UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549







FORM
10-Q




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


For
the quarterly period ended June 30, 2009




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




For
the transition period
from           to




Commission
File Number 000-53656







III
to I Maritime Partners Cayman I, L.P.


(Exact
name of registrant as specified in its charter)




Cayman
      Islands
                98-0516465(State
      or other jurisdiction of
                  incorporation
      or organization)
                (I.R.S.
      Employer
                  Identification
      No.)5580
      Peterson Lane
                  Suite
      155
                  Dallas,
      Texas
                75240(Address
      of principal executive offices)
                (Zip
      Code)




(972)
392-5400


(Registrant’s
telephone number, including area code)




Not
applicable


(Former
name, former address and former fiscal year, if changed since last
report)







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


 ̈ Yes  x No




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


x Yes   ̈ No




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.




Large
      accelerated filer  ̈
              
              Accelerated
      filer  ̈Non-accelerated
      filer    ̈
              (Do
      not check if a smaller reporting company)
              Smaller
      reporting company x


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


 ̈ Yes x  No


APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE


PRECEDING
FIVE YEARS:


Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.


 ̈ Yes   ̈ No





APPLICABLE
ONLY TO CORPORATE ISSUERS:


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










III
TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES


INDEX




Page
                                                                        NumberForward-Looking
      Statements
                                                                      
                                                                      3PART
      I.
                                                                      
                                                                      Financial
      Information
                                                                      
                                                                      4Item
      1.
                                                                      
                                                                      Financial
      Statements
                                                                      
                                                                      4Consolidated
      Balance Sheets as of June 30, 2009 and December 31, 2008
                                                                      
                                                                      4Consolidated
      Statements of Operations for the three and six months ended June 30, 2009
      and 2008
                                                                      
                                                                      5Consolidated
      Statements of Partners’ Equity as of June 30, 2009 and December 31,
      2008
                                                                      
                                                                      6Consolidated
      Statements of Cash Flows for the six months ended June 30, 2009 and2008
                                                                      
                                                                      7Consolidated
      Statements of Comprehensive Income (Loss) for the three and six months
      ended June 30, 2009 and 2008
                                                                      
                                                                      8Notes
      to Consolidated Financial Statements
                                                                      
                                                                      9Item
      2.
                                                                      
                                                                      Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                                                      
                                                                      25Item
      4.
                                                                      
                                                                      Controls
      and Procedures
                                                                      
                                                                      41PART
      II.
                                                                      
                                                                      Other
      Information
                                                                      
                                                                      42Item
      1.
                                                                      
                                                                      Legal
      Proceedings
                                                                      
                                                                      42Item
      1A.
                                                                      
                                                                      Risk
      Factors
                                                                      
                                                                      42Item
      2.
                                                                      
                                                                      Unregistered
      Sales of Equity Securities and Use of Proceeds
                                                                      
                                                                      42Item
      4.
                                                                      
                                                                      Submission
      of Matters to a Vote of Security Holders
                                                                      
                                                                      43Item
      6.
                                                                      
                                                                      Exhibits
                                                                      
                                                                      44


2


Forward-Looking
Statements





Certain
statements contained or incorporated by reference in this Form 10-Q including
without limitation statements containing the words “believe,” “anticipate,”
“attainable,” “forecast,” “will,” “may,” “expect(ation),” “envision,” “project,”
“budget,” “objective,” “goal,” “target(ing),” “estimate,” “could,” “should,”
“would,” “conceivable,” “intend,” “possible,” “prospects,” “foresee,” “look(ing)
for,” “look to,” and words of similar import, are forward-looking statements
within the meaning of the federal securities laws.  Forward-looking
statements appear in a number of places and include statements with respect to,
among other things:





·
            forecasts
      about our ability to make cash distributions on the
  units;


·
            planned
      capital expenditures and availability of capital resources to fund capital
      expenditures;


·
            future
      supply of, and demand for, products that will be shipped, supplied or
      otherwise supported by our vessels;


·
            expected
      demand in the maritime shipping industry in general and for our vessels in
      particular;


·
            our
      ability to maximize the use of our
vessels;


·
            expected
      delivery of the anchor handling tug supply ships and the chemical
      tanker;


·
            estimated
      future maintenance capital
expenditures;


·
            the
      absence of future disputes or other
  disturbances;


·
            increasing
      emphasis on environmental and safety
concerns;


·
            our
      future financial condition or results of operations and our future
      revenues and expenses;


·
            our
      business strategy and other plans and objectives for future
      operations;


·
            any
      statements contained herein that are not statements of historical
      fact.





These
statements are not guarantees of future performance and involve a number of
risks, uncertainties and assumptions.  Accordingly, our actual results
or performance may differ significantly, positively or negatively, from
forward-looking statements.  Unanticipated events and circumstances
are likely to occur.  Important factors that could cause our actual
results of operations or financial condition to differ include, but are not
limited to:





·
            inability
      to raise sufficient capital;


·
            fluctuations
      in charter rates;


·
            insufficient
      cash from operations;


·
            a
      decline in the demand for petroleum products or other products shipped,
      supplied or otherwise supported by our
vessels;


·
            intense
      competition in the anchor handling tug supply ship, multipurpose bulk
      carrier or chemical tanker
industries;


·
            the
      occurrence of marine accidents or other
hazards;


·
            fluctuations
      in currency exchange rates and/or interest
  rates;


·
            delays
      or cost overruns in the construction of new
  vessels;


·
            changes
      in international trade agreements;


·
            adverse
      developments in the marine transportation business;
  and


·
            other
      financial, operational and legal risks and uncertainties detailed from
      time to time in our Securities and Exchange Commission filings, including
      those set forth in our Registration Statement on Form 10, as amended,
      under Item 1A. Risk Factors.





All
forward-looking statements included in this Form 10-Q and all subsequent written
or oral forward-looking statements attributable to us or persons acting on our
behalf are expressly qualified in their entirety by these cautionary
statements.  The forward-looking statements speak only as of the date
made and, other than as required by law, we undertake no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.


3


PART
I.  Financial Information





Item
1.   Financial Statements




III
TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




CONSOLIDATED
BALANCE SHEETS




(Unaudited)




June 30,
                                    
                                    
                                    December 31,2009
                                    
                                    
                                    2008ASSETSCash
      and cash equivalents
                                    
                                    $
                                    11,230,817
                                    
                                    
                                    $
                                    2,222,196Restricted
      cash
                                    
                                    
                                    5,620,903
                                    
                                    
                                    
                                    -Cash
      held in escrow
                                    
                                    
                                    25,000
                                    
                                    
                                    
                                    314,500Related
      party receivable
                                    
                                    
                                    1,898,021
                                    
                                    
                                    
                                    5,940,945Due
      from charterers, net
                                    
                                    
                                    2,440,242
                                    
                                    
                                    
                                    -Other
      receivables
                                    
                                    
                                    23,956
                                    
                                    
                                    
                                    198,133Prepaid
      assets
                                    
                                    
                                    442,105
                                    
                                    
                                    
                                    100,000Current
      derivative assets
                                    
                                    
                                    1,747,851
                                    
                                    
                                    
                                    -Other
      current assets
                                    
                                    
                                    757,420
                                    
                                    
                                    
                                    491,335Current
      assets
                                    
                                    
                                    24,186,315
                                    
                                    
                                    
                                    9,267,109Vessels
                                    
                                    
                                    109,280,335
                                    
                                    
                                    
                                    -Vessel
      construction in progress
                                    
                                    
                                    48,212,646
                                    
                                    
                                    
                                    80,049,335On
      board equipment
                                    
                                    
                                    5,460,868
                                    
                                    
                                    
                                    811,255162,953,849
                                    
                                    
                                    
                                    80,860,590Less
      accumulated depreciation
                                    
                                    
                                    (1,144,069
                                    )
                                    
                                    
                                    -Vessels
      and equipment, net
                                    
                                    
                                    161,809,780
                                    
                                    
                                    
                                    80,860,590Investment
      in unconsolidated entities
                                    
                                    
                                    3,237,896
                                    
                                    
                                    
                                    3,575,462Restricted
      cash
                                    
                                    
                                    -
                                    
                                    
                                    
                                    55,967,374Deferred
      loan fees
                                    
                                    
                                    3,621,713
                                    
                                    
                                    
                                    3,771,774Derivative
      assets, net of current portion
                                    
                                    
                                    2,318,576
                                    
                                    
                                    
                                    -Deposits
      on business acquisition
                                    
                                    
                                    9,602,566
                                    
                                    
                                    
                                    -Other
      assets
                                    
                                    
                                    812
                                    
                                    
                                    
                                    1,426Total
      assets
                                    
                                    $
                                    204,777,658
                                    
                                    
                                    $
                                    153,443,735LIABILITIES AND PARTNERS'
      EQUITYAccounts
      payable and other accrued liabilities
                                    
                                    $
                                    7,382,568
                                    
                                    
                                    $
                                    2,653,705Vessel
      construction installments payable
                                    
                                    
                                    -
                                    
                                    
                                    
                                    10,381,453Accrued
      interest payable
                                    
                                    
                                    98,706
                                    
                                    
                                    
                                    322,220Due
      to related party
                                    
                                    
                                    2,580,273
                                    
                                    
                                    
                                    850,828Unaccepted
      equity contributions
                                    
                                    
                                    25,000
                                    
                                    
                                    
                                    314,500Current
      portion of long-term debt
                                    
                                    
                                    13,869,464
                                    
                                    
                                    
                                    34,927,967Current
      liabilities
                                    
                                    
                                    23,956,011
                                    
                                    
                                    
                                    49,450,673Long-term
      derivative liabilities
                                    
                                    
                                    3,754,136
                                    
                                    
                                    
                                    -Notes
      payable to related party
                                    
                                    
                                    656,000
                                    
                                    
                                    
                                    1,250,000Long-term
      debt, net of current portion
                                    
                                    
                                    94,537,947
                                    
                                    
                                    
                                    21,327,408Total
      liabilities
                                    
                                    
                                    122,904,094
                                    
                                    
                                    
                                    72,028,081Commitments
      and contingenciesIII
      to I Maritime Cayman I, L.P. partners' equity:General
      partner
                                    
                                    
                                    781,005
                                    
                                    
                                    
                                    942,557Class
      A limited partners (units issued and outstanding:June
      30, 2009 - 596,997, December 31, 2008 - 556,725)
                                    
                                    
                                    51,015,630
                                    
                                    
                                    
                                    53,153,690Class
      B limited partners (units issued and outstanding:June
      30, 2009 - 84,313, December 31, 2008 - 84,313)
                                    
                                    
                                    7,061,751
                                    
                                    
                                    
                                    8,026,114Class
      D limited partners (units issued and outstanding:June
      30, 2009 - 2,000, December 31, 2008 - 0)
                                    
                                    
                                    (59,815
                                    )
                                    
                                    
                                    -Accumulative
      other comprehensive income
                                    
                                    
                                    3,533,335
                                    
                                    
                                    
                                    123,166III
      to I Maritime Cayman I, L.P. partners' equity
                                    
                                    
                                    62,331,906
                                    
                                    
                                    
                                    62,245,527Noncontrolling
      interest
                                    
                                    
                                    19,541,658
                                    
                                    
                                    
                                    19,170,127Total
      partners' equity
                                    
                                    
                                    81,873,564
                                    
                                    
                                    
                                    81,415,654Total
      liabilities and partners' equity
                                    
                                    $
                                    204,777,658
                                    
                                    
                                    $
                                    153,443,735





See Notes
to Consolidated Financial Statements.


4


III
TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




CONSOLIDATED
STATEMENTS OF OPERATIONS




(Unaudited)




Three Months Ended June 30,
                        
                        
                        Six Months Ended June 30,2009
                        
                        
                        2008
                        
                        
                        2009
                        
                        
                        2008Time
      charter revenue
                        
                        $
                        4,391,713
                        
                        
                        $
                        -
                        
                        
                        $
                        5,218,890
                        
                        
                        $
                        -Operating
      expenses:Vessel
      operating expenses
                        
                        
                        4,504,396
                        
                        
                        
                        -
                        
                        
                        
                        5,289,641
                        
                        
                        
                        -Professional
      fees
                        
                        
                        754,128
                        
                        
                        
                        218,884
                        
                        
                        
                        1,940,112
                        
                        
                        
                        349,617Brokerage
      and representation fees
                        
                        
                        164,062
                        
                        
                        
                        164,062
                        
                        
                        
                        328,125
                        
                        
                        
                        328,125Other
      operating expenses
                        
                        
                        216,870
                        
                        
                        
                        56,024
                        
                        
                        
                        233,083
                        
                        
                        
                        193,007Total
      operating expenses
                        
                        
                        5,639,456
                        
                        
                        
                        438,970
                        
                        
                        
                        7,790,961
                        
                        
                        
                        870,749Operating
      loss
                        
                        
                        (1,247,743
                        )
                        
                        
                        (438,970
                        )
                        
                        
                        (2,572,071
                        )
                        
                        
                        (870,749
                        )Other
      income (expense):Interest
      income
                        
                        
                        195,497
                        
                        
                        
                        613,243
                        
                        
                        
                        865,332
                        
                        
                        
                        1,223,799Interest
      expense
                        
                        
                        (4,256,964
                        )
                        
                        
                        (220
                        )
                        
                        
                        (5,408,650
                        )
                        
                        
                        (10,315
                        )Foreign
      currency transaction gain (loss)
                        
                        
                        3,230,705
                        
                        
                        
                        46,735
                        
                        
                        
                        (226,828
                        )
                        
                        
                        3,239,950Equity
      in loss of unconsolidated entities
                        
                        
                        (186,270
                        )
                        
                        
                        (544,407
                        )
                        
                        
                        (309,029
                        )
                        
                        
                        (1,135,343
                        )Total
      other income (expense)
                        
                        
                        (1,017,032
                        )
                        
                        
                        115,351
                        
                        
                        
                        (5,079,175
                        )
                        
                        
                        3,318,091Net
      income (loss)
                        
                        
                        (2,264,775
                        )
                        
                        
                        (323,619
                        )
                        
                        
                        (7,651,246
                        )
                        
                        
                        2,447,342Net
      loss attributable to the noncontrolling interest
                        
                        
                        839,960
                        
                        
                        
                        12,557
                        
                        
                        
                        987,185
                        
                        
                        
                        50,875Net
      income (loss) attributable to III to I Maritime
                        
                        
                        (1,424,815
                        )
                        
                        
                        (311,062
                        )
                        
                        
                        (6,664,061
                        )
                        
                        
                        2,498,217Partners
      Cayman I, L.P.Less
      general partner interest in net income (loss)
                        
                        
                        (20,561
                        )
                        
                        
                        (5,731
                        )
                        
                        
                        (97,820
                        )
                        
                        
                        47,303Limited
      partner interest in net income (loss)
                        
                        $
                        (1,404,254
                        )
                        
                        $
                        (305,331
                        )
                        
                        $
                        (6,566,241
                        )
                        
                        $
                        2,450,914Net
      income (loss) per general partner unit:Basic
      and diluted
                        
                        $
                        (2.08
                        )
                        
                        $
                        (0.58
                        )
                        
                        $
                        (9.88
                        )
                        
                        $
                        4.78Weighted
      average general partner units outstanding
                        
                        
                        9,900
                        
                        
                        
                        9,900
                        
                        
                        
                        9,900
                        
                        
                        
                        9,900Net
      income (loss) per limited partner unit:Basic
      and diluted
                        
                        $
                        (2.08
                        )
                        
                        $
                        (0.58
                        )
                        
                        $
                        (9.88
                        )
                        
                        $
                        4.78Weighted
      average limited partner units outstanding
                        
                        
                        676,156
                        
                        
                        
                        527,430
                        
                        
                        
                        664,556
                        
                        
                        
                        512,937





See Notes
to Consolidated Financial Statements.


5


III
TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




CONSOLIDATED
STATEMENTS OF PARTNERS’ EQUITY




(Unaudited)




III to I Maritime Partners Cayman I, L.P.AccumulatedClass A
                        
                        
                        Class B
                        
                        
                        Class D
                        
                        
                        OtherGeneral
                        
                        
                        Limited
                        
                        
                        Limited
                        
                        
                        Limited
                        
                        
                        Comprehensive
                        
                        
                        NoncontrollingPartner
                        
                        
                        Partners
                        
                        
                        Partners
                        
                        
                        Partners
                        
                        
                        Income
      (Loss)
                        
                        
                        Interest
                        
                        
                        TotalBalance
      at January 1, 2008
                        
                        
                        1,020,841
                        
                        
                        
                        44,681,597
                        
                        
                        
                        5,507,244
                        
                        
                        
                        -
                        
                        
                        
                        163,683
                        
                        
                        
                        12,953,730
                        
                        
                        
                        64,327,095Contributions,
      net of syndication costs
                        
                        
                        (29,572
                        )
                        
                        
                        11,301,184
                        
                        
                        
                        2,874,247
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        8,129,972
                        
                        
                        
                        22,275,831Receivable
      from partners
                        
                        
                        -
                        
                        
                        
                        (460,000
                        )
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (460,000
                        )Distributions
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (739,518
                        )
                        
                        
                        (739,518
                        )Sale
      to affiliate
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (173,668
                        )
                        
                        
                        (173,668
                        )Net
      loss
                        
                        
                        (48,712
                        )
                        
                        
                        (2,369,091
                        )
                        
                        
                        (355,377
                        )
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (247,818
                        )
                        
                        
                        (3,020,998
                        )Foreign
      currency translation adjustment
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (40,517
                        )
                        
                        
                        (752,571
                        )
                        
                        
                        (793,088
                        )Balance
      at December 31, 2008
                        
                        
                        942,557
                        
                        
                        
                        53,153,690
                        
                        
                        
                        8,026,114
                        
                        
                        
                        -
                        
                        
                        
                        123,166
                        
                        
                        
                        19,170,127
                        
                        
                        
                        81,415,654Contributions,
      net of syndication costs
                        
                        
                        (15,418
                        )
                        
                        
                        3,125,179
                        
                        
                        
                        (131,296
                        )
                        
                        
                        (1,566
                        )
                        
                        
                        -
                        
                        
                        
                        1,576,497
                        
                        
                        
                        4,553,396Payment
      on receivable from partners
                        
                        
                        -
                        
                        
                        
                        460,000
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        460,000Distributions
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (689,986
                        )
                        
                        
                        (689,986
                        )Transfer
      of noncontrolling interest in Cyprus subsidiary
                        
                        
                        (48,314
                        )
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (48,314
                        )
                        
                        
                        -
                        
                        
                        
                        96,628
                        
                        
                        
                        -Net
      loss
                        
                        
                        (97,820
                        )
                        
                        
                        (5,723,239
                        )
                        
                        
                        (833,067
                        )
                        
                        
                        (9,935
                        )
                        
                        
                        -
                        
                        
                        
                        (987,185
                        )
                        
                        
                        (7,651,246
                        )Forward
      currency exchange contract
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        2,064,830
                        
                        
                        
                        688,277
                        
                        
                        
                        2,753,107Foreign
      currency translation adjustment
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        1,345,339
                        
                        
                        
                        (312,700
                        )
                        
                        
                        1,032,639Balance
      at June 30, 2009
                        
                        $
                        781,005
                        
                        
                        $
                        51,015,630
                        
                        
                        $
                        7,061,751
                        
                        
                        $
                        (59,815
                        )
                        
                        $
                        3,533,335
                        
                        
                        $
                        19,541,658
                        
                        
                        $
                        81,873,564





See Notes
to Consolidated Financial Statements.


