
Under the terms of the agreement the Company was to pay Kelso annual fees of
up to $500,000. The agreement had also provided for Kelso to be paid fees in
connection with other services. In June 2005, the Company terminated certain
of its obligations under this agreement, including its obligation to pay the
annual fees of $500,000, for a one-time payment of $1,000,000. The Company
recorded an expense of $6,175,046 in the quarter ended June 30, 2005 for fees
incurred under such agreement.

     Non-Cash Compensation Expense

     For the three-month periods ended September 30, 2006 and 2005, the
Company recorded non-cash compensation charges of $3,076,699 and $3,735,705,
respectively. For the nine-month period ended September 30, 2006 and the
period from January 26, 2005 (inception) to September 30, 2005 the Company
recorded non-cash compensation charges of $5,768,355 and $11,376,552,
respectively. The expense for the nine-month period ended September 30, 2006
includes $5,721,322 in non-cash, non-dilutive charges relating to profits
interests awarded to members of the Company's management by the Company's
principal shareholder Eagle Ventures LLC, and a non-


                                                                            23
<PAGE>


cash amount of $47,033 which relates to the fair value of the stock options
granted on March 17, 2006 to certain directors of the Company under the 2005
Stock Incentive Plan.

     These non-cash, non-dilutive charges relate to profits interests awarded
to members of the Company's management by the Company's principal shareholder
Eagle Ventures LLC. These profits interests will dilute only the interests of
the owners of Eagle Ventures LLC, and will not dilute the direct holders of
the Company's common stock. The non-cash compensation charge is being recorded
as an expense over the estimated service period in accordance with SFAS No.
123(R). The non-cash compensation charges will be based on the fair value of
the profits interests which will be "marked to market" at the end of each
reporting period. The impact of any changes in the estimated fair value of the
profits interests will be recorded as a change in estimate cumulative to the
date of change. The impact on the amortization of the compensation charge of
any changes to the estimated vesting periods for the performance related
profits interests will be adjusted prospectively as a change in estimate. The
Company's Financial Statements for the year ended December 31, 2005 on Form
10-K includes a more detailed description of these profits interests.

     From January 26, 2005 (inception) to June 30, 2006, named executive
officers of Eagle Bulk received the following aggregate distributions from
Eagle Ventures in respect of their common equity ownership interest in Eagle
Ventures: Sophocles Zoullas ($469,976) and Alan Ginsberg ($2,956).

     On September 12, 2006, the Company's principal shareholder, Eagle
Ventures, sold 2,300,000 shares of the Company's common stock in a secondary
sale in a private placement. Eagle Ventures distributed the proceeds of this
secondary sale to its members in accordance with the Fourth Amended and
Restated Limited Liability Company Agreement of Eagle Ventures. Named
executive officers of Eagle Bulk received proceeds from this distribution (in
respect of vested profits interests) as follows: Sophocles Zoullas
($1,497,107) and Alan Ginsberg ($99,807). Named executive officers of Eagle
Bulk received additional proceeds from this distribution (in respect of their
common ownership interests in Eagle Ventures) as follows: Sophocles Zoullas
($481,704) and Alan Ginsberg ($3,030).

     In addition, on October 18, 2006 the Company's Board of Directors
declared a cash dividend for the third quarter of 2006 of $0.51 per share to
all shareholders of record as of October 30, 2006, including Eagle Ventures,
which was paid on November 2, 2006. Eagle Ventures distributed the proceeds of
this dividend to its members in accordance with the Fourth Amended and
Restated Limited Liability Company Agreement of Eagle Ventures. Named
executive officers of Eagle Bulk received proceeds from this distribution (in
respect of vested profits interests) as follows: Sophocles Zoullas ($334,710)
and Alan Ginsberg ($22,314). Named executive officers of Eagle Bulk received
additional proceeds from this distribution (in respect of their common
ownership interests in Eagle Ventures) as follows: Sophocles Zoullas ($72,638)
and Alan Ginsberg ($457).

     On November 9, 2006, the limited liability company agreement of Eagle
Ventures LLC was amended and restated (the "Fifth LLC Agreement") and is
included as Exhibit 10.7 to this quarterly report. Pursuant to the Fifth LLC
Agreement, the unvested portion of the performance-related profits interests
that previously vested ratably based on Kelso affiliates achieving a multiple
(ranging from two to four times) on their original investment in the Company
will now vest ratably based on Kelso affiliates achieving a multiple (ranging
from two to 3.25 times) on their original investment in the Company. In
addition, a first priority catch-up payment was added so that certain members
of Eagle Ventures receive a first priority distribution from Eagle Ventures,
prior to other distributions to members of Eagle Ventures, in an aggregate
amount of approximately $100,000, in order to adjust for the interest payments
received by Eagle Ventures on loans made by Eagle Ventures to the Company
prior to its initial public offering. Furthermore, all of the service-related
profits interests that are subject to a three-year vesting schedule are now
considered fully vested for purposes of determining participation in
distributions from Eagle Ventures but these service-related profits interests
will remain forfeitable, if applicable, by the management members (in
accordance with the existing three-year vesting schedule) upon their
termination of employment with Eagle Ventures LLC or its subsidiaries
(including the Company). Finally, a second priority catch-up payment was added
so that management members receive a second priority distribution from Eagle
Ventures, prior to other distributions to members of Eagle Ventures (other
than the first priority catch-up payment described above), in an aggregate
amount of approximately $740,000, as a catch-up in respect of such newly
vested service-related profits interests. Accordingly, we anticipate recording
an additional charge in the fourth quarter of approximately $840,000 as a
result of the amendment.


