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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIESEXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIESEXCHANGE ACT OF 1934
 For the transition period from            to
 Commission file number 000-51412
 Quintana Maritime Limited
  Republic of the Marshall Islands
    
    98-0453513(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 c/o Quintana Management LLC
 Attention: Stamatis Molaris
 Pandoras 13 & Kyprou Street
 166 74 Glyfada
 Greece
  011-30-210-898-5056
  o þ
 o þ
 o þ




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##### Table of Contents



TABLE OF CONTENTS
 FORM 10-Q
 PART I.
    
    FINANCIAL INFORMATION
    
    
    1Item 1.
    
    Financial Statements
    
    
    1Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    24Item 4.
    
    Controls and Procedures
    
    
    24PART II.
    
    OTHER INFORMATION
    
    
    26Item 1.
    
    Legal Proceedings
    
    
    26Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 6.
    
    Exhibits
    
    
    27SIGNATURES
    
    
    28Certification pursuant to Section 302 by CEOCertification pursuant to Section 302 by CFOCertification pursuant to Section 906 by CEOCertification pursuant to Section 906 by CFO




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Quintana Maritime Limited
 Consolidated Balance Sheets
 June 30, 2005(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    12,166,466Inventories
    
    
    177,212Due from charterers
    
    
    214,447Other receivables
    
    
    53,423Prepaid expenses and other current assets
    
    
    1,538,913Total current assets
    
    
    14,150,461Non-current assets:Vessels, net of accumulated depreciation of
$1,844,600
    
    
    201,326,215Advances for vessel deposits
    
    
    12,700,000Other fixed assets, net of accumulated
depreciation of $20,402
    
    
    216,238Deferred dry docking costs, net of accumulated
amortization of $33,350
    
    
    1,168,916Deferred financing costs, net
    
    
    4,230,157Total non-current assets
    
    
    219,641,526Total assets
    
    $
    233,791,987LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Trade accounts payable
    
    $
    1,564,363Due to related party
    
    
    479,950Sundry liabilities and accruals
    
    
    947,982Deferred income
    
    
    735,375Term loan Facility
    
    
    161,071,351Total current liabilities
    
    
    164,799,021Shareholders equity:Common stock
at $0.01 par value  6,319,492 shares
issued, authorized and outstanding
    
    
    63,195Additional paid-in capital
    
    
    68,342,442Retained earnings
    
    
    587,329Total shareholders equity
    
    
    68,992,966Total liabilities and shareholders equity
    
    $
    233,791,987
  1




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Quintana Maritime Limited
 Consolidated Statement of Operations
 Period fromJanuary 13,Three months
    
    
    2005ended June 30,
    
    
    (inception) to2005
    
    
    June 30, 2005(unaudited)
    
    
    (unaudited)Revenues:Voyage revenue
    
    $
    7,262,910
    
    
    $
    7,262,910Commission
    
    
    (285,369
    )
    
    
    (285,369
    )Net revenue
    
    
    6,977,541
    
    
    
    6,977,541Expenses:Vessel operating expenses
    
    
    1,286,140
    
    
    
    1,286,140General and administrative expenses
    
    
    992,048
    
    
    
    1,148,914Management fees
    
    
    117,200
    
    
    
    117,200Depreciation and amortization
    
    
    1,898,352
    
    
    
    1,898,352Total expenses
    
    
    4,293,740
    
    
    
    4,450,606Operating profit
    
    
    2,683,801
    
    
    
    2,526,935Other expenses:Interest expense
    
    
    (1,621,639
    )
    
    
    (1,621,639
    )Interest income
    
    
    27,268
    
    
    
    27,268Finance costs
    
    
    (333,066
    )
    
    
    (333,066
    )Foreign exchange losses
    
    
    (12,169
    )
    
    
    (12,169
    )Total other expenses
    
    
    (1,939,606
    )
    
    
    (1,939,606
    )Net income
    
    $
    744,195
    
    
    $
    587,329Earnings per share  Basic and Diluted
    
    $
    0.12
    
    
    $
    0.09Weighted average shares outstanding
    
    
    6,319,492
    
    
    
    6,319,492
  2




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Quintana Maritime Limited
 Consolidated Statement of Shareholders Equity
(unaudited)
 Number
    