6


III
TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




CONSOLIDATED
STATEMENTS OF CASH FLOWS




(Unaudited)




Six Months Ended June 30,2009
                      
                      
                      2008Operating
      activities:Net
      income (loss)
                      
                      $
                      (7,651,246
                      )
                      
                      $
                      2,447,342Adjustments
      to reconcile net income (loss) to net cash used in operating
      activities:Depreciation
                      
                      
                      1,087,966
                      
                      
                      
                      664Amortization
      of debt issue costs
                      
                      
                      140,389
                      
                      
                      
                      10,315Foreign
      currency transaction gain
                      
                      
                      1,670,842
                      
                      
                      
                      (3,239,950
                      )Net
      gain on forward currency exchange contracts
                      
                      
                      (1,444,014
                      )
                      
                      
                      -Net
      loss on interest rate swap
                      
                      
                      3,568,139
                      
                      
                      
                      -Equity
      in loss of unconsolidated entities
                      
                      
                      309,029
                      
                      
                      
                      1,135,343Payment
      of interest on Berenberg Facility
                      
                      
                      (3,559,158
                      )
                      
                      
                      (95,021
                      )Changes
      in assets and liabilities:Due
      from charterers
                      
                      
                      (2,242,660
                      )
                      
                      
                      -Other
      receivables
                      
                      
                      (23,958
                      )
                      
                      
                      (140,164
                      )Prepaid
      and other assets
                      
                      
                      (609,895
                      )
                      
                      
                      40,709Accounts
      payable and accrued liabilities
                      
                      
                      4,735,613
                      
                      
                      
                      (431,156
                      )Accrued
      interest payable
                      
                      
                      (222,400
                      )
                      
                      
                      262,279Net
      cash used in operating activities
                      
                      
                      (4,241,355
                      )
                      
                      
                      (9,639
                      )Investing
      activities:Related
      party receivable
                      
                      
                      (96,022
                      )
                      
                      
                      (3,664,188
                      )Advances
      for vessel acquisitions
                      
                      
                      (74,023,548
                      )
                      
                      
                      (3,481,784
                      )Advances
      for capitalized vessel construction costs
                      
                      
                      (3,861,963
                      )
                      
                      
                      (1,701,016
                      )Purchase
      on board equipment
                      
                      
                      (4,652,432
                      )
                      
                      
                      (118,409
                      )Proceeds
      from sale to affiliate
                      
                      
                      -
                      
                      
                      
                      3,296,624(Increase)
      decrease in restricted cash
                      
                      
                      50,346,471
                      
                      
                      
                      (3,754,719
                      )Net
      cash used in investing activities
                      
                      
                      (32,287,494
                      )
                      
                      
                      (9,423,492
                      )Financing
      activities:Proceeds
      from Berenberg Facility
                      
                      
                      1,263,351
                      
                      
                      
                      4,055,447Repayments
      on Berenberg Facility
                      
                      
                      (48,100,352
                      )
                      
                      
                      (3,253,798
                      )Proceeds
      from senior loan with Nord/LB
                      
                      
                      98,469,456
                      
                      
                      
                      -Repayments
      on senior loan with Nord/LB
                      
                      
                      (1,025,723
                      )Deferred
      loan fees
                      
                      
                      (9,527
                      )
                      
                      
                      -Repayment
      of related party note payable
                      
                      
                      (10,939,369
                      )
                      
                      
                      -Payable
      to related party
                      
                      
                      1,731,903
                      
                      
                      
                      105,043Contributions
      from partners
                      
                      
                      4,680,071
                      
                      
                      
                      7,115,000Unaccepted
      equity contributions
                      
                      
                      (289,500
                      )
                      
                      
                      -Syndication
      costs
                      
                      
                      (1,050,300
                      )
                      
                      
                      -Contributions
      from minority interests
                      
                      
                      1,673,125
                      
                      
                      
                      991,813Distributions
      to minority interests
                      
                      
                      (689,986
                      )
                      
                      
                      (333,070
                      )Net
      cash provided by financing activities
                      
                      
                      45,713,149
                      
                      
                      
                      8,680,435Effect
      of exchange rate changes on cash
                      
                      
                      (175,680
                      )
                      
                      
                      8,680,435Net
      increase in cash and cash equivalents
                      
                      
                      9,008,621
                      
                      
                      
                      2,792,793Cash
      and cash equivalents, beginning of period
                      
                      
                      2,222,196
                      
                      
                      
                      5,988,201Cash
      and cash equivalents, end of period
                      
                      $
                      11,230,817
                      
                      
                      $
                      8,780,994





See Notes
to Consolidated Financial Statements.


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CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)




(Unaudited)




Three Months Ended June 30,
                        
                        
                        Six Months Ended June 30,2009
                        
                        
                        2008
                        
                        
                        2009
                        
                        
                        2008Net
      income (loss)
                        
                        $
                        (2,264,775
                        )
                        
                        $
                        (323,619
                        )
                        
                        $
                        (7,651,246
                        )
                        
                        $
                        2,447,342Foreign
      currency exchange forward contracts
                        
                        
                        2,753,107
                        
                        
                        
                        -
                        
                        
                        
                        2,753,107
                        
                        
                        
                        -Foreign
      currency translation adjustment
                        
                        
                        1,954,609
                        
                        
                        
                        (9,514
                        )
                        
                        
                        1,032,639
                        
                        
                        
                        1,134,076Comprehensive
      income (loss)
                        
                        $
                        2,442,941
                        
                        
                        $
                        (333,133
                        )
                        
                        $
                        (3,865,500
                        )
                        
                        $
                        3,581,418





See Notes
to Consolidated Financial Statements.


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NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited





1.      Nature
of Partnership’s Business and Summary of Significant Accounting
Policies





References
herein to III to I Maritime Partners Cayman I, L.P. (“Cayman I”) include III to
I Maritime Partners Cayman I, L.P. and its consolidated
subsidiaries.  In accordance with the Securities and Exchange
Commission’s (“SEC”) “Plain English” guidelines, these financial statements have
been written in the first person.  In this document, the words “we”,
“our”, “ours” and “us” refer only to III to I Maritime Partners Cayman I, L.P.
and its consolidated subsidiaries or to III to I Maritime Partners Cayman I,
L.P. or an individual subsidiary and not to any other person.





The
accompanying unaudited consolidated interim financial statements have been
prepared in accordance with the rules applicable to the Form 10-Q and include
all information and footnotes required for interim financial statement
presentation, but do not include all disclosures required under accounting
principles generally accepted in the United States (“U.S. GAAP”) for complete
financial statements.  In the opinion of management, these financial
statements include all adjustments, consisting only of normal recurring
adjustments and accruals, that in our opinion are necessary for a fair
presentation of our financial position as of June 30, 2009, the results of
operations for six months ended June 30, 2009 and 2008 and cash flows for the
six months ended June 30, 2009 and 2008.  These financial statements
should be read in conjunction with the consolidated financial statements for the
year ended December 31, 2008 and for the three months ended March 31, 2009
included in our amended Registration Statement on Form 10 as filed with the
SEC.  Interim results of operations are not necessarily indicative of
the results to be expected for the full year.





Our
functional currency is the U.S. dollar.  However, the functional
currency of many of our subsidiaries is the Euro.  All amounts are
stated in U.S. dollars (“USD”), and where the amount relates to a subsidiary,
the amount has been restated in Euros (“EUR”) following the USD
amount.  Amounts related to future payments which are payable in EUR
have been stated in USD and translated using the exchange rate as of June 30,
2009.  Amounts shown in narrative statements related to payments made
in the past have been translated using the exchange rate on the date the
transaction occurred.  When comparisons are made between balance sheet
dates, the appropriate exchange rate for the given balance sheet date is
used.  When comparisons are made related to income statement amounts,
the average exchange rate for the given period is used.





Nature
of the Business





Cayman I,
a Cayman Islands limited partnership, was formed October 18,
2006.  Cayman I and its consolidated subsidiaries were formed for the
primary purpose of acquiring, managing and operating maritime
vessels.  Our primary focus is on anchor-handling tug supply (“AHTS”)
vessels, but we also purchased a noncontrolling interest in two multipurpose
bulk carrier vessels (“mini-bulkers”) and entered into an agreement to purchase
a chemical tanker.  We are also authorized to engage in other
activities if III to I International Maritime Solutions Cayman Inc., a Cayman
Islands corporation (“General Partner”), believes such activities will benefit
our core business of shipping operations.  We are authorized to issue
Class A, Class B, Class C and Class D limited partner units as well as general
partner units.  To date we have issued Class A, Class B and Class D
limited partner units and general partner units.  As of June 30, 2009,
delivery of two of our AHTS vessels had occurred with seven of our AHTS vessels
still under construction.  Delivery of our first two AHTS vessels, UOS
Atlantis and UOS Challenger, occurred on February 27, 2009 and May 28, 2009,
respectively, with the AHTS vessels immediately placed in
service.  With these two vessels delivered and operating under their
charters, our operations have begun to shift focus from development stage to
vessel operations, therefore we are no longer a development stage company as
defined by Statement of Financial Accounting Standards (“SFAS”) No. 7, Accounting and Reporting by
Development Stage Enterprises.


9


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NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited





Initially,
we owned approximately 96% of the units of I-A Suresh Capital Maritime Partners
Limited, a limited liability company formed under the laws of Cyprus (our
“Cyprus Subsidiary”).  On April 28, 2009, having received the proper
approval from our limited partners, we underwent a reorganization in order to
simplify our ownership structure, streamline the calculation of allocations and
distributions by incorporating economic rights in our Partnership Agreement that
formerly resided in the organizational documents of our Cyprus Subsidiary and
simplify the financial statements by eliminating the noncontrolling interest
component related to the Cyprus Subsidiary.  As part of the
reorganization approval, the effective date of the reorganization was deemed to
be April 1, 2009.  Pursuant to the reorganization, one of the
noncontrolling unitholders in our Cyprus Subsidiary contributed its units in the
Cyprus Subsidiary for newly created Class D units of Cayman I.  The
newly created Class D units are structured to represent, in total, substantially
the same allocation rights in the results of operations and similar rights of
control as the interest in the Cyprus Subsidiary which was the consideration for
their issuance.  Our general partner, the other noncontrolling
unitholder, contributed its units in the Cyprus Subsidiary in exchange for the
contribution by the other unitholder and the adoption of the Second Amended and
Restated Agreement of Limited Partnership.  As a result of the
reorganization, we now own 100% of our Cyprus Subsidiary.





In
accordance with SFAS 160, Noncontrolling Interests in
Consolidated Financial Statements – An Amendment of ARB No. 151, we have
treated the acquisition of the noncontrolling interest in our Cyprus Subsidiary
as an equity transaction, and have recorded a decrease in the equity of the
Class D unitholders and of the general partner equal to the negative carrying
value of the noncontrolling interest attributable to the acquired interests
effective April 1, 2009.  The table below reflects the carrying value
of our General Partner, Class D and noncontrolling interests as of June 30, 2009
and March 31, 2009.  The excess of the fair value of the Class D units
over the negative carrying value has also been allocated solely to the Class D
limited partners, resulting in no affect on the financial statements of such
excess.





Class DGeneral
                    
                    
                    Limited
                    
                    
                    NoncontrollingPartner
                    
                    
                    Partners
                    
                    
                    InterestBalance
      at March 31, 2009
                    
                    $
                    864,290
                    
                    
                    $
                    -
                    
                    
                    $
                    17,350,044Transfer
      of noncontrolling interest in Cyprus subsidiary
                    
                    
                    (48,314
                    )
                    
                    
                    (48,314
                    )
                    
                    
                    96,628Syndication
      costs
                    
                    
                    (15,418
                    )
                    
                    
                    (1,566
                    )
                    
                    
                    1,576,497Distributions
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (71,025
                    )Net
      loss
                    
                    
                    (19,553
                    )
                    
                    
                    (9,935
                    )
                    
                    
                    (839,960
                    )Forward
      currency exchange contract
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    688,277Foreign
      currency translation adjustment
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    741,197Balance
      at June 30, 2009
                    
                    $
                    781,005
                    
                    
                    $
                    (59,815
                    )
                    
                    $
                    19,541,658





Suresh
Capital Maritime Partners Germany GmbH (“German Subsidiary”), a German limited
liability company and a wholly owned subsidiary of the Cyprus Subsidiary, was
formed for the purpose of acquiring, managing and operating our maritime
vessels.





In
addition to our AHTS vessels and the mini-bulkers, we have paid $8,300,000 in
deposits through our wholly owned subsidiary Kronos Shipping I, Ltd. (“Kronos”)
in connection with our potential acquisition of a chemical tanker.  If
acquired, the chemical tanker would be held in a separate special purpose entity
(“SPV”) owned by Kronos.  The chemical tanker would transport bulk
cargos such as chemicals, clean petroleum products and vegoils.  See
Note 2 for additional information regarding the potential chemical tanker
acquisition.


10


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TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited





Significant
Accounting Policies





Principles of
Consolidation


The
accompanying consolidated financial statements present our consolidated
financial position, results of operations and cash flows in accordance with U.S.
GAAP.  Significant intercompany balances and transactions have been
eliminated.  We consolidate investments in entities in which we have a
majority interest.  Investments in unconsolidated entities where we
have the ability to exercise significant influence over operating and financial
policies (generally 20% to 50% ownership) are accounted for using the equity
method.





Use of
Estimates


The
preparation of financial statements in accordance with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period.  Actual results could differ
from those estimates.





Cash and Cash
Equivalents


We
consider all highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents.  Our cash balance will from
time to time include amounts which may be subject to the conditions under the
agreement with Norddeutsche Landesbank Girozentrale (“Nord/LB”) for the senior
loan facility (“Senior Loan”).  The Senior Loan conditions for each
AHTS SPV prohibit us from making distributions unless payment of any delivered
vessels’ operating costs and all amounts due and payable under the Senior Loan
are secured for a 12 month period.





Cash Held in
Escrow


We
maintain balances in an escrow account, which are restricted from release until
conditions of the escrow agreement have been met.  The escrow account
is used to hold investor deposits until subscription agreements have been
accepted by the depositor, at which time the conditions of the escrow are
fulfilled.





Due from
Charterers


Customer
obligations due under normal trade terms are recorded as due from
charterers.  An allowance for doubtful accounts would represent our
estimate of the amount of probable credit losses existing in our accounts
receivable.  We have a limited number of customers with individually
large amounts due at any given date.  Any unanticipated change in any
one of these customers’ credit worthiness or other matters affecting the
collectability of amounts due from such customers could have a material effect
on the results of operations in the period in which such changes or events
occur.  We regularly review all aged accounts receivables for
collectability and establish an allowance as necessary for individual customer
balances.  As of June 30, 2009, we had recorded no allowance for
doubtful accounts.





Derivatives
Instruments


We
account for derivatives and derivatives classified as hedges in accordance with
SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities and SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities, an Amendment of SFAS No.
133.  All our derivative and hedge positions are stated at fair
value within either current derivative assets, derivative assets, current
derivative liabilities or long-term derivative liabilities on our consolidated
balance sheet.





Realized
and unrealized gains and losses related to our foreign currency exchange
contracts not classified as hedges are reported in our consolidated statements
of operations in foreign currency transaction gain (loss).  Realized
and unrealized gains and losses related to foreign currency exchange contracts
designated for hedge accounting are included in foreign currency transaction
gain (loss) on the consolidated statement of operations to the extent they are
ineffective, with the effective portion of the fair value gains or losses
recorded as part of accumulated other comprehensive income (loss) on the
consolidated balance sheet.  The gain or loss related to our interest
rate swap contracts, none of which are classified as hedges, is reported in
interest expense.


11


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TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited





We
evaluate the risk of counterparty default by monitoring the financial condition
of the financial institutions and counterparties involved and primarily
conducting business with well-established financial institutions.  We
do not currently anticipate nonperformance by any of our
counterparties.





Vessels and
Equipment


Vessels
are stated at cost less accumulated depreciation.  Vessel costs
include acquisition costs directly attributable to the vessel and expenditures
made to prepare the vessel for its initial voyage.  On board equipment
represents all the equipment required to operate a vessel.  Vessels
and on board equipment are depreciated on a straight-line basis over their
estimated useful lives which have been determined to be 20 years and 10 years,
respectively, from the initial delivery date from the shipyard.





Depreciation
is based on cost less estimated residual value.  The costs of
significant replacements, renewals or betterments will be capitalized over the
shorter of the vessel’s remaining useful life or the life of the renewal or
betterment.  The non-depreciated cost of any asset component being
replaced will be written off as part of vessel operating
expenses.  Expenditures for routine maintenance and repairs will be
expensed as incurred.





Vessel
construction in progress represents the cost of acquiring contracts to build
vessels, installments paid to the shipyards, certain other payments made to
third parties and interest costs incurred during the construction of each vessel
until the vessel is substantially complete and ready for its intended
use.





Restricted
Cash


Restricted
cash represents the compensating balances required by Berenberg Bank in relation
to our outstanding loans.  Once an AHTS vessel has been delivered, a
portion of the compensating balances equal to the current outstanding loan
amount with regard to the delivered ship will be released and used to repay the
associated loan.  See Note 4 for additional information.





Deferred Loan
Fees


Costs
incurred in connection with the issuance of debt have been capitalized and are
being amortized on a straight-line basis to interest expense over the life of
the related debt agreements, which does not create a significant difference from
the effective interest method.  Deferred loan fees at June 30, 2009
and December 31, 2008 amounted to $3,621,713 and $3,771,774, respectively, net
of accumulated amortization of $158,441 and $11,223, respectively.





Noncontrolling
Interest


The
noncontrolling interest in our consolidated balance sheet reflects the original
investment by noncontrolling unitholders in the consolidated subsidiaries along
with their proportional share of the earnings or losses of the subsidiaries,
which are consolidated in our financial statements, less any distributions
received from our consolidated subsidiaries.  The noncontrolling
interest also receives a portion of the cumulative foreign currency translation
adjustment, the effective portion of the fair value gains or losses of our
hedges, and syndication costs.





Syndication
Costs


Syndication
costs are costs or fees incurred for financial services including, but not
limited to, the procurement of equity at any level within Cayman
I.  Such costs are netted against partners’ equity in proportion to
the ownership of each class of partner.  See Note 6 for additional
information.


12


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TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited





Revenue
Recognition


Our
revenue is earnedprimarily
from time chartering of vessels to charterers based upon daily rates of hire. A
time charter is a lease arrangement under which we provide a vessel to a
charterer and we are responsible for all crewing, insurance and other operating
expenses.  Time charters may be long term charters for six months to
several years, or short-term charters, typically called “spot charters” measured
in days or weeks.  Our AHTS SPVs participate in a pool arrangement
with three SPVs owned by our affiliate, FLTC Fund I, (“UOS AHTS Pool”) under
which they pool their revenue less voyage expenses (“Voyage
Results”).  Revenue from charters is generally recorded when services
are rendered, estimates are reasonably determinable and collection is reasonably
assured.  Revenue is recognized net of price adjustments and other
potential adjustments based upon the daily charter rate for the reporting
period.  Our pooling arrangement under the UOS AHTS Pool will not have
any bearing on our revenue until such time as one of the vessels owned by FLTC
Fund I is delivered and begins to participate in the UOS AHTS Pool, which is
expected to occur in May 2010.  After such time, our revenue will be
recorded taking into account potential pool adjustments for the
period.





Recent Accounting
Pronouncements


On
January 1, 2008, we adopted SFAS No. 157, Fair Value
Measurements.  This statement defines fair value, establishes a
framework for measuring fair value and enhances disclosures about fair value
measurements.  In February 2008, the Financial Accounting Standards
Board (“FASB”) issued FASB Staff Position (“FSP”) 157-1, Application of FASB Statement No.
157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address
Fair Value Measurements for Purposes of Lease Classification or Measurement
under Statement 13 and FSP 157-2, Effective Date of FASB Statement No.
157.  FSP 157-1 amends SFAS No. 157 to remove certain leasing
transactions from its scope.  FSP 157-2 delays the effective date of
SFAS No. 157 for all nonfinancial assets and liabilities except those that are
recognized or disclosed at fair value in the financial statements on at least an
annual basis, until January 1, 2009 for calendar year end
entities.  We adopted the provisions of SFAS No. 157 for financial
assets and liabilities as of January 1, 2008, and there was not a material
impact on the consolidated financial statements. The adoption of the remaining
provisions of SFAS No. 157 on January 1, 2009 did not have a material impact on
our consolidated financial position or results of operations when it was applied
to non-financial assets and liabilities not recognized or disclosed at fair
value in the financial statements on a recurring basis.  See Note 7
for additional information.





