UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 20-F


/ /      REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE
         SECURITIES EXCHANGE ACT OF 1934

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

For the fiscal year ended:      December 31, 1999

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

Commission file number:  333-63055


                           MILLENIUM SEACARRIERS, INC.
             (Exact name of Registrant as specified in its charter)

                                 Not Applicable
                 (Translation of Registrant's Name into English)

                                 Cayman Islands
                 (Jurisdiction of incorporation or organization)

                                c/o Ugland House
                               South Church Street
                          Grand Cayman, Cayman Islands
                    (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

         Title of each Class       Name of each exchange on which registered
         -------------------       -----------------------------------------

         Not Applicable            Not Applicable

Securities registered or to be registered pursuant to Section 12(g) of the Act.

         None




<PAGE>



Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.

         Millenium Seacarriers, Inc.
         12% First Priority Ship Mortgage Exchange Notes Due 2005

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.

         9,500,000 shares of common stock, US$.01 par value per share

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 which financial statement item the registrant has elected
to follow.

         Item 17  / /               Item 18  /X/



<PAGE>


<TABLE>
<CAPTION>


                                         MILLENIUM SEACARRIERS, INC.
                                        INDEX TO REPORT ON FORM 20-F

TABLE CAPTION

PART I                                                                                                  PAGE
                                                                                                        ----

<S>               <C>
Item 1.           Description of Business..................................................................1
Item 2.           Description of Property..................................................................9
Item 3.           Legal Proceedings.......................................................................10
Item 4.           Control of Registrant...................................................................10
Item 5.           Nature of Trading Market................................................................10
Item 6.           Exchange Controls and Other Limitations Affecting Security
                     Holders..............................................................................10
Item 7.           Taxation................................................................................10
Item 8.           Selected Financial Data.................................................................12
Item 9.           Management's Discussion and Analysis of Financial
                    Condition and Results of Operations...................................................13
Item 9A.          Quantitative and Qualitative Disclosures About Market Risk..............................19
Item 10.          Directors and Officers of Registrant....................................................19
Item 11.          Executive Compensation..................................................................21
Item 12.          Options to Purchase Securities From Registrant
                    or Subsidiaries.......................................................................22
Item 13.          Interest of Management in Certain Transactions..........................................22

PART II

Item 14.          Description of Securities to be Registered..................................Not applicable

PART III

Item 15.          Defaults Upon Senior Securities.............................................Not applicable
Item 16.          Changes in Securities, Changes in Security for
                    Registered Securities and Use of Proceeds.................................Not applicable

PART IV

Item 17.          Financial Statements........................................................Not applicable
Item 18.          Financial Statements....................................................................22
Item 19.          Financial Statements and Exhibits.......................................................23
Signature.................................................................................................24
</TABLE>



<PAGE>



                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS
-------           -----------------------

THE COMPANY

         Millenium Seacarriers, Inc. ("Millenium Seacarriers"), a Cayman Islands
company formed in 1998, is an international shipping company that owns and
operates a fleet of drybulk carriers, primarily in the 20,000 to 49,999
deadweight ton ("dwt") range ("Handysize drybulk carriers"). Millenium
Seacarriers, through its whollyowned subsidiaries (collectively, the "Subsidiary
Guarantors" and, together with Millenium Seacarriers, the "Company") had a fleet
as of December 31, 1999 consisting of 20 vessels with an aggregate tonnage of
approximately 555,666 dwt. In the year ended December 31, 1999, the Company's
fleet transported approximately 3.6 million tons of drybulk cargo worldwide.

         Millenium Seacarriers began operations on July 24, 1998, with the
acquisition of the shipowning companies which operated the Clipper Atlantic,
Clipper Pacific, Clipper Golden Hind, Clipper Harmony, and Monica Marissa. By
the end of 1998, the Company had acquired the Millenium Amethyst, Millenium
Yama, Millenium Majestic, Millenium Condor, Millenium Osprey, Millenium Leader,
Millenium Hawk, Millenium Falcon, Millenium Eagle, Millenium Aleksander, and
Millenium Elmar. The Company continued its acquisitions in the year ended
December 31, 1999 and acquired the Millenium Raptor, Millenium Trader, Millenium
Dawn, Millenium Express and Millenium Amanda, all of which have been
successfully delivered to their charterers under their respective contracts.
During 1999, the Company sold the Monica Marissa, reducing its fleet size to 20
vessels.

         The Company's strategy is to provide superior transportation services
to its charterers by operating a fleet of high quality second hand drybulk
carriers. The Company intends to generate stable cash flows by mostly using
period time charters and to focus on the Handysize drybulk sector of the
shipping industry.

         The Company's business strategy is intensely customer and
operations-oriented. By focusing on the Handysize drybulk sector, the Company is
able to identify and respond to its market and customer needs. As a
customer-oriented service provider, the Company can use this market and customer
information to develop creative solutions for its clients, including acquiring
additional vessels or reconfiguring existing vessels within its fleet and
developing customized trade routes.

         The Company also has the ability to serve its charter customers in
niche trades which require specialized vessels. The Company is generally able to
achieve significant cost efficiencies as a result of operating a fleet focused
in one sector. These include more efficient drydock service, better rates for
insurance and spares and purchasing efficiencies from suppliers. In addition,
many of the vessels in the Company's fleet include sister vessels that have
similar design characteristics, allowing the Company to benefit from operating,
maintenance and crew efficiencies.



                                       -1-

<PAGE>



         The vessels in the Company's fleet are all of Cayman Islands, Cypriot,
Bahamian, Panamanian or Liberian registry. All of the vessels are currently "in
class" with Lloyds Register, the American Bureau of Shipping, Germanischer Lloyd
or Det Norske Veritas, each a leading classification society. Each of the
vessels in the Company's fleet has received certification under the
International Maritime Organization's ("IMO") International Management Code for
the Safe Operation of Ships and Pollution Prevention (the "ISM Code") by
successfully completing audits conducted by Det Norske Veritas. However, there
can be no assurance that such certification will be maintained indefinitely.

MANAGEMENT

         The Company has engaged Millenium Management, Inc. ("MMI"), the sole
shareholder of Millenium Seacarriers, to provide certain commercial and
technical management services to the Company at current market rates. MMI has
subcontracted with Millenium Maritime Services Ltd. ("Millenium Maritime
Greece") and Millenium Maritime Services, Inc. ("Millenium Maritime USA" and,
collectively with Millenium Maritime Greece, "Millenium Maritime") to provide
management services. Millenium Maritime Greece and Millenium Maritime USA
collectively employ approximately 38 individuals. Millenium Maritime Greece has
offices in Piraeus and Millenium Maritime USA has offices in New York, providing
full service and support to the Company's fleet from two locations, each located
in strategic shipping epicenters. Millenium Maritime Greece and Millenium
Maritime USA coordinate their activities to eliminate duplicative effort and
conflicting priorities so as to provide the most complete, efficient, cost
effective management services to their respective clients. Millenium Maritime's
multi-disciplined and coordinated structure allows it to provide the most
effective management services for the differing sizes and types of vessels
operated by the Company.

         MMI and Millenium Maritime provide commercial management services by
coordinating with various third party brokers. MMI solicits, researches,
evaluates and proposes charters for the Company's fleet and, pursuant to the
Company's direction, also negotiates the terms and conditions for the sale and
purchase of the Company's fleet, through recognized shipbrokers worldwide.
Finally, at the Company's instruction, MMI obtains insurance for the Company's
fleet, working through recognized third party brokers worldwide.

         MMI and Millenium Maritime also provide comprehensive technical
management services to each vessel of the Company's fleet. MMI's services
include: obtaining qualified officers and crews; managing day-to-day vessel
operations and relationships with charterers; purchasing stores, supplies and
new equipment; performing general vessel maintenance, reconditioning and repair,
including commissioning and supervising shipyards, subcontractors, or drydock
facilities required for such work; ensuring regulatory and classification
society compliance; performing operational budgeting, evaluating and arranging
financing for the vessels and performing accounting, treasury and finance
functions (including cash disbursements and collections). MMI provides these
services on a collective basis to the Company's fleet, thereby allowing the
Company to benefit from certain economies of scale.



                                       -2-

<PAGE>



         Each member of Millenium Maritime's staff that interacts with vessels
is provided with home and portable linkages to the vessels' communication and
data system, so that ship management services can be provided around the clock,
seven days a week. All vessels in the Company's fleet will also be linked by
electronic communication to Millenium Maritime to allow immediate response to
vessel management operations.

CREWING

         The Company employs mainly Russian officers and crews on its vessels,
all of whom must be fully licensed and certified in accordance with
international regulatory requirements and shipping conventions. As part of its
ongoing commitment to maintain a high quality fleet and efficient operations,
the Company places great emphasis on attracting qualified crew members and on
regular training. Prior to and during employment, the Company requires all
shipboard personnel to undergo training courses both in-house and at recognized
national training centers. All these courses are selected with a view toward
enabling shipboard personnel to maintain a high level of skill within their
respective areas, with an emphasis on safety and keeping up to date with the
latest technical and professional developments. The Company's seaboard personnel
are responsible for carrying out routine maintenance aboard the vessels while at
sea.

COMPETITION

         Seaborne transportation services are provided by independently owned
fleets, proprietary fleets and state-owned fleets. Competition for charters can
be intense and depends on freight rates offered, location, size, age, condition
and acceptability of a vessel and its operator to the charterer. Competition in
the drybulk sector is also affected by the availability of other size vessels
that compete in the Company's markets. Although the Company believes that the
markets in which the Company competes are highly fragmented and that no single
competitor has a dominant position, the Company is aware that certain
competitors may be able to devote greater financial and other resources to their
activities, which may result in a competitive threat to the Company.

CLASSIFICATION SOCIETY AND OTHER SAFETY REQUIREMENTS

         Every commercial vessel's hull and machinery must be "classed" by a
classification society authorized by its country of registry. The classification
society verifies that a vessel is constructed, maintained and equipped in
accordance with the rules of such classification society and that the vessel
complies with flag state regulations and with international conventions,
including the Safety of Life at Sea Convention ("SOLAS") and the regulations
promulgated by the IMO. Insurance underwriters make it a condition of insurance
coverage for the vessel to be "classed" and the failure of a vessel to be
"classed" may render such a vessel uninsurable. Insurance underwriters may also
require that vessels comply with standards more restrictive than those of the
classification society. All the Company's fleet is currently "in class," with
the Lloyds Register, the American Bureau of Shipping, Germanischer Lloyd or Det
Norske Veritas, each of which is a member of the International Association of
Classification Societies.



                                       -3-

<PAGE>



         A vessel must be inspected by a surveyor of the classification society
at least every year, every two and one-half years ("Intermediate Survey") and
every four or five years ("Special Survey"). If any defects are found, the
classification society will issue a "recommendation" which requires the ship
owner to remedy the defect within a prescribed time limit. The Intermediate
Survey includes an underwater examination of the vessel's submerged hull and
machinery. The Special Survey includes a mandatory drydocking. In connection
with a Special Survey, the vessel is examined extensively, including an
inspection to determine the thickness of the steel plates in various parts of
the vessel. If the vessel experiences excessive wear and tear, substantial
expenditures may become necessary for steel renewals and other repairs to pass a
Special Survey. Although the useful life of a vessel may be extended by capital
improvements and upgradings, the costs necessary to meet classification society
and other safety and regulatory requirements generally increase significantly as
a vessel becomes older. All the vessels in the Company's fleet are on a
five-year Special Survey cycle. In addition to the drydocking conducted as part
of the Special Survey, each vessel must be drydocked at some time between
special surveys.