                                                                            24
<PAGE>


     Interest and Finance Costs

     Interest expense for the three-month period ended September 30, 2006, of
$3,180,336 includes loan interest of $2,986,183 incurred on our borrowings
from our revolving credit facility, commitment fees of $142,887 incurred on
the unused portion of the revolving credit facility, and costs of $51,266
relating to the amortization of financing costs associated with our revolving
credit facility.

     Interest expense for the corresponding three-month period ended September
30, 2005, was $1,727,416. These costs included loan interest costs of
$1,467,773, commitment fees of $194,900, and amortization charges of $64,743
relating to financing costs associated with the then existing term loan and
the revolving credit facility.

     Interest expense for the nine-month period ended September 30, 2006, of
$7,364,009 includes loan interest of $6,720,658 incurred on our borrowings
from our revolving credit facility, commitment fees of $525,860 incurred on
the unused portion of the revolving credit facility, and costs of $117,491
relating to the amortization of financing costs associated with our revolving
credit facility.

     Interest expense for the previous period from January 26, 2005
(inception) to September 30, 2005, was $4,961,012. These costs included loan
interest costs of $2,821,079, commitment fees of $336,255, $608,222 in
interest costs associated with a Note from Eagle Ventures, and amortization
charges of $1,195,456 which includes a write-off of $1,130,713 relating to the
deferred financing fees associated with the then existing term loan which was
entirely repaid upon refinancing with our revolving credit facility in July
2005, and $64,743 relating to amortization of financing costs associated with
the revolving credit facility.

     For the three-month period ended September 30, 2006, interest rates
applicable on the Company's debt ranged from 4.97% to 6.32%, including the
margin. The weighted average effective interest rate was 5.49%. For the
nine-month period ended September 30, 2006, interest rates applicable on the
Company's debt ranged from 4.97% to 6.32%, including the margin. The weighted
average effective interest rate was 5.37%.

     Our interest expense will increase as we increase our debt to finance
vessel acquisitions for our fleet growth.

     Interest Rate Swaps

     We have entered into interest rate swaps to effectively convert a portion
of its debt from a floating to a fixed-rate basis. The swaps are designated
and qualify as cash flow hedges.

     During the quarter ended September 30, 2006, we entered an interest rate
swap contract for a notional amount of $84,800,000. This contract matures in
September 2009. On this contract, exclusive of applicable margin, the Company
will pay 5.24% fixed-rate interest and receive floating-rate interest amounts
based on three-month LIBOR settings. The Company has two other interest rate
swap contracts for notional amounts of $100,000,000 and $30,000,000 which were
entered into in 2005. These contracts mature in September 2010. On these
contracts, exclusive of applicable margin, the Company pays 4.22% and 4.54%
fixed-rate interest, respectively, and receives floating-rate interest amounts
based on three-month LIBOR settings.

     We record the fair value of the interest rate swap as an asset or
liability in our financial statement. The effective portion of the swap is
recorded in accumulated other comprehensive income. Accordingly, at September
30, 2006 and December 31, 2005, we recorded an asset of $3,516,513 and
$2,647,077, respectively, which is included in Other Assets in the
accompanying balance sheet.

     EBITDA

     EBITDA represents operating earnings before extraordinary items,
depreciation and amortization, interest expense, and income taxes, if any.
EBITDA is included because it is used by certain investors to measure a
company's financial performance. EBITDA is not an item recognized by GAAP and
should not be considered a substitute for net


                                                                            25
<PAGE>


income, cash flow from operating activities and other operations or cash flow
statement data prepared in accordance with accounting principles generally
accepted in the United States or as a measure of profitability or liquidity.
EBITDA is presented to provide additional information with respect to the
Company's ability to satisfy its obligations including debt service, capital
expenditures, and working capital requirements. While EBITDA is frequently
used as a measure of operating results and the ability to meet debt service
requirements, the definition of EBITDA used here may not be comparable to that
used by other companies due to differences in methods of calculation.