    
    
    
    
    
    Additionalof
    
    
    Common
    
    
    Paid - in
    
    
    RetainedShares
    
    
    Shares
    
    
    Capital
    
    
    Earnings
    
    
    TotalBalance, January 13, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock
    
    
    6,319,492
    
    
    $
    63,195
    
    
    $
    68,342,442
    
    
    
    
    
    
    $
    68,405,637Net income for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    587,329
    
    
    
    587,329Balance, June 30, 2005
    
    
    6,319,492
    
    
    $
    63,195
    
    
    $
    68,342,442
    
    
    $
    587,329
    
    
    $
    68,992,966
  3




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Quintana Maritime Limited
 Consolidated Statement of Cash Flows
(unaudited)
 Period fromJanuary 13, 2005(inception) toJune 30, 2005(unaudited)Cash flows from operating activities:Net income
    
    $
    587,329Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation of vessels
    
    
    1,844,600Depreciation of other fixed assets
    
    
    20,402Amortization of deferred dry-docking costs
    
    
    33,350Amortization of deferred finance and legal costs
    
    
    320,363Changes in assets and liabilities:Increase in inventories
    
    
    (177,212
    )Increase in due from charterer
    
    
    (214,447
    )Increase in other receivables
    
    
    (53,423
    )Increase in prepaid expenses and
other current assets
    
    
    (492,054
    )Increase in trade accounts payable
    
    
    1,564,363Increase in payable to related party
    
    
    479,950Increase in sundry liabilities and accruals
    
    
    947,982Increase in deferred income
    
    
    735,375Deferred dry-dock costs incurred
    
    
    (1,202,266
    )Net cash from operating activities
    
    $
    4,394,312Cash flows from investing activities:Vessel acquisitions
    
    
    (203,170,815
    )Advances for vessel deposit
    
    
    (12,700,000
    )Purchases of property, plant and equipment
    
    
    (236,640
    )Net cash used in investing activities
    
    $
    (216,107,455
    )Cash flows from financing activities:Proceeds from long-term debt
    
    
    311,071,351Repayment of bank debt
    
    
    (150,000,000
    )Prepaid offering expenses
    
    
    (1,046,859
    )Payment of financing costs
    
    
    (4,550,520
    )Paid-in capital and common stock
    
    
    68,405,637Net cash from financing activities
    
    
    223,879,609Net increase in cash and cash equivalents
    
    
    12,166,466Cash and cash equivalents at beginning of period
    
    
    Cash and cash equivalents at end of period
    
    $
    12,166,466Supplemental disclosure of cash flow information:Cash paid during the period for interest
    
    $
    1,091,480
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Quintana Maritime Limited
 Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 1. Basis of Presentation and General Information
 The Company
     VesselContracted
    
    
    
    Deadweightto be
    
    
    
    Tonnage (in
    
    
    
    DeliveryCompany
    
    Acquired
    
    Agreement Date
    
    metric tons)
    
    Built
    
    DateFearless Shipco LLC
    
    Fearless I
    
    February 18, 2005
    
    73,427
    
    1997
    
    April 11, 2005King Coal Shipco LLC
    
    King Coal
    
    February 25, 2005
    
    72,873
    
    1997
    
    April 12, 2005Coal Glory Shipco LLC
    
    Coal Glory
    
    March 21, 2005
    
    73,670
    
    1995
    
    April 13, 2005Iron Man Shipco LLC
    
    Iron Man
    
    March 15, 2005
    
    72,861
    
    1997
    
    May 6, 2005Coal Age Shipco LLC
    
    Coal Age
    
    March 15, 2005
    
    72,861
    
    1997
    
    May 4, 2005Barbara Shipco LLC
    
    Barbara
    
    March 24, 2005
    
    73,390
    
    1997
    
    July 20, 2005Coal Pride Shipco LLC
    
    Coal Pride
    
    March 29, 2005
    
    72,600
    
    1999
    
    August 16, 2005Linda Leah Shipco LLC
    
    Linda Leah
    
    March 24, 2005
    
    73,390
    
    1997
    
    August 22, 2005
  5




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Quintana Maritime Limited
 Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 2. Significant Accounting Policies
 Basis of presentation
  Principles of consolidation
  Use of estimates
  Other comprehensive income/(loss)
  Foreign currency translation
  Cash and cash equivalents
  6




