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

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

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

                                    FORM 10-Q

(Mark One)

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

                  For the quarterly period ended June 30, 2006

                                       OR

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

             For the transition period from            to

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

                        Commission File Number 000-51366

                            EAGLE BULK SHIPPING INC.

             (Exact name of Registrant as specified in its charter)

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

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

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

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

                                 YES |X| NO |_|

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

Large accelerated Filer   |_| Accelerated Filer   |X| Non-accelerated Filer |_|

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

                                 YES |_| NO |X|

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

Common Stock, par value $0.01 per share 35,900,000 shares outstanding as of
August 9, 2006.

================================================================================
<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                                                            Page
                                                                            ----
PART I     FINANCIAL INFORMATION

Item 1.    Financial Statements
           Consolidated Balance Sheets
           as of June 30, 2006 (unaudited) and December 31, 2005...........    3

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

           Consolidated Statement of Stockholders' Equity (unaudited)
           for the six-months ended June 30, 2006 .........................    5

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

           Notes to Consolidated Financial Statements......................    7

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

Item 3.    Quantitative and Qualitative Disclosures about Market Risks.....   31

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

PART II    OTHER INFORMATION

Item 1.    Legal Proceedings...............................................   33
Item 1A.   Risk Factors....................................................   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...............................................   34
Item 6.    Exhibits........................................................   34
           Signatures......................................................   35
<PAGE>

Part 1 : FINANCIAL INFORMATION
Item 1 : Financial Statements

<TABLE>
                                EAGLE BULK SHIPPING INC.
                               CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                     June 30, 2006    December 31, 2005
                                                     -------------        -------------
                                                      (Unaudited)
<S>                                                   <C>                  <C>
ASSETS:
Current Assets:
  Cash ...........................................     $54,547,756          $24,526,528
  Accounts Receivable ............................         458,916              281,094
  Prepaid Charter Revenue ........................       5,983,000            8,508,000
  Prepaid Expenses ...............................       1,679,846              513,145
                                                     -------------        -------------
 Total Current Assets ............................      62,669,518           33,828,767
Fixed Assets:
Advances for Vessel Acquisitions .................       6,900,000                   --
Vessels and Vessel Improvements, at cost,
  net of Accumulated Depreciation of $19,831,383
  at June 30, 2006 and $10,384,247 at December
  31, 2005 .......................................     444,134,474          417,581,610

Restricted Cash ..................................       6,624,616            6,624,616
Deferred Drydock Costs, net of Accumulated
  Amortization of $338,087 at June 30, 2006,
  and $27,980 at December 31, 2005 ...............       1,548,068              393,702
Deferred Financing Costs, net of Accumulated
  Amortization of $164,290 at June 30, 2006 and
  $98,065 at December 31, 2005 ...................       1,203,514            1,268,209
Other Assets .....................................       6,027,014            2,647,077
                                                     -------------        -------------
Total Assets .....................................    $529,107,204         $462,343,981
                                                     =============        =============

LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable .................................      $4,368,281           $1,861,145
Accrued Interest .................................         624,412              514,631
Other Accrued Liabilities ........................         594,275              424,669
Deferred Revenue .................................         491,500            1,306,000
Unearned Charter Hire Revenue ....................       2,590,937            2,444,522
                                                     -------------        -------------
 Total Current Liabilities .......................       8,669,405            6,550,967

Long-term Debt ...................................     182,400,000          140,000,000
                                                     -------------        -------------
Total Liabilities ................................     191,069,405          146,550,967
Commitment and Contingencies
Stockholders' Equity:
Preferred Stock, $.01 par value, 25,000,000 shares
  authorized, none issued ........................              --                   --
Common stock, $.01 par value, 100,000,000 shares
  authorized, 35,900,000 shares issued and
  outstanding as of June 30, 2006 and 33,150,000
  shares issued and outstanding as of December
  31, 2005, respectively .........................         359,000              331,500
Additional Paid-In Capital .......................     354,945,648          320,822,037
Retained Earnings (net of cumulative Dividends
  declared of $50,131,500 at June 30, 2006 and
  $14,661,000 at December 31, 2005) ..............     (23,293,863)          (8,007,600)
Accumulated Other Comprehensive Income ...........       6,027,014            2,647,077
                                                     -------------        -------------
 Total Stockholders' Equity ......................     338,037,799          315,793,014
                                                     -------------        -------------
Total Liabilities and Stockholders' Equity .......    $529,107,204         $462,343,981
                                                     =============        =============
</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
                                         Three Months    Three Months     Six Months      January 26, 2005
                                             ended           ended           ended          (inception) to
                                         June 30, 2006   June 30, 2005   June 30, 2006       June 30, 2005
                                         -------------   -------------   -------------    ----------------
<S>                                       <C>             <C>             <C>                 <C>
Revenues, net of commissions ..........   $ 24,105,383    $ 10,615,879    $ 47,895,435         $10,615,879

Vessel Expenses .......................      4,919,422       3,066,188       9,624,419           3,115,399
Depreciation and Amortization .........      4,937,661       2,020,572       9,757,243           2,020,572
General and Administrative Expenses ...      1,114,024         663,034       2,099,503           1,420,036
Management and Other Fees to Affiliates             --       6,175,046              --           6,175,046
Non-cash Compensation Expense .........      1,938,970       7,640,847       2,691,656           7,640,847
                                          ------------    ------------    ------------    ----------------
  Total Operating Expenses ............     12,910,077      19,565,687      24,172,821          20,371,900
                                          ------------    ------------    ------------    ----------------

Operating Income/(Loss) ...............     11,195,306      (8,949,808)     23,722,614          (9,756,021)

Interest Expense ......................      2,117,322       3,233,596       4,183,673           3,233,596
Interest Income .......................       (313,752)        (94,860)       (645,296)            (94,860)
                                          ------------    ------------    ------------    ----------------
  Net Interest Expense ................      1,803,570       3,138,736       3,538,377           3,138,736
                                          ------------    ------------    ------------    ----------------

Net Income/(Loss) .....................   $  9,391,736    $(12,088,544)   $ 20,184,237        $(12,894,757)
                                          ============    ============    ============    ================

Weighted Average Shares Outstanding :

Basic .................................     33,180,220      13,857,692      33,165,193          13,396,154
Diluted ...............................     33,180,898      13,857,692      33,165,246          13,396,154

Per Share Amounts:

Basic Net Income/(Loss) ...............          $0.28          $(0.87)          $0.61              $(0.96)
Diluted Net Income/(Loss) .............          $0.28          $(0.87)          $0.61              $(0.96)
Cash dividends declared and paid ......          $0.50              --           $1.07                  --
</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
                                      FOR THE SIX-MONTHS ENDED JUNE 30, 2006
<CAPTION>
                                                                                   Retained Earnings
                                                        Additional     -----------------------------------------
                                             Common       Paid-In                       Cash        Accumulated
                                 Shares      Shares       Capital     Net Income      Dividends       Deficit
                               ----------   --------   ------------   -----------   ------------    -------------
<S>                            <C>          <C>        <C>            <C>           <C>             <C>
Balance at December 31, 2005   33,150,000   $331,500   $320,822,037    $6,653,400   $(14,661,000)    $(8,007,600)
Comprehensive Income :
   Net Income ..............           --         --             --    20,184,237             --      20,184,237
   Net Unrealized gains on
       derivatives .........           --         --             --            --             --              --