     Our revolving credit facility permits us to pay dividends in amounts up
to our earnings before extraordinary or exceptional items, interest, taxes,
depreciation and amortization (Credit Agreement EBITDA), less the aggregate
amount of interest incurred and net amounts payable under interest rate
hedging agreements during the relevant period and an agreed upon reserve for
dry-docking. Therefore, we believe that this non-GAAP measure is important for
our investors as it reflects our ability to pay dividends. The following table
is a reconciliation of net income, as reflected in the consolidated statements
of operations, to the Credit Agreement EBITDA for the three-month periods
ended September 30, 2006 and 2005 and for the nine-month period ended
September 30, 2006 and the period from January 26, 2005 (inception) to
September 30, 2005 respectively:


<TABLE>
<CAPTION>
                                                                                                           Period from
                                                 Three-Months      Three-Months        Nine-Months          January 26
                                                   ended              ended              ended            (inception) to
                                                September 30,      September 30,       September 30,      September 30,
                                                     2006               2005               2006               2005
                                               ----------------   ----------------   ----------------   ----------------
<S>                                            <C>                <C>                <C>                <C>

Net Income/(Loss)                                    $9,100,737         $7,394,289        $29,284,974        $(5,500,468)
Interest Expense                                      3,180,336          1,727,416          7,364,009          4,961,012
Depreciation and Amortization                         5,980,747          3,858,943         15,737,990          5,879,515
Amortization of Prepaid and Deferred Revenue            725,000            123,500          2,435,500            328,500
                                               ----------------   ----------------   ----------------   ----------------
EBITDA                                               18,986,820         13,104,148         54,822,473          5,668,559
Adjustments for Exceptional Items:
Management and Other Fees to Affiliates (1)                --                 --                 --            6,175,046
Non-cash Compensation Expense (2)                     3,076,699          3,735,705          5,768,355         11,376,552
                                               ----------------   ----------------   ----------------   ----------------
Credit Agreement EBITDA                             $22,063,519        $16,839,853        $60,590,828        $23,220,157
                                               ================   ================   ================   ================
</TABLE>

     (1)  One-time charge

     (2)  Management's participation in profits interests in Eagle Ventures
          LLC and Options Expense (see Notes to our financial statements)

Effects of Inflation

     We do not believe that inflation has had or is likely, in the foreseeable
future, to have a significant impact on vessel operating expenses, drydocking
expenses or general and administrative expenses.

Liquidity and Capital Resources

     Net cash provided by operating activities during the nine-month period
ended September 30, 2006, was $52,123,412 compared to $18,359,470 during the
period from inception on January 26, 2005 to September 30, 2005. This increase
was primarily due to cash generated from the operation of a fleet of 16
vessels for 3,816 operating days in the period for 2006 compared to 1,422
operating days from 11 vessels during the corresponding period in 2005.

     Net cash used in investing activities during the nine-month period ended
September 30, 2006, was $105,112,609 as the Company expanded its fleet to 16
vessels by acquiring three Supramax class vessel, KESTREL I, TERN and JAEGER.
Net cash used in investing activities during the corresponding period from
inception on January 26, 2005 to September 30, 2005 was $373,554,183 as the
Company acquired its initial eleven vessels and placed deposits for two
additional vessels.


                                                                            26
<PAGE>


     Net cash provided by financing activities during the nine-month period
ended September 30, 2006, was $51,676,257 which primarily consisted of
$33,000,000 in gross proceeds from a private placement of its common stock,
borrowings of $74,800,000 from its revolving credit facility, and payments of
$53,420,500 in dividends. Net cash provided by financing activities during the
corresponding period from inception on January 26, 2005 to September 30, 2005
was $376,369,845 primarily consisting of net proceeds of $186,529,290 from the
initial public offering, capital contributions of $40,843,662 and net
borrowings of $157,000,000 from its credit facilities.

     As of September 30, 2006, our cash balance was $23,213,588 compared to a
cash balance of $24,526,528 at December 31, 2005. In addition, $6,400,000 in
cash deposits are maintained with our lender for loan compliance purposes and
this amount is recorded in Restricted Cash in our financial statements as of
September 30, 2006 and December 31, 2005. Also recorded in Restricted Cash is
an amount of $124,616 which is collateralizing a letter of credit relating to
our office lease.

     In July 2006, we amended and increased our $330,000,000 long-term
revolving credit facility which we had entered into in July 2005. Our revised
facility consists of $450,000,000 of which $235,200,000 was unused as of
September 30, 2006. The amended revolving credit agreement also provides us
with the ability to borrow up to $15,000,000 for working capital purposes.
(See section entitled "Revolving Credit Facility" for a description of the
revised facility and subsequent changes to the credit facility).

     We anticipate that our current financial resources, together with cash
generated from operations and, if necessary, borrowings under our revolving
credit facility will be sufficient to fund the operations of our fleet,
including our working capital requirements, for at least the next 12 months.

     It is our intention to fund our future acquisition related capital
requirements initially through borrowings under our revolving credit facility
and to repay all or a portion of such borrowings from time to time with the
net proceeds of equity issuances. We believe that funds will be available to
support our growth strategy, which involves the acquisition of additional
vessels, and will allow us to pay dividends to our stockholders as
contemplated by our dividend policy.