INSURANCE

         The business of the Company is affected by a number of risks, including
mechanical failure, personal injury, vessel and cargo loss or damage, business
interruption due to political conditions in foreign countries, hostilities,
labor strikes, adverse weather conditions and catastrophic marine disaster,
including environmental accidents and collisions. The Company's fleet is insured
against these risks with the following forms of insurance for each vessel.

         HULL AND MACHINERY INSURANCE. The Company maintains marine hull and
machinery insurance, which insures against the risk of damage and the total or
constructive total loss of an insured vessel and against damage to third parties
directly caused by an insured vessel. Constructive total loss occurs when the
vessel is damaged to the extent that the repair costs exceed the insured value
of the vessel. The Company also maintains war risk insurance, which insures
against the risk of damage and the total or constructive total loss of an
insured vessel directly caused by certain warlike situations such as military
use of weapons or terrorist activities. Coverage for areas designated from time
to time as war zones may be excluded or additional premiums may be required in
respect of vessels operating in such zones. The Company maintains coverage for
at least the full value of each insured vessel and updates this insurance at
least annually. The Company maintains civil and war risk hull and machinery
insurance on all of its vessels. This insurance has been placed in the French,
Italian and Norwegian markets, and is subject to deductibles consistent with
industry practice.

         P&I INSURANCE. The Company maintains protection and indemnity ("P&I")
insurance coverage for its shipping activities, which includes the legal
liability and other related expenses of injury to or death of crew members and
third parties, loss or damage to cargo, claims arising from collisions with
other vessels, damage to other third party property, pollution liability and
salvage, towing and other related costs. The Company's P&I insurance coverage is
arranged through P&I mutual insurance clubs. As a member of a club, the Company
may be required to pay additional premiums at the end of a year in which claims
made on the club were particularly large. The Company's total premium is based
on the Company's own claims record, the total claims record of the members of
the club and the aggregate claims record of all clubs which are members of the


                                       -4-

<PAGE>



international association of P&I clubs.

         In line with industry practice, coverage for damages arising out of
hazardous materials discharges is limited to $500 million per vessel per
incident. For trading in United States Waters, the Company arranges additional
insurance coverage, satisfactory to United States Coast Guard ("USCG")
regulatory approval, for liability arising from oil pollution.

         The Company's insurance policies are subject to commercially reasonable
deductibles.

REGULATION

         The Company's operations are materially affected by regulation in the
form of international conventions and national, state and local laws and
regulations in force in the jurisdictions in which the Company's fleet operates,
as well as in the country or countries of their registration. Because such
conventions, laws and regulations are subject to revision, the Company cannot
predict the ultimate cost of compliance or the impact thereof on the resale
price or useful life of its vessels. The Company is required to carry certain
permits, licenses and certificates with respect to its operations. The Company
believes that the heightened environmental and quality concerns of insurance
underwriters, regulators and charterers will impose greater inspection and
safety requirements on all vessels. The Company's fleet is subject to both
scheduled and unscheduled inspections by a variety of governmental and private
interests, each of which may have a different perspective or impose different
standards. These interests include the local port state authority (USCG or
equivalent), classification society, flag state administration (country of
registry) and charterers.

  ENVIRONMENTAL REGULATION--INTERNATIONAL

         The IMO is an agency of the United Nations whose purpose is to develop
international regulations and practices affecting shipping and international
trade, and to encourage the adoption of standards of safety and navigation. All
IMO agreements must be ratified by the IMO's individual government constituents.
The International Convention on Civil Liability for Oil Pollution Damage, 1969,
as amended (the "CCL"), and the Convention for the Establishment of an
International Fund for Oil Pollution of 1979, as amended, are the principal
international laws adopted by most jurisdictions for imposing strict liability
on a vessel's registered owner for pollution damage caused on the territorial
waters of a contracting state by the discharge of persistent oil. The liability
of the vessel owner is subject to certain complete defenses. The United States
is not a party to the CCL. Approximately one-quarter of the countries that have
ratified the CCL have increased the liability limits through a 1992 Protocol to
the CCL that has recently entered into force. As of April 17, 2000, for vessels
of between 5,000 and 140,000 gross tons, the liability limits in the countries
that have ratified this Protocol to the CCL are approximately $3.9 million plus
approximately $546 per gross ton above 5,000 gross tons, with an approximate
maximum of $78.0 million. The exact amount of liability is tied to a unit of
account which varies according to a basket of currencies. The exchange rate in
effect on April 17, 2000 for the dollar equivalent of this unit of account was
approximately 1.3. The right to limit liability is forfeited under the CCL where
the spill is caused by the owner's intentional or reckless conduct. Vessels
carrying cargo in bulk trading to contracting states must establish evidence of
insurance covering the limited liability of the owner. In jurisdictions where
the CCL has


                                       -5-

<PAGE>



not been adopted, various legislative schemes or common law govern, and
liability is imposed either on the basis of fault or in a manner similar to the
CCL.

         The ISM Code and implementing regulations require shipowners and
bareboat charterers to have developed, no later than July 1, 1998, an extensive
"Safety Management System" that includes policy statements and instruction
manuals that set forth standard operating, maintenance and communication
protocol. Noncompliance with the ISM Code may subject shipowners and bareboat
charterers to increased liability, may lead to decreases in available insurance
coverage for affected vessels, and may result in the denial of access to, or
detention in, certain ports. The Company, through Millenium Maritime, has
obtained ISM certification for all of the vessels in the Company's fleet.

         The IMO recently adopted new survivability and structural requirements
for drybulk carriers aimed at preventing the sinking of any such vessel if one
cargo hold floods. The new requirements will apply to existing ships carrying
heavy cargoes, including iron ore, steel, bauxite and cement and future vessels
carrying lighter cargo. On certain of the vessels in the Company's fleet, the
transverse watertight bulkhead below the foremost cargo hold, and the bottom of
that hold, would have to withstand flooding of the fore hold. All drybulk
vessels of 150 meters or more built after July 1, 1999 would have to withstand
flooding of any one hold, even if they only haul lighter cargo, such as grain.
The IMO has called on member states to enact these new requirements and begin
enforcing them on July 1, 1999. The Company believes that it will be able to
comply with these requirements without incurring material costs.

         The IMO continues to review and introduce new regulations on a regular
basis. It is impossible to predict what additional regulations, if any, may be
passed by the IMO, whether those regulations will be adopted by member
countries, and what effect, if any, such regulations might have on the Company's
operations.

ENVIRONMENTAL REGULATION--OPA 90

         OPA 90 applies to all owners, operators and bareboat charterers of
vessels ("Responsible Parties") that trade within the United States or its
territories or possessions or that operate in the navigable waters of the United
States or adjoining shorelines, including the 200-nautical mile exclusive
economic zone of the United States ("U.S. Waters").

         Under OPA 90, Responsible Parties are strictly liable, on a joint and
several basis, for all oil spill containment, removal costs and damages arising
from actual or threatened discharges of oil from their vessels (unless the
discharge results solely from the act or omission of a third party, an act of
God or an act of war). Damages include (i) natural resources damages and the
costs of assessment thereof, (ii) real and personal property damages, (iii) net
loss of taxes, royalties, rent fees and other lost government revenues, (iv)
lost profits or impairment of earning capacity due to property or natural
resources damage, (v) net cost of public services necessitated by a spill
response, such as protection from fire, safety or health hazards and (vi) loss
of subsistence use of natural resources. OPA 90 limits the strict liability of
Responsible Parties to the greater of $1,200 per gross ton or $10 million per
tanker, but such limitation may not be available to the Responsible Parties in
certain circumstances.


                                       -6-

<PAGE>



The Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended ("CERCLA") contains a similar strict liability regime for the
release of hazardous substances, which the Company's vessels may carry.
Liability under CERCLA is limited to the greater of $300 per gross ton or $5
million. These limits of liability under CERCLA and OPA 90 do not apply if the
incident is proximately caused by violation of applicable United States federal
safety, construction or operating regulations, or by the Responsible Party's
gross negligence or willful misconduct, or if the Responsible Party failed or
refused to report the incident or to cooperate and assist in connection with oil
removal activities. OPA 90 specifically permits individual states to impose
their own liability regimes with regard to oil pollution incidents occurring
within their waters, and most states that border on a navigable waterway have
enacted legislation providing for unlimited liability for the discharge of
pollutants. Moreover, OPA 90 and CERCLA preserve the right to recover damages
under existing law, including maritime tort law.

         OPA 90 increased the financial requirements of the Federal Water
Pollution Control Act for vessels operating in United States waters and requires
owners and operators of vessels to establish and maintain with the USCG evidence
of financial responsibility sufficient to meet the limit of their potential
strict liability under OPA 90 and CERCLA. Bulk carriers must demonstrate
financial responsibility in the amount of the greater of $500,000 or $600 per
gross ton. Such financial responsibility, evidenced by the USCG's issuance of a
Certificate of Financial Responsibility ("COFR"), may be demonstrated by a
guarantee in the form of acceptable insurance, surety bond, self-insurance or
other means approved by the USCG. Claimants may bring suit directly against an
insurer, surety or other party that furnishes that guarantee. An insurer, surety
or other party that is sued directly is limited to asserting the following
defenses: (i) the defense that the incident was caused by the willful misconduct
of the Responsible Party; (ii) the defenses available to the Responsible Party
under OPA 90 or CERCLA; (iii) the defense that the claim exceeds the amount of
the guarantee; (iv) the defense that the claim exceeds the property amount of
the guarantee based on the gross tonnage of the vessel; and (v) the defense that
the claim has not been made under either OPA 90 or CERCLA. The Company has
demonstrated its financial responsibility by purchasing insurance from special
purpose insurers approved by the USCG. The Company believes that its vessels
that call within U.S. Waters comply with these USCG requirements.

         OPA 90 requires owners or operators of vessels operating in U.S. Waters
to file vessel response plans with the USCG and with certain states detailing
the steps to be taken to address an oil spill and to operate their vessels in
compliance with their USCG-approved plans. Such response plans must, among other
things, (i) address a "worst case" scenario and identify and ensure, through
contract or other approved means, the availability of necessary private response
resources to respond to a "worst case discharge," (ii) describe crew training
and drills and (iii) identify a qualified individual with full authority to
implement removal actions. The Company has vessel response plans approved by the
USCG for vessels in its fleet operating in United States Waters and the
Company's vessels are operated in substantial compliance with such plans.

INDUSTRY

         The Company operates in the Handysize drybulk carrier sector. Handysize
drybulk carriers are versatile, single deck ships that transport unpacked cargo,
which is poured, tipped or placed


                                       -7-

<PAGE>



through hatchways into the hold of the vessel. Their size, dimension and
self-sustaining cargo gear enable Handysize drybulk carriers to access
geographic markets which larger and gearless vessels cannot service and respond
to the widest range of trade movements. Handysize drybulk carriers carry a wide
variety of cargoes, including agricultural products, sugar, salt, minerals,
phosphates, bauxite and alumina, forest products, petcoke, cement, steel
products, scrap metal and pig iron, as well as cargoes generally carried by
larger, gearless drybulk carriers, such as coal, iron ore and grain.