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Quintana Maritime Limited
 Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 2. Summary of Significant Accounting Policies  Continued
 Inventories
  Impairment of long-lived assets
  Vessel cost
  Vessel depreciation
  Drydocking costs
  7




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Quintana Maritime Limited
 Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 2. Summary of Significant Accounting Policies  Continued
 Financing costs
  Pension and retirement benefit obligations  crew
  Revenues and expenses
   Repairs and maintenance
  Income taxes
  8




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Quintana Maritime Limited
 Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 2. Summary of Significant Accounting Policies  Continued
 Segment reporting
  Derivatives
  Earnings/(loss) per share
  Recent accounting pronouncements
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Quintana Maritime Limited
 Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 2. Summary of Significant Accounting Policies  Continued
  3. Prepaid expenses and other current assets
  4. Vessel Acquisitions
 Fearless I King Coal Coal Glory Iron Man Coal Age
 5. Advances for Vessel Deposits
  6. Financing Costs
  7. Sundry Liabilities and Accruals
  8. Borrowings
 Iron
Man Coal Age
  10




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Quintana Maritime Limited
 Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 8. Borrowings  Continued
   9. Related Party Transactions
    11




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Quintana Maritime Limited
 Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 10. Technical-management company
  11. Commitments
  AmountJuly 1, 2005 to June 30, 2006
    
    $
    89,862July 1, 2006 to June 30, 2007
    
    
    96,044July 1, 2007 to February 28, 2008
    
    
    57,626Total
    
    $
    243,532
  VesselContracted to be
    
    
    PurchaseCompany
    
    Acquired
    
    
    Price
    
    
    Delivery DateBarbara Shipco LLC
    
    Barbara
    
    $
    42,000,000
    
    
    July 20, 2005Coal Pride Shipco LLC
    
    Coal Pride
    
    
    43,000,000
    
    
    August 16, 2005Linda Leah Shipco LLC
    
    Linda Leah
    
    
    42,000,000
    
    
    August 22, 2005Total cost
    
    
    
    
    
    
    127,000,000Less: 10% deposit
    
    
    
    
    
    
    (12,700,000
    )Total commitment
    
    
    
    
    
    $
    114,300,000
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Quintana Maritime Limited
 Notes to the consolidated financial statements
(Unaudited)
(All amounts expressed in U.S. Dollars)
 12. Stock Split and Stock Dividend
  13. Subsequent Events
 
    
    On July 14, 2005, the Company completed the initial public offering in the United
States and issued 16,700,000 shares at $11.50 for gross proceeds of $192.1 million.
Expenses related to the offering are estimated to be approximately $14.2 million.The outstanding term loan facility as at June 30, 2005 amounting to $161,071,351 was
fully repaid on July 22, 2005 from the proceeds of the initial public offering
discussed above.
    
    On July 20, August 16 and August 22, 2005 the vessels Barbara, Coal Prideand Linda
Leahwere delivered, and a portion of the term loan facility amounting to $100.55
million was drawn down. This term loan facility was split into Tranche A and Tranche B
amounting to $81.7 million and $18.85, respectively.
    
    On July 22, 2005 the Company gave to Blossom Management Company six-months notice of
termination of the management agreement in accordance with the terms of the management
agreement.
    
    On July 14, 2005 the Company adopted its stock incentive plan which entitles
employees, directors and consultants of importance to the Company to receive
equity-based incentive compensation. A total of 3,000,000 common shares may be issued
under this plan. The plan will be administered by the Compensation, Nominating &
Governance Committee (the Committee) appointed by the Board of Directors. Under the
terms of the plan, the Committee will be able to grant new awards on terms to be
determined by the Committee. The plan will expire in July 2015. On August 24, 2005,
284,625 shares of restricted stock and 284,625 shares of phantom stock were granted
under the plan.
    
    On August 17, 2005, the Company completed an additional offering of 268,500 shares in
connection with the partial exercise of the underwriters over-allotment option for
gross proceeds of $3.1 million, with related expenses totaling $0.2 million.
    