Dividends

     Our policy is to declare quarterly dividends to stockholders in February,
April, July and October in amounts that are substantially equal to our
available cash from operations during the previous quarter less any cash
reserves for drydocking and working capital.

     Our revolving credit facility permits us to pay quarterly dividends in
amounts up to our quarterly earnings before extraordinary or exceptional
items, interest, taxes, depreciation and amortization (Credit Agreement
EBITDA), less the aggregate amount of interest incurred and net amounts
payable under interest rate hedging agreements during the relevant period and
an agreed upon reserve for drydocking for the period, provided that there is
not a default or breach of loan covenant under the credit facility and the
payment of the dividends would not result in a default or breach of a loan
covenant. Depending on market conditions in the dry bulk shipping industry and
acquisition opportunities that may arise, we may be required to obtain
additional debt or equity financing which could affect our dividend policy.

     On July 18, 2006 the Company's Board of Directors declared a cash
dividend for the second quarter of 2006 of $0.50 per share, based on
35,900,000 shares of common stock outstanding, which was paid on August 3,
2006 to all shareholders of record as of July 28, 2006. The aggregate amount
of this cash dividend was $17,950,000.

     On October 18, 2006 the Company's Board of Directors declared a cash
dividend for the third quarter of 2006 of $0.51 per share, based on 35,900,000
shares of common stock outstanding, payable on November 2, 2006 to all
shareholders of record as of October 30, 2006. The aggregate amount of the
cash dividend paid to the Company's shareholders on November 2, 2006 was
$18,309,000.

Revolving Credit Facility


                                                                            27
<PAGE>


     In July 2006, the Company amended and increased its initial $330,000,000
long-term revolving credit facility which we had entered into in July 2005.
(The Company's Financial Statements for the year ended December 31, 2005 on
Form 10-K includes a more detailed description of the initial revolving credit
facility). During the nine-month period ended September 30, 2006, the Company
borrowed a total of $74,800,000 from its initial revolving credit facility
which was used to partly fund the acquisition of the KESTREL I, TERN and
JAEGER. Following the completion of these acquisitions the Company's
borrowings under the revolving credit facility stood at $214,800,000.

     Subsequent to the acquisition of the three vessels, in July 2006, the
initial revolving credit facility was amended and increased to $450,000,000
with a new term of ten years. The entire $450,000,000 facility will be
available for a period of six years from July 30, 2006, compared to four years
remaining in the commitment period of the Company's initial facility. There
are no principal repayment obligations during this initial six-year period.
Over the remaining four years until maturity in July 2016, the facility will
reduce in semi-annual amounts of $25,000,000 with a final reduction of
$250,000,000 occurring simultaneously with the last semi-annual reduction. We
paid an arrangement fee of $900,000 to our lender in connection with the
amended credit facility.

     As a result of the amendment to the facility, at September 30, 2006, the
Company had increased its remaining undrawn capacity to $235,200,000 which is
available to fund future acquisitions of dry bulk vessels.

     We are permitted to borrow up to $15,000,000 (increased from $10,000,000
under its existing facility) at any one time for working capital purposes
during an initial period of 18 months from the first draw down date, after
which time our ability to borrow amounts for working capital purposes is
subject to review and reapproval on an annual basis.

     The amended facility will bear interest at the rate of 0.75% to 0.85%
over LIBOR (decreased from 0.95% over LIBOR under its initial facility),
depending upon the amount of debt drawn as a percentage of the value of the
Company's vessels. The Company will pay a commitment fee of 0.25% per annum
(decreased from 0.40% under its initial facility) on the undrawn amount of the
amended facility.

     Our ability to borrow amounts under the amended revolving credit facility
will be subject to the satisfaction of certain customary conditions precedent
and compliance with terms and conditions included in the loan documents. In
connection with vessel acquisitions, amounts borrowed may not exceed 75% of
the value of the vessels securing our obligations under the credit facility.
Our ability to borrow such amounts, in each case, is subject to our lender's
approval of the vessel acquisition. Our lender's approval will be based on the
lender's satisfaction of our ability to raise additional capital through
equity issuances in amounts acceptable to our lender and the proposed
employment of the vessel to be acquired.

     Our obligations under the amended revolving credit facility are secured
by a first priority mortgage on each of the vessels in our fleet and such
other vessels that we may from time to time include with the approval of our
lender, and by a first assignment of all freights, earnings, insurances and
requisition compensation relating to our vessels. The facility also limits our
ability to create liens on our assets in favor of other parties. We may grant
additional securities from time to time in the future.