In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements - An Amendment of ARB No.
51.  SFAS No. 160 establishes new accounting and reporting
standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary.  This accounting standard is
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008.  We adopted SFAS No. 160 as
of January 1, 2009.  The adoption of SFAS No. 160 did not have a
material impact on our consolidated financial statements, but it did change the
presentation of the consolidated balance sheet, income statement and other
comprehensive income.  The presentation changes have been made for all
periods presented.





In
November 2008, the FASB ratified Emerging Issues Task Force (“EITF”) 08-6, Equity Method Investment Accounting
Considerations.  EITF 08-6 clarifies that the initial carrying
value of an equity method investment should be determined in accordance with
SFAS No. 141R.  Other-than-temporary impairment of an equity method
investment should be recognized in accordance with FSP Accounting Principles
Board (“APB”) Opinion 18-1, Accounting by an Investor for Its
Proportionate Share of Accumulated Other Comprehensive Income of an
Investee Accounted for
under the Equity Method in Accordance with APB Opinion No. 18 upon a Loss of
Significant Influence.  EITF 08-6 is effective on a prospective
basis in fiscal years beginning after December 15, 2008 and interim periods
within those fiscal years.  The adoption of EITF 08-6 did not have a
material impact on our consolidated financial position and results of operations
as no acquisitions accounted for under the equity method were made during the
six months ended June 30, 2009.





In March
2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities, an Amendment of SFAS No. 133 which
amended and expanded the disclosure requirements of SFAS No. 133 to include
disclosure of the objectives and strategies related to an entity’s use of
derivative instruments, disclosure of how an entity accounts for its derivative
instruments and disclosure of the financial impact including the effect on cash
flows associated with derivative activity.  We adopted SFAS No. 161 as
of January 1, 2009 on a prospective basis; accordingly, disclosures related to
interim periods prior to the date of adoption have not been
presented.  The adoption had no impact on our consolidated financial
statements, besides the additional disclosures.  See Note 5 for
additional information.


13


III
TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited





In April
2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosure about Fair Value
of Financial Instruments (“FSP 107-1/APB 28-1”).  FSP 107-1/APB
28-1 requires interim disclosures regarding the fair values of financial
instruments that are within the scope of FAS 107, Disclosures about the Fair Value of
Financial Instruments.  Additionally, FSP 107-1/APB 28-1
requires disclosure of the methods and significant assumptions used to estimate
the fair value of financial instruments on an interim basis as well as changes
of the methods and significant assumptions from prior periods.  FSP
107-1/APB 28-1 does not change the accounting treatment for these financial
instruments.  We adopted this standard in the second quarter of 2009
and the required disclosures are included in Note 7.





In May
2009, the FASB issued SFAS No. 165, Subsequent Events which
applies to subsequent events not addressed by other applicable US
GAAP.  SFAS No. 165 states that all events occurring after the balance
sheet date through the date of issuance should be evaluated to determine if the
events provide additional evidence about conditions that existed at the balance
sheet date.  If additional information is provided, the information
should be disclosed in the financial statements being issued.  An
entity shall not recognize events after the balance sheet date that provide
evidence about conditions that did not exist at the balance sheet date but arose
after the balance sheet date and before the financial statements are
issued.  The date through which subsequent events have been evaluated
and whether that date is the date of issuance or the date the financial
statements are available to be issued should be disclosed in the financial
statements as well.  SFAS No. 165 is effective for interim and annual
periods ending after June 15, 2009.  We adopted this statement during
the second quarter of 2009.  See Note 10 for additional
information.





In June
2009, the FASB issued SFAS No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting
Principles, which approves the Accounting Standards
Codification, or ASC, as the single source of authoritative United States
accounting and reporting standards applicable for all non-governmental
entities.  The ASC, which changes the referencing of financial
standards, is effective for interim or annual financial periods ending after
September 15, 2009.  As the ASC is not intended to change or alter
existing U.S. GAAP, it is not expected to have any impact on our consolidated
financial position or results of operations.





2.      Maritime
Vessels





We
committed to purchase nine AHTS vessels.  As of June 30, 2009, the
construction of the first two AHTS vessels was complete and operations had
begun.  The estimated cost of each AHTS vessel ranges from $52,200,963
(EUR 37,159,000) to $59,837,456 (EUR 42,595,000) for a total commitment for the
nine vessels of $506,218,275 (EUR 360,349,000).  Under the contracts,
installments are due upon certain milestones being met during the
construction.  Approximately 30% of the total construction costs
require deposits, some of which are funded with equity while others have been or
will be funded through draws on our credit facility with Berenberg Bank and our
Senior Loan.  Amounts drawn on our Senior Loan require either that
each AHTS SPV is fully funded based on the capital as called for in the AHTS SPV
company agreements, or provision of a guarantee acceptable to
Nord/LB.  A guarantee from Reederei Hartmann in the amount of
$53,609,802 (EUR 38,161,875) was outstanding at June 30, 2009.  There
were no guarantees outstanding at December 31, 2008.  As of June 30,
2009 and December 31, 2008, we incurred $162,953,849 and $80,860,590,
respectively, in connection with the acquisition of the contracts to build the
AHTS vessels.  The remaining seven AHTS vessels are scheduled to be
delivered from September 2009 through April 2010.  Interest related to
the debt financing is capitalized as part of the vessel construction costs until
the delivery of each AHTS vessel.  Interest incurred after the
delivery of the AHTS vessel is expensed as incurred.  See Note 4 for
additional information.


14


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TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited





At
December 31, 2008, we accrued $10,381,453 (EUR 7,364,300) owed to the shipyard
for the fourth installment on our first two AHTS vessels.  The amount
of the two shipyard payments was included in vessel construction in progress and
vessel construction installments payable on our consolidated balance sheet at
December 31, 2008.  Accordingly, this accrual was a non-cash activity
on our consolidated statements of cash flows affecting operating and investing
activities since these installments were not paid at December 31,
2008.  The $5,196,717 (EUR 3,686,400) owed on UOS Atlantis at December
31, 2008 was repaid during the first quarter of 2009 as part of the delivery of
the AHTS vessel.  The outstanding amount owed on the second AHTS
vessel, UOS Challenger, totaling $4,857,770 (EUR 3,677,900) under the loan, was
repaid during the second quarter of 2009.





In
addition to our AHTS vessels, we have entered into an agreement related to the
potential acquisition of a chemical tanker.  On November 13, 2007, III
to I IMS Holdings, LLC (“IMS Holdings”), the sole shareholder of our general
partner, entered into a Memorandum of Agreement (“MOA”) with the Schulte Group
relating to the acquisition of the chemical tanker.  Pursuant to the
MOA, IMS Holdings placed an order for the chemical tanker through the Schulte
Group for the purchase price of $41,500,000 to be paid in five equal
installments.  The Schulte Group agreed to loan IMS Holdings up to
$8,300,000 for the first installment payment and to facilitate a bank guarantee
for the second installment payment of $8,300,000.  The Schulte Group
has formed Anthos Shipping Co. Limited (“Anthos”), a Cyprus SPV, to own the
chemical tanker.  The equity of Anthos will be assigned to Kronos
Shipping I, Ltd., a newly formed Cayman entity (“Kronos”), upon repayment of the
loan, retirement of the bank guarantee and payment of all fees due to the
Schulte Group.  Kronos was not formed at the time the MOA was signed;
therefore, the chemical tanker transaction was undertaken through an affiliate
of IMS Holdings, IMS Capital Partners, LLC (“IMS Capital Partners”) on behalf of
Kronos.





Effective
April 2009, we entered into an agreement whereby all of the rights retained by
IMS Capital Partners and IMS Holdings with respect to the chemical tanker
pursuant to the MOA between IMS Holdings and Schulte Group were transferred to
Kronos, the new obligor under an amended version of the MOA between Kronos and
Conway Shipping I, Ltd (“Amended MOA”).  As consideration for and to
give effect to this transfer, we assigned the receivables from IMS Holdings,
through which the transaction was undertaken, to IMS Capital Partners in
exchange for the consent of IMS Capital Partners to the execution of the Amended
MOA.  This amount was credited by Kronos as additional paid in
capital, and Kronos accepted the rights to the chemical tanker pursuant to the
Amended MOA.  The outcome left Kronos as the sole holder of all rights
and obligations with respect to the potential acquisition of the chemical tanker
and resulted in IMS Capital Partners and IMS Holdings each holding directly
offsetting note obligations.  By entering into a Note Cancellation
Agreement, the note obligations between IMS Holdings and IMS Capital Partners
were terminated.  Through June 30, 2009, we incurred $9,602,566 in
connection with the potential acquisition of Anthos.





3.      Investment
in Unconsolidated Entities





We also
hold a 49% interest in two additional SPVs, Hesse Schiffahrts GmbH & Co. MS
“Markasit” KG and ATL Reederei GmbH & Co. MS “Larensediep” KG, each holding
a single mini-bulker, which were acquired through an equity investment made in
each SPV of $2,022,450 (EUR 1,500,000) and $2,161,650 (EUR 1,500,000),
respectively, at the prevailing exchange rate at the time the commitments were
funded.  The mini-bulkers are merchant ships specially designed to
transport bulk cargo such as grains, fertilizer, quick lime, soda ash, forest
and paper products and cement in their cargo holds, and currently operate in
liner services between the Baltic area and Northern Spain, Portugal,
Mediterranean Sea, Greece, Turkey and Israel where the operator has established
long-term partners.





These
investments are accounted for under the equity method.  As such,
assets, liabilities and results of operations are not consolidated with our
operations.  Rather, the net investment in the mini-bulker SPVs is
presented on our consolidated balance sheet in investment in unconsolidated
entities as a single line item and includes our equity contributions,
distributions and interest in the income or loss of each SPV.


15


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TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited




The
following presents summarized financial information for the unconsolidated
entities, in dollars:





June
      30,
                            
                            
                            December
      31,2009
                            
                            
                            2008Assets
                            
                            $
                            27,035,193
                            
                            
                            $
                            26,294,940Liabilities
                            
                            $
                            20,327,014
                            
                            
                            $
                            19,323,326Equity
                            
                            
                            6,708,179
                            
                            
                            
                            6,971,614Total
      liabilities and equity
                            
                            $
                            27,035,193
                            
                            
                            $
                            26,294,940





Three Months Ended June 30,
                
                
                Six Months Ended June 30,2009
                
                
                2008
                
                
                2009
                
                
                2008For
      the PeriodRevenue
                
                $
                1,004,357
                
                
                $
                2,775,450
                
                
                $
                3,034,446
                
                
                $
                2,900,783Expenses
                
                
                (1,386,377
                )
                
                
                (3,886,485
                )
                
                
                (3,665,118
                )
                
                
                (5,217,810
                )Net
      income (loss)
                
                $
                (382,020
                )
                
                $
                (1,111,035
                )
                
                $
                (630,672
                )
                
                $
                (2,317,027
                )Interest
      in net income (loss) of unconsolidated entities
                
                $
                (186,270
                )
                
                $
                (544,407
                )
                
                $
                (309,029
                )
                
                $
                (1,135,343
                )





The
functional currency of the mini-bulker SPVs is the EUR.  The financial
statements above were translated from EUR to USD with the balance sheet
translated at the exchange rate at the balance sheet date and the income
statement translated at the weighted-average exchange rate for the
period.  The equity accounts were translated at historical
rates.  The investment in unconsolidated entities on our consolidated
balance sheet was translated at the exchange rate at the balance sheet
date.  The difference of $49,112 between the amount at which the
investment is reflected on our consolidated balance sheet, $3,237,896, and 49%
of the equity as shown on the financial information above, $3,287,008, is
related to the difference in the rates utilized to translate the equity accounts
and the investment in unconsolidated entities on our consolidated balance sheet
at June 30, 2009.





4.      Long-Term
Debt and Pledged Cash





June
      30,
                
                
                December
      31,2009
                
                
                2008Berenberg
      Facility
                
                $
                5,663,679
                
                
                $
                56,255,375Senior
      Loan
                
                
                97,443,732
                
                
                
                -Schulte
      Group
                
                
                5,300,000
                
                
                
                -Total
      debt
                
                
                108,407,411
                
                
                
                56,255,375Current
      portion of long-term debt
                
                
                (13,869,464
                )
                
                
                (34,927,967
                )Total
      debt classified as long-term
                
                $
                94,537,947
                
                
                $
                21,327,408


16


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TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited





In
November 2006, we entered into a credit facility (“Berenberg Facility”) with
Berenberg Bank, a German financial institution, allowing for borrowings up to
$37,086,720 (EUR 26,400,000).  Proceeds from borrowings are primarily
used for the acquisition of AHTS vessels.  The Berenberg Facility is
available in multiple tranches with each tranche being directly related to a
single AHTS vessel, but secured by restricted cash.  The Berenberg
Facility was amended in March and May 2007, increasing the available borrowings
to $70,661,440 (EUR 50,300,000) and extending the maturity date to September
2010.  The remaining terms of the Berenberg Facility were not
materially changed.





Under the
Berenberg Facility, interest is calculated based on the one-month EURIBOR rate
plus a margin of 0.35%.  The weighted-average effective interest rate
as of June 30, 2009 and December 31, 2008 was 1.15% and 3.97%,
respectively.  Interest is due quarterly but is rolled into the
principal amount instead of being paid.  Principal payments are due on
each tranche upon the earlier of the delivery date, sale of the related vessel
or September 30, 2010.





Under the
Berenberg Facility, we are required to maintain compensating balances as
security for the repayment of the borrowings under such facility.  The
compensating balances must be equal to or greater than the initial amounts drawn
by our German Subsidiary and used to pay deposits on construction of our AHTS
vessels.  The compensating balances represent the original tranche
balance plus interest earned since the original deposit date.  The
tranche balance represents the original loan plus all incurred interest which is
rolled into the new loans upon maturity which is usually three
months.  As the interest rate earned on the compensating balances is
less than the interest charged on the tranche balance, the compensating balances
do not fully offset the outstanding tranche balances.  During the
second quarter of 2009, portions of the Berenberg Facility were repaidutilizing
the restricted cash balances which were pledged against the loans, supplemented
with contributions from our limited partners.  As of June 30, 2009 and
December 31, 2008, borrowings of $5,663,679 (EUR 4,031,662) and $56,255,375 (EUR
39,905,920), respectively, were outstanding and the related compensating balance
was $5,620,904 (EUR 4,001,213) and $55,967,374 (EUR 39,701,620),
respectively.





On
November 20, 2008, Kronos entered into a $30,000,000 credit facility (“Deutsche
Schiffsbank Facility”) with Deutsche Schiffsbank Aktiengesellschaft (“Deutsche
Schiffsbank”), in preparation for the potential acquisition of a chemical
tanker.  The Deutsche Schiffsbank Facility also provided for a related
guarantee facility of up to $16,320,000 under which Deutsche Schiffsbank will
issue two separate guarantees in favor of the sellers of the chemical tanker,
Nantong Mingde Heavy Industry Stock Co., Ltd. And Jiangxi Topsky Technology Co.
Ltd. (“Nantong Mingde”).  The Deutsche Schiffsbank Facility is to be
drawn in multiple advances with proceeds used to fund the construction and
acquisition of the chemical tanker.  Anthos Shipping Co. Limited
(“Anthos”) is the current owner of the contract to purchase the chemical
tanker.  We anticipate taking ownership of Anthos upon fulfilling the
terms of the Amended MOA.  Each pre-delivery advance shall be repaid
in full upon delivery of the chemical tanker to Anthos,but no later than
March 31, 2012.  Additionally, each delivery advance shall be repaid
in 40 installments of $500,000 with a balloon installment in the amount of
$10,000,000 payable at the time of the final $500,000 installment, which can be
no later than March 31, 2022.





On
November 13, 2007, IMS Holdings, the sole shareholder of our general partner,
entered into the MOA with the Schulte Group relating to the acquisition of the
chemical tanker.  Pursuant to the MOA, IMS Holdings placed an order
for the chemical tanker through the Schulte Group for the purchase price of
$41,500,000 to be paid in five equal installments.  The Schulte Group
agreed to loan IMS Holdings up to $8,300,000 for the first installment payment
and to facilitate a bank guarantee for the second installment payment of
$8,300,000.





The
Schulte Group provided funds for the first installment on the chemical tanker of
$8,300,000 through a loan, and IMS Holdings repaid $3,000,000 through its
affiliate to the Schulte Group by January 15, 2008, in compliance with the terms
of the MOA.  We advanced approximately $3,800,000 to IMS Holdings to
allow IMS Holdings to provide funds to make the required payments to the Schulte
Group under the MOA.  An addendum to the MOA was executed in July 2008
to extend the loan through November 30, 2008, extend the time period allowed for
IMS Holdings to secure financing and increase the amount of possible liquidated
damages.  As of December 31, 2008, no agreement had been reached on a
further extension of the terms of the MOA, and IMS Holdings was technically in
default on their loan and required to pay liquidating damages.  An
amended and restated MOA was entered into on April 25, 2009, which extends the
term of the loan and bank guarantee through July 30, 2010, increases the
interest rate and the possible liquidated damages, requires us to pay a lump sum
amount of $200,000 as a fee for providing the extension of the bank guarantee,
waives any prior default and clarifies certain other terms of the original
MOA.  As part of the changes, the parties to the MOA were formally
changed to be between Kronos in place of IMS Holdings and Conway Shipping Co.
Ltd (“Conway”) in place of the Schulte Group.  If acquired, the
chemical tanker would be held in Anthos, which would be owned by
Kronos.  In the future, we may sell or assign the chemical tanker or
the rights to acquire it, or may elect to cancel the transaction to purchase the
chemical tanker, whereby we would be subject to liquidated damages through the
forfeiture of all amounts advanced under the MOA.


17




III
TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited





On
December 19, 2008, we entered into a $590,816,736 (EUR 420,570,000) Senior Loan
with Nord/LB as administrative agent, with a term of 12 years from the delivery
of each AHTS vessel.  The proceeds from the loan will be used to fund
preconstruction costs (“Pre-Delivery Facility”), outstanding balances due to the
shipyard at delivery and working capital requirements of each AHTS
SPV.  A post-delivery credit facility (“Revolving Credit Facility”) in
the amount of $118,163,347 (EUR 84,114,000) can also be used to extend the
Senior Loan from 12 to 15 years.  However, in no case can the total
loans be in excess of 75% of the aggregate costs of all ships covered by the
Senior Loan.





The
Senior Loan is a fleet financing arrangement which covers all our AHTS vessels
plus the three AHTS vessels held by FLTC Fund I.  The 12 ships serve
individually and collectively as the collateral for the Senior
Loan.  In connection with the Senior Loan, a commitment fee of 0.20%
to 0.45% is due semi-annually in arrears as determined by our bank internal
rating class based on the unused Senior Loan balance and the elapsed days within
the year.  An agency fee of $14,048 (EUR 10,000) per ship is due each
year payable at the end of each quarter until the delivery of the applicable
ship.  After the delivery of the applicable AHTS vessel, the agency
fee, payable quarterly, will be $7,024 (EUR 5,000) per year per vessel until the
Senior Loan is paid in full.





Repayment
of the Pre-Delivery Facility of the Senior Loan is guaranteed by Reederei
Hartmann who is our noncontrolling interest holder and the 25% owner of the
three AHTS SPVs of FLTC Fund I.  In the event the Corporate Guarantee
is drawn upon, the German Subsidiary may increase its equity interest in (i) the
AHTS SPVs pursuant to the Share Transfer Agreement SCMP (“Share Transfer
Agreement”) and (ii) the mini-bulker SPVs pursuant to the applicable “Sale and
Assignment of a Limited Share” agreement, in each case, by and between the
German Subsidiary and Reederei Hartmann.  There is also a financial
guarantee for up to 70% of the loan balance issued by SACE S.P.A. of Roma,
Italy, which is the Italian export credit and reinsurance agency.