Comprehensive Income .......           --         --             --            --             --              --
Issuance of Common Stock,
   net of issuance costs ...    2,750,000     27,500     31,431,955            --             --              --
Cash Dividends .............           --         --             --            --    (35,470,500)    (35,470,500)
Non-cash Compensation ......           --         --      2,691,656            --             --              --

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

Balance at June 30, 2006 ...   35,900,000   $359,000   $354,945,648   $26,837,637   $(50,131,500)   $(23,293,863)
                               ==========   ========   ============   ===========   ============    ============
<CAPTION>
                                   Other             Total
                               Comprehensive     Stockholders'
                                   Income           Equity
                               -------------     -------------
<S>                              <C>              <C>
Balance at December 31, 2005     $2,647,077       $315,793,014
Comprehensive Income :
   Net Income ..............             --         20,184,237
   Net Unrealized gains on
       derivatives .........      3,379,937          3,379,937
                                                 -------------

Comprehensive Income .......             --         23,564,174
Issuance of Common Stock,
   net of issuance costs ...             --         31,459,455
Cash Dividends .............             --        (35,470,500)
Non-cash Compensation ......             --          2,691,656

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

Balance at June 30, 2006 ...     $6,027,014       $338,037,799
                                 ==========      =============
</TABLE>

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

<TABLE>
                                    EAGLE BULK SHIPPING INC.
                              CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
                                                                                   Period from
                                                             Six Months       January 26, 2005
                                                                ended           (inception) to
                                                            June 30, 2006        June 30, 2005
                                                            -------------     ----------------
<S>                                                          <C>              <C>
  Cash Flows from Operating Activities
  Net Income ............................................     $20,184,237         $(12,894,757)
  Adjustments to Reconcile Net Income (Loss)
  to Net Cash provided by (used in) Operating
  Activities: Items included in net income not
  affecting cash flows:
Depreciation ............................................       9,447,136            2,020,572
Amortization of Deferred Drydocking Costs ...............         310,107                   --
Amortization of Deferred Financing Costs ................          66,225            1,130,713
Amortization of Prepaid and Deferred Charter Revenue ....       1,710,500              205,000
Non-cash Compensation Expense ...........................       2,691,656            7,640,847
  Changes in Operating Assets and Liabilities:
Accounts Receivable .....................................        (177,822)             (22,034)
Prepaid Revenue .........................................              --           (1,489,000)
Prepaid Expenses ........................................      (1,166,701)            (186,373)
Accounts Payable ........................................         966,591            1,823,761
Accrued Interest ........................................         109,781              430,984
Accrued Expenses ........................................         169,606              235,775
Deferred Revenue ........................................              --              914,000
Drydocking Expenditures .................................      (1,464,473)                  --
Unearned Charter Hire Revenue ...........................         146,415            1,790,082
                                                             ------------     ----------------
  Net Cash Provided by/(Used in) Operating Activities ...      32,993,258           (1,599,570)
  Cash Flows from Investing Activities
Advances for Vessel Deposits ............................      (6,900,000)          (7,018,100)
Advances for Vessel Improvements ........................              --             (640,000)
Purchase of Vessels .....................................     (36,000,000)        (294,583,793)
                                                             ------------     ----------------
  Net Cash Used in Investing Activities .................     (42,900,000)        (302,241,893)

  Cash Flows from Financing Activities
Capital Contribution ....................................              --           40,843,662
Issuance of Common Stock ................................      33,000,000          201,600,000
Equity Issuance Costs ...................................              --          (13,949,161)
Bank Borrowings .........................................      42,400,000          214,450,000
Rapayment of Bank Debt ..................................              --         (125,950,000)
Increase in Restricted Cash .............................              --           (4,000,000)
Deferred Financing Costs ................................          (1,530)          (1,381,215)
Borrowings from Eagle Ventures LLC ......................              --           58,730,434
Repayment of Eagle Ventures LLC Note ....................              --          (58,730,434)
Cash Dividends ..........................................     (35,470,500)                  --
                                                             ------------     ----------------
  Net Cash Provided by Financing Activities .............      39,927,970          311,613,286
  Net Increase in Cash ..................................      30,021,228           10,970,963
  Cash at Beginning of Period ...........................      24,526,528                   --
                                                             ------------     ----------------

  Cash at End of Period .................................     $54,547,756          $10,970,963
                                                             ============     ================

  Supplemental Cash Flow Information:
Cash paid during the period for Interest (including Fees)      $4,007,482           $1,671,899
</TABLE>

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

                            EAGLE BULK SHIPPING INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation and General Information

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

     The Company is a holding company incorporated on March 23, 2005, under the
laws of the Republic of the Marshall Islands. Following incorporation, the
Company merged with Eagle Holdings LLC, a Marshall Islands limited liability
company formed on January 26, 2005, and became a wholly-owned subsidiary of
Eagle Ventures LLC, a Marshall Islands limited liability company. Eagle Ventures
LLC is owned by Kelso Investments Associates VII, L.P. and KEP VI, LLC, both
affiliates of Kelso & Company, L.P. ("Kelso"), members of management, a
director, and outside investors. The merger was accounted for as a
reorganization of entities under common control. Eagle Ventures LLC currently
owns approximately 34.6% of the Company's outstanding common stock. Eagle
Ventures LLC is 85.9% owned by affiliates of Kelso.

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

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

                                   Owner of
Company                            Vessel       dwt.    Built   Vessel Acquired
-------                            ------       ----    -----   ---------------

Cardinal Shipping LLC...........   Cardinal    55,362   2004    April 18, 2005
Condor Shipping LLC.............   Condor      50,206   2001    April 29, 2005
Falcon Shipping LLC.............   Falcon      50,206   2001    April 21, 2005
Griffon Shipping LLC............   Griffon     46,635   1995    June 1, 2005
Harrier Shipping LLC............   Harrier     50,206   2001    April 19, 2005
Hawk Shipping LLC...............   Hawk I      50,206   2001    April 26, 2005
Heron Shipping LLC..............   Heron       52,827   2001    December 1, 2005
Kite Shipping LLC...............   Kite        47,195   1997    May 9, 2005
Merlin Shipping LLC.............   Merlin      50,296   2001    October 26, 2005
Osprey Shipping LLC.............   Osprey I    50,206   2002    August 31, 2005
Peregrine Shipping LLC..........   Peregrine   50,913   2001    June 30, 2005
Shikra Shipping LLC.............   Shikra      41,096   1984    April 29, 2005
Sparrow Shipping LLC............   Sparrow     48,225   2000    July 19, 2005

   New Acquisitions
   ----------------
Kestrel Shipping LLC............   Kestrel I   50,209   2004    June 30, 2006
Tern Shipping LLC...............   Tern        50,209   2003    July 3, 2006
Jaeger Shipping LLC.............   Jaeger      52,265   2004    July 7, 2006

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

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

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

----------
(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 initial charter on the KITE at a daily charter rate of $25,000 ended in
     April 2006.

