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

                                    FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                For the quarterly period ended September 30, 2005

                                       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.)

      29 Broadway, New York, New York                          10006
------------------------------------------         -----------------------------
          (Address of principal                              (Zip Code)
            executive offices)

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

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 an accelerated filer (as
defined in Rule 12b-2 of the 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 $0.01 per share 32,650,000 shares outstanding as of
November 11, 2005.
<PAGE>

                            EAGLE BULK SHIPPING INC.
                                      INDEX

                                                                            Page
                                                                            ----

PART I: FINANCIAL INFORMATION

     Item 1- Financial Statements
          Consolidated Balance Sheets
            as of September 30, 2005 (unaudited) and June 30, 2005...........  3

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

          Consolidated Statement of Stockholders' Equity
            (unaudited) for the period from January 26, 2005
            (inception) to September 30, 2005................................  5

          Consolidated Statement of Cash Flows (unaudited)
            for the period from January 26, 2005 (inception)
            to September 30, 2005............................................  6

          Notes to Consolidated Financial
            Statements (unaudited)...........................................  7

     Item 2- Management's Discussion and Analysis of
               Financial Condition and Results of Operation.................. 18

     Item 3- Quantitative and Qualitative Disclosures about
               Market Risk................................................... 31

     Item 4- Controls and Procedures......................................... 32

PART II: OTHER INFORMATION

     Item 1- Legal Proceedings............................................... 33
     Item 2- Unregistered Sales of Equity Securities and Use of Proceeds..... 33
     Item 3- Defaults upon Senior Securities................................. 33
     Item 4- Submission of Matters to a Vote of Security Holders............. 33
     Item 5- Other Information............................................... 33
     Item 6- Exhibits........................................................ 33

SIGNATURES
<PAGE>

Part 1 : FINANCIAL INFORMATION
Item 1 : Financial Statements

<TABLE>
                            EAGLE BULK SHIPPING INC.
                           CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                         September 30,      June 30,
                                                             2005             2005
                                                         -------------    -------------
                                                          (Unaudited)
<S>                                                       <C>              <C>
ASSETS:
Current Assets:
  Cash and cash equivalents ..........................     $21,175,132      $10,970,963
  Accounts Receivable ................................          54,153           22,034
  Interest Receivable ................................          49,278               --
  Prepaid Charter Revenue ............................         824,000        1,284,000
  Prepaid Expenses ...................................         783,946          186,373
                                                         -------------    -------------
     Total Current Assets ............................      22,886,509       12,463,370
Fixed Assets:
  Advances for Vessel Acquisitions ...................       7,000,000        7,018,100
  Advances for Vessel Improvements ...................              --          640,000
  Vessels at cost, net of Accumulated Depreciation
    of $5,879,515 and $2,020,572 at September 30, 2005
    and June 30, 2005, respectively ..................     360,674,668      292,563,221
                                                         -------------    -------------
     Total Fixed Assets ..............................     367,674,668      300,221,321
Restricted Cash ......................................       5,500,000        4,000,000
Other Assets and Deferred Charges ....................       2,812,399          776,105
                                                         -------------    -------------
Total Assets .........................................    $398,873,576     $317,460,796
                                                         =============    =============

LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts Payable ...................................      $1,906,956       $2,945,310
  Accrued Liabilities ................................         985,411          666,759
  Deferred Revenue ...................................       1,720,000          914,000
  Unearned Charter Hire Revenue ......................       2,507,425        1,790,082
                                                         -------------    -------------
     Total Current Liabilities .......................       7,119,792        6,316,151
Long-term Debt .......................................     157,000,000       88,500,000
                                                         -------------    -------------
Total Liabilities ....................................     164,119,792       94,816,151
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, 27,150,000 and 12,750,000 shares
    issued and outstanding, respectively .............         271,500          271,500
  Additional Paid-In Capital .........................     238,478,004      234,742,299
  Accumulated Deficit ................................      (5,500,468)     (12,894,757)
  Accumulated Other Comprehensive Income .............       1,504,748          525,603
                                                         -------------    -------------
     Total Stockholders' Equity ......................     234,753,784      222,644,645
                                                         -------------    -------------
Total Liabilities & Stockholders' Equity .............    $398,873,576     $317,460,796
                                                         =============    =============
</TABLE>

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

<TABLE>
                            EAGLE BULK SHIPPING INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<CAPTION>
                                                                            Period from
                                                                            January 26,
                                                            Three Months       2005
                                                               ended        (inception)
                                                              September    to September
                                                              30, 2005       30, 2005
                                                            ------------   ------------
<S>                                                         <C>            <C>
Revenues, net of commissions ..........................      $21,137,615    $31,753,494

Vessel Expenses .......................................        3,732,726      6,848,124
Depreciation ..........................................        3,858,943      5,879,515
General and Administrative Expenses ...................          833,384      2,253,421
Management and Other Fees to Affiliates ...............               --      6,175,046
Non-cash Compensation Expense .........................        3,735,705     11,376,552
                                                            ------------   ------------
  Total Operating Expenses ............................       12,160,758     32,532,658
                                                            ------------   ------------

Operating Income/(Loss) ...............................        8,976,857       (779,164)

Interest Expense ......................................        1,727,416      4,961,012
Interest Income .......................................         (144,848)      (239,708)
                                                            ------------   ------------
  Net Interest Expense ................................        1,582,568      4,721,304
                                                            ------------   ------------

Net Income/(Loss) .....................................       $7,394,289    $(5,500,468)
                                                            ============   ============

Income/(Loss) per Common Share - Basic and Diluted ....            $0.27         $(0.30)
                                                            ============   ============
Weighted Average Shares Outstanding - Basic and Diluted       27,150,000     18,498,387
                                                            ============   ============
</TABLE>

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

<TABLE>
                            EAGLE BULK SHIPPING INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
             FROM JANUARY 26, 2005 (INCEPTION) TO SEPTEMBER 30, 2005
                                   (UNAUDITED)
<CAPTION>
                                               Additional                                        Other          Total
                                    Common       Paid-In     Subscription     Accumulated    Comprehensive   Stockholders'
                                    Shares       Capital      Receivable        Deficit          Income         Equity
                                   --------   ------------   -------------    -----------    -------------   -------------
<S>                                <C>        <C>            <C>              <C>            <C>             <C>
Balance at January 26, 2005 ..     $     --   $         --   $          --    $        --    $       --      $         --
Comprehensive Income (Loss):
   Net Loss ..................           --             --              --     (5,500,468)           --        (5,500,468)
   Net Unrealized gains on
   derivatives ...............           --             --              --             --     1,504,748         1,504,748
                                                                                                             ------------
Comprehensive (Loss) .........           --             --              --             --            --        (3,995,720)
Issuance of Common Stock and
   Capital Contributions .....      127,500     40,716,162         (21,384)            --            --        40,822,278
Capital Contributions ........           --             --          21,384             --            --            21,384
Initial Public Offering, net
   of issuance costs .........      144,000    186,385,290              --             --            --       186,529,290
Non-cash Compensation ........           --     11,376,552              --             --            --        11,376,552

Balance at September 30, 2005      $271,500   $238,478,004   $          --    $(5,500,468)   $1,504,748      $234,753,784
                                   --------   ------------   -------------    -----------    ----------      ------------
</TABLE>

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

                            EAGLE BULK SHIPPING INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
             FROM JANUARY 26, 2005 (INCEPTION) TO SEPTEMBER 30, 2005
                                   (UNAUDITED)