         The Handysize drybulk carrier market is highly fragmented and cyclical.
Demand for Handysize drybulk carriers is geographically diverse and is affected
by a number of factors including world and regional economic and political
conditions, developments in international trade, changes in seaborne and other
transportation patterns, weather patterns, crop yields, armed conflicts, port
congestion, canal closures and other diversions in trade. These factors cause
the demand for drybulk cargoes, and consequently the demand for Handysize
drybulk carriers, to fluctuate. In addition, demand for Handysize drybulk
carriers is affected by geo-political trends. As political and economic barriers
to international trade are removed, international trade increases, thereby
increasing demand for the seaborne transportation of cargoes, such as the
cargoes Handysize drybulk carriers transport.

         Freight rates are strongly influenced by the supply of and demand for
shipping capacity. The demand for shipping capacity is primarily determined by
demand for the commodities carried and by the distance that those commodities
are to be moved by sea. Demand for commodities is affected by, among other
things, world and regional economic and political conditions (including
developments in international trade, fluctuations in industrial and agricultural
production and armed conflicts), environmental concerns, weather patterns, and
changes in seaborne and other transportation costs.

TAXATION

         Millenium Seacarriers has been incorporated as an exempted company
under the laws of the Cayman Islands and has received an undertaking from the
Governor in Council of the Cayman Islands under Section 6 of The Tax Concessions
Law (1995 Revision) that for a period of 20 years from the date of the
undertaking (a) that no Law which is hereafter enacted in the Cayman Islands
imposing any tax to be levied on profits, income, gains or appreciation shall
apply to Millenium Seacarriers or its operations; and (b) that no tax to be
levied on profits, income, gains, or appreciations or which is the nature of
estate duty or inheritance tax shall be payable by Millenium Seacarriers (i) on
or in respect of its shares, debentures or other obligations; or (ii) by way of
the withholding in whole or in part of any relevant payment as defined in
Section 6(3) of the Tax Concessions Law (1995 Revision). The Cayman Islands does
not have an income tax treaty arrangement with the United States or any other
country.

EXECUTIVE OFFICES

         The principal executive offices of the Company are located at c/o
Ugland House, South Church Street, Grand Cayman, Cayman Islands and its
telephone number is 345-949-8066.



                                       -8-

<PAGE>



ITEM 2.           DESCRIPTION OF PROPERTIES
-------           -------------------------

THE COMPANY'S FLEET

         The following list provides information with respect to the Company's
vessels as of December 31, 1999.

<TABLE>
<CAPTION>

NAME OF VESSEL                       YEAR BUILT         CAPACITY (DWT)                  FLAG
<S>                                 <C>                 <C>                    <C>
MILLENIUM ALEKSANDER............... 1988                52,670(A)              CAYMAN ISLANDS
MILLENIUM ELMAR.................... 1987                52,640(A)              CAYMAN ISLANDS
MILLENIUM EXPRESS.................. 1984                39,055                 LIBERIA
MILLENIUM LEADER................... 1984                37,489                 CAYMAN ISLANDS
MILLENIUM AMANDA................... 1983                36,249                 LIBERIA
MILLENIUM RAPTOR................... 1982                30,670                 CAYMAN ISLANDS
MILLENIUM HAWK..................... 1984                28,791                 CAYMAN ISLANDS
MILLENIUM EAGLE.................... 1983                28,786                 CAYMAN ISLANDS
MILLENIUM OSPREY................... 1984                28,786                 CAYMAN ISLANDS
MILLENIUM FALCON................... 1981                27,048                 CAYMAN ISLANDS
MILLENIUM CONDOR................... 1981                27,036                 CAYMAN ISLANDS
MILLENIUM DAWN..................... 1985                26,563                 LIBERIA
MILLENIUM TRADER................... 1985                26,536                 LIBERIA
MILLENIUM AMETHYST................. 1978                23,538                 BAHAMAS
MILLENIUM YAMA..................... 1979                23,540                 BAHAMAS
MILLENIUM MAJESTIC................. 1979                17,152                 BAHAMAS
MILLENIUM HARMONY.................. 1978                16,711                 PANAMA
MILLENIUM GOLDEN HIND.............. 1978                16,560                 LIBERIA
CLIPPER PACIFIC.................... 1976                7,923                  CYPRUS
CLIPPER ATLANTIC................... 1975                7,923                  CYPRUS

</TABLE>

(A) ALTHOUGH THE VESSEL CAPACITY IS SLIGHTLY GREATER THAN 49,999 DWT, IT IS
CONSIDERED A HANDY SIZE DRYBULK CARRIER.



                                       -9-

<PAGE>



ITEM 3.           LEGAL PROCEEDINGS

         From time to time the Company has been, and expects to continue to be,
subject to legal proceedings and claims in the ordinary course of its business,
principally personal injury and property claims. Such claims, even if lacking
merit, could result in the expenditure of significant financial and managerial
resources. As of December 31, 1999, the Company was not aware of any legal
proceedings or claims that it believed would have, individually or in the
aggregate, a material adverse effect on the Company or on its financial
condition or results of operation.

         On March 28, 2000, an action was brought against the Company by Wayland
Investment Fund, LLC ("WIF") in the United States District Court, Southern
District of New York. In the First Amended Complaint filed on March 30, 2000
(the "Complaint"), WIF claims that it is a beneficial holder of in excess of 25%
of the 12% First Priority Ship Mortgage Notes. The factual basis alleged to
underlie the proceeding concerns the calculation of interest due and owing on
the 12% First Priority Ship Mortgage Notes. WIF makes three claims in the
Complaint: the first is for mutual mistake; the second is for breach of
contract; and the third is for violations of Section 10(b) of the Exchange Act
and Rule 10b-5. WIF's first claim for relief is that the 12% First Priority Ship
Mortgage Notes be reformed to provide for interest on the principal amount at
maturity of the 12% First Priority Ship Mortgage Notes and that damages be paid
in the amount of $517,263.16. WIF's second claim of relief is damages in the
amount of $74,417,263.15. WIF's third claim for relief is that damages be paid
in the amount of $517,263.16. On April 19, 2000, the Company filed a Motion to
Dismiss WIF's second claim and answered WIF's first and third claims. The
Company intends to vigorously contest this litigation.

ITEM 4.           CONTROL OF REGISTRANT
-------           ---------------------

         As of April 17, 2000, all of the Company's issued and outstanding
shares are owned by MMI.

ITEM 5.           NATURE OF TRADING MARKET
-------           ------------------------

         The Millenium Seacarriers, Inc.12% First Priority Ship Mortgage
Exchange Notes Due 2005 (the "Exchange Notes") do not trade on an organized
exchange but rather trade in private transactions among the parties.

ITEM 6.       EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS
-------       ------------------------------------------------------------------

         Not applicable.

ITEM 7.           TAXATION
-------           --------

UNITED STATES - CAYMAN ISLAND INCOME TAX TREATY

There is currently no income tax treaty between the United States and the Cayman
Islands.



                                      -10-

<PAGE>



CAYMAN ISLANDS TAX CONSIDERATIONS

         There is no income tax, corporation tax, capital gains tax, withholding
tax or any other kind of tax on profits or gains or tax in the nature of estate
duty or inheritance tax currently in effect in the Cayman Islands. Holders who
bring individual Exchange Notes in original form to the Cayman Islands may be
liable to pay stamp duty in an amount of up to C.I.$250 on each Exchange Note.

LIBERIAN TAX CONSIDERATIONS

         No taxes or withholding will be imposed by the Republic of Liberia on
or with respect to any payments to be made in respect of the Exchange Notes,
PROVIDED that (i) each of the Subsidiary Guarantors that is incorporated under
the laws of the Republic of Liberia (each a "Liberian Guarantor") is and
maintains its status as a "nonresident Liberian entity" under the Liberian
Internal Revenue Code, (ii) each of the Liberian Guarantors is not now carrying
on, and in the future does not expect to carry on, any operations within the
Republic of Liberia, (iii) the Exchange Notes and all related documentation will
be executed outside of the Republic of Liberia and (iv) the holders of the
Exchange Notes will neither reside in, maintain offices in, nor engage in
business in, the Republic of Liberia.

CYPRIOT TAX CONSIDERATIONS

         No taxes or withholding will be imposed by the Republic of Cyprus on or
with respect to any payments to be made in respect of the Exchange Notes,
provided that (i) each of the Subsidiary Guarantors is and maintains its status
as a shipping company of limited liability under the Cyprus Merchant Shipping
(Fees and Taxing Provisions) Law No. 38(1)(92), (ii) the Company and each of the
Subsidiary Guarantors is not now carrying on, and in the future is not expected
to carry on, any operations exclusively within the Republic of Cyprus, (iii) the
Exchange Notes and all related documentation will be executed outside the
Republic of Cyprus and (iv) the Holders of the Exchange Notes will neither
reside in, maintain offices in, nor engage in business in, the Republic of
Cyprus.



                                      -11-

<PAGE>



ITEM 8.           SELECTED FINANCIAL DATA
-------           -----------------------

         The selected consolidated financial and other data set forth below for
the Company have been derived from the Company's consolidated financial
statements. The data set forth below should be read in conjunction with the
consolidated financial statements and related notes thereto and the reports of
the independent accountants.

<TABLE>
<CAPTION>

                (IN THOUSANDS, EXCEPT RATIOS AND OPERATING DATA)

INCOME STATEMENT DATA:

                                                               Year ended           161-day period
                                                              December 31,          ended December
                                                                  1999                 31, 1998
                                                         ----------------------------------------------
<S>                                                      <C>                      <C>
Net revenue (a).........................................    $            32,253   $             12,136
Operating expenses (b)..................................                 22,882                  8,563
Depreciation and amortization...........................                  7,048                  2,318
Provision for vessel impairment.........................                  7,000                      0
                                                         ---------------------- ----------------------
   Vessel Operating Income/(loss).......................                (4,677)                  1,255
Interest expense........................................                 12,643                  5,812
Other income............................................                  (611)                (1,030)
Loss on sale of vessel..................................                  2,089                      0
   Net Loss.............................................                      $                      $
                                                                       (18,798)                (3,527)

OTHER FINANCIAL DATA:
Capital expenditures....................................    $            24,219                 55,119

                                                         ---------------------- ----------------------
BALANCE SHEET DATA:                                        as of December 31,     as of December 31,
                                                                  1999                   1998
                                                         ---------------------- ----------------------
Net book value of vessels(c)............................    $            93,485                 82,719
Total assets............................................                112,687                129,625
Total debt..............................................                 96,070                 95,604
Shareholders' equity....................................                  1,775                 20,573
</TABLE>

(a)  Net revenue is gross revenues from charters net of charter commissions and
     voyage related expenses.
(b)  Operating expenses include, among other things, vessel running costs,
     management fees and general and administrative expenses.
(c)  During 1999, Millenium Seacarriers, through its subsidiaries, purchased the
     Millenium Raptor, Millenium Trader, Millenium Dawn, Millenium Express,and
     Millenium Amanda



                                      -12-

<PAGE>



ITEM 9.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-------           ------------------------------------------------------------
AND RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------------------

GENERAL

         The Company is an international shipping company that owns and operates
a fleet of drybulk carriers, primarily Handysize (generally classified as being
in the 20,000-49,000 deadweight-ton range) drybulk carriers. As of December 31,
1999, the Company's fleet consisted of 20 vessels totalling 555,666
deadweight-tons.