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

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

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

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

                                                                     Period from
                Three-months    Three-months     Six-months     January 26, 2005
                    ended           ended           ended         (inception) to
Charterer       June 30, 2006   June 30, 2005   June 30, 2006      June 30, 2005
---------       -------------   -------------   -------------   ----------------

Charterer A ....        16.7%             --            15.8%                --
Charterer B ....        16.6%           27.9%           16.1%              27.9%
Charterer C ....        14.1%           11.2%           15.2%              11.2%
Charterer D ....        14.0%           16.5%           12.4%              16.5%
Charterer E ....          --            12.9%             --               12.9%
Charterer F ....          --            12.2%             --               12.2%

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

     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 2005 Annual Report on Form 10-K.

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

Note 2. Vessels

     Advances for Vessel Acquisitions

     During the three-month period ended June 30, 2006, the Company through its
subsidiaries entered into purchase contracts for three Supramax dry bulk
vessels, KESTREL I, TERN and JAEGER from an unaffiliated owner for an aggregate
contracted price of $105,000,000. The KESTREL I was delivered on June 30, 2006
and the Company has made deposits in the amount of $6,900,000, representing 10%
of the purchase price for the TERN and JAEGER vessels which were to be delivered
subsequent to June 30, 2006. These deposits are recorded in Advances for Vessel
Acquisitions in the Company's financials statements as of June 30, 2006. At June
30, 2006, the unpaid balance of the purchase price for the two remaining vessels
was $62,100,000.

     Vessel and Vessel Improvements

     At June 30, 2006, the Company's fleet consisted of a total of 14 dry bulk
vessels acquired at a total cost of $463,144,953. These costs consist of the
contracted purchase price of $470,877,903, $359,550 in additional costs relating
to the acquisition of the vessels, and adjustments of $8,092,500 in net prepaid
charter revenue relating to the assumption of time charters associated with
certain of the acquired vessels. The Company has also capitalized $820,904 of
costs relating to vessel improvements.

     Vessel and vessel improvement costs have been depreciated from the date of
their acquisition through their remaining estimated useful life. Depreciation
expense for the three-month and six-month periods ended June 30, 2006 were
$4,749,665 and $9,447,136 respectively.

Note 3. Long-Term Debt

     At June 30, 2006, the Company's debt consisted of $182,400,000 in
borrowings under a revolving credit facility. During the three-month period
ended June 30, 2006, the Company borrowed a total of $42,400,000 from its
revolving credit facility which was used to partly fund the acquisition of the
KESTREL I and place deposits representing 10% of the purchase price for the TERN
and JAEGER.

     The revolving credit facility has a facility limit of $330,000,000 and a
term of ten years. At June 30, 2006, the Company had a remaining undrawn
capacity of $147,600,000 available to borrow for future acquisitions of dry bulk
vessels. The credit facility bears interest at the London Interbank Offered Rate
(LIBOR) plus a margin of 0.95%. The Company must also pays a fee of 0.4% per
annum on the unused portion of the revolving credit facility on a quarterly
basis.

     For the three-month period ended June 30, 2006, interest rates applicable
on the Company's debt ranged from 5.17% to 6.29%, including the margin. The
weighted average effective interest rate was 5.30%. For the six-month period
ended June 30, 2006, interest rates applicable on the Company's debt ranged from
5.17% to 6.29%, including the margin. The weighted average effective interest
rate was 5.28%.

Interest Expense consists of:

<TABLE>
<CAPTION>
                                                                                               Period from
                                           Three-months    Three-months      Six-months   January 26, 2005
                                                  ended           ended           ended     (inception) to
                                          June 30, 2006   June 30, 2005   June 30, 2006      June 30, 2005
                                          -------------   -------------   -------------   ----------------
<S>                                          <C>             <C>             <C>                <C>
Loan Interest ..........................     $1,893,185      $1,353,306      $3,734,475         $1,353,306
Commitment Fees ........................        190,862         141,355         382,973            141,355
Eagle Ventures Note Interest ...........             --         608,222              --            608,222
Amortization of Deferred
Financing Costs ........................         33,275       1,130,713          66,225          1,130,713
                                          -------------   -------------   -------------   ----------------
Total Interest Expense .................     $2,117,322      $3,233,596      $4,183,673         $3,233,596
                                          =============   =============   =============   ================
</TABLE>

Interest-Rate Swaps

     The Company has entered into interest rate swaps to effectively convert a
portion of its debt from a floating to a fixed-rate basis. The swaps are
designated and qualify as cash flow hedges. Interest rate swap contracts for
notional amounts of $100,000,000 and $30,000,000 were entered into in 2005.
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. At June 30, 2006 and December 31, 2005, the Company
recorded an asset of $6,027,014 and $2,647,077, respectively, which is included
in Other Assets in the accompanying balance sheet.

Note 4. Related Party Transactions

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

     The Company had a financial advisory agreement dated February 1, 2005 with
Kelso. Under the terms of the agreement the Company was to pay Kelso annual fees
of up to $500,000. The agreement had also provided for Kelso to be paid fees in
connection with other services. In 2005, the Company terminated certain of its
obligations under this agreement, including its obligation to pay the annual
fees of $500,000, for a one-time payment of $1,000,000. The Company recorded an
expense of $6,175,046 in the period ended June 30, 2005 for fees incurred under
such agreement..........

Note 5. 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. V.
Ships is paid a technical management fee of $8,583 per vessel per month.

Operating Lease

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

Note 6. Earnings Per Common Share

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

<TABLE>
<CAPTION>
                                                                                          Period from
                                    Three months    Three months       Six Months    January 26, 2005
                                        ended           ended            ended         (inception) to
                                    June 30, 2006   June 30, 2005    June 30, 2006      June 30, 2005
                                    -------------   -------------    -------------   ----------------
<S>                                  <C>             <C>              <C>                <C>
Net Income/(Loss) ...............    $9,391,736      $(12,088,544)    $20,184,237        $(12,894,757)
Weighted Average Shares - Basic
                                     33,180,220        13,857,692      33,165,193          13,396,154
Incremental Shares using treasury
 stock method ...................           678                --              53                  --
Weighted Average Shares - Diluted
                                     33,180,898        13,857,692      33,165,246          13,396,154
Basic Earnings Per Share ........         $0.28            $(0.87)          $0.61              $(0.96)
Diluted Earnings Per Share ......         $0.28            $(0.87)          $0.61              $(0.96)
</TABLE>

Note 7. Non-cash Compensation

     For the three-months ended June 30, 2006 the Company recorded a non-cash,
non-dilutive compensation charge of $1,938,970 which relates to profits
interests awarded to members of the Company's management by the Company's
principal shareholder Eagle Ventures LLC. For the six-months ended June 30, 2006
the Company recorded a non-cash compensation charge of $2,691,656. This amount
includes $2,644,623 in non-cash, non-dilutive charges relating to profits
interests awarded to members of the Company's management by the Company's
principal shareholder Eagle Ventures LLC, and a non-cash amount of $47,033 which
relates to the fair value of the stock options granted to certain directors of
the Company under the 2005 Stock Incentive Plan on the date of grant (see Note
9).