Interest
on the borrowings is based upon the EURIBOR, the Euro Interbank Offered
Rate.  For the portion of the Senior Loan not guaranteed by SACE
S.P.A., the applicable interest rate is EURIBOR plus 1.375% per annum plus a
fixed funds cost to be determined prior to each drawdown.  For the
portion of the Senior Loan that is guaranteed by SACE S.P.A, the applicable
interest rate is EURIBOR plus 1.375% per annum.  With respect to the
Revolving Credit Facility, the applicable interest rate is (i) EURIBOR plus
1.600% per annum or (ii) the lenders’ funding costs, as conclusively to be
agreed and determined by the lenders, plus 1.600% per annum.  Upon the
fifth anniversary of the Senior Loan, each interest rate will be subject to
renegotiation.  Interest incurred before the delivery of each AHTS
vessel will be rolled into the loan balance of the corresponding tranche of the
Senior Loan until ship delivery up to a maximum of $1,404,800 (EUR
1,000,000).  If interest incurred exceeds $1,404,800 (EUR 1,000,000)
the excess interest will be due at each interest payment date which can be every
three to six months.





A
guarantee commission of 1.375% per annum is due to Nord/LB on the loans provided
during the pre-delivery stage of each ship up to a loan balance of $337,152,000
(EUR 240,000,000).  The guarantee commission is due and payable each
quarter that construction payments are outstanding up to and including the date
the construction payments are made.





We are
subject to various covenants associated with the Senior Loan such as the payment
of dividends, amount of capital infusions from outside investors into the AHTS
SPVs, limits on additional financing, restrictions of cargo and weapons,
structure and duration of charters related to the ships and establishment of
cash accounts with Nord/LB for the cash generated from operations of each AHTS
vessel until the Senior Loan is paid in full.


18


III
TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited





On
January 31, 2009, in order to comply with the conditions of the Senior Loan, we
passed a Resolution increasing the total share capital of one of our AHTS SPVs,
Isle of Usedom, from $17,378,550 (EUR 13,500,000) to $48,917,400 (EUR
38,000,000) based on the exchange rate at January 31, 2009.  This
resulted in an increase in our capital commitment to Isle of Usedom from
$14,223,600 (EUR 10,125,000) to $40,036,800 (EUR 28,500,000), based on current
exchange rates.





We
accepted a drawdown on the Senior Loan on February 25, 2009 related to the
delivery of UOS Atlantis totaling $44,689,067 (EUR 35,047,500).  The
proceeds were used to pay the fifth and final installment to Fincantieri
totaling $33,394,067 (EUR 26,201,700) and to repay the advance from Reederei
Hartmann totaling $4,698,317 (EUR 3,686,400) plus accrued interest thereon on
February 27, 2009.





On May
26, 2009, UOS Challenger was delivered to our AHTS SPV, MS
Norderney.  We accepted a drawdown on the Senior Loan on May 25, 2009
related to the upcoming delivery totaling $49,080,519 (EUR
35,047,500).  The proceeds were used to pay the fifth and final
installment to Fincantieri totaling $36,432,946 (EUR 26,016,100) and to repay
the advance from Reederei Hartmann totaling $5,150,531 (EUR 3,677,900) plus
accrued interest thereon on May 26, 2009.





At June
30, 2009, a total of $97,443,732 (EUR 69,364,844) was outstanding under the
Senior Loan with an effective interest rate of 3.293%.  The
outstanding balance will be due in full in February 2021.  During the
three and six months ended June 30, 2009, we incurred interest expense of
$541,864 (EUR 403,258) and $706,910 (EUR 529,441), respectively, related to the
drawdown on the Senior Loan.





A summary
of the total interest incurred, capitalized and expensed is shown below (in
dollars):





Three Months Ended
                  
                  
                  Six Months EndedEnded June 30,
                  
                  
                  Ended June 30,2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008(Unaudited)
                  
                  
                  (Unaudited)
                  
                  
                  (Unaudited)
                  
                  
                  (Unaudited)Interest
      capitalized to vessel construction in progress:Beginning
      of period
                  
                  $
                  3,652,207
                  
                  
                  $
                  1,782,453
                  
                  
                  $
                  3,448,928
                  
                  
                  $
                  1,017,307Interest
      incurred
                  
                  
                  4,985,504
                  
                  
                  
                  587,018
                  
                  
                  
                  6,557,969
                  
                  
                  
                  1,383,316Currency
      translation change related to beginning balance
                  
                  
                  205,512
                  
                  
                  
                  (69
                  )
                  
                  
                  (11,988
                  )
                  
                  
                  73,903Interest
      related to property and other assets held for sale
                  
                  
                  -
                  
                  
                  
                  6
                  
                  
                  
                  -
                  
                  
                  
                  (95,023
                  )Interest
      expense
                  
                  
                  (4,256,964
                  )
                  
                  
                  (220
                  )
                  
                  
                  (5,408,650
                  )
                  
                  
                  (10,315
                  )Amount
      reclassed to delivered vessels
                  
                  
                  (1,158,779
                  )
                  
                  
                  -
                  
                  
                  
                  (1,158,779
                  )
                  
                  
                  -End
      of period
                  
                  $
                  3,427,480
                  
                  
                  $
                  2,369,188
                  
                  
                  $
                  3,427,480
                  
                  
                  $
                  2,369,188Interest
      paid
                  
                  $
                  4,240,395
                  
                  
                  $
                  2,189
                  
                  
                  $
                  5,408,650
                  
                  
                  $
                  102,367Interest
      added to principal on borrowings on Berenberg Facility
                  
                  $
                  173,230
                  
                  
                  $
                  586,798
                  
                  
                  $
                  594,009
                  
                  
                  $
                  1,373,001





The
amount shown as interest incurred above for the three and six months ended June
30, 2009 includes $3,125,129 (EUR 2,332,341) and $3,653,314 (EUR 2,736,155)
related to adjustments to the fair value of our interest rate swap
agreements.  Please see Note 5 for further
information.  There were no interest rate swap agreements in place
during the three and six months ended June 30, 2008.


19


III
TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited





5.      Derivative
Instruments





We are
exposed to global market risks, including the effect of changes in interest
rates and foreign currency fluctuations.  Foreign currency denominated
debt and derivative instruments are used to mitigate the impact of these
changes.  We do not use derivatives or hedges with a level of
complexity or with a risk higher than the exposures to be hedged and do not hold
or issue derivatives for trading purposes.





On March
6, 2009 and March 11, 2009, respectively, two of our AHTS SPVs, MS Juist and MS
Norderney, entered into forward currency exchange contracts for a portion of
their future expected USD charter revenue, to hedge the currency risk related to
expenses and debt redemption that are denominated in EUR.  The
original notional amount of the forward currency exchange contracts was
$10,800,000 and $7,500,000, respectively.  The contract for MS Juist
covers the one year period beginning May 26, 2009 and the contract for MS
Norderney covers the period from May 20, 2009 through November 26,
2009.  These contracts are not designated for hedge accounting under
SFAS No. 133.





On March
27, 2009, one of our AHTS SPVs, MS Juist, entered into an interest rate swap
agreement, which begins February 2010 and expires February 2019 with a notional
value of $45,131,834 (EUR 32,126,875) at June 30, 2009, in order to hedge the
risk of rising interest rates related to the Senior Loan, which is based on the
three-month EURIBOR rate.  On May 25, 2009, the remaining eight of our
nine AHTS SPVs entered into similar interest rate swap agreements, which begin
in March 2010 and expire from May 2019 to April 2020.  The total
notional value of these agreements is $380,543,419 (EUR 270,887,969) at June 30,
2009, bringing the total notional value under the nine interest rate swap
agreements to $425,675,253 (EUR 303,014,844) at June 30,
2009.  Through these agreements, we have fixed our debt service cost
related to our AHTS SPVs for the period covered by the agreement at rates
between 3.465% and 3.885% plus the applicable margin and funding
costs.  By entering into these interest rate swap agreements, we are
protecting against interest rate fluctuations on the variable three-month
EURIBOR rate component of the outstanding borrowings under our Senior Loan which
matures in February 2021.  These instruments are not designated for
hedge accounting under SFAS No. 133.





On May 8,
2009, our AHTS SPVs entered into forward exchange contracts for a portion of
their future expected USD charter revenue, to hedge the currency risk related to
expenses and debt redemption that are denominated in EUR.  The
contracts run from December 2009 through December 2011.  These forward
currency exchange contracts, which have been designated for hedge accounting
under SFAS No. 133, total $113,400,000.





Derivative
instruments, including those classified as hedges, are reported as either assets
or liabilities based on whether their individual fair value is a gain or loss,
and amounts are classified as short term where appropriate.  The
offset is dependent upon the nature of the derivative, and whether or not it is
designated as a hedge.  The change in the fair value of our interest
rate swaps, none of which are classified as hedges, is included in interest
expense on the consolidated statement of operations.  Changes in the
value of forward currency exchange contracts not classified as hedges are offset
to foreign currency transaction gain (loss) on the consolidated statement of
operations.





Changes
in the value of forward currency exchange contracts classified as hedges are
recognized as gains or losses.  Such gains or losses are included in
foreign currency transaction gain (loss) on the consolidated statement of
operations to the extent that testing shows them to be ineffective, with the
effective portion of the fair value gains or losses recorded as part of
accumulated other comprehensive income on the consolidated balance
sheet.


20


III
TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES
  NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
  JUNE
30, 2009
  Unaudited


The fair
value of our derivative instruments as of June 30, 2009 is as follows (in
dollars):





Fair Value
                
                
                Fair Valueof Short-Term
                
                
                of Derivative
                
                
                Fair ValueDerivative
                
                
                Assets, net of
                
                
                of DerivativeDerivatives
      by hedge designation
                
                Assets
                
                
                short-term
      portion
                
                
                LiabilitiesDesignated
      as hedging instruments:Forward
      currency exchange contracts
                
                $
                356,181
                
                
                $
                2,318,576
                
                
                $
                -Not
      designated as hedging instruments:Forward
      currency exchange contracts
                
                
                1,391,670
                
                
                
                -
                
                
                
                -Interest
      rate swap agreements
                
                
                -
                
                
                
                -
                
                
                
                3,754,136Total
      derivatives
                
                $
                1,747,851
                
                
                $
                2,318,576
                
                
                $
                3,754,136





For the
three and six months ended June 30, 2009, we recognized net gains and (losses)
on derivative instruments as follows (in dollars):





Three Months
                  
                  
                  Six MonthsEnded
                  
                  
                  EndedDerivatives by hedge designation
                  
                  Classification of gains (losses)
                  
                  
                  June 30, 2009
                  
                  
                  June 30, 2009Cash
      flow hedges:Forward
      currency exchange contracts
                  
                  Foreign
      currency transaction gain (loss)
                  
                  
                  $
                  (74,468
                  )
                  
                  $
                  (74,468
                  )Not
      designated as hedging instruments:Forward
      currency exchange contracts
                  
                  Foreign
      currency transaction gain (loss)
                  
                  
                  $
                  1,058,190
                  
                  
                  $
                  1,518,483Interest
      rate swap agreements
                  
                  Interest
      expense
                  
                  
                  $
                  (3,039,954
                  )
                  
                  $
                  (3,568,139
                  )





6.      Related
Party Transactions





In
November 2006, we entered into a management agreement (“Management Agreement”)
with Suresh Capital Maritime Holdings, LLC (“SCMH”), which until April 1, 2009,
held an approximate 2% ownership in our Cyprus Subsidiary.  The
Management Agreement provided for a management fee of $4,200,000, payable in 12
installments of $350,000 each.  The initial installment was paid in
October 2006.  The remaining installments were due at the beginning of
each quarter commencing January 2007 and ending July 2009.





Effective
January 1, 2007, the terms of the Management Agreement were
amended.  We entered into a letter agreement with SCMH (“Letter
Agreement”) which replaced the Management Agreement.  The Letter
Agreement provided for us to advance funds as a loan, which are unsecured,
totaling $3,237,500 to SCMH on a quarterly basis.  The Letter
Agreement provided for repayment of the advances with interest at a rate equal
to 5% per annum.  As of June 30, 2009 and December 31, 2008, the
amount receivable from SCMH in connection with the Letter Agreement was
$1,796,985 and $1,661,782, respectively, including accrued interest of $164,001
and $118,798, respectively.  During the three and six months ended
June 30, 2009, we recognized interest income of $24,522 and $45,203,
respectively.


21


III
TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited





Effective
January 1, 2009, we entered into an Amended and Restated Shareholders’ Agreement
in our Cyprus Subsidiary.  As a result of this agreement, the Letter
Agreement with SCMH was terminated.





As of
December 31, 2008, we had $4,278,164, including accrued interest of $283,164,
due from IMS Holdings resulting from short-term advances we made to IMS Holdings
relating to the acquisition of the chemical tanker prior to the formation of
Kronos (the “Partnership Notes”).  Each advance bore interest at 8%
with a final maturity date of December 2018.  As of June 24, 2009, the
amount due from IMS Holdings was $4,238,983, including accrued interest of
$361,983.  The cost basis of the investment in the chemical tanker on
the financial statements of IMS Capital Partners was
$4,138,946.  Therefore, $4,138,946 of the note receivable balance was
transferred to IMS Capital Partners in exchange for the consent of IMS Capital
Partners to the execution of the Amended MOA, under which Kronos was the
obligor.  Therefore, as of June 30, 2009, we had a residual amount due
of $100,036 from IMS Holdings related to these short-term
advances.  See Note 2 for additional information regarding the
potential acquisition of the chemical tanker.





In
January 2009, two of our AHTS SPVs entered into short-term loan agreements with
Reederei Hartmann for the advancement of funds to pay the fourth installment
payment due to the shipyard with respect to the delivery of the first two AHTS
vessels.  At December 31, 2008, these payments due to the shipyard
were accrued as part of vessel construction installments payable on our
consolidated balance sheet.  The short-term loans with Reederei
Hartmann are due upon the delivery of the applicable AHTS
vessel.  These advances were necessary because the shipyard invoiced
the installment payments before the Senior Loan was in place; therefore, the
Pre-Delivery Facility was not available.  The loan associated with UOS
Atlantis was paid in full upon the vessel delivery in February 2009, and the
loan associated with UOS Challenger was paid in full upon the vessel delivery in
May 2009.





During
October 2008, we were advanced $1,000,000 in the form of a loan from III:I
Emerging Market Partners Real Estate Investment Fund I, L.P. (“EMP Fund I”), an
affiliate of our General Partner.  This loan, which is unsecured,
bears interest at a rate of 12% and matures in October 2010.  In
connection with this loan, we paid a $20,000 commitment fee to EMP Fund I upon
execution of the promissory note.  This fee was included in interest
expense on our consolidated statement of operations.  The loan balance
at June 30, 2009 and December 31, 2008 was $622,391 and $1,001,041, including
$22,391 and $1,041 of accrued interest, respectively.  During the
three and six months ended June 30, 2009, we recognized interest expense of
$22,391 and $51,439, respectively.





During
December 2008, we were advanced $250,000 in the form of a loan from III to I
Financial Management Research, L.P., an affiliate of our General
Partner.  This loan, which is unsecured, bears interest at a rate of
12% and matures in December 2018.  The loan balance at June 30, 2009
and December 31, 2008 was $56,000 and $251,233, respectively.  The
balance as of December 31, 2008 includes accrued interest of
$1,233.  There was no accrued interest payable as of June 30,
2009.  During the three and six months ended June 30, 2009, we
incurred interest expense of $3,660 and $4,542, respectively, related to this
loan.





The AHTS
SPVs pay technical and commercial management fees to Hartmann Offshore, an
affiliate of Reederei Hartmann, the noncontrolling interest owner of the AHTS
SPVs.  These fees are included in vessel construction in progress or
vessels on our consolidated balance sheet.  The balances as of June
30, 2009 and December 31, 2008 were $3,687,600 (EUR 2,625,000) and $2,290,763
(EUR 1,625,000), respectively.





The AHTS
SPVs pay construction fees to Hartmann Offshore.  These fees are
included in vessel construction in progress or vessels on our consolidated
balance sheet.  The balances as of June 30, 2009 and December 31, 2008
were $1,580,400 (EUR 1,125,000) and $352,425 (EUR 250,000),
respectively.


22





III
TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




JUNE
30, 2009




Unaudited





Each AHTS
SPV entered into a contract with the German Subsidiary, whereby the German
Subsidiary or its assignee will provide financial services including, but not
limited to, the procurement of equity during the building period of the relevant
AHTS vessel.  Under such agreements, the German Subsidiary would have
received fees of $702,400 (EUR 500,000) payable in four equal installments, each
due at (i) the beginning of steel cutting, (ii) installation of the main
engines, (iii) launching of the vessel and (iv) delivery of the completed
vessel.  The German Subsidiary subcontracted the requirement to
provide these services and the right to receive these payments to Suresh Capital
Consulting & Finance Ltd., Maritime Funding Group LLC and Churada
Investments Limited which are affiliates of SCMH.  As of June 30, 2009
and December 31, 2008, we incurred $2,801,288 (EUR 1,968,750) and $1,750,988
(EUR 1,218,750), respectively, in syndication costs.  These costs are
translated using historical rates and they are included as an offset to
noncontrolling interest and partners’ equity on our consolidated balance
sheet.





7.      Fair
Value of Financial Instruments





Fair
value is defined under SFAS No. 157 as the exchange price that would be received
for an asset or paid to transfer a liability (an exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction
between market participants on the measurement date.  Valuation
techniques used to measure fair value under SFAS No. 157 must maximize the use
of the observable inputs and minimize the use of unobservable
inputs.  The standard established a fair value hierarchy based on
three levels of inputs, of which the first two are considered observable and the
last unobservable.





·
            Level
      1 - Quoted prices in active markets for identical assets or liabilities.
      These are typically obtained from real-time quotes for transactions in
      active exchange markets involving identical
  assets.


·
            Level
      2 - Quoted prices for similar assets and liabilities in active markets;
      quoted prices included for identical or similar assets and liabilities
      that are not active; and model-derived valuations in which all significant
      inputs and significant value drivers are observable in active markets.
      These are typically obtained from readily-available pricing sources for
      comparable instruments.


·
            Level
      3 - Unobservable inputs, where there is little or no market activity for
      the asset or liability.  These inputs reflect the reporting
      entity’s own assumptions about the assumptions that market participants
      would use in pricing the asset or liability, based on the best information
      available in the circumstances.





The
estimated fair value of cash and cash equivalents, accounts receivable, accounts
payable, related party receivables and payables approximate their carrying
amounts due to the relatively short period to maturity of these
instruments.  The estimated fair value of all debt as of June 30, 2009
and December 31, 2008 approximated the carrying value since the Berenberg
Facility loans are renewed every three months at the current interest rates at
renewal and the draws on the Senior Loan incur interest at a variable rate and
mature every one to three months.  The estimates presented are not
necessarily indicative of the amounts that would be realized in a current market
exchange.





The fair
value of the interest rate swaps and the forward currency exchange contracts
discussed in Note 5 are presented separately in long-term derivative liabilities
and both current and long-term derivative assets on our consolidated balance
sheet.  The fair value of the interest rate swap (used for
non-speculative purposes) is based on the relative fair values of the discounted
future stream of interest payments under the original floating interest facility
using rates derived based on a forward curve of the three-month EURIBOR, upon
which the terms of the Senior Loan are based, versus the future interest
payments due under the fixed rate obtained in the interest rate swap
agreements.  The fair values of the forward currency exchange
contracts are based on the relative exchange rates per the forward currency
exchange contracts versus the forward exchange rate curve as of June 30,
2009.  The fair value of the derivative instruments are determined
with reference to observable rates which are commonly quoted on a forward basis,
and are therefore classified as Level 2 items.