         The Company was incorporated on March 10, 1998 in the Cayman Islands.
The Company began operations on July 24, 1998, with five vessels and
subsequently expanded its fleet to 21 vessels as of June 30, 1999, all of which
were acquired from the net proceeds of an offering of Units ("Units") consisting
of $100 million principal amount at maturity of Notes and $1.2 million of
Warrants. The Company also received an equity contribution of $24 million from
Millenium Management, Inc., MMI, the holder of 100% of the outstanding common
stock of the Company. In the quarter ended September 30, 1999, the Company sold
a vessel, the Monica Marissa, thereby reducing its fleet to 20 vessels as of
December 31, 1999.

         The following benchmarks are used by the Company to measure revenues:
(i) utilization as an index that indicates vessel earning days (on the basis
that 350 calendar days per year equals 100% utilization), and (ii) the average
daily time charter equivalent (TCE) rate to analyze net revenues after
commissions on the basis of 350-days utilization.

The following table sets forth certain statement of operations and other
operating data for the Company.

<TABLE>
<CAPTION>

                                                                  Year ended         Period ended
                                                                 December 31,        December 31,
                                                                     1999                1998
                                                              ------------------ ---------------------
<S>                                                           <C>                    <C>
Net Revenue                                                        $  32,253,199          $ 12,136,209
Vessel Operating Expenses                                           (18,237,342)           (7,001,095)
Management Fees                                                      (3,822,801)             (965,666)
General and Administrative                                             (821,507)             (596,497)
                                                              ------------------     -----------------
Earnings Before Interest, Tax, Depreciation and
     Amortization (EBITDA)                                         $   9,371,549         $   3,572,951
                                                              ==================     =================
Average Utilization (%)                                                    97.5%                 95.4%
                                                              ==================     =================
</TABLE>

         While the Company does have a comparable year in 1998, the comparisons
are not meaningful as the year ended December 31, 1998 was only for 161 days of
operations since inception, and also there were fewer vessels in the Company's
fleet in 1998. EBITDA consists of net income prior to deductions for interest
expense, income taxes, other income or expense net, and depreciation, and
impairment write-downs. EBITDA is not required by United States generally
accepted accounting principles, and should not be considered as an alternative
to net income as an indicator of the Company's operating performance or to cash
flows from operations as a measure of liquidity.


                                      -13-

<PAGE>



RESULTS OF OPERATIONS FOR YEAR ENDED DECEMBER 31, 1999

NET REVENUE

         Net revenue for the year ended December 31, 1999 was $32.3 million.
During the period, 92% of the Company's gross revenues were earned from period
time charters contracted with first class charterers, many of which continued
from the previous year. The period consisted of 6,877 ship-operating days at an
average fleet gross hire rate of $5,674 per day. The fleet averaged a
utilization rate of 97.5% during the period.

         The year saw the Company's fleet expand from 16 vessels to 21 vessels,
and then down to 20 vessels. The revenue earnings profile of the fleet also
changed as many vessels ended their period charters contracted in 1998 and were
entered into service with new charterers at market rates of hire.
The revenues during the year were impacted by adverse market conditions which
existed through most of the year compared to market conditions during inception
of the Company in 1998. The Company's average hire rate per day is not
reflective of market rates as the acquired younger vessels enjoy a higher
charter rate while charter rates on its older tonnage have declined.

         During the year, 92% of revenues were earned from period time charters.
A few of the company's vessels performed short voyages in the spot market during
the course of the year for positioning purposes. The Clipper Atlantic and the
Clipper Pacific ended their charters with Clipper in December 1999. The Clipper
Golden Hind and Clipper Harmony charters with Clipper ended in mid-June and
these vessels were subsequently renamed Millenium Golden Hind and Millenium
Harmony and chartered by other charterers without loss of hire days. The
Millenium Leader's charter with HSH of Singapore ended in the third quarter and
the vessel was immediately placed on another period charter with a different
charterer. The Millenium Aleksander's charter with Estonian Shipping Company
("Esco") concluded at the end of the first quarter and the vessel was placed
into a period charter with another charterer. The Millenium Elmar's charter with
Esco ended in mid-May following which it was placed with another charterer.
During the first quarter, Fednav International Ltd. redelivered the Laker-type
vessels, the Millenium Osprey, Millenium Condor, Millenium Falcon and Millenium
Hawk, for three months during the Winter when the Great Lakes freeze, as per
terms of the charter contract. These vessels were immediately placed into short
term charters with other reputable charterers, albeit at lower daily hire rates
due to adverse market conditions. However, Fednav re-hired the Millenium Hawk
during this period, but at market rates which were lower than the contracted
charter party rates. In April, Fednav re-took delivery of all these vessels back
at the previously contracted charter rates, while the Millenium Eagle reverted
to its contracted rate in May. The Millenium Raptor entered into service with
Fednav in April. The Monica Marissa's charter with Cementos Mexicanos ("Cemex")
ended in January following which the vessel was placed on a short-term charter
with another charterer at market rates. This charter ended in May when the
vessel went on a voyage charter after a brief repair period, and at the
conclusion of this voyage in September the vessel was sold. The Millenium Trader
went on a voyage charter upon acquisition and following the conclusion of this
voyage the vessel was placed on a period charter. The Millenium Dawn, the
Millenium Express, and the Millenium Amanda were all placed on period charters
upon acquisition.



                                      -14-

<PAGE>



VESSEL OPERATING EXPENSES

         Vessel operating expenses, excluding management fees and depreciation
and amortization, and impairment provisions, were $18.2 million for the year
ended December 31, 1999. The year consisted of 6,877 ship-operating days; the
Monica Marissa was sold 69-days into the third quarter of the year. The average
vessel running costs for crewing, insurance, lubricants, repairs and
maintenances, registry and survey costs, and vessel communications, came to
$2,652 per day.

MANAGEMENT FEES

         Management fees incurred to MMI for contracted technical and commercial
management services for the year ended December 31, 1999 were $3.8 million.

         Each of the Company's vessels receives management services from its
equity shareholder MMI pursuant to a Management Agreement among the Company's
vessel owning subsidiaries (the "Vessel Owning Subsidiaries") and MMI. Under the
Management Agreement, MMI acts as the fleet's technical and commercial manager.
As a technical manager, MMI, on behalf of the Vessel Owning Subsidiaries, (i)
provides qualified officers and crews on board vessels, (ii) manages day-to-day
vessel operations and maintains relationships with charterers, (iii) purchases
on behalf of the Company stores, spares, supplies and equipment for vessels,
(iv) performs general vessel maintenance, subcontracts for drydock facilities
for any major repairs and overhauls, (v) ensures regulatory and classification
society compliance, (vi) performs vessel operational budgeting and evaluations,
and (vii) provides accounting, treasury and finance functions (including cash
collections and disbursements on behalf of the Company). As remuneration for its
services, MMI receives a fixed management fee (payable monthly in advance)
ranging from $350 to $600 per day per vessel. The Company treats the management
fee paid to MMI as an operating expense.

         Under commercial management services, MMI, on behalf of the Vessel
Owning Subsidiaries, primarily maintains and negotiates vessel charters, vessel
sale-and-purchase brokering, and places insurance covers for vessels. As
remuneration for its services, MMI receives a commission of 1.25% on all gross
time charter revenue and 1.75% on all gross spot charter revenue earned by each
vessel managed, 1% on the gross sale or purchase price of a vessel for brokerage
services, and 2% of all insurance covers placed per vessel managed.

         MMI sub-contracts certain of its technical and commercial management
services to Millenium Maritime Services Ltd. and Millenium Maritime Services,
Inc.

GENERAL AND ADMINISTRATIVE

         These expenses totalled $821,507 for the year ended December 31, 1999.
These expenses included, among other things, legal and professional fees of
$371,491, advisory fees of $300,000 paid to Millenium Advisors, L.L.C. and new
vessel inspections of $90,138.



                                      -15-

<PAGE>



DEPRECIATION AND AMORTIZATION

         Total depreciation for the year ended December 31, 1999 was $5,777,652.
Vessel depreciation is calculated based on the remaining useful life of the
vessel, assuming a maximum life of 30 years, net of salvage value.

         Deferred vessel costs, including deferred dry-docking expenses, are
capitalized and amortized over a period of two and a half years (30 months).
During the year ended December 31, 1999, the new costs for dry-docking and
special surveys amounted to $1,148,578 which included $538,539 for the Millenium
Majestic, $312,832 for the Clipper Atlantic, $149,799 for the Millenium Osprey
and $110,624 for the Millenium Trader. For the year December 31, 1999, total
amortization of deferred vessel charges, including deferred dry-docking
expenses, were $804,654. Also included in amortization in the the statement of
operations for the year ended December 31, 1999, is $465,682 of amortization of
costs associated with the acquisition costs relating to the issuance of the
Units. These costs are amortized over the life of the Notes, being 7 years from
their issuance in July 1998. In December 1999, these costs were reduced to $0
and the total charge was included in Provision for vessel impairment.

PROVISION FOR VESSEL IMPAIRMENT

         Subsequent to the loss incurred on the sale of the Monica Marissa, some
tests were carried out on the impact of current market conditions on the market
value of the fleet. Accordingly, cash flow projections were prepared and this
indicated that, except for three vessels, the estimated net cash flows of each
of the vessels generated through the end of their useful lives will exceed their
net book value as of December 31, 1999. Consequently, an impairment of
$4,400,000 was recorded in December of 1999. Additionally, in December 1999,
during the Company's periodic review of the carrying value of its goodwill based
on undiscounted estimated future cash flows of the vessels acquired, determined
that none of the goodwill remaining at December 31, 1999 would be recoverable.
Accordingly, in December 1999, the Company also recorded a $2,600,088 charge
which reduced the remaining balance of goodwill to $0. The total charge as
included in Provision for vessel impairment on the statement of operations
amounts to $7,000,088.

INTEREST EXPENSE

         For the year ended December 31, 1999, the interest expense on the
Company's long-term debt was $11,498,404. During the year ended December 31,
1999, interest earned on cash balances was $682,051. Interest expense also
includes amortization of $465,160 recorded in connection with the bond discount
relating to the debt issue, and the amortization of $680,140 recorded in
connection with the deferred financing costs incurred relating to the debt
issue.

LOSS ON SALE OF VESSEL

         During the quarter ended September 31, 1999, the vessel Monica Marissa
was sold for scrap. The vessel had a lightweight of 13,881 long-tons. Net
proceeds from the sale amounted to $1,610,196. The loss on the sale was
$2,088,655.


                                      -16-

<PAGE>



NET LOSS

         Net loss for the year ended December 31, 1999 was $18.8 million.
Earnings were impacted by a decline in charter rates during the period, a $2.0
million loss on the sale of the Monica Marissa, and a $7.0 million impairment
loss. However, earnings before interest, taxes, depreciation and amortization,
and provision for impairment (EBITDA) for the period was $9.4 million.