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

Note 8. Capital Stock

     Dividends

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

     On April 18, 2006 the Company's Board of Directors declared a cash dividend
for the first quarter of 2006 of $0.50 per share which was paid on May 3, 2006
to all shareholders of record as of April 28, 2006. The aggregate amount of this
cash dividend was $16,575,000.

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

     Sale of Common Stock

     On June 28, 2006 the Company sold 2,750,000 shares of its common stock to
certain institutional investors in a private placement at $12.00 per share,
pursuant to a securities purchase agreement dated June 22, 2006, raising gross
proceeds of $33,000,000 before deduction of fees and expenses of $1,540,545. The
Company used the proceeds from the offering to fund a portion of the acquisition
of three vessels KESTREL I, TERN and JAEGER.

Note 9. 2005 Stock Incentive Plan

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

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

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

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

Note 10. Subsequent Events

     Vessel Deliveries

     On July 3, 2006 and July 7, 2006, respectively, the Company took delivery
of the TERN, a 2003 built 50,209 dwt. Supramax class dry bulk vessel, and the
JAEGER, a 2004 built 52,265 dwt. Supramax class dry bulk vessel. The Company
funded the balance of the purchase price of $62,100,000 for the two vessels with
a combination of proceeds from cash on hand and additional borrowings of
$32,400,000 from its revolving credit facility.

     Credit Facility

     On July 6, 2006, the Company received a commitment from its sole lender,
the Royal Bank of Scotland plc, to increase and amend its revolving credit
facility to $450 million from $330 million. The entire $450 million facility
will be available for a period of six years from July 30, 2006, compared to four
years remaining in the commitment period of the Company's existing facility.
There are no principal repayment obligations during this initial six-year
period. Over the remaining four years, the facility will reduce in semi-annual
amounts of $25,000,000 with a final reduction of $250,000,000 occurring
simultaneously with the last semi-annual reduction.

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

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

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

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

Overview

     We are Eagle Bulk Shipping Inc., a Marshall Islands corporation
headquartered in New York City. We are the largest U.S. based owner of Handymax
dry bulk vessels. Handymax dry bulk vessels range in size from 35,000 to 60,000
deadweight tons, or dwt, and transport a broad range of major and minor bulk
cargoes, including iron ore, coal, grain, cement and fertilizer, along worldwide
shipping routes. As of June 30, 2006, we owned and operated a modern fleet of 14
Handymax dry bulk vessels that we have purchased from unrelated third parties,
and we acquired two additional Handymax vessels from an unrelated third party in
July 2006.

     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. With the delivery of the two additional vessels in July, twelve of
the 16 vessels in our fleet are classed as Supramax dry bulk vessels. These
vessels have the cargo loading and unloading flexibility of on-board cranes
while offering cargo carrying capacities approaching that of Panamax dry bulk
vessels, which range in size from 60,000 to 100,000 dwt and must rely on port
facilities to load and offload their cargoes. We believe that the cargo handling
flexibility and cargo carrying capacity of the Supramax class vessels make them
attractive to potential charterers. The 16 vessels in our fleet have a combined
carrying capacity of 796,663 dwt and an average age of only five and a half
years as compared to an average age for the world Handymax dry bulk fleet of
over 15 years.

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

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

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

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

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

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

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

Our Fleet

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

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

                                                        Time Charter
Vessel                      Year Built    Dwt     Employment Expiration(1)
------                      ----------    ---     ------------------------------

SUPRAMAX:
 Condor (2)...............     2001      50,296   November 2006 to March 2007
 Falcon (2)...............     2001      50,296   February 2008 to June 2008
 Harrier (2)..............     2001      50,296   March 2007 to June 2007
 Hawk I (2)...............     2001      50,296   March 2007 to June 2007
 Merlin (2)...............     2001      50,296   October 2007 to December 2007
 Osprey I (2) (4) ........     2002      50,206   July 2008 to November 2008
 Cardinal (3).............     2004      55,408   March 2007 to June 2007
 Peregrine (3)............     2001      50,913   October 2006 to January 2007
 Heron ...................     2001      52,827   December 2007 to February 2008
 Kestrel (5)..............     2004      50,209   December 2007 to April 2008
HANDYMAX:
 Sparrow (3)..............     2000      48,220   November 2006 to February 2007
 Kite ....................     1997      47,195   March 2007 to May 2007
 Griffon..................     1995      46,635   January 2007 to February 2007
 Shikra...................     1984      41,096   August 2006 to November 2006

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

(2)  These vessels are sister ships.

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

(4)  The charterer of the OSPREY I has an option to extend the charter period by
     up to 26 month.

(5)  The KESTREL I was acquired on June 30, 2006. The charterer of the KESTREL I
     has an option to extend the charter period by 11 to 13 months.

New Acquisitions

     Subsequent to the three-month period ended June 30, 2006, we have acquired
two additional Supramax class Handymax vessels which were delivered to us in
July 2006. Upon their deliveries to us, each vessel commenced time charters as
tabulated below:

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

                                                           Time Charter
Vessel       Year Built     Dwt    Vessel Acquired   Employment Expiration(1)
------       ----------     ---    ---------------   ---------------------------

Tern (2)..      2003      50,209   July 3, 2006      December 2007 to April 2008
Jaeger....      2004      52,265   July 7, 2006      April 2007 to June 2007

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

(2)  The charterer of the TERN has an option to extend the charter period by 11
     to 13 months.

Fleet Management

The management of our fleet includes the following functions:

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

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

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

Commercial and Strategic Management

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

     o    commercial operations and technical supervision;

     o    safety monitoring;

     o    vessel acquisition; and

     o    financial, accounting and information technology services.

     We currently have a total of seven shore based personnel, including our
senior management team.

Technical Management

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

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

     We currently crew our vessels with Ukrainian officers and seamen supplied
by V.Ships in its capacity as technical manager. These officers and seamen are
employees of our wholly owned vessel owning subsidiaries while aboard our
vessels. We currently employ a total of 298 officers and seamen on the 14
vessels in our operating fleet. Our technical manager handles each seaman's
training, travel, and payroll and ensures that all our seamen have the
qualifications and licenses required to comply with international regulations
and shipping conventions. Additionally, our seafaring employees perform most
commissioning work and assist in supervising work at shipyards and drydock
facilities. We typically man our vessels with more crew members than are
required by the country of the vessel's flag in order to allow for the
performance of routine maintenance duties. All of our crew members are subject
to and are paid commensurate with international collective bargaining agreements
and, therefore, we do not anticipate any labor disruptions. No international
collective bargaining agreements to which we are a party are set to expire
within two years.

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

Competition

     We compete with a large number of international fleets. The international
shipping industry is highly competitive and fragmented with many market
participants. There are approximately 6,100 drybulk carriers aggregating
approximately 350 million dwt, and the ownership of these vessels is divided
among approximately 1,400 mainly private independent dry bulk vessel owners with
no one shipping group owning or controlling more than 5.0% of the world dry bulk
fleet. We primarily compete with other owners of dry bulk vessels in the
Handymax class that are mainly privately owned fleets.