     The revolving credit facility, as amended, contains financial covenants
requiring us, among other things, to ensure that:

     o    the aggregate market value of the vessels in our fleet that secure
          our obligations under the revolving credit facility, as determined
          by an independent shipbroker on a charter free basis, at all times
          exceeds 125% of the aggregate principal amount of debt outstanding
          under the new credit facility and the notional or actual cost of
          terminating any related hedging arrangements;

     o    to the extent our debt during any accounting period is less than
          $250,000,000, our total assets minus our debt will not be less than
          $100,000,000; to the extent our debt during any accounting period is
          greater than $250,000,000, our total assets minus our debt will not
          be less than $150,000,000;


                                                                            28
<PAGE>


     o    our EBITDA, as defined in the credit agreement, will at all times be
          not less than 2x the aggregate amount of interest incurred and net
          amounts payable under interest rate hedging arrangements during the
          relevant period; and

     o    we maintain with the lender $400,000 per vessel in addition to an
          amount adequate to meet anticipated capital expenditures for the
          vessel over a 12 month period.

     For the purposes of the revolving credit facility, our "total assets"
includes our tangible fixed assets and our current assets, as set forth in our
consolidated financial statements, except that the value of any vessels in our
fleet that secure our obligations under the facility are measured by their
fair market value rather than their carrying value on our consolidated balance
sheet.

     The revolving credit facility permits us to pay dividends in amounts up
to our earnings before extraordinary or exceptional items, interest, taxes,
depreciation and amortization (EBITDA), less the aggregate amount of interest
incurred and net amounts payable under interest rate hedging agreements during
the relevant period and an agreed upon reserve for dry-docking, provided that
there is not a default or breach of loan covenant under the credit facility
and the payment of the dividends would not result in a default or breach of a
loan covenant.

     On November 6, 2006, the Company amended its existing revolving credit
facility from its sole lender, Royal Bank of Scotland plc to increase the
borrowing capacity from $450 million to $500 million. The structure of the
financing will enable us to capitalize pre-delivery payments under our vessel
newbuilding contracts and costs associated with supervision and financing the
new vessels.

     There are no principal repayment obligations under the amended facility
until July 2012. Over the remaining four years until maturity in 2016, the
facility will reduce in semi-annual amounts of $28,750,000 with a final
reduction of $270,000,000 occurring simultaneously with the last semi-annual
reduction. All other terms and conditions of the amended facility remain the
same as the existing facility. We paid an arrangement fee of $250,000 to our
lender in connection with the amended credit facility.

Contractual Obligations

The following table sets forth our expected contractual obligations and their
maturity dates as of September 30, 2006:

<TABLE>
<CAPTION>

                                            Within          One to      Three to        More than      Total
                                          One Year     Three Years    Five Years       Five years
                                          -------      ----------     ----------       ----------   --------
                                                           (in thousands of U.S. dollars)
<S>                                      <C>            <C>            <C>           <C>            <C>

Bank Loans                                  --             --             --          214,800        214,800
Interest and borrowing fees ((1))         12,394         24,823         24,789         46,487        108,493
Office lease                                 250            501            376           --            1,127

                                         -------------------------------------------------------------------
Total                                    $12,645        $25,324        $25,164       $261,287       $324,420
                                         ===================================================================
</TABLE>

     (1)  The Company is a party to floating-to-fixed interest rate swaps
          covering notional amounts of $100,000,000, $30,000,000, and
          $84,800,000 at September 30, 2006 that effectively convert the
          Company's interest rate exposure from a floating rate based on LIBOR
          to a fixed rate of 4.22%, 4.54% and 5.24% respectively, plus
          applicable margin.

     Capital Expenditures

     Our capital expenditures relate to purchase of vessels and capital
improvements to our vessels which are expected to enhance the revenue earning
capabilities of these vessels. In addition to acquisitions that we may
undertake in future periods, other major capital expenditures include funding
the Company's maintenance program of regularly scheduled drydocking necessary
to preserve the quality of our vessels as well as to comply with international


                                                                            29
<PAGE>


shipping standards and environmental laws and regulations. Although the
Company has some flexibility regarding the timing of its dry docking, the
costs are relatively predictable. Management anticipates that vessels are to
be drydocked every two and a half years. Funding of these requirements is
anticipated to be met with cash from operations. We anticipate that this
process of recertification will require us to reposition these vessels from a
discharge port to shipyard facilities, which will reduce our available days
and operating days during that period.

     During the three-month period ended September 30, 2006, we drydocked two
vessels. In the nine-month period ended September 30, 2006, we have spent
$2,269,422 on vessel drydockings and this amount is amortized to expense on a
straight-line basis over the period through the date the next drydocking for
those vessels are scheduled to occur. The following table represents certain
information about the estimated costs for anticipated vessel drydockings in
the remainder of 2006 and calendar 2007 along with the anticipated off-hire
days:

--------------------------------------------------------------------------------


   Quarter Ending                         Off-hire Days(1)    Projected Costs(2)
   --------------                         ----------------    ------------------
   December 31, 2006.....................       --                    --
   March 31, 2007........................        30             $0.70 million
   June 30, 2007.........................        15             $0.35 million
   September 30, 2007....................        30             $0.70 million
   December 31, 2007.....................        30             $0.70 million

--------------------------------------------------------------------------------

     (1)  Actual duration of drydocking will vary based on the condition of
          the vessel, yard schedules and other factors.