Cash Flows from Operating Activities
Net Loss ......................................................     $(5,500,468)
Adjustments to Reconcile Net Loss to Net Cash
provided by Operating Activities:
Items included in net income not affecting cash flows:
   Depreciation ...............................................       5,879,515
   Amortization of Deferred Financing Costs ...................       1,195,456
   Amortization of Prepaid Charter Revenue ....................         328,500
   Non-cash Compensation Expense ..............................      11,376,552
Changes in Operating Assets and Liabilities:
   Accounts Receivable ........................................         (54,153)
   Interest Receivable ........................................         (49,278)
   Prepaid Revenue ............................................      (1,489,000)
   Prepaid Expenses ...........................................        (783,946)
   Accounts Payable ...........................................       1,906,956
   Accrued Expenses ...........................................         985,411
   Deferred Revenue ...........................................       2,056,500
   Unearned Charter Hire Revenue ..............................       2,507,425
                                                                    -----------
Net Cash Provided by Operating Activities .....................      18,359,470
Cash Flows from Investing Activities
   Advances for Vessel Acquisition ............................      (7,000,000)
   Purchase of Vessels ........................................    (365,733,279)
   Vessel Improvements ........................................        (820,904)
                                                                    -----------
Net Cash Used in Investing Activities .........................    (373,554,183)
Cash Flows from Financing Activities
   Capital Contribution .......................................      40,843,662
   Issuance of Common Stock in initial public offering ........     201,600,000
   Equity Issuance Costs ......................................     (15,070,710)
   Bank Borrowings ............................................     282,950,000
   Repayment of Bank Debt .....................................    (125,950,000)
   Increase in Restricted Cash ................................      (5,500,000)
   Deferred Financing Costs ...................................      (2,503,107)
   Borrowings from Eagle Ventures LLC .........................      58,730,434
   Repayment of Eagle Ventures LLC  Note ......................     (58,730,434)
                                                                    -----------
Net Cash Provided by Financing Activities .....................     376,369,845
Net Increase in Cash ..........................................      21,175,132
Cash at Beginning of Period ...................................              --
                                                                    -----------
Cash at End of Period .........................................     $21,175,132
                                                                    ===========

Supplemental Cash Flow Information :
   Cash paid during the period for Interest (including Fees) ..      $3,218,772

The accompanying notes are an integral part of these Consolidated Financial
Statements.
<PAGE>

                            EAGLE BULK SHIPPING INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

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
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 and outside
investors. The merger was accounted for as a reorganization of entities under
common control. Immediately following the completion of the Company's initial
public offering, Eagle Ventures LLC owned approximately 47% of the Company's
outstanding common stock. Eagle Ventures LLC is 92.6% owned by affiliates of
Kelso.

     On March 31, 2005, in connection with its formation, the Company sold 250
shares of its common stock, par value $.01 per share, to Eagle Ventures LLC for
an aggregate purchase price of $250. On March 31, 2005, in connection with the
merger of Eagle Holdings LLC with and into the Company, all of the issued and
outstanding membership interests in Eagle Holdings LLC (which were held by Eagle
Ventures LLC) were converted into and exchanged for, and the Company issued 250
shares of its common stock, par value $.01 per share, to Eagle Ventures LLC. An
additional $21,384 was recorded as a subscription receivable. On June 14, 2005
the Company effected a 25,500 for 1 stock split in the form of a stock dividend.
As a result of the stock split, Eagle Ventures LLC received, in the form of a
stock dividend, 12,749,500 additional shares of the Company's common stock. All
share and per share data gives retroactive effect to the stock split. As of
March 31, 2005, Eagle Ventures LLC had made equity contributions to the Company
(as successor to Eagle Holdings LLC) of $40,822,278.

     On June 23, 2005, the Company completed its initial public offering by
issuing and selling to the public 14,400,000 shares of common stock, par value
$0.01 per share, at a price to the public of $14.00 per share, raising gross
proceeds of $201,600,000 before deduction of underwriting discounts, commissions
and expenses of $15,070,710. The Company used $185,288,656 of the net proceeds
from the offering to repay $125,950,000 of the indebtedness under its then
existing loan facility and $59,338,656 owed to Eagle Ventures LLC under a
promissory note, including accrued interest.

     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>
--------------------------------------------------------------------------------------------------

                                        LLC           Owner of
Company                            Agreement Date      Vessel      dwt.    Built   Vessel Acquired
-------                            --------------      ------      ----    -----   ---------------
<S>                              <C>                  <C>         <C>       <C>    <C>
Cardinal Shipping LLC........... March 17, 2005       Cardinal    55,408    2004   April 18, 2005
Condor Shipping LLC............. January 28, 2005     Condor      50,296    2001   April 29, 2005
Falcon Shipping LLC............. January 28, 2005     Falcon      50,296    2001   April 21, 2005
Griffon Shipping LLC............ March 17, 2005       Griffon     46,635    1995   June 1, 2005
Harrier Shipping LLC............ January 28, 2005     Harrier     50,296    2001   April 19, 2005
Hawk Shipping LLC............... January 28, 2005     Hawk I      50,296    2001   April 26, 2005
Kite Shipping LLC............... February 24, 2005    Kite        47,195    1997   May 9, 2005
Osprey Shipping LLC............. February 24, 2005    Osprey I    50,206    2002   August 31, 2005
Peregrine Shipping LLC.......... March 17, 2005       Peregrine   50,913    2001   June 30, 2005
Shikra Shipping LLC............. March 17, 2005       Shikra      41,096    1984   April 29, 2005
Sparrow Shipping LLC............ February 24, 2005    Sparrow     48,220    2000   July 19, 2005
Merlin Shipping LLC............. September 21, 2005   Merlin      50,296    2001   October 26, 2005
Heron Shipping LLC.............. September 21, 2005   Heron (1)   52,827    2001   Expected in
                                                                                   December 2005
</TABLE>

----------
(1)  The Company has agreed to purchase this vessel from an unrelated third
     party and expects to take delivery of the vessel in December 2005.

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

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

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

                                                                     Daily Time
               Delivered to                                         Charter Hire
Vessel         Charterer            Time Charter Expiration (1)          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        June 3, 2005         February 2006 to April 2006        $28,000
Harrier        April 21, 2005       March 2007 to June 2007            $23,750
Hawk I         April 28, 2005       March 2007 to June 2007            $23,750
Kite           May 10, 2005         March 2006 to May 2006             $25,000
Osprey I (2)   September 1, 2005    July 2008 to November 2008         $21,000
Peregrine      July 1, 2005         October 2006 to January 2007       $24,000
Shikra         April 30, 2005       July 2006 to November 2006         $22,000
Sparrow        July 20, 2005        November 2006 to February 2007     $22,500
Merlin         October 26, 2005     October 2007 to December 2007      $24,000
Heron (3)      Expected in          December 2007 to February 2008     $24,000
               December 2005

----------
(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 Osprey I has an option to extend the charter period by
     up to 26 months at a daily time charter hire rate of $25,000

(3)  The Company has agreed to purchase this vessel from an unrelated third
     party and expects to take delivery of the vessel in December 2005. The time
     charter is scheduled to commence immediately upon the delivery of the
     vessel and the expiration date assumes that the vessel is delivered as
     scheduled.

     During the three-month and year-to-date periods ended September 30, 2005,
three charterers individually accounted for more than 10% of the Company's time
charter revenue as follows:

                                          Three Months ended
     Charterer                            September 30, 2005   Year-To-Date
     ---------                            ------------------   ------------

     Charterer A......................          20.2%             17.5%
     Charterer B......................          19.6%             22.4%
     Charterer C......................          10.9%             12.9%

     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 should be read
in conjunction with the consolidated financial statements and notes thereto
included in the Company's Registration Statements on Form S-1.

     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. Significant Accounting Policies:

     (a)  Principles of Consolidation: The accompanying unaudited consolidated
          financial statements have been prepared in accordance with U.S.
          generally accepted accounting principles and include the accounts of
          Eagle Bulk Shipping Inc. and its wholly-owned subsidiaries referred to
          in Note 1. All significant intercompany balances and transactions were
          eliminated upon consolidation.

     (b)  Use of Estimates: The preparation of consolidated financial statements
          in conformity with U.S. generally accepted accounting principles
          requires management to make estimates and assumptions that affect the
          reported amounts of assets and liabilities and disclosure of
          contingent assets and liabilities at the date of the consolidated
          financial statements and the reported amounts of revenues and expenses
          during the reporting period. Actual results could differ from those
          estimates.