    Effective as of August 15, 2005, the Company entered into a definitive Waiver Letter,
Consent and Agreement with the lenders and facility agent under its term loan facility.
In that waiver, the lenders agreed to (i) waive certain funding limits relating to the
utilization of the loans with respect to the vessels Linda Leahand Coal Pride, (ii)
consent to the release of Quintana Maritime Investors LLC from all of its obligations
under the facility and related documents and permit it to be dissolved or liquidated at
any time on and after August 15, 2005 and (iii) release the first- and second-priority
liens on certain shares of the Companys stock held by Quintana Maritime Investors LLC.
    
    On August 24, 2005, the Company declared a dividend of $0.05 per share payable on September
20, 2005 to all shareholders of record as of September 12, 2005.
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion and analysis of financial condition and results of operations should
be read in conjunction with our historical consolidated financial statements and the notes thereto
included elsewhere in this filing.
 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:
(1) changes in demand in the dry-bulk market, including changes in production of, or demand for,
commodities and bulk cargoes, generally or in particular regions; (2) greater than anticipated
levels of dry-bulk-vessel newbuilding orders or lower than anticipated rates of dry-bulk-vessel
scrapping; (3) changes in rules and regulations applicable to the dry-bulk industry, including
legislation adopted by international bodies or organizations such as the International Maritime
Organization and the European Union or by individual countries; (4) actions taken by regulatory
authorities; (5) changes in trading patterns significantly affecting overall dry-bulk tonnage
requirements; (6) changes in the typical seasonal variations in dry-bulk charter rates; (7) changes
in the cost of other modes of bulk commodity transportation; (8) changes in general domestic and
international political conditions; (9) changes in the condition of the Companys vessels or
applicable maintenance or regulatory standards (which may affect, among other things, our
anticipated drydocking costs); (10) and other factors listed from time to time in our filings with
the Securities and Exchange Commission, including our Registration Statement on Form S-1 filed with
the Securities and Exchange Commission. We disclaim any intent or obligation to update publicly any
forward-looking statements, whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
 Executive Overview
  Results of Operations
  14




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Charters
  Three MonthsEnded June 30,2005Ownership days
    
    
    354Operating days
    
    
    286Fleet utilization
    
    
    80.8
    %
 
    
    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.
    
    Operating days.We define operating days as the number of our ownership days in a
period less the aggregate number of days that our vessels are off-hire due to any
reason. The shipping industry uses operating days to measure the aggregate number of
days in a period during which vessels actually generate revenues.
    
    Fleet utilization.We calculate fleet utilization by dividing the number of our
operating days during a period by the number of our ownership 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.
    
    TCE rates.We define TCE (Time Charter Equivalent) rates as our voyage and time charter revenues less voyage
expenses during a period divided by the number of our ownership days during the period,
which is consistent with industry standards. TCE rate is a shipping industry performance
measure used primarily to compare daily earnings generated by vessels on time charters
with daily earnings generated by vessels on voyage charters, because charter hire rates
for vessels on voyage charters are generally not expressed in per day amounts while
charter hire rates for vessels on time charters generally are expressed in such amounts.
    
    Spot Charter Rates.Spot charter hire rates are volatile and fluctuate on a seasonal
and year to year basis. The fluctuations are caused by imbalances in the availability of
cargoes for shipment and the number of vessels available at any given time to transport
these cargoes.
    
    Voyage and Time Charter Revenue.Our revenues will be driven primarily by the number
of vessels in our fleet, the number of days during which our vessels operate and the
amount of daily charter hire rates that our vessels earn under charters, which, in turn,
will be affected by a number of factors, including:
 °            the duration of our charters;
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°            our decisions relating to vessel acquisitions and disposals;°            the amount of time that we spend positioning our vessels;°            the amount of time that our vessels spend in dry-dock undergoing repairs;°            the amount of time that our vessels spend in connection with maintenance and upgrade work;°            the age, condition and specifications of our vessels;°            levels of supply and demand in the drybulk shipping industry; and°            other factors affecting spot market charter hire rates for drybulk carriers.
   Net Revenues
  Voyage Expenses
  Vessel Operating Expenses
  General and Administrative Expenses
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Management Fees
  Depreciation
  Drydocking
  Financing costs.
  Interest and Finance Costs
 Three MonthsEnded June30, 2005(in thousands)Term loan interest
    