     Competition in the ocean shipping industry varies primarily according to
the nature of the contractual relationship as well as with respect to the kind
of commodity being shipped. Our business will fluctuate in line with the main
patterns of trade of dry bulk cargoes and varies according to changes in the
supply and demand for these items. Competition in virtually all bulk trades is
intense and based primarily on supply and demand. We compete for charters on the
basis of price, vessel location, size, age and condition of the vessel, as well
as on our reputation as an owner and operator. Increasingly, major customers are
demonstrating a preference for modern vessels based on concerns about the
environmental and operational risks associated with older vessels. Consequently,
owners of large modern fleets have gained a competitive advantage over owners of
older fleets.

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

Value of Assets and Cash Requirements

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

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

Critical Accounting Policies

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

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

Revenue Recognition

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

Vessel Lives and Impairment

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

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

Deferred Drydock Cost

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

Vessel Acquisitions

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

     Where we have assumed an existing charter obligation or enter into a time
charter with the existing charterer in connection with the purchase of a vessel
at charter rates that are less than market charter rates, we record a liability
in Deferred Revenues based on the difference between the assumed charter rate
and the market charter rate for an equivalent vessel. Conversely, where we
assume an existing charter obligation or enter into a time charter with the
existing charterer in connection with the purchase of a vessel at charter rates
that are above market charter rates, we record an asset in Prepaid Charter
Revenue, based on the difference between the market charter rate and the
contracted charter rate for an equivalent vessel. This determination is made at
the time the vessel is delivered to us, and such assets and liabilities are
amortized to revenue over the remaining period of the charter. The determination
of the fair value of acquired assets and assumed liabilities requires us to make
significant assumptions and estimates of many variables including market charter
rates, expected future charter rates, future vessel operation expenses, the
level of utilization of our vessels and our weighted average cost of capital.
The use of different assumptions could result in a material change in the fair
value of these items, which could have a material impact on our financial
position and results of operations. In the event that the market charter rates
relating to the acquired vessels are lower than the contracted charter rates at
the time of their respective deliveries to us, our net earnings for the
remainder of the terms of the charters may be adversely affected although our
cash flows will not be so affected.

Factors Affecting Our Results of Operations

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

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

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

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

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

     Voyage and Time Charter Revenue

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

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

          o    the duration of our charters;

          o    our decisions relating to vessel acquisitions and disposals;

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

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

          o    maintenance and upgrade work;

          o    the age, condition and specifications of our vessels;

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

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

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

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

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

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

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

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

     Voyage Expenses

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

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

     Fleet Data

     Fleet utilization was steady for the three-month periods ending June 30,
2006 and June 30, 2005 respectively even as fleet days increased by 141% in the
three-month period from a year before due to increase in fleet size.

<TABLE>
<CAPTION>
                                                                        Period from
                      Three months    Three months      Six Months      January 26,
                          ended           ended           ended       (inception) to
                      June 30, 2006   June 30, 2005   June 30, 2006    June 30, 2005
                      -------------   -------------   -------------   --------------
<S>                       <C>             <C>             <C>              <C>
Ownership Days........    1,183           490             2,353            490
Available Days........    1,183           479             2,309            479
Operating Days........    1,181           477             2,297            477
Fleet Utilization.....    99.9%           99.6%           99.5%            99.6%
</TABLE>

     Revenues

     Net revenues, for the three-month period ended June 30, 2006, of
$24,105,383 includes billed time charter revenues of $26,199,776 and deductions
for brokerage commissions of $1,320,894 and $773,500 in amortization of net
prepaid and deferred charter revenue. Net revenues for the three-month period
ended June 30, 2006 were 127% greater than net revenues for the three-month
period ended June 30, 2005, primarily due to a larger fleet size as reflected by
increased operating days. Net revenue, for the same three-month period ended
June 30, 2005, was $10,615,879 which included time charter revenues of
$11,486,411 and deductions for brokerage commissions of $665,532 and $205,000 in
amortization of net prepaid and deferred charter revenue.

     Net revenues, for the six-month period ended June 30, 2006, of $47,895,435
includes billed time charter revenues of $52,247,893 and deductions for
brokerage commissions of $2,641,958 and $1,710,500 in amortization of net
prepaid and deferred charter revenue. Net revenue, for the period from January
26, 2005 (inception) to June 30, 2005, was $11,486,411 which included billed
time charter revenues of $10,615,879 and deductions for brokerage commissions of
$665,532 and $205,000 in amortization of net prepaid and deferred charter
revenue. Net revenues for the six-month period ended June 30, 2006 were greater
than net revenues for the period from January 26, 2005 (inception) to June 30,
2005 primarily due to a larger fleet size and to reflect the shorter operating
period in 2005 as operations commenced only in April 2005.

     Vessel Expenses

     For the three-month period ended June 30, 2006, total vessel expenses
incurred amounted to $4,919,422. These expenses included $4,584,922 in vessel
operating costs and $334,500 in technical management fees. Total vessel expenses
for the three-month period ended June 30, 2006 were higher than the same
three-month period ended June 30, 2005 due to the increase in fleet size and
corresponding increase in vessel ownership days. Total vessel expenses for the
three-month period ended June 30, 2005 were $3,066,188.

     For the six-month period ended June 30, 2006, total vessel expenses
incurred amounted to $9,624,419. These expenses included $8,954,919 in vessel
operating costs and $669,500 in technical management fees. Total vessel expenses
for the six-month period ended June 30, 2006 were higher than the period from
January 26, 2005 (inception) to June 30, 2005 due to the increase in fleet size
and the increase in vessel ownership days. Total vessel expenses for the period
from January 26, 2005 (inception) to June 30, 2005 were $3,115,399.

     Depreciation and Amortization

     For the three-month period ended June 30, 2006, total depreciation and
amortization expense was $4,937,661 of which amount, $4,749,665 relates to
depreciation and $187,996 relates to the amortization of deferred drydocking
costs. Depreciation expenses increased from the corresponding three-month period
ended June 30, 2005 due to the growth in our fleet. Total depreciation expenses
for the three-month period ended June 30, 2005 was $2,020,572.

     Amortization of deferred financing costs for the three-month period ended
June 30, 2006 is included in interest expense. These costs of $33,275 relate to
the amortization of financing costs associated with our revolving credit
facility. Amortization of deferred financing costs for the corresponding
three-month period ended June 30, 2005 was $1,130,713 which related to the
financing costs associated with the then existing term loan.

     For the six-month period ended June 30, 2006, total depreciation and
amortization expense was $9,757,243 of which amount, $9,447,136 relates to
depreciation and $310,107 relates to the amortization of deferred drydocking
costs. Depreciation expenses increased from the corresponding period from
January 26, 2005 (inception) to June 30, 2005 due to the growth in our fleet.
Total depreciation expense for the period from January 26, 2005 (inception) to
June 30, 2005 was $2,020,572.

     Amortization of deferred financing costs for the six-month period ended
June 30, 2006 is included in interest expense. These costs of $66,225 relate to
the amortization of financing costs associated with our revolving credit
facility. Amortization of deferred financing costs for the corresponding period
from January 26, 2005 (inception) to June 30, 2005 was $1,130,713 which related
to the financing costs associated with the then existing term loan.