     (c)  Other Comprehensive Income (Loss): The Company follows the provisions
          of Statement of Financial Accounting Standards ("SFAS") No. 130,
          "Reporting Comprehensive Income", which requires separate presentation
          of certain transactions, which are recorded directly as components of
          stockholders' equity. The Company records the fair value of 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 (loss). Comprehensive Income (Loss) is composed
          of net income (loss) and gains or losses relating to the adoption of
          SFAS No. 133.

     (d)  Cash and Cash Equivalents: The Company considers highly liquid
          investments such as time deposits and certificates of deposit with an
          original maturity of three months or less to be cash equivalents.
          Restricted Cash includes minimum cash deposits required to be
          maintained with a bank for loan compliance purposes.

     (e)  Accounts Receivable: Accounts receivable includes receivables from
          charterers for hire. At each balance sheet date, all potentially
          uncollectible accounts are assessed for purposes of determining the
          appropriate provision for doubtful accounts.

     (f)  Insurance Claims: Insurance claims are recorded on an accrual basis
          and represent the claimable expenses, net of deductibles, incurred
          through each balance sheet date, which are expected to be recovered
          from insurance companies. Any remaining costs to complete the claims
          are included in accrued liabilities.

     (g)  Vessels at Cost: Vessels are stated at cost which consists of the
          contract price and any material expenses incurred upon acquisition for
          initial repairs, major improvements and delivery expenses.

     (h)  Intangibles: Where the Company identifies any intangible assets or
          liabilities associated with the acquisition of a vessel, the Company
          records 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. The Company values any
          asset or liability arising from the market value of the time charters
          assumed when a vessel is acquired. When the time charters assumed are
          above market charter rates, the difference between the market charter
          rate and assumed charter rate is recorded as Prepaid Charter Revenue.
          When the time charters assumed are below market charter rates, the
          difference between the market charter rate and assumed charter rate is
          recorded as Deferred Revenue. Such assets and liabilities are
          amortized to revenue over the remaining period of the time charters.

     (i)  Impairment of Long-Lived Assets: The Company uses SFAS No. 144
          "Accounting for the Impairment or Disposal of Long-lived Assets,"
          which addresses financial accounting and reporting for the impairment
          or disposal of long-lived assets. The standard requires that,
          long-lived assets and certain identifiable intangibles held and used
          or disposed of by an entity be reviewed for impairment whenever events
          or changes in circumstances indicate that the carrying amount of the
          assets may not be recoverable. When the estimate of undiscounted cash
          flows, excluding interest charges, expected to be generated by the use
          of the asset is less than its carrying amount, the Company should
          evaluate the asset for an impairment loss. Measurement of the
          impairment loss is based on the fair value of the asset as provided by
          third parties or discounted cash flow analyses. In this respect,
          management regularly reviews the carrying amount of the vessels in
          connection with the estimated recoverable amount for each of the
          Company's vessels.

     (j)  Vessel Depreciation: Depreciation is computed using the straight-line
          method over the estimated useful life of the vessels, after
          considering the estimated salvage value. Each vessel's salvage value
          is equal to the product of its lightweight tonnage and estimated scrap
          rate. Management estimates the useful life of the Company's vessels to
          be 28 years from the date of initial delivery from the shipyard to the
          original owner. Management estimates the scrap rate to be $150 per
          lightweight ton. Secondhand vessels are depreciated from the date of
          their acquisition through their remaining estimated useful life.

     (k)  Accounting for Dry-Docking Costs: The Company follows the deferral
          method of accounting for dry-docking costs whereby actual costs
          incurred are deferred and are amortized on a straight-line basis over
          the period through the date the next dry-docking is scheduled to
          become due. Unamortized dry-docking costs of vessels that are sold are
          written off and included in the calculation of the resulting gain or
          loss in the year of the vessels' sale.

     (l)  Financing Costs: Fees incurred for obtaining new loans or refinancing
          existing loans are deferred and amortized to interest expense over the
          life of the related debt. Unamortized fees relating to loans repaid or
          refinanced are expensed in the period the repayment or refinancing is
          made.

     (m)  Accounting for Revenues and Expenses: Revenues are generated from
          voyage and time charter agreements. Time charter revenues are
          recognized on a straight-line basis over the term of the respective
          time charter agreements as service is provided. Under a voyage charter
          the revenues and associated voyage costs are recognized on a pro-rata
          basis over the duration of the voyage. Probable losses on voyages are
          provided for in full at the time such losses can be estimated. A
          voyage is deemed to commence upon the completion of discharge of the
          vessel's previous cargo and is deemed to end upon the completion of
          discharge of the current cargo. Voyage expenses primarily include only
          those specific costs which are borne by the Company in connection with
          voyage charters which would otherwise have been borne by the charterer
          under time charter agreements. These expenses principally consist of
          fuel and port charges. Demurrage income represents payments by the
          charterer to the vessel owner when loading or discharging time
          exceeded the stipulated time in the voyage charter and is recognized
          as incurred. Time charter hire and voyage charter revenue brokerage
          Commissions are recorded in the same period as these revenues are
          recognized. Vessel operating expenses are accounted for on the accrual
          basis.

     (n)  Unearned Charter Hire Revenue: Unearned charter hire revenue
          represents cash received from charterers prior to the time such
          amounts are earned. These amounts are recognized as revenue as
          services are provided in future periods.

     (o)  Repairs and Maintenance: All repair and maintenance expenses are
          expensed as incurred.

     (p)  Protection and Indemnity Insurance: The vessels' Protection and
          Indemnity Insurance is subject to additional premiums referred to as
          "back calls" or "supplemental calls" which are accounted for on an
          accrual basis.

     (q)  Derivatives: SFAS No. 133, "Accounting for Derivative Instruments and
          Hedging Activities" as amended establishes accounting and reporting
          standards requiring that every derivative instrument (including
          certain derivative instruments embedded in other contracts) be
          recorded in the balance sheet as either an asset or liability measured
          at its fair value, with changes in the derivatives' fair value
          recognized currently in earnings unless specific hedge accounting
          criteria are met.

     (r)  Earnings Per Share: Earnings/(loss) per share is computed by dividing
          the net income/(loss) by the weighted average number of common shares
          outstanding during the period.

     (s)  Segment Reporting: The Company reports financial information and
          evaluates its operations by charter revenues and not by the length of
          ship employment for its customers, i.e., spot or time charters. The
          Company does not use discrete financial information to evaluate the
          operating results for each such type of charter. Although revenue can
          be identified for these types of charters, management cannot and does
          not identify expenses, profitability or other financial information
          for these charters. As a result, management, including the chief
          operating decision maker, reviews operating results solely by revenue
          per day and operating results of the fleet and thus the Company has
          determined that it operates under one reportable segment. Furthermore,
          when the Company charters a vessel to a charterer, the charterer is
          free to trade the vessel worldwide and, as a result, the disclosure of
          geographic information is impracticable.

     (t)  Interest Rate Risk Management: The Company is exposed to the impact of
          interest rate changes. The Company's objective is to manage the impact
          of interest rate changes on earnings and cash flows of its borrowings.
          The Company may use interest rate swaps to manage net exposure to
          interest rate changes related to its borrowings.

     (u)  Federal Income Taxes: The Company is a Marshall Islands Corporation.
          Pursuant to various tax treaties and the current United States
          Internal Revenue Code, the Company does not believe its operations
          prospectively will be subject to federal income taxes in the United
          States of America.

     (v)  Comprehensive Income: Comprehensive (loss)/income for the period from
          January 26, 2005 (inception) to September 30, 2005 and for the three
          months ended September 30, 2005 was $(3,995,720) and $8,899,037,
          respectively.

Note 3. Recent Accounting Pronouncements

     On December 16, 2004, Statement of Financial Accounting Standards No. 123
(revised 2004) (SFAS No. 123(R)), "Share-Based Payment," was issued. SFAS No.
123(R) is a revision of SFAS No. 123 and supersedes APB No. 25. The approach in
SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However,
SFAS No. 123(R) requires all share-based payments to employees, including grants
of employee stock options, to be recognized in the income statement based on
their fair values. Pro forma disclosure, required under SFAS No. 123, is no
longer an alternative. The Company adopted SFAS No.123(R) at inception.