23


III
TO I MARITIME PARTNERS CAYMAN I, L.P. AND SUBSIDIARIES
  NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
  JUNE
30, 2009
  Unaudited


Our
assets and liabilities as of June 30, 2009 that are measured at fair value on a
recurring basis are summarized below (in dollars):





Level
      1
                
                
                Level
      2
                
                
                Level
      3AssetsForward
      currency exchange contracts
                
                $
                -
                
                
                $
                4,066,427
                
                
                $
                -LiabilitiesInterest
      rate swap agreement
                
                $
                -
                
                
                $
                3,754,136
                
                
                $
                -





8.      Legal
Proceedings





We may in
the future be involved as a party to various legal proceedings, which are
incidental to the ordinary course of business.  We regularly analyze
current information and, as necessary, provide accruals for probable liabilities
on the eventual disposition of these matters.  In the opinion of
management, as of June 30, 2009, there were no threatened or pending legal
matters that would have a material impact on our consolidated results of
operations, financial position or cash flows.





9.      Other
Comprehensive Income





The
components of other comprehensive income (loss) are as follows:





Three Months Ended June 30,
                          
                          
                          Six Months Ended June 30,2009
                          
                          
                          2008
                          
                          
                          2009
                          
                          
                          2008Unrealized
      gain (loss) on forward currency exchange contract hedge
                          
                          $
                          2,753,107
                          
                          
                          $
                          -
                          
                          
                          $
                          2,753,107
                          
                          
                          $
                          -Foreign
      currency translation adjustment
                          
                          
                          1,954,609
                          
                          
                          
                          (9,514
                          )
                          
                          
                          1,032,639
                          
                          
                          
                          1,134,076Other
      comprehensive income (loss)
                          
                          
                          4,707,716
                          
                          
                          
                          (9,514
                          )
                          
                          
                          3,785,746
                          
                          
                          
                          1,134,076Less
      other comprehensive (income) loss attributable to noncontrollinginterest
                          
                          
                          (1,429,474
                          )
                          
                          
                          367
                          
                          
                          
                          (375,577
                          )
                          
                          
                          (43,618
                          )Other
      comprehensive income (loss) attributable to III to I MaritimePartners Cayman I, L.P.
                          
                          $
                          3,278,242
                          
                          
                          $
                          (9,147
                          )
                          
                          $
                          3,410,169
                          
                          
                          $
                          1,090,458





Accumulated
other comprehensive income in the partners’ equity section of the consolidated
balance sheets includes:





June 30,
                  
                  
                  December 31,2009
                  
                  
                  2008Unrealized
      loss on forward currency exchange contract hedge
                  
                  $
                  2,064,830
                  
                  
                  $
                  -Foreign
      currency translation adjustment
                  
                  
                  1,468,505
                  
                  
                  
                  123,166Accumulated
      other comprehensive income
                  
                  $
                  3,533,335
                  
                  
                  $
                  123,166





10.           Subsequent
Events





We
analyze subsequent events in accordance with SFAS No. 165 to determine if events
after the balance sheet date provide additional evidence about conditions that
existed at the balance sheet date.  Events have been evaluated through
August 13, 2009 which is the date the financial statements are available to be
issued, and we determined that no additional disclosures are
required.


24


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





The
following Management’s Discussion and Analysis of Financial Condition and
Results of Operations presents our operating results for the three and six
months ended June 30, 2009 and 2008.  This report represents an update
to the more detailed and comprehensive disclosures included in our amended
Registration Statement on Form 10 for the periods ended March 31, 2009 and the
years ended December 31, 2008 and 2007.  Accordingly, the following
discussion should be read in conjunction with the information included in our
amended Form 10 filed with the Securities and Exchange Commission (“SEC”), and
with our unaudited consolidated financial statements and related notes as
presented in this Form 10-Q under Part I, Item 1. Financial
Statements.





The
discussion includes forward-looking statements.  As such, the
cautionary language applicable to such forward-looking statements described
above in Forward-Looking
Statements is incorporated by reference into this
section.  Forward-looking statements are management’s best estimates,
and actual results could differ substantially from those
estimates.  Among the factors that could cause actual results to
differ materially are those discussed in Item 1A. Risk Factors of our
registration statement on Form 10/A.





Our
functional currency is the U.S. dollar.  However, the functional
currency of many of our subsidiaries is the Euro.  All amounts are
stated in U.S. dollars (“USD”), and where the amount relates to a subsidiary,
the amount has been restated in Euros (“EUR”) following the USD
amount.  Amounts related to future payments which are payable in EUR
have been stated in USD and translated using the exchange rate as of June 30,
2009.  Amounts shown in narrative statements related to payments made
in the past have been translated using the exchange rate on the date the
transaction occurred.  When comparisons are made between balance sheet
dates, the appropriate exchange rate for the given balance sheet date is
used.  When comparisons are made related to income statement amounts,
the average exchange rate for the given period is used.





Overview





The
partnership is a Cayman Islands exempted limited partnership formed in October
2006 with III to I International Maritime Solutions Cayman, Inc. as our general
partner.  Through our subsidiaries, we own majority interests in nine
anchor-handling tug supply (“AHTS”) vessels, two of which are in operation, and
non-controlling interests in two multipurpose bulk carrier vessels
(“mini-bulkers”) currently in operation.  The first AHTS vessel was
delivered on February 27, 2009, the second on May 28, 2009, with the the seven
AHTS vessels still under construction scheduled for delivery from September 2009
through April 2010.  Our two delivered AHTS vessels were immediately
placed in service, and began operating under their respective charter agreements
on March 15, 2009 and June 24, 2009, respectively.  Each AHTS SPV has
entered into a ship management agreement with Hartmann Offshore for the
management of its respective vessel.  Each of our mini-bulkers is
managed by Reederei Hesse.  Reederei Hesse and their affiliates and
affiliates of the Hartmann Group collectively own the remaining ownership of
each of the mini-bulkers.  In addition to our AHTS vessels and
mini-bulker acquisitions, we have advanced funds for the potential purchase of a
chemical tanker to be held in a separate special purpose entity (“SPV”) which
will be owned by Kronos Shipping I, Ltd. (“Kronos”).  If the
acquisition of the chemical tanker is completed, we intend to join the Hanseatic
Tankers Pool and retain Bernhard Schulte Shipmanagement (“Schulte Group”) to
manage the operations of our chemical tanker as part of a fleet of like-kind
vessels.





With the
first two AHTS vessels delivered and operating under their charters, our
operations have begun to shift focus from development stage to vessel
operations, and we are therefore no longer a development stage company as
defined by Statement of Financial Accounting Standards (“SFAS”) No. 7, Accounting and Reporting by
Development Stage Enterprises.





The
mini-bulkers are merchant ships specially designed to transport bulk cargo and
typically operate under short-term leases in established liner services between
the Baltic area and Northern Spain, Portugal, the Mediterranean Sea, Greece,
Turkey and Israel where the operator has established long-term
partners.





The AHTS
vessel industry supports the exploration, development and production stages of
offshore oil and gas drilling.  Our AHTS vessels are specialized
vessels built to tow deepwater drilling rigs into position and deploy and
recover the mooring systems for the rig.  The vessels may also be used
for rig and platform supply, transportation of bulk and deck cargo and in
emergency situations such as fire-fighting, evacuation of personnel or oil
recovery operations.  The market for our AHTS vessels, which we
anticipate will represent the majority of our operations, is dependent upon the
numerous factors which drive demand for offshore oil and gas exploration and
development.  This demand is ultimately tied to oil and gas prices
that are determined by the supply and demand relationship for oil.





25




Our AHTS
vessels could support offshore deep sea oil and gas drilling in any of the
following locations:  the North Sea, Gulf of Mexico, Mediterranean
Sea, Brazil, West Africa, Southeast Asia and Australia.  They will
generally be available to work worldwide, with the exception of the United
States due to Jones Act restrictions.  Once in operation, we believe
our AHTS vessels will earn revenue through time charter leasing arrangements
with oil companies under either short-term “spot market” charters, which are
measured in days or weeks, or long-term charters, which typically range from one
to three years.





In March
2009, we entered into an agreement (“AHTS Pool Agreement”) with United Offshore
Support GmbH & Co. KG (“UOS”), an affiliate of Hartmann Offshore and a
member of the Hartmann Group, to participate in a revenue pool comprised of our
nine AHTS SPVs and three AHTS SPVs owned by our affiliate, FLTC Fund I (the
“Pool Members”, together the “UOS AHTS Pool”).  The agreement names
UOS as the “Pool Manager”, with responsibility for the management and accounting
of the pool and also for monitoring Pool Members’ compliance with the AHTS Pool
Agreement.  Under the AHTS Pool Agreement, each of our AHTS SPVs has
agreed to pool its revenue less voyage expenses (“Voyage Results”) with the
other Pool Members to achieve an even distribution of the risks resulting from
the fluctuation in the offshore chartering business.  The AHTS Pool
Agreement will have no effect on our consolidated revenues until such time as
one of the FLTC Fund I vessels is placed in service, which is expected to occur
in May 2010.  Under these arrangements, our AHTS SPVs will typically
be responsible for their individual vessel operating expenses such as crew
costs, class costs, insurance on the vessel and routine
maintenance.  Class costs represent the cost of maintaining our
vessels to the level which permits them to obtain annual quality certificates
applicable to the AHTS vessel class, mandatory inspections every two and one
half years and dry docking, which is mandatory every five years.  Crew
costs represent the cost of employing the crews, including wages, which operate
the vessel.




Our first
AHTS vessel, UOS Atlantis, was delivered in February 2009.  The vessel
was placed in operation through a one-year charter with EDT Offshore Egypt
S.A.E. to become part of BP Egypt’s Mediterranean vessel fleet and support BP’s
offshore drilling activities.  This charter can be extended at the
option of BP Egypt for two one-year options after the initial one year
period. Our
second AHTS vessel, UOS Challenger, was delivered in May 2009.  It
began operating in June 2009 under a charter agreement with Transportacion
Maritima Mexicana, S.A de C.V. for approximately seven months with an option for
an additional 18 months.




Our first
AHTS vessel was placed in service upon delivery on February 27, 2009, and began
operating under its charter on March 15, 2009.  Our net daily earnings
for our first AHTS vessel, which is a measure of the SPVs charter income less
the vessel operating expenses, which do not include interest expense on
acquisition debt, averaged $16,430 and $12,771 for the three and six months
ended June 30, 2009, based on the date the vessel was placed in service through
June 30, 2009.  Included in vessel revenue is a mobilization fee of
$100,000, which is a one-time fee due under the charter contract for the initial
mobilization of the vessel to its charter destination, as well as approximately
$60,000 related to the fuel on board the vessel at the time of
delivery.  Included in the vessel operating expenses are management
fees paid to Hartmann Offshore totaling $141,124 and $172,520 for the three and
six months ended June 30, 2009.  Also included is an accrual of repair
expenses for one of the AHTS vessel’s auxiliary engines.
 
 Our
second AHTS vessel was placed in service upon delivery on May 28, 2009, and
began operating under its charter on June 24, 2009.  Our net daily
earnings for our second AHTS vessel averaged ($50,252) for the three and six
months ended June 30, 2009, based on the date the AHTS vessel was placed in
service through June 30, 2009.  Included in vessel revenue is a
mobilization fee of approximately $650,000, which is a one-time fee due under
the charter contract for the initial mobilization of the vessel to its charter
destination.  Included in the vessel operating expenses are management
fees paid to Hartmann Offshore totaling $34,542 for both the three and six
months ended June 30, 2009.  Also included are one-time charges
related to an accrual of repair expenses as a result of damage to the AHTS
vessel’s main winch sustained during regular operations, and compensation due to
the charterer related to late delivery of the AHTS vessel to its
charterer.





Currently,
no additional charters have been arranged.  The remaining AHTS vessels
are currently scheduled for delivery from September 2009 through April 2010,
although delays in delivery of one or two months are common.


26


Results
of Operations





Three Months Ended June 30,
                                          
                                          
                                          Six Months Ended June 30,2009
                                          
                                          
                                          2008
                                          
                                          
                                          2009
                                          
                                          
                                          2008Time
      charter revenue
                                          
                                          $
                                          4,391,713
                                          
                                          
                                          $
                                          -
                                          
                                          
                                          $
                                          5,218,890
                                          
                                          
                                          $
                                          -Operating
      expenses:Vessel
      operating expenses
                                          
                                          
                                          4,504,396
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          5,289,641
                                          
                                          
                                          
                                          -Professional
      fees
                                          
                                          
                                          754,128
                                          
                                          
                                          
                                          218,884
                                          
                                          
                                          
                                          1,940,112
                                          
                                          
                                          
                                          349,617Brokerage
      and representation fees
                                          
                                          
                                          164,062
                                          
                                          
                                          
                                          164,062
                                          
                                          
                                          
                                          328,125
                                          
                                          
                                          
                                          328,125Other
      operating expenses
                                          
                                          
                                          216,870
                                          
                                          
                                          
                                          56,024
                                          
                                          
                                          
                                          233,083
                                          
                                          
                                          
                                          193,007Total
      operating expenses
                                          
                                          
                                          5,639,456
                                          
                                          
                                          
                                          438,970
                                          
                                          
                                          
                                          7,790,961
                                          
                                          
                                          
                                          870,749Operating
      loss
                                          
                                          
                                          (1,247,743
                                          )
                                          
                                          
                                          (438,970
                                          )
                                          
                                          
                                          (2,572,071
                                          )
                                          
                                          
                                          (870,749
                                          )Other
      income (expense):Interest
      income
                                          
                                          
                                          195,497
                                          
                                          
                                          
                                          613,243
                                          
                                          
                                          
                                          865,332
                                          
                                          
                                          
                                          1,223,799Interest
      expense
                                          
                                          
                                          (4,256,964
                                          )
                                          
                                          
                                          (220
                                          )
                                          
                                          
                                          (5,408,650
                                          )
                                          
                                          
                                          (10,315
                                          )Foreign
      currency transaction gain (loss)
                                          
                                          
                                          3,230,705
                                          
                                          
                                          
                                          46,735
                                          
                                          
                                          
                                          (226,828
                                          )
                                          
                                          
                                          3,239,950Equity
      in loss of unconsolidated entities
                                          
                                          
                                          (186,270
                                          )
                                          
                                          
                                          (544,407
                                          )
                                          
                                          
                                          (309,029
                                          )
                                          
                                          
                                          (1,135,343
                                          )Total
      other income (expense)
                                          
                                          
                                          (1,017,032
                                          )
                                          
                                          
                                          115,351
                                          
                                          
                                          
                                          (5,079,175
                                          )
                                          
                                          
                                          3,318,091Net
      income (loss)
                                          
                                          
                                          (2,264,775
                                          )
                                          
                                          
                                          (323,619
                                          )
                                          
                                          
                                          (7,651,246
                                          )
                                          
                                          
                                          2,447,342Net
      loss attributable to thenoncontrolling
    interest
                                          
                                          
                                          839,960
                                          
                                          
                                          
                                          12,557
                                          
                                          
                                          
                                          987,185
                                          
                                          
                                          
                                          50,875Net
      income (loss) attributable to III to I Maritime Partners
      Cayman I, L.P.
                                          
                                          
                                          (1,424,815
                                          )
                                          
                                          
                                          (311,062
                                          )
                                          
                                          
                                          (6,664,061
                                          )
                                          
                                          
                                          2,498,217Less
      general partner interest in net income (loss)
                                          
                                          
                                          (20,561
                                          )
                                          
                                          
                                          (5,731
                                          )
                                          
                                          
                                          (97,820
                                          )
                                          
                                          
                                          47,303Limited
      partner interest in net income (loss)
                                          
                                          $
                                          (1,404,254
                                          )
                                          
                                          $
                                          (305,331
                                          )
                                          
                                          $
                                          (6,566,241
                                          )
                                          
                                          $
                                          2,450,914Net
      income (loss) per general partner unit:Basic
      and diluted
                                          
                                          $
                                          (2.08
                                          )
                                          
                                          $
                                          (0.58
                                          )
                                          
                                          $
                                          (9.88
                                          )
                                          
                                          $
                                          4.78Weighted
      average general partner units outstanding
                                          
                                          
                                          9,900
                                          
                                          
                                          
                                          9,900
                                          
                                          
                                          
                                          9,900
                                          
                                          
                                          
                                          9,900Net
      income (loss) per limited partner unit:Basic
      and diluted
                                          
                                          $
                                          (2.08
                                          )
                                          
                                          $
                                          (0.58
                                          )
                                          
                                          $
                                          (9.88
                                          )
                                          
                                          $
                                          4.78Weighted
      average limited partner units outstanding
                                          
                                          
                                          676,156
                                          
                                          
                                          
                                          527,430
                                          
                                          
                                          
                                          664,556
                                          
                                          
                                          
                                          512,937





Three
Months Ended June 30, 2009 Compared to the Three Months Ended June 30, 2008 and
the Six Months Ended June 30, 2009 Compared to the Six Months Ended June 30,
2008





Revenues


Revenues
consist of charter revenue earned by our delivered AHTS vessels and may include
revenue from the chemical tanker if we complete its purchase.





Revenues
increased approximately $4,392,000 and $5,219,000 for the three and six months
ended June 30, 2009 compared to the three and six months ended June 30, 2008,
respectively, when we had no revenue.  This increase represents
revenue earned on our first two AHTS vessels, which began operation under their
respective charters in March and June 2009.




27




Vessel Operating
Expenses


Vessel
operating expenses consist of expenses related to the operation of our vessels,
and include depreciation but do not include interest expense related to the
Senior Loan.





The
vessel operating expenses of approximately $4,504,000 and $5,290,000 for the
three and six months ended June 30, 2009, respectively, represents operating
costs for our first two AHTS vessels placed in service on February 27, 2009 and
May 28, 2009.  We did not have any vessel operating expenses prior to
the first AHTS vessel being placed in operation.  Vessel operating
expenses for the three months ended June 30, 2009 included accruals of one-time
charges related to a repair of the main winch of the UOS Challenger estimated at
approximately $582,000 due to damage sustained during operations, and repair of
one of the auxiliary engines of UOS Atlantis estimated at approximately
$129,000.   The auxiliary engine repairs or some portion thereof
may be reimbursed by Fincantieri Shipyards (“Fincantieri”) in a future period
related to the shipbuilders’ guarantee, but because such reimbursement is highly
uncertain and the amount is not likely to be material, an estimate of the
reimbursement has not been accrued.  Also included is accrued
compensation due to the charterer of UOS Challenger due to the late delivery of
the vessel into its charter contract totaling $460,000.





Vessel
operating expenses for the third quarter will include repair costs related to an
incident with UOS Atlantis where its propeller was damaged.  Current
estimates of repair costs and penalties due to the charterer related to this
incident are approximately $1,000,000, net of expected insurance
proceeds.





Professional
Fees


Professional
fees consist of legal, accounting, audit, tax, management and consulting
fees.





The
increase in professional fees of approximately $535,000, or 245%, from
approximately $219,000 for the three months ended June 30, 2008 compared to
approximately $754,000 for the three months ended June 30, 2009, was due to an
increase in legal fees and audit and tax consulting fees during 2009 related to
our Consent Solicitation, amendment of our limited partnership agreement,
restructuring of our Cyprus subsidiary, preparation for the filing of our
initial registration statement and other matters, including the formation of our
wholly owned subsidiary, Kronos.  The remaining difference is due to
an increase in the fees charged related to our administrative and professional
services agreement with Dental Community Management, Inc.
(“DCMI”).  DCMI maintains our books and records and handles all our
business activities.  Their monthly fee was $25,000 through April
2008, $60,000 per month from May to December 2008 and $100,000 per month
thereafter.