     General and Administrative Expenses

     General and Administrative Expenses for the three-month periods ended June
30, 2006 and 2005 were $1,114,024 and $663,034 respectively. The increase in
such expenses was primarily due to increase in recurring administrative costs as
our fleet expanded. Our general and administrative expenses include recurring
administrative costs and non-recurring formation and advisory costs. Recurring
costs include our onshore vessel administration related expenses such as legal
and professional expenses and administrative and other expenses including
payroll and expenses relating to our executive officers and office staff, office
rent and expenses, directors fees and compensations, and directors and officers
insurance. For the three-month period ended June 30, 2006, all of our general
and administrative costs were recurring in nature. For the corresponding
three-month period ended June 30, 2005, recurring administrative costs amounted
to $363,327. We did not incur any non-recurring costs in the three-months ended
June 30, 2006. For the corresponding three-month period ended June 30, 2005,
non-recurring costs amounted to $299,707. We expect general and administrative
expenses to increase as our fleet expands.

     General and Administrative Expenses for the six-month period ended June 30,
2006 and period from January 26, 2005 (inception) to June 30, 2005 were
$2,099,503 and $1,420,036, respectively. The increase in such expenses was
primarily due to increase in recurring administrative costs as our fleet
expanded. For the six-month period ended June 30, 2006, all of our general and
administrative costs were recurring in nature. For the corresponding period from
January 26, 2005 (inception) to June 30, 2005, recurring administrative costs
amounted to $609,769. We did not incur any non-recurring costs in the six-months
ended June 30, 2006. For the corresponding period from January 26, 2005
(inception) to June 30, 2005, non-recurring costs amounted to $810,267.

     Financial Advisory Fees

     We did not incur any related party expenses in the three-month or six-month
periods ended June 30, 2006.

     The Company had a financial advisory agreement dated February 1, 2005 with
Kelso. Under the terms of the agreement the Company was to pay Kelso annual fees
of up to $500,000. The agreement also provided for Kelso to be paid fees in
connection with other services. In 2005, the Company terminated certain of its
obligations under this agreement, including its obligation to pay the annual
fees of $500,000, for a one-time payment of $1,000,000. The Company recorded an
expense of $6,175,046 in the three-month period ended June 30, 2005 and in the
period from January 26, 2005 (inception) to June 30, 2005 for fees under the
agreement.

     Non-Cash Compensation Expense

     For the three-month periods ended June 30, 2006 and 2005, the Company
recorded non-cash compensation charges of $1,938,970 and $7,640,847,
respectively. For the six-month period ended June 30, 2006 and the period from
January 26, 2005 (inception) to June 30, 2005 the Company recorded non-cash
compensation charges of $2,691,656 and $7,640,847, respectively. The expense for
the six-month period ended June 30, 2006 includes $2,644,623 in non-cash,
non-dilutive charges relating to profits interests awarded to members of the
Company's management by the Company's principal shareholder Eagle Ventures LLC,
and a non-cash amount of $47,033 which relates to the fair value of the stock
options granted on March 17, 2006 to certain directors of the Company under the
2005 Stock Incentive Plan.

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

     Interest and Finance Costs

     Interest expense for the three-month period ended June 30, 2006, of
$2,117,322 includes loan interest of $1,893,185 incurred on our borrowings from
our revolving credit facility, commitment fees of $190,862 incurred on the
unused portion of the revolving credit facility, and costs of $33,275 relating
to the amortization of financing costs associated with our revolving credit
facility.

     Interest expense for the three-month period ended June 30, 2005, was
$3,233,596. These costs included loan interest costs of $1,353,306, commitment
fees of $141,355, amortization charges of $1,130,713 relating to financing costs
associated with the then existing term loan and the revolving credit facility,
and $608,222 in interest costs associated with a Note from Eagle Ventures.

     Interest expense for the six-month period ended June 30, 2006, of
$4,183,673 includes loan interest of $3,734,475 incurred on our borrowings from
our revolving credit facility, commitment fees of $382,973 incurred on the
unused portion of the revolving credit facility, and costs of $66,225 relating
to the amortization of financing costs associated with our revolving credit
facility.

     Interest expense for the previous period from January 26, 2005 (inception)
to June 30, 2005, was $3,233,596. These costs included loan interest costs of
$1,353,306, commitment fees of $141,355, amortization charges of $1,130,713
relating to financing costs associated with the then existing term loan and the
revolving credit facility, and $608,222 in interest costs associated with a Note
from Eagle Ventures.

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

     Interest Rate Swaps

     We have entered into interest rate swaps to effectively convert a portion
of our debt from a floating to a fixed-rate basis. The swaps are designated and
qualify as cash flow hedges. Interest rate swap contracts for notional amounts
of $100,000,000 and $30,000,000 were entered into in 2005. 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. Accordingly, at June
30, 2006, we recorded an asset of $6,027,014 which is included in Other Assets
in the accompanying balance sheet. We did not have any swap instruments in place
in the corresponding three-month period ended June 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 periods ended
June 30, 2006 and 2005 and for the six-month period ended June 30, 2006 and the
period from January 26, 2005 (inception) to June 30, 2005 respectively:

<TABLE>
<CAPTION>
                                                                                                 Period from
                                               Three months    Three months       Six Months     January 26,
                                                   ended           ended            ended      (inception) to
                                               June 30, 2006   June 30, 2005    June 30, 2006   June 30, 2005
                                               -------------   -------------    -------------   -------------
<S>                                              <C>            <C>               <C>            <C>
Net Income .................................      $9,391,736    $(12,088,544)     $20,184,237    $(12,894,757)
Interest Expense ...........................       2,117,322       3,233,596        4,183,673       3,233,596
Depreciation and Amortization ..............       4,937,661       2,020,572        9,757,243       2,020,572
Amortization of Prepaid and Deferred Revenue         773,500         205,000        1,710,500         205,000
                                               -------------   -------------    -------------   -------------
EBITDA .....................................      17,220,219      (6,629,376)      35,835,653      (7,435,589)
Adjustments for Exceptional Items:
Management and Other Fees to Affiliates(1) .              --       6,175,046               --       6,175,046
Non-cash Compensation Expense(2) ...........       1,938,970       7,640,847        2,691,656       7,640,847
                                               -------------   -------------    -------------   -------------
Credit Agreement EBITDA ....................     $19,159,189      $7,186,517      $38,527,309      $6,380,304
                                               =============   =============    =============   =============
</TABLE>

     (1)  One-time charge

     (2)  Management's participation in profits interests in Eagle Ventures LLC
          and Options Expense

     (see Notes to our financial statements)

Effects of Inflation

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

Liquidity and Capital Resources

     Net cash provided by operating activities during the six-month period ended
June 30, 2006, was $32,993,258 compared to $1,559,570 during the same period
from inception on January 26, 2005 to June 30, 2005. This increase was primarily
due to cash generated from the operation of a fleet of 13 vessels for 2,297
operating days in the review period for 2006 compared to 477 operating days from
9 vessels during the corresponding review period in 2005.