     (2)  Actual costs will vary based on various factors, including where the
          drydockings are actually performed.
--------------------------------------------------------------------------------

     Contracted Time Charter Revenue

     We have time charter contracts currently for all our vessels. The
contracted time charter revenue schedule, as shown below, reduces future
contracted revenue for any estimated off-hire days relating to dry-docks.

     The following table represents certain information about the Company's
revenue earning charters:

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                          Daily Time Charter
Vessel               Delivered to Charterer    Time Charter Expiration (1)     Hire Rate
-----                ----------------------    --------------------------      ---------
<S>                  <C>                       <C>                              <C>
Cardinal             April 19, 2005            March 2007 to June 2007          $26,500
Condor  (2)          April 30, 2005            November 2006 to March 2007      $24,000
Falcon               April 22, 2005            February 2008 to June 2008       $20,950
Griffon  (3)         February 17, 2006         January 2007 to February 2007    $13,550
Harrier              April 21, 2005            March 2007 to June 2007          $23,750
Hawk I  (4)          April 28, 2005            April 2007                       $23,750
Heron                December 11, 2005         December 2007 to February 2008   $24,000
Jaeger               July 7, 2006              April 2007 to June 2007          $18,550
Kestrel I (5)        July 1, 2006              December 2007 to April 2008      $18,750
Kite                 April 17, 2006            March 2007 to May 2007           $14,750
Merlin               October 26, 2005          October 2007 to December 2007    $24,000
Osprey I   (6)       September 1, 2005         May 2008 to September 2008       $21,000
Peregrine  (7)       July 1, 2005              October 2006 to January 2007     $24,000
Shikra  (8)          September 10, 2006        September 2007 to December 2007  $14,800
Sparrow  (9)         July 20, 2005             November 2006 to Feb 2007        $22,500
Tern  (10)           July 3, 2006              December 2007 to April 2008      $19,000
</TABLE>

--------------------------------------------------------------------------------

(1)  The date range provided represents the earliest and latest date on which
     the charterer may redeliver the vessel to the Company upon the
     termination of the charter.

(2)  Upon completion of the current charter the CONDOR will enter a new time
     charter at $20,500 per day for 26 to 29 months.
--------------------------------------------------------------------------------

31
<PAGE>

--------------------------------------------------------------------------------

(3)  Upon completion of the current charter the GRIFFON will enter a new time
     charter at $20,075 per day for 24 to 26 months.

(4)  The charter for the HAWK I has been renewed at $22,000 per day commencing
     in April 2007 for 24 to 26 months.

(5)  The charterer of the KESTREL I has an option to extend the charter period
     by 11 to 13 months at a daily time charter rate of $20,000 per day.

(6)  The charterer of the OSPREY I has an option to extend the charter period
     by up to 26 months at a daily time charter rate of $25,000.

(7)  Upon conclusion of the current charter, the PEREGRINE commences a new
     time charter at $20,500 per day for 24 to 26 months.

(8)  Upon conclusion of the current charter in September 2006 the SHIKRA
     commenced a new time charter at $14,800 per day for 12 to 15 months.

(9)  Upon completion of the current charter the SPARROW will enter a new time
     charter at a base rate of $24,000 per day for 11 to 13 months with a
     profit share of 30% of upto the first $3,000 per day over the base rate

(10) The charterer of the TERN has an option to extend the charter period by
     11 to 13 months at a daily time charter rate of $20,500 per day.
--------------------------------------------------------------------------------

Off-balance Sheet Arrangements

     We do not have any off-balance sheet arrangements.


                                                                            31
<PAGE>


Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

     There have been no material changes from the "Interest Rate Risk"
previously disclosed in our Form 10-K for the year ended December 31, 2005.

Currency and Exchange Rates

     The shipping industry's functional currency is the U.S. dollar. The
Company generates all of its revenues in U.S. dollars. The majority of the
Company's operating expenses and the entirety of its management expenses are
in U.S. dollars. The Company does not intend to use financial derivatives to
mitigate the risk of exchange rate fluctuations for its revenues and expenses.

     Subsequent to September 30, 2006, the Company has entered into foreign
exchange swap transactions to hedge the Japanese yen exposure into US dollars
for the purchase price in Japanese yen of two new-build vessels which are
expected to be delivered to the Company in January 2010 and February 2010. The
Company has swapped a total of 7,310,000,000 in yen currency exposure into
equivalent US $67,108,583.


                                                                            32
<PAGE>


Item 4. Controls and Procedures

Disclosure Controls and Procedures

     Our management, including our Chief Executive Officer and Chief Financial
Officer, has conducted an evaluation of the effectiveness of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934) as of the end of the period covered by this
report. Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that our disclosure controls and procedures
are effective to ensure that information required to be disclosed by the
Company in the reports that it files or submits to the SEC under the
Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported within the time periods specified in SEC rules and
forms.