LIQUIDITY AND CAPITAL RESOURCES

         The Company is a holding company. As of December 31, 1999, it owns all
of the issued and outstanding shares of 20 Vessel Owning Subsidiaries.

         As of December 31, 1999, the Company's cash position consisted of $6.9
million in unrestricted cash and cash equivalents. Restricted cash includes $1.6
million of proceeds from the sale of the Monica Marissa which are in escrow.
Restricted cash also includes other deposits made toward contingencies and
vessel upgrades.

OPERATING ACTIVITIES

         Net cash flows used in operations for the period ended December 31,
1999 were $2.8 million compared to cash provided by operations in 1998 of $7.0
million. This change is due primarily to increases in current liabilities
relating to initiating operations in 1998 which was not repeated in 1999.
In addition, net loss before adjustments to reconcile loss to net cash used in
operating activities increased from $0.7 million in the 1998 period to $1.7
million in 1999, which is attributable to 1999 operations being for the entire
year compared to only 161 days of operations in 1998. As is common in the
shipping industry, the Company collects its hire for all time charters 15 days
in advance. The Company also has established long-term relationships with many
suppliers resulting in the Company receiving favorable credit terms.

INVESTING ACTIVITIES

         Principal investing activities were the acquisition of the companies
which own the Existing Vessels and the purchase of Committed Vessels.
Transactions for the purchase of vessels from the international shipping market
is usually conducted in two stages: (i) a deposit of approximately 10% of the
purchase price is paid upon the execution of the related purchase agreement, and
(ii) the balance of the purchase price is paid upon the vessel's physical
delivery, usually within 90 days from the date of the execution of the
agreement.

         Net cash used in investing activities in 1999 were $22.8 million
compared to net cash used of $55.3 million in 1998. This decrease is
attributable to there being 16 vessels acquired in 1998 compared to only 5 being
acquired in 1999. Additionally, the 1999 use of cash was partially offset by the
proceeds from the sale of a vessel.



                                      -17-

<PAGE>



FINANCING ACTIVITIES

         Net cash provided by financing activities were $26.7 million in 1999
compared to $54.0 million. Cash provided in 1998 was due to proceeds of $96.6
million relating to the net proceeds from the issuance of Notes and Warrants And
shareholder contributions of $7.1 million, offset by $31.5 million of cash put
into escrow for the purchase of vessels, deferred financing costs of $5.9
million and repayment of debt on a vessel of $12.3 million. In 1999, cash
provided consisted of $26.7 million released from escrow in connection with the
purchase of 5 additional vessels.

         The Company believes that based upon the current level of operation,
cash flow from operations, together with other readily available sources of
funds, including the balance escrow cash, which was made available to the
Company on July 31, 1999, for use as working capital and other corporate
purposes, it has adequate liquidity to fund its working capital requirements,
meet capital expenditures for repairs and maintenance and make required payments
of interest on the Company's debt. The Company has completed its schedule of
vessel acquisitions, and any further expansion of its fleet is dependent on its
ability to raise capital through either borrowing activities or from cash
generated from operations, or both.

WORKING CAPITAL

         Pursuant to a Working Capital Facility Agreement between the Company
and The Bank of New York, the Company had a standby line of credit in a
principal amount up to $7.0 million available for its working capital
requirements, which expired on July 20, 1999. The Bank, however, extended the
maturity of a $500,000 tranche until August 5, 1999 which also expired unused.
The facility was only used once during its tenure for an amount of $250,000
which was repaid. The facility, collateralized by the Company's vessels and
subject to various covenants, bore interest at LIBOR+1.5% and was subject to a
0.375% commitment fee on the unused portion.

         On December 23, 1999, the Company accepted a commitment for a standby
line of credit in a principal amount up to $2.5 million available for its
working capital requirements from the Allfirst Bank. The facility,
collateralized by the Company's vessels and subject to various covenants,
provided that interest would accrue at the US Prime rate and was subject to a 1%
commitment fee on the unused portion. This commitment, which was valid until
March 23, 2000, was subject to consent from Note Holders due to the fact that
the Allfirst Bank will be both the Working Capital Facility provider as well as
the Indenture Trustee and a potential of conflict of interest could arise under
certain conditions. Pending such consent, the Allfirst Bank has extended the
commitment until June 1, 2000.

FOREIGN EXCHANGE RATE FLUCTUATIONS

         All of the Company's revenue, and most of its expenses, are denominated
in United States dollars. For the year ended December 31, 1999, approximately 5%
of the Company's expenses were denominated in foreign currencies, primarily
Greek drachmae. The Company does not hedge its exposure to foreign currency
fluctuations.



                                      -18-

<PAGE>



INFLATION

         The Company does not believe that inflation has had a material impact
on its operations during the periods presented, although certain of the
Company's operating expenses (E.G. crewing, insurance and drydocking costs) are
subject to fluctuations as a result of market forces. Inflationary pressures on
bunker costs are not expected to have a material effect on the Company's results
from operations and cash flows since such costs are paid by the charterers as
the majority of the Company's vessels are on period time charters.

YEAR 2000 CONSEQUENCES

         The year 2000 issue is the result of prior computer programs being
written using two digits, rather than four digits, to define the applicable
year. Any of the Company's programs that have time-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000.
This could result in major system failure or miscalculations.

         The Company has analyzed its operations and has identified four primary
areas that may be affected by the year 2000 issue, including crew safety, vessel
maneuverability, vessel communications and vessel navigation. In addition, to
ensure year 2000 compliance, the Company had auxiliary systems in place in all
of these areas. These auxiliary systems include with respect to (a) crew safety,
having fire detectors and other safety equipment on the vessels which are
analogue technology and non-computer based, (b) vessel maneuverability, having
emergency steering wheels that are not computer-cased, (c) vessel
communications, having non-digital-based radio transmitters, having crew members
trained to employ semi-fores, aldis lights and fog horns and (d) vessel
navigation, having crew members trained to employ gyro-compasses, sextants and
magnetic compasses.

         Subsequent to the end of the year, the Company entered 2000 with no
disruptions and there were no Year 2000 related computer malfunctions. The
Company continues to prepare and enhance its systems and embedded technologies
for future computer related compliance.

ITEM 9A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------  ----------------------------------------------------------

         The Company's outstanding debt bears a fixed interest rate and
therefore the Company is not susceptible to interest rate fluctuations. In
addition, all of the Company's revenues and expenses are denominated in United
States dollars, except for 5% of its expenses which are denominated primarily in
Greek drachmae, and therefore the Company believes it is not susceptible to
foreign exchange fluctuations.

ITEM 10.  DIRECTORS AND OFFICERS OF REGISTRANT
--------  ------------------------------------

         The following table sets forth the name, age and principal position
with the Company of each of its directors and executive officers.



                                      -19-

<PAGE>



         The following individuals are the senior officers and directors of
Millenium Seacarriers (ages as of April 17, 2000):

Vassilios M. Livanos          52          Chairman and Director
Theotokis S. Milas            56          Chief Operating Officer
Nicholas A. Cotzias, Jr.      39          Chief Financial Officer and Director
Emanuel Kyprios               56          Vice President, Projects
Michael A. Dritz              61          Director
Harald H. Ludwig              44          Director
Connor O'Brien                38          Director
Tom Stage Petersen            41          Director

         Certain biographical information about each of these individuals is set
forth below:

         VASSILIOS M. LIVANOS has been involved in the shipping industry for
over 25 years. In 1993 he was one of the founding partners of Millenium Maritime
Greece. From 1985 to 1993, Mr. Livanos was president of Kedma Ltd., a New
York-based shipowning company which was founded in 1985. As President of Kedma,
Mr. Livanos directed the growth of Kedma's fleet from four vessels to over 20
vessels. From 1972 to 1985, Mr. Livanos worked for Seres Shipping Inc., in New
York and Tokyo, as Director of Engineering responsible for the technical
management of a fleet of over 100 vessels. Mr. Livanos spent four years in
Japan, where he supervised the construction of over 20 vessels of various types.
During his tenure at Seres Shipping Inc., Mr. Livanos was a principal shipowner
of two vessels from 1981 and a principal in a drybulk chartering operation from
1983. Mr. Livanos graduated from the Massachusetts Institute of Technology in
1971, with a B.A. and M.S. in Naval Architecture and Marine Engineering, and an
M.S. in Shipping and Shipbuilding Management.

         THEOTOKIS S. MILAS has been involved in the shipping industry for over
30 years. In 1993 Mr. Milas was one of the founding members of Millenium
Maritime Greece. In 1984 he was a founding partner of IMI, a New York based
shipowning company with 15 vessels having an aggregate tonnage of 1.25 million
dwt. Prior to 1984, Mr. Milas held various management positions with other
shipping companies based in the United States. Also during that time, Mr. Milas
was appointed and acted as a qualified surveyor for the American Bureau of
Shipping and the NKK, the Japanese Classification society. He graduated from
City University of New York with a B.S. degree in Mechanical Engineering in
1966, and from Massachusetts Institute of Technology in 1971 with M.S.
degrees in Naval Architecture and Marine Engineering, as well as in Shipping and
Shipbuilding Management. Mr. Milas was elected a member of the Society of
Maritime Arbitrators in 1981.

         NICHOLAS A. COTZIAS, JR. has been involved in the shipping industry for
over 15 years. In 1993, he was one of the founding partners of Millenium
Maritime Greece. From 1988 to 1993, Mr. Cotzias served as the General Manager
and Director of Trade and Transport (UK) Ltd. in London, part of Brokerage &
Management Group, a United States connected shipping venture which controlled,
at the time, in excess of 40 vessels including drybulk carriers, tankers and
offshore supply and support vessels, trading primarily in the North Seas. Mr.
Cotzias handled a number of transactions in the sale and purchase sector, and
period charter employments, for and on behalf of the owners of vessels, and was
responsible for successfully preparing, analyzing and negotiating investment
proposals in


                                      -20-

<PAGE>



assisting the group implement various programs and maximizing returns by meeting
targets. From 1984 to 1988, Mr. Cotzias worked at Cotzias Shipping of Greece, an
international family owned concern established in 1892, as sale and purchase
manager. Mr. Cotzias graduated from Boston University in 1982 with a B.A. and an
M.A. degree in International Economics.

         EMANUEL KYPRIOS has been involved in the shipping industry for over 25
years. In 1993 Mr. Kyprios was one of the founding members of Millenium Maritime
Greece. In 1985, Mr. Kyprios founded the OSI Group which specializes in merchant
banking for the shipping industry, and has provided financial services to some
of the leading shipping groups and financial shipping institutions in the world.
From 1970 to 1984, Mr. Kyprios was an executive at Bankers Trust Company and
Manufacturers Hanover Trust Company and Vice President and Group Head of
Shipping and Transportation at Marine Midland Bank. Mr. Kyprios graduated from
The Wharton School of Finance and Commerce in 1968 with an MBA degree.