Note 4. Advances for Vessel Acquisitions

     As of September 30, 2005, the Company through its subsidiaries had entered
into contracts to purchase two second-hand Supramax dry bulk vessels from an
unrelated third party owner with an aggregate contracted price of $70,000,000.
As of September 30, 2005, the Company had made deposits in the amount of
$7,000,000, representing 10% of the purchase price for the two vessels. At
September 30, 2005, the unpaid balance of the purchase price for the two vessels
was $63,000,000.

Note 5. Vessels

     As of September 30, 2005, the Company had acquired 11 vessels at a total
cost of $366,554,183. These costs consist of the total contracted purchase price
of $364,877,903, $820,904 in vessel improvements, $287,876 in additional costs
relating to the acquisition of the vessels, and $567,500 in deferred charter
revenue adjustments relating to the assumption of time charters associated with
several of the acquired vessels.

Note 6. Accrued Liabilities

     Accrued liabilities consists of:

                                              September 30, 2005   June 30, 2005
                                              ------------------   -------------

Interest and Other Financing Costs............          $546,784        $430,984
Vessel Operating Expenses ....................           265,235         121,854
General and Administrative Expenses ..........           173,392         113,921
                                                         -------         -------
Total Accrued Liabilities ....................          $985,411        $666,759
                                                        ========        ========

Note 7. Long-Term Debt

     The Company's subsidiaries initially entered into a term loan facility with
an aggregate principal balance of $185,950,000. Concurrent with its initial
public offering, the Company used part of the proceeds from the initial public
offering to repay $125,950,000 of the principal balance under the term loan
facility.

     Subsequent to the Company's initial public offering, on June 30, 2005, the
Company borrowed $28,500,000 under its term loan facility to fund the balance of
the purchase price of its ninth vessel, M/V Peregrine.

     In July 2005, the Company entered into a 10-year $330,000,000 revolving
credit facility. As of September 30, 2005 the Company had borrowed $157,000,000
under this credit facility to (i) refinance its $88,500,000 of outstanding
indebtedness under its term loan facility, (ii) pay the balance of the purchase
price for its tenth and eleventh vessels, M/V Sparrow and M/V Osprey I, acquired
in July and August 2005, which amounted to $61,500,000, and (iii) fund
$7,000,000 in deposits representing 10% of the purchase prices for its twelfth
and thirteenth vessels, M/V Merlin and M/V Heron, which were contracted for
during the third quarter of 2005. The M/V Merlin was delivered on October 26,
2005 and the Company funded the balance of the purchase price of $31,500,000 for
the vessel with borrowings from its revolving credit facility. The M/V Heron is
expected to be delivered in the fourth quarter of 2005.

     The Company is permitted to borrow the remaining capacity of $173,000,000,
including amounts borrowed for working capital purposes as described below, in
connection with future acquisitions of dry bulk carriers between 25,000 dwt and
85,000 dwt that are not older than 10 years. The Company is permitted to borrow
up to $10,000,000 at any one time for working capital purposes during an initial
period of 18 months from the first draw down date, after which time the
Company's ability to borrow amounts for working capital purposes is subject to
review and reapproval on an annual basis.

     Under the terms of the revolving credit agreement, the facility will be
available in full for five years and there are no principal repayment
obligations for the first five years. Over the remaining period of five years,
the amount available under the facility will reduce in semi-annual amounts of
$20,500,000 with a final reduction of $125,000,000 occurring simultaneously with
the last semi-annual reduction. The credit facility bears interest at the London
Interbank Offered Rate (LIBOR) plus a margin of 0.95%.

     The Company paid an arrangement fee of $1,200,000 in connection with the
credit facility. In addition, the Company must pay a commitment fee of 0.4% per
annum on the unused portion of the revolving credit facility on a quarterly
basis.

     The Company's ability to borrow amounts under the credit facility is
subject to 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 60% of the value of the
vessels securing the Company's obligations under the credit facility. The
Company's ability to borrow such amounts, in each case, is subject to the
lender's approval of the vessel acquisition. The lender's approval will be based
on the lender's satisfaction of the Company's ability to raise additional
capital through equity issuances in amounts acceptable to the lender and the
proposed employment of the vessel to be acquired.

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

     The credit facility contains financial covenants requiring the Company,
among other things, to ensure that: (1) the aggregate market value of the
vessels in the Company's fleet that secure its obligations under the credit
facility, as determined by an independent shipbroker on a charter-free basis, at
all times exceeds 130% 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; (2) the Company's total assets minus debt will not
be less than $150,000,000; (3) the Company's 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 (4) the Company maintains with the
lender $500,000 per vessel in addition to an amount adequate to meet anticipated
capital expenditures for the vessel over a 12 month period. These cash deposits
are recorded in Restricted Cash.

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

     The Company's credit facility permits it to pay dividends in amounts up to
its 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.

     As of September 30, 2005, the Company's debt consisted of $157,000,000 in
borrowings under the credit facility. After taking delivery of the M/V Merlin on
October 26, 2005, the Company's debt consisted of $188,500,000 in borrowings
under the credit facility. Subsequently, the Company repaid $38,500,000 of the
outstanding debt with a portion of the proceeds from the sale of common stock
(see Note 13) reducing its outstanding debt to $150,000,000.

     From the inception of the Company's debt through September 30, 2005,
interest rates ranged from 4.10% to 5.49%, including a margin of 0.95% over
LIBOR. The weighted average effective interest rate was 4.39%.

     Interest Expense consists of :

                                                              Period from
                                                           January 26, 2005
                                                            (inception) to
                                                            September 30,
                                                                 2005
                                                           ----------------

     Loan Interest ..................................           $ 2,821,079
     Commitment Fees.................................               336,255
     Eagle Ventures Note Interest (see Note 8).......               608,222
     Amortization of Deferred Financing Costs........             1,195,456
                                                                -----------
     Total Interest Expense .........................           $ 4,961,012
                                                                ===========

     Interest-Rate Swaps

     The Company 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. As of September 30, 2005, the
Company had entered into interest rate swap contracts for notional amounts of
$100,000,000 and $30,000,000. These contracts mature in September 2010.
Exclusive of a margin of 0.95%, the Company will pay 4.22% and 4.54% fixed-rate
interest, respectively, and receive floating-rate interest amounts based on
three-month LIBOR settings. The Company records the fair value of the interest
rate swap as an asset or liability on the balance sheet. The effective portion
of the swap is recorded in accumulated other comprehensive income (loss). At
September 30, 2005, the Company recorded an asset of $1,504,748 which is
included in Other Assets in the accompanying balance sheet.

Note 8. Related Party Transactions

     The Company borrowed $58,730,434 from Eagle Ventures LLC. This borrowing
bore interest at 7%. Such amount was repaid along with interest amounting to
$608,222 upon the closing of the Company's initial public offering.

     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 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 agreement also provided that Kelso would be
paid certain fees in connection with other services. The Company paid $5,175,046
in fees to Kelso and certain non-management affiliates of Eagle Ventures LLC for
investment banking services pursuant to the financial advisory agreement. This
fee was payable in connection with Kelso assisting the Company in its formation,
strategic planning, obtaining debt and equity financing and acquiring vessels,
and this amount has been recorded in the quarter ended June 30, 2005.

Note 9. Commitments and Contingencies

     Vessel Technical Management Contract

     The Company entered into technical management agreements for each of its
vessels with V. Ships Management Ltd., an independent technical manager. In
conjunction with the Company's management, V. Ships has established an operating
expense budget for each vessel. All deviations from the budgeted amounts are for
the Company's account. V. Ships is paid a technical management fee of $8,333 per
vessel per month.

     Vessel Acquisitions

     As of September 30, 2005, the Company had commitments to acquire two
second-hand Supramax vessels under vessel purchase agreements. The total
purchase price for these two vessels is $70,000,000. The Company has funded
deposits in the amount of $7,000,000, representing 10% of the purchase price,
for the two vessels. One vessel, renamed "Merlin", was delivered in October 2005
and the second vessel, to be renamed "Heron", is expected to be delivered in
December 2005.