Internal Control Over Financial Reporting

     We evaluated our internal control over financial reporting, (as defined
in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934), and
there have been no changes in our internal control over financial reporting
that occurred during the second quarter of 2006 that materially affected, or
are reasonably likely to materially affect, our internal control over
financial reporting.


                                                                            33
<PAGE>


PART II: OTHER INFORMATION

Item 1 - Legal Proceedings

     We are not aware of any legal proceedings or claims to which we or our
subsidiaries are party or of which our property is subject. From time to time
in the future, we may be subject to legal proceedings and claims in the
ordinary course of business, principally personal injury and property casualty
claims. Those claims, even if lacking merit, could result in the expenditure
by us of significant financial and managerial resources.

Item 1A - Risk Factors

     There have been no material changes from the "Risk Factors" previously
disclosed in our Form 10-K for the year ended December 31, 2005.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

     On March 17, 2006, the Company granted 56,666 shares of the Company's
stock in options to its independent non-employee directors. These options
vested and became exercisable on the grant date at an exercise price of $13.23
per share. All options expire ten years from the date of grant.

     On June 28, 2006, the Company issued an aggregate of 2,750,000 shares of
its common stock, par value $0.01, to certain institutional investors pursuant
to a securities purchase agreement dated June 22, 2006, for an aggregate
purchase price of $33,000,000, or $12.00 per share of common stock. The shares
of common stock were sold pursuant to an exemption from registration afforded
by Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 of
Regulation D promulgated thereunder.

     The offering incurred costs of $1,770,811 in fees and expenses and the
balance of the proceeds was used to fund a portion of the acquisition of three
vessels, KESTREL I, TERN and JAEGER.

Item 3 - Defaults upon Senior Securities

         None

Item 4 - Submission of Matters to a Vote of Security Holders

         None

Item 5 - Other Information

     On September 12, 2006 the Company's principal shareholder, Eagle Ventures
LLC, sold 2,300,000 shares from its holdings of the Company's common stock in
a private placement. The Company did not receive any proceeds from this
secondary sale. The sale incurred costs of $198,200.

     On November 9, 2006, the limited liability company agreement of Eagle
Ventures LLC was amended and restated (the "Fifth LLC Agreement") and is
included as Exhibit 10.7 to this quarterly report. Pursuant to the Fifth LLC
Agreement, the unvested portion of the performance-related profits interests
that previously vested ratably based on Kelso affiliates achieving a multiple
(ranging from two to four times) on their original investment in the Company
will now vest ratably based on Kelso affiliates achieving a multiple (ranging
from two to 3.25 times) on their original investment in the Company. In
addition, a first priority catch-up payment was added so that certain members
of Eagle Ventures receive a first priority distribution from Eagle Ventures,
prior to other distributions to members of Eagle Ventures, in an aggregate
amount of approximately $100,000, in order to adjust for the interest payments
received by Eagle Ventures on loans made by Eagle Ventures to the Company
prior to its initial public offering. Furthermore, all of the service-related
profits interests that are subject to a three-year vesting schedule are now
considered fully vested


                                                                            34
<PAGE>


for purposes of determining participation in distributions from Eagle Ventures
but these service-related profits interests will remain forfeitable, if
applicable, by the management members (in accordance with the existing
three-year vesting schedule) upon their termination of employment with Eagle
Ventures LLC or its subsidiaries (including the Company). Finally, a second
priority catch-up payment was added so that management members receive a
second priority distribution from Eagle Ventures, prior to other distributions
to members of Eagle Ventures (other than the first priority catch-up payment
described above), in an aggregate amount of approximately $740,000, as a
catch-up in respect of such newly vested service-related profits interests.


Item 6 - Exhibits

                                 EXHIBIT INDEX

     3.1  Amended and Restated Articles of Incorporation of the Company*

     3.2  Amended and Restated Bylaws of the Company*

     4.1  Form of Share Certificate of the Company*

     10.1 Form of Registration Rights Agreement*

     10.2 Form of Management Agreement*

     10.3 Form of Amended and Restated Credit Agreement**

     10.3.1 Form of Second Amended and Restated Credit Agreement

     10.4 Eagle Bulk Shipping Inc. 2005 Stock Incentive Plan*

     10.5 Employment Agreement for Mr. Sophocles N. Zoullas*

     10.6 Form of Fourth Amended and Restated Limited Liability Company
          Agreement of Eagle Ventures LLC***

     10.7 Form of Fifth Amended and Restated Limited Liability Company
          Agreement of Eagle Ventures LLC

     31.1 Rule 13a-14(d) / 15d-14(a)_Certification of CEO

     31.2 Rule 13a-14(d) / 15d-14(a)_Certification of CFO

     32.1 Section 1350 Certification of CEO

     32.2 Section 1350 Certification of CFO

          *    Incorporated by reference to the Registration Statement on Form
               S-1, Registration No. 333-123817.