The
increase in professional fees of approximately $1,590,000, or 455%, from
approximately $350,000 for the six months ended June 30, 2008 compared to
approximately $1,940,000 for the six months ended June 30, 2009, was due to
increased legal, audit and tax service fees related to the matters mentioned
above which accounted for approximately $1,210,000 of the increase; and finally
to our entrance into an administrative and professional services agreement with
DCMI as described above.





We expect
that our professional fees will remain fairly consistent with those during the
three months ended June 30, 2009 due to increased legal, accounting and
professional service fees related to the increased regulatory environment that
we are subject to as an SEC registrant and increased legal fees related to
negotiation of charters as vessels are placed into service.





Brokerage and Representation
Fees


Brokerage
and representation fees consist of fees paid to providers of our ship brokerage,
representation and consulting services.  The last payment under this
agreement will be made during the fourth quarter of 2009.  We do not
expect to pay brokerage and representation fees beyond this date.





Our
brokerage and professional fees for the three and six months ended June 30, 2008
as compared to that for the three and six months ended June 30, 2009 remained
constant, due to the continuing arrangement with the providers of our ship
brokerage, representation and consulting services.





Other Operating
Expenses


Other
operating expenses consist of office and administrative expenses, travel
expenses and bank fees that are not directly related to financing
arrangements.





28




The
increase in other operating expenses of approximately $161,000, or 287%, from
approximately $56,000 for the three months ended June 30, 2008 to approximately
$217,000 for the three months ended June 30, 2009, was due to an increase in
office expenses of approximately $70,000, and an increase in other miscellaneous
costs, including commissions related to the chartering of our vessels, of
approximately $91,000.





The
increase in other operating expenses of approximately $40,000, or 21%, from
approximately $193,000 for the six months ended June 30, 2008 to approximately
$233,000 for the six months ended June 30, 2009, was due to an increase in
office expenses of approximately $79,000, and an increase in bank fees and
miscellaneous costs of approximately $42,000.  These increases were
partially offset by a decrease in travel and other administrative costs of
approximately $81,000.





Given the
increased business activity and the travel related to the construction stage of
the remaining AHTS vessels, we expect these costs to increase as compared to
that for the three months ended June 30, 2009.





Interest
Income


Interest
income is earned on balances in various operating and money market accounts in
which our funds are held.  As funds are raised, they are deposited in
operating accounts in the United States and in interest bearing accounts in
foreign countries.  Amounts necessary for operations and payment of
upcoming AHTS vessel construction installments are held in these
accounts.  In the past, as construction payments came due, funds held
were moved to the restricted cash accounts and pledged as collateral for the
loans that funded the AHTS vessel construction payments to
Fincantieri.  As the balance of these pledged funds grew, so too did
the interest earned on the funds.  During the six months ended June
30, 2009, funds held in these pledged accounts were utilized to repay the loans
under the credit facility (“Berenberg Facility”) with Berenberg Bank related to
the AHTS vessel construction payments, and our interest income
decreased.  Interest was also earned on short-term loans to a related
party.





Interest
income decreased approximately $418,000, or 68%, from approximately $613,000 for
the three months ended June 30, 2008 to approximately $196,000 for the three
months ended June 30, 2009.  Interest income also decreased
approximately $358,000, or 29%, from approximately $1,224,000 for the six months
ended June 30, 2008 to approximately $865,000 for the six months ended June 30,
2009.  These decreases were due to a decrease in funds held in
interest bearing pledged accounts due to repayment of the related loans with the
pledged funds, and a decrease in interest income from our related party notes
receivable, which were partially repaid during the second quarter of
2009.





We expect
interest income to decrease in future periods due to the use of the restricted
cash balances, which was our primary source of interest income, to repay the
Berenberg Facility.





Interest
Expense


Interest
expense was incurred on the senior loan facility (“Senior Loan”) with
Norddeutsche Landesbank Girozentrale (“Nord/LB”) which was entered into on
December 19, 2008, and two related party loans which were entered into during
the fourth quarter of 2008.  Interest expense is also recognized
related to our entering into interest rate swap agreements related to the Senior
Loan on our AHTS vessels.  The underlying Senior Loan agreements are
at variable rates, while the swap agreements serve to fix the interest rates
through 2019.





The
increase in interest expense of approximately $4,257,000, from approximately
$220 for the three months ended June 30, 2008 to approximately $4,257,000 for
the three months ended June 30, 2009, was primarily due to recognition of
interest expense due to the execution in April 2009 of the interest rate swap
agreements related to the Nord/LB senior loan facility for eight of our nine
AHTS vessels.  These instruments have not been designated for hedge
accounting, and therefore the entire change in the fair value of the positions
from period to period of approximately $3,040,000 is recorded as interest
expense.  Of the nine AHTS vessels for which we have swap agreements,
eight were entered into during the three months ended June 30, 2009, resulting
in the initial recording of the fair value of these positions.  The
agreements are effective from 2010 through 2019, and are currently recorded as a
derivative liability totaling approximately $3,754,000, due to the relatively
low variable rates being experienced as compared with the fixed rates under the
swap agreements, which reflect our belief that interest rates will rise in the
long term.





29




Approximately
$822,000 of the increase is due to interest expense related to the amounts drawn
on the Senior Loan with Nord/LB for the first two AHTS vessels, which were
delivered in March and May 2009, as well as agency and commitment fees related
to the Senior Loan.  The remaining increase is due to guarantee fees
due under the guarantee provided by Reederei  Hartmann related to the
Senior Loan and amortization expense on the deferred loan costs.





The
increase in interest expense of approximately $5,398,000, from approximately
$10,000 for the six months ended June 30, 2008 to approximately $5,409,000 for
the six months ended June 30, 2009, was again primarily due to the execution of
the interest rate swap agreements discussed above, which resulted in our
recognizing interest expense totaling $3,568,000 for the six months ended June
30, 2009.  Approximately $1,196,000 of interest expense was incurred
on amounts drawn on the Senior Loan for the first two AHTS vessels, as well as
agency and commitment fees related to the Senior Loan.  The related
guarantee provided by Reederei Hartmann accounts for $363,000 of the
increase.  The remaining increase is due to amortization expense of
the deferred loan costs.





Foreign Currency Transaction
Gain (Loss)


Foreign
currency transaction gain (loss) is the amount of gain or loss realized when the
cash balances held in EUR by our parent company, III to I Maritime Partners
Cayman I, LP, are converted to our functional currency, USD, on each balance
sheet date.





The
change in our foreign currency transaction gain (loss) from the three and six
months ended June 30, 2008 to the three and six months ended June 30, 2009, was
caused by a continuation of a period of relatively high volatility in exchange
rates.  The primary factor with respect to changes in the foreign
currency transaction gain (loss) was due to the revaluing of our EUR denominated
bank accounts and restricted cash balances held in foreign countries to USD
using the current prevailing exchange rate at the end of each
month.





In
addition to the relative volatility in exchange rates, we entered into currency
forward exchange contracts related to our anticipated USD revenue, under which
we locked in the future rates at which amounts representing portions of our
anticipated U.S. dollar revenue will be converted to EUR.  The
recording of the valuation of these agreements resulted in the recognition of a
net foreign currency transaction gain for the three and six months ended June
30, 2009 totaling $984,000 and $1,444,000, respectively.





Equity in Income (Loss) of
Unconsolidated Entities





Equity in
loss of unconsolidated entities represents our share of the income or loss
reported for the operations of the bulk carrier vessels in which we own a
minority interest.





The
decrease of approximately $358,000 and $826,000 in the loss recognized from the
three and six months ended June 30, 2008 compared to the three and six months
ended June 30, 2009, respectively, is due to the fact that the bulk carrier
vessels experienced fewer losses as relationships were established with the
charterers utilizing the liner services between the Baltic and Mediterranean
Seas.





Noncontrolling
interest


Noncontrolling
interest represents the amount of income or loss allocable to other parties
where their share has been included in our consolidated results of
operations.





The
comparative effect on our allocation of income or loss to the noncontrolling
interest holders between the three and six months ended June 30, 2008 and the
three and six months ended June 30, 2009, was primarily due to the difference in
income for the periods presented.





Liquidity
and Capital Resources





As of
June 30, 2009, we had cash and cash equivalents of $11,230,817 along with
restricted cash of $5,620,903.  Restricted cash represents the
compensating balances required by Berenberg Bank in relation to our outstanding
loans.  Upon the delivery of our first two AHTS vessels, the portion
of the restricted cash balances related to the outstanding loan amount on the
delivered AHTS vessel was used to repay the majority of the associated
loan.  In addition, during the second quarter of 2009, we have repaid
the majority of the remaining loans under the Berenberg Facility with the
restricted cash balances, which has reduced the restricted cash balances to the
level shown above.





30




Since
inception through June 30, 2009, we have raised approximately $66,243,688, net
of syndication costs of approximately $2,877,332, through the private placement
of our limited partner units.  As discussed above, the funds from the
offering were utilized primarily to collateralize loans, the proceeds of which
were used to pay the first two of five installments to Fincantieri for the
construction of our AHTS vessels and to pay for related expenditures as shown in
our consolidated financial statements.  The payments to Fincantieri
were made via draws on our Berenberg Facility attributable to each AHTS SPV
which then paid Fincantieri.  The pledged funds have now been utilized
to repay the loans under the Berenberg Facility.





Upon the
deliveries of UOS Atlantis and UOS Challenger, funds were drawn on the Senior
Loan, which were used to repay the outstanding balances on the loan from
Reederei Hartmann and pay the fifth and final installments on each vessel to
Fincantieri.  The remaining funds were utilized to pay for outfitting
costs for the AHTS vessels and to provide operating reserves for the AHTS
SPVs.





Operating Cash
Flows


Operating
activities produced a net use of cash of approximately $4,241,000 for the six
months ended June 30, 2009, as compared to approximately $10,000 for the six
months ended June 30, 2008, for an increase in net cash used of approximately
$4,231,000.  Net cash used increased between periods due to increased
expenses, the payment of accrued interest related to the repayment of our loan
with Berenberg Bank for the first delivered AHTS vessel in February 2009 and the
second in May 2009, and an increase in prepaid assets, which is mainly due to
supplies purchased for future vessel deliveries.  Approximately
$2,243,000 of the net use of cash related to the charter revenue receivable as
of June 30, 2009.  These increases were partially offset by increases
in accounts payable due to added expenses from UOS Atlantis and UOS Challenger
being in operation, as well as additional costs associated with our
reorganization and registration with the SEC, and decreases in other
receivables.





Investing Cash
Flows




Investing
activities used approximately $32,287,000 for the six months ended June 30,
2009, as compared to $9,423,000 for the six months ended June 30,
2008.  This was due primarily to the use of approximately $77,886,000
for advances for vessel acquisitions and construction costs, the majority of
which was related to the deliveries of UOS Atlantis and UOS Challenger in late
February and May 2009, respectively.  Additionally, on board equipment
totaling approximately $4,652,000 was purchased during the six months ended June
30, 2009.  During the six months ended June 30, 2008, proceeds of
approximately $3,297,000 were provided by the sale of an AHTS vessel to FLTC
Fund I.  There were no corresponding dispositions during the three
months ended June 30, 2009.  These factors were partially offset by a
decrease in amounts due from related parties between the two periods, and an
increase in cash provided by investing activities of approximately $50,346,000
from the recording of the release by Berenberg Bank of pledged cash for loans
related to eight of the nine AHTS vessels, resulting in the recognition of cash
provided by investing activities.




Financing Cash
Flows


Net cash
provided by financing activities was approximately $45,713,000 for the six
months ended June 30, 2009 as compared by approximately $8,680,000 for the six
months ended June 30, 2008.  The difference is primarily related to
the deliveries of UOS Atlantis and UOS Challenger and the related proceeds drawn
on the Senior Loan of $98,469,000, which was partially offset by the repayments
on the Berenberg Facility related to either of our nine AHTS vessels of
$48,100,000 and repayment of related party loans which funded the fourth
installments to the shipyard for UOS Atlantis and UOS Challenger totaling
$10,939,000.  In addition, principal repayments to Nord/LB utilized
cash of approximately $1,026,000 and payment of syndication costs utilized cash
of approximately $1,050,000.  Contributions from partners were
approximately $4,680,000 for the six months ended June 30, 2009, as compared
with approximately $7,115,000 for the six months ended June 30,
2008.  Contributions from noncontrolling interests in the AHTS SPVs
were approximately $1,673,000 for the six months ended June 30, 2009 as compared
with approximately $992,000 for the six months ended June 30, 2008.





31




Financing
Arrangements


Berenberg
Facility


In
November 2006, we entered into the Berenberg Facility with Berenberg Bank, a
German financial institution, allowing for borrowings up to $37,086,720 (EUR
26,400,000).  The Berenberg Facility was amended in March and May
2007, increasing the available borrowings to $70,661,440 (EUR 50,300,000) and
extending the maturity date to September 2010.  The remaining terms of
the Berenberg Facility were not materially changed.





Under the
Berenberg Facility, we are required to maintain compensating balances as
security for the repayment of the borrowings under such facility.  The
compensating balances must be equal to or greater than the amounts drawn by our
German Subsidiary and used to pay deposits on the acquisition and construction
of our AHTS vessels.  The Berenberg Facility is funded in multiple
tranches with each tranche being directly related to a single AHTS
vessel.





Interest
under the Berenberg Facility is calculated based on the one-month EURIBOR rate
plus a margin of 0.35%.  The weighted-average effective interest rate
as of June 30, 2009 and December 31, 2008 was 1.15% and 3.97%,
respectively.  Interest is due quarterly but is rolled into the
principal amount instead of being paid.  Principal payments are due on
each tranche upon the earlier of the delivery date, sale of the related vessel
or September 30, 2010.





The
compensating balances represent the original tranche balance plus interest
earned since the original deposit date.  The tranche balance
represents the original loan plus all incurred interest which is rolled into the
new loans upon maturity which is usually three months.  As the
interest rate earned on the compensating balances is less than the interest
charged on the tranche balance, the compensating balances do not fully offset
the outstanding tranche balances.





Upon the
deliveries of UOS Atlantis and UOS Challenger, the restricted cash related to
the compensating balance was used to repay the majority of the outstanding loans
related to the AHTS vessel with operating cash used to complete the
repayment.  Additionally, in July 2009, we completed repayment of the
remaining tranches and accrued interest under the Berenberg Facility utilizing
the restricted cash balances combined with approximately $500,000 of cash on
hand and contributions from new limited partners.  The repayments
result in the reduction and then the complete elimination of our restricted cash
over the course of the repayments, and a reduction in our current and long-term
debt.  As of June 30, 2009 and December 31, 2008, borrowings of
$5,663,679 (EUR 4,031,662) and $56,255,375 (EUR 39,905,920), respectively, were
outstanding and the related compensating balance was $5,620,940 (EUR 4,001,213)
and $55,967,374 (EUR 39,701,620), respectively.





Nord/LB
Facility


On
December 19, 2008, we entered into a $590,816,736 (EUR 420,570,000) Senior Loan
with Nord/LB as administrative agent and lender, with a term of 12 years from
the delivery of each ship.  The proceeds from the loan will be used to
fund preconstruction costs (“Pre-Delivery Facility”), outstanding balances due
to the shipyard at delivery and working capital requirements of each AHTS
SPV.  A post-delivery credit facility (“Revolving Credit Facility”) in
the amount of $118,163,347 (EUR 84,114,000) can also be used to extend the
Senior Loan from 12 to 15 years.  However, in no case can the total
loans be in excess of 75% of the aggregate investment costs of all vessels,
which is defined to include the construction price, building supervision,
financing, initial equipment and other costs, of all the ships covered by the
Senior Loan.





The
Senior Loan is a fleet financing arrangement which covers all our AHTS vessels
plus three AHTS vessels held by FLTC Fund I.  The 12 AHTS vessels
serve as the collateral for the Senior Loan.  In connection with the
Senior Loan, a commitment fee of 0.20% to 0.45% is due semi-annually in arrears
as determined by our bank internal rating class based on the unused Senior Loan
balance and the elapsed days within the year.  An agency fee of
$14,048 (EUR 10,000) per ship is due each year payable at the end of each
quarter until the delivery of the applicable ship.  After the delivery
of the applicable AHTS vessel, the agency fee, payable quarterly, will be $7,024
(EUR 5,000) per year per vessel until the Senior Loan is paid in
full.





Repayment
of the Pre-Delivery Facility of the Senior Loan is guaranteed by Reederei
Hartmann (the “Corporate Guarantee”) who is our noncontrolling interest holder
and the 25% owner of the three AHTS SPVs of FLTC Fund I.  In the event
the Corporate Guarantee is drawn upon, the German Subsidiary may increase its
equity interest in (i) the AHTS SPVs pursuant to the Share Transfer Agreement
SCMP (“Share Transfer Agreement”) and (ii) the mini-bulker SPVs pursuant to the
applicable “Sale and Assignment of a Limited Share” agreement, in each case, by
and between the German Subsidiary and Reederei Hartmann.  There is
also a financial guarantee for up to 70% of the loan balance issued by SACE
S.P.A. of Roma, Italy, which is the Italian export credit and reinsurance
agency.





32




Interest
on the borrowings is based upon the EURIBOR, the Euro Interbank Offered
Rate.  For the portion of the Senior Loan not guaranteed by SACE
S.P.A., the applicable interest rate is EURIBOR plus 1.375% per annum plus a
fixed funds cost to be determined prior to each drawdown.  For the
portion of the Senior Loan that is guaranteed by SACE S.P.A, the applicable
interest rate is EURIBOR plus 1.375% per annum.  With respect to the
Revolving Credit Facility, the applicable interest rate is (i) EURIBOR plus
1.600% per annum or (ii) the lenders’ funding costs, as conclusively to be
agreed and determined by the lenders, plus 1.600% per annum.  Upon the
fifth anniversary of the Senior Loan, each interest rate will be subject to
renegotiation.  Interest incurred before the delivery of each AHTS
vessel will be rolled into the loan balance of the corresponding tranche of the
Senior Loan until ship delivery up to a maximum of $1,404,800 (EUR
1,000,000).  If interest incurred exceeds $1,404,800 (EUR 1,000,000),
the excess interest will be due at each interest payment date which can be every
three to six months.





We
accepted a drawdown on the Senior Loan on February 25, 2009 related to the
delivery of UOS Atlantis totaling $44,689,067 (EUR 35,047,500).  On
May 28, 2009, UOS Challenger was delivered to our AHTS SPV MS
Norderney.  In connection with the delivery, we accepted a drawdown on
the Senior Loan on May 25, 2009 totaling $49,080,519 (EUR
35,047,500).  The proceeds from the drawdowns were used to pay the
fifth and final installments to Fincantieri totaling $33,394,067 (EUR
26,201,700) and $36,432,946 (EUR 26,016,100), respectively, and to repay the
advances from Reederei Hartmann totaling $4,698,317 (EUR 3,686,400) and
$5,150,531 (EUR 3,677,900), respectively, plus accrued interest
thereon.  The remaining cash from each of the above drawdowns was used
to fund operations and provide cash reserves to the respective SPV for future
operations.  Additionally, the Senior Loan conditions require that
amounts sufficient to cover operating costs and all amounts due and payable
under the Senior Loan for a one year period be secured by each AHTS SPV before
any dividends can be considered.





At June
30, 2009, a total of $97,443,733 (EUR 69,364,844) was outstanding under the
Senior Loan with an effective interest rate of 3.293%.  The
outstanding balance will be due in full in February 2021.  During the
six months ended June 30, 2009, we incurred interest expense of $706,910 (EUR
529,441) related to the drawdown on the Senior Loan.





A
guarantee commission of 1.375% per annum is due to Nord/LB on the loans provided
during the pre-delivery stage of each ship up to a loan balance of $337,152,000
(EUR 240,000,000).  The guarantee commission is due and payable each
quarter that construction payments are outstanding up to and including the date
the construction payments are made.