     Net cash used in investing activities during the six-month period ended
June 30, 2006, was $42,900,000 as the Company acquired its fourteenth vessel,
KESTREL I, a Supramax class vessel and placed deposits for two additional
Supramax class vessels, TERN and JAEGER, which were delivered in July 2006. Net
cash used in investing activities during the corresponding period from inception
on January 26, 2005 to June 30, 2005 was $302,241,893 as the Company acquired
its nine initial vessels and placed deposits for two additional vessels .

     Net cash provided by financing activities during the six-month period ended
June 30, 2006, was $39,927,970 as the Company borrowed $42,400,000 from its
revolving credit facility, raised $33,000,000 from a private placement of its
common stock, and paid $35,470,500 in dividends. Net cash provided by investing
activities during the corresponding period from inception on January 26, 2005 to
June 30, 2005 was $311,613,286 primarily consisting of net proceeds of
$186,529,290 from the initial public offering, capital contributions of
$40,843,662 and net borrowings of $88,500,000 from its credit facilities.

     As of June 30, 2006, our cash balance was $54,547,756 compared to a cash
balance of $24,526,528 at December 31, 2005. In addition, $6,500,000 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 June 30,
2006 and December 31, 2005. Also recorded in Restricted Cash is an amount of
$124,616 which is collateralizing a letter of credit relating to our office
lease.

     We have a $330,000,000 long-term revolving credit facility which we entered
into in July 2005, of which $147,600,000 was unused as of June 30, 2006. 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 revolving credit agreement also provides us with the
ability to borrow up to $10,000,000 for working capital purposes. (See section
entitled "Revolving Credit Facility" for subsequent changes to the credit
facility).

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

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

Dividends

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

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

     On April 14, 2006 the Company's Board of Directors declared a cash dividend
for the first quarter of 2006 of $0.50 per share, based on 33,150,000 shares of
common stock outstanding, payable on May 3, 2006 to all shareholders of record
as of April 28, 2006. The aggregate amount of the cash dividend paid to the
Company's shareholders on May 3, 2006 was $16,575,000.

     On July 18, 2006 the Company's Board of Directors declared a cash dividend
for the second quarter of 2006 of $0.50 per share, based on 35,900,000 shares of
common stock outstanding, payable on August 3, 2006 to all shareholders of
record as of July 28, 2006. The aggregate amount of the cash dividend paid to
the Company's shareholders on August 3, 2006 was $17,950,000. Since the Company
did not own the newly acquired vessels and receive the benefit of their revenues
for the full quarter (the Kestrel I delivered on June 30, 2006, the Tern on July
3, 2006 and the Jaeger on July 7, 2006), it funded approximately $1,375,000 of
this dividend from excess working capital.

Sale of Common Stock

     On June 28, 2006 the Company sold 2,750,000 shares of its common stock to
certain institutional investors in a private placement at $12.00 per share,
pursuant to a securities purchase agreement dated June 22, 2006, raising gross
proceeds of $33,000,000 before deduction of fees and expenses of $1,540,545. The
Company used the proceeds from the offering to fund a portion of the acquisition
of three vessels KESTREL I, TERN and JAEGER.

Revolving Credit Facility

     At June 30, 2006, the Company's debt consisted of $182,400,000 in
borrowings under our 10-year $330,000,000 revolving credit facility which we
entered into in July 2005. During the three-month period ended June 30, 2006,
the Company borrowed a total of $42,400,000 from its revolving credit facility
which was used to partly fund the acquisition of the KESTREL I and place
deposits representing 10% of the purchase price of $69,000,000 for the TERN and
JAEGER.

     The revolving credit facility has a facility limit of $330,000,000 and a
term of ten years. The Company's Financial Statements for the year ended
December 31, 2005 on Form 10-K includes a more detailed description of the
revolving credit facility. At June 30, 2006, the Company had a remaining undrawn
capacity of $147,600,000 available to fund future acquisitions of dry bulk
vessels. The credit facility bears interest at the London Interbank Offered Rate
(LIBOR) plus a margin of 0.95%. The Company incurs a fee of 0.4% per annum on
the unused portion of the revolving credit facility on a quarterly basis.

     For the three-month period ended June 30, 2006, interest rates applicable
on the Company's debt ranged from 5.17% to 6.29%, including the margin. The
weighted average effective interest rate was 5.30%. For the six-month period
ended June 30, 2006, interest rates applicable on the Company's debt ranged from
5.17% to 6.29%, including the margin. The weighted average effective interest
rate was 5.28%.

     Subsequent to the quarter ended June 30, 2006, on July 3, 2006 and July 7,
2006, respectively, the Company took delivery of two Supramax class vessels,
TERN and JAEGER. The Company funded the balance of the purchase price of
$62,100,000 for the two vessels with a combination of proceeds from cash on hand
and additional borrowings of $32,400,000 from its revolving credit facility.
Following the completion of these acquisitions the Company's borrowings under
the revolving credit facility stood at $214,800,000.

     On July 6, 2006, the Company received a commitment from its current lender
to increase and amend its 10-year revolving credit facility to $450,000,000 from
$330,000,000. The entire $450,000,000 facility will be available for a period of
six years from July 31, 2006, compared to four years remaining in the commitment
period of the Company's existing facility. There are no principal repayment
obligations during this initial six-year period. Over the remaining four years,
the facility will reduce in semi-annual amounts of $25,000,000 with a final
reduction of $250,000,000 occurring simultaneously with the last semi-annual
reduction.

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

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

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

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

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

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

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

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

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

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

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

Contractual Obligations

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

<TABLE>
<CAPTION>
                                  Within        One to     Three to    More than
                                One Year   Three Years   Five Years   Five years       Total
                                --------   -----------   ----------   ----------       -----
                                                (in thousands of U.S. dollars)
<S>                              <C>           <C>          <C>         <C>        <C>
Vessel Purchase(1) ...........   $62,100           $--          $--          $--    $62,100
Bank Loans ...................        --            --           --      182,400    182,400
Interest and borrowing fees(2)     7,592        21,904       21,956       50,661    102,113
Office lease .................       143           511          544           69      1,267
                                 -------       -------      -------     --------   --------
Total ........................   $69,835       $22,415      $22,500     $233,130   $347,880
                                 =======       =======     =======      ========   ========
</TABLE>

     (1)  The total purchase price of the two vessels delivered subsequent to
          June 30, 2006 was $69,000,000 of which we had paid $6,900,000 as of
          June 30, 2006. Subsequent to June 30, 2006 we took delivery of these
          vessels and paid the balance of the purchase price with a combination
          of bank debt and cash on hand.

     (2)  The Company is a party to floating-to-fixed interest rate swaps
          covering notional amounts of $100,000,000 and $30,000,000 at June 30,
          2006 that effectively convert the Company's interest rate exposure
          from a floating rate based on LIBOR to a fixed rate of 4.22% and 4.54%
          respectively, plus a margin of 0.95%. The interest obligations for
          floating rate debt ($52,400,000 as of June 30, 2006) have been
          estimated based on the fixed rates stated in related floating-to-fixed
          interest rate swaps, where applicable, or the LIBOR rate at June 30,
          2006.