    
    1,207Bridge loan interest
    
    
    415Commitment and Bank fees
    
    
    314Amortization of financing and legal
fees
    
    
    19
  17




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Iron Man Coal Age
 Barbara Coal Pride Linda Leah
 Inflation
  Liquidity and Capital Resources
     Bridge Loan Facility
  18




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Term Loan Facility
 General.
 Fees and Interest.
   Term and Facility Limit.
  Prepayments.
  Security.
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Conditions.
 Financial Covenants.
 
    
    the ratio of Total Debt (as defined) to Total Capitalization (as defined) shall be no
greater than 0.80 to 1.00 at any time on or after January 1, 2006 and prior to January
1, 2007 and 0.60 to 1.00 at any time on or after January 1, 2007,
    
    we have consolidated cash and cash equivalents of not less than $5.0 million on the
last day of each fiscal quarter from July 31, 2005 until 12 months from the closing
date, increasing to $10.0 million from the beginning of the second year after the
closing date, subject to increase to $15.0 million if more than half of our vessels fail
to be employed under fixed rate charters that have a remaining life of less than six
months,
    
    the ratio of Consolidated EBITDA (as defined) to cash Interest Expense (as defined)
is no less than 2.5 to 1.00 commencing December 31, 2005 and prior to January 1, 2008,
2.1 to 1.00 commencing January 1, 2008 and prior to January 1, 2009, 2.25 to 1.00
commencing January 1, 2009 and prior to January 1, 2010 and 2.5 to 1.00 at any time on
or after January 1, 2010, and
    
    the aggregate fair market value of the vessels shall be no less than 115% of the
aggregate principal amount outstanding under the secured term loan facility during the
first year after the closing date of the secured term loan facility and no less than
125% of the aggregate principal amount thereafter. If the fair market value is less than
the required amount, we will be required to either prepay indebtedness under the term
loan facility or provide additional collateral, to the extent necessary to restore
compliance with this covenant.
 Restrictive Covenants.
  Linda Leah Coal Pride
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Proposed Revolving Credit Facility
 General .
 Off-balance Sheet Arrangements
  Contractual Obligations
  One to
    
    
    Three
    
    
    MoreWithin One
    
    
    Three
    
    
    Years to
    
    
    Than FiveYear
    
    
    Years
    
    
    Five Years
    
    
    Years
    
    
    Total(Dollars in thousands)Term loan facility (1)
    
    $
    41,732
    
    
    $
    39,584
    
    
    $
    24,549
    
    
    $
    55,206
    
    
    $
    161,071Vessel purchase agreements(2)
    
    
    114,300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    114,300Management fees(3)
    
    
    430
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    430Office lease(4)
    
    
    90
    
    
    
    154
    
    
    
    
    
    
    
    
    
    
    
    244Total
    
    $
    156,552
    
    
    $
    39,738
    
    
    $
    24,549
    
    
    $
    55,206
    
    
    $
    276,045
 
 (1)
    
    The outstanding term loan facility as at June 30, 2005 amounting to $161,071 was fully repaid
on July 22, 2005 from the proceeds of the initial public offering.(2)
    
    As of June 30, 2005, we had entered into vessel purchase agreements for three vessels for an
aggregate purchase price of $127 million, of which we paid a 10% deposit on those vessels, or
$12.7 million. Subsequent to June 30, 2005, we took delivery of those vessels and paid the
$114.3 million balance that was due on these vessels. We financed the balance of the payments
with proceeds from our initial public offering and indebtedness under our term loan facility.(3)
    
    Based upon the terms of management agreements with our manager, assuming each of the five
vessels under its management remains under management until the management agreement is
terminated in January 2006. On July 22, 2005 the Company gave to Blossom Management Company a
six-month notice of termination pursuant to the management agreement.(4)
    
    Represents the U.S. Dollar equivalent of lease payments in Euros as calculated in accordance
with the rate of $1.206 to 1.00 as of June 30, 2005. Such rate was $1.223 to 1.00 as
of August 24, 2005. Our office lease has a three-year term. Critical Accounting Policies
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Impairment of long-lived assets
  Vessel depreciation
  Drydocking costs
  Recent accounting pronouncements
   22




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Risks Related to our Business
 
    
    Because we are a new company with a limited operating history, we may be less successful
in implementing our business strategy than a more seasoned company.
    