          **   Incorporated by reference to the Report on Form 8-K filed on
               July 31, 2006.

          ***  Incorporated by reference to the Registrant's annual report on
               Form 10-K for the period ending December 31, 2005 filed on
               March 14, 2006.


                                                                            35
<PAGE>


                                  SIGNATURES


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

EAGLE BULK SHIPPING INC.

----------------------------------------
(REGISTRANT)
Date:    November 9, 2006
By:    /s/ Sophocles N. Zoullas

----------------------------------------
Sophocles N. Zoullas
Chairman of the Board and
Chief Executive Officer

Date:    November 9, 2006
By:    /s/ Alan S. Ginsberg

----------------------------------------
Alan S. Ginsberg
Chief Financial Officer
and Treasurer


                                                                            36
<PAGE>


Exhibit 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

I, Sophocles Zoullas, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Eagle Bulk Shipping
     Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement
     of a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered
     by this report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as
     defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
     control over financial reporting (as defined in Exchange Act Rules
     13a-15(f) and 15d-15(f)) for the registrant and have:

     a)   designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known
          to us by others within those entities, particularly during the
          period in which this report is being prepared;

     b)   designed such internal control over financial reporting, or caused
          such internal control over financial reporting to be designed under
          our supervision, to provide reasonable assurance regarding the
          reliability of financial reporting and the preparation of financial
          statements for external purposes in accordance with generally
          accepted accounting principles;

     c)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about
          the effectiveness of the disclosure controls and procedures, as of
          the end of the period covered by this report based on such
          evaluation; and

     d)   disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the period
          covered by the annual report that has materially affected, or is
          reasonably likely to materially affect, the Company's internal
          control over financial reporting.

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting,
     to the registrant's auditors and the audit committee of the registrant's
     board of directors (or persons performing the equivalent function):

     a)   all significant deficiencies and material weaknesses in the design
          or operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material, that involves management or
          other employees who have a significant role in the registrant's
          internal control over financial reporting.

Date: November 13, 2006


                                                                            37
<PAGE>

------------------------------
/s/ Sophocles Zoullas
Sophocles Zoullas
Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Alan Ginsberg, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Eagle Bulk Shipping
     Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement
     of a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered
     by this report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as
     defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
     control over financial reporting (as defined in Exchange Act Rules
     13a-15(f) and 15d-15(f)) for the registrant and have:

     a)   designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          Company, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period
          in which this report is being prepared;

     b)   designed such internal control over financial reporting, or caused
          such internal control over financial reporting to be designed under
          our supervision, to provide reasonable assurance regarding the
          reliability of financial reporting and the preparation of financial
          statements for external purposes in accordance with generally
          accepted accounting principles;

     c)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about
          the effectiveness of the disclosure controls and procedures, as of
          the end of the period covered by this report based on such
          evaluation; and

     d)   disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the period
          covered by the annual report that has materially affected, or is
          reasonably likely to materially affect, the Company's internal
          control over financial reporting.

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting,
     to the registrant's auditors and the audit committee of the registrant's
     board of directors (or persons performing the equivalent function):

     a)   all significant deficiencies and material weaknesses in the design
          or operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     control over financial reporting.

Date: November 13, 2006


                                                                            38
<PAGE>


------------------------------
/s/ Alan Ginsberg
Alan Ginsberg
Chief Financial Officer


                                                                            39
<PAGE>


Exhibit 32.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

     In connection with the quarterly report of Eagle Bulk Shipping Inc. (the
"Company") on Form 10-Q for the quarter ended September 30, 2006, as filed
with the Securities and Exchange Commission (the "SEC") on or about the date
hereof (the "Report"), I, Sophocles Zoullas, Principal Executive Officer of
the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully complies with the requirements of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all
          material respects, the financial condition and results of operations
          of the Company.

     A signed original of this written statement has been provided to the
Company and will be retained by the Company and furnished to the SEC or its
staff upon request.

Date: November 13, 2006

----------------------------
/s/ Sophocles Zoullas
Sophocles Zoullas
Chief Executive Officer


                                                                            40
<PAGE>


Exhibit 32.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

     In connection with the quarterly report of Eagle Bulk Shipping Inc. (the
"Company") on Form 10-Q for the quarter ended September 30, 2006, as filed
with the Securities and Exchange Commission (the "SEC") on or about the date
hereof (the "Report"), I, Alan Ginsberg, Principal Financial Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully complies with the requirements of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all
          material respects, the financial condition and results of operations
          of the Company.

     A signed original of this written statement has been provided to the
Company and will be retained by the Company and furnished to the SEC or its
staff upon request.

Date: November 13, 2006

-----------------------------
/s/ Alan Ginsberg
Alan Ginsberg
Chief Financial Officer


                                                                            41
<PAGE>