         MICHAEL DRITZ is the Chairman of Dritz Enterprises LLC, a New York
based investment firm which also provides consulting services for the financial
industry since 1996. Mr. Dritz also serves on the board of directors of Compass
Aerospace Corporation, a supplier of aerospace parts. Mr. Dritz was previously a
Managing Director for Merrill Lynch & Co. and Chairman of its Smith Brothers
International Advisory Division. Until 1996, following the acquisition by
Merrill Lynch & Co. of Smith New Court PLC, Mr. Dritz was the President and
Chief Executive Officer of Smith New Court, Inc. and an Executive Director of
Smith New Court PLC from 1985 to 1995. Mr. Dritz is a graduate of Syracuse
University.

         HARALD H. LUDWIG is a co-founder and President of Macluan Capital
Corporation, a private investment company based in Vancouver, British Columbia.
Under Mr. Ludwig's leadership, Macluan Capital Corporation has invested in over
20 companies since 1986. Mr. Ludwig serves on the board of directors of Compass
Aerospace Corporation, a supplier of aerospace parts. Mr. Ludwig graduated from
Simon Fraser University and received a law degree from Osgoode Hall Law School.

         CONNOR O'BRIEN is a co-founder and Managing Director of Stanton Capital
Corporation, a private equity investment firm based in New York. Prior to
forming Stanton Capital in 1995, he worked in the Investment Banking Group at
Merrill Lynch & Co., following four years in the Mergers & Acquisitions and
Natural Resources Groups at Lehman Brothers Inc. and two years at a major New
York bank. Mr. O'Brien sits on the board of directors of several privately-held
companies, including ESCO and Siderperu, the former government-owned national
steel company in Peru. Mr. O'Brien received an M.B.A. from the Tuck School at
Dartmouth College.

         TOM STAGE PETERSEN is the Managing Director of ESCO and has 23 years
experience in the shipping industry. Prior to joining ESCO in the beginning of
1998, Mr. Petersen worked for Norasia Lines Ltd. for ten years, where he held
various management positions in Asia, the Middle East and Europe. Prior to that
Mr. Petersen worked at Maersk Line/A.P. Moller for thirteen years.

ITEM 11.  EXECUTIVE COMPENSATION
--------  ----------------------

         The directors of the Company are each entitled to receive approximately
$10,000 plus


                                      -21-

<PAGE>



expenses from the Company annually. Neither the Company nor any of its
subsidiaries have set aside or reserved funds for pension, retirement or similar
benefits for directors and officers. Certain officers and directors of the
Company will also be officers and directors of and might be compensated by MMI,
Millenium Maritime Greece and/or Millenium Maritime USA.

ITEM 12.  OPTIONS TO PURCHASE SECURITIES FROM THE REGISTRANT OR SUBSIDIARIES
--------  ------------------------------------------------------------------

         Not applicable.

ITEM 13.  INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
--------  ----------------------------------------------

         The Company has engaged MMI, the sole shareholder of Millenium
Seacarriers, to provide certain commercial and technical management services to
the Company at current market rates. MMI has subcontracted with Millenium
Maritime Greece and Millenium Maritime USA to provide management services.

                                     PART II

ITEM 14.  DESCRIPTION OF SECURITIES TO BE REGISTERED
--------  ------------------------------------------

         Securities have already been registered.

                                    PART III

ITEM 15.  DEFAULTS UPON SENIOR SECURITIES
--------  -------------------------------

         Not applicable.


ITEM 16.  CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR REGISTERED
--------  -------------------------------------------------------------
SECURITIES
----------

         Not applicable.

                                     PART IV

ITEM 17.  FINANCIAL STATEMENTS
--------  --------------------

         See Item 19 for a list of financial statements required under Item 18.
The financial information and the report of the Independent Certified Public
Accountants set forth on pages F-2 to F-14 of the annexed Financial Statements
of the Company are incorporated into this Annual Report on Form 20-F.

ITEM 18.  FINANCIAL STATEMENTS
--------  --------------------

         See Item 19(a) below.


                                      -22-

<PAGE>



ITEM 19.  FINANCIAL STATEMENTS
--------  --------------------

         (a)      Financial Statements

         The following financial statements, together with the reports of the
independent auditors thereon, are filed as part of this Annual Report.

         (b)      Exhibits

         1. Copies of all amendments or modifications, not previously filed, to
all exhibits previously file. Not Applicable.

         2. Copies of all contracts and other documents of a character required
to be filed as an exhibit to an original registration statement which were
executed or in effect during the fiscal year end and not previously filed. Not
Applicable.




                                      -23-

<PAGE>



SIGNATURES

         Pursuant to the requirements of Section 12 of the Securities Act of
1934, the registrant certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused this annual report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                           MILLENIUM SEACARRIERS, INC.

                           By: /s/ Vassilios M. Livanos
                               ----------------------------
                           Name:   Vassilios M. Livanos
                           Title:  Chairman

Dated:    April 28, 2000


                                      -24-

<PAGE>



                   MILLENIUM SEACARRIERS INC. AND SUBSIDIARIES


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS






                                                                      PAGES
                                                                      -----

Independent Auditors' Reports                                           F-2


Consolidated Balance Sheets                                             F-4


Consolidated Statements of Operations                                   F-5


Consolidated Statements of Cash Flows                                   F-6


Consolidated Statements of Shareholders' Equity                         F-7


Notes to the Consolidated Financial Statements                          F-8




                                       F-1

<PAGE>



                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
Millenium Seacarriers Inc.
Grand Cayman, Cayman Islands


We have audited the accompanying consolidated balance sheet of Millenium
Seacarriers, Inc. and subsidiaries (the "Company") as of December 31, 1999, and
the related consolidated statements of income, stockholders' equity, and cash
flows for the year ended December 31, 1999 (all expressed in U.S. Dollars).
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Millenium Seacarriers, Inc. and
subsidiaries as of December 31, 1999, and the results of their operations and
their cash flows for the year ended December 31, 1999 in conformity with
accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP
New York, New York
March 23, 2000


                                       F-2

<PAGE>



PRICEWATERHOUSECOOPERS

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




                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors and Shareholders of
Millenium Seacarriers Inc. and Subsidiaries


In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, cash flows and shareholders' equity
present fairly, in all material respects, the financial position of Millenium
Seacarriers Inc. and its subsidiaries at December 31, 1998 and the results of
their operations and cash flows for the period from inception (March 10, 1998)
to December 31, 1998, in conformity with generally accepted accounting
principles in the United States. These financial statements are the
responsibility of the company's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these financial statements in accordance with generally accepted auditing
standards in the United States, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and the significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.


/s/ PricewaterhouseCoopers
PricewaterhouseCoopers


Piraeus, Greece
April 21, 1999


                                       F-3

<PAGE>


<TABLE>
<CAPTION>

                                    MILLENIUM SEACARRIERS INC. AND SUBSIDIARIES

                                         CONSOLIDATED BALANCE SHEETS AS OF
                                      DECEMBER 31, 1999 AND DECEMBER 31, 1998

                                            (Expressed in U.S. Dollars)


                                                                    DECEMBER 31,               DECEMBER 31,
ASSETS                                                                  1999                       1998
------
CURRENT ASSETS
<S>                                                        <C>                        <C>
Cash and cash equivalents                                  $               6,903,645  $               5,736,645
Restricted cash                                                            4,827,135                 31,524,890
                                                                 -------------------        -------------------
                                                                          11,730,780                 37,261,535
Receivables :
   Voyages                                                                   516,763                    311,574
   Claims and other                                                          324,564                    242,552
Inventories and prepaid expenses                                           1,479,206                    443,252
                                                                 -------------------        -------------------
          Total current assets                                            14,051,313                 38,258,913
                                                                 -------------------        -------------------

Fixed assets
Vessels, net of accumulated depreciation of $7,164,750                    93,484,950                 82,719,321
and $1,774,349 at December 31, 1999 and 1998,
respectively
Other, net of accumulated depreciation                                       138,337                     25,536
                                                                 -------------------        -------------------
          Total fixed assets                                              93,623,287                 82,744,857

Intangible assets, net                                                             -                  3,065,775
Other assets                                                               5,012,248                  5,555,303
                                                                 -------------------        -------------------

Total Assets                                               $             112,686,848  $             129,624,848
                                                                 ===================        ===================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
Trade accounts payable                                     $               5,705,471  $               5,465,844
Accrued liabilities                                                        8,632,155                  7,368,365
Charter revenue received in advance                                          504,290                    613,031
                                                                 -------------------        -------------------
          Total current liabilities                                       14,841,916                 13,447,240
Notes                                                                     96,069,637                 95,604,477
                                                                 -------------------        -------------------
          TOTAL LIABILITIES                                              110,911,553                109,051,717
                                                                 -------------------        -------------------

Commitments and contingencies

Shareholders' equity
Common stock and paid in capital                                          22,900,000                 22,900,000
Warrants                                                                   1,200,000                  1,200,000
Accumulated deficit                                                     (22,324,705)                (3,526,869)
                                                                 -------------------        -------------------
          Total shareholders' equity                                       1,775,295                 20,573,131
                                                                 -------------------        -------------------
Total Liabilities and shareholders' equity                 $             112,686,848  $             129,624,848
                                                                 ===================        ===================
</TABLE>


    The accompanying notes are an integral part of these financial statements


                                       F-4

<PAGE>


<TABLE>
<CAPTION>

                                    MILLENIUM SEACARRIERS INC. AND SUBSIDIARIES

                                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                  FOR THE YEAR ENDED DECEMBER 31, 1999 AND PERIOD
                                      FROM MARCH 10, 1998 TO DECEMBER 31, 1998

                                            (Expressed in U.S. Dollars)


                                                                                 Period from             PERIOD FROM
                                                                                  January 1,               MARCH 10,
                                                                                     1999 to                 1998 TO
                                                                                December 31,            DECEMBER 31,
                                                                                        1999                    1998
REVENUE
<S>                                                                  <C>                     <C>
Freight and hire from voyages                                        $            36,488,454 $            12,721,853
Voyage expenses                                                                  (2,642,675)                (43,757)
Commissions                                                                      (1,592,580)               (541,887)
                                                                        --------------------    --------------------
          Net revenue                                                             32,253,199              12,136,209
                                                                        --------------------    --------------------

EXPENSES
Vessel operating expenses                                                         18,237,342               7,001,095
Management fees                                                                    3,822,801                 965,666
General and administrative                                                           821,507                 596,497
Depreciation and amortization                                                      7,047,988               2,318,452
Provision for vessel impairment                                                    7,000,088                       -
                                                                        --------------------    --------------------
                                                                                  36,929,726              10,881,710

                                                                        --------------------    --------------------
      Operating (loss) / income                                                  (4,676,527)               1,254,499
                                                                        --------------------    --------------------

OTHER INCOME / (EXPENSE)
Interest expense                                                                (12,643,704)             (5,811,573)
Other income                                                                         611,050               1,030,205
Loss on sale of vessel                                                           (2,088,655)                       -
                                                                        --------------------    --------------------
                                                                                (14,121,309)             (4,781,368)
                                                                        --------------------    --------------------

Loss before income taxes                                                        (18,797,836)             (3,526,869)
Income tax provision                                                                       -                       -
                                                                        --------------------    --------------------
Net loss                                                             $          (18,797,836) $           (3,526,869)
                                                                        ====================    ====================