    We cannot assure you that our board of directors will declare dividends.
    
    Our earnings may be adversely affected if we do not successfully employ our vessels on
medium- or long-term time charters or take advantage of favorable opportunities in the spot
market.
    
    Because we will initially depend on our technical manager to provide the technical
management for a majority of our fleet, our operations will be vulnerable to any financial
or operational problems of the technical manager.
    
    We may have difficulty properly managing our planned growth through acquisitions of
additional vessels.
    
    We cannot assure you that we will be able to borrow further amounts under our term loan
facility, which we may need to fund the acquisition of additional vessels.
    
    We cannot assure that we will be able to enter into our proposed revolving credit
facility or borrow funds thereunder to finance our growth.
    
    Restrictive covenants in our term loan facility impose, and any future debt facilities
will impose, financial and other restrictions on us.
    
    Servicing future indebtedness would limit funds available for other purposes, such as
the payment of dividends.
    
    Unless we set aside reserves for vessel replacement, at the end of a vessels useful
life our revenue will decline, which would adversely affect our cash flows and income.
    
    Purchasing and operating secondhand vessels may result in increased operating costs and
reduced fleet utilization.
    
    When our initial time charters end, we may not be able to replace them promptly or with
profitable ones.
    
    The international dry-bulk shipping industry is highly competitive, and we may not be
able to compete successfully for charters with new entrants or established companies with
greater resources.
    
    We may be unable to retain key management personnel and other employees in the shipping
industry, which may negatively impact the effectiveness of our management and results of
operations.
    
    Risks associated with operating oceangoing vessels could negatively affect our business
and reputation, which could adversely affect our revenues and stock price.
    
    The operation of dry-bulk carriers has certain unique operational risks.
    
    Our vessels may suffer damage and we may face unexpected costs, which could adversely
affect our cash flow and financial condition.
    
    The shipping industry has inherent operational risks that may not be adequately covered
by our insurance.
    
    If our dry-bulk carriers are not delivered on time or are delivered with significant
defects, our earnings and financial condition could suffer.
    
    The aging of our fleet may result in increased operating costs in the future, which
could adversely affect our earnings.
    
    We may earn United States source income that is subject to tax, thereby reducing our
earnings.
    
    U.S. tax authorities could treat us as a passive foreign investment company, which
could have adverse U.S. federal income tax consequences to U.S. holders.
    
    The enactment of proposed legislation could affect whether dividends paid by us
constitute qualified dividend income eligible for a preferential rate of federal income
taxation.
    
    Because we expect to generate all of our revenues in U.S. dollars but may incur a
significant portion of our expenses in other currencies, exchange rate fluctuations could
hurt our results of operations.
    
    We depend upon a limited number of customers for a large part of our revenues and the
loss of one or more of these customers could adversely affect our financial performance.
    
    We are a holding company, and we depend on the ability of our subsidiaries to distribute
funds to us in order to satisfy our financial obligations and to make dividend payments.
    
    As we expand our business, we may need to improve our operating and financial systems
and will need to recruit suitable employees and crew for our vessels.
    
    The international dry-bulk shipping sector is cyclical and
volatile, which may lead to reductions in our charter hire rates, vessel values and results of operations.
 23




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
    
    Charter hire rates in the dry-bulk sector will depend on continued economic growth in the world economy that exceeds the
capacity of the growing world fleets ability to match it.
    
    We may not be able to draw down the full amount under our proposed revolving credit
facility if the market value of our vessels, which are currently near historically high
levels, declines.
    
    We may breach some of the covenants under our proposed revolving credit facility if the
market price of our vessels, which are currently near historically high levels, declines.
    
    Our substantial operations outside the United States expose us to political,
governmental and economic instability, which could harm our operations.
    
    Seasonal fluctuations in industry demand could adversely affect our operating results
and the amount of available cash with which we can pay dividends.
    
    We are subject to regulation and liability under environmental laws that could require
significant expenditures and affect our cash flow and net income.
    