     Capital Expenditures

     Our capital expenditures relate to purchase of vessels and capital
improvements to our vessels which are expected to enhance the revenue earning
capabilities of these vessels. In addition to acquisitions that we may undertake
in future periods, other major capital expenditures include funding the
Company's maintenance program of regularly scheduled drydocking necessary to
preserve the quality of our vessels as well as to comply with international
shipping standards and environmental laws and regulations. Although the Company
has some flexibility regarding the timing of its dry docking, the costs are
relatively predictable. Management anticipates that vessels are to be drydocked
every two and a half years. Funding of these requirements is anticipated to be
met with cash from operations. We anticipate that this process of
recertification will require us to reposition these vessels from a discharge
port to shipyard facilities, which will reduce our available days and operating
days during that period.

     During the three-month period ended June 30, 2006, we did not drydock any
vessels. In the six-month period ended June 30, 2006, we have spent $1,464,473
on vessel drydockings and this amount is amortized to expense on a straight-line
basis over the period through the date the next drydocking is scheduled to
occur. The following table represents certain information about the estimated
costs for anticipated vessel drydockings in the remainder of 2006 and calendar
2007 along with the anticipated off-hire days:

     ----------------------------------------------------------------------
     Quarter Ending                   Off-hire Days(1)   Projected Costs(2)
     --------------                   ----------------   ------------------
     September 30, 2006............          15            $0.35 million
     December 31, 2006.............          15            $0.35 million
     March 31, 2007................          30            $0.70 million
     June 30, 2007.................          --                   --
     September 30, 2007............          30            $0.70 million
     December 31, 2007.............          15            $0.35 million
     ----------------------------------------------------------------------
     (1)  Actual duration of drydocking will vary based on the condition of
          the vessel, yard schedules and other factors.
     (2)  Actual costs will vary based on various factors, including where
          the drydockings are actually performed.
     ----------------------------------------------------------------------

     Contracted Time Charter Revenue

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

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

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

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

Cardinal        April 19, 2005      March 2007 to June 2007            $26,500
Condor          April 30, 2005      November 2006 to March 2007        $24,000
Falcon          April 22, 2005      February 2008 to June 2008         $20,950
Griffon         February 17, 2006   January 2007 to February 2007      $13,550
Harrier         April 21, 2005      March 2007 to June 2007            $23,750
Hawk I          April 28, 2005      March 2007 to June 2007            $23,750
Kite(2)         April 17, 2006      March 2007 to May 2007             $14,750
Osprey I(3)     September 1, 2005   May 2008 to September 2008         $21,000
Peregrine(4)    July 1, 2005        October 2006 to January 2007       $24,000
Shikra(5)       April 30, 2005      August 2006 to November 2006       $22,000
Sparrow         July 20, 2005       November 2006 to Feb 2007          $22,500
Merlin          October 26, 2005    October 2007 to December 2007      $24,000
Heron           December 11, 2005   December 2007 to February 2008     $24,000
Kestrel I(6)    July 1, 2006        December 2007 to April 2008        $18,750
Tern(7)         July 3, 2006        December 2007 to April 2008        $19,000
Jaeger          July 7, 2006        April 2007 to June 2007            $18,550

----------
(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 initial charter on the KITE at a daily charter rate of $25,000 ended in
     April 2006.

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

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

(5   Upon conclusion of the current charter, the SHIKRA commences a new time
     charter at $14,800 per day for 11 to 13 months.

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

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

Off-balance Sheet Arrangements

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

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

Currency and Exchange Rates

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

Item 4. Controls and Procedures

Disclosure Controls and Procedures

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

Internal Control Over Financial Reporting

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

PART II: OTHER INFORMATION

Item 1 - Legal Proceedings

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

Item 1A - Risk Factors

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

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

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

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

     The offering incurred costs of $1,540,545 in fees and expenses and the
balance of the proceeds was used to fund a portion of the acquisition of three
vessels, KESTREL I, TERN and JAEGER.

Item 3 - Defaults upon Senior Securities

     None

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

     The Annual Meeting of Shareholders of the Company was held on May 24, 2006.
At the meeting the matters described below were approved by the shareholders.

     The following nominees for the office of director were elected for terms
expiring at the 2009 Annual Meeting of Shareholders, by the following votes:

                                     For             Withheld

          Sophocles N. Zoullas      29,694,737       1,361,117
                                 -------------   -------------
          Michael B. Goldberg       30,935,453         120,401


     The following persons continue as directors:

          Joseph Cianciolo
          Michael Mitchell
          David B. Hiley
          Frank J. Loverro
          Douglas P. Haensel

     The ratification of the appointment of Ernst & Young LLP as the independent
registered public accounting firm to audit the financial statements of the
Company and its subsidiaries for the fiscal year ending December 31, 2006, was
approved by the following number of stockholder votes for, against, and
abstained

     For: 30,933,643             Against: 70,514         Abstained: 51,697

Item 5 - Other Information

     On March 17, 2006, the Company granted 56,666 shares of the Company's stock
in options to its independent non-employee directors. These options vested and
became exercisable on the grant date at an exercise price of $13.23 per share.
All options expire ten years from the date of grant. As of March 31, 2006, no
other grants have been made under the plan. Also on March 17, 2006, the Company
granted a Dividend Equivalent Rights award to its independent non-employee
directors equivalent to 62,964 shares of the Company's common stock. This award
entitles the participant to receive a Dividend Equivalent payment each time the
Company pays a dividend to the Company's stockholders. The amount of the
Dividend Equivalent payment is equal to the number of Dividend Equivalent Rights
multiplied by the amount of the per share dividend paid by the Company on its
stock on the date the dividend is paid.

Item 6 - Exhibits

                                  EXHIBIT INDEX

          3.1       Amended and Restated Articles of Incorporation of the
                    Company*

          3.2       Amended and Restated Bylaws of the Company*

          4.1       Form of Share Certificate of the Company*

          10.1      Form of Registration Rights Agreement*

          10.2      Form of Management Agreement*

          10.3      Amended and Restated Form of Credit Agreement**

          10.4      Eagle Bulk Shipping Inc. 2005 Stock Incentive Plan*

          10.5      Employment Agreement for Mr. Sophocles N. Zoullas*

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

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

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

          32.1      Section 1350 Certification of CEO

          32.2      Section 1350 Certification of CFO


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

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

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

     This quarterly report on Form 10-Q for the three month period ended June
30, 2006 is incorporated by reference into the Company's Registration Statements
on Form S-3, filed on July 11, 2006 (Registration No. 333-135708) and July 19,
2006 (333-135866).

                                   SIGNATURES

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

EAGLE BULK SHIPPING INC.
----------------------------------------------
(REGISTRANT)

Date: August 9, 2006


By: /s/ Sophocles N. Zoullas
----------------------------------------------
Sophocles N. Zoullas
Chairman of the Board and
Chief Executive Officer

Date: August 9, 2006


By: /s/ Alan S. Ginsberg
----------------------------------------------
Alan S. Ginsberg
Chief Financial Officer
and Treasurer

SK 25083 0001 693804