Note 10. Earnings Per Common Share

     The computation of earnings per share is based on the weighted average
number of common shares outstanding during the period. The Company does not have
any potentially dilutive securities outstanding. Accordingly, basic and diluted
income/(loss) per share are the same for each period presented.

Note 11. Non-cash Compensation

     Members of the Company's management have been awarded profits interests
(and in the future others having senior management and/or strategic
planning-type responsibilities may be awarded similar profits interests) in
Eagle Ventures LLC that may entitle such persons to an economic interest of up
to 16.7% on a fully diluted basis (assuming all profits interests were vested)
in any appreciation in the value of the assets of Eagle Ventures LLC (including
shares of the Company's common stock owned by Eagle Ventures LLC when sold). In
all, one-fourth of the profits interests are service-related and vest in equal
three-month installments over four years (the vesting of such service-related
profits interests is subject to continued employment with Eagle Ventures LLC or
its affiliates at the end of each such three-month period), and the remaining
profits interests are performance-related. Pursuant to an amendment to the Eagle
Ventures LLC limited liability company agreement, 44% of the performance-related
profits interests became fully vested upon the consummation of the Company's
initial public offering (or an economic interest in approximately 6.2% of the
appreciation of the assets of Eagle Ventures LLC on a fully diluted basis taking
into account the vesting of only such profits interests), and the remaining
portion of the performance-related profits interests will vest based on
affiliates of Kelso achieving certain multiples on their original indirect
investment in the Company, subject to an internal rate of return minimum.
Retention of the non-accelerated performance-related profits interests is
subject to continued employment with Eagle Ventures LLC or its affiliates.

     The vesting of profits interests may be further accelerated in the future
by the compensation committee of Eagle Ventures LLC. These profits interests
will dilute only the interests of owners of Eagle Ventures LLC, and will not
dilute direct holders of the Company's common stock. However, the Company's
income statement reflects non-cash charges for compensation related to the
profits interests.

     For the quarter ended September 30, 2005, the Company recorded a non-cash
compensation charge of $3.7 million. Of that charge, approximately $3.3 million
relates to the portion of the performance-related profits interests that vested
upon consummation of the Company's initial public offering. The remaining $0.5
million non-cash compensation charge was taken as a result of the
service-related and non-accelerated performance-related profits interests. The
Company is recording compensation charges relating to the service-related
profits interests over four years. The non-accelerated performance related
profits interests vest based on affiliates of Kelso achieving certain multiples
on their original investment in the assets of Eagle Ventures LLC through the
receipt of distributions from Eagle Ventures LLC. The vesting occurs ratably
upon achieving a return on investment ranging from two times to four times the
original investment. To calculate the non-cash compensation charge that is
reflected in the Company's income statement for the non-accelerated
performance-related profits interests, the Company has assumed that these
profits interests will vest four years after their issuance. The Company is
therefore recording compensation charges relating to such profits interests over
four years.

     If the December 31, 2005 stock price is $17.15 per share (the stock price
at September 30, 2005), the total non-cash compensation charge for the fourth
quarter of 2005 for the service-related profits interests and
performance-related profits interest would be approximately $1.0 million.

     The non-cash compensation charge will be 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 12. 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. To date no awards have been made under
the plan.

Note 13. Subsequent Events

     Cash dividends

     On October 5, 2005 the Company's board of directors voted to declare a cash
dividend on its common stock of $0.54 per share, based on 27,150,000 shares of
common stock outstanding, payable on October 31, 2005 to all holders of record
as of October 17, 2005.

     Vessel Delivery

     On October 26, 2005, the Company took delivery of the M/V Merlin for a
total purchase price of $35,000,000. The Company funded the balance of the
purchase price of $31,500,000 with borrowings from its revolving credit
facility. The vessel was immediately placed into a 24 to 26 month charter at the
contracted rate of $24,000 per day.

     Sale of Common Stock

     On October 28, 2005, the Company sold 5,500,000 shares of its common stock
in a public offering at a price of $14.50 per share, raising gross proceeds of
$79,750,000 before deduction of underwriting discounts, commissions and expenses
of $5,187,500. The Company used $38,500,000 of the net proceeds from the
offering to repay a portion of its outstanding indebtedness under its revolving
credit facility and intends to use $31,500,000 of the net proceeds to pay the
balance of the purchase price for the M/V Heron, which the Company expects to
acquire in December 2005. The remainder of the net proceeds from the offering,
an amount equal to $4,562,500, will be used for general corporate purposes. In
addition, the Company granted the underwriters of the offering a 30 day option
to purchase up to an additional 500,000 shares of common stock at the public
offering price to cover over-allotments and Eagle Ventures LLC has granted the
underwriters of the offering a 30 day option to purchase up to an additional
325,000 shares of common stock at the public offering price to cover
over-allotments.
<PAGE>

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

     The following is a discussion of the Company's financial condition and
results of operations for the quarter ended September 30, 2005 and the period
from January 26, 2005 (inception) to September 30, 2005. This section should be
read in conjunction with the consolidated financial statements including the
notes to those financial statements for the periods mentioned above.

     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. 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.

GENERAL

     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. We own a modern fleet of Handymax dry bulk vessels that we have
purchased or agreed to purchase from unrelated third parties. As of September
30, 2005, we had taken delivery of 11 vessels and have entered into agreements
to purchase two additional vessels. Our 11 vessel fleet had a combined carrying
capacity of 540,816 dwt and an average age of six years as of September 30,
2005, as compared to an average age for the world Handymax dry bulk fleet of
over 15 years. In October 2005, we took delivery of our twelfth vessel, the M/V
Merlin. We expect to take delivery of our thirteenth vessel, the M/V Heron, in
December 2005 when our fleet size will increase to 643,980 dwt with an average
age of 5.5 years.

     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 from 50,000 to
60,000 dwt. Eight of the vessels in our current fleet of 12 vessels are of the
Supramax type. 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.

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

     We commenced vessel operations in April 2005. Accordingly, no comparisons
can be made with previous periods.

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:

                                                      Period from January
                                 Three Months ended   26, 2005 (inception)
                                 September 30, 2005   to September 30, 2005
                                 ------------------   ---------------------
     Ownership Days...........          932                    1,422
     Available Days...........          929                    1,408
     Operating Days...........          926                    1,403
     Fleet Utilization........          99.7%                  99.6%

     Our fleet consisted of 11 Handymax vessels as of September 30, 2005. Our
fleet increased in size by two vessels during the three-months ended September
30, 2005 with the deliveries of the M/V Sparrow in July 2005 and the M/V Osprey
in August 2005. Our fleet has since increased to 12 vessels as we have taken
delivery of the M/V Merlin in October 2005 and we expect to take delivery of our
thirteenth vessel, the M/V Heron, in December 2005.

     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.

     o    TCE rates. We define TCE rates as our voyage and time charter revenues
          less voyage expenses during a period divided by the number of our
          available days during the period, which is consistent with industry
          standards. TCE rate is a standard shipping industry performance
          measure used primarily to compare daily earnings generated by vessels
          on time charters with daily earnings generated by vessels on voyage
          charters, because charter hire rates for vessels on voyage charters
          are generally not expressed in per day amounts while charter hire
          rates for vessels on time charters generally are expressed in such
          amounts.

     Voyage and Time Charter Revenue

     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;
     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.

     All our revenues for the period from inception on January 26, 2005 to
September 30, 2005 were earned from time charters. 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.

     Net revenues, for the quarter ended September 30, 2005, of $21,137,615
included deductions for brokerage commissions of $1,054,346 and $123,500 in
amortization of prepaid charter revenue. Net revenues, for the period since
inception on January 26, 2005 to September 30, 2005, were $31,753,494 and
included deductions for brokerage commissions of $1,719,878 and $328,500 in
amortization of prepaid charter revenue.

     Voyage Expenses

     To the extent we employ our vessels on voyage charters, we will incur
increased voyage related expenses, including port and canal charges, bunker
(fuel oil) expenses and commissions, as these expenses are borne by the vessel
owner on voyage charters. 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.