    We are subject to international safety regulations and the failure to comply with these
regulations may subject us to increased liability, may adversely affect our insurance
coverage and may result in a denial of access to, or detention in, certain ports.
    
    Maritime claimants could arrest one or more of our vessels, which could interrupt our
cash flow.
    
    Governments could requisition our vessels during a period of war or emergency, resulting
in a loss of earnings.
    
    Increased inspection procedures and tighter import and export controls could increase
costs and disrupt our business.
    
    An economic slowdown in the Asia Pacific region could have a material adverse effect on
our business, financial position and results of operations.
    
    World events could affect our results of operations and financial condition.
 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
 Interest Rates
  Currency and Exchange Rates
  
 Item 4. Controls and Procedures
  24




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25




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  Legal Proceedings Related to Mr. Molaris
   
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    26




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##### Table of Contents



Item 6. Exhibits
 ExhibitNo.
    
    
    
    Description3.1*
    
    
    
    Amended and Restated Articles of Incorporation3.2*
    
    
    
    Amended and Restated By-laws4.1*
    
    
    
    Form of Share Certificate10.1*
    
    
    
    Form of Vessel Management Agreement10.2*
    
    
    
    Agreement Related to Credit Facility10.3*
    
    
    
    First Supplemental Agreement to US$262,456,000 Credit Facility10.4*
    
    
    
    Second Supplemental Agreement to US$262,456,000 Credit Facility10.5*
    
    
    
    Registration Rights Agreement10.6*
    
    
    
    Memorandum of Agreement for purchase of Barbara(including Amendment No. 1)*10.7*
    
    
    
    Memorandum of Agreement for purchase of Linda Leah(including Amendment No. 1)*10.8*
    
    
    
    Memorandum of Agreement for purchase of Coal Pride(including Amendment No. 1)*10.9*
    
    
    
    2005 Stock Incentive Plan31.1**
    
    
    
    Certification pursuant to Section 302 of the Sarbanes- Oxley Act of 2002 by Chief
Executive Officer.31.2**
    
    
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief
Financial Officer.32.1***
    
    
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief
Executive Officer.32.2***
    
    
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief
Financial Officer.
 
 *
    
    Incorporated by reference to the Companys Registration Statement filed on Form S-1 (File No.
333-124576) with the Securities and Exchange Commission on July 14, 2005.**
    
    Filed herewith***
    
    Furnished herewith 27




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SIGNATURES
  QUINTANA MARITIME LIMITEDBy:
    
    /s/ Stamatis MolarisStamatis MolarisChief Executive Officer, President and Director(Principal Executive Officer)/s/ Paul J. CornellPaul J. CornellChief Financial Officer(Principal Financial Officer; Principal Accounting Officer)




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##### Table of Contents



Index to Exhibits
 ExhibitNo.
    
    
    
    Description3.1*
    
    
    
    Amended and Restated Articles of Incorporation3.2*
    
    
    
    Amended and Restated By-laws4.1*
    
    
    
    Form of Share Certificate10.1*
    
    
    
    Form of Vessel Management Agreement10.2*
    
    
    
    Agreement Related to Credit Facility10.3*
    
    
    
    First Supplemental Agreement to US$262,456,000 Credit Facility10.4*
    
    
    
    Second Supplemental Agreement to US$262,456,000 Credit Facility10.5*
    
    
    
    Registration Rights Agreement10.6*
    
    
    
    Memorandum of Agreement for purchase of Barbara(including Amendment No. 1)*10.7*
    
    
    
    Memorandum of Agreement for purchase of Linda Leah(including Amendment No. 1)*10.8*
    
    
    
    Memorandum of Agreement for purchase of Coal Pride(including Amendment No. 1)*10.9*
    
    
    
    2005 Stock Incentive Plan31.1**
    
    
    
    Certification pursuant to Section 302 of the Sarbanes- Oxley Act of 2002 by Chief
Executive Officer.31.2**
    
    
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief
Financial Officer.32.1***
    
    
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief
Executive Officer.32.2***
    
    
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief
Financial Officer.
 
 *
    
    Incorporated by reference to the Companys Registration Statement filed on Form S-1 (File No.
333-124576) with the Securities and Exchange Commission on July 14, 2005.**
    
    Filed herewith***
    
    Furnished herewith