We are
subject to various covenants associated with the Senior Loan, such as the
payment of dividends, amount of capital infusions from outside investors into
the AHTS SPVs, limits on additional financing, restrictions of cargo and
weapons, structure and duration of charters related to the ships and the
establishment of cash accounts with Nord/LB for the cash generated from
operations of each AHTS vessel until the Senior Loan is paid in
full.





Chemical
Tanker Transaction/Schulte Group Facility/Kronos


On
November 13, 2007, III to I IMS Holdings, LLC (“IMS Holdings”), the sole
shareholder of our general partner, entered into a Memorandum of Agreement
(“MOA”) with the Schulte Group relating to the acquisition of the chemical
tanker.  Pursuant to the MOA, IMS Holdings placed an order for the
chemical tanker through the Schulte Group for the purchase price of $41,500,000
to be paid in five equal installments.  The Schulte Group agreed to
loan IMS Holdings up to $8,300,000 for the first installment payment and to
facilitate a bank guarantee for the second installment payment of
$8,300,000.  The Schulte Group has formed Anthos Shipping Co. Limited
(“Anthos”), a Cyprus SPV, to own the chemical tanker.  The equity of
Anthos will be assigned to Kronos upon repayment of the loan, retirement of the
bank guarantee facilitated by the Schulte Group and payment of all fees due to
the Schulte Group.  Kronos was not formed at the time the MOA was
signed; therefore, the chemical tanker transaction was undertaken through an
affiliate of IMS Holdings on behalf of Kronos.  As of June 30, 2009
and December 31, 2008, $8,300,000 had been paid toward the option to purchase
the chemical tanker.


33




The
Schulte Group provided funds for the first installment on the chemical tanker of
$8,300,000 through a loan, and IMS Holdings repaid $3,000,000 through its
affiliate to the Schulte Group by January 15, 2008, in compliance with the terms
of the MOA.  As of December 31, 2008, we had advanced $4,278,164,
including accrued interest, to IMS Holdings to allow IMS Holdings to provide
funds to its affiliate to make the required payments to the Schulte Group under
the MOA and other expenses related to the option to purchase the chemical
tanker.  An addendum to the MOA was executed in July 2008 to extend
the loan through November 30, 2008, extend the time period allowed for IMS
Holdings to secure financing and increase the amount of possible liquidated
damages.  As of December 31, 2008, no agreement had been reached on a
further extension of the terms of the MOA, and IMS Holdings was technically in
default on their loan and required to pay liquidating damages.





Effective
April 2009, we entered into an agreement whereby all of the rights retained by
IMS Holdings’ affiliate, IMS Capital Partners, LLC (“IMS Capital Partners”) and
IMS Holdings with respect to the chemical tanker pursuant to the MOA between IMS
Holdings and Schulte Group were transferred to Kronos, the new obligor under an
amended version of the MOA (“Amended MOA”) between Kronos and Conway Shipping I,
Ltd. (“Conway”), an affiliate of the Schulte Group.  As consideration
for and to give effect to this transfer, we assigned the receivables from IMS
Holdings through which the transaction was undertaken to IMS Capital Partners in
exchange for the consent of IMS Capital Partners to the execution of the Amended
MOA.  This amount was credited by Kronos as additional paid in
capital, and Kronos accepted the rights to the chemical tanker pursuant to the
Amended MOA.  The outcome left Kronos as the sole holder of all rights
and obligations with respect to the potential acquisition of the chemical tanker
and resulted in IMS Capital Partners and IMS Holdings each holding directly
offsetting note obligations.  By entering into a Note Cancellation
Agreement, the note obligations between IMS Holdings and IMS Capital Partners
were terminated.





The
Amended MOA was entered into on April 25, 2009.  It extended the term
of the loan and bank guarantee through July 30, 2010, increased the interest
rate and the possible liquidated damages, required us to pay a lump sum amount
of $200,000 as a fee for providing the extension of the bank guarantee, waived
any prior default and clarified certain other terms of the original
MOA.  As part of the changes, the parties to the MOA were formally
changed to be between Kronos in place of IMS Holdings and Conway in place of the
Schulte Group.  As a result of the amended MOA, the payable to Schulte
Group and the offsetting deposits on the chemical tanker transaction were
recorded on the books of Kronos.  At June 30, 2009, a total of
$5,300,000 was outstanding under the Schulte loan agreement at an effective
interest rate of 5.883%.  During the six months ended June 30, 2009,
we incurred interest expense of $163,620 related to the loan.





If the
chemical tanker is acquired, it would be through assignment of the equity of
Anthos to Kronos upon the fulfillment of the obligations of the
MOA.  We currently expect that Kronos will fulfill the terms of the
MOA when the second installment is due to the shipyard, which is anticipated to
be June 2010.  Upon the assignment of the equity in Anthos to Kronos,
Anthos will become a wholly owned subsidiary of Kronos, and its operations will
be reflected on our consolidated financial statements.


34





The table
below includes the assets and liabilities recorded on our consolidated balance
sheet related to the option to purchase the chemical tanker, associated debt
with Deutsche Schiffsbank and other expenses of Kronos.





June 30,
                            
                            
                            December 31,2009
                            
                            
                            2008(Unaudited)Cash
      and cash equivalents
                            
                            $
                            864
                            
                            
                            $
                            -Related
      party receivable
                            
                            
                            100,037
                            
                            
                            
                            4,278,164Deferred
      loan fees
                            
                            
                            223,095
                            
                            
                            
                            222,316Deposits
      on business acquisition
                            
                            
                            9,602,566
                            
                            
                            
                            -Total
      assets
                            
                            
                            9,926,562
                            
                            
                            
                            4,500,480Accounts
      payable and other accrued liabilities
                            
                            
                            10,250
                            
                            
                            
                            223,547Accrued
      interest payable
                            
                            
                            75,624
                            
                            
                            
                            -Due
      to related party
                            
                            
                            -
                            
                            
                            
                            144,308Schulte
      Group note payable
                            
                            
                            5,300,000
                            
                            
                            
                            -Total
      liabilities
                            
                            
                            5,385,874
                            
                            
                            
                            367,855Net
      assets
                            
                            $
                            4,540,688
                            
                            
                            $
                            4,132,625





In the
future, we may sell or assign the chemical tanker or the rights to acquire it,
or may elect to cancel the transaction to purchase the chemical tanker, whereby
we would be subject to liquidated damages of $3,000,000, which would be paid
from funds already paid to Conway as deposits on the potential tanker
acquisition, and we would not be required to repay the net amount owed to Conway
of $5,300,000.





Deutsche
Schiffsbank Facility


On
November 20, 2008, Kronos entered into a $30,000,000 credit facility (“Deutsche
Schiffsbank Facility”) with Deutsche Schiffsbank.  The Deutsche
Schiffsbank Facility also provided for a related guarantee facility of up to
$16,320,000 under which Deutsche Schiffsbank would issue two separate guarantees
in favor of the sellers of the chemical tanker, Nantong Mingde Heavy Industry
Stock Co., Ltd. and Jiangxi Topsky Technology Co., Ltd. (“Nantong
Mingde”).  The Deutsche Schiffsbank Facility is to be drawn in
multiple advances with the proceeds used to fund the construction and
acquisition of the chemical tanker.  Anthos is the current owner of
the contract to purchase the chemical tanker.  Pursuant to the terms
of the MOA, we would take ownership of Anthos upon fulfilling the terms of the
MOA.  Each pre-delivery advance shall be repaid in full upon delivery
of the chemical tanker to Anthos, but no later than March 31,
2012.  Additionally, each delivery advance shall be repaid in 40
installments of $500,000 each with a balloon installment in the amount of
$10,000,000 payable at the time of the final $500,000 installment which can be
no later than March 31, 2022.





Interest
on the Deutsche Schiffsbank Facility shall be paid in arrears on the last day of
each applicable interest period.  In the event the interest period is
longer than six months, interest shall be paid every six months during such
interest period and on the last day of any such interest
period.  Interest on the borrowings is based upon LIBOR, the London
Interbank Offered Rate, plus 1.4% per annum during each interest
period.





Pursuant
to the terms of the Deutsche Schiffsbank Facility, an arrangement fee of
$120,000 was earned and due as of the acceptance of the financing
commitment.  Additionally, in relation to the advances and the
guarantee facility, a commitment fee at the rate of 0.3% per annum on the daily
undrawn amount of such advance and unutilized amount of the guarantee facility
accrues from the date of the Deutsche Schiffsbank Facility to and including the
date of payment thereof.  Such fee is payable quarterly in arrears and
on the last day of the commitment period applicable to such
advance.  Further, a guarantee commission is payable quarterly in
arrears at a rate equal to 1.4% per annum on the daily average maximum amount of
the liabilities and obligations of Deutsche Schiffsbank under or pursuant to the
guarantees to be issued by Deutsche Schiffsbank in favor of the sellers of the
chemical tanker.


35


From the
date of transfer of ownership in Anthos to Kronos through the date of payment of
the second installment for the chemical tanker to Nantong Mingde pursuant to the
building contract, the Deutsche Schiffsbank Facility will be secured by a cash
collateral account with a balance of at least
$7,560,000.  Additionally, prior to the delivery of the chemical
tanker, the Deutsche Schiffsbank Facility shall be secured by an assignment of
the chemical tanker building contract, the related refund guarantee issued by
Bank of China Limited in favor of Anthos, a pledge of the equity of Kronos and a
guarantee by Anthos.  Upon delivery of the chemical tanker, the
Deutsche Schiffsbank Facility will be secured by a mortgage on the chemical
tanker including the related deed of covenants and deed of share
charges.





We are
subject to various covenants associated with the Deutsche Schiffsbank Facility,
under which we must obtain consent of Deutsche Schiffsbank to carry out
transactions including, but not limited to, the following:





·
            payment
      of dividends;


·
            capital
      infusions from outside investors into Kronos or its
      subsidiaries;


·
            additional
      financing and/or encumbrances; and


·
            making
      loans and advances.





Acquisitions and
Dispositions


During
January 2008, we sold to FLTC Fund I our interest in one AHTS vessel in exchange
for cash approximating the carrying value of our investment; therefore, no gain
or loss was recognized on this transaction.





We
currently have an agreement to purchase a chemical tanker, which would be held
through Kronos.





Ongoing Capital
Expenditures


We have
commitments to purchase the seven remaining AHTS vessels under construction as
of June 30, 2009.  The cost of each vessel is denominated in EUR, and
amounts in USD related to future payments are determined using the exchange rate
as of June 30, 2009.  The estimated cost of each of the remaining
seven AHTS vessels ranges from $52,916,006 (EUR 37,668,000) to $59,837,456 (EUR
42,595,000), for a total remaining commitment of $401,535,389 (EUR
285,831,000).  Under the AHTS shipbuilding contracts, installments are
due in five stages based upon certain milestones being met during
construction.  Approximately 30% of the total construction costs
require deposits, some of which are funded with equity while others will be
funded from the Pre-Delivery Facility from the Senior Loan.  Amounts
drawn on the Pre-Delivery Facility require either (i) that each AHTS SPV is
fully funded based on the capital as called for in the applicable SPV agreements
or (ii) the provision of a guarantee acceptable to Nord/LB.  In
addition to our obligations to Fincantieri, there are agreements between the
SPVs and Hartmann Offshore for vessel construction oversight and commercial and
technical management during construction.  As of June 30, 2009 and
December 31, 2008, we incurred $162,953,849 and $80,860,590, respectively, in
connection with the acquisition of the contracts to build these
vessels.





Additionally,
each AHTS SPV entered into a contract with the German Subsidiary, whereby the
German Subsidiary or its assignee would provide financial services including,
but not limited to, the procurement of equity during the building period of the
relevant AHTS vessel.  Under such agreements, the German Subsidiary
would have received fees of $702,400 (EUR 500,000) payable in four equal
installments, each due at (i) the beginning of steel cutting, (ii) installation
of the main engines, (iii) launching of the vessel and (iv) delivery of the
completed vessel.  The German Subsidiary subcontracted the requirement
to provide these services and the right to receive these payments to Suresh
Capital Consulting & Finance Ltd., Maritime Funding Group LLC and Churada
Investments Limited which are affiliates of SCMH.


36


Discussion of Short- and
Long-Term Liquidity Needs


We have
funded payments related to the first two of the five installments on all of our
nine AHTS vessels marking the completion of the initial funding stage, which was
funded primarily with equity from limited partners’ contributions.  In
order to fund our remaining commitments to Fincantieri, we entered into the
Senior Loan discussed above under the caption Financing
Arrangements.  The Pre-Delivery Facility will be drawn to fund
portions of the third and fourth installments to Fincantieri.  Upon
delivery of each AHTS vessel, we will draw on the Senior Loan in the amount of
$49,234,728 (EUR 35,047,500).  The proceeds will be used to repay the
Pre-Delivery Facility for the AHTS vessel, fund the fifth and final installment
to Fincantieri and, where amounts are available, fund the outfitting of each
vessel.  The schedule below reflects the anticipated amount of
reserves at delivery for the remaining seven AHTS vessels under construction
based on the equity funded to the AHTS SPVs as of June 30, 2009.




Remaining
                        
                        
                        
                        
                        
                        AnticipatedCapital
                        
                        
                        
                        
                        
                        Reserves orExpenditure
                        
                        
                        Senior Loan
                        
                        
                        (Deficit) in SPVSPV Name
                        
                        Vessel Name
                        
                        Obligation
                        
                        
                        Proceeds
                        
                        
                        at Delivery6162
      –  Isle of Baltrum
                        
                        UOS
      Columbia
                        
                        
                        51,620,501
                        
                        
                        
                        49,234,728
                        
                        
                        
                        (2,385,773
                        )6163
      –  Isle of Langeoog
                        
                        UOS
      Discovery
                        
                        
                        51,474,682
                        
                        
                        
                        49,234,728
                        
                        
                        
                        (2,239,954
                        )6168
      –  Isle of Amrum
                        
                        UOS
      Endeavour
                        
                        
                        56,136,229
                        
                        
                        
                        49,234,728
                        
                        
                        
                        (6,901,501
                        )6169
      –  Isle of Sylt
                        
                        UOS
      Enterprise
                        
                        
                        55,293,349
                        
                        
                        
                        49,234,728
                        
                        
                        
                        (6,058,621
                        )6171
      –  Isle of Wangerooge
                        
                        UOS
      Explorer
                        
                        
                        57,981,434
                        
                        
                        
                        49,234,728
                        
                        
                        
                        (8,746,706
                        )6172
      –  Isle of Neuwerk
                        
                        UOS
      Freedom
                        
                        
                        57,981,434
                        
                        
                        
                        49,234,728
                        
                        
                        
                        (8,746,706
                        )6173
      –  Isle of Usedom
                        
                        UOS
      Liberty
                        
                        
                        57,981,434
                        
                        
                        
                        49,234,728
                        
                        
                        
                        (8,746,706
                        )$
                        388,469,063
                        
                        
                        $
                        344,643,096





We
continue to raise funds through private placement of our limited partner units,
both to new and existing investors.  The majority of proceeds from
future fundraising efforts, through the continued offering of limited partner
units, will be used to complete the funding of our equity commitments under the
agreements which govern the SPV entities in which the AHTS vessels are held,
fund the delivery of the AHTS vessels and fund our operations and those of each
SPV.  Under the AHTS SPV formation documents (“Company Agreements”),
we have committed to contribute capital to these entities totaling $147,504,000
(EUR 105,000,000) (“Capital Commitment”).  This amount reflects an
increase in our share capital commitment for the Isle of Usedom SPV from
$14,223,600 (EUR 10,125,000) to $40,036,800 (EUR 28,500,000) in order to comply
with the terms of the Senior Loan.  Through contributions made to each
SPV to fund the first two installments to Fincantieri, we had funded $57,603,824
(EUR 41,005,000) as of June 30, 2009.





Were ATL
Offshore GmbH (“ATL”), which serves as the general partner of each AHTS SPV and
is a member of the Hartmann Group, to call in the remaining unfunded share
capital, we would be required pursuant to the Company Agreements to fund the
capital call up to our maximum share of the Capital Commitment.  If we
were unable to fund the capital call from additional limited partner
contributions or other means, such as additional credit facilities, our fellow
limited partner, Reederei Hartmann, could fund our unfunded capital under a
guarantee that has been provided as part of the Senior Loan, resulting in a
transfer of interest in the applicable AHTS SPV from us to Reederei
Hartmann.  Pursuant to the Senior Loan, Reederei Hartmann is
prohibited from owning more than 50% of any one AHTS SPV.  Therefore,
in the event we are unable to raise capital sufficient to keep our ownership
share in each AHTS in excess of 50%, ATL would likely seek to raise capital from
other sources, which could dilute our ownership, or ATL could seek to sell all
or part of a vessel or vessels.  Our limited partners are not subject
to additional capital calls under our Agreement of Limited
Partnership.


37


The table
below provides a schedule of unfunded capital commitments for each AHTS SPV as
of June 30, 2009, and also includes the information from the table
above:





Remaining
                  
                  
                  Anticipated Reserves atCapital Contribution
                  
                  
                  at Delivery based on
                  
                  Anticipated VesselSPV Name
                  
                  Vessel Name
                  
                  Commitment (1)
                  
                  
                  Capital Contributed
                  
                  Delivery Date6160 –  MS Juist
                  
                  UOS
      Atlantis
                  
                  $
                  2,100,176
                  
                  
                  $
                  -
                  
                  February 27, 2009 (delivered)6161 –  MS
      Norderney
                  
                  UOS
      Challenger
                  
                  
                  3,188,896
                  
                  
                  
                  -
                  
                  May
      28, 2009 (delivered)6162
      –  Isle of Baltrum
                  
                  UOS
      Columbia
                  
                  
                  9,398,112
                  
                  
                  
                  (2,385,773
                  )
                  September
      20096163
      –  Isle of Langeoog
                  
                  UOS
      Discovery
                  
                  
                  9,974,080
                  
                  
                  
                  (2,239,954
                  )
                  November
      20096168
      –  Isle of Amrum
                  
                  UOS
      Endeavour
                  
                  
                  11,484,240
                  
                  
                  
                  (6,901,501
                  )
                  December
      20096169
      –  Isle of Sylt
                  
                  UOS
      Enterprise
                  
                  
                  11,168,160
                  
                  
                  
                  (6,058,621
                  )
                  April
      20106171
      –  Isle of Wangerooge
                  
                  UOS
      Explorer
                  
                  
                  10,943,392
                  
                  
                  
                  (8,746,706
                  )
                  January
      20106172
      –  Isle of Neuwerk
                  
                  UOS
      Freedom
                  
                  
                  11,800,320
                  
                  
                  
                  (8,746,706
                  )
                  March
      20106173
      –  Isle of Usedom
                  
                  UOS
      Liberty
                  
                  
                  46,569,120
                  
                  
                  
                  (8,746,706
                  )
                  April
      2010$
                  116,626,496





(1)
            Pursuant
      to the AHTS SPV Agreements, the noncontrolling interest holder is
      committed to contribute 25% of this
amount.





These
additional capital contributions will be utilized by the AHTS SPVs for
operations during the construction period, outfitting of each AHTS vessel upon
delivery and providing working capital to the AHTS SPVs, a portion of which is
necessary in order to fulfill the conditions under the Senior Loan (“Senior Loan
Conditions”).  The capital in excess of the amount required for
operations, outfitting and compliance with the Senior Loan Conditions will be
called at the option of ATL in its judgment as general partner of each
SPV.  The factors which would affect such a decision would include the
excess loan proceeds available from the funding of the Senior Loan upon delivery
of each AHTS vessel, if any, charter coverage, current market day rates,
operational requirements such as anticipated dry dockings and unexpected repair
costs as well as other factors deemed relevant by ATL regarding each
vessel.