Loss per Share, Basic and Diluted                                                   $ (1.98)                $ (0.67)
                                                                        ====================    ====================
</TABLE>

    The accompanying notes are an integral part of these financial statements



                                       F-5

<PAGE>


<TABLE>
<CAPTION>

                                     MILLENIUM SEACARRIERS INC. AND SUBSIDIARIES

                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                               FOR THE YEAR ENDED DECEMBER 31, 1999 AND FOR THE PERIOD
                                      FROM MARCH 10, 1998 TO DECEMBER 31, 1998
                                             (Expressed in U.S. Dollars)

                                                                                YEAR ENDED                   PERIOD FROM
                                                                              DECEMBER 31,             MARCH 10, 1998 TO
                                                                                      1999             DECEMBER 31, 1998
Cash flows from operating activities
<S>                                                                 <C>                    <C>
Net loss                                                            $         (18,797,836) $                 (3,526,869)
Adjustments to reconcile loss to net cash provided by operating
activities:
   Loss on sale of vessel                                                        2,088,655                             -
   Provision for vessel impairment                                               7,000,088                             -
   Depreciation and amortization                                                 7,047,988                     2,318,452
   Amortization of bond discount and deferred financing costs                    1,145,300                       534,420
Changes in operating assets and liabilities
   Increase in Receivables                                                       (287,201)                     (443,643)
   Increase in Inventories and prepaid expenses                                (1,035,954)                     (291,063)
   Increase in Trade accounts payable                                               58,888                     2,571,585
   Increase in Accrued liabilities                                               1,263,790                     6,100,896
   Deferred dry-docking and special survey                                     (1,148,574)                     (622,782)
   (Decrease) Increase in Charter revenue received in advance                    (108,741)                       376,045
                                                                        ------------------ -----------------------------
Net cash (used in)/provided by operating activities                            (2,773,597)                     7,017,041
                                                                        ------------------ -----------------------------

Cash flows from investing activities
Purchase of vessels                                                           (23,615,000)                  (53,412,500)
Additions to vessels                                                             (603,797)                   (1,706,170)
Proceeds from sale of vessel                                                     1,610,196                             -
Acquisitions, net of cash acquired                                                       -                     (106,944)
Purchase of other fixed assets                                                   (148,557)                      (26,678)
                                                                        ------------------ -----------------------------
Net cash used in investing activities                                         (22,757,158)                  (55,252,292)
                                                                        ------------------ -----------------------------

Cash flows from financing activities
Proceeds from working capital facility                                             250,000                             -
Repayment of Proceeds from working capital facility                              (250,000)                             -
Proceeds from Escrow account and restricted cash                                26,697,755                  (31,524,890)
Proceeds from long-term debt                                                             -                    95,393,000
Principal payments on Existing Vessel Debt                                               -                  (12,325,856)
Issuance of warrants                                                                     -                     1,200,000
Deferred financing costs                                                                 -                   (5,870,360)
Shareholder contribution                                                                 -                     7,100,000
                                                                        ------------------ -----------------------------
Net cash provided by financing activities                                       26,697,755                    53,971,894
                                                                        ------------------ -----------------------------

Increase in cash and cash equivalents                                            1,167,000                     5,736,643
Cash and cash equivalents at beginning of period                                 5,736,645                             2
                                                                        ------------------ -----------------------------
Cash and cash equivalents at end of period                          $            6,903,645 $                   5,736,645
                                                                        ================== =============================
Supplementary cash flow information
Interest paid                                                       $           11,445,018 $                     480,872
                                                                        ================== =============================
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                       F-6

<PAGE>


<TABLE>
<CAPTION>

                                    MILLENIUM SEACARRIERS INC. AND SUBSIDIARIES

                                   CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
                                        FOR THE YEAR ENDED DECEMBER 31, 1999

                                             (Expressed in U.S. Dollars)



                                    COMMON STOCK
                                    AND PAID-IN                         ACCUMULATED
                                      CAPITAL           WARRANTS          DEFICIT             TOTAL

Issuance of stock :

<S>                             <C>                  <C>             <C>                <C>
Incorporation, March 10,        $                 2  $           -   $               -  $              2
1998

Acquisition of Existing
Vessel Owning Companies,
July 24, 1998                             3,999,998              -                   -         3,999,998
                                 ------------------   ------------    ----------------    --------------

Balance, July 24, 1998                    4,000,000              -                   -         4,000,000

Contributions                            18,900,000              -                   -        18,900,000

Warrants                                          -      1,200,000                   -         1,200,000

Net Loss, December 31,                            -              -         (3,526,869)       (3,526,869)
1998
                                 ------------------   ------------    ----------------    --------------

Balance January 1, 1999                  22,900,000      1,200,000         (3,526,869)        20,573,131

Net Loss for the year ended
December 31, 1999                                                         (18,797,836)      (18,797,836)
                                 ------------------   ------------    ----------------    --------------

Balance December 31,            $        22,900,000  $   1,200,000   $    (22,324,705)  $      1,775,295
1999
                                 ==================   ============    ================    ==============
</TABLE>


         The accompanying notes are an integral part of these statements


                                       F-7

<PAGE>



                  MILLENIUM SEACARRIERS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            (Expressed in US Dollars)

1.  BUSINESS INFORMATION

On March 10, 1998, Millenium Seacarriers, Inc. ("Millenium") was formed (the
"Formation") to directly hold the capital stock of a group of subsidiaries
(collectively the "Company") each of which owns one of Millenium's vessels.
These consolidated financial statements give effect to the Formation pursuant to
which all of Millenium subsidiaries became wholly owned subsidiaries of
Millenium. Millenium owns and operates a fleet of dry-bulk carriers, primarily
of Handy-size type. As of December 31, 1999, the Company's fleet consisted of 20
vessels, with an aggregate tonnage of 555,666 dwt.

The Company is registered and incorporated in the Cayman Islands. Its principal
business is the acquiring, upgrading and operating of vessels. Millenium
conducts its operations through its subsidiaries whose principal activity is the
operation and ownership of dry-bulk vessels that will be under the exclusive
management of Millenium Management, Inc. ("MMI") and the submanagement of
Millenium Maritime Services Ltd. and Millenium Maritime Services, Inc.

2.  BASIS OF FINANCIAL STATEMENT PRESENTATION AND ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements are prepared in accordance
with accounting principles generally accepted in the United States. All
inter-company balances and transactions have been eliminated upon consolidation.

USE OF ESTIMATES

The preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent liabilities at the date of
the consolidated financial statements, and the stated amount of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. Certain reclassifications have been made to the 1998 financial
statements to conform to the classifications in the 1999 financial statements.

REVENUE AND EXPENSE RECOGNITION

Revenue and expenses resulting from each voyage or time charter are accounted
for on the accrual basis and are recognized in the income statement on the
percentage of completed voyage basis. Chartered revenue received in advance is
recorded as a liability until charter services are rendered.

Operating expenses comprise all expenses relating to the operation of the
vessels, including crewing, repairs and maintenance, insurance premiums, stores
and lubricants, and miscellaneous expenses, including communications. Voyage
expenses comprise all expenses relating to particular voyages, including
bunkers, port charges, canal tolls and agency fees.



                                       F-8

<PAGE>



INCOME TAXES

The countries of the vessel-owning companies' incorporation do not impose taxes
on international shipping income. Minor registration and tonnage taxes must be
paid annually and have been included in the vessels' operating expenses in the
accompanying consolidated statements of operations. Pursuant to the Internal
Revenue Code of the United States (the Code), U.S. source income from the
international operations of ships is generally exempt from U.S. tax if the
company operating the ships meets certain requirements. Among other things, in
order to qualify for this exemption, the company operating the ships must be
incorporated in a country which grants an equivalent exemption from income taxes
to U.S. citizens and U.S. corporations and must be more than 50% owned by
individuals who are resident, as defined, in such country or another foreign
country that grants an equivalent exemption to U.S. citizens and U.S.
corporations. At December 31, 1999 the Company had met the requirement for
exemption from U.S. income tax.

FOREIGN CURRENCIES

The Company's functional currency is the U.S. dollar. Certain of the expenses
which are denominated in foreign currencies are remeasured into U.S. dollars at
exchange rates prevailing at the date of the transaction. Resulting exchange
gains and/or losses on settlement are included in operating expenses in the
accompanying consolidated statement of operations.

BASIC AND DILUTED LOSS PER ORDINARY SHARE

Basic and diluted loss per ordinary share have been computed by dividing net
loss by the average number of outstanding ordinary shares (9,500,000) following
the formation of the Company. There are also 500,000 warrants outstanding to
acquire 500,000 shares of common stock for $0.01 per share. Assumed exercise of
these warrants has been excluded from the calculation of loss per common share
as the effect of such exercise would be antidilutive.

CASH AND CASH EQUIVALENTS AND ESCROW ACCOUNTS

The Company considers time deposits or other certificates purchased with an
original maturity of three months or less to be cash equivalents. Restricted
cash includes proceeds deposits made towards contingencies and vessel upgrades,
and also includes proceeds from the sale of a vessel (see Note 6) which have
been placed in a restricted Escrow account under the governing rules of the
Indenture.

RECEIVABLES

Voyage receivables include balance freights and demurrages, contested charterers
hire deductions, advances to agents and unsubstantiated charterers deductions in
respect of vessels' disbursements at the various ports of call. Claims and other
receivables principally represent claims arising from hull and machinery
damages, or other insured risks, which have been submitted to insurance
underwriters and insurance adjusters or are currently being compiled.

INVENTORIES AND PREPAID EXPENSES

Inventories consist of bunkers, lubricants, spares and stores on board the
Company's vessels at the balance sheet date. Inventories are stated at the lower
of cost or market value. Cost is determined on a first-in, first- out method.
Inventories and prepaid expenses as of December 31, 1999 and 1998 were
$1,479,206 and $443,252, respectively.



                                       F-9

<PAGE>



FIXED ASSETS

Vessels, net is stated at cost less accumulated depreciation. Vessels are
depreciated on a straight-line basis over their estimated remaining useful
lives, based on cost less scrap value. The useful lives have been estimated to
be 30 years from completion of construction. Depreciation is calculated on a
straight-line basis by reference to the vessels' cost, age and scrap value as
estimated at the date of acquisition which is $150 per ton.

The Company has adopted the provision of Statement of Financial Accounting
Standards ("SFAS") No. 121, Accounting for Impairment of Long-lived Assets to Be
Disposed Of. The statement requires that long-lived assets used or disposed of
by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recovered. An impairment loss for an asset held for use should be recognized
when the estimate of non-discounted future net cash flows, excluding interest
charges, expected to be generated by the use of the asset is less than its
carrying amount. Measurement of impairment loss is based on the fair market
value of the asset. (See Note 3.)

OTHER ASSETS

Other assets include dry-docking, special survey and debt issue costs.
Dry-docking and special survey costs are deferred and amortized over the
estimated period to the next scheduled dry-docking or survey, which are
generally, two and a half years and five years, respectively. The amortization
of dry-docking and special survey costs are included in amortization in the
accompanying consolidated statement of operations and amounted to $804,651 in
1999 and $322,441 in 1998.