     Vessel Expenses

     For the quarter ended September 30, 2005, total vessel expenses incurred
amounted to $3,732,726. These expenses included $3,420,859 in vessel operating
costs, $275,383 in delivery and pre-operating costs associated with the
acquisition of the three vessels, M/V Peregrine, M/V Sparrow and M/V Osprey,
including providing these newly acquired vessels with initial provisions and
stores, and $36,484 in costs associated with vessel onboard inventory stocks.

     For the period since inception on January 26, 2005 to September 30, 2005,
total vessel expenses incurred amounted to $6,848,124. These expenses included
$4,983,409 in vessel operating costs, $1,462,933 in delivery and pre-operating
costs associated with the acquisition of the eleven vessels of our fleet
including providing these newly acquired vessels with initial provisions and
stores, and $401,782 in costs associated with vessel onboard inventory stocks.

     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. 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.

     We pay our technical manager, V. Ships, a fixed management fee of $8,333
per month for each vessel in our operating fleet in respect of which it provides
technical management services. These fees are included in Vessel Operating
Expenses. 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 lubricants.

     Depreciation and Amortization

     The cost of our vessels is depreciated on a straight-line basis over the
expected useful life of each vessel. Depreciation is based on the cost of the
vessel less its estimated residual value. We estimate the useful life of our
vessels to be 28 years from the date of initial delivery from the shipyard to
the original owner. Furthermore, we estimate the residual values of our vessels
to be $150 per lightweight ton, which we believe is common in the dry bulk
shipping industry. Our depreciation charges will increase as our fleet is
enlarged which will also lead to an increase of ownership days. For the quarter
ended September 30, 2005, total depreciation charges recorded amounted to
$3,858,943. For the period from inception on January 26, 2005 to September 30,
2005, total depreciation charges recorded amounted to $5,879,515.

     Amortization expense for the quarter ended September 30, 2005 and the
period from inception on January 26, 2005 to September 30, 2005 amounted to
$64,743 and $1,195,456, respectively. These expenses relate to amortization of
financing costs associated with our credit facilities.

     General and Administrative Expenses

     General and Administrative Expenses for the quarter ended September 30,
2005 and the period from inception on January 26, 2005 to September 30, 2005
amounted to $833,384 and $2,253,421, respectively. 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, and directors and
officers insurance. For the quarter ended September 30, 2005 and the period from
inception on January 26, 2005 to September 30, 2005, recurring administrative
costs amounted to $833,384 and $1,443,154, respectively. Non-recurring costs
include costs relating to the formation of our company and related advisory
costs. For the quarter ended September 30, 2005 there were no non-recurring
costs incurred. For the period from inception on January 26, 2005 to September
30, 2005, non-recurring costs amounted to $810,267. We expect general and
administrative expenses to increase as our fleet is enlarged.

     Financial Advisory Fees

     We have recorded an expense of $5,175,046 in the quarter ended June 30,
2005 in connection with an investment banking and financial advisory fee paid to
Kelso & Company, L.P. ("Kelso") and certain non-management affiliates of Eagle
Ventures LLC pursuant to the financial advisory agreement that we entered into
with Kelso. This fee was payable in connection with Kelso assisting us in our
formation, strategic planning, obtaining debt and equity financing and acquiring
vessels. In addition, we have recorded an expense of $1,000,000 in the quarter
ended June 30, 2005 in connection with a payment made to Kelso in order to
terminate certain of our obligations under the financial advisory agreement
including our obligation to pay an annual $500,000 fee thereunder.

     Non-Cash Compensation Expense

     Members of the Company's management have been awarded profits interests
(and in the future others having senior management and/or strategic
planning-type responsibilities may be awarded similar profits interests) in
Eagle Ventures LLC that may entitle such persons to an economic interest of up
to 16.7% on a fully diluted basis (assuming all profits interests were vested)
in any appreciation in the value of the assets of Eagle Ventures LLC (including
shares of the Company's common stock owned by Eagle Ventures LLC when sold). In
all, one-fourth of the profits interests are service-related and vest in equal
three-month installments over four years (the vesting of such service-related
profits interests is subject to continued employment with Eagle Ventures LLC or
its affiliates at the end of each such three-month period), and the remaining
profits interests are performance-related. Pursuant to an amendment to the Eagle
Ventures LLC limited liability company agreement, 44% of the performance-related
profits interests became fully vested upon the consummation of the Company's
initial public offering (or an economic interest in approximately 6.2% of the
appreciation of the assets of Eagle Ventures LLC on a fully diluted basis taking
into account the vesting of only such profits interests), and the remaining
portion of the performance-related profits interests will vest based on
affiliates of Kelso achieving certain multiples on their original indirect
investment in the Company, subject to an internal rate of return minimum.
Retention of the non-accelerated performance-related profits interests is
subject to continued employment with Eagle Ventures LLC or its affiliates.

     The vesting of profits interests may be further accelerated in the future
by the compensation committee of Eagle Ventures LLC. These profits interests
will dilute only the interests of owners of Eagle Ventures LLC, and will not
dilute direct holders of the Company's common stock. However, the Company's
statement of operations reflects non-cash charges for compensation related to
the profits interests.

     For the quarter ended September 30, 2005, the Company recorded a non-cash
compensation charge of $3.7 million. Of that charge, approximately $3.3 million
relates to the portion of the performance-related profits interests that vested
upon consummation of the Company's initial public offering. The remaining $0.5
million non-cash compensation charge was taken as a result of the
service-related and non-accelerated performance-related profits interests. For
the period from inception in January 26, 2005 to September 30, 2005, the Company
recorded a non-cash compensation charge of $11.4 million. Of that charge,
approximately $10.7 million related to the portion of the performance-related
profits interests that vested upon consummation of the Company's initial public
offering. The remaining $0.6 million non-cash compensation charge was taken as a
result of the service-related and non-accelerated performance-related profits
interests. The Company is recording compensation charges relating to the
service-related profits interests over four years. The non-accelerated
performance related profits interests vest based on affiliates of Kelso
achieving certain multiples on their original investment in the assets of Eagle
Ventures LLC through the receipt of distributions from Eagle Ventures LLC. The
vesting occurs ratably upon achieving a return on investment ranging from two
times to four times the original investment. To calculate the non-cash
compensation charge that is reflected in the Company's income statement for the
non-accelerated performance-related profits interests, the Company has assumed
that these profits interests will vest four years after their issuance. The
Company is therefore recording compensation charges relating to such profits
interests over four years.

     If the December 31, 2005 stock price is $17.15 per share (the stock price
at September 30, 2005), the total non-cash compensation charge for the fourth
quarter of 2005 for the service-related profits interests and
performance-related profits interest would be approximately $1.0 million.

     The non-cash compensation charge will be 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.

     Interest and Finance Costs

                                                                   Period
                                                                    from
                                                                 January 26,
                                                       Three        2005
                                                       Months    (inception)
                                                       ended         to
                                                     September   September
                                                     30, 2005     30, 2005
                                                    ----------   ----------
     Loan Interest ..............................   $1,467,773   $2,821,079
     Commitment Fees ............................      194,900      336,255
     Eagle Ventures Note ........................           --      608,222
     Amortization of Deferred Financing Costs ...       64,743    1,195,456
                                                    ----------   ----------
     Total Interest Expense .....................   $1,727,416   $4,961,012
                                                    ==========   ==========

     At the time of our initial public offering, we had term loan facilities
with aggregate principal balances of $185,950,000 and a promissory note in the
amount of $58,730,434 issued to Eagle Ventures LLC. Concurrent with the initial
public offering, we used a portion of the net proceeds of the offering to repay
$125,950,000 of the outstanding principal balance of the term loan facility and
the promissory note in full with accrued interest of $608,222. Subsequent to the
public offering, we borrowed $28,500,000 from the term loan facility to fund the
balance of the purchase price of the M/V Peregrine.

     In July 2005, the outstanding balance of $88,500,000 under the term loan
facility was refinanced with a new ten-year $330,000,000 revolving credit
facility. We paid a facility arrangement fee of $1,200,000, the unamortized
portion of which is recorded under Deferred Financing Costs. We expect to incur
interest expense and additional financing costs under our new credit facility in
connection with debt incurred to finance future vessel acquisitions.