In
summary, through June 30, 2009 we have contributed capital totaling $57,603,824
(EUR 41,005,000) to the AHTS SPVs primarily with contributions from the sale of
limited partner units, which provided funds for the first two installments to
Fincantieri and operations to date for the AHTS SPVs.  The first two
AHTS vessels have been delivered, and the remaining capital obligations of the
AHTS SPVs for the vessels total $388,469,063 (EUR 276,529,801).  Of
this amount, we anticipate receiving $344,643,096 (EUR 245,332,500) through the
Senior Loan.  The remaining obligation will be funded by both us and
Reederei Hartmann from additional capital contributions.  In order to
secure ownership of at least 50% of each AHTS SPV, which is a requirement under
the Senior Loan Conditions, we must fund an additional amount of approximately
$40,732,176 (EUR 28,995,000).  Failure to reach this funding level is
likely to result in the sale or transfer of the ownership interest in one or
more vessels.  In order to maintain our 75% ownership of all nine AHTS
SPVs, we must fund an additional amount that is estimated to range from EUR
$47,763,200 (EUR 34,000,000) to $89,900,176 (EUR 63,995,000).  The
lower range includes minimum reserves of $2,809,600 (EUR 2,000,000) for each
AHTS SPV.  Funding the upper range of $89,900,176 (EUR 63,995,000)
would represent full funding of our obligation under the current Company
Agreements for each AHTS SPV.  The actual funding level will depend
upon certain items such as charter rates, charter length and working capital
requirements and whether the general partner of the AHTS SPVs determines to call
the full amount of our capital commitment.  We do not anticipate
making distributions in the future until the funding stage is completed and the
vessels have been delivered to the applicable AHTS
SPVs.  Additionally, the Share Transfer Agreement requires the German
Subsidiary to maintain all distributions from the AHTS SPVs in an escrow account
for purpose of funding capital contributions with respect to the other AHTS SPVs
until all such SPVs are fully funded.





Critical
Accounting Estimates





The
preparation of financial statements in accordance with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period.  Actual results could differ
from those estimates.  Our significant accounting policies, which are
reviewed by management on a regular basis, are described in Note 1 Nature of
Partnership’s Business and Summary of Significant Accounting Policies in our
Notes to Consolidated Financial Statements.


38





The
majority of our assets are still under construction, and the estimates and
judgments with respect to reporting those assets and their results of operations
currently do not involve many critical accounting estimates.  We deem
an accounting policy to be critical if it requires an accounting estimate to be
made based on assumptions about matters that are uncertain at the time the
estimate is made, and if different estimates that reasonably could have been
used, or changes in the accounting estimates that are reasonably likely to occur
periodically, could materially impact the financial
statements.  Management believes the following critical accounting
policies reflect its more significant estimates and assumptions used in the
preparation of our Consolidated Financial Statements.





Revenue
Recognition


Our
revenue is earned primarily from time chartering of vessels to charterers based
upon daily rates of hire. Our AHTS SPVs participate in the UOS AHTS Pool under
which they pool their Voyage Results, which is their revenue less voyage
expenses.  Revenue from charters is generally recorded when services
are rendered, estimates are reasonably determinable and collection is reasonably
assured.  Revenue is recognized net of price adjustments and other
potential adjustments based upon the daily charter rate for the reporting
period.  Our pooling arrangement under the UOS AHTS Pool will not have
any bearing on our revenue until such time as one of the vessels owned by FLTC
Fund I is delivered and begins to participate in the UOS AHTS Pool, which is
expected in May 2010.  After such time, our revenue will be recorded
taking into account potential pool adjustments for the period.  The
period in which management estimates revenues have been earned and the extent to
which those revenues are deemed collectible, and estimates of any adjustments to
revenues, could have a material effect on the net recognized revenue in any
given period.





Valuation of Derivative
Financial Instruments


We
account for derivatives and derivatives classified as hedges in accordance with
SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities and SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities, an Amendment of SFAS No.
133.  All our derivative and hedge positions are stated at fair
value within either current derivative assets, derivative assets, current
derivative liabilities or long-term derivative liabilities on our consolidated
balance sheet. Realized and unrealized gains and losses related to our foreign
currency exchange contracts not classified as hedges are reported in our
consolidated statements of operations in foreign currency transaction gain
(loss), while those related to foreign currency exchange contracts designated
for hedge accounting are included in foreign currency transaction gain (loss) on
the consolidated statement of operations with the effective portion of the fair
value gains or losses recorded as part of accumulated other comprehensive income
on the consolidated balance sheet.  The gain or loss related to our
interest rate swap contracts, none of which are classified as hedges, is
reported in interest expense.





In order
to value the derivatives, management must make estimates regarding the future
values of interest and currency exchange rates.  Management relies on
published forward estimates of EURIBOR rates and currency exchange rates when
estimating the fair value of its derivatives.  These estimates could
materially change from what was available at the balance sheet
date.





We
evaluate the risk of counterparty default by monitoring the financial condition
of the financial institutions and counterparties involved and primarily
conducting business with well-established financial institutions.  We
do not currently anticipate nonperformance by any of our
counterparties.





Fixed
Assets


Vessels
are stated at cost less accumulated depreciation.  Vessel costs
include acquisition costs directly attributable to the vessel and expenditures
made to prepare the vessel for its initial voyage.  On board equipment
represents all the equipment required to operate a vessel. Vessels and on board
equipment are depreciated on a straight-line basis over their estimated useful
lives which have been determined to be 20 years and 10 years, respectively, from
the initial delivery date from the shipyard.


39


The
estimated useful life was determined based on the historical useful lives of
like-kind vessels and equipment.  The actual useful life could be more
or less than estimated, and this could result in the vessels and equipment being
stated at values materially above or below their actual
value.  Factors that could result in a shorter useful life, and thus
an actual value of less than the stated value, include the unexpected emergence
of new technology making our vessels obsolete sooner than expected, or changes
in maritime or environmental law which are unpredictable but could result in a
shorter than expected useful life for our vessels.  If the useful life
is materially less than that estimated for depreciation purposes, it could
result in our having to record an impairment to the value of the
asset.  A similar situation could arise if a vessel which we have an
intention to sell is found to have a fair value less cost to sell lower than its
stated value at the time it is reclassified as held for sale, due to a shorter
useful life than that estimated in computing depreciation.  In this
case we would be required to record an allowance against the asset at the time
it is reclassified as held for sale for the difference between the carrying
value and the fair value less cost to sell.





New
Accounting Pronouncements


In April
2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosure about Fair Value
of Financial Instruments (“FSP 107-1/APB 28-1”).  FSP 107-1/APB 28-1
requires interim disclosures regarding the fair values of financial instruments
that are within the scope of FAS 107, Disclosures about the Fair Value of
Financial Instruments.  Additionally, FSP 107-1/APB 28-1 requires
disclosure of the methods and significant assumptions used to estimate the fair
value of financial instruments on an interim basis as well as changes of the
methods and significant assumptions from prior periods.  FSP 107-1/APB 28-1
does not change the accounting treatment for these financial instruments. 
We adopted this standard in the second quarter of 2009 and it did not have a
material impact on our consolidated financial statements.





In May
2009, the FASB issued SFAS No. 165, Subsequent Events which
applies to subsequent events not addressed by other applicable US
GAAP.  SFAS No. 165 states that all events occurring after the balance
sheet date through the date of issuance should be evaluated to determine if the
events provide additional evidence about conditions that existed at the balance
sheet date.  If additional information is provided, the information
should be disclosed in the financial statements being issued.  An
entity shall not recognize events after the balance sheet date that provide
evidence about conditions that did not exist at the balance sheet date but arose
after the balance sheet date and before the financial statements are
issued.  The date through which subsequent events have been evaluated
and whether that date is the date of issuance or the date the financial
statements are available to be issued should be disclosed in the financial
statements as well.  SFAS No. 165 is effective for interim and annual
periods ending after June 15, 2009.  We adopted this statement during
the second quarter of 2009.





In June
2009, the FASB issued SFAS No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting
Principles, which approves the Accounting Standards
Codification, or ASC, as the single source of authoritative United States
accounting and reporting standards applicable for all non-governmental
entities.  The ASC, which changes the referencing of financial
standards, is effective for interim or annual financial periods ending after
September 15, 2009.  As the ASC is not intended to change or alter
existing US GAAP, it is not expected to have any impact on our consolidated
financial position or results of operations.


40


Item
4.    Controls and Procedures





As of
June 30, 2009, our general partner’s chief executive officer and chief financial
officer evaluated the effectiveness of our disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act
of 1934 (“Securities Exchange Act”)), and concluded that, as of such date, our
disclosure controls and procedures were adequate and effective for the purpose
of ensuring that information required to be disclosed by us in the reports that
we file or submit under the Securities Exchange Act (15 U.S.C 78a et seq.) is recorded,
processed, summarized and reported, within the time periods specified by the
SEC’s rules and forms and is accumulated and communicated to our management,
including the principal executive and principal financial officers of our
general partner, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosures.





During
the quarter ended June 30, 2009, there have been no changes in our internal
controls over financial reporting that have materially affected, or are
reasonably likely to materially affect, those internal controls subsequent to
the date of the evaluation. As a result, no corrective actions were required or
undertaken.


41


PART
II.  Other Information





Item
1.  Legal Proceedings





We may in
the future be involved as a party to various legal proceedings, which are
incidental to the ordinary course of business.  We regularly analyze
current information and, as necessary, provide accruals for probable liabilities
on the eventual disposition of these matters.  No director, executive
officers or affiliate of ours or owner of record or beneficially of more than
five percent of any class of our limited partner units is a party adverse to us
or has a material interest adverse to us in any proceeding.  In the
opinion of management, as of June 30, 2009, there were no threatened or pending
legal matters that would have a material impact on our consolidated results of
operations, financial position or cash flows.





Item
1A.  Risk Factors




Investing
in us involves a degree of risk, including the risks described below and in our
amended Registration Statement on Form 10, as filed with the SEC. Our operating
results have been, and will continue to be, affected by a wide variety of risk
factors, many of which are beyond our control, that could have adverse effects
on profitability during any particular period.  Additional risks and
uncertainties not currently known or deemed to be immaterial may also materially
and adversely affect our business operations.  If any of the risks
referred to above were to actually occur, our business, financial condition or
results of operations could be materially and adversely
affected.  Limited partner units are inherently different from the
capital stock of a corporation, although many of our business risks are similar
to those that would be faced by a corporation engaged in a similar
business.




We
have entered into a revenue pooling agreement with three SPVs owned by our
affiliate, FLTC Fund I, which could negatively affect our operating
revenues.
 In March
2009, we entered into an agreement with United Offshore Support GmbH & Co.
KG (“UOS”) and three SPVs owned by our affiliate, FLTC Fund I (the “AHTS Pool
Agreement”).  Pursuant to the ATHS Pool Agreement, we have agreed to
participate in a revenue pool comprised of our nine AHTS SPVs and three AHTS
SPVs owned by our affiliate, FLTC Fund I (the “Pool Members”).  Under
the AHTS Pool Agreement, each Pool Member has agreed to pool its returns from
the employment of its AHTS vessel (less voyage expenses) with the other Pool
Members to achieve an even distribution of the risks resulting from the
fluctuation in the offshore chartering business.  As a result, if the
vessels owned by our AHTS SPVs are chartered at higher average rates than the
vessels owned by the three SPVs of FLTC Fund I, then our AHTS SPVs could receive
less operating revenue than they would otherwise receive in the absence of the
AHTS Pool Agreement.


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





During
the three months ended June 30, 2009, we issued and sold approximately 18,876
Class A limited partnership units to our partners at a purchase price of $100.00
per unit.  We also issued 2,000 Class D limited partner units in
exchange for certain securities of our Cyprus Subsidiary.





Exemption
from registration for Sales of Restricted Securities


None of
these sales were registered with the SEC.  Each of these sales were
deemed to be exempt from registration under the Securities Act pursuant to
Section 4(2) and Rule 506 of Regulation D thereof, as transactions by an issuer
not involving a public offering.  No underwriting discounts or
commissions were paid in these transactions and we conducted no general
solicitation in connection with the offer or sale of the
securities.  The purchasers of the securities in each transaction were
accredited investors as defined in Regulation D, and such purchasers made
representations to us regarding their status as accredited investors and their
intention to acquire the securities for investment only and not with a view to
or for sale in connection with any distribution thereof.  Registration
of sales to accredited investors is preempted from state regulation by Section
18 of the Securities Act, though states may require the filing of notices, a fee
and other administrative documentation.  All purchasers were provided
a private placement memorandum containing all material information concerning
the partnership and the offering.  All purchases were made with cash
and the total amount of cash consideration for those securities was
approximately $1,887,600.





Use
of Proceeds of Registered Securities


The
proceeds from the sale of limited partnership units have been used to provide
equity in our AHTS vessel entities and provide for our operating
activities.


42


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





During
March 2009, we submitted a Consent Solicitation Statement to each of our limited
partners, which sought our limited partners’ approval with respect to the
adoption of our Second Amended and Restated Agreement of Limited Partnership
(the “Proposal”).  While the Consent Solicitation Statement was
submitted to our limited partners during the first quarter of 2009, the voting
process was not concluded until April 28, 2009, when our limited partners
approved the Proposal.  The number of votes cast for or against, with
respect to the Proposal, are as set forth below:





For
                  
                  Against483,863
                  
                  166,650





Since
none of our units are held in “street name,” there were no “broker
non-votes.”  In addition, under Cayman law, any limited partner who
failed to return their vote was counted as a vote “against.”


43


Item
6.  Exhibits





Exhibit
                Number
              
              Title
      of Document2.1
              
              Equity
      Contribution Agreement, dated as of April 23, 2009, by and among III to I
      Maritime Partners Cayman I, L.P., I-A Suresh Capital Maritime Partners
      Limited, III to I International Maritime Solutions Cayman, Inc., Suresh
      Capital Maritime Holdings, LLC, Suresh Capital Partners, LLC and The
      Maritime Funding Group, Inc. Irrevocable Trust. (Incorporated by reference
      to Exhibit 2.1 to our Amendment No. 1 to Registration Statement on Form
      10-12G (File No. 000-53656) filed with the SEC on July 2,
      2009)3.1
              
              Second
      Amended and Restated Agreement of Limited Partnership of III to I Maritime
      Partners Cayman I, L.P. (Incorporated by reference to Exhibit 3.4 to our
      Registration Statement on Form 10-12G (File No. 000-53656) filed with the
      SEC on April 30, 2009)4.1
              
              Second
      Amended and Restated Agreement of Limited Partnership of III to I Maritime
      Partners Cayman I, L.P. (included as Exhibit 3.1 above). (Incorporated by
      reference to Exhibit 4.2 to our Registration Statement on Form 10-12G
      (File No. 000-53656) filed with the SEC on April 30,
  2009)10.1
              
              Amended
      and Restated Memorandum of Agreement, dated as of April 25, 2009, by and
      between Kronos Shipping I, Ltd. and the Conway Shipping Co. Ltd.
      (Incorporated by reference to Exhibit 10.8 to our Registration Statement
      on Form 10-12G (File No. 000-53656) filed with the SEC on April 30,
      2009)10.2
              
              Share
      Transfer Agreement SCMP, dated as of February 2009, by and between
      Reederei Hartmann GmbH & Co., KG and Suresh Capital Maritime Partners
      Germany GmbH, as amended by Addendum No. 1, dated May 20, 2009 and
      Addendum No. 2, dated June 18, 2009. (Incorporated by reference to Exhibit
      10.17 to our Amendment No. 1 to Registration Statement on Form 10-12G
      (File No. 000-53656) filed with the SEC on July 2,
2009)10.3
              
              Agreement,
      dated June 17, 2009, by and among III to I Maritime Partners Cayman I,
      L.P., III to I International Maritime Solutions Cayman, Inc., IMS Capital
      Partners, LLC and Kronos Shipping I, Ltd. (Incorporated by reference to
      Exhibit 10.28 to our Amendment No. 1 to Registration Statement on Form
      10-12G (File No. 000-53656) filed with the SEC on July 2,
      2009)10.4
              
              Note
      Cancellation Agreement, dated June 17, 2009, by and among III to I IMS
      Holdings LLC and IMS Capital Partners, LLC. (Incorporated by reference to
      Exhibit 10.29 to our Amendment No. 1 to Registration Statement on Form
      10-12G (File No. 000-53656) filed with the SEC on July 2,
      2009)31.1*
              
              Certification
      (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Executive
      Officer31.2*
              
              Certification
      (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Financial
      Officer32.1*
              
              Section
      1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief
      Executive Officer32.2*
              
              Section
      1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief
      Financial Officer


*
            Filed
      herewith.


44


SIGNATURE




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




III
      to I Maritime Partners Cayman I, L.P.(Registrant)By:
                III
      to I International Maritime Solutions Cayman, Inc.Its
      General PartnerBy:
                /s/
      Jason M. MortonJason
      M. MortonDirector
      and Chief Financial Officer(Duly
      authorized to sign this report on behalf of the
  Registrant)Date: August
      14, 2009


45


Exhibits





Exhibit
      Number
            
            Title
      of Document2.1
            
            Equity
      Contribution Agreement, dated as of April 23, 2009, by and among III to I
      Maritime Partners Cayman I, L.P., I-A Suresh Capital Maritime Partners
      Limited, III to I International Maritime Solutions Cayman, Inc., Suresh
      Capital Maritime Holdings, LLC, Suresh Capital Partners, LLC and The
      Maritime Funding Group, Inc. Irrevocable Trust. (Incorporated by reference
      to Exhibit 2.1 to our Amendment No. 1 to Registration Statement on Form
      10-12G (File No. 000-53656) filed with the SEC on July 2,
      2009)3.1
            
            Second
      Amended and Restated Agreement of Limited Partnership of III to I Maritime
      Partners Cayman I, L.P. (Incorporated by reference to Exhibit 3.4 to our
      Registration Statement on Form 10-12G (File No. 000-53656) filed with the
      SEC on April 30, 2009)4.1
            
            Second
      Amended and Restated Agreement of Limited Partnership of III to I Maritime
      Partners Cayman I, L.P. (included as Exhibit 3.1 above). (Incorporated by
      reference to Exhibit 4.2 to our Registration Statement on Form 10-12G
      (File No. 000-53656) filed with the SEC on April 30,
  2009)10.1
            
            Amended
      and Restated Memorandum of Agreement, dated as of April 25, 2009, by and
      between Kronos Shipping I, Ltd. and the Conway Shipping Co. Ltd.
      (Incorporated by reference to Exhibit 10.8 to our Registration Statement
      on Form 10-12G (File No. 000-53656) filed with the SEC on April 30,
      2009)10.2
            
            Share
      Transfer Agreement SCMP, dated as of February 2009, by and between
      Reederei Hartmann GmbH & Co., KG and Suresh Capital Maritime Partners
      Germany GmbH, as amended by Addendum No. 1, dated May 20, 2009 and
      Addendum No. 2, dated June 18, 2009. (Incorporated by reference to Exhibit
      10.17 to our Amendment No. 1 to Registration Statement on Form 10-12G
      (File No. 000-53656) filed with the SEC on July 2,
2009)10.3
            
            Agreement,
      dated June 17, 2009, by and among III to I Maritime Partners Cayman I,
      L.P., III to I International Maritime Solutions Cayman, Inc., IMS Capital
      Partners, LLC and Kronos Shipping I, Ltd. (Incorporated by reference to
      Exhibit 10.28 to our Amendment No. 1 to Registration Statement on Form
      10-12G (File No. 000-53656) filed with the SEC on July 2,
      2009)10.4
            
            Note
      Cancellation Agreement, dated June 17, 2009, by and among III to I IMS
      Holdings LLC and IMS Capital Partners, LLC. (Incorporated by reference to
      Exhibit 10.29 to our Amendment No. 1 to Registration Statement on Form
      10-12G (File No. 000-53656) filed with the SEC on July 2,
      2009)31.1*
            
            Certification
      (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Executive
      Officer31.2*
            
            Certification
      (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Financial
      Officer32.1*
            
            Section
      1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief
      Executive Officer32.2*
            
            Section
      1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief
      Financial Officer


*
            Filed
      herewith.