Debt issue costs also include costs associated with the issuance of Notes and
the acquisition of the Millenium subsidiaries. These deferred financing costs
are amortized over the life of the Notes and is included in interest expense in
the accompanying consolidated statement of operations (see Note 4).

INTANGIBLE ASSETS

Intangible assets consist of goodwill relating the excess of cost over fair
value of five vessels built between 1975 and 1978 which were acquired on July
24, 1998. This goodwill, which aggregated $3,259,812 at the time the vessels
were acquired, was being amortized over a seven year period. Amortization was
$465,682 and $194,037 in 1999 and 1998, respectively, and is included in
amortization in the accompanying consolidated statement of operations. In
December 1999, the Company reviewed the carrying value of its goodwill and
determined that an impairment existed that based on a fair value analysis none
of the goodwill remaining would be recoverable. Accordingly, in December 1999,
the Company recorded a $2,600,088 charge which reduced the remaining balance of
goodwill to $0. This charge is included in Provision for vessel impairment on
the statement of operations.

ACCRUED LIABILITIES

Accrued liabilities primarily consists of accrued payroll, accrued interest and
other accrued expenses. These liabilities at December 31, 1999 were, $1,393,366,
$5,330,600 and $1,908,189 respectively, and at December 31, 1998 were $808,675,
$5,277,153 and $1,282,537, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS No.
130, REPORTING COMPREHENSIVE INCOME. SFAS No. 130 establishes new rules for the
reporting and display of comprehensive income and its components. The Company
has no elements of comprehensive income and the net loss reported in the
statements of operations is equivalent to the total comprehensive loss.


                                      F-10

<PAGE>



Effective January 1, 1998, the Company adopted SFAS No. 131, DISCLOSURE ABOUT
SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION. SFAS No. 131 establishes
standards for the way business enterprises report information about operating
segments, as well as enterprise-wide disclosures about products and services,
geographic areas and major customers. The Company operates in one segment. The
Company's customers are located worldwide. All of the Company's transactions
have been conducted in United States dollars.

In June 1998, the FASB issued SFAS No. 133, ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES, which establishes accounting and reporting
standards for derivative instruments and hedging activities. Generally, it
requires that an entity recognizes all derivatives as either an asset or
liability and measures those instruments at fair value, as well as identifies
the conditions for which a derivative may be specifically designed as a hedge.
SFAS No. 133 is effective for fiscal years beginning after June 15, 2000. The
Company does not currently engage or plan to engage in any derivative or hedging
activities.

3.  FIXED ASSETS

Fixed assets consists of the Company's fleet of dry bulk carriers and other
assets. Vessels owned by the Company are stated at cost, which comprises the
vessels' contract price, capital improvements, direct delivery and acquisition
expenses, and finance charges relating to the acquisition of vessels, reduced by
impairment writedowns described in the following paragraph.

Management believes that depressed freight market conditions have impacted the
fair market value of certain older vessels in the fleet. In December 1999, the
Company reviewed the carrying value of its vessels and determined that an
impairment existed. Accordingly, the Company estimated an impairment of
$4,400,000, which represents the aggregate amount by which carrying value
exceeded fair value of the vessels. This amount is included in Provision for
vessel impairment in the accompanying consolidated statement of operations.

<TABLE>
<CAPTION>

                                                           Balance at               Balance at
                                                       December 31, 1999        December 31, 1998
                                                    ------------------------ ------------------------
<S>                                                             <C>                       <C>
Vessels, at cost                                                $100,649,700              $84,493,670
Less: accumulated depreciation                                   (7,164,750)              (1,774,349)
                                                                 -----------              -----------
Vessels, net                                                     $93,484,950              $82,719,321
                                                                 ===========              ===========
Other assets, at cost                                               $175,234                  $26,678
Less: accumulated depreciation                                      (36,897)                  (1,142)
                                                                    --------                  -------
Other assets, net                                                   $138,337                  $25,536
                                                                    ========                  =======
</TABLE>




                                      F-11

<PAGE>



4.  LONG-TERM DEBT

Long term debt is as follows:

<TABLE>
<CAPTION>

                                                           December 31,              December 31,
                                                               1999                      1998
                                                    ----------------------------------------------------
<S>                                                  <C>                          <C>
12% First Priority Ship Mortgage Exchange
Notes (the "Notes") due 2005. Interest on the
Notes is payable semi-annually on January 15
and July 15 of each year, commencing January
15, 1999, at a rate of 12% per annum on the
accreted value. The Notes will mature on July
15, 2005 and will be redeemable, in whole or
part, at the option of the Company at any
time on or after July 15, 2003.                         $         100,000,000     $         100,000,000

Less: Unamortized portion of bond discount                         (3,930,363)               (4,395,523)

                                                    ----------------------------------------------------
Notes                                                   $           96,069,637    $           95,604,477
                                                    ====================================================
</TABLE>

The gross bond discount of $4,607,000 at date of issuance is amortized using the
effective interest method over the life of the Notes (7 years). Amortization
recorded in connection with this discount was $465,160 and $211,477 in 1999 and
1998, respectively and is included in interest expense. The deferred financing
costs amortized in connection with the debt issue was $680,140 and $322,943 in
1999 and 1998, respectively and is included in interest expense.

Semiannual interest payments are made on the Notes on January 15 and July 15 of
each year commencing on January 15, 1999. Cash interest payments are made to
holders of the Notes based on the Accreted Value of the Notes as defined in the
Note Indenture. During 1999, the Company paid cash interest of $11,445,018 in
accordance with the terms of the Note. No cash interest was paid on the Notes in
1998.

The Notes are fully and unconditionally guaranteed (the "Subsidiary
Guarantees"), jointly and severally, on a senior basis by each of the
subsidiaries of Millenium (the "Subsidiary Guarantors"). The Notes are currently
collateralized by First Priority Ship Mortgages on the Company's vessels. The
Company's bonds are registered by the United States Securities & Exchange
Commission pursuant to the United States Securities Act of 1933.

The indebtedness evidenced by the Notes constitutes a general secured senior
obligation of the Company and is fully and unconditionally guaranteed by each of
the subsidiaries of the Company and will rank PARI PASSU in right of payment
with all future senior indebtedness of the Company and its subsidiary
guarantors. The Indenture, pursuant to where the Notes were issued (the Notes
Indenture), contains certain covenants that among other things, limit the type
and amount of additional indebtedness that may be incurred by the Company and
imposes certain limitations on investments, loans and advances, sales or
transfers of assets, dividends and other payments, the ability of the Company to
enter into sale-leaseback transactions, certain transactions with affiliates and
certain mergers, consolidations and purchases of assets, and amendments to
security agreements. The Company is currently in compliance with the terms of
the Notes Indenture at December 31, 1999.



                                      F-12

<PAGE>



5.  RELATED PARTY TRANSACTIONS

Each of the Company's vessels receives management services from its equity
shareholder MMI pursuant to a Management Agreement among the Company's vessel
owning subsidiaries and MMI. Under the Management Agreement, MMI acts as the
fleet's technical manager and performs all commercial management functions,
including arranging, chartering, advising the Company on the purchase and sale
of vessels and advising on obtaining insurance. As a technical manager, MMI (i)
provides qualified officers and crews on board vessels, (ii) manages day-to-day
vessel operations and maintains relationships with charterers, (iii) purchases
on behalf of the Company stores, spares, supplies and equipment for vessels,
(iv) performs general vessel maintenance, subcontracts for dry-dock facilities
for any major repairs and overhauls, (v) ensures regulatory and classification
society compliance, (vi) performs vessel operational budgeting and evaluations,
and (vii) provides accounting, treasury and finance functions (including cash
collections and disbursements on behalf of the Company). As remuneration for its
services, MMI receives a fixed management fee (payable monthly in advance)
ranging from $350 to $600 per day per vessel depending on the vessel type. In
addition, any visit to a vessel by a superintendent of MMI to evaluate and
supervise any repairs, dry-docking or other activities will entitle MMI to
expenses incurred and, from visits in excess of five days per annum per vessel,
its expenses incurred and an amount equal to $550 for each additional day. As
additional remuneration for its services, MMI receives commission of (i) 1.25%
on all gross time charter revenue, (ii) 1.75% on all gross freight revenue,
(iii) 1% on the gross sale or purchase price of a vessel and (iv) 2% of
insurance premiums for insurance placed, in each case as adjusted to reflect
fluctuations in market rates and practices.

MMI has sub-contracted certain of its technical and commercial management
services to Millenium Maritime Services Ltd. and Millenium Maritime Services,
Inc., both affiliates of MMI.

The Company records the management fee paid to MMI in operating expenses. As of
December 31, 1999, there is a payable to MMI which is reflected in Accrued
liabilities, amounting to $550,957. During 1999 and 1998, the Company incurred
management fees of $3,822,801 and $965,666 in connection with the aforementioned
agreement.

6.  LOSS ON SALE OF VESSEL

During the year ended December 31, 1999, the Company disposed one vessel, the
Monica Marissa, for scrap incurring a loss on sale of $2,088,655.

7.  CONTINGENCIES

From time to time the Company has been, and expects to continue to be, subject
to legal proceedings and claims in the ordinary course of its business,
principally personal injury and property claims. Such claims, even if lacking
merit, could result in the expenditure of significant financial and managerial
resources. As of December 31, 1999, the Company was not aware of any legal
proceedings or claims that it believed would have, individually or in the
aggregate, a material adverse effect on the Company or on its financial
condition or results of operation.

On March 28, 2000, an action was brought against the Company by Wayland
Investment Fund, LLC ("WIF") in the United States District Court, Southern
District of New York. In the First Amended Complaint filed on March 30, 2000
(the "Complaint"), WIF claims that it is a beneficial holder of in excess of 25%
of the 12% First Priority Ship Mortgage Notes. The factual basis alleged to
underlie the proceeding concerns the calculation of interest due and owing on
the 12% First Priority Ship Mortgage Notes. WIF makes three claims in the
Complaint: the first is for mutual mistake; the second is for breach of
contract; and the third is for violations of Section 10(b) of the Exchange Act
and Rule 10b-5. WIF's first claim for relief is that the 12% First Priority Ship
Mortgage Notes be reformed to provide for interest on the principal amount at
maturity of the 12% First Priority Ship Mortgage Notes and that damages be paid
in the amount of $517,263.16. WIF's


                                      F-13

<PAGE>


second claim of relief is damages in the amount of $74,417,263.15. WIF's third
claim for relief is that damages be paid in the amount of $517,263.16. On April
19, 2000, the Company filed a Motion to Dismiss WIF's second claim and answered
WIF's first and third claims. The Company intends to vigorously contest this
litigation.

8. COMMITMENTS

On December 23, 1999, the Company accepted a commitment for a standby line of
credit in a principal amount up to $2.5 million available for its working
capital requirements from the Allfirst Bank. The facility, collateralized by the
Company's vessels and subject to various covenants, provided that interest would
accrue at the US Prime rate and was subject to a 1% commitment fee on the unused
portion. This commitment, which was valid until March 23, 2000, was subject to
consent from Note Holders due to the fact that the Allfirst Bank would be both
the Working Capital Facility provider as well as the Indenture Trustee and a
potential of conflict of interest could arise under certain conditions. Pending
such consent, the Allfirst Bank has extended the commitment until June 1, 2000.


                                      F-14