     During the quarter ended September 30, 2005, we took delivery of our tenth
and eleventh vessels, the M/V Sparrow and the M/V Osprey I. These acquisitions
were funded in part with borrowings of $61,500,000 under the revolving credit
facility.

     During the quarter ended September 30, 2005, the Company entered into
commitments to acquire two additional vessels, to be renamed M/V Merlin and M/V
Heron, under vessel purchase agreements. The total purchase price for these two
vessels is $70,000,000. The Company borrowed $7,000,000 from its revolving
credit facility to fund deposits representing 10% of the purchase price for the
two vessels.

     As of September 30, 2005, the Company's debt consisted of $157,000,000 in
borrowings under its revolving credit facility. The Company's vessels are
pledged as collateral under its credit agreements.

     We took delivery of the M/V Merlin in October 2005. The balance of the
purchase price amounting to $31,500,000 was paid from borrowings from our
revolving credit facility. We expect to take delivery of the M/V Heron in
December 2005 (see Capital Expenditures below)

     For the quarter ended September 30, 2005 interest rates on our outstanding
debt ranged from 4.12% to 5.49%, including a margin of 0.95% over the London
Interbank Offered Rate (LIBOR). The weighted average effective interest rate was
4.65%. From the inception of the Company's debt through September 30, 2005,
interest rates ranged from 4.10% to 5.49%, including a margin of 0.95% over
LIBOR. The weighted average effective interest rate was 4.39%.

     We have entered into interest rate swaps to effectively convert a portion
of our debt from a floating to a fixed-rate basis. The swaps are designated and
qualify as cash flow hedges. In September 2005, we entered into interest rate
swap contracts for notional amounts of $100,000,000 and $30,000,000. These
contracts mature in September 2010. Exclusive of a margin of 0.95%, the Company
will pay fixed-rate interest of 4.22% and 4.54% respectively, and receive
floating-rate interest amounts based on three month LIBOR settings (for a term
equal to the swaps' reset periods). We record the fair value of the interest
rate swap as an asset or liability in our financial statements. The effective
portion of the swap is recorded in accumulated other comprehensive income
(loss). Accordingly, $1,504,748 has been recorded in Other Assets in our
financial statements as of September 30, 2005.

     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 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 period ended
September 30, 2005, and the period from inception on January 26, 2005 to
September 30, 2005 :

                                                                   Period from
                                                                   January 26,
                                                  Three Months        2005
                                                      ended       (inception) to
                                                    September     September 30,
                                                    30, 2005           2005
                                                  ------------    --------------
Net Income ....................................   $  7,394,289    $ (5,500,468)
Interest Expense ..............................      1,727,416       4,961,012
Depreciation ..................................      3,858,943       5,879,515
Amortization of Prepaid Revenue ...............        123,500         328,500
                                                  ------------    ------------
EBITDA ........................................     13,104,148       5,668,559
Adjustments for Exceptional Items:
Management and Other Fees to Affliates (1) ....             --       6,175,046
Non-cash Compensation Expense (2) .............      3,735,705      11,376,552
                                                  ------------    ------------
Credit Agreement EBITDA .......................   $ 16,839,853    $ 23,220,157
                                                  ============    ============

----------
(1)  One time charge (see Note 8 of our financial statements)
(2)  Management's participation in profits interests in Eagle Ventures LLC (see
     Note 11 of our financial statements)

Effects of Inflation

     The Company does not believe that inflation has had or is likely, in the
foreseeable future, to have a significant impact on vessel operating expenses,
dry-docking expenses and general and administrative expenses.

Liquidity and Capital Resources

     Prior to our initial public offering, we funded our initial capital
requirements with equity contributions, borrowings from Eagle Ventures and
borrowings under our existing term loan facility. Eagle Ventures had provided us
with $40,843,662 in equity contributions, $58,730,404 in debt financing in the
form of a promissory note, and we borrowed a total of $214,450,000 under our
term loan facility in connection with vessel acquisitions. Our initial public
offering on June 23, 2005 raised a total of $201,600,000, providing us with net
proceeds of $186,529,290. We used the net proceeds from that offering primarily
to repay the Eagle Ventures' promissory note in full along with accrued interest
of $608,222, to repay $125,950,000 of outstanding principal under the existing
term loan facility and to pay a $1,000,000 one time fee to Kelso to terminate
certain of our obligations under a financial advisory agreement with Kelso &
Company, L.P. We paid Kelso a $5,000,000 financial advisory fee and paid
$175,046 to certain non-management affiliates of Eagle Ventures LLC pursuant to
our financial advisory agreement with Kelso. In July 2005, we entered into a
$330,000,000 revolving credit facility with our lender to refinance the
remaining portion of our outstanding indebtedness under the term loan facility,
fund vessel acquisitions and provide funds for working capital purposes. As of
September 30, 2005 we have borrowed an additional $68,500,000 from the revolving
credit facility for a total outstanding debt of $157,000,000. As of September
30, 2005, the available undrawn amount under our revolving credit facility was
$173,000,000.

     As of September 30, 2005, our cash balance was $21,175,132. In addition,
$5,500,000 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, 2005. We anticipate that internally generated
cash flow and, if necessary, borrowings under our new credit facility will be
sufficient to fund the operations of our fleet, including our working capital
requirements, for at least the next 12 months.

     As of September 30, 2005, we had total capital commitments to acquire
vessels of $63,000,000 (see Capital Expenditures below).

     It is our intention to fund our future acquisition related capital
requirements initially through borrowings under our new 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. 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 dry-docking and working capital. 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.

Dividends

On October 5, 2005 our board of directors voted to declare a cash dividend on
our common stock of $0.54 per share, based on 27,150,000 shares of common stock
outstanding, payable on October 31, 2005 to all holders of record as of October
17, 2005. The aggregate amount of the cash dividend paid to our shareholders on
October 31, 2005 was $14,661,000. 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 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.

Sale of Common Stock

     On October 28, 2005, we sold 5,500,000 shares of our common stock in a
public offering at a price of $14.50 per share, raising gross proceeds of
$79,750,000 before deduction of underwriting discounts, commissions and expenses
of $5,187,500. We used $38,500,000 of the net proceeds from the offering to
repay a portion of our outstanding indebtedness under our revolving credit
facility which reduced our outstanding debt to $150,000,000. We intend to use
$31,500,000 of the net proceeds to pay the balance of the purchase price for the
M/V Heron which we expect to acquire in December 2005 (see Capital Expenditures
below). The remainder of the net proceeds from the offering of $4,562,500 will
be used for general corporate purposes. In addition, we have granted the
underwriters of the offering a 30 day option to purchase up to an additional
500,000 shares of common stock at the public offering price to cover
over-allotments and Eagle Ventures LLC has granted the underwriters of the
offering a 30 day option to purchase up to an additional 325,000 shares of
common stock at the public offering price to cover over-allotments.

Revolving Credit Facility

     In July 2005, we entered into a 10-year $330,000,000 revolving credit
facility. As of September 30, 2005, we had borrowed $157,000,000 to (i)
refinance our $88,500,000 of outstanding indebtedness under our initial term
loan facility, (ii) pay the balance of the purchase price for the tenth and
eleventh vessels, M/V Sparrow and M/V Osprey I, that we acquired in July and
August 2005, which amounted to $61,500,000, and (iii) fund $7 million in
deposits representing 10% of the purchase price for our twelfth and thirteenth
vessels, M/V Merlin and M/V Heron, which were contracted for during the third
quarter of 2005. One of these vessels, M/V Merlin, was delivered on October 26,
2005 and the other vessel, M/V Heron, is expected to be delivered in the fourth
quarter of 2005. We funded the balance of the purchase price of $31,500,000 for
the M/V Merlin with borrowings from our revolving credit facility.

     We are permitted to borrow up to the remaining capacity, as of September
30, 2005, of $173,000, including amounts borrowed for working capital purposes
as described below, in connection with future acquisitions of dry bulk carriers
between 25,000 dwt and 85,000 dwt that are not older than 10 years. We are
permitted to borrow up to $10 million 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.

     Under the terms of the revolving credit agreement, the facility will be
available in full for five years and there are no principal repayment
obligations for the first five years. Over the remaining period of five years,
the facility will reduce in semi-annual amounts of $20,500,000 with a final
reduction of $125,000,000 occurring simultaneously with the last semi-annual
reduction. The facility bears interest at LIBOR plus a margin of 0.95%.

     We paid an arrangement fee of $1,200,000 in connection with the credit
facility. The unamortized portion of these fees is recorded under Deferred
Financing Costs in the financial statements as of September 30, 2005. We incur a
fee of 0.4% per annum on the unused portion of the revolving loan on a quarterly
basis.

     Our ability to borrow amounts under the 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 60% of the
value of the vessels securing our obligations under the credit facility. Our
ability to borrow such amounts, in each case, are 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 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 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
          130% 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    our total assets minus our debt will not be less than $150,000,000;

     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 $500,000 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.

     As of September 30, 2005, our debt consisted of $157,000,000 in borrowings
under the revolving credit facility. After taking delivery of the vessel
"Merlin" on October 26, 2005, our debt consisted of $188,500,000 in borrowings
under the credit facility. Subsequently, we repaid $38,500,000 of the
outstanding debt with a portion of the proceeds from the sale of common stock
(see Sale of Common Stock above) reducing our outstanding debt to $150,000,000.

Contractual Obligations

     Capital Expenditures

     Our current commitments for capital expenditures for vessel acquisitions
relate to our two new acquisitions of Supramax dry bulk vessels for which we
entered into purchase agreements in the quarter ended September 30, 2005. As of
September 30, 2005 we had paid deposits of $7,000,000 towards the purchase price
for the two vessels aggregating $70,000,000.

     One vessel, M/V Merlin, was delivered in October 2005 and the acquisition
was funded in full through borrowings of $31,500,000 under the revolving credit
facility. The other vessel, M/V Heron, is expected to be delivered in December
2005 and we intend to finance the balance $31,500,000 of the purchase price for
that vessel from a portion of the net proceeds of our equity offering in October
2005.

     In addition to the vessel acquisitions, in the quarter ended September 30,
2005 we have spent $180,904 on capital improvements to some of our vessels. We
had advanced $640,000 towards such improvements in the quarter ended June 30,
2005. These improvements totaling $820,904 for the period from January 26, 2005
to September 30, 2005 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 dry docking necessary to preserve the quality of our vessels
as well as to comply with international 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 dry docked every 2.5 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.

     The following table represents certain information about the estimated
dry-dock costs until December 2007 along with the allocation of anticipated
off-hire days:

          -----------------------------------------------------------
          Quarter Ending              Off-hire Days   Projected Costs
          --------------              -------------   ---------------
          December 31, 2005........        --              --
          March 31, 2006 *.........        60          $1.00 million
          June 30, 2006............        15          $0.25 million
          September 30, 2006.......        15          $0.25 million
          December 31, 2006........        15          $0.25 million
          March 31, 2007...........        30          $0.50 million
          June 30, 2007............        --              --
          September 30, 2007.......        30          $0.50 million
          December 31, 2007........        15          $0.25 million

----------
*    includes M/V Merlin and M/V Heron - vessels acquired or to be acquired
     subsequent to September 30, 2005

     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 Hire
Vessel         Delivered to Charterer   Time Charter Expiration (1)           Rate
------         ----------------------   ---------------------------           ----
<S>            <C>                      <C>                                 <C>
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        June 3, 2005             February 2006 to April 2006         $28,000
Harrier        April 21, 2005           March 2007 to June 2007             $23,750
Hawk I         April 28, 2005           March 2007 to June 2007             $23,750
Kite           May 10, 2005             March 2006 to May 2006              $25,000
Osprey I (2)   September 1, 2005        May 2008 to September 2008          $21,000
Peregrine      July 1, 2005             October 2006 to January 2007        $24,000
Shikra         April 30, 2005           July 2006 to November 2006          $22,000
Sparrow        July 20, 2005            November 2006 to Feb 2007           $22,500
Merlin (3)     October 26, 2005         October 2007 to December 2007       $24,000
Heron (3)      Expected December 2005   December 2007 to February 2008      $24,000
</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)  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
(3)  Vessels acquired or to be acquired subsequent to quarter ended September
     30, 2005. Time charter expiration date assumes timely delivery of the
     vessel.

Off-balance Sheet Arrangements

     We do not have any off-balance sheet arrangements.
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

     The Company is exposed to market risk from changes in interest rates, which
could impact its results of operations and financial condition. The Company's
objective is to manage the impact of interest rate changes on earnings and cash
flows of its borrowings. The Company expects to manage this exposure to market
risk through its regular operating and financing activities and, when deemed
appropriate, through the use of derivative financial instruments. The Company
expects to use interest rate swaps to manage net exposure to interest rate
changes related to its borrowings and to lower its overall borrowing costs.

     As of September 30, 2005, the Company's debt consisted of $157,000,000 in
loans under bank mortgage agreements at a margin plus variable rates above the
LIBOR. From the facility's inception through September 30, 2005, rates ranged
from 4.10% to 5.49% (including margins). The weighted average effective interest
rates was 4.39%.

     The Company 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. As of September 30, 2005 the Company
has entered into interest rate swap contracts for notional amounts of
$100,000,000 and $30,000,000. These contracts commenced in September 2005 and
mature in September 2010. Exclusive of a margin of 0.95%, the Company will pay
fixed-rate interest of 4.22% and 4.54% respectively, and receive floating-rate
interest amounts based on three month LIBOR settings (for a term equal to the
swaps' reset periods). The Company records the fair value of the interest rate
swap as an asset or liability on the balance sheet. The effective portion of the
swap is recorded in accumulated other comprehensive income (loss). At September
30, 2005, the Company recorded an asset of $1,504,748 which is included in Other
Assets in the accompanying balance sheet.

Currency and Exchange Rates

     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.
<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

     We maintain disclosure controls and procedures designed to ensure that
information required to be disclosed in reports filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, summarized
and processed within time periods specified in the SEC's rules and forms. As of
the end of the period covered by this report (the "Evaluation Date"), we carried
out an evaluation, under the supervision and with the participation of our
management, including our chief executive officer and our chief financial
officer, of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act).
Based upon this evaluation, our chief executive officer and our chief financial
officer concluded that, as of the Evaluation Date, our disclosure controls and
procedures were effective.

     During the last fiscal quarter, there were no changes in our internal
control over financial reporting that have materially affected, or are
reasonable likely to materially affect, our internal controls over financial
reporting.
<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 2 - Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3 - Defaults upon Senior Securities

None

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

None

Item 5 - Other Information

None

Item 6 - Exhibits

                                  EXHIBIT INDEX

     Exhibit
     Number                        Description
     ---------------------------------------------------------------------------
     3.1       Amended and Restated Articles of Incorporation of the Company*
     3.2       Amended and Restated Bylaws of the Company*
     10.1      Form of Registration Rights Agreement*
     10.2      Form of Management Agreement*
     10.3      Form of Current Credit Facility Agreement*
     10.4      Eagle Bulk Shipping Inc. 2005 Stock Incentive Plan*
     10.5      Employment Agreement for Mr. Sophocles N. Zoullas*
     10.6      Form of Second Amended and Restated Limited Liability Company
               Agreement of Eagle Ventures LLC*
     31.1      Certification of Chief Executive Officer pursuant to Rule
               13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934,
               as amended.
     31.2      Certification of Chief Financial Officer pursuant to Rule
               13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934,
               as amended.
     32.1      Certification of Chief Executive Officer pursuant to 18 U.S.C.
               Section 1350.
     32.2      Certification of Chief Financial Officer pursuant to 18 U.S.C.
               Section 1350.

----------
*    Incorporated by reference to the Company's Registration Statement filed on
     Form S-1 (File No. 333-123817) with the Securities and Exchange Commission
     on June 22, 2005.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

EAGLE BULK SHIPPING INC.

------------------------------------------
(REGISTRANT)
Date: November 14, 2005
By:   /s/Sophocles N. Zoullas


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

Date: November 14, 2005
By:   /s/Alan S. Ginsberg


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

25083.0001 #617785